Beijing Shougang Company Limited
2023 Annual Report
18 April 2024
Section I. Important notice, Content, Definitions
The board of directors (the “Board”), the supervisory committee, all directors, supervisors and senior executivesof the Company warrant that there are no false representations, misleading statements or material omissions in thisannual report; and are jointly and individually responsible for the truthfulness, accuracy and completeness of theinformation contained in this annual report.Chairman Qiu Yinfu, General Manager Sun Maolin, Chief Accountant Liu Tonghe, and Accounting Officer GongJuanjuan declare that they guarantee the authenticity, accuracy, and completeness of the financial reports in thisyear's report.All directors have attended the board meeting to review this report.Certain risks that may exist have been elaborated by the Company in this report. Please refer to Discussion andAnalysis of Business Operations for details.The profit distribution plan approved by the board of directors is as follows: based on 7,794,611,605, cashdividends of RMB 0.3 (including tax) will be distributed to all shareholders for every 10 shares, and 0 bonusshares (including tax) will be issued and there is no conversion of reserve into share capital.
CONTENTS
SECTION I. IMPORTANT NOTICE, CONTENT, DEFINITIONS ...................................................................................................................................................... 2
SECTION II. COMPANY PROFILE AND MAJOR FINANCIAL INDICATORS ........................................................................................................................... 6
SECTION III. DISCUSSION AND ANALYSIS OF BUSINESS OPERATIONS .......................................................................................................................... 8
SECTION IV. CORPORATE GOVERNANCE..................................................................................................................................................................................... 29
SECTION V. ENVIRONMENT AND SOCIAL RESPONSIBILITY ................................................................................................................................................ 46
SECTION VI. SIGNIFICANT EVENTS ............................................................................................................................................................................................... 52
SECTION VII. MOVEMENTS IN SHARE CAPITAL AND SHAREHOLDERS .......................................................................................................................... 59
SECTION VIII. PREFERRED SHARES ............................................................................................................................................................................................. 65
SECTION IX. BONDS ........................................................................................................................................................................................................................... 66
SECTION X. FINANCIAL REPORT ......................................................................................................................................................................................................72
File directory for reference
1. Accounting statements signed and stamped by the Chairman, General Manager, Chief Accountant, and Head ofAccounting Institution.
2. Original audit report with the seal of the accounting firm, signature and seal of the CPA.
3. Original copies of all company documents and announcements publicly disclosed in newspapers designated bythe China Securities Regulatory Commission during the reporting period.
4. The articles of association of the Company, etc.
INTERPRETATION
| Items | Refers to | Contents |
| CSRC | Refers to | China Securities Regulatory Commission |
| SZSE | Refers to | Shenzhen Stock Exchange |
| Company, the Company/the company or Shougang Co. | Refers to | Beijing Shougang Company Limited |
| Shougang or Shougang Group | Refers to | Shougang Group (Reforming from an enterprise owned by the whole people to exclusively state-owned companies, name of Shougang Group is changed from Shougang Corporation. The specific content is detailed in 15 June 2017 public announcement.) |
| Listing Rules of SZSE | Refers to | Listing Rules of Shenzhen Stock Exchange |
| The Articles of Association | Refers to | The Articles of Association of Beijing Shougang Company Limited |
| Board of Directors or the Board | Refers to | The board of directors of Beijing Shougang Company Limited |
| Supervisory Committee | Refers to | The supervisory committee of Beijing Shougang Company Limited |
| Shareholders’ General Meeting | Refers to | The Shareholders’ General Meeting of Beijing Shougang Company Limited |
| Qiangang Co. | Refers to | Shougang Qian'an Iron&Steel Co., Ltd. (Branch of the Company) |
| Cold-R Co. | Refers to | Beijing Shougang Cold Rolling Co., Ltd. (Holding subsidiary of the Company, the Company holds 70.2806%) |
| Zhixin Co. | Refers to | Shougang Zhixin Qian'an Electromagnetic Materials Co., Ltd. (Holding subsidiary of the Company, the Company holds 66.2310%) |
| Steel Trading | Refers to | Beijing Shougang Steel Trading Investment Management Co., Ltd. (Wholly-owned subsidiaries of the Company) |
| Qianshun Base | Refers to | The integrated production organization and product research and development system formed by Qiangang Co, located in Qian-an, Hebei province, and Cold-R Co., located in Shunyi District, Beijing. |
| Jingtang Co./Jingtang Base. | Refers to | Shougang Jingtang United Iron&Steel Co., Ltd. (Holding subsidiary of the Company, the Company holds 70.1823%, Steel Trading Co. holds 29.8177%) |
| First Reorganization, and Previous Major Assets Reorganization | Refers to | Since the shut down of the main process of iron and steel manufacturing in late 2010, which was operated in Shijingshan District, Beijing, a transaction between the Company and Shougang carried out. The transaction event was announced as "Related Party Transactions between Beijing Shougang Co., Ltd. and Shougang Corporation - Major Assets Swap and Asset Purchase through Issue of Shares". The event was unconditional approved by China Securities Regulatory Commission Restructuring Committee on 16 January 2013. On 29 January 2014, the Company received the approval document, named "The Approval of Related Party Transactions between Beijing Shougang Co., Ltd. and Shougang Corporation - Major Assets Reorganization and Asset Purchase through Issue of Shares", which was issued by China Securities Regulatory Commission. On 25 April 2014, the reorganization was accomplished. |
| Second Reorganization | Refers to | On 23 April 2015, trading in the shares of the Company was suspended and the major assets swap launched. Main content of the swap is: 100% shareholding of Guizhou Investment Co., Ltd. was replaced with 51% shareholding of Jingtang Co., any insufficiency was paid in cash. This major assets swap was accomplished at the end of 2015. On 27 April 2016, re-election of the board of directors and amendment of Articles of Association of Jingtang Co. was accomplished and the Company was qualified to consolidate the financial statements of Jingtang Co. The second swap was then accomplished. |
| EVI | Refers to | Early Vendor Involvement means involving the downstream users at early stage of product development process and fully understanding users’ requirements for raw material so that high-performance materials and personalized services could be offered to users. |
| Reporting Period | Refers to | From 1 January 2023 to 31 December 2023 |
| Thousand, Million, Billion | Refers to | RMB Thousand, RMB Million, RMB Billion |
Section II. Company Profile and Major Financial Indicators
I. Company information
| Short name of stock | Shougang Stock | Stock code | 000959 |
| Stock exchange for listing of shares | The Shenzhen Stock Exchange | ||
| Statutory Chinese name of the Company | 北京首钢股份有限公司 | ||
| The Chinese abbreviation of the Company | 首钢股份 | ||
| English name of the Company (if any) | Beijing Shougang Co., Ltd. | ||
| Legal representative of the Company | Qiu yinfu | ||
| Registered address | Shijingshan Road, Shijingshan District, Beijing, PRC | ||
| Postal code of the registered address | 100041 | ||
| Historical changes in the registered address of the Company | N/A | ||
| Office address | No. 99 Shijingshan Road, Shijingshan District, Beijing, PRC | ||
| Postal code of the office address | 100041 | ||
| The Company’s website | www.sggf.com.cn | ||
| Email address | sggf@sgqg.com | ||
II. Contact information
| Secretary of the board | |
| Name | Qiao yufei |
| Correspondence address | No. 99 Shijingshan Road, Shijingshan District, Beijing, PRC |
| Telephone | 010-88293727 |
| Fax | 010-88292055 |
| Email address | qiaoyf1827@sgqg.com |
III. Information disclosure and place for inspection
| Stock exchange website for the disclosure of the annual report | http://www.szse.cn/ |
| Media and website for disclosure of the annual report | China Securities Journal, Securities Times, Shanghai Securities Journal, Securities Daily. http://www.cninfo.com.cn |
| Place for inspection of the annual report | Secretary office of the board of the Company |
IV. Changes of registration
| Organization code | 911100007002343182 |
| Changes of the core business since listing (if any) | No changes |
| Changes of controlling shareholder (if any) | No changes |
V. Other relevant informationAccounting firm engaged by the company
| Name of accounting firm | Grant Thornton LLP |
| Address of accounting firm | 5th Floor of Scitech Plaza, No. 22 Jianguomenwai Avenue, Chaoyang District, Beijing |
| Signed CPA | Li Dan, Yu Qike |
Sponsor engaged by the Company for performing continuous supervision duties in reporting period
√ Applicable □ Non applicable
| Name | Office address | Representatives | Supervision period |
| Huatai United Securities Co., Ltd. | Room 401, Building B7, Qianhai Shenzhen-Hong Kong Fund Town, No.128 guiwan Fifth Road, Nanshan Street, Qianhai Shenzhen-Hong Kong Joint Development Zone, Shenzhen | Chai Qizhi, Zhang Zhanpei | 1 May 2021- 31 December 2023 |
| China Securities Co., Ltd. | Building 4, 66 Anli Road, Chaoyang District, Beijing | Lv Jia, Chen Jian | 1 May 2021- 31 December 2023 |
Financial consultant engaged by the Company for performing continuous supervision duties in reporting period
√ Applicable □ Non applicable
| Name | Office address | Representatives | Supervision period |
| Huatai United Securities Co., Ltd. | Room 401, Building B7, Qianhai Shenzhen-Hong Kong Fund Town, No.128 guiwan Fifth Road, Nanshan Street, Qianhai Shenzhen-Hong Kong Joint Development Zone, Shenzhen | Chai Qizhi, Zhang Zhanpei | 1 May 2021- 31 December 2023 |
| CITIC Securities Co., Ltd | Building 4, 66 Anli Road, Chaoyang District, Beijing | Lv Jia, Chen Jian | 1 May 2021- 31 December 2023 |
Financial advisors engaged by the company to perform continuous supervision duties during the reporting period
√ Applicable □ Non applicable
| Name | Office address | Representatives | Supervision period |
| Huatai United Securities Co., Ltd. | Room 401, Building B7, Qianhai Shenzhen-Hong Kong Fund Town, No.128 guiwan Fifth Road, Nanshan Street, Qianhai Shenzhen-Hong Kong Joint Development Zone, Shenzhen | Chai Qizhi, Zhang Zhanpei | 1 May 2021- 31 December 2023 |
| CITIC Securities Co., Ltd | Building 4, 66 Anli Road, Chaoyang District, Beijing | Lv Jia, Chen Jian | 1 May 2021- 31 December 2023 |
VI. Major accounting data and financial indicatorsWhether the Company has retroactive adjustment or re-statement on previous accounting data or not
√ YES □ NO
Reasons for retroactive adjustment or restatementBusiness combination under common control
| 2023 | 2022 | Changes over last year | 2021 | |||
| Before the adjustment | After the adjustment | After the adjustment | Before the adjustment | After the adjustment | ||
| Operating revenue | 113,761,443,633.43 | 118,142,183,549.47 | 118,142,183,549.47 | -3.71% | 132,984,304,668.28 | 132,984,304,668.28 |
| Net profit attributable to shareholders of the listed company | 663,754,519.41 | 1,124,540,659.14 | 1,124,540,659.14 | -40.98% | 7,106,480,663.26 | 7,106,480,663.26 |
| Net profit attributable to shareholders of the listed company after deducting non-recurring profit and loss | 527,672,139.72 | 1,052,510,876.43 | 1,052,510,876.43 | -49.87% | 7,014,226,910.72 | 7,014,226,910.72 |
| Net cash flows from operating activities | 6,154,306,071.82 | 10,044,235,497.80 | 10,044,235,497.80 | -38.73% | 15,393,189,844.23 | 15,393,189,844.23 |
| Basic earnings per share | 0.0856 | 0.1496 | 0.1496 | -42.78% | 1.1439 | 1.1439 |
| Diluted earnings per share | 0.0856 | 0.1496 | 0.1496 | -42.78% | 1.1439 | 1.1439 |
| Weighted average return on net assets | 1.35% | 2.42% | 2.42% | Reduce by 1.07 % | 19.42% | 19.42% |
| 31 December 2023 | 31 December 2022 | Changes over end of last year | 31 December 2021 | |||
| Before the adjustment | After the adjustment | After the adjustment | Before the adjustment | After the adjustment | ||
| Total assets | 137,519,661,128.33 | 143,173,445,003.35 | 143,191,520,398.78 | -3.96% | 149,442,546,290.82 | 149,464,014,364.33 |
| Net assets attributable to shareholders of the listed company | 49,473,789,412.65 | 47,947,672,865.42 | 47,947,672,865.42 | 3.18% | 41,647,543,198.14 | 41,647,543,198.14 |
Changes in accounting policies and correction of accounting errorsThe reasons for changes in accounting policies are detailed in Section X, Changes in significant accounting policies and estimates.The Company’s net profit before and after deducting non-recurring profit and loss in the last three fiscal years is negative, and theaudit profit of the last year presents that the Company’s ability of continuing operations is uncertain.
□ YES √ NO
The net profit before and after deducting non - recurring profit and loss is negative.
□ YES √ NO
VII. Difference of accounting data under accounting rules in and out of China
1. Differences of net profit and net assets in financial statements disclosed according to International Financial ReportingStandards and Chinese Accounting Standards
□ Applicable √ Non applicable
There is no difference between the net profit and net assets in the financial statements disclosed in accordance with InternationalFinancial Reporting Standards and Chinese Accounting Standards during the reporting period of the Company.
2. Difference of net profit and net assets in financial statements disclosed according to foreign accounting standards andChinese Accounting Standards
□ Applicable √ Non applicable
There is no difference between the net profit and net assets in the financial statements disclosed in accordance with foreignaccounting standards and Chinese Accounting Standards during the reporting period of the Company.
VIII. Major financial indicators by quarter in 2023
Unit: RMB Yuan
| Q1 | Q2 | Q3 | Q4 | |
| Total revenue | 28,714,734,639.43 | 28,653,361,389.94 | 27,651,662,460.34 | 28,741,685,143.72 |
| Net profit attributable to shareholders of the listed company | -58,476,560.35 | 468,833,955.24 | 540,042,760.11 | -286,645,635.59 |
| Net profit attributable to shareholders of the listed company after deducting non-recurring profit and loss | -69,047,203.90 | 454,125,213.88 | 521,212,828.24 | -378,618,698.50 |
| Net cash flows from operating activities | -1,747,495,508.81 | 2,103,046,586.41 | 3,112,332,929.20 | 2,686,422,065.02 |
Whether there are significant differences between the above-mentioned financial indicators or the sum and the relevant financialindicators disclosed in the Company’s quarterly report and semi-annual report
□ YES √ NO
IX. Items and amounts of non-recurring profit and loss
√ Applicable □ Non applicable
Unit: RMB Yuan
| Item | 2023 | 2022 | 2021 | Note |
| Gains and losses on disposal of non-current assets (including the write-off that accrued for impairment of assets) | -22,066,115.49 | -56,974,152.72 | -55,726,886.68 | |
| Government grant included in the current profit and loss (except for the government grant which are closely related to the business of the company and are in accordance with the national unified standard quota) | 137,487,616.66 | 67,816,372.72 | 48,447,356.52 | |
| Profit and loss from external entrusted loans | 8,990,991.36 | 11,275,389.73 | 10,518,170.49 | |
| Reversal of impairment provisions for accounts receivable subject to separate impairment testing | 33,127,315.83 | |||
| Current net profit and loss of subsidiaries from the beginning of the period to the date of business combination under the common control | 55,404,276.08 | 92,145,653.81 | ||
| Other non-operating income and expenses except the above items | 4,157,902.31 | 10,369,331.96 | 1,941,256.62 |
| Less: The impact of income tax | 21,652,772.59 | 7,764,321.72 | -950,188.41 | |
| The impact on non-controlling interests (post-tax) | 3,962,558.39 | 8,097,113.34 | 6,021,986.63 | |
| Total | 136,082,379.69 | 72,029,782.71 | 92,253,752.54 | -- |
Particulars about other items that meet the definition of exceptional gain/loss:
□ Applicable √ Non applicable
During the reporting period, there is no other item that meet the definition of exceptional gain/loss.Explanation of why the Company reclassifies as recurrent an exceptional gain/loss item listed in the Explanatory Announcement No.1 on Information Disclosure for Companies Offering Their Securities to the Public—Exceptional Gain/Loss Items:
□ Applicable √ Non applicable
During the reporting period, there is no non-recurring profit and loss item defined and listed in "Explanatory Announcement No. 1 ofInformation Disclosure of Companies offering securities to the public non-recurring profit and loss" as recurring profit and lossitems.
Section III. Discussion and Analysis of Business Operations
I. The industry situation of the Company during the reporting periodIn 2023, China's economy maintained a positive trend of recovery and the growth of GPD was 5.2%. The upstream raw fuel prices inthe steel industry remain reletively high, while downstream demand has recovered less than expected. The year-on-year decline insteel market prices is greater than that of the raw material end. Steel enterprises are facing significant pressure in production andoperation, and the industry as a whole is showing a trend of “weakened demand, price decline, high costs, and declining profits”.According to data from the National Bureau of Statistics, in 2023, the production of crude steel and steel in China was 1.019 billiontons and 1.363 billion tons, respectively, with a year-on-year growth of 5.2%. According to data from China Steel Association, theaverage value of China Steel Price Index (CSPI) in 2023 was 111.60 points, a year-on-year decrease of 9.02%. Among them, theaverage value of the board index was 111.53 points, a year-on-year decrease of 8.12%; The average value of the long material indexis 115.00 points, a year-on-year decrease of 10.24%.On the upstream side, raw fuel costs fluctuate and differentiate. The procurement costs of main raw materials for key statisticalenterprises of China Steel Association have fluctuated, with domestic iron concentrate and imported fine ore procurement costsincreasing by 4.37% and 5.34% year-on-year, respectively. The procurement costs of coking coal, metallurgical coke, and scrap steelhave decreased by 18.75%, 21.57%, and 14.11% year-on-year, respectively.Downstream, there has been a change in the consumption structure of steel. The demand for steel in the green and low-carbon drivennew energy industry is increasing, while the demand for traditional steel in industries such as automobiles, shipbuilding, andhousehold appliances is improving. Among them, the automotive industry has performed well driven by new energy vehicles andexports, the shipbuilding industry has maintained a good development momentum, the wind power and photovoltaic industries havemaintained growth, the home appliance industry has recovered in line with expectations, and the real estate industry has continued tobe sluggish. Steel exports have significantly increased, while imports have maintained a downward trend. According to statistics fromthe General Administration of Customs, China's cumulative steel exports in 2023 were 90.264 million tons, a year-on-year increaseof 36.2%; The cumulative import volume of steel was 7.645 million tons, a year-on-year decrease of 27.6%.
II. Main business of the Company during the reporting periodThe Company continues to benchmark against world-class enterprises, firmly adheres to the strategic determination of "greenmanufacturing, intelligent manufacturing, boutique manufacturing, lean manufacturing, and precision services", adheres toinnovation driven, and promotes technological innovation to become the company's first competitive advantage. Adhering to thedevelopment direction of "boutique+service", continuously improving "manufacturing+service" capabilities, continuously optimizingproduct structure, production line structure, and customer structure, and continuously promoting high-end product research anddevelopment with a focus on electrical steel, automotive panels, and tin plated (chromium plated) plate. The Company hastransformed from a high-quality bar and wire production enterprise with a production capacity of 4 million tons in the early stage oflisting to a technology leading, green, and low-carbon technology company with a high-end plate production capacity of 21.7 milliontons.The main business of the Company is the production and sales of steel products and metal soft magnetic materials (electrical steel)
1. Zhixin Co.
Zhixin Co. is a research and development, manufacturing, and sales base for metal soft magnetic materials (electrical steel), and is aleading global manufacturer and service provider of electrical steel.The products include two major series: oriented electrical steel and non oriented electrical steel. Among them, oriented electricalsteel includes six categories of products: high magnetic induction, magnetic domain refinement, low noise, low excitation, no bottomlayer, and medium frequency. Zhixin Co. has independently developed low-temperature slab heating technology to produce highmagnetic induction oriented electrical steel, becoming the fourth enterprise in the world to industrialize all low-temperature processes;Non oriented electrical steel includes four major categories of products: new energy vehicles, stress relief annealing, high-efficiency,and general-purpose, with stable batch production capacity for all grades.The world's first high-grade non oriented electrical steel production line for new energy vehicles was completed in August 2022, andthe world's first specialized production line with 100% thin specification and high magnetic induction oriented electrical steel wascompleted in April 2023.
2. Jingtang Co.
Jingtang Co, the large steel base, is a company with international advanced level designed and constructed in accordance with theconcept of circular economy. It has the obvious advantages of being near the sea and near the harbor, large equipments, highproduction efficiency and low cost.Iron and steel products of Jingtang Base include hot and cold plates. The hot plates mainly contain hot-rolled products, i.e., hot-rolledpickling sheet, weather-resistant steel, automobile structure steel, high-performance construction steel, pipeline steel, shipboard,marine steel, etc.; and also contain medium and thick plates products, such as bridge steel, energy steel, pipeline steel, etc. The coldplates mainly contain: automobile sheet, tin sheet, cold-rolled special-use plate, color-coated sheet, etc. four main products series.
3. Qianshun Base
Iron and steel products of Qianshun Base is an important high-end plate production base in China, with world-class equipment andindustry-leading clean steel manufacturing technology, with high-end auto plate, high-end household appliance board full range ofsupply capacity.Iron and steel products of Qianshun Base include hot and cold plates. The hot plates mainly contain: hot-rolled pickle sheet,
weather-resistant steel, automobile structure steel, high-strength construction machinery steel, pipeline steel, etc. The cold platesmainly contain: automobile sheet, cold-rolled special-use plate, etc.III. Analysis of core competitiveness
1. Leading level of technology
The Company adheres to innovation driven approach and promotes technological innovation as its primary competitive advantage.The Company and its subsidiaries Jingtang Co., Zhixin Co., Cold-R Co. are all high-tech enterprises, with R&D investment ofRMB5.022 billion during the reporting period, accounting for 4.41% of operating revenue. Relying on the "one institute, multiplecenters" R&D system, the company carries out in-depth technical research projects, optimize expert workstations, and solidifyexternal cooperation platforms. The incubation and efficiency creation of new products, technologies, and processes are constantlyaccelerating. The significant progress made during the reporting period includes:
Patents: The Company has obtained 685 patent authorizations, including 229 invention patents. Zhixin Electromagnetic won theExcellent Award at the 24th China Patent Award for two patents: "A Method and Device for Determining the Transmission Torqueof Cold Rolling Mills" and "A Non oriented Electrical Steel and Its Preparation Method and Application". "A Low temperature HighMagnetic Induction Oriented Silicon Steel Manufacturing Method with Excellent Bottom Layer" won the Excellent Award at the 1stHebei Provincial Patent Award.Standards: The Company establishes the participated in the formulation and publication of 21 international, national, industry, andgroup standards, with 6 of them leading the development.Science and technology awards: The Company has received 21 provincial and ministerial level scientific and technological awardsand 8 provincial management innovation awards. Among them, 6 key technologies and applications for enhancing formability ofdual phase steel manufacturing won the first prize of Metallurgical Science and Technology Award, "New high-performance weatherresistant bridge steel and key application technologies" won the first prize of Hebei Province Science and Technology Award, and"Development and operation management of high-end electrical steel products for steel enterprises to build global competitiveness"won the first prize of National Management Innovation Achievement Award.
2. High-end products
The company adheres to the development strategy of continuously leading the way in electrical steel, refining and strengtheningautomotive panels, and breaking through the high-end of tin plated (chromium plated) plate. It continuously increases the proportionof strategic and key products, promoting both product quality and efficiency improvement. During the reporting period, theproduction of the three major strategic products (electrical steel, automotive panels, and tinned (chrome) panels) increased by about12% year-on-year, while the production of key products increased by about 17% year-on-year.The production of electrical steel is 1.695 million tons, a year-on-year increase of about 14%, and the proportion of high-endproducts is steadily increasing. In the electrical steel category, high-end products accounted for 65%, an increase of 2%year-on-year. The production of high magnetic induction oriented electrical steel is 300,000 tons, an increase of about 46%year-on-year. Ultra thin specifications of high magnetic induction oriented electrical steel with a thickness of 0.20mm and belowcontinue to maintain the top sales position in China. The structure of non oriented electrical steel products continues to be optimized,with a production volume of 808,000 tons of high-grade non oriented electrical steel products, a year-on-year increase of about 11%.Among them, the production volume of high-grade non oriented electrical steel products for new energy vehicles increased by about29% year-on-year. 8 of the top 10 global sales companies for new energy vehicles have stable supply, and all of the top 10 domesticsales companies have achieved stable supply.The production of automotive panels reached 4.025 million tons, a year-on-year increase of about 12%, and newbreakthroughs were made in the adjustment of product structure and user structure. The product structure has been furtheroptimized, with the production of galvanized, high-strength, and outer panels increasing by about 21%, 15%, and 24% year-on-year,respectively. The production of ultra-high strength and aluminum-silicon products has increased by about 6% and 39%, respectively.The supply of UF steel has doubled year-on-year. The user structure has been further upgraded, with a steady increase in the numberand supply of core host factories. The supply of Japanese users has increased by about 38% year-on-year, while the supply of newenergy clients has increased by about 51% year-on-year.The production of tin (chromium) plates reached 656,000 tons, a year-on-year increase of about 6%. The Company hascompleted the industrial trial production of the DR-10 product for secondary cold rolling, achieved full coverage of DR materialbrand numbers, stable mass production of 0.13mm food cans, and further improved manufacturing capabilities. The production offunctional drinks and easy to open lid products has reached a historic high, and the proportion of high-end varieties is steadilyincreasing. Intensify overseas market development efforts and supply high sulfur resistant food cans to the Latin American market.New progress has been made in promoting the specialization and differentiation of key products, serving national keyprojects. Marine LNG fuel tanks were produced using 9Ni steel in 10 consecutive heats, with delivery volume tripling year-on-year;High grade hydrogen pipeline steel is produced in bulk, and the product has achieved a demonstration application of tens ofthousands of tons in the first hydrogen blending pipeline in China; Successfully developed 18m ultra long pipeline steel incollaboration with downstream pipeline factories, filling the gap in domestic ultra long pipelines; The photovoltaic bracket is made ofweather resistant steel to achieve full coverage of 490-800MPa level; Wind power steel achieved batch supply of 420MPa levelproducts, with a 6-fold increase in supply volume compared to the same period last year; Enamel steel (SRT550) has beensuccessfully applied in the 28,500 square meter ultra large tank project in the Dominican Republic.
3. Green and low-carbon
As the world's first steel enterprise to achieve full process ultra-low emissions, the Company has deeply promoted ultra-low emissiongovernance and maintained an A-level environmental performance evaluation in Hebei Province. The company adheres to thehigh-quality development path of green and low-carbon, and actively promotes the practice of extreme energy efficiency and carbonreduction technology around the national low-carbon strategy and customer carbon reduction needs.The Company participated in the development of the TCISA 293-2022 Energy Efficiency Benchmarking Guidelines for Key
Processes in Steel Enterprises and the Demonstration Acceptance Standards and Methods for Energy Efficiency Benchmarks,contributing to the promotion of the industry's ultimate energy efficiency engineering.The Company has been awarded the titles of "Benchmark Enterprise for Green Development of Steel", "Advanced Collective forThree Year Action Organization and Promotion of Energy Efficiency Benchmark for Ultimate Energy Efficiency Engineering ofSteel in 2023", and "Provincial Water saving Enterprise in 2023". Jingtang Co. has been awarded the first batch of "PilotDemonstration Units for Carbon Management System Construction" in Hebei Province. The EPD products of the company and itssubsidiaries, including hot-rolled steel plates and strips, cold-rolled steel plates and strips, hot-dip galvanized aluminum magnesiumalloy coated steel plates and strips, have been successfully released on the EPD platform in the steel industry. Five categories ofproducts, including oriented electrical steel, pipeline steel, non oriented electrical steel for new energy vehicles, hot-rolledhigh-strength steel plates and strips for automobiles, and cold-rolled high-strength steel plates and strips for automobiles, have beenselected for the "Green Design Product List" of the Ministry of Industry and Information Technology.
4. Intelligent manufacturing
The Company has established a cross regional, multi base, and consistent integrated production and sales collaborative managementplatform, with a digitalization rate of over 90% for production equipment, 51 "one click control" processes, 203 sets of "industrialrobots" and 26 "RPA process robots" applied, and 15 unmanned intelligent storage areas built.During the reporting period, the focus was on promoting digital transformation and improving the level of intelligent manufacturingaround "integration of railway front", "construction of cold rolling lighthouse factories", and "Jingtang Smart Logistics ControlPlatform". Complete the construction of the "Iron Front Integration" management system project, achieve data monitoring, collection,and analysis of pellet, sintering, and blast furnace processes, and provide important support for reducing iron costs and improvingiron front integration collaborative control; The temperature drop control system for molten iron has been officially launched,realizing functions such as visual tracking of torpedo tanks, on-demand iron production, and torpedo tank lifecycle management,helping to improve the efficiency of molten iron logistics. The turnover rate of torpedo tanks has increased by one time per daycompared to the previous year. The second phase of the "Cold Rolling Lighthouse Factory" will launch 25 applications, realizing thedeepening application of intelligent manufacturing scenarios. The Jingtang Intelligent Logistics Control Platform achievesautomation and intelligence in transportation planning, vehicle scheduling, and route planning, resulting in an overall improvementof 15% in logistics efficiency.
5. Supply chain security
The Company is the only platform for the development and integration of the steel and upstream iron ore resources industry ofShougang Group, the controlling shareholder, in China. The supply of iron ore, coke, and coal resources for production is guaranteedto be safe. In terms of iron ore, Shougang Group owns Shuichang Iron Mine and Xingshan Iron Mine with an annual productioncapacity of 4 million tons of iron concentrate powder. At the same time, it controls Peru Iron Mine with an annual productioncapacity of 20 million tons of iron concentrate powder. The annual production capacity of the iron concentrate powder at the ongoingconstruction of Macheng Iron Mine is 7 million tons, which has the characteristics of high reserves, low cost, and efficienttransportation. After being put into operation, the company's iron ore resource guarantee capacity will be further improved. In termsof coke, Qiangang Co.'s coke is mainly supplied by Qian'an Zhonghua Coal Chemical Co., Ltd., a joint venture between ShougangGroup and Kailuan Group, while Jingtang Co.'s coke is supplied by Tangshan Shougang Jingtang Xishan Coking Co., Ltd., a jointventure between Jingtang Co. and Shanxi Coking Coal. The supply of coke resources is strongly guaranteed. In terms of coal, theCompany has signed long-term agreement with state-owned large coal groups, and Shougang Fushan Resources Group Co., Ltd., inwhich Shougang Group holds shares, also provides the Company with some high-quality coking coal resources, providing strongcoal supply guarantee.
6. "Technology + Service" marketing
The Company takes the customer as the center to deepen the marketing strategy of "technology + service", and creates Shougangservice to enhance the brand value. The company continues to improve the service system, improve service efficiency, strengthen theconstruction of new energy vehicle service team, meet customers' requirements for quality, delivery, research and development,service, technical marketing continues to strengthen. EVI service capacity was improved year by year. During the reporting period,EVI supply increased by 17% year-on-year. The product advantage analysis model established by the company promotes keyproducts to maintain competitive advantages and strategic products to expand leading advantages by strengthening product researchand development and improving manufacturing capacity.A centralized, unified, rapid response, and efficient marketing management network has been formed, with a marketing center as thecore and a combination of 5 regional steel trading subsidiaries and 11 processing centers, effectively ensuring stable supply todownstream customers. 15 large customer service teams have been established to consolidate and improve the channel structure thatcombines leading enterprises in the industry chain with high-quality small and medium-sized customers. Cultivate comparativeadvantages in industrial chain cooperation, carry out comprehensive, multi-level, and high-quality cooperation with key customers inthe industry, further enhance cooperation depth, enhance cooperation viscosity, and stabilize market share.During the reporting period, the Company successfully held 5 product technology forums, including automotive panels and electricalsteel, and held "Shougang Day" activities in 5 main engine factories, including Nissan and Honda. It won 21 awards, including the"Best Service Provider Award" from BMW Brilliance and the "Best Partner Award" from BYD. The Company also received 23thank-you letters for efficient services from users such as the National Pipeline Network and FAW Volkswagen. The recognition ofShougang's "Manufacturing+Service" continues to increase.
7. Talent thriving enterprise
The Company has deeply promoted the strategy of strengthening enterprises with talents, build a multi-level and comprehensivetraining system for all employees, improved the talent promotion and evaluation mechanism, and facilitated the career developmentpath of talents. A career development system for high potential talents throughout their entire life cycle has been established, andsolidly promoted the "four horizontal and three vertical" training system for all employees, held training programs such as Deep BlueSpecial Training Camp and Future Craftsman Youth Training Camp, strengthen talent empowerment, and build a platform for cadres
to improve and grow; Develop the Implementation Plan for the Incentive Mechanism of the Three Talent Teams of Shougang Co. in2023, strengthen performance oriented and practical oriented, strengthen the training and development of high-level personnel, andsteadily increase the proportion of high-tech and high skilled talents.During the reporting period, 1 position of the company was awarded the "National May Day Women's Model", 1 person wasawarded the "National May Day Labor Medal" and "National May Day Women's Model", 1 person was awarded the "Capital LaborMedal", 1 person was awarded the "Beijing Great Craftsman", 2 people were awarded the "National Steel Industry Technical Expert",2 people were awarded the "National Machinery and Metallurgical Building Materials Industry Craftsman", 1 person was awardedthe "Capital Most Beautiful Women's Struggler", and 1 person was elected the "Capital Citizen Learning Star".IV. Analysis of principal business
1. Overview
(1) Completion status of the Company's main business indicators
During the reporting period, the Company's operating revenue was RMB 113.761 billion, a year-on-year decrease of 3.71%; The totalprofit was RMB 900 million, a year-on-year decrease of 49.79%; The net profit attributable to shareholders of the listed companywas RMB 664 million, a year-on-year decrease of 40.98%; Earnings per share was RMB 0.0856, a year-on-year decrease of 42.78%;The total assets was RMB 137.520 billion, and the equity attributable to the shareholders of the listed company was RMB 49.474billion.
(2) Completion status of the Company's main product output and other indicators
① Metal soft magnetic materials (electrical steel)
Zhixin Co.: The production of metal soft magnetic materials (electrical steel) reached 1.695 million tons, a year-on-year increase of
14.2%. Among them, the production of oriented electrical steel were 300,000 tons, a year-on-year increase of 46.3%; 587,000 tons oflow to medium grade products without orientation, a year-on-year increase of 6.5%; 808,000 tons of non oriented high-gradeproducts, a year-on-year increase of 11.0%.The sales volume of metal soft magnetic materials (electrical steel) is 1.7481 million tons, with a revenue of RMB 13.792 billion,accounting for 12.12% of the Company's operating revenue.
② Iron and steel products
Qiangang Co. produced 8.708 million tons of steel, a year-on-year increase of 7.4%; Jingtang Co. produced 14.368 million tons ofsteel, a year-on-year increase of 0.4%; The Cold-R Co. produced 1.83 million tons of cold-rolled sheets, a decrease of 0.5%year-on-year. The sales revenue of steel products was RMB96.568 billion, accounting for 84.89% of the Company's operatingrevenue.
| No. | Type | Sales volume (tons in 0,000) |
| 1 | Billet | 11.94 |
| 2 | Hot rolling | 1207.53 |
| 3 | Cold rolling | 934.86 |
(3) Highlights of the Company
In 2023, the company's business and production were smooth and stable, with stable and rising technical and economic indicators.Significant achievements were made in product structure, technological innovation, green and low-carbon, and cost reduction andefficiency improvement.
① Continuous optimization of product structure
The Company closely monitors changes in downstream demand, seizes opportunities for structural demand growth in industries suchas automobiles, wind power, and photovoltaics, focuses on efficiency, continuously promotes product structure optimization andupgrading, and increases the proportion of strategic and key products.During the reporting period, the total production of 3 strategic products (electrical steel, automotive plate, and tin (chromium) plate)and 9 key products (cold-rolled special steel, hot-rolled pickling plate, weather resistant steel, energy steel, automotive structuralsteel, high-strength engineering machinery steel, pipeline steel, bridge steel, and ship plate marine steel) was 15.93 million tons,accounting for 69% of the company's total steel production, an increase of 6 percentage points year-on-year.
| No. | Types | Sales volumes (tons in ‘0000) |
| 1 | Metal soft magnetic materials (electrical steel) | 170 |
| 2 | Automobile board | 403 |
| 3 | Tin plated (chromium plated) plate | 66 |
| 4 | Special steel for cold rolled | 280 |
| 5 | Weathering resistant steel | 91 |
| 6 | Automotive structural steel | 78 |
| 7 | Hot rolled pickled plate | 213 |
| 8 | High strength steel for construction machinery | 59 |
| 9 | Pipeline steel | 33 |
| 10 | Energy steel | 93 |
| 11 | Bridge steel | 20 |
| 12 | Shipboard marine engineering steel | 89 |
| The data in this table is rounded to the nearest whole number | ||
③ Comprehensive promotion of technological innovation
The company is led by technological innovation, focusing on forging key core technology strengths. It continues to make newbreakthroughs in new product research and development, key process technologies, and promotes the transformation of enterprisedevelopment quality towards higher efficiency, resilience, and sustainability.In terms of new product development, 6 new products, including oriented electrical steel 15SQF1250, non oriented electrical steelESW1021, and high-strength automotive steel 980TBF, have been launched. Among them, the 15SQF1250 product is a newintermediate frequency oriented electrical steel product for the future, providing key core materials for new energy generationtechnologies such as wind power and photovoltaic, and meeting the development requirements of flexible exchange between AC andDC in the future power grid; High strength and low iron loss non oriented electrical steel ESW1021, supporting the high-qualitydevelopment of the high-speed motor industry; 980TBF for high-strength automobiles has higher strength and better performance,meeting the higher demands of downstream customers. Focusing on solving the "bottleneck" problem, we will continue to promote26 localization projects of "substitute imports", resulting in a supply of 80000 tons.In terms of key process technology, the company has pioneered the process equipment technology for cold rolling high-gradesilicon steel using a six stand six roll rolling mill, achieving a breakthrough in continuous rolling of non oriented electrical steel fornew energy vehicle drive motors and oriented electrical steel for high-efficiency energy-saving transformers. 96% of producs with alateral thickness difference of less than or equal to 5μ, which reaching the world's leading level; Pioneering the multi-modecontinuous rolling process for hot-rolled ultra-thin and high-strength steel strips, achieving efficient production of products with athickness of 1.1mm and a grade of 980MPa in headless mode, improving the rolling efficiency of thin and high-strength steel strips,and enhancing the flexibility of production organization.
③ Green and low-carbon benchmark leading
The company has released and implemented the "Shougang Group Low Carbon Action Plan", building a carbon managementplatform and a steel production full process LCA data collection system to achieve visualization of steel product carbon footprint andsteel production carbon emissions data. Through international certification bodies (SGS) carbon emissions certification, it is steadilypromoting low-carbon practices and forming a differentiated competitive advantage in products.Steady progress has been made in reducing carbon emissions at the source. Jingtang Co's blast furnace operates stably with a55% proportion of pellet ore, reducing carbon emissions by 10% compared to traditional processes. Qiangang Co has steadilypromoted the smelting experiment of 50% pellet ore in the blast furnace, and completed the industrial test of injecting biomass richhydrogen micro powder into the blast furnace at the hundred-ton level, which is a breakthrough in the use of biomass energy in steelmetallurgy in China.The capacity of low carbon production achieve promotion. Carry out low-carbon product dedicated line experiments to enhancetechnical carbon reduction capabilities, and achieve mass production of low-carbon automotive plate coating products with acomprehensive carbon reduction of over 40% by adopting a 50% scrap steel ratio steel making process; For the first time in theindustry, a full series of GA low-carbon products, including IF steel, low-carbon aluminum killed steel, and ultra-high strength steel,have been produced and customer formed trial production has been carried out. The comprehensive application evaluation fromautomotive inner panels to outer panels has been completed, and low-carbon products have achieved the same quality asconventional process flow.Recycling and going up the stairs. The comprehensive utilization rate of solid secondary resources by Jingtang Co. and QiangangCo. has reached 99%. Jingtang Co. has established a new model of efficient conversion and cascading utilization of metallurgicalenergy through the "combustion heat electricity water salt" five effect integrated high-efficiency recycling system, with a powergeneration efficiency of over 47% and an annual emission reduction of about 400,000 tons of CO2.
④ Lowering costs and increasing efficiency to a new level
The Company strengthens benchmarking analysis, deeply explores the potential for cost reduction throughout the entire process andall factors, constructs a sustainable cost reduction system, rolls forward key tasks of cost reduction and efficiency improvement,effectively hedges external market profit reduction factors, and takes consumption cost reduction, technology cost reduction,management cost reduction, and product structure efficiency improvement to a new level.In terms of cost reduction in consumption, the Company strengthens the operation of the integrated platform for iron and steelproduction. Qiangang Co. and Jingtang Co. adhere to the principles of economic material utilization, resource coordination andmutual preparation, and focus on key indicators such as coal blending and ore blending costs and steel material consumption. Thecost of iron and steel processes continues to decrease; Breaking the process interface, the iron and steel system collaborates to controlsulfur economically, and the iron temperature drop of Qiangang Co. is below 100 ℃, breaking a new historical record.In terms of cost reduction in technology, the Company has deepened the work of alloy substitution and process optimization, andpromote the optimal application of manganese based alloys; Through technological breakthroughs to improve control accuracy,optimize product material design, and steadily increase product yield.In terms of cost reduction management, the Company has established a collaborative mechanism between production and supply,and carry out comprehensive and all factor material cost reduction; Strengthen equipment cost control, reduce operating coststhrough measures such as negotiating cost reductions, domestic conversion, and self repair; the Company firmly pursue ultimateenergy efficiency, achieve full gas recovery and efficient utilization, and enhance the ability to balance and optimize the entire energysystem.In terms of product structure efficiency enhancement, the Company adhere to the direction of high-end, distinctive, anddifferentiated development, expand product competitive advantages, take product profitability as the guide, coordinate productionand sales, dynamically optimize product structure, and achieve an annual output of over 4 million tons of automotive panels.
2. Revenue and cost
(1) Composition of operating revenue
Unit：RMB Yuan
| 2023 | 2022 | Year-on-year Changes | |||
| Amount | Proportion of operating | Amount | Proportion of operating | ||
| revenue | revenue | ||||
| Total operating revenue | 113,761,443,633.43 | 100% | 118,142,183,549.47 | 100% | -3.71% |
| According to industries | |||||
| Metallurgy | 113,761,443,633.43 | 100.00% | 118,142,183,549.47 | 100.00% | -3.71% |
| According to products | |||||
| Billet | 420,010,787.22 | 0.37% | 546,474,748.00 | 0.46% | -23.14% |
| Hot-rolled steel | 47,572,138,080.78 | 41.82% | 48,304,009,189.85 | 40.89% | -1.52% |
| Cold-rolled steel | 46,496,393,503.18 | 40.87% | 50,168,306,781.05 | 42.46% | -7.32% |
| Metallic soft magnetic material | 13,791,974,212.14 | 12.12% | 13,401,000,073.28 | 11.34% | 2.92% |
| Other steels | 2,079,869,284.47 | 1.83% | 2,182,776,642.12 | 1.85% | -4.71% |
| Other businesses | 3,401,057,765.64 | 2.99% | 3,539,616,115.17 | 3.00% | -3.91% |
| According to regions | |||||
| North China | 46,411,595,797.83 | 40.80% | 45,126,988,057.24 | 38.20% | 2.85% |
| Northeast China | 3,134,806,205.43 | 2.76% | 2,585,270,587.07 | 2.19% | 21.26% |
| East China | 38,582,031,420.60 | 33.91% | 40,848,885,782.99 | 34.58% | -5.55% |
| Mid-South China | 3,280,219,730.18 | 2.88% | 3,246,213,129.88 | 2.75% | 1.05% |
| South China | 11,147,846,153.45 | 9.80% | 15,338,953,399.84 | 12.98% | -27.32% |
| Southwest China | 1,954,223,073.95 | 1.72% | 2,048,028,590.12 | 1.73% | -4.58% |
| Northwest China | 978,909,209.78 | 0.86% | 1,256,111,815.93 | 1.06% | -22.07% |
| Export | 8,271,812,042.21 | 7.27% | 7,691,732,186.40 | 6.51% | 7.54% |
| Distribution model | |||||
| Direct selling | 105,489,631,591.22 | 92.73% | 110,450,451,363.07 | 93.49% | -4.49% |
| Sale by proxy | 8,271,812,042.21 | 7.27% | 7,691,732,186.40 | 6.51% | 7.54% |
(2) Industries, products, or regions that generated operating revenue or operating profit that over 10% of the total operatingrevenue or operating profit of the Company
√ Applicable □ Non applicable
Unit: RMB Yuan
| Operating revenue | Costs of sales | Gross margin | Year-on-year change of operating revenue | Year-on-year change of costs of sales | Year-on-year change of gross margin | |
| According to industries | ||||||
| Metallurgy | 110,360,385,867.79 | 105,336,679,879.43 | 4.55% | -3.70% | -2.48% | -1.20% |
| According to products | ||||||
| Billet | 420,010,787.22 | 419,214,964.92 | 0.19% | -23.14% | -11.40% | -13.23% |
| Hot-rolled steel | 47,572,138,080.78 | 45,948,593,124.43 | 3.41% | -1.52% | -1.45% | -0.07% |
| Cold-rolled steel | 46,496,393,503.18 | 43,955,471,030.68 | 5.46% | -7.32% | -6.81% | -0.53% |
| Metallic soft magnetic material | 13,791,974,212.14 | 13,112,850,675.32 | 4.92% | 2.92% | 10.64% | -6.64% |
| Other steels | 2,079,869,284.47 | 1,900,550,084.08 | 8.62% | -4.71% | 0.06% | -4.36% |
| According to regions | ||||||
| North China | 43,010,538,032.19 | 41,290,877,791.82 | 4.00% | 3.42% | 3.50% | -0.07% |
| Northeast China | 3,134,806,205.43 | 2,719,914,779.53 | 13.23% | 21.26% | 16.85% | 3.27% |
| East China | 38,582,031,420.60 | 37,298,563,933.51 | 3.33% | -5.55% | -3.12% | -2.42% |
| Mid-South China | 3,280,219,730.18 | 2,856,713,754.97 | 12.91% | 1.05% | -2.19% | 2.88% |
| South China | 11,147,846,153.45 | 10,849,438,123.11 | 2.68% | -27.32% | -26.65% | -0.89% |
| Southwest China | 1,954,223,073.95 | 1,674,246,176.87 | 14.33% | -4.58% | -7.18% | 2.40% |
| Northwest China | 978,909,209.78 | 887,536,495.72 | 9.33% | -22.07% | -18.37% | -4.11% |
| Export | 8,271,812,042.21 | 7,759,388,823.90 | 6.19% | 7.54% | 16.06% | -6.89% |
| Distribution model | ||||||
| Direct selling | 102,088,573,825.58 | 97,577,291,055.53 | 4.42% | -4.51% | -3.70% | -0.80% |
| Sale by proxy | 8,271,812,042.21 | 7,759,388,823.90 | 6.19% | 7.54% | 16.06% | -6.89% |
The adjusted principal business data according to the financial report of the Company under the circumstances that the statisticalranges of the Company’s principal business data changed during the reporting period.
□Applicable √ Non applicable
(3) Whether revenue from sales of goods is more than from render of services
√ Yes □ No
| Industry | Item | Unit | 2023 | 2022 | Year-on-year change |
| Metallurgy | Sales | Ton | 23, 291, 347 | 22,066,038 | 5.55% |
| Output | Ton | 23, 175, 391 | 22,175,618 | 4.51% | |
| Storage | Ton | 1,004,500 | 1,007,071 | -0.26% |
Explanation in the year-on-year change more than 30% based on aboved data
□ Applicable √ Non applicable
(4) Fulfillment of the singed significant sales contracts and purchase contracts during the reporting period
□ Applicable √ Non applicable
(5) Composition of costs of sales
Presented as industries
Unit: RMB Yuan
| Industry | Item | 2023 | 2022 | Year-on-year change | ||
| Amount | Proportion of costs of sales | Amount | Proportion of costs of sales | |||
| Metallurgy | Raw materials | 56,884,575,720.35 | 54.00% | 56,640,251,091.58 | 52.44% | 1.56% |
| Metallurgy | Fuels | 25,130,337,808.09 | 23.86% | 31,007,832,547.47 | 28.71% | -4.85% |
| Metallurgy | Power cost | 2,999,386,938.56 | 2.85% | 1,825,623,929.41 | 1.69% | 1.16% |
| Metallurgy | Staff cost | 3,340,122,566.08 | 3.17% | 3,111,375,214.85 | 2.88% | 0.29% |
| Metallurgy | Depreciation | 7,517,928,617.89 | 7.14% | 7,279,948,522.16 | 6.74% | 0.40% |
| Metallurgy | Manufacturing cost | 9,464,328,228.47 | 8.98% | 8,148,812,556.57 | 7.54% | 1.44% |
| Total | 105,336,679,879.43 | 100.00% | 108,013,843,862.04 | 100.00% | ||
(6) Whether the scope of consolidation changes during the reporting period
√ Yes □ No
Please refer to the relevant contents of Section X. Changes in the scope of consolidation due to other reasons for details.
(7) Significant adjustments or changes in businesses, products, or services during the reporting period
□ Applicable √ Non applicable
(8) Major clients and suppliers
Major clients of the Company
| Total top five clients in sales (RMB Yuan) | 17,768,470,868.55 |
| Proportion of total sales for the top 5 clients in total annual sales | 15.62% |
| Proportion of the sales from related parties in total annual sales among the top five clients | 2.25% |
Information for top five clients of the Company
| Serial | Name | Sales (RMB Yuan) | Proportion of total annual sales |
| 1 | Client A | 7,030,467,047.75 | 6.18% |
| 2 | Client B | 4,332,334,910.05 | 3.81% |
| 3 | Client C | 2,561,415,297.70 | 2.25% |
| 4 | Client D | 2,161,815,227.57 | 1.90% |
| 5 | Client E | 1,682,438,385.48 | 1.48% |
| Total | -- | 17,768,470,868.55 | 15.62% |
Other information for the major customers of the Company
□ Applicable √ Non applicable
Major suppliers
| Total purchase amount from top five suppliers (RMB) | 74,129,568,481.66 |
| Proportion of total annual purchase amount for top five suppliers | 65.93% |
| Proportion of the purchase from related parties in total annual purchase among the top five suppliers | 62.12% |
Information for the top five suppliers of the Company
| Serial | Name | Procurement (RMB Yuan) | Proportion of total annual procurement |
| 1 | Shougang Group Co., Ltd. | 46,426,530,213.29 | 41.29% |
| 2 | Supplier B | 16,448,935,240.07 | 14.63% |
| 3 | Supplier C | 6,960,115,662.67 | 6.19% |
| 4 | Supplier D | 3,123,463,522.59 | 2.78% |
| 5 | Supplier E | 1,170,523,843.04 | 1.04% |
| Total | -- | 74,129,568,481.66 | 65.93% |
Other information for the major suppliers of the Company
□ Applicable √ Non applicable
3. Expenses
Unit: RMB Yuan
| 2023 | 2022 | Year-on-year change | Notes of material changes | |
| Selling expenses | 247,978,613.12 | 237,997,026.22 | 4.19% | |
| Administrative expenses | 1,289,613,009.53 | 1,271,175,739.06 | 1.45% | |
| Finance expenses | 1,353,210,253.87 | 1,731,584,291.35 | -21.85% | |
| Research and development expenses | 491,078,795.33 | 626,923,257.36 | -21.67% |
4. Research and development investment
√ Applicable □ Non applicable
| Name of main R&D project | Project objective | Progress of the project | Goals to be achieved | The expected impact on the company's future development |
| Development of Optimization and Repair Technology for Burner Structure of Internal Combustion Hot Air Stove | The flue gas emitted by the blast furnace hot blast stove during the combustion process contains pollutants such as CO and NOx. In order to adapt to the current severe environmental situation, the flue gas treatment work of the hot blast stove is imperative. | Pilot stage | Developing new technologies and equipment | The implementation of this project provides improvement direction and technical support for the flue gas treatment of similar internal combustion hot blast furnaces, provides experience and solutions for the online transformation of internal combustion hot blast furnaces into top combustion hot blast furnaces, and also provides new methods for reducing CO and NOx emissions in steel processes. |
| Development and application of a prediction model for the temperature of molten steel inside the ladle at the endpoint of converter steelmaking | The temperature of molten steel during the steelmaking process of the converter is affected by factors such as the ladle and alloy, resulting in significant fluctuations and higher control of the steelmaking temperature. Therefore, through mechanism research, big data statistics, and other methods, the variation pattern of molten steel | Development stage | Develop new models | The purpose of this project is to implement a temperature model, provide better guidance for steelmaking positions, reduce the tapping temperature of the converter, help improve the scrap ratio, and reduce carbon emissions. |
| temperature is clarified to provide better guidance for job operations. | ||||
| Research on Reducing Burning Loss and Decarbonization during the Heating Process of Slabs | This project aims to improve the yield and product quality by conducting research on reducing burning loss and decarbonization during the heating process of slab. | R&D stage | Developing new processes and technologies | The implementation of the project helps to suppress the oxidation and decarburization behavior during the heating process of the slab, improve the product yield, improve product quality, and further enhance the market competitiveness of the enterprise. |
| Research on Key Control Technologies for Cold Used Special Steel Production | This project conducts research on customer processes, uses, and usage needs, and designs production processes accordingly. Based on the characteristics of special steel varieties, the composition is integrated, the production process is optimized, and the customer experience and product profitability are enhanced. | Pilot stage | Developing new processes and technologies | This project provides guidance for the production process of similar products through targeted process design, assists customers in optimizing annealing processes, enhances product performance, and lays a solid foundation for further enhancing the market competitiveness of the enterprise. |
| Ultimate Energy Consumption and Energy Efficiency Improvement of Main Processes and Process Systems | This project aims to construct a full process energy efficiency evaluation system and develop an implementation plan for full process energy efficiency improvement technology, which can analyze the theoretical energy-saving potential of each process. Provide reference for future disruptive technology research and development. | Pilot stage | Developing new processes and technologies | The implementation of this project helps to clarify the key factors and influencing laws that affect the energy consumption of the entire process, comprehensively improve the energy efficiency level of the entire steel process, and provide a theoretical basis for the construction of a smart industrial energy brain system in the future. |
| Research on the technology of combining LF and VD processes to produce cold series clean steel | The Jingtang Phase II steelmaking process is the first large-scale converter plant in China to adopt VD as a single vacuum refining equipment and incorporate it into normal production, achieving stable operation of the two major production lines of medium and thick plates and MCCR. Research is conducted on the production of cold series clean steel using the VD process in the Jingtang Phase II steelmaking project, clarifying the issue of mechanical rationality and providing the correct direction and reliable basis for optimizing the production process. | Completion | Developing new processes and technologies | To achieve high cleanliness and high-quality coil production on the wide and thick plate casting machine production line, flexible and flexible production organization of different production lines can be achieved. The product structure and capacity allocation can be adjusted in a timely manner according to market conditions, reducing production costs and providing a good model for the industry. |
| Research and development of hole and edge crack detection technology for 1420 No. 7 heavy coil steel strip | Considering the characteristics of thin specifications and high surface quality requirements of tinplate products, with low cost and strong practicality as the starting point, we independently developed and designed a multifunctional online detection equipment that can detect both steel strip holes and edge tearing defects. | Completion | Developing new processes and technologies | Realize automatic re inspection of steel coils with missing hole information on the acid rolling production line, reduce the low work efficiency and risk of missed inspections caused by manual re inspection, improve product quality reliability, and thus enhance the market competitiveness of hot-rolled products. |
| Research and development of MR T-3 BA in tin plating production line for milk powder | The preparation process of milk powder shaped cans is complex and special. The composition system of the substrate and various stages of the production | Completion | Developing new processes and technologies | To meet the performance requirements of users and provide reference and guidance for the development of high-performance ultra-high strength tinplate by Shougang. |
| shaped cans | process will affect its microstructure, and have a significant impact on the final performance of the tin plated plate. Exploring the strengthening process of high elongation DR tinplate, providing reference and guidance for the development of high-performance ultra-high strength tinplate by Shougang. | |||
| Research and Development of High Grade Bridge Steel in Medium and Heavy Plate Production Line | Solve quality issues such as low strength, high yield to strength ratio, and inadequate impact of Q500qE high-performance bridge steel plates. | Completion | Developing new processes and technologies | The Q500qE high-performance bridge steel plate developed has been applied in batches to key projects such as Wuhu Yangtze River Bridge and Changtai Yangtze River Bridge, with a cumulative supply of over 30000 tons. The performance control is stable, and the use effect has been highly praised by users, making significant contributions to China's transportation power strategy. |
| Research on the Mechanism and Process Optimization of Oxidation Layer Fracture and Crushing in the Straightening Unit | The project is based on a scanning electron microscope in situ stretching equipment, conducting in-situ tensile compression bending experiments. Based on the deformation theory of strip steel during the stretching and straightening process, a combination of theoretical analysis and experimental research is used to dynamically observe and analyze the micro deformation morphology and fracture mechanism of iron oxide scale. The fracture, fragmentation, and scaling mechanism of different steel grades of oxide scale under the stretching and straightening process conditions are precisely explained, and the scaling effect is taken into account. At the same time, research on improving the shape of raw materials is carried out, and relevant modeling calculations and analysis are carried out to guide the formulation, evaluation, and optimization of existing stretching and straightening process parameters. | R&D stage | Developing new processes | Based on the research results, carry out large-scale production application research, improve the evaluation and testing of pickling effect under different steel grades, different process parameters, and different degrees of iron sheet cracking, improve and solidify the straightening process system, improve product quality, and reduce the consumption of recycled acid per ton of steel. |
| Research on the closed-loop feedback control system for the shape of the cold rolling continuous annealing and leveling unit of Shougang Shunyi Cold Rolling | This project adopts a combination of model simulation and computer experiments to conduct experimental research on plate shape recognition and control, and to achieve intelligent recognition of plate shape patterns; Establish a closed-loop control system for the flatness machine, and achieve better closed-loop control of the flatness through precise identification of the flatness. Establish a closed-loop feedback | Pilot stage | Developing new processes | Through in-depth research on intelligent recognition of flatness patterns and flatness control strategies, and combining with on-site conditions, a closed-loop feedback control system for flatness is established to reduce flatness defects and improve the accuracy of plate shape control. |
| control model for the flatness, and introduce the model into the production line to verify its effectiveness. | ||||
| Research and application of phosphorus containing high-strength steel and its preparation method | Develop and develop stamping steel plates with high strength and good formability, which have excellent formability and surface quality. | Pilot stage | Develop new processes and products | While improving the safety performance of automobiles, it also increases the sales revenue of enterprises and enhances their economic benefits. |
| Research and application of acid rolling process for producing 600 MPa and 700 MPa TRIP steel | Solve the existing acid rolling process barrier, improve the mechanical properties of TRIP steel, and manufacture TRIP steel with strength reaching 600MPa and 700MPa levels. | Pilot stage | Develop new processes and products | Solved existing technological problems and achieved industrial production, which can bring considerable economic benefits. |
| Research and Control Application of Digital Model and Intelligent Optimization for Rolling Stability of Pickled Five Continuous Rolling | Research will be conducted around coarse and fine thickness control, thickness compensation control, inter frame tension control, and thickness tension coordination optimization control. Advanced intelligent theories and technologies in the field of data and algorithms will be applied to explore intelligent solutions for thickness quality control and achieve intelligent quality control. | R&D stage | Develop new processes | Developing core technologies for rolling stability control of cold continuous rolling mills with independent intellectual property rights, improving thickness control accuracy and production process stability, in order to improve product quality, reduce scrap rates, and increase operational rates, thereby enhancing the market competitiveness of enterprises and expanding their market share. |
| Efficient Process Development of Oriented Silicon Steel for Power Transformers | Obtain the influence of steelmaking composition and heat treatment process on the primary and secondary recrystallization of highly efficient oriented silicon steel. | Research stage | Develop new products | Breakthrough improvement in rolling efficiency and product upgrading, development of more environmentally friendly and energy-saving production processes, research and development of greener and more efficient electrical steel products, and support the country's long-term goal of achieving carbon peak and carbon neutrality. |
| Research and application of high-strength non oriented silicon steel for variable speed pumped storage motors | Developing high-strength non oriented silicon steel products for variable speed pumped storage motors | Research stage | Develop new products | Occupy the market share of high-end manufacturing in the green energy storage industry, fill the gap in domestic variable speed pumped storage motors, and expand the company's non oriented silicon steel social influence. |
| Research on Preparation of High Strength Non oriented Electrical Steel by High Silicon Method | Develop high silicon high-strength electrical steel products with performance similar to that of Nippon Steel's high-strength electrical steel products. | Research stage | Develop new products | Improve the overall performance level of high-strength non oriented electrical steel products, and provide assistance for the smooth realization of the goal of "carbon peak and carbon neutrality". |
| Research on the Effect and Control of Decarburization and Nitriding Behavior on the Formation of Oxide Film in Low Temperature Oriented Silicon Steel | Obtain the influence law of nitriding conditions on the oxide film; Guide DCL process optimization and improve the proportion of underlying defects. | Research stage | Developing new processes | Improve the surface quality of oriented silicon steel products, enhance their market competitiveness and profitability. |
| Development of Low Excitation Products for Oriented Silicon | Developed 23SQGD085 low excitation product | Trial stage | Develop new products | Developing low excitation products to fill market gaps, enhancing the company's manufacturing capabilities for cutting-edge products, and enhancing |
| Steel 23SQGD085 | profitability. |
Research and development investment
| 2023 | 2022 | Proportion of changes | |
| Number of R&D staff | 2,481 | 2,342 | 5.94% |
| Proportion of R&D staff | 13.61% | 12.59% | 1.02% |
| Educational background of R&D personnel | |||
| Bachelor’s degree | 1,303 | 1,212 | 7.51% |
| Master’s degree | 700 | 670 | 4.48% |
| Age structure of R&D personnel | |||
| Below 30 | 117 | 105 | 11.43% |
| 30~40 | 1,231 | 1,273 | -3.30% |
Details about R&D investments:
| 2023 | 2022 | Proportion of changes | |
| R&D investments (RMB Yuan) | 5,022,121,736.17 | 5,386,070,865.84 | -6.76% |
| R&D investments as % of operating revenue | 4.41% | 4.56% | -0.15% |
| Capitalized R&D investments (RMB Yuan) | 0.00 | 0.00 | 0.00% |
| Capitalized R&D investments as % of total R&D investments | 0.00% | 0.00% | 0.00% |
Reasons for any significant change in the composition of R&D personnel and the impact:
□ Applicable √ Non applicable
Reasons for any significant YoY change in the percentage of R&D expense in operating revenue:
□ Applicable √ Non applicable
Reasons for any sharp variation in the percentage of capitalized R&D expense and rationale:
□ Applicable √ Non applicable
5. Analysis of cash flow
Unit: RMB Yuan
| Item | 2023 | 2022 | Year-on-year changes |
| Cash inflow from operating activities | 65,498,998,275.77 | 61,124,110,070.62 | 7.16% |
| Cash outflow from operating activities | 59,344,692,203.95 | 51,079,874,572.82 | 16.18% |
| Net cash flow from operating activities | 6,154,306,071.82 | 10,044,235,497.80 | -38.73% |
| Cash inflow from investing activities | 1,486,782,790.69 | 266,430,661.79 | 458.04% |
| Cash outflow from investing activities | 2,428,854,960.16 | 3,428,494,466.51 | -29.16% |
| Net cash flow from investing activities | -942,072,169.47 | -3,162,063,804.72 | 70.21% |
| Cash inflow from financing activities | 36,413,359,368.93 | 36,440,713,251.59 | -0.08% |
| Cash outflow from financing activities | 41,050,137,224.35 | 43,529,541,314.07 | -5.70% |
| Net cash flow from financing activities | -4,636,777,855.42 | -7,088,828,062.48 | 34.59% |
| Net increase in cash and cash equivalents | 575,445,674.40 | -206,656,369.40 | 378.46% |
Main reasons for significant year-on-year changes in relevant data
√ Applicable □ Non applicable
(1) The decrease in net cash flow from operating activities is mainly due to the decline in steel prices in the current period and the
high price of upstream fuel, which leads to a greater decrease in cash received from selling products and providing services thancash paid for purchasing goods and receiving services.
(2) The increase in cash inflow from investment activities is mainly due to the impact of New-E Co. disposal of the equity of Zhixin
Co. and recovery of investment funds.
(3) The decrease in cash outflow from investing activities is mainly due to the decrease in the cash receivd from disposal ofproperty, plant and equipment, intangible assets and other long-term assets.
(4) The increase in net cash flow from investing activities is due to the impact of New-E Co. disposal of the equity of Zhixin Co.and recovery of investment funds.
(5) The increase in net cash flow from financing activities is mainly due to the decrease in debt repayment in the current period and
the investment received by Zhixin Co. from absorbing minority shareholder investments.
(6) The increase in the net increase in cash and cash equivalents is mainly due to the impact of New-E Co. disposal of the equity ofZhixin Co. and recovery of investment funds.Explanation of the significant difference between the net cash flow from operating activities and the annual net profit during thereporting period.
√ Applicable □ Non applicable
During the reporting period, the cash flow generated from operating activities was RMB6.154 billion and the net profit was RMB754million, the difference was RMB5.4 billion. The main reasons are: assets impairment provision of RMB552 million, depreciation andamortization of RMB7.954 billion, financial expenses of RMB1.353 billion, a RMB-552 million in increase in receivables fromoperating activites and RMB-4.243 billion in decrease in payables from operating activities, a RMB-764 million in increase ininventory, an investment loss of RMB174 million, and RMB926 million for others.V. Non-principal business analysis
□ Applicable √ Non Applicable
VI. Assets and liabilities
1. Significant changes in the composition of assets
Unit: RMB Yuan
| Year-end of 2023 | Year-begin of 2023 | Proportion changes | Notes | |||
| Amount | Proportion of total assets | Amount | Proportion of total assets | |||
| Cash and Cash equivalents | 9,153,205,626.37 | 6.66% | 9,470,472,522.05 | 6.61% | 0.05% | |
| Accounts receivable | 1,365,633,725.20 | 0.99% | 1,450,008,897.10 | 1.01% | -0.02% | |
| Inventories | 12,177,610,585.90 | 8.86% | 11,960,246,748.15 | 8.35% | 0.51% | |
| Long-term equity investments | 2,420,775,096.36 | 1.76% | 2,724,285,925.35 | 1.90% | -0.14% | |
| Fixed assets | 89,895,037,102.17 | 65.37% | 93,331,072,969.17 | 65.18% | 0.19% | |
| Construction in progress | 5,320,613,251.88 | 3.87% | 7,673,649,852.77 | 5.36% | -1.49% | |
| Right-of-use assets | 489,044,162.56 | 0.36% | 83,107,359.45 | 0.06% | 0.30% | |
| Short-term borrowings | 26,661,355,641.29 | 19.39% | 29,580,006,103.39 | 20.66% | -1.27% | |
| Contract liabilities | 4,699,449,813.28 | 3.42% | 4,508,016,725.74 | 3.15% | 0.27% | |
| Long-term borrowings | 12,789,060,000.00 | 9.30% | 10,594,350,000.00 | 7.40% | 1.90% | |
| Lease liabilities | 471,745,760.35 | 0.34% | 72,439,836.79 | 0.05% | 0.29% | |
Foreign assets account for a relatively high proportion:
□Applicable √ Non Applicable
2. Assets and liabilities measured at fair value
√ Applicable □ Non Applicable
Unit: RMB Yuan
| Item | Opening balance | Fair value changes in the period | Accumulated fair value changes in equity | Impairment accrual in the period | Amount of purchase in the period | Amount of sales in the period | Other changes | Closing balance |
| Financial assets | ||||||||
| Other equity instruments investments | 232,766,133.81 | 107,437,958.40 | 340,204,092.21 | |||||
| Financing receivables | 3,489,134,871.56 | -1,265,703,445.10 | 2,223,431,426.46 | |||||
| Other non-current financial assets | 79,234,007.60 | -4,224,788.99 | 75,009,218.61 | |||||
| Total | 3,801,135,012.97 | -4,224,788.99 | 107,437,958.40 | 0.00 | 0.00 | 0.00 | -1,265,703,445.10 | 2,638,644,737.28 |
| Financial liabilities | 0.00 | 0.00 | ||||||
Whether the company's main asset measurement attributes have changed significantly during the reporting period
□ Yes √ No
3. Major restricted assets at the end of the reporting period
Unit: RMB Yuan
| Item | Year-end | |||
| Book balance | Book value | Type of restriction | Restriction reason | |
| Cash and Cash equivalents | 246,369,301.95 | 246,369,301.95 | Freeze | All kinds of deposits |
| Notes receivable | 297,201,490.24 | 297,201,490.24 | Pledge | Pledged notes |
| Total | 543,570,792.19 | 543,570,792.19 |
At the end of the period, except for various types of security deposits of RMB196,369,301.95 and fixed deposits of 50,000,000.00,the Company has no funds pledged, guaranteed or blocked frozen or overseas balances that restricted to remittance back.VII. Investment analysis
1. Overall situation
√ Applicable □ Non Applicable
| Invested amount during the reporting period (RMB Yuan) | Investment amount during the previous reporting period (RMB Yuan) | Change |
| 3,977,367,822.54 | 4,701,092,730.53 | -15.39% |
2. Significant equity investment during the reporting period
□ Applicable √ Non Applicable
3. Significant non-equity investment during the reporting period
√ Applicable □ Non Applicable
Unit: RMB Yuan
| Project name | Investment method | Fixed asset investment or not (Y/N) | Related industries | Investment amount during the reporting period | Actual investment amount up to the end of reporting period | Capital source | Project schedule | Anticipated benefits | Realized income up to the end of reporting period | Reasons for non-achievement of planned schedule and anticipated income | Date of disclosure (if any) | Index of disclosure (if any) |
| Zhixin Co. Oriented phase II project | Self-built | Y | Iron and steel | 1,922,416.03 | 1,315,975,321.25 | Self-raised | 88.26% | 391,380,000.00 | 136,799,335.98 | Fixed asset transferred on estimated value | ||
| Zhixin Co. High-end heat treatment engineering project | Self-built | Y | Iron and steel | 1,131,900,137.82 | 1,315,631,740.70 | Self-raised | 73.74% | 436,810,000.00 | The civil foundation has been completed and equipment is being installed gradually | |||
| Total | -- | -- | -- | 1,133,822,553.85 | 2,631,607,061.95 | -- | -- | 828,190,000.00 | 136,799,335.98 | -- | -- | -- |
4. Financial assets investment
(1) Securities investment
□ Applicable √ Non Applicable
The Company has no securities investment during the reporting period.
(2) Derivatives investment
□ Applicable √ Non Applicable
The Company has no derivatives investment during the reporting period.
5. Use of raised funds
√ Applicable □ Non Applicable
(1) Overall use of raised funds
√ Applicable □ Non Applicable
Unit: RMB’0,000
| Year for fund-raising | Method of fund-raising | Total fundraising | Net fundraising | Total fundraising used in the current period | Total fundraising used accumulatively | Alternation of fundraising purposes during the reporting Period | Accumulative amount of fundraising with altered purposes | Proportion of accumulative amount of fundraising with altered purposes | Total unused fundraising | Purpose and usage of unused fundraising | Raised funds that have been left unused for over two years |
| 2022 | Non-public offering | 291,200 | 273,36.82 | 6,944.03 | 28,796.50 | 0 | 0 | 0.00% | 0 | 0 | |
| Total | -- | 291,200 | 273,36.82 | 6,944.03 | 28,796.50 | 0 | 0 | 0.00% | 0 | -- | 0 |
| Explanation of the overall use of raised funds | |||||||||||
| In 2022, the total amount of supporting funds raised by the Company through non-public issuance of RMB ordinary shares (A-shares) was RMB291,199,983.58. After deducting the underwriting fees of the lead underwriter, the Company's special account for fundraising received a subscription amount of RMB287,603,983.82; After deducting the independent financial advisor and other related expenses for this restructuring, the net amount of raised funds is RMB273,368,221.41. During the reporting period, RMB69.4403 million of raised funds were used for the comprehensive energy-saving and consumption reducing renovation project of Jingtang Co.'s railway front system. As of December 31, 2023, the raised funds have been fully utilized. | |||||||||||
(2) Committed projects of raised funds
√ Applicable □ Non Applicable
Unit: RMB’0,000
| Committed investment projects and investment of excessive raised funds | Whether projects have been altered | Total committe d investme nt with raised | Adjusted total investme nt amount (1) | The investme nt amount during the | Accumul ative investme nt amount as | Invest ment progre ss as of the end of the | Date when the projec ts are ready for their | Benef its recor ded durin g the Repor ting | Whet her the estim ated benefi ts are reach | Whet her there are mater ial chang es in |
| (including partial alternation) | funds | Reporting Period | of the end of the Reporting Period (2) | Report ing Period (3) = (2)/(1) | intend ed use | Perio d | ed | the proje ct feasib ility | |||
| Committed investment projects | |||||||||||
| Jingtang Co. railway front system energy saving and consumption reduction comprehensive transformation project | No | 125,000 | 13,636.16 | 6,944.03 | 13,636.16 | 100.00% | Not applicable | No | |||
| Supplementary liquidity | No | 125,000 | 15,160.34 | 0 | 15,160.34 | 100.00% | Not applicable | No | |||
| Subtotal of committed investment projects | -- | 250,000 | 28,796.5 | 6,944.03 | 28,796.50 | -- | -- | -- | -- | ||
| Investment of excessive raised funds | |||||||||||
| Not applicable | |||||||||||
| Total | -- | 250,000 | 28,796.5 | 6,944.03 | 28,796.50 | -- | -- | 0 | -- | -- | |
| Explain the circumstances and reasons for failing to achieve the planned progress and estimated income by item (including the reasons why "Reach the estimated benefit" is selected as "Not applicable") | Not applicable | ||||||||||
| Explanations of the material changes in the project feasibility | Not applicable | ||||||||||
| Amount, use, and use progress of overraised funds | Not applicable | ||||||||||
| Change of the implementation location of the investment project raised funds | Not applicable | ||||||||||
| Adjustment of implementation methods of investment projects with raised funds | Not applicable | ||||||||||
| Advance investment and replacement of investment projects with raised funds | Not applicable | ||||||||||
| Temporary replenishment of working capital with the idle raised funds | Not applicable | ||||||||||
| Surplus raised funds for project impleme ntation and reasons for the surplus | Not applicable | ||||||||||
| Purpose and usage of unused fundraising | Fully utilized | ||||||||||
| Problems in the use of raised funds and disclosure, or other cases | Not applicable | ||||||||||
(3) Altered projects of raised funds
□ Applicable √ Not applicable
The Company has no altered projects of raised funds in the reporting period.
VIII. Material disposal of assets and equity
1. Material disposal of assets
□ Applicable √ Non Applicable
The Company has no disposal of assets during the reporting period.
2. Material disposal of equity
√ Applicable □ Non Applicable
| Counterparty | Selling equity | Sale date | Transaction price (RMB’0,000) | The net profit contributed by the equity to the listed company from the beginning of this period to the date of sale (RMB’0,000) | Impact of the sale on the company | The proportion of net profit contributed by the sale of equity to the total net profit of the listed company | Pricing principles for equity sales | related party transaction or not | Related relationship with the counterparty | Has all the equity involved been transferred | Whether it has been implemented as planned as scheduled. If not, explain the reasons and measures taken by the company | Disclosure date | Disclosure index |
| 8 enterprises including China National Building Materials (Anhui) New Materials Industry Investment Fund Partnership Enterprise (Limited Partnership) | 6.1483 equity shareholding of Zhixin Co. held by New-E Co. | August 11, 2023 | 126,040.15 | Realize equity exit and increase cash inflow by RMB706 million. | Asset evaluation | No | N/A | Yes | Yes |
IX. Analysis of main holding companies and stock-jointly companies
√ Applicable □ Non Applicable
Main subsidiaries and stock-jointly companies that have an impact on the company's net profit of over 10%.
Unit: RMB Yuan
| Company Name | Type | Main business | Registered capital | Total assets | Net assets | Operating revenue | Operating profit | Net profit |
| Shougang Jingtang United Iron & Steel Co., Ltd. | Subsidiary | Production and sales of steel products and by-products | 35,821,676,294.00 | 75,149,357,110.08 | 36,006,424,412.55 | 68,493,729,633.33 | 640,823,510.40 | 554,063,170.19 |
| Shougang Zhixin Qian'an Electromagnetic Materials Co., Ltd. | Subsidiary | Production and sales of steel products and by-products | 11,299,828,445.19 | 21,111,582,247.88 | 14,481,778,917.31 | 14,317,006,979.29 | 356,074,454.21 | 308,135,956.50 |
Acquisition and disposal of subsidiaries during the reporting period
√ Applicable □ Non Applicable
| Company Name | Method of acquiring and disposing of subsidiaries during the reporting period | The impact on overall production, operation, and performance |
| Beijing Shougang New Energy Automobile Material Technology Co., Ltd. | Derecognized after separation | Realize equity exit and increase cash inflow by RMB706 million. |
X. Structured entity controlled by the Company
□ Applicable √ Non Applicable
XI. Future development prospects
1. Industry pattern and development trend
In 2024, the basic trend of China's economy rebounding and improving has not changed. The global economy is expected to continuea slow recovery trend, with increasing complexity and uncertainty due to currency contraction in major economies, ongoinggeopolitical conflicts, and the rise of trade protectionism. The steel industry is expected to continue the pattern of strong supply andweak demand, and market competition will become more intense. However, with the implementation of national industrial policiesand measures to promote high-quality development, high-quality steel enterprises may welcome good development opportunities.
2. Development strategy of the Company
Shougang Co. focuses on promoting the construction of world-class enterprises and implementing the "Two Strong and ThreeExcellent" project (to create a steel industry with strong profitability, innovation ability, asset quality, operational efficiency, andenergy conservation and environmental protection). It firmly adheres to the strategic determination of "green manufacturing,intelligent manufacturing, boutique manufacturing, lean manufacturing, and precision services", adheres to the dual drive of"capital+operation" and technological innovation to drive comprehensive innovation, and promotes the deepening of enterprisereform, the improvement of new quality productivity, and the achievement of high-quality development. The steel industry adheres tothe development direction of "boutique+service", continuously promotes the research and development of three strategic products:
electrical steel, automotive plate, and tin (chromium) plate, continuously improves service level and operational efficiency, forms agroup of strategic product customer clusters with international competitiveness, and strives to build Shougang Co. into a steel listedcompany with global competitiveness and influence.
3. Operating plans of 2024
(1) Output of products
Steel production reached 21.62 million tons, a year-on-year decrease of 6.23%. Among them:
① Qiangang Co.: 8.57 million tons of steel, a year-on-year decrease of 0.44%.
② Jingtang Co.: 13.05 million tons of steel, a year-on-year decrease of 9.18%.
③ Zhixin Co.: 1.81 million tons of electrical steel, a year-on-year increase of 4.68%. Among them: 1.5 million tons withoutorientation, a year-on-year increase of 7.55%; Targeting 310,000 tons, a year-on-year increase of 3.23%.
④ Cold-R Co.: cold rolled sheet metal reached 2.05 million tons, a year-on-year increase of 12.03%. Among them, 950,000 tons ofcontinuous board refunds increased by 10.17% year-on-year; 1 million tons of galvanized sheet, a year-on-year increase of 6.54%;100,000 tons of cold and hard coils, a year-on-year increase of 246.2%.
(2) Budget arrangement for financial indicators
RMB 108.26 billion for operating revenue, year-on-year decrease of 4.84%, including: RMB 38.63 billion for operating revenue ofparent company, year-on-year decrease of 0.76%; RMB 65.5 billion for operating revenue of Jingtang Co., year-on-year decrease of
4.37%; RMB14.3 billion for operating revenue of Zhixin Co., year-on-year decrease of 0.12%; RMB11 billion for operating revenueof Cold-R Co., year-on-year increase of 7.61%; RMB 0.76 billion for operating revenue of Steel Trading, year-on-year decrease of
27.26%.
(3) Budget arrangement for cashflow
RMB 156.817 billion for cash inflows, including RMB 124.928 billion for cash inflow from operating activities, RMB 35 million forcash inflow from investing activities, RMB 31.855 billion for cash inflow from financing activities.RMB 155.707 billion for cash outflows, including RMB 113.629 billion for cash outflow from operating activities, RMB 4.256billion for cash outflow from investing activities, RMB 47.823 billion for cash outflow from financing activities.
(4) Budget arrangement forfixed-assets project capital expenditure
Arrangement of fixed assets investment is RMB 4.123 billion, including: RMB 1.460 billion for Qiangang Co., RMB 2.037 billion
for Jingtang Co., RMB 516 million for Zhixin Co., RMB 71 million for Cold-R Co., RMB 39 million for Steel Trading.
4. Potential risk
(1) Policy and industry risk
In order to consolidate the achievements of supply side reform and establish the goals of "carbon peak and carbon neutrality", thenational policy will continue to strictly control the addition of new steel production capacity and continuously eliminate outdatedproduction capacity through capacity replacement. However, due to the fact that capacity replacement mainly focuses on largeadvanced blast furnaces, electric furnaces, and converters, output efficiency has significantly improved. Therefore, the overcapacitysituation in the industry will not change in the short term, and the competitive environment in the industry remains severe.To cope with the above risks, firstly, it is necessary to enhance the awareness of market entities, closely monitor and timely studymacro policies, upstream and downstream industrial chains, and industry development changes, strengthen market prediction andanalysis, improve rapid response capabilities, and enhance the ability to resist market risks. The second is to take the market as thelead, fully leverage the advantages of production lines and products, enhance the "manufacturing+service" capabilities, promote deepoptimization and adjustment of product and channel structures, strengthen the promotion of first product and new product markets,and organize projects to replace imported products, expanding the high-end product cluster. The third is to enhance market awarenessand operational capabilities, deepen system and professional collaboration, enhance production and sales guarantee capabilities,adhere to seeking benefits from the market and collaboration, and continuously improve profitability and market competitiveness;The fourth is to focus on forging the "manufacturing+service" long board, continuously launching overall solutions for differentapplication scenarios, and meeting customer needs with high quality.
(2) Low carbon environmental risk
As the time for the steel industry to be included in the national carbon market for carbon trading compliance approaches, theecological environment department has put forward higher requirements for annual carbon emission reporting and verification work;Under the background of the "carbon peak and carbon neutrality" policy, downstream customers have put forward higherrequirements for the company's carbon reduction work; The EU Carbon Border Adjustment Mechanism (CBAM) bill has officiallycome into effect, requiring domestic steel product exporting companies to provide carbon emission related data.To address the aforementioned risks and demands, firstly, the Company will firstly accelerate the construction of a low-carbonmanagement system, promote the implementation of low-carbon action plans, apply comprehensive carbon reduction technologies,and focus on creating low-carbon product dedicated lines to meet customer carbon reduction needs. The second is to deepen theconstruction of the LCA system, standardize carbon data management, improve data quality, and meet verification and certificationrequirements. The third is to continuously build a low-carbon supply chain system, select low-carbon raw materials, and promote thelow-carbon process of procurement, production, transportation, and other processes.
(3) Horizontal competition risk
There is a certain degree of industry competition between the Company and its controlling shareholder Shougang Group and itsaffiliates.In order to address industry competition, during the first restructuring, Shougang Group issued a commitment on measures to resolveindustry competition and avoid industry competition after this restructuring. According to the steel industry development plan ofShougang Group, Shougang Co. will serve as the only platform for the development and integration of Shougang Group's steel andupstream iron ore resource industries in China, ultimately achieving the overall listing of Shougang Group's steel and upstream ironore resource businesses in China. Afterwards, Shougang Group made further commitments based on the aforementioned industrycompetition commitments. These commitments have been fulfilled on schedule, please refer to the corresponding content of"Corporate Governance" in this annual report for details.
(4) Marketing risk
In 2024, the steel industry is expected to continue the pattern of strong supply and weak demand, and market competition willbecome more intense. With the decrease in demand for construction steel, the production capacity of long materials is rapidly shiftingtowards sheet metal, and is constantly spreading towards the subsequent process and high-end products of sheet metal. The supplypressure of sheet metal varieties is increasing, and structural contradictions are accumulating. Enterprises are facing significantpressure in their operations.To cope with the above risks, firstly, the company will adhere to the principle of asking questions in the market, staying on the spot,seizing opportunities in the structural changes of market demand, continuously paying attention to the development trends of theindustry, focusing on building competitive advantages, stabilizing cooperation with leading enterprises, keeping up with industryupgrading and development, continuously developing the end user market, and extending and expanding to the full coverage of midto high end user groups. The second is to promote the organic combination of technological innovation and marketing services,adhere to the responsibility and mission of "service creates value", based on meeting user needs, guided by improving user serviceexperience, and create comparative advantages in enterprise technology marketing services. The third is to fully leverage theadvantages of multiple production lines and rich varieties, promote deep optimization and adjustment of product and channelstructures, and improve the contribution of structural adjustments to business efficiency.
(5) Related transactions risk
Related party transactions between Shougang Co. and Shougang Group and its affiliated enterprises, Shougang Co. and ShougangGroup signed the framework agreement of related transactions in accordance with the stock listing rules and other provisions forregular related transactions. If the agreement cannot be strictly executed in the future, interests of the Company will be damaged andalso the risks of related transactions will emerge.The Company will strictly comply with various regulations on related party transactions, fulfill information disclosure obligations inaccordance with the Stock Listing Rules and Articles of Association, ensure the openness, fairness, and impartiality of related partytransactions, and safeguard the legitimate rights and interests of the company and all shareholders. The above-mentioned dailyrelated party transactions are ongoing related party transactions that exist in the normal operation and production process of thecompany. Both parties have followed the legal approval procedures and signed in accordance with regulations, which will not affectthe independence of the Company.
XII. Reception of research, communication, interview and other activities during thereporting period
√ Applicable □ Non Applicable
| Time | Location | Method | Type | Counterparty | Main contents and provided material | Reference for basic information |
| April 21, 2023 | AM: Panoramic network studio（http://ir.p5w.net） PM: Company conference room | Others | Others | AM: Small and medium-sized investors. PM: Institutional investors such as Everbright Securities, Guotai Junan Securities, Huachuang Securities, Changjiang Securities, Guangfa Securities, CITIC Securities, Haitong Securities, Guosen Securities, Northeast Securities, etc | Provide an explanation of the company's production and operation situation, as well as the performance results achieved in the first quarter of 2022 and 2023, and answer any questions that investors may be concerned about | The details disclosed on the interactive platform on April 24, 2023 |
| August 14, 2023 | Online performance briefing: panoramic network studio（https://rs.p5w.net/html/139408.shtml） Specific Investor Performance Briefing: Company conference room | Others | Others | Online Performance Briefing: All Investors Specific Investor Performance Briefing: Analysts from institutions such as CICC, Huachuang Securities, Everbright Securities, CITIC Securities, Guotai Junan Securities, China Merchants Securities, Changjiang Securities, Guangfa Securities, Industrial Securities, Northeast Securities, Zhongtai Securities, Xingquan Fund, Nanhua Futures, and Securities Daily reporters, etc | Provided an explanation of the company's production and business performance in the first half of 2023, and answered questions of concern to investors | The details disclosed on the interactive platform on August 16, 2023 |
| August 18, 2023 | Company conference room | Telephone communication | Institution | Analysts from institutions such as CICC, Yinhua Fund, Penghua Fund, Pengyang Fund, Beijing Yanhang Asset Management, PING AN ASSET MANAGE, and Guangfa Securities | Answering questions from investors regarding the company's main products, performance, future development plans, and environmental control impacts | The details disclosed on the interactive platform on August 22, 2023 |
| October 27, 2023 | Online performance briefing: panoramic network studio（https://rs.p5w.net/html/140726.shtml） Specific Investor Performance Briefing: Company conference room | Others | Others | Online Performance Briefing: All Investors Specific Investor Performance Briefing: Analysts from institutions such as CICC, Huachuang Securities, Everbright Securities, Guotai Junan Securities, China Merchants Securities, Changjiang Securities, Guangfa Securities, Industrial Securities, Huatai Securities, Zhongtai Securities, Guoxin Securities, CICC Asset Management, and Dongzheng Asset Management | Provided an explanation of the company's production and business performance for the first three quarters of 2023, and answered questions of concern to investors | The details disclosed on the interactive platform on October 29, 2023 |
| November 17, 2023 | Company conference | Field research | Institution | Analysts from institutions such as | Provide answers to investor concerns | The details disclosed on the interactive platform on |
| room | Guangfa Securities, China Canada Fund, Defeng Investment, Jiahe Fund, CICC, Danshui Spring (Beijing) Asset Management, Shangcheng Asset Management, Taiyang Asset Management, Zhengyuan Investment, Xueshi Asset Management, Industrial Bank, Zhengxingu Capital, and Yuanxin Investment | regarding the company's electrical steel products, production capacity, demand for automotive panels, development plans, R&D investment, capital expenditures, and raw fuel conditions | November 19, 2023 | |||
| December 8, 2023 | Company conference room | Field research | Institution | Analysts from institutions such as Everbright Securities, Guoshou Asset Investment, Hezhong Asset Management, Jiutai Fund, and Changsheng Fund | Provide answers to future industry demands that investors are concerned about, changes in electrical steel prices, production capacity of automotive panels, future capital expenditures, and raw material costs | The details disclosed on the interactive platform on December 9, 2023 |
XIII. Implementation of the Action Plan for "Double Improvement of Quality and Return"Whether the Company disclosed an action plan for "dual improvement of quality and return" or not.
□ Yes √ No
Section IV. Corporate Governance
I. Information of corporate governance
In accordance with the Company Law of People’s Republic of China, the Securities Law of People’s Republic of China, the Code ofCorporate Governance for Listed Companies, Self-regulatory Guide for Listed Companies of Shenzhen Stock Exchange No. 1 -Business Management, the Articles of Association and other applicable regulations and laws, the Company establishes a soundinternal control system, actively promotes the improvement of corporate governance structure, continuously deepens standardizedoperation, improves the level and quality of corporate governance, innovates interactive communication channels, maintains goodinvestor relations, and protects the legitimate rights and interests of the Company and all shareholdersAccording to the Articles of Association, the Rules of Procedure of the Shareholders' Meeting, the Rules of Procedure of the Boardof Directors, and the Rules of Procedure of the Board of Supervisors, the company shall organize the convening of the Shareholders'Meeting, the Board of Directors Meeting, and the Board of Supervisors Meeting; Directors and supervisors are diligent andresponsible, comply with rules and regulations, and actively safeguard the legitimate rights and interests of the company andshareholders; The management operates in accordance with the law and strictly adheres to the company's various internal controlsystems; The company shall fulfill its information disclosure obligations in accordance with normative documents such as the StockListing Rules, and ensure the truthfulness, accuracy, and completeness of the company's information disclosure, without any falserecords, misleading statements, or significant omissions.During the reporting period, the company mainly carried out corporate governance work in the following aspects: firstly, based onthe company's repurchase and cancellation of stocks, adjustments made to the special committees under the board of directors, andother actual situations, 72 systems such as the Articles of Association and the Regulations on the Work of the Board's Strategy, Risk,ESG and Compliance Management Committee were revised. The second is to develop 20 systems, including the "Management andEvaluation System for Personnel Dispatched to Participating and Holding Enterprises" and the "ESG Work Management System",according to operational needs. The third is to organize internal control self-evaluation based on actual business adjustments, systemupdates, and other factors, combined with the Risk Control Manual and Internal Control Evaluation Manual. The fourth is tocomprehensively promote the construction of the "1+2+N" compliance and legal management system, focusing on the requirementsof compliance management, contract management, and legal management, and become the first enterprise in the steel industry topass compliance certification. Fifthly, in accordance with the relevant provisions of the Articles of Association and the Rules ofProcedure of the Shareholders' Meeting, the shareholders' meeting shall be convened through "on-site+online voting" to ensure thatthe matters submitted for review and approval by the shareholders' meeting are in compliance with the law.As at the end of the reporting period, the Company has a total of 495 regulations, among which 491 regulations are formulated andimplemented by the company and 4 regulations are forwarded to the government and regulatory authoritiesWhether there are material differences between the actual state of corporate governance and the regulatory documents issued by theCSRC on the governance of listed companies.
□ Yes √ No
There is no material difference between the fact of corporate governance and the regulations for listing companies required by theCSRC.II. Independence of the Company from the controlling shareholder and actual controller interms of assets, personnel, finance, organization, businessThe company strictly plans and operates in accordance with the law, maintaining complete independence from its controllingshareholders in terms of assets, personnel, finance, institutions, and business. The company has a complete procurement, production,marketing, and business management system, a complete product research and development organization and personnel, and theability to independently produce and operate.
1. Assets: The Company has a production system and its supporting facilities that are independent of the controlling shareholder andits related parties. The Company's assets are independent and complete, with clear ownership.
2. Personnel: The Company has a complete human resources management system, which operates independently and has a sound andeffective system. The directors and supervisors of the Company are elected in accordance with the statutory approval proceduressuch as shareholders' meetings or corresponding democratic elections; senior management personnel are appointed or dismissed bythe Board of Directors, and there are no irregularities in their concurrent positions with controlling shareholders and related parties.
3. Financial: The Company has an independent financial management department, equipped with full-time financial personnel, with acomplete internal financial accounting and management system and perfect financial management system, which is sound andcapable of making independent financial decisions, and the Company is independently and legally subject to taxation.
4. Institutions: The Company has a general meeting of shareholders, the board of directors, the board of supervisors, managers andother corporate governance structure, a complete organizational system, independent operation, independent exercise of power. Andthere is no subordinate relationship with the controlling shareholder and its related parties.
5. Business: The Company has a complete raw fuel procurement, product manufacturing, product marketing and management system,an independent business system, conducts its business independently, operates independently and bears its own risks.III. Horizontal competition
√ Applicable □ Not applicable
| Type | Type of association with the Company | Name of controlling shareholder | Nature of controlling shareholder | Causes | Solutions | Work progress and follow-up plan |
| Competition in the same industry | The controlling shareholder | Shougang Group Co., Ltd. | Local SASAC | Since the listing of the Company, there has been inter-sector competition and connected transactions resulting from the partial conversion to listing. | 1. Shougang Group undertakes in respect of measures to resolve inter-sector competition and avoid inter-sector competition after the First Reorganisation (1) Except for the situation of inter-sector competition existing prior to the date of this Letter of Undertaking, if the Company obtains opportunities for acquisition, development and investment in the same or similar business as Shougang Co, the Company will immediately notify Shougang Co and offer them to Shougang Co for selection on a priority basis and make its best efforts to make such business opportunities available for transfer to Shougang Co. (2) In integrating and operating existing steel assets not yet transferred to Shougang Co., the Company will select the appropriate platform and means to achieve resource integration in a manner that is conducive to the future transfer to Shougang Co. and will not include provisions in the relevant agreements or arrangements with partners or third parties that restrict or prohibit the injection of such assets or businesses into Shougang Co. (3) The Company will, as far as possible, safeguard the normal operation and profitability of the existing steel assets not injected into Shougang Co. and ensure that the aforesaid assets and businesses do not fall into operational difficulties due to the Company or other circumstances that prevent the ultimate injection into Shougang Co. or render such injection legally impeded. (4) Each commitment made by the Company in eliminating or avoiding competition in the same line of business shall also apply to other enterprises under the direct or indirect control of the Company other than Shougang Co. and its subsidiaries, and the Company is obliged to supervise and ensure that the other subsidiaries of the Company implement the arrangements for each of the matters described in this document and strictly comply with all the commitments. 2. As approved by the second extraordinary general meeting of the Company for 2018 on 27 December 2018, Shougang Group undertakes to: (1) According to the development plan of Shougang's steel industry, Shougang shares will serve as the sole platform for the development and integration of Shougang Group's steel and upstream iron ore resources industries in the PRC, and ultimately realise the overall listing of Shougang Group's steel and upstream iron ore resources businesses in the PRC. (2) In the event that Shougang Group's other companies engaged in steel operations and production further optimise and adjust their product structure through active implementation of national industrial policies and environmental protection requirements, and achieve profits for three consecutive years, and that the overall situation of the industry does not fluctuate significantly, Shougang Group will, in accordance with the requirements of securities laws and regulations and industry policies, initiate a process including but not limited to acquisition, merger, restructuring and other means in the interests of | In December 2021, Shougang Co., Ltd. and Shougang Group signed the "Management Service Agreement between Shougang Group Co., Ltd. And Beijing Shougang Co., Ltd. On The Affiliated Enterprises of Shougang Group Co., Ltd. ". Shougang Co., Ltd. provides management services for a total of 14 target enterprises in the steel sector of Shougang Group. Shougang shares will continue to negotiate with Shougang Group and actively promote the follow-up work in accordance with the commitment to resolve horizontal competition. |
| Type | Type of association with the Company | Name of controlling shareholder | Nature of controlling shareholder | Causes | Solutions | Work progress and follow-up plan |
| shareholders of the listed company The injection of relevant high-quality assets into Shougang will be completed within 36 months after the commencement of the relevant matters. |
IV. General shareholders’ meetings and extraordinary shareholders’ general meeting duringthe reporting period
1. Information on the general shareholders meeting
| Sessions | Type | Investor participation ratio | Date | Date of Disclosure | Conference resolution |
| 2022 Annual General Meeting | Annual General Shareholders Meeting | 84.22% | June 30, 2023 | July 1, 2023 | Please refer to the company announcement on the disclosure date of the meeting resolution |
| 2023 First Extraordinary General Meeting | Extraordinary General Shareholders Meeting | 77.81% | September 28, 2023 | September 29, 2023 | Please refer to the company announcement on the disclosure date of the meeting resolution |
| 2022 Second Extraordinary General Meeting | Extraordinary General Shareholders Meeting | 83.59% | December 28, 2023 | December 29, 2023 | Please refer to the company announcement on the disclosure date of the meeting resolution |
2. Request for extraordinary general meeting by preferred stockholders whose voting rights restore
□ Applicable √ Not applicable
V. Directors, Supervisors, Senior Management
I. General information
| Name | Gender | Age | Position | Status of employment | Start date of term | End date of term | Number of shares held at the beginning of the period | Number of shares increased in the current period | Number of shares reduced in the current period (shares) | Other changes | Number of shares held at the end of the period | Reasons for changes in the increase or decrease of shares |
| Qiu Yinfu | Male | 56 | Chairman | Incumbent | 2023/12/28 | 2025/12/22 | 290,000 | 0 | 290,000 | 0 | 0 | |
| Zhu Guosen | Male | 46 | Director | Incumbent | 2023/9/28 | 2024/3/21 | 0 | 0 | 0 | 0 | 0 | |
| Zeng Li | Male | 52 | Director | Incumbent | 2022/12/23 | 2024/3/21 | 290,000 | 0 | 95,700 | 0 | 194,300 | |
| Li Jiantao | Male | 45 | Director | Incumbent | 2022/12/23 | 2025/12/22 | 0 | 0 | 0 | 0 | 0 | |
| Gu Wenxian | Male | 62 | Independent director | Incumbent | 2021/12/20 | 2025/12/22 | 0 | 0 | 0 | 0 | 0 | |
| Yu Jiaxi | Male | 65 | Independent director | Incumbent | 2022/12/23 | 2025/12/22 | 0 | 0 | 0 | 0 | 0 | |
| Liu Shen | Male | 48 | Independent director | Incumbent | 2020/6/23 | 2025/12/22 | 0 | 0 | 0 | 0 | 0 | |
| Peng Feng | Male | 44 | Independent director | Incumbent | 2020/6/23 | 2025/12/22 | 0 | 0 | 0 | 0 | 0 | |
| Sun Yi | Male | 58 | Supervisory board chairman | Incumbent | 2021/11/29 | 2025/12/22 | 0 | 0 | 0 | 0 | 0 | |
| Guo Liyan | Female | 48 | Supervisory | Incumbent | 2016/1/7 | 2024/1/9 | 0 | 0 | 0 | 0 | 0 | |
| Chang Haiyu | Female | 39 | Supervisory | Incumbent | 2022/12/23 | 2025/12/22 | 0 | 0 | 0 | 0 | 0 | |
| Wang Xingtao | Male | 45 | Employee representative supervisor | Incumbent | 2022/12/23 | 2025/12/22 | 0 | 0 | 0 | 0 | 0 | |
| Qu Erlong | Male | 42 | Employee representative supervisor | Incumbent | 2021/7/7 | 2025/12/22 | 0 | 0 | 0 | 0 | 0 | |
| Zhu Guosen | Male | 46 | General manager | Incumbent | 2023/8/18 | 2024/3/21 | 0 | 0 | 0 | 0 | 0 | |
| Sun Maolin | Male | 47 | Vice general manager | Incumbent | 2022/12/23 | 2024/3/21 | 261,000 | 0 | 86,130 | 0 | 174,870 | |
| Liu Tonghe | Male | 43 | Chief accountant | Incumbent | 2023/8/18 | 2025/12/22 | 0 | 0 | 0 | 0 | 0 |
| Xie Tianwei | Male | 42 | Vice general manager | Incumbent | 2022/10/27 | 2025/12/22 | 203,300 | 0 | 66,990 | 0 | 136,310 | |
| Wang Kai | Male | 41 | Vice general manager | Incumbent | 2022/10/27 | 2025/12/22 | 203,000 | 0 | 66,990 | 0 | 136,310 | |
| Qiao Yufei | Female | 35 | Secretary of the Board of Directors | Incumbent | 2023/10/26 | 2025/12/22 | 0 | 0 | 0 | 0 | 0 | |
| Zhao Mingge | Male | 57 | Chairman | Resignation | 2013/5/16 | 2023/12/28 | 0 | 0 | 0 | 0 | 0 | |
| Liu Jianhui | Male | 59 | Managing Director | Resignation | 2014/9/19 | 2023/8/17 | 290,000 | 0 | 95,700 | 0 | 194,300 | |
| Ye Lin | Male | 60 | Independent director | Resignation | 2017/12/26 | 2023/12/25 | 0 | 0 | 0 | 0 | 0 | |
| Zhang Binglong | Male | 47 | Vice general manager | Resignation | 2022/10/27 | 2023/10/8 | 232,000 | 0 | 232,000 | 0 | 0 | |
| Li Baizheng | Male | 58 | Chief accountant | Resignation | 2015/10/28 | 2023/8/17 | 261,000 | 0 | 86,130 | 0 | 174,870 | |
| Li Jingchao | Male | 57 | Vice general manager | Resignation | 2017/10/25 | 2023/7/21 | 261,000 | 0 | 86,130 | 0 | 174,870 | |
| Chen Yi | Male | 56 | Secretary of the Board of Directors | Resignation | 2015/8/26 | 2023/10/26 | 0 | 0 | 0 | 0 | 0 | |
| Chen Yi | Male | 56 | Vice general manager | Resignation | 2019/4/24 | 2023/11/27 | 261,000 | 0 | 86,130 | 0 | 174,870 | |
| Total | - | - | -- | -- | -- | -- | 2,552,300 | 0 | 1,191,900 | 0 | 1,360,700 | -- |
During the reporting period, did any directors and supervisors resign and was any members of the senior management resignedduring their term of office
√ Yes □ No
For details, please refer to "Changes in directors, supervisors and senior manager".Changes in directors, supervisors and senior manager
√Applicable □Not applicable
| Name | Position | Type | Date | Reason of changes |
| Zhao Mingge | Chairman | Resignation | 2023/12/28 | Resignation upon transfer of work |
| Liu Jianhui | Director/ General manager | Resignation | 2023/8/17 | Resignation upon transfer of work |
| Ye Lin | Independent director | Resignation upon expiration of term | 2023/12/25 | Resignation upon expiration of term |
| Zhang Binglong | Vice general manager | Resignation | 2023/10/8 | Resignation upon transfer of work |
| Li Baizheng | Chief accountant | Resignation | 2023/8/17 | Resignation upon transfer of work |
| Li Jingchao | Vice general manager | Resignation | 2023/7/21 | Resignation upon transfer of work |
| Chen Yi | Secretary of the Board of Directors | Resignation | 2023/10/26 | Resignation upon transfer of work |
| Chen Yi | Vice general manager | Resignation | 2023/11/27 | Resignation upon transfer of work |
II. Current positionProfessional background, main work experience and main responsibilities of the current director, supervisors, and senior manager ofthe Company
A. Board members
1. Qiu Yinfu: The chairman of the Company, University degree, Master of Business Administration in Senior Management, SeniorEngineer. Formerly served as a professional and deputy director of the Mobility Department at Shougang Medium and Thick PlatePlant, deputy director, department head, and party branch secretary of the Mobility Department at Shougang Second SteelmakingPlant, head of the Mobility Department and party branch secretary at Beijing Shougang Co., Ltd. Second Steelmaking Plant, deputydirector and director of Shougang Oxygen Plant, director of Shougang Oxygen Plant and director and party branch secretary ofShougang Qiansteel Company's Oxygen Plant, director of Shougang Oxygen Plant and director and party branch secretary ofShougang Qiansteel Company's Oxygen Plant, party branch secretary, and project leader of Jingtang Support, director of ShougangOxygen Plant and project leader of Jingtang Support, Tangshan Shougang Baoye Company Director of the Oxygen Plant, Leader ofthe Cold Rolling Preparation Group of Shougang Relocation Company, Director of the Cold Rolling Operations Department ofShougang Relocation Company, Assistant General Manager and Director of the Cold Rolling Operations Department of Shougang
Relocation Company, Assistant General Manager and Director of the Cold Rolling Operations Department and Party Secretary ofShougang Relocation Company, Deputy General Manager and Director of the Cold Rolling Operations Department and PartySecretary of Shougang Relocation Company, Deputy Party Secretary, Director, and General Manager of Beijing Shougang ColdRolling Thin Plate Co., Ltd., Chairman, Deputy Party Secretary, and General Manager of Beijing Shougang Cold Rolling Thin PlateCo., Ltd, Deputy General Manager of Beijing Shougang Co., Ltd. and Chairman, Deputy Secretary of the Party Committee, andGeneral Manager of Beijing Shougang Cold Rolled Thin Plate Co., Ltd., Deputy Secretary of the Party Committee, Chairman of theTrade Union, and Deputy General Manager of Beijing Shougang Co., Ltd. and Secretary of the Party Committee of Qian'an Iron andSteel Co., Ltd., Deputy Secretary of the Party Committee, Chairman of the Trade Union, Director, and Deputy General Manager ofBeijing Shougang Co., Ltd. concurrently serve as Secretary of the Party Committee of Qian'an Iron and Steel Co., Ltd., Secretary andChairman of the Party Committee of Shougang Jingtang Iron and Steel United Co., Ltd. also serve as Director of Beijing ShougangCo., Ltd., Deputy Secretary and Director of the Party Committee of Shougang Group Co., Ltd. also serve as Director of BeijingShougang Co., Ltd., Deputy Secretary, Director, and Union of the Party Committee of Shougang Group Co., Ltd. The Chairmanconcurrently serves as a Director of Beijing Shougang Co., Ltd., Deputy Secretary of the Party Committee, Director, and Chairmanof the Trade Union of Shougang Group Co., Ltd., and Deputy Secretary, Director, and General Manager of the Party Committee ofShougang Group Co., Ltd. The current Deputy Secretary of the Party Committee, Director, and General Manager of Shougang GroupCo., Ltd., and Chairman of Beijing Shougang Co., Ltd.
2. Zhu Guosen: The director of the Company, Doctoral degree, Doctor of Engineering, Professor level Senior Engineer. Formerlyserved as a researcher at the Plate and Strip Research Institute of Shougang Technology Research Institute, a researcher, deputydirector (deputy director), deputy director (deputy director, in charge of work), and director (chief director) at the Thin PlateResearch Institute of Shougang Technology Research Institute, assistant to the president of Shougang Technology Research Instituteand director of the Thin Plate Research Institute (chief director), chief engineer (deputy department) of Shougang Jingtang Iron andSteel United Co., Ltd., deputy secretary and first vice president of the Party Committee of Shougang Group Technology ResearchInstitute, secretary and first vice president of the Party Committee of Shougang Group Technology Research Institute, deputysecretary of the Party Committee of Beijing Shougang Co., Ltd., deputy secretary and general manager of the Party Committee ofBeijing Shougang Co., Ltd. The current Deputy Secretary of the Party Committee, Director, and General Manager of BeijingShougang Co., Ltd.
3. Zeng Li: The director of the Company, the senior engineer, being a master of engineering with postgraduate education. The majoremployment history of Mr. Zeng is as follows: Mr. Zeng used to be a technician, head of technical section, deputy chief of technicalsection, deputy chief of technical section (in charge of work), chief of technical section and deputy director of steelmaking workshopof Shougang No. 3 Steelmaking Plant, director of No. 2 Steelmaking Plant of the Company, director and Secretary of General PartyBranch of Qiangang Co., director of the Second Steelmaking Plant of the Company, director of the Steelmaking Branch of QiangangCo., Secretary of the General Party Branch and Deputy Director of the Steelmaking Operation Department of Jingtang Co., assistantto the general manager and director of the steelmaking plant of Tangshan Shougang Baoye Iron and Steel Co., Ltd., director of theSecond Steelmaking plant of the Company, deputy director of the steelmaking Operation Department of Jingtang Co., deputy chiefengineer and director of the chief Engineer's Office (Chief Engineer's Office of Beijing Shougang New Steel Company) of ShougangCorporation, Director of the deputy chief Engineer and chief Engineer's Office of Shougang Corporation (Beijing Shougang NewSteel Company Chief Engineer's Office), director of the manufacturing Department of Jingtang Co., deputy chief engineer ofShougang Corporation and director of the Manufacturing Department of Jingtang Co., deputy chief engineer of ShougangCorporation, deputy general manager of Jingtang Co., deputy chief engineer of Shougang Corporation, director and deputy generalmanager of Jingtang Co., director and deputy general manager of Jingtang Co., deputy Secretary of the Party Committee, director andgeneral manager of Jingtang Co. At present, Mr. Zeng is currently a director of Beijing Shougang Co., Ltd., Secretary of the PartyCommittee and Chairman of Jingtang Co.
4. Li Jiantao: The director of the Company, the intermediate economist with Bachelor's Degree. The major employment history ofMr. Li is as follows: Mr. Li used to be a member of Finance Department of Baosteel Group Shanghai No. 1 Iron and Steel Co., Ltd.,a member of Finance Department of Shanghai No. 1 Iron and Steel Co., Ltd., a member of asset Management Section, DeputyDirector of Finance Department and Deputy Director of Finance Department of Baosteel Group Shanghai No. 1 Iron and Steel Co.,Ltd., a deputy director of Finance Department and Deputy Director of Transportation Reform Department of Baosteel GroupShanghai No. 1 Iron and Steel Co., Ltd., Senior Manager of expense Management of Operating Finance Department of BaosteelGroup (Head Office), Senior Manager of expense Management of Operating Finance Department of China Baowu Iron and SteelGroup Co., L Ltd., Senior Manager of Fund Management of Finance Department of China Baowu Iron and Steel Group Co., L Ltd.,and Fund Director of Finance Department of China Baowu Iron and Steel Group Co., Ltd. Currently, Mr. Li is director of capitalOperation Department and Capital Operation Center of China Baowu Iron and Steel Group Co., Ltd., and director of BeijingShougang Co., Ltd.
5. Gu Wenxian: The independent director of the Company, a senior accountant and Certified Public Accountant in China withbachelor's degree. He used to be a teacher of Shanghai Railway Medical College, a teacher of Shanghai Fisheries University, a seniormanager of Dahua Certified Public Accountants LLP, a senior manager of Ernst & Young Da Hua Certified Public Accountants, anda member of the first, second and third mergers and acquisitions Committee of China Securities Regulatory Commission. Mr. Gu isnow a senior partner and director of BDO China Shu Lun Pan Certified Public Accountants LLP. Gu Wenxian serves Shougang Co.as an independent director from 20 December, 2021.
6. Yu Xingxi: The independent director of the Company. Graduate degree, Master of Management, Senior Accountant. Formerlyserved as a soldier in the 1st Company of the 46th Regiment of the 10th Division of the Railway, a soldier in the Logistics ServiceSociety of the New Management Department of the 10th Division of the Railway, a soldier in the Finance Department of the NewManagement Department of the Qinghai Tibet Line of the Railway, an assistant in the Finance Department (platoon) of the NewManagement Department of the Qinghai Tibet Line of the Railway, the director of the 4th Police Station (deputy company) of theNew Management Department of the Qinghai Tibet Line of the Railway, an accountant in the Finance Department (deputydepartment) of the New Management Department of the 10th Division of the Railway, a clerk in the Finance Department (deputy
department) of the New Railway Transportation Department of the 20th Bureau of the Railway, the deputy head and deputy head ofthe Finance Department of the Planning and Statistics Department of the 5th Division of the 20th Bureau of the Railway, the deputyhead and head of the Finance Department of the Construction Vice President of the Construction Department (Zhengke), DeputyPresident and Accountant of the Construction Department (Zhengke) of the Railway 20th Bureau, General Manager and Accountantof the Construction Department of the Railway 20th Bureau, General Manager and Senior Manager of the Finance Department andFund Settlement Center of China Railway Construction Corporation, Deputy Director and Senior Manager of the FinanceDepartment and Fund Settlement Center of China Railway Construction Corporation, Manager and Senior Manager of theInvestment Department of China Railway Construction Corporation, Minister and Senior Manager of the Finance Department ofChina Railway Construction Corporation, Minister and Senior Manager of the Finance Department of China Railway ConstructionCorporation Limited, Secretary of the Board of Directors and Joint Company of China Railway Construction Corporation, NewsSpeaker and Senior Manager of China Railway Construction Corporation, The Secretary General of the Beijing Listed CompaniesAssociation also serves as an independent director of Ruitai Technology Co., Ltd., Beijing Kerui International Co., Ltd., and ChinaNational Pharmaceutical Group Co., Ltd. Current independent director of Ruitai Technology Co., Ltd. and independent director ofChina National Pharmaceutical Group Pharmaceutical Co., Ltd. Appointed as an independent director of Beijing Shougang Co., Ltd.on December 23, 2022.
7. Liu Shen: The independent director of the Company with doctor's degree. The major employment history of Mr. Liu is as follows:
Once served as an employee of the real estate credit department of Shanghai Branch of China Construction Bank, assistant manager,manager and senior manager of the listed company Department of Shanghai Stock Exchange, executive manager and assistantdirector of the office of Shanghai Stock Exchange, assistant director of the second Supervision Department of listed company ofShanghai Stock Exchange, deputy director of the issuance and listing business center of Shanghai Stock Exchange and memberDepartment of Shanghai Stock Exchange Deputy director. During the period, Mr. Liu worked in the issuance Supervision Departmentof China Securities Regulatory Commission (CSRC), and is a member of the 16th main board stock issuance examination committeeof CSRC. At present, Mr. Liu is the vice general manager of Shanghai Xinfugang Real Estate Development Co., Ltd., an independentdirector of Shanghai Kangheng environment Co., Ltd. (unlisted company) and an independent director of Guizhou Guotai Liquor Co.,Ltd. (unlisted company). Mr. Liu serves as an independent director of Beijing Shougang Co., Ltd. since 23 June 2020.
8. Peng Feng: The independent director of the Company, a professor level senior engineer with master's degree. The majoremployment history of Mr. Peng is as follows: Mr. Peng once served as assistant engineer, engineer and deputy director of Smeltingraw materials department of Metallurgical Industry Planning and Research Institute, chief designer and vice director of smelting rawmaterials department of Metallurgical Industry Planning and Research Institute, chief designer and director of smelting raw materialsdepartment of Metallurgical Industry Planning and Research Institute. At present, Mr. Peng is vice chief engineer and chief designerof Metallurgical Industry Planning and Research Institute, director of smelting raw materials department, vice chairman of ferroalloybranch of China Society for metals, and executive deputy secretary of Zhongguancun Stainless Steel and Special Alloy New MaterialIndustry Technology Innovation Alliance. Mr. Peng serves as an independent director of Beijing Shougang Co., Ltd. since 23 June2020.
B. Supervisors
1. Sun Yi: The chairman of supervisory Board of the Company, a senior economist with doctor's degree of Economics. The majoremployment history of Mr. Sun is as follows: A cadre of machinery workshop of Changchun Bus Factory in Jilin Province, aresearch secretary in the factory director's office, a staff member, section member, deputy director section member of Jilin ProvincialLabor Department labor Management Office, a deputy director of the First General Affairs Department, a director of the first GeneralAffairs Department, chief secretary of the secretariat and deputy secretary of the Secretariat of jilin Provincial Government generalOffice, Director, deputy general manager, chairman of the trade union, standing member of the Party Committee, secretary of theDiscipline inspection Commission and Secretary of the Party Committee of Tonghua Iron & Steel Co., Ltd. Mr. Sun is currently theDirector of the Work Office of the Supervisory Board of Shougang Group Co., Ltd., and the Chairman of the Supervisory Board ofBeijing Shougang Co., Ltd.
2. Guo Liyan: The supervisor of the Company, a senior accountant with master's degree. The major employment history of Mrs.Guo is as follows: She has served as a member of finance Department of Machinery Factory of Shougang Mechanical and ElectricalCompany, auditor of Audit Office of Shougang Mechanical and Electrical Company, chief of Finance Department of HydraulicCenter of Shougang Mechanical and Electrical Company, Deputy Director of Fund Department of Finance Department of ShougangMechanical and Electrical Company, Deputy Director of Cost Department of Finance Department of Shougang Mechanical andElectrical Company, Deputy station chief of financial dispatch station of Technical Research Institute of Finance Department ofShougang Mechanical and Electrical Company, Deputy Director of Audit Division I (in charge of work) of the Audit Department ofShougang Corporation, Assistant Director and Deputy Director of the Audit Department of Shougang Corporation, Director of theaudit Department of Shougang Corporation and supervisor of Beijing Shougang Co., Ltd. Mrs. Guo is the current director of auditdepartment of Shougang Group and the current supervisor of Shougang Co.
3. Chang Haiyu: The supervisor of the Company, an intermediate economist with master's degree. The major employment history ofMr. Chang is as follows: He used to be senior manager of Financing Management Department of Beijing State-owned CapitalOperation Management Co., Ltd., senior manager of key Account Department of head office of Zheshang Bank Co., Ltd., andassistant to general manager of Capital Operation Department of Beijing Financial Holding Group Co., Ltd. Currently, he is theinvestment director of Beijing Jingguorui Equity Investment Fund Management Co., Ltd., and the supervisor of Beijing ShougangCo., Ltd.
4. Wang Xingtao: The employee representative supervisor of the Company, a senior marketer with bachelor's degree. The majoremployment history of Mr. Wang is as follows: He used to be a member of supply and Marketing Department of Shougang First-linematerial Factory, a salesman of Sales Department of high-quality Profile Sales Department of Shougang Sales Company, a researcherof price Management Department of Marketing Management Department of Shougang Sales Company, a deputy chief of priceManagement Department of Marketing Management Department of Shougang Sales Company (probation period of one year), a
deputy chief of price Management Department of Marketing Management Department of Shougang Sales Company, and aprofessional manager of marketing Management Department of Marketing Management Department. Currently, he is theprofessional manager of marketing Office of Marketing Management Department of Marketing Center and the employeerepresentative supervisor of Beijing Shougang Co., Ltd.
5. Qu Erlong: The employee representative supervisor of the Company, a senior marketer with bachelor's degree. The majoremployment history of Mr. Qu is as follows: Mr. Qu worked as a worker in Shougang High-speed Wire Mill, Shougang EquipmentMaintenance Center, Qiangang Co. Equipment Maintenance Center, Qiangang Company Equipment Maintenance Center, BeijingShougang Co., Ltd. Equipment Department, hot-rolling Operation Department.C. Senior manager
1. Zhu Guosen: The general manager of the Company, Doctoral degree, Doctor of Engineering, Professor level Senior Engineer.Formerly served as a researcher at the Plate and Strip Research Institute of Shougang Technology Research Institute, a researcher,deputy director (deputy director), deputy director (deputy director, in charge of work), and director (chief director) at the Thin PlateResearch Institute of Shougang Technology Research Institute, assistant to the president of Shougang Technology Research Instituteand director of the Thin Plate Research Institute (chief director), chief engineer (deputy department) of Shougang Jingtang Iron andSteel United Co., Ltd., deputy secretary and first vice president of the Party Committee of Shougang Group Technology ResearchInstitute, secretary and first vice president of the Party Committee of Shougang Group Technology Research Institute, deputysecretary of the Party Committee of Beijing Shougang Co., Ltd., deputy secretary and general manager of the Party Committee ofBeijing Shougang Co., Ltd. The current Deputy Secretary of the Party Committee, Director, and General Manager of BeijingShougang Co., Ltd.
2. Sun Maolin: The deputy General Manager, University degree, Senior Management Master of Business Administration, SeniorEngineer. Formerly served as a professional in the Technical Department of Shougang Medium and Heavy Plate Plant, DeputySecretary and Deputy Section Chief of the Party Branch of the Hot Rolling Section, Secretary of the Party Branch of the BOperation Area, and Deputy Director of the Technical Research Department; Deputy Director of the Technical Department ofShougang Qiangang Company (in charge of work), Assistant Director of the Technical Quality Department, Deputy Director of theSilicon Steel Department (in charge of work), Executive Deputy Director of the Silicon Steel Department, and Deputy Director ofthe Silicon Steel Business Unit; Deputy Director and Deputy Director of Silicon Steel Business Unit of Qian'an Iron and SteelCompany of Shougang Corporation (in charge of work); Vice Minister (in charge of work) and Minister of Silicon Steel BusinessDepartment of Beijing Shougang Co., Ltd; Secretary of the Party Committee and Minister of the Silicon Steel Business Unit ofBeijing Shougang Co., Ltd; Secretary of the Party Committee and Minister of the Silicon Steel Business Unit of Beijing ShougangCo., Ltd., and Director of the Silicon Steel Engineering Technology Research Center; Assistant to the General Manager of BeijingShougang Co., Ltd., Secretary and Minister of the Party Committee of the Silicon Steel Business Unit, and Director of the SiliconSteel Engineering Technology Research Center; Vice General Manager of Beijing Shougang Co., Ltd., Secretary of the PartyCommittee of the Silicon Steel Business Unit, and Director of the Silicon Steel Engineering Technology Research Center; DeputyGeneral Manager of Beijing Shougang Co., Ltd., Director of Silicon Steel Engineering Technology Research Center, PartySecretary and Executive Director of Shougang Zhixin Qian'an Electromagnetic Materials Co., Ltd; Vice General Manager ofBeijing Shougang Co., Ltd., Director of Silicon Steel Engineering Technology Research Center, and Executive Director ofShougang Zhixin Qian'an Electromagnetic Materials Co., Ltd; Member of the Party Committee and Deputy General Manager ofBeijing Shougang Co., Ltd., Director of Silicon Steel Engineering Technology Research Center, and Executive Director ofShougang Zhixin Qian'an Electromagnetic Materials Co., Ltd; Member of the Party Committee and Deputy General Manager ofBeijing Shougang Co., Ltd., Director of Silicon Steel Engineering Technology Research Center, and Chairman of Shougang ZhixinQian'an Electromagnetic Materials Co., Ltd; Member of the Party Committee and Deputy General Manager of Beijing ShougangCo., Ltd., Deputy Secretary and General Manager of the Party Committee of the Marketing Center, and Chairman of ShougangZhixin Qian'an Electromagnetic Materials Co., Ltd; Member of the Party Committee and Deputy General Manager of BeijingShougang Co., Ltd., Deputy Secretary and General Manager of the Party Committee of the Marketing Center, Chairman ofShougang Zhixin Qian'an Electromagnetic Materials Co., Ltd., Executive Director and General Manager of Beijing Shougang SteelTrade Investment Management Co., Ltd., and Director of Shougang Jingtang Steel United Co., Ltd. Currently serving as a memberof the Party Committee and Deputy General Manager of Beijing Shougang Co., Ltd., Deputy Secretary and General Manager of theParty Committee of the Marketing Center, Executive Director and General Manager of Beijing Shougang Steel Trade InvestmentManagement Co., Ltd., and Director of Shougang Jingtang Steel United Co., Ltd.
3. Liu Tonghe: The chief accountant of the Company, university degree, senior accountant. Formerly served as the FinancingAdministrator of the Finance Department of Shougang Corporation, the Chief Engineer and Deputy Director of the FinanceDepartment of Shougang Corporation (New Steel Company), the Director of Fund Management (Deputy Director) of the FinanceDepartment of Shougang Corporation, the Director of Fund Management of the Finance Department of Shougang Group Co., Ltd.,the Deputy General Manager of Shougang Group Finance Co., Ltd., and the Secretary and Deputy General Manager of the PartyBranch of Shougang Group Finance Co., Ltd. Current Chief Accountant of Beijing Shougang Co., Ltd.
4. Xie Tianwei: The deputy general manager of the Company, a senior engineer with master's degree of Management. The majoremployment history of Mr. Xie is as follows: He used to be an intern of Shougang Medium thick Plate Factory, a member ofShougang 2160 preparatory Group, chief operation officer (seconded) of Operation Area A, chief operation officer of Operation AreaA, director of production technology Office, assistant director of hot rolling operation Department, Assistant director of ProductionDepartment and deputy director of hot rolling Operation Department of Shougang Relocated Steel Company, Vice Minister of hotrolling Operation Department, Vice Minister of Production Department, Vice Minister of Manufacturing Department, Vice Ministerof Manufacturing Department and Vice Minister of System Innovation Department, Vice Minister of Manufacturing Department andDirector of Contract Planning Room of Marketing Center of Beijing Shougang Co., Ltd., Assistant to general manager of MarketingCenter of Beijing Shougang Co., Ltd., director (director) of Contract Planning Office of Marketing Management Department, DeputyDirector of Manufacturing Department of Beijing Shougang Co., Ltd. Deputy General manager of Beijing Shougang Co., Ltd.
5. Wang Kai: The deputy general manager of the Company, a senior engineer with master's degree of Management. The majoremployment history of Mr. Wang is as follows: He used to be deputy foreman of 1# blast furnace, deputy foreman of 2# blast furnace,chief foreman of 2# blast furnace, technician of 2# blast furnace, deputy foreman of 2# blast furnace operation area, chief operator of1# blast furnace operation area (one-year probation), chief operator of 1# blast furnace operation area, assistant minister (temporaryvice minister) and deputy minister (in charge of work) of Iron Making Division of Shouqin Company. Deputy Minister, Deputyminister (in charge of work) and minister of the Iron making Operation Department of Shougang Jingtang Co., assistant to thegeneral manager and head of the Iron making Operation Department of Jingtang Co.. Deputy General manager of Beijing ShougangCo., Ltd.
6. Qiao Yufei: Secretary of the Board of Directors. Master's degree. Formerly served as Senior Manager and Vice President of theInvestment Banking Committee and Equity Investment Department of CITIC Securities Co., Ltd; Senior Vice President of ChinaMinsheng Financial Investment Department; General Manager of Post Investment Management and Service Department ofShougang Fund Co., Ltd., Director and General Manager of Beijing Shouxi Investment Management Co., Ltd., concurrently servingas a supervisor of Beijing Automotive Co., Ltd., director of Shouhui Industrial Financial Services Group Co., Ltd., director of BeijingChuangye Industrial Operation Management Co., Ltd., supervisor of Beijing Shougang Green Festival Entrepreneurship InvestmentCo., Ltd., and senior manager of the Board Secretary Office of Beijing Shougang Co., Ltd. The current Secretary of the Board ofDirectors of Beijing Shougang Co., Ltd.Employment at the shareholder of the Company
√Applicable □Not applicable
| Name | Entity | Position in shareholder company | Start date of term | End date of term | Received remuneration from other entity (Y/N) |
| Qiu Yinfu | Shougang Group Co., Ltd. | Deputy secretary of the Party Committee, Director and General Manager | September 2023 | Y | |
| Sun Yi | Shougang Group Co., Ltd. | Executive director of the office of the board of supervisors | January 2021 | Y | |
| Guo Liyan | Shougang Group Co., Ltd. | Director of audit department | June 2017 | January 2024 | Y |
| Li Jiantao | China Baowu Steel Group Corporation Ltd. | Capital Operation Department, Director of capital Operation of Industry and Finance Center | March 2021 | Y | |
| Chang Hiyu | Beijing Jingguorui Equity Investment Fund Management Co., Ltd. | Investment director | November 2011 | Y |
Position in other entity
□ Applicable √ Not applicable
Notes for any punishment from securities review and management authorities, on resigned or current directors, supervisors, andsenior managers within the three years
□ Applicable √ Not applicable
IIⅠ. Remuneration of directors, supervisors and senior management
Decision making procedure, determination basis and actual payment of remuneration for directors, supervisors and senior managers：
Remuneration for directors: the independent directors of the Company collect the allowance of independent directors, and theallowance standard of independent directors is determined by the general meeting of shareholders; the director who concurrentlyserves as the general manager does not collect the remuneration of directors; director Qiu Yinfu collects remuneration in Jingtang Co.,which is not the director remuneration; other directors do not collect remuneration from the Company.Remuneration for supervisors: employee representative supervisors collect remuneration from the Company, while other supervisorsdo not collect remuneration from the Company. The employee representative supervisor shall be remunerated according to theposition of non-supervisor in the Company.Remuneration of senior management personnel: The remuneration of senior management personnel such as the general manager shallbe formulated by the Remuneration and Assessment Committee of the Board of Directors of the company in accordance withregulations, and the "Annual General Manager Remuneration Assessment and Allocation Method" shall be formulated. Assessmentand allocation opinions shall be proposed based on the completion of annual tasks and division of responsibilities, and shall besubmitted to the annual board of directors for review and approval before settling and realizing all performance-based annual salaries.The specific remuneration situation for the year 2023 is shown in the table below.Remuneration of directors, supervisors and senior management during the reporting period
Unit：RMB 0,000
| Name | Gender | Age | Position | Status | Total pretax remuneration received from the company | Whether to get remuneration from related parties of the company |
| Qiu Yinfu | Male | 56 | Chairman | Incumbent | 0 | Yes |
| Zhu Guosen | Male | 46 | Director | Incumbent | 0 | No |
| Zeng Li | Male | 52 | Director | Incumbent | 75.77 | No |
| Li Jiantao | Male | 45 | Director | Incumbent | 0 | Yes |
| Gu Wenxian | Male | 62 | Dndependent director | Incumbent | 12 | No |
| Yu Xingxi | Male | 65 | Dndependent director | Incumbent | 12 | No |
| Liu Shen | Male | 48 | Dndependent director | Incumbent | 12 | No |
| Peng Feng | Male | 44 | Dndependent director | Incumbent | 0 | No |
| Sun Yi | Male | 58 | Chairman of supervisory board | Incumbent | 0 | Yes |
| Guo Liyan | Female | 48 | Supervisor | Incumbent | 0 | Yes |
| Chang Haiyu | Female | 39 | Supervisor | Incumbent | 0 | Yes |
| Wang Xingtao | Male | 45 | Employee representative supervisor | Incumbent | 27.91 | No |
| Qu Erlong | Male | 42 | Employee representative supervisor | Incumbent | 22.58 | No |
| Zhu Guosen | Male | 46 | General Manager | Incumbent | 17.99 | No |
| Sun Maolin | Male | 47 | Vice general manager | Incumbent | 64.97 | No |
| Liu Tonghe | Male | 43 | Chief Accountant | Incumbent | 14.72 | No |
| Xie Tianwei | Male | 42 | Vice general manager | Incumbent | 59.17 | No |
| Wang Kai | Male | 41 | Vice general manager | Incumbent | 54.01 | No |
| Qiao Yufei | Female | 35 | Secretary of the Board of Directors | Incumbent | 13.72 | No |
| Zhao Minge | Male | 57 | Chairman | Resignation | 0 | Yes |
| Liu Jianhui | Male | 59 | Director/ General Manager | Resignation | 53.03 | Yes |
| Ye Lin | Male | 60 | Independent director | Resignation | 12.00 | No |
| Zhang Binglong | Male | 47 | Vice general manager | Resignation | 48.73 | Yes |
| Li Baizheng | Male | 58 | Chief Accountant | Resignation | 48.32 | Yes |
| Li Jingchao | Male | 57 | Vice general manager | Resignation | 38.35 | Yes |
| Chen Yi | Male | 56 | Deputy General Manager and Secretary of the Board of Directors | Resignation | 58.46 | Yes |
| Total | -- | -- | -- | -- | 645.73 | -- |
Explanation of other situations
□ Applicable √ Not applicable
VI. Performance of Directors during the reporting period
1. Board meetings during the reporting period
| Meeting | Convening date | Disclosure date | Resolutions of meeting |
| The first extraordinary meeting of the board of directors for the year 2023 | 2023/3/10 | 2023/3/11 | Detailed information can be found in the company's announcement on the date of disclosure of the meeting resolution |
| The Second Board Meeting of the Eighth Board of Directors | 2023/4/19 | 2023/4/21 | Detailed information can be found in the company's announcement on the date of disclosure of the meeting resolution |
| The Second Extraordinary Meeting of the Board of Directors for the Year 2023 | 2023/6/9 | 2023/6/10 | Detailed information can be found in the company's announcement on the date of disclosure of the meeting resolution |
| The Third Extraordinary Meeting | 2023/8/10 | 2023/8/11 | Detailed information can be found in the company's |
| of the Board of Directors for the Year 2023 | announcement on the date of disclosure of the meeting resolution | ||
| The Fourth Extraordinary Meeting of the Board of Directors for the Year 2023 | 2023/8/18 | 2023/8/19 | Detailed information can be found in the company's announcement on the date of disclosure of the meeting resolution |
| The Third Meeting of the Eighth Board of Directors | 2023/9/12 | 2023/9/13 | Detailed information can be found in the company's announcement on the date of disclosure of the meeting resolution |
| The Fifth Extraordinary Meeting of the Board of Directors for the Year 2023 | 2023/9/28 | 2023/9/29 | Detailed information can be found in the company's announcement on the date of disclosure of the meeting resolution |
| The 6th Extraordinary Meeting of the Board of Directors in 2023 | 2023/10/26 | 2023/10/27 | Detailed information can be found in the company's announcement on the date of disclosure of the meeting resolution |
| The 7th Extraordinary Meeting of the Board of Directors in 2023 | 2023/12/12 | 2023/12/13 | Detailed information can be found in the company's announcement on the date of disclosure of the meeting resolution |
| The Fourth Meeting of the Eighth Board of Directors | 2023/12/28 | 2023/12/29 | Detailed information can be found in the company's announcement on the date of disclosure of the meeting resolution |
2. Attendance of Directors at Board meetings and general meetings
| Attendance of Directors at Board meetings and general meetings | |||||||
| Name of Directors | Number of attendance required for Board meetings during the reporting period | Attendance at Board meetings in person | Attendance at Board meetings by communication | Attendance at Board meetings by proxy | Absence from Board meetings | Absent from Board meetings twice in a row (in person) | Attendance at general meetings |
| Qiu Yinfu | 1 | 1 | 0 | 0 | 0 | 否 | 1 |
| Zhu Guosen | 4 | 1 | 3 | 0 | 0 | 否 | 2 |
| Zeng Li | 10 | 3 | 7 | 0 | 0 | 否 | 3 |
| Li Jiantao | 10 | 3 | 7 | 0 | 0 | 否 | 2 |
| Gu Wenxian | 10 | 2 | 7 | 1 | 0 | 否 | 0 |
| Yu Xingxi | 10 | 3 | 7 | 0 | 0 | 否 | 2 |
| Liu Shen | 10 | 3 | 7 | 0 | 0 | 否 | 0 |
| Peng Feng | 10 | 3 | 7 | 0 | 0 | 否 | 0 |
3. Objections from Directors on related issues of the Company
Whether the directors raise any objection to the relevant matters of the Company
□ Yes √ No
During the reporting period, the directors did not raise any objection to the relevant matters of the Company.
4. Other details about the performance of duties by Directors
Whether the directors' suggestions on the Company have been adopted
√ Yes □ No
Explanation on the adoption or non-adoption with related suggestions from the directors
□ Applicable √ Not applicable
VII. Special committees under the board of directors during the reporting period
| Name of the committee | Member | Number of meeting convened | Convening date | Details of the meeting | Important opinion and advice | Other performance of duty | Details of objection (if any) |
| Strategic and Risk Management Committee | Composed by 5 directors, including 2 independent directors. | 0 | N/A | N/A | N/A | ||
| Audit Committee | Composed by 3 independent directors. | 1 | February 28, 2023 | Minutes of communication between the CPA and the audit committee (independent director) before the audit entry | Agreed to submit to the Board for review | Independent directors express independent opinions in accordance with regulations |
| March 31, 2023 | Communication letters with independent directors and the audit committee of the board of directors regarding the issuance of preliminary audit opinions by the annual audit certified public accountant on the company's 2022 financial settlement report | Agreed to submit to the Board for review | Independent directors express independent opinions in accordance with regulations | ||||
| Remuneration and Assessment Committee | Composed by 3 independent directors. | 1 | March 31, 2023 | Proposal on the general manager's salary cashing in 2022and the salary and assessment distribution method in 2023 | Agreed to submit to the Board for review | Independent directors express independent opinions in accordance with regulations | |
| Nomination Committee | Composed by 3 independent directors | 0 | Independent directors express independent opinions in accordance with regulations |
VIII. Performance of duties by the supervisory committeeWhether the board of supervisors found any risks in the company during the supervision activities during the reporting period
□ Yes √ No
None of those issues under the supervision was objected by the supervisory committee during the reporting period.IX. Personnel of the Company
1. Number of employees, professional composition and education background
| Number of employees in the parent company | 6,078 |
| Number of employees in the main subsidiary | 12,148 |
| Total number of employees | 18,226 |
| Total number of employees receiving salary in the current period | 18,226 |
| Number of retired employees to be borne by parent company and main subsidiary | 1,388 |
| Professional composition | |
| Professional composition category | Number of professional composition |
| Production | 12,351 |
| Salesman | 672 |
| Technician | 2,242 |
| Finance | 288 |
| Administrative | 2,245 |
| Services and other | 428 |
| Total | 18,226 |
| Education background | |
| Type | Quantity |
| Master degree or above | 1,631 |
| Bachelor's degree | 7,935 |
| College | 5,573 |
| Vocational secondary and below | 3,087 |
| Total | 18,226 |
2. Remuneration policies
The middle-level employees of the company implement the annual salary system, and the annual salary structure includes three parts:
basic annual salary, performance annual salary and term incentive. The basic salary is paid monthly. The performance bonus (70% ofannual salary standard) links to the performing duty monthly or annually, and annual assessment and settlement based on the
completion of the Business Objective Responsibility Agreement. The term incentive shall be assessed and distributed at the end ofthe term in accordance with the provisions of the Term Target Responsibility Agreement, based on the business and productionperformance during the term.The salary system of front-line and blow staff is composed of occupation salary and benefit salary. The occupation salary isinfluenced by the attendance, and the benefit salary is distributed as the monthly performance on the duty.
3. Training program
Qianshun Base and Zhixin Co. focus on the national and Beijing vocational skills improvement action plan, combined with theoverall requirements of employee team construction, with quality improvement, ability cultivation, and talent appreciation as the core,adhering to the combination of theory and practice, learning and summary, to establish a "long-distance" development system for thefull life cycle of high potential talents. According to the positioning needs of different levels of talents, such as training reserves,backbone, core, key, and strategy, design five levels of talent development and training projects, including "waves, sailing, sailing,piloting, and navigation", to form a continuous and progressive map of high potential talent cultivation and development. This iscontinuously promoted in stages and levels, and a series of talent development projects are formulated based on the characteristicsand growth elements of talent abilities at different stages. The talent training implementation project effectively achieves unifiedguidance for the cultivation of high potential talents in three talent sequences, accelerating talent growth. Throughout the year, weorganized and completed 193 key training projects at all levels, achieving full coverage of three talent teams: business management,professional technology, and skill operation. This provides strong support for building a team of employees with both moral integrityand excellent quality, continuously enhancing the cohesion and high-quality development of the enterprise.Jingtang Co. focuses on improving the quality and ability of the staff, continuously expanding its growth and talent platform.Establish a correct orientation for selecting and employing personnel, focus on practical training in undertaking urgent, difficult, andheavy tasks, hold leadership lecture halls and grassroots leadership rotation classes, select pilot units to promote competition forleadership positions, and strengthen the construction of management personnel teams. Utilize the advantages of school enterprisejoint training, hold the second high-end composite technical talent training course, and enhance the abilities of professional andtechnical personnel. Continuously carry out skill competitions and graded training for team leaders to enhance the operational skillsof employees in their positions. Establish a differentiated training path for graduates, implement a "blue and blue" consistent trainingplan, and strengthen the cultivation of reserve forces.
4. Outsourcing of labor source
□ Applicable √ Not applicable
X. Porposal for profit distribution and transfer of capital reserve to share capitalFormulation, Implementation and Adjustment of common stock Profit Distribution Policy Especially Cash Dividend policy duringthe reporting period
√Applicable □Not applicable
| Special description on cash dividend policy | |
| Whether it meets the requirements of the Article of Association or the Resolution of the General Meeting (Y/N): | Y |
| Whether the bonus standards and proportion is clear and well-defined (Y/N): | Y |
| Whether has a completed relevant decision-making procedures and mechanism (Y/N): | Y |
| Whether independent directors fulfill duties and play a due role (Y/N): | Y |
| If the company does not distribute cash dividends, specific reasons should be disclosed, as well as the measures to be taken next to enhance investor returns: | N/A |
| Minority shareholders whether has opportunity of full expression and appeals, the legal interest of the minority are being protected adequately (Y/N): | Y |
| As for the adjustment and change of cash bonus policy, the condition and procedures whether meets regulations and transparent (Y/N): | N/A |
The Company was profitable during the reporting period and the Parent Company’s profit available for distribution to shareholderswas positive, but no cash dividend distribution plan was proposed
□ Applicable √ Not applicable
Profit distribution and conversion of capital reserves into share capital during the reporting period
√ Applicable □ Not applicable
| Number of bonus shares per 10 shares | 0 |
| Dividend payout per 10 shares (RMB yuan) (including tax) | 0.3 |
| Number of shares converted for every 10 shares | 0 |
| Distribution plan's share capital base (shares) | 7,794,611,605 |
| Cash dividends (RMB yuan) (including tax) | 233,838,348.15 |
| Cash dividend amount in other ways (such as repurchase of shares) (RMB yuan) | 0.00 |
| Total cash dividends (including other methods) (RMB yuan) | 233,838,348.15 |
| Distributable profit (RMB yuan) | 317,765,555.82 |
| The proportion of total cash dividends (including other methods) to total profit distribution | 74% |
| Current cash dividend situation | |
| Others | |
| Detailed explanation of profit distribution or capital reserve conversion plan | |
| Not increasing share capital through the conversion of provident fund. | |
XI. Implementation of the equity incentive plan, employee shareholding plan or otheremployee incentive measures of the Company.
√Applicable □Not applicable
1. Equity incentive
According to the "Reply on The Implementation of Equity Incentive Plan for Beijing Shougang Co., Ltd." issued by State-ownedAssets Supervision and Administration Commission of Beijing Municipal People's Government (Jingguozi [2021] No. 140) and theresolution of the Company's first interim general Meeting of shareholders in 2021, the Company implemented the 2021 restrictedstock Incentive plan. 64,901,800 shares were issued to 386 directors, senior management personnel, core technical personnel andmanagement backbones. The restricted stock grant date is December 9, 2021, and the restricted stock is booked as of December 23,2021.According to the Incentive Plan, if the company's 2022 performance indicators do not meet the performance evaluation conditions atthe company level for the first period of lifting restrictions as stipulated in the Incentive Plan, and 15 incentive targets haveundergone changes due to organizational or personal reasons and no longer meet the incentive conditions, the company needs torepurchase and cancel 23,418,884 restricted stocks granted to the aforementioned 15 incentive targets that have not yet been liftedfrom restrictions; Considering the actual implementation of the employee stock ownership plan by Zhixin Co., and considering thatboth the employee stock ownership plan and equity incentives are medium and long-term incentives, the company allows relatedpersonnel of Zhixin Co. to choose to participate in one of the two incentive methods and repurchase 1,838,681 restricted stocks heldby 18 incentive targets (employees of Zhixin Co.) who withdrew from the incentive plan. With the approval of the company'sshareholders meeting, as of December 5, 2023, the company has repurchased and cancelled a total of 25,257,565 shares of theaforementioned restricted shares.
Information on share option scheme provided to directors and senior management during the reporting period
√Applicable □Not applicable
Unit: share
| Name | Position | Number of Restricted shares held at the beginning of the period | Number of newly granted restricted shares during the reporting period d | Number of shares exercisable during the reporting period | Number of shares exercised during the reporting period | Exercise price of the shares exercised during the reporting period (RMB/ share) | Number of restricted shares held at the end of the period | Market price at the end of the reporting period (RMB/ share) | Number of restricted shares held at the beginning of the period | Number of unlocked shares during the current period | Number of newly granted restricted shares during the reporting period | Grant price of restricted shares (RMB/ share) | Number of restricted shares held at the end of the period |
| Zeng Li | Director | 0 | 0 | 0 | 0 | 0 | 3.46 | 290,000 | 0 | 0 | 3.17 | 194,300 | |
| Sun Maolin | Vice General Manager | 0 | 0 | 0 | 0 | 0 | 3.46 | 261,000 | 0 | 0 | 3.17 | 174,870 | |
| Xie Tianwei | Vice General Manager | 0 | 0 | 0 | 0 | 0 | 3.46 | 203,300 | 0 | 0 | 3.17 | 136,310 | |
| Wang Kai | Vice General Manager | 0 | 0 | 0 | 0 | 0 | 3.46 | 203,300 | 0 | 0 | 3.17 | 136,310 | |
| Total | -- | 0 | 0 | 0 | 0 | -- | 0 | -- | 957,600 | 0 | 0 | -- | 641,790 |
| Notes (if any) | |||||||||||||
Evaluation mechanism and incentive of senior managementEvaluation of senior management personnel such as the general manager: The general manager and other senior managementpersonnel implement an annual salary system consisting of three parts: base salary, performance-based annual salary, and termincentives. Among them: the base salary ratio is 30%, paid monthly; The performance-based annual salary ratio is 70%, with amonthly advance payment of 50%. The annual assessment and allocation opinions shall be proposed by the Compensation andAssessment Committee of the Board of Directors of the company in accordance with regulations, based on the completion of annualtasks and division of responsibilities in the "Salary Assessment and Allocation Method for General Managers and SeniorManagement Personnel". After being reviewed and approved by the annual board meeting, all performance-based annual salariesshall be settled and fulfilled; The term incentive is determined based on an annual salary standard of 30%, and will be assessed andfulfilled at the end of the term according to the "Term Target Responsibility Agreement".
2. Implementation of employee stock ownership plan
□ Applicable √ Not applicable
3. Other employee incentive measures
□ Applicable √ Not applicable
XII. Construction and implementation of internal control system during the reporting period
1. Construction and implementation of internal control system
The Company has established and improved its internal control system, and has revised and improved it in conjunction with actualoperations, fully leveraging its institutional guarantee role. During the reporting period, the company formulated 20 regulations,including the "ESG Work Management System of Beijing Shougang Co., Ltd." and the "Management and Evaluation System forPersonnel Dispatched to Participating and Holding Enterprises of Beijing Shougang Co., Ltd.", and revised 72 regulations, includingthe "Articles of Association of Beijing Shougang Co., Ltd." and the "Work Regulations of the Strategy, Risk, ESG and ComplianceManagement Committee of the Board of Directors of Beijing Shougang Co., Ltd."; As of the end of 2023, the company has a total of495 regulations, including 491 regulations formulated and implemented by the company, and 4 regulations forwarded to thegovernment and regulatory agencies.
2.Particulars of material deficiencies in internal control detected during the reporting period
□Yes √ No
XIII. The Company’s management and control of subsidiaries during the reporting period
Not applicable
XIV. Self-assessment report on internal control or auditor’s report on internal control
1. Appraisal Report of Internal Control
| Disclosure date of full internal control evaluation report | 22 April 2024 | |
| Disclosure index of full internal control evaluation report | Beijing Shougang Co., Ltd. 2023 Internal Control Self-Assessment Report, disclosed on CNINFO Website (http://www.cninfo.com.cn/). | |
| Proportion of total assets included in internal control evaluation report accounting for the total assets in the consolidated financial statements | 100.00% | |
| Proportion of operating revenue included in internal control evaluation report accounting for operating revenue in the consolidated financial statements | 100.00% | |
| Defect identification criteria | ||
| Type | Financial Reports | Non-financial reporting |
| Qualitative criteria | 1. Material deficiency: (1) it may or has made the company unable to achieve all operating objectives, resulting in business suspension. It is not an objective reason and has exceeded the budget by more than 20% in terms of time, manpower or cost without proper approval, and has exceeded the level of importance; (2) The company has financial related fraud, which affects the accuracy of financial statements. | 1. Material deficiency: there is causing multiple casualties among employees and citizens, causing serious damage to the environment, and the situation spiraling out of control; May or has prevented the company from achieving all operational goals, resulting in business suspension, non objective reasons, and exceeding the budget by more than 20% in terms of time, manpower, or cost without appropriate approval, and exceeding the level of importance; May or has already caused significant impact on the company, negative news is widely circulated, causing significant damage to the reputation of the enterprise, government or regulatory agencies conduct investigations, attracting public attention, and causing irreparable damage to the reputation of the enterprise; Violating national laws and regulations, facing business |
| 2. Significant deficiency: it may or has slowed down the business operation, or unable to achieve some business objectives, or not exceeding the budget by 6% - 20% in terms of time, manpower or cost for non-objective reasons and without proper approval; 3. General deficiency: it may or has caused slight impact on business activities, which is not an objective reason and has exceeded the budget by 1% - 5% in terms of time, manpower or cost without proper approval. | suspension, legal litigation or economic compensation, which may or have already caused serious social impact, being notified or publicly condemned by regulatory agencies, or even ordered to suspend business for rectification. 2. Significant deficiency: failure to establish a "three major and one major" decision-making process, or inadequate or inadequate implementation of the decision-making process, which may or has already had negative impacts; May or has seriously affected the health of multiple employees or citizens, or caused general environmental damage, which requires external support to be controlled; May or has already slowed down business operations, unable to achieve some business objectives, and not exceeding the budget by 6% -20% in terms of time, manpower, or cost due to objective reasons and without appropriate approval; Negative news may or has already had a significant impact on the company, spreading in a certain region and attracting the attention of relevant stakeholders, such as partners suspending cooperation, low employee efficiency, and reduced customer loyalty; Violation of national or regional regulations or industry norms, facing legal proceedings, economic compensation, which may or have already caused general social impact, has attracted the attention of regulatory agencies, and requires regular rectification. 3. General deficiency: it may or has temporarily affected the health of employees or citizens; May or has already caused a slight impact on business activities, exceeding the budget by 1% -5% in terms of time, manpower, or cost due to non objective reasons and without appropriate approval; Negative news may or has already had a slight impact on the company, spreading within the company or locally, and will not attract the attention of stakeholders; Violation of company regulations or conflicts with self established rules and regulations may have caused minor social impact and will not attract the attention of regulatory authorities. | |
| Quantitative criteria | 1. Material misstatement: amount of misstatement≥1% of total assets 2. Significant misstatement: 0.5% of total assets≤amount of misstatement < 1% of total assets 3. General misstatement: amount of misstatement < 0.5% of total assets | 1. Material misstatement: amount of direct property losses≥RMB 10,000,000 2. Significant misstatement: RMB 5,000,000≤ amount of direct property losses < RMB 10,000,000 3. General misstatement: RMB 100,000≤amount of property losses < RMB 5,000,000 |
| Number of material defects in financial reports | 0 | |
| Number of material defects in non-financial reports | 0 | |
| Number of significant defects in financial reports | 0 | |
| Number of significant defects in non-financial reports | 0 | |
2.Audit report for internal control
√ Applicable □ Not applicable
| Audit opinion on internal control |
| Shougang Co. has kept the effective internal control over financial reporting in all material matters on 31 December 2023, in accordance with the “Basic Standards for Internal Control of Enterprises” and other relevant regulations. |
| Disclosure of internal control audit report | Disclosed |
| Date of disclosure of the internal control audit report | 22 April 2024 |
| Source for the internal control audit report | Searching for: http://www.cninfo.com.cn/. |
| Audit opinion on internal control | Standard unqualified opinion |
| Whether material deficiency over non-financial reporting | No |
Whether non-standard opinions from independent auditors in the audit report on internal control
□ Yes √ No
Whether there is consistent opinion between the audit report on internal control and the self-assessment report on internal control
√ Yes □ No
XV. Rectification of problems found in self-inspection under the special initiative oncorporate governance of the listed companyThe Company has no problems found in self-inspection under the special initiative on corporate governance of the listed company.
Section V. Environment and Social Responsibility
I. Major environmental protection mattersWhether the listed company and its subsidiaries belong to the key pollutant discharge units announced by the environmentalprotection department
√ Yes □ No
1. Environmental protection related policies and industry standards
The policies and industry standards related to environmental protection implemented by the Company and its subsidiaries mainlyinclude: Environmental Protection Law of the People's Republic of China, Cleaner Production Promotion Law of the People'sRepublic of China, Air Pollution Prevention and Control Law of the People's Republic of China, Water Pollution Prevention andControl Law of the People's Republic of China, Environmental Pollution Prevention and Control Law of the People's Republic ofChina by Solid Waste, Noise Pollution Prevention and Control Law of the People's Republic of China, Soil Pollution Prevention andControl Law, Environmental Impact Assessment Law of the People's Republic of China, Regulations on the Administration ofPollutant Emission Permits, Regulations of Hebei Province on Ecological and Environmental Protection, Ultra-Low EmissionStandards of Air Pollutants for the Iron and Steel Industry, Regulations of Tangshan City on Ecological and Environmental Protection,etc.
2. Administrative license for environmental protection
During the reporting period, Qiangang Co. has completed environmental protection acceptance work for three projects, including the15MWCCPP project of the Ministry of Energy and the renovation project of the steel slag pressing ball line drying equipment. It hasorganized and carried out environmental impact assessment procedures for 14 construction projects, including the new supportingwhite ash kiln project and the thawing warehouse project, to ensure that environmental protection projects comply with laws andregulations. In October 2023, Qiangang Co. obtained a new version of the pollution discharge permit issued by the TangshanEcological Environment Bureau, which is valid until October 2028.Jingtang Co. adheres to the principle of attaching equal importance to production development and environmental protection, so itcarries out environmental impact assessment of construction projects strictly in accordance with the Environmental ImpactAssessment Law of the People's Republic of China. In the process of project implementation, Jingtang Co. carries out constructionstrictly in accordance with the EIA approval, and all construction projects are supporting the construction of environmental protectionfacilities, environmental protection approval procedures are complete, which meets the requirements of "three simultaneous"management of environmental protection. In August 2017, Jingtang Co. obtained a new version of the sewage discharge permitissued by Tangshan Environmental Protection Bureau, which enabled the construction of the second-phase one-step project toproceed smoothly. In April 2019, Jingtang Co. completed the change of sewage discharge permit and obtained relevant certificates,and incorporated the sewage discharge outlet of the second-phase one-step project into standardized management. In August 2020,Jingtang Co. completed the extension of the sewage discharge permit, with the validity period extended to August 2025. In Februaryand May 2023, and January 2024, the re application for the pollution discharge permit was completed, and the validity period wasextended to January 2029.In strict accordance with the Environmental Impact Assessment Law of the People's Republic of China, Regulations on PollutantEmission Permit Management and other laws and regulations, according to the requirements of pollutant emission permit and EIAmanagement, Zhixin Co. continues to improve the post- emission permit management work, and continues to do a good job in EIAand acceptance. Apply for a new pollution discharge permit in February 2023, which is valid until February 2028; Complete theenvironmental acceptance procedures for the new energy vehicle electrical steel project of Shougang Zhixin Qian'an ElectromagneticMaterials Co., Ltd. in March 2023, and the environmental acceptance procedures for the wastewater station environmental capacityimprovement project of Zhixin Co. in April 2023; Apply for a new pollution discharge permit in October 2023, which is valid untilOctober 2028. In August 2023, the approval procedures for the environmental impact report form of the high-end silicon steel heattreatment project (re submitted) of Zhixin Co. were completed.In October 2017, Cold-R Co. obtained the first pollutant emission permit for key enterprises in Shunyi District, Beijing. In September2020, Cold-R Co. submitted an application for the renewal of the sewage permit in accordance with relevant regulations, and inOctober 2022, the application passed the government review, which extended the validity of the permit to October 2025.
3. Industrial discharge standards and details of the discharge of pollutants involved in production and business activities
| Name of Company or Subsidiary | Types of major pollutants and characteristic contaminants | Names of major pollutants and characteristic contaminants | Way of Discharge | No. of drains | Distribution of emission drains | Emission concentration | Implemented pollutant emission standards | Total emissions (tons) | Total approved emissions (tons) | Emissions exceed the standard |
| Qiangang Co. | Water pollutant | COD (Chemical Oxygen Demand) | Direct | 1 | 1# wastewater discharge port | 4.131mg/L | 50mg/L | 1.5866 | 648.990 | No |
| Qiangang Co. | Water pollutant | Ammonia Nitrogen | Direct | 1 | 1# wastewater discharge port | 0.185mg/L | 5mg/L | 0.0689 | 64.899 | No |
| Qiangang Co. | Air pollutants | Sulfur Dioxide | Organized | 28 | Power station boiler chimney, sintering machine head flue gas outlet, pellet roasting flue gas outlet, CCPP combustion exhaust gas, blast furnace hot blast furnace outlet, steel rolling heating furnace outlet, white ash kiln roof, sleeve kiln roof | Sintering, pelletizing < 10.87mg/m?, blast furnace hot blast furnace, rolling steel heating furnace, lime kiln < 28.3mg/m?, power generation < 26.35mg/m? | Sintering, pelletizing < 35mg/m?, blast furnace hot blast furnace, rolling steel heating furnace, lime kiln < 50mg/m?, power generation < 35mg/m? | 932.52 | 1465.98 | No |
| Qiangang Co. | Air pollutants | Nitrogen Oxides | Organized | 28 | Power station boiler chimney, sintering machine head flue gas outlet, pellet roasting flue gas outlet, CCPP combustion exhaust gas, blast furnace hot blast furnace outlet, steel rolling heating furnace outlet, white ash kiln roof, sleeve kiln roof | Sintering, pelletizing < 30.9mg/m?, blast furnace hot blast furnace, rolling steel heating furnace, lime kiln < 37.76mg/m?, power generation < 34.79mg/m? | Sintering, pelletizing < 50mg/m?, blast furnace hot blast furnace, rolling steel heating furnace, lime kiln < 150mg/m?, power generation < 100mg/m? | 1027.14 | 3032.405 | No |
| Qiangang Co. | Air pollutants | Particulate Matter | Organized | 124 | Power station boiler chimney, sintering machine head flue gas outlet, pellet roasting flue gas outlet, blast furnace iron field dust removal, blast furnace silo dust removal, steelmaking converter secondary dust removal, converter primary dust removal, CCPP combustion exhaust gas, hot rolling heating furnace exhaust gas, environmental dust removal, material transfer exhaust gas | Sintering, pelleting < 3.42mg/m?, blast furnace hot blast furnace, rolling steel heating furnace, lime kiln, other environment < 3.26mg/m?, power generation < 2.55mg/m? | Sintering, pelletizing < 10mg/m?, blast furnace hot blast furnace, rolling steel heating furnace, lime kiln < 10mg/m?, power generation < 5mg/m? | 1655.93 | 2302.92902 | No |
| Jingtang Co. | Air pollutants | Sulfur Dioxide | Organized | 50 | Boiler chimney of power station of thermoelectric branch plant, flue gas outlet of sintering machine head, flue gas outlet of pellet roasting, primary flue gas dust removal 1#, primary flue gas dust removal 2#, secondary flue gas dust removal 2#, secondary flue gas dust removal on silo of 1# and 2# blast furnace, secondary dust removal from 1# decarbonization converter, secondary dust removal from 2# decarbonization converter, coke oven chimney 3 emissions Port, coke pushing machine ground station discharge port, coke dust removal 3 discharge port, dry extinguishing dust removal 3 discharge port, dry extinguishing dust removal 4 discharge port, 7# converter secondary dust removal, CCPP combustion exhaust gas, 6# converter secondary dust removal, etc | Sintering, pelletizing < 15mg/m?, blast furnace hot blast furnace, rolling steel heating furnace, lime kiln < 25mg/m?, coke oven flue gas < 15mg/m?, coal-fired power generation < 10mg/m? | Sintering, pelletizing < 35mg/m?, blast furnace hot blast furnace, rolling steel heating furnace, lime kiln < 50mg/m?, coke oven flue gas < 30mg/m?, coal-fired power generation < 35mg/m? | 1089 | 3031 | No |
| Jingtang Co. | Air pollutants | Nitrogen Oxides | Organized | 46 | Boiler chimney of power station of thermoelectric branch plant, flue gas outlet of sintering machine head, flue gas outlet of pellet roasting, primary flue gas dust removal 1#, primary flue gas dust removal 2#, secondary flue gas dust removal 2#, secondary flue gas dust removal on silo of 1# and 2# blast furnace, secondary dust removal from 1# decarbonization converter, secondary dust removal from 2# decarbonization converter, coke oven chimney 3 emissions Port, coke pushing machine ground station discharge port, coke dust removal 3 discharge port, dry extinguishing dust removal 3 discharge port, dry extinguishing dust removal 4 discharge port, 7# converter secondary dust removal, CCPP combustion exhaust gas, 6# converter secondary dust removal, etc | Sintering < 25mg/m?, pelletizing < 30mg/m?, blast furnace hot blast furnace, rolling steel heating furnace, lime kiln < 50mg/m?, coke oven flue gas < 45mg/m?, coal-fired power generation < 30mg/m? | Sintering, pelletizing < 50mg/m?, blast furnace hot blast furnace, rolling steel heating furnace, lime kiln < 150mg/m?, coke oven flue gas < 130mg/m?, coal-fired power generation < 50mg/m? | 2735 | 6110 | No |
| Name of Company or Subsidiary | Types of major pollutants and characteristic contaminants | Names of major pollutants and characteristic contaminants | Way of Discharge | No. of drains | Distribution of emission drains | Emission concentration | Implemented pollutant emission standards | Total emissions (tons) | Total approved emissions (tons) | Emissions exceed the standard |
| Jingtang Co. | Air pollutants | Particulate Matter | Organized | 219 | Boiler chimney of power station of thermoelectric branch plant, flue gas outlet of sintering machine head, flue gas outlet of pellet roasting, primary flue gas dust removal 1#, primary flue gas dust removal 2#, secondary flue gas dust removal 2#, secondary flue gas dust removal on silo of 1# and 2# blast furnace, secondary dust removal from 1# decarbonization converter, secondary dust removal from 2# decarbonization converter, coke oven chimney 3 emissions Port, coke pushing machine ground station discharge port, coke dust removal 3 discharge port, dry extinguishing dust removal 3 discharge port, dry extinguishing dust removal 4 discharge port, 7# converter secondary dust removal, CCPP combustion exhaust gas, 6# converter secondary dust removal, etc | Sintering, pelletizing < 5mg/m?, blast furnace hot blast furnace, rolling steel heating furnace, lime kiln < 8mg/m?, coke oven flue gas < 8mg/m?, coal-fired power generation < 5mg/m? | Sintering, pelletizing < 10mg/m?, blast furnace hot blast furnace, rolling steel heating furnace, lime kiln < 10mg/m?, coke oven flue gas < 10mg/m?, coal-fired power generation < 10mg/m? | 3541 | 3969 | No |
| Zhixin Co. | Air pollutants | Sulfur Dioxide | Organized | 50 | Continuous annealing furnace, regular annealing furnace, decarbonization annealing furnace, ring furnace, hot drawing furnace | <30mg/m3 | 30mg/m3 | 5.53 | 53.7 | No |
| Zhixin Co. | Air pollutants | Nitrogen Oxides | Organized | 50 | Continuous annealing furnace, regular annealing furnace, decarbonization annealing furnace, ring furnace, hot drawing furnace | <100mg/m3 | 100mg/m3 | 42.375 | 164.118 | No |
| Zhixin Co. | Air pollutants | Particulate Matter | Organized | 69 | Acid regeneration, continuous annealing furnace, constant annealing furnace, decarbonization annealing furnace, ring furnace, hot drawing furnace, scoring | Acid regeneration < 30 mg/m3, heat treatment furnace, score < 10 mg/m3 | Heat treatment furnace, pull straightening machine, finishing and shot blasting: 10 mg/m3, acid regeneration: 30 mg/m3 | 20.34 | 32.5 | No |
| Cold-R Co. | Water pollutant | COD | Organized | 1 | Wastewater stations | 1.3891-24.1182 mg/m3 | 30mg/m3 | 13.796 | 67.5 | No |
| Cold-R Co. | Water pollutant | Ammonia Nitrogen | Organized | 1 | Wastewater stations | 0.01304-0.861182mg/m3 | 1.5(2.5) mg/m3 | 0.157 | 3.937 | No |
| Cold-R Co. | Air pollutants | Sulfur Dioxide | Organized | 8 | Continuous annealing furnace, 1 # galvanized annealing furnace, 2 # galvanized annealing furnace, acid regeneration calcination furnace, hydrogen production conversion furnace, 1 # boiler room, 2 # boiler room, 3 # boiler room | 3 mg/m3 | Continuous annealing furnace, 1 # galvanized annealing furnace, 2 # galvanized annealing furnace, acid regeneration calcination furnace, hydrogen production conversion furnace: 20 mg/m3; 1 #, 2 #, and 3 # boiler rooms: 10 mg/m3 | 3.8646 | 18 | No |
| Cold-R Co. | Air pollutants | Nitrogen Oxides | Organized | 8 | Continuous annealing furnace, 1 # galvanized annealing furnace, 2 # galvanized annealing furnace, acid regeneration calcination furnace, hydrogen production conversion furnace, 1 # boiler room, 2 # boiler room, 3 # boiler room | Continuous annealing furnace, 1 # galvanized annealing furnace, 2 # galvanized annealing furnace: 0.02-99.31 mg/m3; Acid regeneration furnace: 35-48 mg/m3; 2 # boiler room: 1 # boiler room, 3 # boiler room: 0.004-78.055 mg/m3; Hydrogen production conversion furnace 26-33mg/m3 | Continuous annealing furnace, 1 # galvanized annealing furnace, 2 # galvanized annealing furnace, acid regeneration calcination furnace, hydrogen production conversion furnace: 100 mg/m3; 1 #, 2 #, and 3 # boiler rooms: 80 mg/m3 | 59.603 | 99.587 | No |
| Cold-R Co. | Air pollutants | Particulate Matter | Organized | 10 | Continuous annealing furnace, 1 # galvanized annealing furnace, 2 # galvanized annealing furnace, acid regeneration calcination furnace, hydrogen production conversion furnace, 1 # boiler room, 2 # boiler room, 3 # boiler room | Exhaust gas from straightening machine:<2.4mg/m3; Continuous annealing furnace, 1 # galvanized annealing furnace, 2 # galvanized annealing furnace, acid regeneration calcination furnace, hydrogen production conversion furnace<4.8mg/m3; Waste acid regeneration iron oxide powder silo<2.3 mg/m3; 1 #, 2 #, and 3 # boiler rooms:<4.979mg/m3 | Waste gas from straightening machine, continuous annealing furnace, 1 # galvanized annealing furnace, 2 # galvanized annealing furnace, acid regeneration and calcination furnace, hydrogen production conversion furnace, waste acid regeneration iron oxide powder bin: 10 mg/m3; 1 #, 2 #, and 3 # boiler rooms: 5 mg/m3 | 18.722 | 18.75 | No |
4. Treatment of pollutants
Each production process of Qiangang Co. is equipped with perfect environmental protection facilities, which will be regularlymonitored by qualified testing departments. The test results prove that all dust removal facilities achieve ultra-low emission and theemission concentration of bag dust collector reaches less than 10 mg/m?. The key pollution sources of Qiangang Co. are equippedwith 56 sets of online monitoring systems, including 1 set of online monitoring system for water pollution, which are all connectedwith the ecological environment department. The online monitoring system is compared and monitored quarterly by a qualifiedmonitoring company, which ensures that the data is true and reliable. Qiangang Co. attaches great importance to saving waterresources and reducing wastewater discharge, so it has invested in the construction of two sewage treatment plants, and theconstruction of deep water desalting station, which adopts the international advanced membrane treatment process, can all thewastewater generated in the production process after treatment and recycling, so the water recycling rate of Qiangang Co. reaches
98.4%.
Jingtang Co. has desulfurization denitrification and other waste gas treatment facilities, which can be highly efficient treatment of allkinds of waste gas, but also built complete dust removal facilities, the measures using bag dust removal, plastic burning plate dustremoval, electric dust removal and other ways to remove particulate matter; Coke oven flue gas is removed by moving bed calciumdesulfurization +SCR denitration process. The sintering and pellet were removed by circulating fluidized bed desulfurization andSCR denitration process. Desulfurization of self-built power plant adopts seawater desulfurization +SCR denitration process toremove, and dense coherent tower desulfurization +SCR denitration process to blast furnace hot blast furnace. Jingtang Co. hascomplete wastewater treatment facilities, including coking phenol cyanide sewage treatment system, continuous casting wastewatertreatment system, hot rolling, cold rolling, medium thickness plate, steel rolling wastewater treatment system and comprehensivesewage treatment station, etc. At the same time, the production wastewater generated by steelmaking and other processes is treatedinto the comprehensive sewage treatment station for treatment, so as to achieve coupling zero discharge of wastewater. Jingtang Co.has complete solid waste treatment facilities, including the construction of rotary hearth furnace - zinc resource recycling project,slag fine grinding cement production line, full solid waste cementitious material production line, etc., to achieve comprehensiveutilization of solid waste. During the reporting period, all the above environmental protection facilities ran well, and all processes inthe whole process reached ultra-low emission standards.All environmental protection facilities of Zhixin Co. are operating well, and the production line is equipped with waste gas treatmentfacilities such as dust removal and denitrification. After regular monitoring by qualified testing departments, particulate matter iscollected through bag dust removal, plastic firing plate dust removal, and other methods. All dust removal facilities achieve ultra-lowemissions, and the concentration of particulate matter emissions reaches 10mg/m ? Below, 4 sets of online monitoring systems areequipped and have been connected to the ecological environment department. The online monitoring system is compared andmonitored quarterly by qualified monitoring units to ensure the authenticity and reliability of data. The emission concentrations ofthe three pollutants are all at the optimal level, and the emissions are far below the permitted emissions.During the reporting period, the pollution prevention and control facilities of Cold-R Co. maintained efficient operation, and allcombustion exhaust gas was generated by using clean fuel natural gas through low nitrogen burners, which minimized theconcentration of pollutants. The dust generated in the production of Cold-R Co. is disposed of by coated bag dust collector, and thefiltration effect reaches 99.99%. The wastewater generated by the cold rolling company is treated by physical, chemical, biochemicaland membrane processes and discharged after treatment. The emission concentration of all pollutants of Cold-R Co. maintains theleading level in China, and the emissions are far lower than the permitted emissions.
5. Environmental self-monitoring programme
According to the Measures for Self-Monitoring and Information Disclosure of State Key Monitoring Enterprises (Trial), Measuresfor Supervisory Monitoring and Information Disclosure of Pollution Sources of State Key Monitoring Enterprises (Trial) and otherrelevant provisions, Qiangang Co. has established and improved the pollution source monitoring and information disclosure systemand formulated the Pollutant Emission Monitoring Plan for 2023, and strictly implemented it. In 2023, all environmental monitoringprojects were entrusted to qualified third-party institutions for monitoring, and Qiangang Co. actively organized and coordinatedself-monitoring work and completed monthly monitoring tasks, which strengthened the management of online monitoring operationand maintenance units and achieved 100% annual monitoring completion rate in 2023. Qiangang Co. fully completed the annualnational pollution source monitoring information disclosure work, up to 100%.The environmental monitoring system of Jingtang Co. consists of automatic monitoring and manual monitoring. The manualmonitoring system is entrusted to a third-party testing institution. The automatic monitoring regularly conducts environmentalmonitoring on pollution sources, waste gas, waste water, noise, radioactive sources and other items in the plant according to theSelf-Monitoring Plan of Key Monitoring Enterprises in 2023, and forms monitoring data and reports at the same time. Themonitoring plan for 2023 has been completed, and all environmental control indicators have reached the standard.Zhixin Co. adheres to green development, strictly observes the bottom line of environmental protection, and fully implements themain responsibility of enterprise environmental protection. In 2023, Zhixin Co. will achieve zero pollution of environmentalprotection, 100% synchronous operation of environmental protection facilities, and 100% smooth passing of environmentalprotection inspection. According to relevant laws and regulations, Zhixin Co. formulates self-monitoring plans and strictlyimplements them. While entrusting qualified third-party institutions to conduct monitoring, Zhixin Co. also actively organizesself-monitoring work. In 2023, Zhixin Co. carried out self-monitoring 98 times, reaching the standard rate of 100%.Cold-R Co. shall formulate its own monitoring plan in accordance with the requirements of laws and regulations and sewagedischarge permit, entrust a qualified third-party organization to monitor pollutants on a daily, monthly and quarterly basis, and uploadthe data to the government-designated information disclosure system. The emission targets of pollution sources will all meet thestandards in 2023.
6. Contingency plan
No ecological and environmental emergencies occurred in the Company and its holding subsidiaries in 2023.In accordance with the Environmental Protection Law of the People's Republic of China and other laws, regulations, rules and
normative documents, Qiangang Co. has formulated the Emergency Plan for Environmental Emergencies. On this basis, QiangangCo. also formulated three special plans respectively: Atmospheric Special Emergency Plan for Environmental Emergencies, WaterSpecial Emergency Plan for Environmental Emergencies and Hazardous Waste Special Emergency Plan for EnvironmentalEmergencies, which further improved the emergency disposal capacity of air pollution, water pollution and hazardous wasteemergencies.Jingtang Co. identified gas storage cabinets, pipelines, benzene storage tanks, acid storage tanks, liquid ammonia storage tanks andother dangerous chemicals and toxic and harmful substances production and storage areas as emergency rescue dangerous targets.According to the requirements of Shougang Jingtang United Iron&Steel Co., Ltd. 's Emergency Treatment Plan for EnvironmentalEmergencies (Fourth Edition), in 2023, Jingtang Co. carried out 25 emergency drills such as oil leakage emergency drill, oily sludgeleakage emergency drill and radiation accident emergency drill, which ensures that Jingtang Co. can effectively carry out rescue inaccordance with the requirements of the Plan. At the same time, the emergency drills also improve the skills and actual combatability of preventing and dealing with sudden environmental pollution accidents.In accordance with the requirements of laws and regulations, Zhixin Co. has prepared and put on record the Emergency Plan forEnvironmental Emergencies, which mainly consists of atmospheric special plan, water special plan, hazardous waste disposal, riskassessment, emergency resource investigation, on-site disposal plan and other plans. In 2023, 20 drills were organized and completedaround sudden environmental incidents such as acid leakage, liquid ammonia leakage, and gas leakage. Through the drill, Zhixin Co.found problems and rectifies them in time, which enhanced the company's ability to deal with environmental emergencies.In accordance with the requirements of laws and regulations, Cold-R Co. has prepared and put on record the Emergency Plan forEnvironmental Emergencies. Cold-R Co. organized acid rolling, continuous annealing, galvanizing operation areas, and publicauxiliary areas to carry out contingency plans annually according to the requirements of the plan, through which the problems arefound and rectifies in time so that the ability to deal with environmental emergencies of Cold-R Co. is enhanced.
7. Environmental protection input and environmental protection tax
During the reporting period, Qiangang Co. continues to implement four projects, including flue gas treatment with roasted pellets,improvement of dust removal system in sintering finished product warehouse, upgrading and renovation of dust removal in hotrolling section and rolling line, and desulfurization improvement of second blast furnace hot blast furnace, with a total investment ofRMB202 million completed throughout the year. In 2023, Qiangang Company paid an environmental protection tax of RMB8.623million, with a reduction of RMB4.603 million.Jingtang Co. has implemented 3 environmental protection deep treatment projects, including the renovation of the 1700 acidregeneration flue gas purification system, with a total investment of RMB31.43 million completed throughout the year. In 2023,environmental protection tax of RMB19.4 million was paid, with a reduction of RMB9.09 million.The total environmental protection investment of Zhixin Co. in 2023 is RMB11.35 million. By increasing environmental governancefacilities to effectively reduce pollutant emissions, the taxable factors for environmental protection tax of Zhixin Co. mainly includesdust, nitrogen oxides, toluene, chromic acid mist, sulfur dioxide, sulfuric acid mist, smoke, hydrogen chloride, etc. A total ofRMB1.0099 million of environmental protection tax was paid, with a reduction of RMB155,600.Cold-R Co. actively promoted environmental management and protection work, with an annual investment of RMB52.2864 million.In 2023, RMB839,500 was paid for environmental protection tax, with a reduction of RMB13,700.
8. Measures taken to reduce its carbon emissions during the reporting period and their effectiveness
√ Applicable □ Not applicable
In order to accelerate the implementation of national industrial policies in enterprises and promote Shougang Co.'s "carbonmanagement" activities in a scientific and standardized manner, in 2023, Qiangang Co. was strengthened the construction of alow-carbon management system, actively promoted the implementation of low-carbon action plans, and focued on creatinglow-carbon product dedicated lined to meet the carbon reduction needs of key customers. Organized the preparation and officialrelease of the "Low Carbon Action Plan of Shougang Co." and its implementation plan, sort out and vigorously promote carbonreduction measures projects, and accelerated the construction of a green and low-carbon development pattern. The companycomprehensively applied carbon reduction technology, focused on creating low-carbon product dedicated lines, organized the trialproduction of low-carbon products with a large proportion of converter scrap steel, conducted experiments on blast furnace largeproportion pellets and biomass rich hydrogen injection, and prepared technical reserves for the company's future low-carbondevelopment. Successfully completed the annual greenhouse gas emission report and verification work. Participated in thedevelopment of multiple low-carbon standards, among which the international standard "Application of Green ElectricityIdentification Based on Blockchain" was officially released on December 6th. Successfully shortlisted as a pilot demonstration unitfor carbon management system construction in Hebei Province. Actively respond to customer needs for sustainable and low-carbondevelopment, and achieve 100% green electricity for key customer products. Actively respond to CBAM, establish a special workinggroup to conduct research on data accounting rules and key product data accounting, and successfully complete export productdeclaration. Organized carbon emission certification and EPD released to establish a good image of green and low-carbondevelopment for enterprises.Jingtang Co. focuses on the ultimate goal of long-term carbon reduction and actively promotes the clean development of energystructure. In 2023, it purchased 355 million kilowatt hours of green electricity, accounting for 18.8% of all externally purchasedelectricity. It fulfilled its commitment to provide 100% green electricity to BMW products, completed the targeted cancellation of26,000 international I-REC green certificates, and orderly promoted and phased implementation of distributed photovoltaic powergeneration projects in the factory. Deepen the construction of the LCA system, successfully pass the organizational level carboncertification of the International Certification Body (SGS), complete the EPD release of hot-rolled steel plates and strips, andevaluate weather resistant steel and medium thick plate X80 pipeline steel products as provincial-level green products. Automotiveplates have a comprehensive carbon reduction capacity of 40%. In 2023, the 1 # sintering machine and the 5 # converter respectivelywon the championship of the 2022 National Key Large Energy consuming Steel Production Equipment Energy Conservation andConsumption Reduction Competition, maintaining their position as industry energy consumption benchmarks. Jingtang CO. has been
listed as one of the first pilot demonstration units for carbon management system construction in Hebei Province. The ChinaEnvironmental Monitoring Station has sent a thank-you letter, expressing high recognition for the carbon monitoring pilot work ofJingtang Co.Zhixin Co. focuses on the implementation of the "dual carbon" strategy and actively promotes the clean development of energystructure. Continuously strengthen the construction of carbon management infrastructure, promote the transformation of heattreatment production line burners and SCR, vigorously promote the green upgrading of low-carbon process flow, and steadily layoutrevolutionary deep decarbonization technology research and development; Simultaneously promoting process carbon reduction andsource carbon reduction, actively promoting the use of green electricity and photovoltaic construction. Existing projects will generate
5.2 million Kwh of photovoltaic power in 2023, and a new high-end heat treatment plant of Zhixin Co. is built to install aphotovoltaic power generation system project. Docking with customer carbon reduction needs, solidly promoting the construction ofLCA system, two series of products for new energy vehicles, non oriented electrical steel and oriented electrical steel, have beenevaluated as green design products by the Energy Conservation Department of the Ministry of Industry and Information Technology,creating a green manufacturing brand image.Cold-R Co. adheres to the concept of green development and integrates carbon reduction into the whole process of development andinto all links of production and operation. In 2023, an investment of RMB9 million is made to construct a photovoltaic capacityincrease project of 1.9656mwp, with an average annual power generation of 2.1443 million kWh. According to the construction andoperation of thermal power with a coal consumption of 305g/kWh (standard coal), approximately 603 tons of standard coal can besaved each year, correspondingly reducing the emissions of various atmospheric pollutants such as carbon dioxide, sulfur oxides, andnitrogen oxides.
9. Administrative penalties imposed due to environmental problems during the reporting periodDuring the reporting period, neither the Company nor its holding subsidiaries were punished by regulatory authorities in respect ofenvironmental protection. At the same time, the Company urges the shareholding companies to abide by the EnvironmentalProtection Law of the People's Republic of China and other laws, regulations, rules and normative documents.
10. Other environmental information that shall be disclosed
On the basis of adhering to the work of environmental protection, Qiangang Co., Jingtang Co., Zhixin Co. and Cold-R Co. regularlyrelease environmental protection information on the national key monitoring enterprise self monitoring information disclosureplatform in accordance with the requirements of the environmental protection department, and actively accept social supervision.
11. Other environmental protection related information
In order to develop circular economy and low-carbon economy, build resource-saving, environment-friendly and low-carbon orientedenterprises, and achieve sound and rapid development of the company, the Company started the preparation of environmentalresponsibility report at the end of 2016, covering the preparation scope of Qiangang Co., Jingtang Co., Zhixin Co. and Cold-R Co.and other subsidiaries. In April 2023, the Company's website (http://www.sggf.com.cn) released the 2022 Annual EnvironmentalResponsibility Report of Beijing Shougang Co., Ltd.II.Social responsibilityThe Company has independently prepared the "2023 Sustainable Development Report" and submitted it for review at the 7th meetingof the 8th Board of Directors. The specific content is detailed in the company announcement on April 22, 2024.III. Consolidate and expand the achievements of poverty alleviation and rural revitalization
1. According to the Opinions of the Central Committee of the Communist Party of China on Continuously Selecting the FirstSecretary and Work Team for Key Villages, as well as the deployment of the Organization Department of the Beijing Municipal PartyCommittee and the Beijing State owned Assets Supervision and Administration Commission, and in combination with thearrangement of the Organization Department of the Party Committee of Shougang Group, Shougang Co. and Jingtang Co. eachselected one staff member to serve as the First Secretary of Beijing's Collective Economy Weak Villages. In 2023, under theleadership of the local Party Committee and government, they conscientiously fulfilled their duties and contributed to theimplementation of the rural revitalization strategy.
2. The Company actively fulfills its social responsibilities, expands the achievements of poverty alleviation, implements povertyalleviation through consumption, and helps rural revitalization. In 2023, the Company purchased RMB3.7088 million of agriculturalmaterials for poverty alleviation in paired assistance areas.
Section VI. Significant EventsI. Implementation of commitment
1.Commitments made by the company's actual controller, shareholders, related parties, acquirers and the company andother committed parties have been fulfilled during the reporting period and have not been fulfilled by the end of thereporting period
√ Applicable □ Not applicable
| Commitment | Commitment party | Type | Contents | Commitment date | Commitment term | Implementation |
| Commitment in assets restructuring | Shougang Group Co., Ltd. | 1.According to the iron and steel industry development plan of Shougang Group, Shougang Co. will be the only platform for the development and integration of the iron and steel and upstream iron ore resources industry of Shougang Group in China, and eventually achieve the overall listing of Shougang Group's iron and steel and upstream iron ore resources business in China 2. As for the other companies of Shougang Group engaged in iron and steel production business, if the profits could be achieved for three consecutive years through optimizing and adjusting the product structure and actively implementing national industrial policies and environmental protection requirements, and the overall situation of the industry does not appear large fluctuation, Shougang Group will activate the manners in line with the interests of shareholders of listed companies, including but not limited to acquisition, merger, reorganization, etc. to invest relevant high-quality assets in Shougang Co. in accordance with the requirements of securities laws, regulations and industrial policies, and will complete the investment within 36 months after start-up. | 27 Dec. 2018 | Refer to contents of commitment | Implementing. In December 2021, Shougang Co., Ltd. and Shougang Group signed the "Management Service Agreement between Shougang Group Co., Ltd. And Beijing Shougang Co., Ltd. On The Affiliated Enterprises of Shougang Group Co., Ltd. ". Shougang Co., Ltd. provides management services for a total of 14 target enterprises in the steel sector of Shougang Group. | |
| Shougang Group Co., Ltd. | When the market improves in the future, Shougang Mining Corporation achieves stable profits for two consecutive years, and the overall situation of the industry is not fluctuated greatly, Shougang Corporation will start the injection of Shougang Mining Corporation in Shougang Co. and complete it within 36 months. Before Shougang Mining Corporation joined in Shougang Co., Shougang Group will urge Shougang Mining Corporation to conduct necessary related party transactions with Shougang Co. in accordance with fair and reasonable market price, strictly conform to the requirements of laws and regulations, normative documents, the articles of association of Shougang Co. and related transaction management system, and perform the corresponding review, approval and information disclosure procedures for the necessary related transactions between Shougang Co. and Shougang Mining Corporation. | 20 Apr. 2017 | Refer to contents of commitment | Implementing. | ||
| Shougang Group Co., Ltd. | The company will not damage the independence of Shougang Co. due to the increase of the proportion of shares held by Shougang Co. after the completion of the reorganization. The company will maintain "the five-aspect separation principle", which means assets, personnel, financial affairs, institution and business should be independent of Shougang Co., strictly conform to relevant provisions of the CSRC on the independence of listed companies, not illegally utilize Shougang Co. to provide guarantees, not illegally occupy the assets of Shougang Co. and keep and maintain the independence of Shougang Co. | 20 Jul. 2012 | After the completion of assets reorganization (completion date: 25 April 2014) | Implementing of the long-term commitment. |
| Shougang Group Co., Ltd. | Shougang Group is the largest shareholder and controlling shareholder of Shougang. On July 17, 2012, Shougang Group issued the "Letter of Commitment of Shougang Corporation on Reducing and Standardizing Related Party Transactions" (i.e. the commitments listed above, hereinafter referred to as the "original letter of commitment"), and promised that after the completion of major asset replacement purchase of assets by issuing shares between Shougang Co., and Shougang Group [hereinafter referred to as "the previous major asset restructuring (completed on April 25, 2014)", Shougang Group will take relevant measures including joining Shougang Mining Company into Shougang Co., to reduce and standardize related party transactions with Shougang Co. In order to reduce and standardize the related party transactions after the major asset replacement and related party transactions of Shougang Co. and safeguard the legitimate rights and interests of Shougang Co. and its public shareholders, the company promises to continue to fulfill the contents of the original commitment letter after the major asset replacement, and further promises as follows: 1. The company will perform its obligations as the controlling shareholder of Shougang Co. in good faith, try to avoid and reduce the related transactions with Shougang Co. (including the enterprises it controls); as for the related transactions, which are unavoidable or occur for reasonable reasons between the company and other enterprises under the control of the company, and Shougang Co. and the enterprises it controls, the company will not require or accept the more favorable conditions provided by Shougang Co. than the conditions to an independent third party in any fair market transaction. The company and other enterprises under the control of the company will sign a standardized related party transaction agreement with Shougang Co. in accordance with the law, follow the market principles of openness, fairness and justice, in accordance with fair and reasonable market price, conform to relevant provisions of laws, regulations and normative documents in the decision-making procedures of related transactions and disclose information in accordance with the law. 2. The company and other enterprises controlled by the company will not obtain any improper benefits or make Shougang Co. bear any improper obligations through related party transactions with Shougang Co. or the enterprises controlled by Shougang Co. 3. The company will be liable for the losses to Shougang Co. and the enterprise controlled by Shougang Co. due to the related party transactions with them in violation of the above commitments. | 29 Sep. 2015 | During and after the assets replacement | Implementing | |
| Shougang Group Co., Ltd. | In respect of the purchase of 51% equity of Jingtang Co. by Shougang Co., Shougang Group made the following commitments in urging Jingtang Co. and its holding subsidiary, Tangshan Shougang Jingtang Caofeidian Port Co., Ltd. (hereinafter referred to as Port Co.) to complete relevant matters: 1. The company promises to urge Jingtang Co. not to actually carry out port operation business of general bulk cargo berth project (552-meter shoreline wharf project) without obtaining formal or temporary port operation license. 2. The company promises to urge Port Co. not to actually carry out port operation business of general wharf project (1600-meter shoreline wharf project) without obtaining formal or temporary port operation license. | 29 Sep. 2015 | Refer to contents of commitment | Jingtang Co. and the Port Co. have obtained relevant port operation licenses, and this commitment has been fulfilled. | |
| Shougang Group Co., Ltd. | In respect of the purchase of 51% of the equity of Jingtang Co. by Shougang Co., Shougang Group made the following commitments in urging Jingtang Co. and its holding subsidiary, Tangshan Shougang Jingtang Caofeidian Port Co., Ltd. (hereinafter referred to as Port Company) to complete relevant matters: 1. Shougang Group promises to urge Jingtang Co. to complete the overall acceptance procedures of supporting wharf project (1240-meter shoreline wharf project) and obtain the formal port operation license before 31 December 2022, and carry out port operation business in accordance with the requirements of relevant competent departments. 2. Shougang Group promises to urge Jingtang Co. to complete the application of ownership certificate of all self-built houses of Jingtang Co. before 31 December 2022. | 23 Dec. 2022 | Refer to contents of commitment | The operating license for the 1240m port supporting the terminal of Jingtang Co. was completed on April 18, 2023; The property ownership certificates for Jingtang Co. and the Port Co. have been completed on October 31, 2023. | |
| Shougang Group Co., Ltd. | In respect of the purchase of 51% of the equity of Jingtang Co. by Shougang Co., the company made the following commitments in urging Jingtang Co. and its holding subsidiary, Port Company, to complete the relevant matters of obtaining land use right certificate: The company promises to urge Jingtang Co. to obtain state-owned land use right certificate of all the land used before 31 December 2023, including but not limited to the land used by Jingtang Co. Phase I project, Jingtang Co. supporting wharf project (1240-meter shoreline wharf project), general bulk cargo berth project (552-meter shoreline wharf project) and Jingtang Co. Phase II project. | 23 Dec. 2022 | 31 Dec. 2023 | The land ownership certificate for Jingtang Co. and the Port Co. have been completed on January 31, 2023. | |
| Beijing Jing Guorui Soe Reform and Development Fund(L.P.) | The shares of the listed company acquired by the Fund as a result of the purchase of assets through the issuance of shares shall not be transferred within 36 months from the date of the completion of the issuance of shares. If such shares are increased due to the listed company's granting of bonus shares, conversion of capital stock and other reasons, the additional shares of the listed company shall be locked in accordance with the above lockup period. | 21 May. 2021 | 20 May. 2024 | Implementing |
| Shougang Group Co., Ltd. | 1. The shares of the listed company acquired by the company in this transaction shall not be transferred within 36 months from the date when the shares are issued. However, transfers permitted by applicable law are not subject to this restriction. Within six months after completion of the transaction, if the closing price of the shares of the listed company for 20 consecutive trading days is lower than the issuing price of the shares, or the closing price at the end of six months after the completion of this transaction is lower than the issue price of this share, the locking period of shares obtained by the company through this transaction will be automatically extended for six months on the basis of the above locking period. If such shares are increased due to the listed company's granting of bonus shares, conversion of capital stock and other reasons, the additional shares of the listed company shall be locked in accordance with the above lockup period. 2. If the aforementioned commitment to lock up shares is inconsistent with the latest regulatory opinions of the securities regulatory authority, the company shall adjust the aforementioned commitment according to the regulatory opinions of the relevant securities regulatory authority. | 20 Dec.2022 | 19 Apr. 2025 | Implementing | ||
| Shougang Group Co., Ltd. | The Asset Appraisal Report evaluates partial of intellectual property rights of Jingtang Co. and Shanxi Coking Co., Ltd. (hereinafter referred to as "performance commitment assets") based on future earnings expectations. The appraisal value of 1,346 patent rights, 190 proprietary technologies, 32 software copyrights and other assets of Jingtang Co. is RMB 242.8 million, and the appraisal value of 57 patent rights assets of Shanxi Coking Co., Ltd. is RMB 40 million. In accordance with the forecast income sharing of the performance committed assets, if the purchase of assets by issuing shares is completed before 31 December 2022, Shougang Group commitments that, in 2022, 2023 and 2024, the total income sharing of performance commitment assets in the current period shall be no less than RMB 90.9182 million, RMB 79.414 million and RMB 61.5618 million respectively. If the above performance commitments are not met, please refer to "Performance Commitments and Impairment Compensation Arrangements" in Beijing Shougang Co., Ltd. 's Report on Issuing Shares to Purchase Assets and Raising Supporting Funds and Related Party Transactions issued by the Company for detailed compensation methods and arrangements. | 20 Dec.2021 | 31 Dec. 2024 | Implementing. The commitments for 2022 and 2023 have been fulfilled | ||
| Completed on time | Yes | |||||
| If the commitment is not fulfilled on time, the specific reasons for the unfulfilled performance and the next step of the work plan should be explained in detail | N/A | |||||
2. Concerning assets or project of the Company, which has profit forecast, and reporting period still in forecasting period,explain reasons of reaching the original profit forecast
□ Applicable √ Not applicable
II. Non-operational fund occupation from controlling shareholders and its related party
□ Applicable √ Not applicable
No non-operational fund occupation from controlling shareholders and its related party during the reporting period.III. External guarantees against the rules and regulations
□ Applicable √ Not applicable
No external guarantee provided by the Company which against the rules and regulations during the reporting period.
IV. Explanation from board of directors on the latest modified auditor’s report
□ Applicable √ Not applicable
V. Explanation from board of directors, supervisory committee and independent directors (ifapplicable) on the current audit report with modified opinion.
□ Applicable √ Not applicable
VI. Changes in accounting policies, accounting estimates or correction of major accountingerrors as compared to the financial report for the prior year
√ Applicable □ Not applicable
On November 30, 2022, the Ministry of Finance issued Interpretation No. 16 of the Enterprise Accounting Standards (Finance andAccounting [2022] No. 31), which stipulates that deferred income tax related to assets and liabilities arising from individualtransactions is not subject to the accounting treatment of initial recognition exemption. The above accounting treatment regulationswill be implemented from January 1, 2023.
VII. Explanation on the change in the scope of consolidated financial statements during thereporting period as compared to financial report of the previous year
√ Applicable □ Not applicable
In April 2023, the Company completed the separation of its subsidiary Beijing Shougang New Energy Automobile MaterialTechnology Co., Ltd. and completed the clear deregistration procedures of the separated Beijing Shougang New Energy AutomobileMaterial Technology Co., Ltd. in December. After deregistration, the number of subsidiaries within the scope of consolidation incurrent period changed from 6 to 5. The 5 subsidiaries are: Shougang Jingtang United Iron & Steel Co., Ltd., Shougang ZhixinQian'an Electromagnetic Materials Co., Ltd., Beijing Shougang Cold Rolling Co., Ltd., Beijing Shougang Steel Trading InvestmentManagement Co., Ltd., and Qian'an Shougang Metallurgical Technology Co., Ltd.VIII. Appointment and non-reappointment (dismissal) of CPACurrent accounting firm
| Name of domestic accounting firm | Grant Thornton LLP. |
| Remuneration for domestic accounting firm (RMB 0,000) | 180 |
| Continuous life of auditing service for domestic accounting firm (year) | 24 |
| Name of domestic CPA | Li Dan, Yu Qike |
| Continuous life of auditing service for domestic accounting firm (year) | 2 |
Whether to change the accounting firm during the audit period
□ Yes √ No
Appointment of internal control auditing accounting firm, financial consultant or sponsor
√ Applicable □ Not applicable
During the reporting period, the Company engaged Grant Thornton LLP. as the auditor for internal control of the Company for 2023.IX. Suspension and termination of listing after disclosure of annual report
□ Applicable √ Not applicable
X. Insolvency or restructuring related matters
□ Applicable √ Not applicable
No insolvency or restructuring related matters during the reporting periodXI. Material litigation or arbitration cases
□ Applicable √ Not applicable
No material litigation or arbitration cases during the reporting period.XII. Punishment or rectification
□ Applicable √ Not applicable
No punishment or rectification during the reporting period.XIII. Integrity of the Company and its controlling shareholders and actual controllers duringthe reporting period
□ Applicable √ Not applicable
XIV. Material related party transactions
1. Related transaction with routine operation concerned
√ Applicable □ Not applicable
| Related parties | Relationship | Transaction type | Transaction content | Pricing principle of transaction | Transaction price | Related transaction price (RMB’0,000) | Proportion in similar transactions | Approved transaction quota (RMB’0,000) | Whether it exceeds the approved quota(Y/N) | Related transaction settlement methods | Available market prices for similar transactions | Date of disclosure | Disclosure index |
| Shougang Group and its subsidiaries | Parent company | Related purchase | Raw fuel, power energy, production services, etc | Market price | Market price | 4,642,653 | 4,758,480 | N | Cash at bank and on hand | Market price | 7 Dec. 2022 | "China Securities Journal" ,"Securities Times" ,"Shanghai Securities News", Juchao Information Network (http://www.cninfo.com.cn) | |
| Shougang Group and its subsidiaries | Parent company | Related sales | Steel, solid waste, power energy, etc | Market price | Market price | 256,142 | 375,508 | N | Cash at bank and on hand | Market price | 7 Dec. 2022 | Ditto | |
| Other related parties | Joint venture and associates | Related purchase | Raw fuel, power energy, production | Market price | Market price | 2,565,419 | 2,978,818 | N | Cash at bank and on hand | Market price | 7 Dec. 2022 | Ditto |
| services, etc | |||||||||||||
| Other related parties | Joint venture and associates | Related sales | Steel, power energy, etc | Market price | Market price | 419,447 | 393,643 | Y | Cash at bank and on hand | Market price | 7 Dec. 2022 | Ditto | |
| Total | -- | -- | 7,883,661 | -- | 8,506,449 | -- | -- | -- | -- | -- | |||
| Details of large sales returns | No | ||||||||||||
| The Company classifies the daily related transactions by category and estimates the transaction amount that will take place in the current period, and discloses the actual transaction amount (if any) | The Company's proposal on the re signing of the Framework Agreement between Shougang Group Co., Ltd. and Beijing Shougang Co., Ltd. on Related Party Transactions and the Estimated Amount of Daily Related Party Transactions for the Year 2023, based on the estimated total amount of daily related party transactions, was reviewed and approved by the 15th meeting of the 7th Board of Directors of the company on December 7, 2022, and submitted for approval at the 4th Extraordinary General Meeting of Shareholders of the company for the year 2022 on December 24, 2022. The total transaction amount approved by the shareholders' meeting for this period is RMB85,064.49 million, with a total amount of RMB78,836.61 million incurred, which does not exceed the approved limit. Please refer to Section 10 for specific information on related parties and related transactions. | ||||||||||||
| The reason for the material difference between the transaction price and the market reference price (if applicable) | Not Applicable | ||||||||||||
2. Related party transactions by assets or equity acquisition and sold
□ Applicable √ Not applicable
3. Related transactions of mutual investment outside
□ Applicable √ Not applicable
No related party transactions in respect of jointly investment during the reporting period.
4. Related creditor's rights and debts
√ Applicable □ Not applicable
Whether the Company had non-operating contact of related credit and debt
□ Applicable √ Not applicable
No related creditor's rights and debts in the reporting period
5. Transactions with related financial companies
√ Applicable □ Not applicable
Deposit
| Related party | Relationship with the Company | Maximum daily deposit limit (RMB’0,000) | Range of deposit interest rate | Opening balance (RMB’0,000) | Current amount | Closing balance (RMB’0,000) | |
| Total deposit amount of current period (RMB’0,000) | Total withdrawal amount of current period (RMB’0,000) | ||||||
| Shougang Group Finance Co., Ltd. | Under the control of the same parent company | 1,600,000 | 1.15%-1.90% | 878,266.33 | 15,520,954.47 | 15,486,359.93 | 912,860.87 |
Loan
| Related party | Relationship with the Company | Amount (RMB’0,000) | Loan interest rate range | Opening balance (RMB’0,000) | Current amount | Closing balance (RMB’0,000) | |
| Total loan amount of current period (RMB’0,000) | Total repayment amount of current period (RMB’0,000) | ||||||
| Shougang Group Finance Co., Ltd. | Under the control of the same parent company | 3,025,660 | 1.85%-2.87% | 1,801,689.43 | 2,142,679.28 | 2,405,447.59 | 1,538,921.11 |
Credit granting or other financial services
| Related party | Relationship with the Company | Business types | Total amount(RMB’0,000) | Actual amount(RMB’0,000) |
| Shougang Group Finance Co., Ltd. | Under the control of the same parent company | Credit | 3,025,660 | 1,538,921.11 |
6. Transactions between financial companies controlled by the company and related parties
□ Applicable √ Not applicable
The Company has no deposits, loans, credits, or other financial services between the financial companies controlled by the Companyand the related parties
7. Other significant related party transactions
□ Applicable √ Not applicable
No other significant related party transaction of the Company during the reporting period.
XV. Material contracts and implementation
1. Entrustment, contract and leasing
(1) Entrustment
□ Applicable √ Not applicable
No entrustment during the reporting period.
(2) Contract
□ Applicable √ Not applicable
No contract during the reporting period.
(3) Leasing
□ Applicable √ Not applicable
No leasing during the reporting period.
2. Material guarantees
√ Applicable □ Not applicable
Unit: RMB0,000
| External guarantees of the Company and its subsidiaries (excluding guarantees to subsidiaries) | ||||||||||
| Name of obligee | Date of the related announcement disclosing the guarantee amount | Amount of guarantee | Guarantee date | Guarantee provided | Type of guarantee | Collateral (if any) | Counterguarantee (if any) | Term | Fulfilled or not | Guarantee to related parties or not |
| Shougang (Qingdao) Steel Industry Co., Ltd. | 10 June 2023 | 21,000 | 18 September 2023 | 14,203 | Guarantee of joint and several liability | One year | No | Yes | ||
| Ningbo Shougang Zhejin Steel Co., Ltd. | 10 June 2023 | 4,400 | 15 February 2023 | 3,275.52 | Guarantee of joint and several liability | One year | No | Yes | ||
| Total external guarantees approved during the reporting period (A1) | 25,400 | Total actual external guarantees during the reporting period (A2) | 17,478.52 | |||||||
| Total external guarantees approved at the end of the reporting period (A3) | 25,400 | Balance of total actual guarantees at the end of the reporting period (A4) | 17,478.52 | |||||||
| Guarantees between the Company and its subsidiaries | ||||||||||
| Name of obligee | Date of the related announcement disclosing the guarantee amount | Amount of guarantee | Guarantee date | Guarantee provided | Type of guarantee | Collateral (if any) | Counterguarantee (if any) | Term | Fulfilled or not | Guarantee to related parties or not |
| Shanghai Shougang Steel & Iron Trading Co., Ltd. | 10 June 2023 | 16,050 | 17 July 2023 | 4,875 | Guarantee of joint and several liability | One year | No | Yes | ||
| Total amount of guarantee provided for subsidiaries approved during the reporting period (B1) | 16,050 | Total amount of guarantee provided for subsidiaries during the reporting period (B2) | 4,875 | |||||||
| Total amount of guarantee provided for subsidiaries approved as at the end of the reporting period (B3) | 16,050 | Total balance of guarantee provided for subsidiaries as at the end of the reporting period (B4) | 4,875 | |||||||
| Total approved guarantee amount during the reporting period (A1+B1) | 41,450 | Total actual amount of guarantees incurred during the reporting period (A2+B2) | 22,353.52 | |||||||
| Total approved guarantee amount at the end of the reporting period (A3+B3) | 41,450 | Total actual guarantee balance at the end of the reporting period (A4+B4) | 22,353.52 | |||||||
| The percentage of total amount of guarantee provided (i.e. A4+B4) to the net assets of the Company | 0.45% | |||||||||
Explanation of the specific situation of using composite guaranteeNot applicable
3. Entrusted asset management, entrusted loans and other wealth management and derivatives investment
(1) Entrusted asset management and other wealth management and derivatives investment
□ Applicable √ Not applicable
No entrusted asset management and other wealth management and derivatives investment during the reporting period.
(2) Entrusted loans
□ Applicable √ Not applicable
No entrusted loan during the reporting period.
4. Other material contracts
□ Applicable √ Not applicable
No other material contracts during the reporting period.XVI. Explanation of other significant matters
√ Applicable □ Not applicable
1. Ye Lin, an independent director, served for 6 consecutive years in the company and resigned on December 25, 2023; SupervisorGuo Liyan resigned from position as supervisor on January 9, 2024 due to job transfer. On February 22, 2024, the firstextraordinary general meeting of shareholders of the Company elected Comrade Wang Cuimin as an independent director andDai Jun as the supervisor of the Company.
2. Zhu Guosen resigned from the position of General Manager on March 21, 2024 due to work transfer. On March 22, 2024, the6th meeting of the 8th Board of Directors of the Company appointed Sun Maolin as the new General Manager of the Company.
3. Zhu Guosen and Zeng Li both resigned from positions as directors of the Company on March 21, 2024 due to job transfers. On
April 8, 2024, the second extraordinary general meeting of shareholders of the Company elected Sun Maolin and Li Ming asdirectors of the Company.
4. On April 18, 2024, the seventh session of the eighth board of directors of the Company appointed Zhao Peng as the deputygeneral manager of the Company.XVII. Significant matters of subsidiaries of the Company
√ Applicable □ Not applicable
1. About Zhixin Co.
(1) In December 2022, the Company signed the "Capital Increase Agreement on Shougang Zhixin Qian'an Electromagnetic
Materials Co., Ltd." with Zhixin Co., the original shareholders of Zhixin Co. and all investors participating in the capitalincrease, and the investors jointly invested RMB 2 billion to become the strategic investors of Zhixin Co. On January 28, 2023,Zhixin Co. completed the industrial and commercial registration procedures for the capital increase and obtained a new businesslicense. The company's shareholding in Zhixin Co. changed to 68.0293%.
(2) According to the resolution of the 5th extraordinary meeting of the board of directors of Shougang Co. in 2023, the company,together with Shougang Group and Zhixin Co.’s employee shareholding platform jointly increased capital to Zhixin Co. OnNovember 28, 2023, Zhixin Co. completed the industrial and commercial registration procedures for the capital increase andobtained a new business license. The company's shareholding in Zhixin Co. changed to 66.2310%.
(3) According to the resolution of the 5th meeting of the 8th Board of Directors of Shougang Co., Zhixin Co. was undergoing ashareholding reform, and its registered capital changed from RMB 11.29982844519 billion to RMB 300 million. The foundingmeeting was held on March 22, 2024. On March 27, 2024, Zhixin Co. completed the industrial and commercial registrationchange, and the name was changed to Shougang Zhixin Electromagnetic Materials (Qian'an) Co., Ltd. The company still holds
66.2310% equity in the Zhixin Co.
2. About Beijing Shougang New Energy Automobile Material Technology Co., Ltd.
(1) According to the resolution of the first extraordinary meeting of the board of directors of Shougang Co., Ltd. in 2023, thecontrolling subsidiary of the company, Beijing Shougang New Energy Automobile Material Technology Co., Ltd. (hereinafterreferred to as "New-E Co."), was implementing a continuing separation. After the separation, New-E Co. became the survivingcompany, with its shareholders changed to Shougang Group Co., Ltd. and Qian'an Jingji Equity Investment Fund (LimitedPartnership), and a new Beijing Shougang New Energy Materials Technology Co., Ltd. (hereinafter referred to as "New EnergyMaterials") was established, with its shareholders being Shougang Co., Ltd. and Beijing Shouxin Jinyuan ManagementConsulting Center (Limited Partnership). As of April 25, 2023, the industrial and commercial registration procedures for thecurrent separation have been completed, and New-E Co. and New Energy Materials have obtained their respective businesslicenses.
(2) According to the resolution of the 5th extraordinary meeting of the board of directors of Shougang Co., Ltd. in 2023, NewEnergy Materials plans to dissolve and liquidate. As of December 22, 2023, New Energy Materials have obtained the"Cancellation Approval Notice" and "Cancellation Registration Notice" issued by the Shunyi District Market SupervisionAdministration of Beijing, and have completed tax cancellation, bank account cancellation, and industrial and commercialderegistration.
Section VII. Movements in share capital and shareholdersI. Share movement
1. Share movement
Unit: share
| Before change | Increase (/decrease) during the year | After change | |||||||
| Amount | Ratio | New shares issued | Bonus issue | Converted from reserves | Others | Subtotal | Amount | Ratio | |
| I. Restricted shares | 1,806,563,829 | 23.10% | -25,257,565 | -25,257,565 | 1,781,306,264 | 22.85% | |||
| 1. State ownership | |||||||||
| 2. State-owned corporation shares | 1,741,662,029 | 22.27% | 1,741,662,029 | 22.34% | |||||
| 3. Shares held by other domestic investors | 64,901,800 | 0.83% | -25,257,565 | -25,257,565 | 39,644,235 | 0.51% | |||
| Of which: Shares held by domestic legal persons | |||||||||
| Shares held by domestic natural persons | 64,901,800 | 0.83% | -25,257,565 | -25,257,565 | 39,644,235 | 0.51% | |||
| 4.Foreign ownership | |||||||||
| Of which: Shares held by overseas legal persons | |||||||||
| Shares held by overseas natural persons | |||||||||
| II. Non-restricted shares | 6,013,305,341 | 76.90% | 6,013,305,341 | 77.15% | |||||
| 1. RMB ordinary shares | 6,013,305,341 | 76.90% | 6,013,305,341 | 77.15% | |||||
| 2. Domestic listed foreign shares | |||||||||
| 3. Overseas listed foreign shares | |||||||||
| 4.Others | |||||||||
| III. Total number of shares | 7,819,869,170 | 100.00% | -25,257,565 | -25,257,565 | 7,794,611,605 | 100.00% | |||
Reasons of shares movements
√Applicable □ Not applicable
According to the Incentive Plan, with the approval of the company's shareholders meeting, the company has repurchased andcancelled 25,257,565 restricted shares during the reporting period, and share capital of the company have been reduced from7,819,869,170 shares to 7,794,611,605 shares.Approval of share movements
√ Applicable □ Not applicable
The restricted stocks repurchased and cancelled by the company during the reporting period have been reviewed and approved at the2022 annual shareholders meeting on June 30, 2023 and the first extraordinary shareholders meeting on September 28, 2023.Transfer of shares arising from changes in shareholding
√ Applicable □ Not applicable
The restricted shares repurchased by the company have been cancelled in accordance with regulations.Influences of shares movements on basic EPS, diluted EPS, net assets per share attributable to common shareholders of thecompany and other financial indicators for both the latest year and the latest period
√ Applicable □ Not applicable
During the reporting period, after completed the repurchase and cancellation of the restricted shares mentioned above, the total sharecapital of the company decreased, which resulted in an increase in earnings per share and net assets per share for the most recent yearand period.
Other information necessary to disclose for the Company or need to disclosed under requirement from security regulators
□ Applicable √ Not applicable
2. Movements of restricted shares
√ Applicable □ Not applicable
Unit: share
| Name of shareholders | Restricted shares at the beginning of period | Restricted shares increased during the period | Restricted shares released during the period | Restricted shares at the end of period | Reason for restriction | Date of release from restriction |
| Shougang Group Co., Ltd. | 1,247,703,723 | 0 | 0 | 1,247,703,723 | Reasons for restricted sales of 232,286,354 shares: The commitments made by Shougang Group when the Company was first restructured are still being fulfilled. For details, please refer to the company's announcements in "China Securities Journal" "Securities Times" "Shanghai Securities News", CNINFO (http://www.cninfo.com.cn)on 28 September 2019. Reasons for restricted sales of other shares: Share lock up commitment made as the counterparty to the company's issuance of shares to purchase assets. | The restriction can be lifted after the performance of the commitment; 19 April 2025 |
| Beijing Jing Guorui Soe Reform and Development Fund(L.P.) | 493,958,306 | 0 | 0 | 493,958,306 | For details, please refer to the relevant announcement issued by the Company on 20 May 2021. Share lock up commitment made as the counterparty to the company's issuance of shares to purchase assets. | 20 May 2024 |
| Shougang Directors, senior executives and other equity incentive targets | 64,901,800 | 0 | 25,257,565 | 39,644,235 | In accordance with relevant regulations, the Company's 2021 restricted stock incentive plan will arrange the lock-up period of the restricted stock grants. For details, please refer to the relevant announcement issued by the Company on 13 November 2021. | According to the Incentive Plan, the Company has repurchased and cancelled the restricted stocks corresponding to the first period of lifting restrictions; The restricted period for the remaining restricted stocks is 36 months and 48 months from the date of completion of grant registration, namely December 24, 2024 and December 24, 2025, respectively |
| Total | 1,806,563,829 | 0 | 25,257,565 | 1,781,306,264 | -- | -- |
II. Securities issuance and listing
1. Security offering (without preferred stock) in reporting period
□ Applicable √ Not applicable
2. Changes of total shares and shareholders structure as well as explanation on changes of assets and liability structure
√ Applicable □ Not applicable
According to the Incentive Plan, with the approval of the company's shareholders meeting, a total of 25,257,565 shares of restrictedstock have been repurchased and cancelled by the company during the reporting period. There has been a change in shareholderstructure and the decrease in the total number of shares of the Company. There is no impact on the asset and liability structure of theCompany.
3. Current internal staff shares
□ Applicable √ Not applicable
III. Shareholders and the actual controller
1. Amount of shareholders and shareholding
Unit: Share
| Total common stock shareholders in reporting period-end | 93,835 | Total common stock shareholders at end of last month before annual report disclosed | 94,900 | Total preference shareholders with voting rights recovered at end of reporting period (if applicable) (found in note 8) | 0 | Total preference shareholders with voting rights recovered at end of last month before annual report disclosed (if applicable) (found in note 8) | 0 | ||||||||||
| Shareholders holding above 5% or top 10 shareholders | |||||||||||||||||
| Name of shareholder | Nature of shareholder | Shareholding ratio | Total shareholders at the end of report period | Changes in report period | Amount of restricted shares held | Amount of unrestricted shares held | Shares pledged or frozen | ||||||||||
| Status | Amount | ||||||||||||||||
| Shougang Group | State-owned legal entity | 56.72% | 4,420,769,800 | 0 | 1,247,703,723 | 3,173,066,077 | N/A | 0 | |||||||||
| Baowu Group | State-owned legal entity | 10.18% | 793,408,440 | 0 | 0 | 793,408,440 | N/A | 0 | |||||||||
| Beijing Jingtou Investment Holding Co., Ltd. | State-owned legal entity | 9.51% | 740,940,679 | 0 | 0 | 740,940,679 | N/A | 0 | |||||||||
| Beijing Jing Guorui Soe Reform and Development Fund(L.P.) | State-owned legal entity | 6.34% | 493,958,306 | 0 | 493,958,306 | 0 | N/A | 0 | |||||||||
| Sunshine Life Insurance Co., Ltd. - Traditional insurance products | Others | 0.98% | 76,692,529 | 0 | 0 | 76,692,529 | N/A | 0 | |||||||||
| Liu Wei | Domestic natural person | 0.87% | 682,000,000 | +14,200,000 | 0 | 68,200,000 | N/A | 0 | |||||||||
| Sunshine Life Insurance Co., Ltd. - Dividend insurance products | Others | 0.72% | 56,159,243 | 0 | 0 | 56,159,243 | N/A | 0 | |||||||||
| Hong Kong Securities Clearing Company Limited | Overseas legal entity | 0.72% | 55,782,302 | +12,051,904 | 0 | 55,782,302 | N/A | 0 | |||||||||
| Shanxi Coking Coal Group Finance Co., Ltd. | State-owned legal entity | 0.41% | 32,155,928 | 0 | 32,155,928 | N/A | 0 | ||||||||||
| National Social Security Fund - Eight combinations | Others | 0.35% | 27,661,700 | -39,885,983 | 0 | 27,661,700 | N/A | 0 | |||||||||
| Strategic investor or general legal person becoming a top-10 ordinary shareholder due to rights issue (if any) (found in note 10) | Not applicable | ||||||||||||||||
| Related or acting-in-concert parties among the shareholders above | Subsidiary of Shougang Group holds 0.68% of Baosteel Co., Baowu Group Co., Ltd. and its persons acting in concert hold 62.30%of Baosteel Co. Except which, Shougang Group has no relationship or concerted acting relationship with other top 10 shareholders; The relationship between other shareholders or the relationship of cooperators is unknown. | ||||||||||||||||
| Above shareholders involved in entrusting / being entrusted with voting rights and giving up voting rights | Not applicable | ||||||||||||||||
| Special account for share repurchases (if any) among the top 10 shareholders(found in note 10) | Not applicable | ||||||||||||||||
| Shareholding of the top 10 shareholders unrestricted shares held | |||||||||||||||||
| Name of shareholders | Amount of unrestricted shares held at period-end | Type of shares | |||||||||||||||
| Type | Amount | ||||||||||||||||
| Shougang Group | 3,173,066,077 | RMB ordinary shares | 3,173,066,077 | ||||||||||||||
| Baowu Group | 793,408,440 | RMB ordinary shares | 793,408,440 | ||||||||||||||
| Beijing Jingtou Investment Holding Co., Ltd. | 740,940,679 | RMB ordinary shares | 740,940,679 | ||||||||||||||
| Sunshine Life Insurance Co., Ltd.- Traditional insurance products | 76,692,529 | RMB ordinary shares | 76,692,529 | ||||||||||||||
| Liu Wei | 68,200,000 | RMB ordinary shares | 68,200,000 | ||||||||||||||
| Sunshine Life Insurance Co., Ltd. - Dividend insurance products | 56,159,243 | RMB ordinary shares | 56,159,243 | ||||||||||||||
| Hong Kong Securities Clearing Company Limited | 55,782,302 | RMB ordinary shares | 55,782,302 | ||||||||||||||
| Shanxi Coking Coal Group Finance Co., Ltd. | 32,155,928 | RMB ordinary shares | 32,155,928 | ||||||||||||||
| National Social Security Fund - eight combinations | 27,661,700 | RMB ordinary shares | 27,661,700 |
| Guoshou Pension Strategy No. 4 Stock based Pension Product - Industrial and Commercial Bank of China Limited | 22,036,104 | RMB ordinary shares | 22,036,104 |
| Connected associated relationship or acting in concert among the top 10 shareholders holding tradable shares without selling restrictions, and between the top 10 shareholders holding tradable shares without selling restrictions and the top 10 shareholders | Subsidiary of Shougang Group holds 0.68% of Baosteel Co., Baowu Group Co., Ltd. and its persons acting in concert hold 62.30%of Baosteel Co. Except which, Shougang Group has no relationship or concerted acting relationship with other top 10 shareholders; The relationship between other shareholders or the relationship of cooperators is unknown. | ||
| Top 10 ordinary shareholders involved in securities margin trading (if any) | Liu Wei holds 68,200,000 shares of the company through its credit securities account. | ||
The top ten shareholders participating in the lending of shares through refinancing business
□ Applicable √ Not applicable
Changes of the top ten shareholders compared to the previous period
√ Applicable □ Not applicable
Unit: Share
| Changes in the top 10 shareholders compared to the end of the previous period | |||||
| Shareholder Name | New additions/exits during this reporting period | At the end of the period, the number of shares lent through refinancing and not yet repaid | The number of shares held in the ordinary account and credit account of shareholders at the end of the period, as well as the shares lent through refinancing, that have not yet been returned | ||
| Total quantity | Proportion to total share capital | Total quantity | Proportion to total share capital | ||
| Shougang Group Co., Ltd. | New addition | 0 | 0.00% | 0 | 0.00% |
| China Baowu Steel Group Corporation Ltd. | New addition | 0 | 0.00% | 0 | 0.00% |
| Beijing Jingtou Investment Holding Co., Ltd. | New addition | 0 | 0.00% | 0 | 0.00% |
| Beijing Jing Guorui Soe Reform and Development Fund(L.P.) | New addition | 0 | 0.00% | 0 | 0.00% |
| Sunshine Life Insurance Co., Ltd.- Traditional insurance products | New addition | 0 | 0.00% | 0 | 0.00% |
| Liu Wei | New addition | 0 | 0.00% | 0 | 0.00% |
| Sunshine Life Insurance Co., Ltd. - Dividend insurance products | New addition | 0 | 0.00% | 0 | 0.00% |
| Hong Kong Securities Clearing Company Limited | New addition | 0 | 0.00% | 0 | 0.00% |
| Shanxi Coking Coal Group Finance Co., Ltd. | New addition | 0 | 0.00% | 0 | 0.00% |
| National Social Security Fund - eight combinations | New addition | 0 | 0.00% | 0 | 0.00% |
Whether top ten common stock shareholders or top ten common stock shareholders with unrestricted shares have a buy-backagreement dealing during the reporting period
□ Yes √ No
The top ten common stock shareholders or top ten common stock shareholders with unrestricted shares of the Company have nobuy-back agreement dealing during the reporting period.
2. Controlling shareholders
Nature of controlling shareholders: local state-owned holdingType of controlling shareholders: legal person
| Name of controlling shareholders | Legal representative / person in charge of the company | Date of establishment | Organization code | Main businesses |
| Shougang Group | Zhao Minge | 13 May 1981 | 911100001011200015 | Industry, construction, geological examination, transportation, foreign trade, post and telecommunications, finance and insurance, scientific research and comprehensive technical services, domestic commerce, public catering, material supply and marketing, warehousing, real estate, residential services, consulting services, leasing, agriculture, forestry, animal husbandry and fishery (excluding business without special permission); authorized operation and management of state-owned assets; hosted Shougang Daily newspaper; design and production of TV advertisements; use of self-owned TV stations to publish advertisements; design and production of print advertising; use of self-owned Shougang Daily to publish |
| advertisements; sewage treatment and recycling; seawater desalination; literary and artistic creation and performance: sports project management (excluding high-risk sports projects); stadium management; Internet information services; Municipal solid waste treatment. (enterprises shall independently choose business projects and carry out business activities in accordance with the law; municipal solid waste treatment, Internet information services and projects subject to approval in accordance with the law after licensing; they shall not engage in business projects prohibited or restricted by local policies) | ||
| Shareholdings of controlling shareholders who have control or hold shares in other domestic or overseas listed companies during the reporting period | 1. Domestic: (1) Hua Xia Bank Co., Ltd., holds 21.68%; (2) Beiqi Foton Motor Co., Ltd., holds 0.15%; (3) BAIC MOTOR Corporation., Ltd. (H-share), holds 12.83%. 2. Overseas: (1) Capital Industrial Financial Services Group Limited, holds 60.88%; (2) Shoucheng Holdings Limited, holds 24.66%; (3) Shougang Fushan Resources Group Ltd., holds 33.24%; (4) Shougang Century Holdings Limited, holds 49.71%; (5) Global Digital Creations Holdings Limited, holds 41.18%; (6) CWT International Limited，holds 3.11%; (7) Newton Resources Limited, holds 27.46%; (8) Sunshine Insurance Group Co., Ltd., holds 0.58%. | |
Controlling shareholder turnover during the reporting period
□ Applicable √ Not applicable
There were no changes of controlling shareholders during the reporting period.
3. Actual controller of the company and persons acting in concert
Nature of actual controller: local management agency of state-owned assetsType of actual controller:
Actual controller turnover during the reporting period
□ Applicable √ Not applicable
The actual controller of the company was not changed during the reporting period.Block diagram of property rights and controlling relations between the Company and actual controllers is as follows:
Actual controller controlling the company through trust or other asset management methods
□ Applicable √ Not applicable
4. The number of shares pledged by the controlling shareholder or the largest shareholder of the Company and personsacting in concert with it reaches 80% of the number of shares held by them in aggregate
□ Applicable √ Not applicable
5. Other legal person shareholders with over 10% shares held
√ Applicable □ Not applicable
| Name of legal person shareholders | Legal representative / person in charge of the company | Date of establishment | Registered capital | Main businesses |
| China Baowu Steel Group Corporation Ltd. | Hu Wangming | 1 Jan. 1992 | RMB 52,791,101,000 | Licensed project: Retail of publications; Wholesale of publications. (For projects that require approval according to law, business activities can only be carried out with the approval of relevant departments. The specific business projects shall be subject to the approval documents or licenses of relevant departments.) General projects: engaging in investment activities with self owned funds; Investment management; Asset management services for self owned fund investment; Enterprise headquarters management; Land use right leasing; Non residential real estate leasing; Tax services; Human resources services (excluding occupational intermediary activities and labor dispatch services); Registration and agency of market entities; Business agency services; Undertake outsourcing of archival services; Tendering and bidding agency services; Big data services; Enterprise management consulting. (Except for projects that require approval according to law, business activities shall be conducted independently based on the business license in accordance with the law) |
6. Limitation on reducing the holdings of shares of controlling shareholders, actual controllers, restructuring side and othercommitment subjects
□ Applicable √ Not applicable
IV. The implementation of share repurchase during the reporting periodProgress of share repurchase
□ Applicable √ Not applicable
Implementation progress of reducing and repurchasing shares through centralized bidding
□ Applicable √ Not applicable
Section VIII. Preferred Shares
□ Applicable √ Not applicable
No preferred shares issued by the Company during the reporting period.
Section IX. Bonds
√ Applicable □ Not applicable
Ⅰ. Enterprise bonds
□ Applicable √ Not applicable
The Company had no enterprise bonds during the reporting period.II. Corporate Bonds
√ Applicable □ Not applicable
1. Basic information on Corporate Bonds
Unit: RMB’0,000
| Name of bond | Bond abbreviation | Bond code | Issue date | Value date | Maturity date | Outstanding amount of the bonds | Interest rate | Payment method | Trading venue |
| Beijing Shougang Co., Ltd.2020 Public Offering of corporate bonds to Professional Investors (Phase I) | 20 Shouqian 01 | 149236 | 15 September 2020 | 17 September 2020 | 17 September 2025 | 0 | 3.98% | Interest is calculated on an annual basis, not compound. The interest is paid once a year, and the principal is repaid once it is due. The last installment of interest is paid together with the repayment of the principal. | Shenzhen Stock Exchange |
| Investor eligibility arrangement (if any) | Public offering for professional investors | ||||||||
| Applicable trading mechanism | Matching transaction, click transaction, inquiry transaction, bidding transaction, negotiation transaction | ||||||||
| Whether there are delisting risks (if any) and counter-measures | No | ||||||||
Overdue and outstanding bonds
□ Applicable √ Not applicable
2. Triggering and execution of issuer’s or investor’s option clause or investor protection clause
√ Applicable □ Not applicable
The bond (20 Shouqian 01) has a five-year maturity with an issuer option to adjust the coupon rate at the end of the third year and aninvestors’ put option. In September 2023, the bondholders of 20 Shouqian 01 chose to sell all their bonds back to the issuer. After theissuer completed the redemption payment process, 20 Shouqian 01 was delisted on September 18, 2023.
3.Particulars of intermediary organisations
| Bond Name | Name of the intermediary organisation | Business address | Name of signing accountant | Contact person of the intermediary organisation | Tel. |
| Beijing Shougang Co., Ltd.2020 Public Offering of corporate bonds to Professional Investors (Phase I) | Grant Thornton LLP | 5F, Saite Plaza, 22 Jianguomenwai Dajie, Chaoyang District, Beijing, China | Qian Bin, Yu Qike, Long Chuanxi | Qian Bin, Yu Qike, Long Chuanxi | 010-85665231 |
| Beijing Shougang Co., Ltd.2020 Public Offering of corporate bonds to Professional Investors (Phase I) | Huatai United Securities Co., Ltd. | 6F, Building A, Fengming International Building, 22 Fengsheng Hutong, Xicheng District, Beijing | Jiang Jiaxiang | 010-56839300 | |
| Beijing Shougang Co., Ltd.2020 Public Offering of corporate bonds to Professional Investors (Phase I) | CITIC Securities Co., Ltd | 16F, Building B, Kaiheng Center, No.2 Chaonei Street, Dongcheng District, Beijing, China | Liu Chuyu | 010-65608485 | |
| Beijing Shougang Co., Ltd.2020 Public Offering of corporate bonds to Professional Investors (Phase I) | China International Capital Corporation Limited | 33F, Tower 2, Guomao Building, Jianguomenwai Street, Chaoyang District, Beijing, China | Wang Hongtai | 010-65051166 |
| Bond Name | Name of the intermediary organisation | Business address | Name of signing accountant | Contact person of the intermediary organisation | Tel. |
| Beijing Shougang Co., Ltd.2020 Public Offering of corporate bonds to Professional Investors (Phase I) | Capital Securities Corporation Limited | 11-21/F, Building A, Building 13, Yard 5, Anding Road, Chaoyang District, Beijing, China | Li Kang | 010-81152595 | |
| Beijing Shougang Co., Ltd.2020 Public Offering of corporate bonds to Professional Investors (Phase I) | Beijing Jingtian Gongcheng Law Firm | 34F, Office Building No.3, Huamao Center, 77 Jianguo Road, Chaoyang District, Beijing, China | Deng Qing, Yang Yao | 010-58091281 010-58091048 | |
| Beijing Shougang Co., Ltd.2020 Public Offering of corporate bonds to Professional Investors (Phase I) | Dagong Global Credit Rating Co., Ltd. | 3F, China Foreign Language Building, 89 Xisanhuan North Road, Haidian District, Beijing, China | Liu Yinling | 010-67413322 |
Change of the above intermediary organisations during the reporting period
□ Yes √ No
4. Use of proceeds
Unit: RMB’0,000
| Bond Name | Total amount of proceeds | Utilised amount | Unutilised amount | Operation of special account for the proceeds (if any) | Rectification of irregularities in the use of proceeds (if any) | Is the use of proceeds consistent with the use of proceeds guaranteed under the prospectus, proposed use of proceeds and other agreement？ |
| Beijing Shougang Co., Ltd.2020 Public Offering of corporate bonds to Professional Investors (Phase I) | 250,000 | 250,000 | 0.00 | During the reporting period, the operation of the Company's special account for raised funds conforms to the standard | No | Consistent |
Proceeds to be used for construction projects
□ Applicable √ Not applicable
During the reporting period, the company changed the purpose of raising funds through the aforementioned bonds
□ Applicable √ Not applicable
5. Adjustment of credit rating results during the reporting period
□ Applicable √ Not applicable
6. Implementation of and changes in guarantee, debt repayment plan and other repayment guarantee measures during thereporting period and their impacts on the rights and interests of bond investors
□ Applicable √ Not applicable
III. Non-financial corporate debt financing instruments
√ Applicable □ Not applicable
1.Basic information of non-financial corporate debt financing instruments
Unit: RMB’0,000
| Name of bond | Bond abbreviation | Bond code | Issue date | Value date | Maturity date | Outstanding amount of the bonds | Interest rate | Payment method | Trading venue |
| Beijing Shougang Co., Ltd.2022 Ultra-short-term financing note (Phase II) (Kechuang Note) | 22Shougang SCP002 (Kechuang Note) | 012282924 | 18 August 2022 | 19 August 2022 | 24 April 2023 | 0 | 1.68% | Repayment of principal and interest once due | National inter-bank bond market |
| Beijing Shougang Co., Ltd. 2023 Ultra-short-term financing note (Phase I) | 23Shougang SCP001 | 012381548 | 14 April 2023 | 17 April 2023 | 20 October 2023 | 0 | 2.37% | Repayment of principal and interest once due | National inter-bank bond market |
| Name of bond | Bond abbreviation | Bond code | Issue date | Value date | Maturity date | Outstanding amount of the bonds | Interest rate | Payment method | Trading venue |
| Beijing Shougang Co., Ltd. 2023 Ultra-short-term financing note (Phase II) | 22Shougang SCP002 | 012383409 | 7 September 2023 | 8 September 2023 | 22 December 2023 | 0 | 2.21% | Repayment of principal and interest once due | National inter-bank bond market |
| Beijing Shougang Co., Ltd.2023 Ultra-short-term financing note (Phase III) (Kechuang Note) | 23Shougang SCP003 (Kechuang Note) | 012384132 | 15 November 2023 | 16 November 2023 | 19 April 2024 | 100,000 | 2.56% | Repayment of principal and interest once due | National inter-bank bond market |
| Investor eligibility arrangement (if any) | Institutional investors in the national inter-bank bond market (except purchasers prohibited by national laws and regulations) | ||||||||
| Applicable trading mechanism | Non-financial enterprise debt financing instrument trading system | ||||||||
| Whether there are delisting risks (if any) and countermeasures | No | ||||||||
Overdue and outstanding bonds
□ Applicable √ Not applicable
2. Triggering and execution of issuer’s or investor’s option clause or investor protection clause
□ Applicable √ Not applicable
3. Particulars of intermediary organisations
| Bond Name | Name of the intermediary organisation | Business address | Name of signing accountant | Contact person of the intermediary organisation | Tel |
| Beijing Shougang Co., Ltd.2022 Ultra-short-term financing note (Phase II) (Kechuang Note) | Grant Thornton LLP | 5F, Saite Plaza, 22 Jianguomenwai Dajie, Chaoyang District, Beijing, PRC. | Qian Bin, Liu Yiwei | Qian Bin, Liu Yiwei | 010-85665231 |
| Beijing Shougang Co., Ltd.2022 Ultra-short-term financing note (Phase II) (Kechuang Note) | Beijing Jingtian Gongcheng Law Firm | 34F, Office Building no.3, Huamao Center, 77 Jianguo Road, Chaoyang District, Beijing, PRC. | Deng Qing, Yang Yao | 010-58091281 010-58091048 | |
| Beijing Shougang Co., Ltd.2022 Ultra-short-term financing note (Phase II) (Kechuang Note) | Bank of Beijing Co., Ltd. | No. 17 C, Financial Street, Xicheng District, Beijing, PRC. | Zhang Guoxia | 010-66223400 | |
| Beijing Shougang Co., Ltd. 2023 Ultra-short-term financing note (Phase I) | Grant Thornton LLP | 5F, Saite Plaza, 22 Jianguomenwai Dajie, Chaoyang District, Beijing, PRC | Qian Bin, Liu Yiwei | Qian Bin, Liu Yiwei | 010-85665231 |
| Beijing Shougang Co., Ltd. 2023 Ultra-short-term financing note (Phase I) | Beijing Jingtian Gongcheng Law Firm | 34F, Office Building no.3, Huamao Center, 77 Jianguo Road, Chaoyang District, Beijing, PRC | Deng Qing, Yang Yao | 010-58091281 010-58091048 | |
| Beijing Shougang Co., Ltd. 2023 Ultra-short-term financing note (Phase I) | Bank of Ningbo Co., Ltd. | 345 Ningdong Road, Yinzhou District, Ningbo, Zhejiang Province, PRC | Hu Qiang | 0574-87002735 | |
| Beijing Shougang Co., Ltd. 2023 Ultra-short-term financing note (Phase I) | Bank of Beijing Co., Ltd. | No. 17 C, Financial Street, Xicheng District, Beijing, PRC | Zhang Guoxia | 010-66223400 | |
| Beijing Shougang Co., Ltd. 2023 Ultra-short-term financing note (Phase II) | Grant Thornton LLP | 5F, Saite Plaza, 22 Jianguomenwai Dajie, Chaoyang District, Beijing, PRC | Qian Bin, Yu Qike | Qian Bin, Yu Qike | 010-85665231 |
| Beijing Shougang Co., Ltd. 2023 Ultra-short-term financing note (Phase II) | Beijing Jingtian Gongcheng Law Firm | 345 Ningdong Road, Yinzhou District, Ningbo, Zhejiang Province, PRC | Deng Qing, Yang Yao | 010-58091281 010-58091048 | |
| Beijing Shougang Co., Ltd. 2023 Ultra-short-term financing note (Phase II) | Beijing Rural Commercial Bank Co., Ltd | Building 2, No.1, Yuetan South Street, Xicheng District, Beijing, PRC | Guan Yuming, Niu Caiping | 010-632299793 | |
| Beijing Shougang Co., Ltd. 2023 Ultra-short-term financing note (Phase II) | China Construction Bank Co., Ltd | 25 Financial Street, Xicheng District, Beijing, PRC | Wang Wenjun | 010-67594276 | |
| Beijing Shougang Co., Ltd.2023 Ultra-short-term financing note (Phase III) (Kechuang Note) | Grant Thornton LLP | 5F, Saite Plaza, 22 Jianguomenwai Dajie, Chaoyang District, Beijing, PRC | Qian Bin, Yu Qike | Qian Bin, Yu Qike | 010-85665231 |
| Beijing Shougang Co., Ltd.2023 Ultra-short-term financing note (Phase III) (Kechuang Note) | Beijing Jingtian Gongcheng Law Firm | 345 Ningdong Road, Yinzhou District, Ningbo, Zhejiang Province, PRC | Deng Qing, Yang Yao | 010-58091281 010-58091048 | |
| Beijing Shougang Co., Ltd.2023 Ultra-short-term financing note (Phase III) (Kechuang Note) | Bank of Beijing Co., Ltd. | No. 17 C, Financial Street, Xicheng District, Beijing, PRC. | Zhang Guoxia | 010-66223400 | |
| Beijing Shougang Co., Ltd.2023 Ultra-short-term financing note (Phase III) (Kechuang Note) | Beijing Rural Commercial Bank Co., Ltd | Building 2, No.1, Yuetan South Street, Xicheng District, Beijing, PRC | Guan Yuming, Niu Caiping | 010-632299793 |
Change of the above intermediary organisations during the reporting period
□ Yes √ No
4. Use of proceeds
Unit: RMB0,000
| Bond Name | Total amount of proceeds | Utilised amount | Unutilised amount | Operation of special account for the proceeds (if any) | Rectification of irregularities in the use of proceeds (if any) | Is the use of proceeds consistent with the use of proceeds guaranteed under the prospectus, proposed use of proceeds and other agreement |
| Beijing Shougang Co., Ltd.2022 Ultra-short-term financing note (Phase II) (Kechuang Note) | 100,000 | 100,000 | 0.00 | During the reporting period, the operation of the Company's special account for raised funds conforms to the standard | No | Consistent |
| Beijing Shougang Co., Ltd. 2023 Ultra-short-term financing note (Phase I) | 100,000 | 100,000 | 0 | During the reporting period, the operation of the Company's special account for raised funds conforms to the standard | No | Consistent |
| Bond Name | Total amount of proceeds | Utilised amount | Unutilised amount | Operation of special account for the proceeds (if any) | Rectification of irregularities in the use of proceeds (if any) | Is the use of proceeds consistent with the use of proceeds guaranteed under the prospectus, proposed use of proceeds and other agreement |
| Beijing Shougang Co., Ltd. 2023 Ultra-short-term financing note (Phase II) | 100,000 | 100,000 | 0 | During the reporting period, the operation of the Company's special account for raised funds conforms to the standard | No | Consistent |
| Beijing Shougang Co., Ltd.2023 Ultra-short-term financing note (Phase III) (Kechuang Note) | 100,000 | 100,000 | 0 | During the reporting period, the operation of the Company's special account for raised funds conforms to the standard | No | Consistent |
Proceeds to be used for construction projects
□ Applicable √ Not applicable
Change in the use of proceeds from the above bonds during the reporting period
□ Applicable √ Not applicable
5. Adjustment of credit rating results during the reporting period
□ Applicable √ Not applicable
6. Implementation of and changes in guarantee, debt repayment plan and other repayment guarantee measures during thereporting period and their impacts on the rights and interests of bond investors
□ Applicable √ Not applicable
IV. Convertible bonds
□ Applicable √ Not applicable
The Company has no convertible bonds during the reporting period.V. The loss in the scope of the consolidated financial statements during the reportingperiodexceeding 10% of the net assets as at the end of the prior year
□ Applicable √ Not applicable
VI. Overdue interest-bearing debts other than bonds at the end of the reporting period
□ Applicable √ Not applicable
VII. Breaches of the regulations during the reporting period
□ Yes √ No
VIII. Major accounting data and financial indicators of the Company over the past two yearsas at the end of the reporting period
Unit: RMB0’000
| Items | As at the end of the reporting period | As at the end of the prior year | Increase/decrease as at the end of the reporting period as compared to the end of the prior year |
| Current ratio | 0.50 | 0.45 | 11.11% |
| Gearing ratio | 60.43% | 65.03% | -4.60% |
| Quick ratio | 0.32 | 0.30 | 6.67% |
| The reporting period | The corresponding period of the prior year | Increase/decrease of the reporting period as compared to corresponding period of the prior year | |
| Net profit after extraordinary gains or losses | 52,767.21 | 105,251.09 | -49.87% |
| Proportion of EBITDA to total debts | 12.37% | 12.28% | 0.09% |
| Interest coverage ratio | 1.62 | 1.95 | -16.92% |
| Cash interest coverage ratio | 5.18 | 6.92 | -25.14% |
| EBITDA interest coverage ratio | 7.04 | 6.08 | 15.79% |
| Loans payment ratio | 100.00% | 100.00% | |
| Interest payment ratio | 100.00% | 100.00% |
Section X. Financial Report(This section is translated based on the Chinese version of the full audit report of the Company. Immaterial difference may existbeween this section in Chinese version annual report and English version annual report. The difference is due to the specific template
required by the Shenzhen Stock Exchange in Chinese version which is not applied in English version.)Auditor’s Report
| Type of audit opinion | Standard unqualified opinion |
| Date of signing of audit report | 18 April 2024 |
| Name of audit institution | Grant Thornton LLP |
| Number of audit report | GTSZ (2024) No. 110A011630 |
| Chinese Certified Public Accountant | Qian Bin, Yu Qike |
Main Body of Audit ReportTo the Shareholders of Beijing Shougang Company Limited：
I. OpinionWe have audited the financial statements of Beijing Shougang Company Limited (theCompany), which are comprised of the consolidated and company statements offinancial position as of 31 December 2023, and the consolidated and companyincome statements, statements of changes in equity and statements of cash flows forthe year then ended, and notes to the financial statements.In our opinion, the accompanying financial statements present fairly, in all materialrespects, the consolidated and company financial position of the Company as of 31December 2023, and the consolidated and company’s financial performance and cashflows for the year then ended in accordance with Accounting Standards for BusinessEnterprises.II. Basis for OpinionWe conducted our audit in accordance with China Standards on Auditing. Ourresponsibilities under those standards are further described in the Auditor’sResponsibilities for the Audit of the financial statements section of our report. We areindependent of the Company in accordance with the Code of Ethics for ChineseCertified Public Accountants, and we fulfilled our other ethical responsibilities. Webelieve that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion.III. Key Audit MattersKey audit matters are those matters that, in our professional judgment, were of mostsignificance in our audit of the financial statements of the current period. Thesematters were addressed in the context of our audit of the financial statements as awhole, and in forming our opinion thereon, and we do not provide a separate opinionon these matters.(I) The provision for inventory impairments
The disclosures related to the impairment of inventories are disclosed in Notes III.13and V.7 to the financial statements.
1. Description of the matter
As of 31 December 2023, the carry value of inventory of the Company amounted toRMB 12.413 billion with an impairment of RMB 235 million in the consolidatedfinancial statements. Inventory had been regarded as the material part of the currentassets of the Company at the end of the period, and the provision for inventoryimpairment referred to the application of management’s accounting estimates. Hence,we have identified the provision for inventory impairments as a key audit matter.According to the accounting policy of the Company, if the cost is in excess of the netrealizable value, impairment of inventories is recognized on the date of balance sheet.Net realizable value is determined based on the estimated selling price on normalbusiness terms deducted by the estimated costs to completion and the relatedexpenses.
2. How our audit addressed the Key Audit Matter
Our main procedures in relation to provision for inventory impairment includes:
(1) Understanding and assessing the management’s internal controls related toimpairment testing of inventories, and testing the effectiveness of key controlexecutions.
(2) Testing, on a sample basis during the inventory monitoring procedure, observingthe inventory status and checking the inventory age
(3) Recalculating the impairment of inventories at the end of the reporting period
(4) Implementing the analysis procedure to determine whether there is a significantdifference between the estimated selling price and the market price, and examiningwhether there is a significant difference between the post-period selling price and theestimated price in conjunction with a subsequent-event audit.
(5) Evaluating the reasonableness of carrying value of the inventory as at 31December 2023 by analyzing manufacturing costs of current inventories.
(6) Inspecting whether the related information of inventory impairments provision isproperly, appropriately and adequately presented and disclosed in the financialstatements.(II) Recognition of RevenueThe disclosures related to the recognition of revenue are disclosed in Notes III.26 andV.42 to the financial statements.
1. Descriptions of the matter
In 2023, the revenue was RMB 113.761 billion in the consolidated financialstatements. Considering that the revenue has a significant impacted on the financial
statements of the Company and steel price could exert a great influence on the profitsof the Company since the steel industry is a cyclical industry, we regarded therecognition of revenue as a key audit matter.
2. How our audit addressed the Key Audit Matter
Our main procedures in relation to recognition of revenue includes:
(1) Understanding and assessing the management’s internal controls related torecognition of revenue, and testing the effectiveness of key control executions.
(2) Assessing whether the revenue recognition conditions, methods and timecomplied with the related standards in Accounting Standards for BusinessEnterprises.
(3) Selecting revenue transaction samples, checking the supporting documents ofrevenue recognition such as sales contracts, orders, delivery records, etc. to evaluatethe truthfulness of revenue recognition.
(4) Selecting major customers to perform the confirmation procedures on annual salesto evaluate the accuracy of revenue recognition.
(5) Implementing cut-off tests on revenue recognition before and after balance sheetdate.
(6) Checking the adequacy and appropriateness of disclosures in relation to revenuein the financial statements.IV. Other InformationThe management of the Company is responsible for the other information. The otherinformation comprises the information included in the Annual Report of 2023, otherthan the financial statements and our auditor’s report thereon.Our opinion on the financial statements does not cover the other information and wedo not express any form of assurance conclusion thereon.In connection with our audit of the financial statements, our responsibility is to readthe other information and, in doing so, consider whether the other information ismaterially inconsistent with the financial statements or our knowledge obtained in theaudit or otherwise appears to be materially misstated.Based on the work we have performed on other information we obtained before theaudit report date, if we conclude that there is material misstatement of otherinformation, we are required to report that fact. We have nothing to report in thisregard.V. Responsibilities of the Management and Those Charged with Governance forthe Financial StatementsManagement of the Company is responsible for the preparation and fair presentationof the financial statements in accordance with Accounting Standards for Business
Enterprises, and designing, implementing and maintaining internal control asmanagement determines is necessary to enable the preparation of financial statementsthat are free from material misstatement, whether due to fraud or error.In preparing the financial statements, the management is responsible for assessing theCompany’s ability to continue as a going concern, disclosing, as applicable, mattersrelated to going concern and using the going concern basis of accounting unless themanagement either intends to liquidate the Company or to cease operations, or has norealistic alternative but to do so.Those charged with governance are responsible for overseeing the Company’sfinancial reporting process.VI. Auditor’s Responsibilities for the Audit of the Financial StatementsOur objectives are to obtain reasonable assurance about whether the financialstatements as a whole are free from material misstatement, whether due to fraud orerror, and to issue an auditor’s report that includes our opinion. Reasonable assuranceis a high level of assurance, but is not a guarantee that an audit conducted inaccordance with China Standards on Auditing will always detect a materialmisstatement when it exists. Misstatements can arise from fraud or error and aregenerally considered material if, individually or in the aggregate, they couldreasonably be expected to influence the economic decisions of users taken on thebasis of these financial statements.As part of an audit in accordance with China Standards on Auditing, we exerciseprofessional judgment and maintain professional skepticism throughout the audit. Wealso:
(1) Identify and assess the risks of material misstatement of the financial statements,whether due to fraud or error, design and perform audit procedures responsive tothose risks, and obtain audit evidence that is sufficient and appropriate to provide abasis for our opinion. The risk of not detecting a material misstatement resulting fromfraud is higher than for one resulting from error, as fraud may involve collusion,forgery, intentional omissions, misrepresentations, or the override of internal control.
(2) Obtain an understanding of internal control relevant to the audit in order to designaudit procedures that are appropriate in the circumstances.
(3) Evaluate the appropriateness of accounting policies used and the reasonablenessof accounting estimates and related disclosures made by the management.
(4) Conclude on the appropriateness of management’s use of the going concern basisof accounting and, based on the audit evidence obtained, whether a materialuncertainty exists related to events or conditions that may cast significant doubt onthe Company’s ability to continue as a going concern. If we conclude that a materialuncertainty exists, we are required to draw attention in our auditor’s report to therelated disclosures in the financial statements or, if such disclosures are inadequate, to
modify our opinion. Our conclusions are based on the audit evidence obtained up tothe date of our auditor’s report. However, further events or conditions may cause theCompany to cease to continue as a going concern.
(5) Evaluate the overall presentation, structure and content of the financial statements,and whether the financial statements represent the underlying transactions and eventsin a manner that achieves fair presentation.
(6) Obtain sufficient appropriate audit evidence regarding the financial information ofthe entities or business activities within the Company to express an opinion on thefinancial statements. We are responsible for the direction, supervision andperformance of the group audit. We remain solely responsible for our audit opinion.We communicate with those charged with governance regarding, among other matters,the planned scope and timing of the audit and significant audit findings, includingany significant deficiencies in internal control that we identify during our audit.We also provide the governance with a statement that we have complied with relevantethical requirements regarding independence and to communicate with them allrelationships and other matters that may reasonably be thought to bear on ourindependence, and where applicable, related safeguards (if any).From the matters communicated with the governance, we determine those mattersthat were of most significance in the audit of the financial statements of the currentperiod and are therefore the key audit matters. We describe these matters in ourauditor’s report unless law or regulation precludes public disclosure about the matteror when, in extremely rare circumstances, we determine that a matter should not becommunicated in our report because the adverse consequences of doing so wouldreasonably be expected to outweigh the public interest benefits of suchcommunication.
| Consolidated and Parent Company Statement of Financial Position | ||||
| Beijing Shougang Co., Ltd. as at 31 December 2023 | ||||
| Unit: RMB Yuan | ||||
Item
| Item | Notes | 31 December 2023 | 31 December 2022 | ||
| Consolidated | Company | Consolidated | Company | ||
| Current assets: | |||||
| Cash at bank and on hand | V. 1 | 9,153,205,626.37 | 1,806,064,978.27 | 9,470,472,522.05 | 1,973,471,254.47 |
| Notes receivable | V. 2 | 3,958,135,183.83 | 825,606,179.97 | 6,691,086,020.85 | 898,640,149.83 |
| Accounts receivable | V. 3 | 1,365,633,725.20 | 1,433,327,640.47 | 1,450,008,897.10 | 1,396,660,925.53 |
| Financing receivables | V. 4 | 2,223,431,426.46 | 823,200,805.55 | 3,489,134,871.56 | 835,526,685.55 |
| Prepayments | V. 5 | 2,111,891,544.80 | 534,795,080.00 | 636,469,216.98 | 326,340,746.62 |
| Other receivables | V. 6 | 9,509,909.78 | 136,314,481.16 | 13,168,697.56 | 1,163,994,995.68 |
| Including: Interest receivable | |||||
| Dividends receivable | 2,407,634.67 | 200,000.00 | 9,713,244.06 | ||
| Inventories | V. 7 | 12,177,610,585.90 | 1,967,980,821.94 | 11,960,246,748.15 | 1,904,197,806.47 |
| Other current assets | V. 8 | 1,529,327,917.77 | 720,044,580.92 | 1,025,942,949.49 | 565,959,166.92 |
| Total current assets | 32,528,745,920.11 | 8,247,334,568.28 | 34,736,529,923.74 | 9,064,791,731.07 | |
| Non-current assets: | |||||
| Long-term equity investments | V. 9 | 2,420,775,096.36 | 37,020,179,840.15 | 2,724,285,925.35 | 37,687,890,460.88 |
| Other equity instruments investments | V. 10 | 340,204,092.21 | 340,204,092.21 | 232,766,133.81 | 232,766,133.81 |
| Other non-current financial assets | V. 11 | 75,009,218.61 | 75,009,218.61 | 79,234,007.60 | 79,234,007.60 |
| Investment properties | |||||
| Fixed assets | V. 12 | 89,895,037,102.17 | 18,294,054,760.24 | 93,331,072,969.17 | 19,254,378,866.41 |
| Construction in progress | V. 13 | 5,320,613,251.88 | 2,096,054,577.18 | 7,673,649,852.77 | 1,490,601,326.57 |
| Right-of-use assets | V. 14 | 489,044,162.56 | 18,009,629.54 | 83,107,359.45 | 27,014,444.30 |
| Intangible assets | V. 15 | 6,004,370,080.22 | 1,650,621,035.40 | 3,906,907,128.11 | 1,702,786,981.19 |
| Development expenditures | |||||
| Goodwill | |||||
| Long-term prepaid expenses | V. 16 | 4,791,419.09 | 3,535,748.04 | ||
| Deferred tax assets | V. 17 | 441,070,785.12 | 191,520,829.30 | 402,355,955.31 | 205,022,924.46 |
| Other non-current assets | |||||
| Total non-current assets | 104,990,915,208.22 | 59,685,653,982.63 | 108,436,915,079.61 | 60,679,695,145.22 | |
| Total assets | 137,519,661,128.33 | 67,932,988,550.91 | 143,173,445,003.35 | 69,744,486,876.29 | |
| Consolidated and Parent Company Statement of Financial Position (Continued) | ||||
| Beijing Shougang Co., Ltd. as at 31 December 2023 | ||||
| Unit: RMB Yuan | ||||
Item
| Item | Notes | 31 December 2023 | 31 December 2022 | ||
| Consolidated | Consolidated | Consolidated | Company | ||
| Current liabilities: | |||||
| Short-term borrowings | V. 19 | 26,661,355,641.29 | 9,697,875,763.85 | 29,580,006,103.39 | 10,586,336,291.69 |
| Notes payable | V. 20 | 3,433,752,366.00 | 50,000,000.00 | 7,261,510,000.00 | 989,500,000.00 |
| Accounts payable | V. 21 | 20,734,040,709.58 | 9,850,290,958.06 | 19,810,594,484.05 | 9,833,463,235.41 |
| Receipts in advance | |||||
| Contract liabilities | V. 22 | 4,699,449,813.28 | 1,036,301,337.72 | 4,508,016,725.74 | 521,402,199.01 |
| Employee benefits payable | V. 23 | 762,360,797.04 | 278,758,236.87 | 620,796,429.60 | 207,863,353.07 |
| Taxes payable | V. 24 | 184,929,853.68 | 30,265,576.48 | 172,300,416.40 | 22,570,197.17 |
| Other payables | V. 25 | 431,690,700.91 | 218,440,824.20 | 2,761,819,276.69 | 1,100,551,048.35 |
| Including: Interest payable | |||||
| Dividend payable | 11,440,046.38 | ||||
| Liabilities classified as held for sale | |||||
| Current portion of non-current liabilities | V. 26 | 1,337,686,760.50 | 513,180,977.19 | 4,038,768,022.60 | 3,419,903,869.77 |
| Other current liabilities | V. 27 | 6,207,392,240.67 | 2,016,969,625.15 | 8,088,749,910.74 | 1,927,653,981.82 |
| Total current liabilities | 64,452,658,882.95 | 23,692,083,299.52 | 76,842,561,369.21 | 28,609,244,176.29 | |
| Non-current liabilities: | |||||
| Long-term borrowings | V. 28 | 12,789,060,000.00 | 3,946,830,000.00 | 10,594,350,000.00 | 1,267,120,000.00 |
| Bonds payable | V. 29 | ||||
| Lease liabilities | V. 30 | 471,745,760.35 | 9,850,828.20 | 72,439,836.79 | 19,284,063.32 |
| Long-term payable | V. 31 | 2,300,000.00 | 2,300,000.00 | 2,300,000.00 | 2,300,000.00 |
| Long-term payroll and employee benefits | V. 32 | 77,050,280.88 | 77,050,280.88 | 82,565,651.02 | 82,565,651.02 |
| Provisions | |||||
| Deferred income | V. 33 | 852,384,301.36 | 99,843,517.79 | 472,861,881.90 | 85,269,577.62 |
| Deferred tax liabilities | V. 17 | 554,522,851.81 | 359,787,326.79 | 502,268,362.26 | 365,393,047.63 |
| Other non-current liabilities | V. 34 | 3,899,674,951.80 | 4,532,018,467.20 | ||
| Total non-current liabilities | 18,646,738,146.20 | 4,495,661,953.66 | 16,258,804,199.17 | 1,821,932,339.59 | |
| Total liabilities | 83,099,397,029.15 | 28,187,745,253.18 | 93,101,365,568.38 | 30,431,176,515.88 | |
| Shareholders’equity： | |||||
| Share capital | V. 35 | 7,794,611,605.00 | 7,794,611,605.00 | 7,819,869,170.00 | 7,819,869,170.00 |
| Capital reserve | V. 36 | 30,359,081,190.35 | 22,108,845,278.76 | 29,644,048,551.50 | 22,176,353,536.77 |
| Less: treasury shares | V. 37 | 130,627,194.09 | 130,627,194.09 | 210,930,850.00 | 210,930,850.00 |
| Other comprehensive income | V. 38 | 249,573,973.65 | 249,574,039.56 | 158,251,774.94 | 158,251,774.94 |
| Special reserve | V. 39 | 32,813,410.14 | 31,852,310.79 | ||
| Surplus reserve | V. 40 | 1,944,190,492.65 | 1,944,190,492.65 | 1,908,883,208.67 | 1,908,883,208.67 |
| Retained earnings | V. 41 | 9,224,145,934.95 | 7,778,649,075.85 | 8,595,698,699.52 | 7,460,883,520.03 |
| Equity attributable to shareholders of the Company | 49,473,789,412.65 | 39,745,243,297.73 | 47,947,672,865.42 | 39,313,310,360.41 | |
| Non-controlling interests | 4,946,474,686.53 | 2,124,406,569.55 | |||
| Total shareholders' equity | 54,420,264,099.18 | 39,745,243,297.73 | 50,072,079,434.97 | 39,313,310,360.41 | |
| Total liabilities and shareholders' equity | 137,519,661,128.33 | 67,932,988,550.91 | 143,173,445,003.35 | 69,744,486,876.29 | |
| Consolidated and Parent Company Income Statement | |||||
| Beijing Shougang Co., Ltd. for the year ended 31 December 2023 | |||||
| Unit: RMB Yuan | |||||
| Item | Notes | 2023 | 2022 | ||
| Consolidated | Company | Consolidated | Company | ||
| I. Operating revenue | V. 42 | 113,761,443,633.43 | 38,926,306,222.11 | 118,142,183,549.47 | 39,004,809,105.09 |
| Less: Cost of sales | V. 42 | 108,450,939,228.35 | 37,636,422,870.72 | 111,067,555,320.28 | 38,195,755,653.87 |
| Taxes and surcharges | V. 43 | 773,788,277.52 | 186,759,975.87 | 823,261,082.93 | 215,684,348.68 |
| Selling expenses | V. 44 | 247,978,613.12 | 145,715,400.04 | 237,997,026.22 | 147,362,228.16 |
| General and administrative expenses | V. 45 | 1,289,613,009.53 | 511,892,492.19 | 1,271,175,739.06 | 533,105,120.91 |
| R&D expenses | V. 46 | 491,078,795.33 | 188,022,863.16 | 626,923,257.36 | 207,810,181.56 |
| Financial expenses | V. 47 | 1,353,210,253.87 | 412,626,659.67 | 1,731,584,291.35 | 460,293,091.81 |
| Including: Interest expense | 1,459,986,955.71 | 472,742,471.44 | 1,863,709,861.13 | 507,359,008.32 | |
| Interest income | 107,859,174.95 | 16,560,676.53 | 132,829,545.65 | 27,521,639.77 | |
| Add: Other income | V. 48 | 497,165,799.61 | 192,257,211.40 | 76,142,005.96 | 11,800,586.33 |
| Investment gain/ (loss) | V. 49 | -173,640,314.78 | 468,027,906.62 | -211,209,023.35 | 59,234,973.72 |
| Including: Share of profits or loss of associates and joint ventures | -192,776,595.40 | -132,155,436.66 | -227,515,854.43 | -178,256,786.93 | |
| Gain/ (loss) on the changes in fair value | V. 50 | -4,224,788.99 | -4,224,788.99 | -765,992.40 | -765,992.40 |
| Credit impairment losses | V. 51 | 48,197,342.07 | 8,342,561.87 | 5,643,463.88 | 337,922.33 |
| Assets impairment losses | V. 52 | -600,099,065.24 | -151,383,222.76 | -402,994,496.88 | -63,210,278.38 |
| Gain/ (loss) from disposal of assets | V. 53 | 567,839.38 | 5,475,499.08 | -611,088.11 | -611,088.11 |
| II. Operating profit/ (loss) | 922,802,267.76 | 363,361,127.68 | 1,849,891,701.37 | -748,415,396.41 | |
| Add: Non-operating income | V. 54 | 6,975,486.44 | 1,803,907.74 | 11,304,199.78 | 4,718,009.36 |
| Less: Non-operating expenses | V. 55 | 29,457,854.70 | 20,311,515.08 | 68,082,023.32 | 51,970,642.22 |
| III. Profit/ (loss) before tax | 900,319,899.50 | 344,853,520.34 | 1,793,113,877.83 | -795,668,029.27 | |
| Less: Income tax expense | V. 56 | 146,515,055.29 | -8,219,319.46 | 283,698,478.31 | -6,832,474.51 |
| IV. Net profit / (loss) | 753,804,844.21 | 353,072,839.80 | 1,509,415,399.52 | -788,835,554.76 | |
| (1) Categorized by operation continuity: | |||||
| Including: Net profit/ (loss) from continuing operations | 753,804,844.21 | 353,072,839.80 | 1,509,415,399.52 | -788,835,554.76 | |
| Net profit/ (loss) from discontinuing operations | |||||
| (2) Categorized by ownership: | |||||
| Including: Net profit/ (loss) attributable to shareholders of the Company | 663,754,519.41 | 1,124,540,659.14 | |||
| Net profit/ (loss) attributable to non-controlling interests | 90,050,324.80 | 384,874,740.38 | |||
| V. Other comprehensive income, net of tax | 91,322,198.71 | 91,322,264.62 | -27,314,435.65 | -27,314,435.65 | |
| Other comprehensive income, net of tax, attributable to shareholders of the company | 91,322,198.71 | 91,322,264.62 | -27,314,435.65 | -27,314,435.65 | |
| (1) Other comprehensive income that will not be reclassified to profit or loss | 91,322,264.62 | 91,322,264.62 | -27,314,435.65 | -27,314,435.65 | |
| Changes in fair value of other equity instrument investments | 91,322,264.62 | 91,322,264.62 | -27,314,435.65 | -27,314,435.65 | |
| (2) Other comprehensive income to be reclassified to profit or loss | -65.91 | ||||
| Foreign currency translation differences | -65.91 | ||||
| Other comprehensive income, net of tax, attributable to non-controlling interests | |||||
| VI. Total comprehensive income | 845,127,042.92 | 444,395,104.42 | 1,482,100,963.87 | -816,149,990.41 | |
| Total comprehensive income attributable to shareholders of the company | 755,076,718.12 | 1,097,226,223.49 | |||
| Total comprehensive income attributable to non-controlling interests | 90,050,324.80 | 384,874,740.38 | |||
| VII. Earnings per share | |||||
| (1) Basic earnings per share | 0.0856 | 0.1496 | |||
| (2) Diluted earnings per share | |||||
| Consolidated and Parent Company Statement of Cash Flows | |||||
| Beijing Shougang Co., Ltd. for the year ended 31 December 2023 | |||||
| Unit: RMB Yuan | |||||
| Items | Note | 2023 | 2022 | ||
| Consolidated | Company | Consolidated | Company | ||
| I. Cash flows from operating activities | |||||
| Cash receipts from the sale of goods and the rendering of services | 64,299,847,202.27 | 20,828,679,035.96 | 60,167,389,548.82 | 16,484,868,626.13 | |
| Tax refunds received | 123,551,111.37 | 9,607,663.70 | 189,506,469.09 | 42,188,257.67 | |
| Cash received relating to other operating activities | V. 57 | 1,075,599,962.13 | 522,648,828.19 | 767,214,052.71 | 20,415,777.73 |
| Sub-total of cash inflows | 65,498,998,275.77 | 21,360,935,527.85 | 61,124,110,070.62 | 16,547,472,661.53 | |
| Cash paid for purchase of goods and services | 51,471,616,413.84 | 18,321,312,770.37 | 43,094,229,128.26 | 11,560,257,021.52 | |
| Cash paid to and on behalf of employee | 4,527,216,997.76 | 1,506,335,099.63 | 4,581,065,361.90 | 1,542,021,128.22 | |
| Cash paid for taxes | 2,863,616,678.56 | 810,940,804.12 | 3,011,630,025.15 | 471,766,716.43 | |
| Cash paid relating to other operating activities | V. 57 | 482,242,113.79 | 133,600,503.19 | 392,950,057.51 | 200,956,450.23 |
| Sub-total of cash outflows | 59,344,692,203.95 | 20,772,189,177.31 | 51,079,874,572.82 | 13,775,001,316.40 | |
| Net cash flows from operating activities | 6,154,306,071.82 | 588,746,350.54 | 10,044,235,497.80 | 2,772,471,345.13 | |
| II. Cash flows from investing activities | |||||
| Cash received from disposal of investments | 1,260,401,500.00 | 702,413,695.89 | 38,609,883.16 | ||
| Cash received from investment income | 115,230,658.40 | 591,297,147.99 | 82,626,235.37 | 242,968,827.72 | |
| Net proceeds from disposal of property, plant and equipment, intangible assets and other long-term assets | 4,617,334.55 | 8,667,874.82 | 12,405,207.57 | 9,996,517.46 | |
| Cash received from disposal of subsidiaries and other business units | |||||
| Cash received relating to other investing activities | V. 57 | 106,533,297.74 | 16,548,922.08 | 132,789,335.69 | 28,160,581.65 |
| Sub-total of cash inflows | 1,486,782,790.69 | 1,318,927,640.78 | 266,430,661.79 | 281,125,926.83 | |
| Purchase of property, plant and equipment, intangible assets and other non-current assets | 1,766,380,951.48 | 302,621,704.63 | 2,639,013,873.80 | 493,955,501.86 | |
| Cash paid for investments | 662,474,008.68 | 650,162,899.68 | 789,480,592.71 | 781,780,592.71 | |
| Net cash paid for acquisition of a subsidiary and other operating units | |||||
| Cash paid relating to other investing activities | 153,910,000.00 | ||||
| Sub-total of cash outflows | 2,428,854,960.16 | 952,784,604.31 | 3,428,494,466.51 | 1,429,646,094.57 | |
| Net cash flows from investing activities | -942,072,169.47 | 366,143,036.47 | -3,162,063,804.72 | -1,148,520,167.74 | |
| III. Cash flows from financing activities | |||||
| Cash received from investment | 1,565,806,677.81 | 1,278,391,712.18 | 287,603,983.82 | ||
| Including: Cash receipts from capital contributions from non-controlling interests of subsidiaries | 1,565,806,677.81 | 990,787,728.36 | |||
| Proceeds from borrowings | 31,847,552,691.12 | 13,583,351,200.88 | 33,162,321,539.41 | 13,549,741,539.41 | |
| Proceeds from issuing bonds | 3,000,000,000.00 | 3,000,000,000.00 | 2,000,000,000.00 | 2,000,000,000.00 | |
| Cash receipts relating to other financing activities | 1,039,800,000.00 | ||||
| Sub-total of cash inflows | 36,413,359,368.93 | 17,623,151,200.88 | 36,440,713,251.59 | 15,837,345,523.23 | |
| Repayments for debts | 38,229,681,200.88 | 17,654,331,200.88 | 40,872,794,754.59 | 15,706,004,754.59 | |
| Cash payments for distribution of dividends or profit and interest expenses | 1,731,838,601.55 | 490,762,007.33 | 2,519,777,625.43 | 1,150,312,727.17 | |
| Including: Dividends or profits paid to non-controlling shareholders of subsidiaries | 245,520,943.15 | 45,895,343.51 | |||
| Cash payments relating to other financing activities | V. 57 | 1,088,617,421.92 | 91,365,753.67 | 136,968,934.05 | 163,699,124.52 |
| Sub-total of cash outflows | 41,050,137,224.35 | 18,236,458,961.88 | 43,529,541,314.07 | 17,020,016,606.28 | |
| Net cash flows from financing activities | -4,636,777,855.42 | -613,307,761.00 | -7,088,828,062.48 | -1,182,671,083.05 | |
| IV. Effect of exchange rate changes on cash and cash equivalents | -10,372.53 | ||||
| V. Net increase in cash and cash equivalents | 575,445,674.40 | 341,581,626.01 | -206,656,369.40 | 441,280,094.34 | |
| Add: Cash and cash equivalents as at the beginning of year | 8,329,215,003.68 | 1,464,146,635.34 | 8,535,871,373.08 | 1,022,866,541.00 | |
| VI. Cash and cash equivalent as at the end of year | 8,904,660,678.08 | 1,805,728,261.35 | 8,329,215,003.68 | 1,464,146,635.34 | |
| Consolidated Statement of Changes in Equity Beijing Shougang Co., Ltd. for the year ended 31 December 2023 | ||||||||||
| Unit: RMB Yuan | ||||||||||
| Item | 2023 | |||||||||
| Equity attributable to shareholders of the parent | Non-controlling interests | Total shareholders’ equity | ||||||||
| Share capital | Capital reserve | Less: treasury shares | Other comprehensive income | Special reserve | Surplus reserve | Retained earnings | ||||
| I. Balance at the end of previous year | 7,819,869,170.00 | 29,644,048,551.50 | 210,930,850.00 | 158,251,774.94 | 31,852,310.79 | 1,908,883,208.67 | 8,595,698,699.52 | 2,124,406,569.55 | 50,072,079,434.97 | |
| Add: Changes in accounting policies | ||||||||||
| Corrections of prior period errors | ||||||||||
| Others | ||||||||||
| II. Balance at the beginning of the year | 7,819,869,170.00 | 29,644,048,551.50 | 210,930,850.00 | 158,251,774.94 | 31,852,310.79 | 1,908,883,208.67 | 8,595,698,699.52 | 2,124,406,569.55 | 50,072,079,434.97 | |
| III. Increase/(decrease) during the period | -25,257,565.00 | 715,032,638.85 | -80,303,655.91 | 91,322,198.71 | 961,099.35 | 35,307,283.98 | 628,447,235.43 | 2,822,068,116.98 | 4,348,184,664.21 | |
| (1)Total comprehensive income | 91,322,198.71 | 663,754,519.41 | 90,050,324.80 | 845,127,042.92 | ||||||
| (2)Shareholders' contributions and reduction | -25,257,565.00 | 714,657,637.11 | -80,303,655.91 | 2,969,269,451.03 | 3,738,973,179.05 | |||||
| (i) Shareholders’ contributions in ordinary share | -25,257,565.00 | -55,046,090.91 | -80,303,655.91 | 2,969,269,451.03 | 2,969,269,451.03 | |||||
| (ii) Amount of share-based payments recognized in equity | -11,692,261.51 | -11,692,261.51 | ||||||||
| (iii) Others | 781,395,989.53 | 781,395,989.53 | ||||||||
| (3) Profit distribution | 35,307,283.98 | -35,307,283.98 | -234,080,896.77 | -234,080,896.77 | ||||||
| (i) Transfer to surplus reserve | 35,307,283.98 | -35,307,283.98 | ||||||||
| (ii) Distribution to shareholders | -234,080,896.77 | -234,080,896.77 | ||||||||
| (iii) Others | ||||||||||
| (4) Transfer within equity | ||||||||||
| (i) Capital reserves converted to share capital | ||||||||||
| (ii) Surplus reserves converted to share capital | ||||||||||
| (iii) Loss made up by surplus reserves | ||||||||||
| (iv) Other comprehensive income transferred to retained earnings | ||||||||||
| (v) Others | ||||||||||
| (5) Special reserve | 375,001.74 | 961,099.35 | -3,170,762.08 | -1,834,660.99 | ||||||
| (i) Additions | 375,001.74 | 961,099.35 | -3,170,762.08 | -1,834,660.99 | ||||||
| (ii) Utilisation | ||||||||||
| (6) Others | ||||||||||
| IV. Balance at the end of the year | 7,794,611,605.00 | 30,359,081,190.35 | 130,627,194.09 | 249,573,973.65 | 32,813,410.14 | 1,944,190,492.65 | 9,224,145,934.95 | 4,946,474,686.53 | 54,420,264,099.18 | |
| Consolidated Statement of Changes in Equity | ||||||||||
| Beijing Shougang Co., Ltd. for the year ended 31 December 2023 | ||||||||||
| Unit: RMB Yuan | ||||||||||
| Item | 2022 | |||||||||
| Equity attributable to shareholders of the parent | Non-controlling interests | Total shareholders’ equity | ||||||||
| Share capital | Capital reserve | Less: treasury shares | Other comprehensive income | Special reserve | Surplus reserve | Retained earnings | ||||
| I. Balance at the end of previous year | 6,750,325,410.00 | 24,861,776,641.72 | 210,930,850.00 | 185,566,210.59 | 21,054,371.78 | 1,908,883,208.67 | 8,130,868,205.38 | 7,348,614,099.26 | 48,996,157,297.40 | |
| Add: Changes in accounting policies | ||||||||||
| Corrections of prior period errors | ||||||||||
| Others | ||||||||||
| II. Balance at the beginning of the year | 6,750,325,410.00 | 24,861,776,641.72 | 210,930,850.00 | 185,566,210.59 | 21,054,371.78 | 1,908,883,208.67 | 8,130,868,205.38 | 7,348,614,099.26 | 48,996,157,297.40 | |
| III. Increase/(decrease) during the period | 1,069,543,760.00 | 4,782,271,909.78 | -27,314,435.65 | 10,797,939.01 | 464,830,494.14 | -5,224,207,529.71 | 1,075,922,137.57 | |||
| (1)Total comprehensive income | -27,314,435.65 | 1,124,540,659.14 | 384,874,740.38 | 1,482,100,963.87 | ||||||
| (2)Shareholders' contributions and reduction | 1,069,543,760.00 | 4,795,867,598.63 | -5,544,665,254.82 | 320,746,103.81 | ||||||
| (i) Shareholders’ contributions in ordinary share | 1,069,543,760.00 | 4,738,436,210.82 | -5,544,665,254.82 | 263,314,716.00 | ||||||
| (ii) Amount of share-based payments recognized in equity | 36,147,743.13 | 36,147,743.13 | ||||||||
| (iii) Others | 21,283,644.68 | 21,283,644.68 | ||||||||
| (3) Profit distribution | -659,710,165.00 | -57,585,389.89 | -717,295,554.89 | |||||||
| (i) Transfer to surplus reserve | ||||||||||
| (ii) Distribution to shareholders | -625,589,533.60 | -57,585,389.89 | -683,174,923.49 | |||||||
| (iii) Others | -34,120,631.40 | -34,120,631.40 | ||||||||
| (4) Transfer within equity | ||||||||||
| (i) Capital reserves converted to share capital | ||||||||||
| (ii) Surplus reserves converted to share capital | ||||||||||
| (iii) Loss made up by surplus reserves | ||||||||||
| (iv) Other comprehensive income transferred to retained earnings | ||||||||||
| (v) Others | ||||||||||
| (5) Special reserve | 7,687,955.83 | 10,797,939.01 | -6,831,625.38 | 11,654,269.46 | ||||||
| (i) Additions | 7,687,955.83 | 10,797,939.01 | -6,831,625.38 | 11,654,269.46 | ||||||
| (ii) Utilisation | ||||||||||
| (6) Others | -21,283,644.68 | -21,283,644.68 | ||||||||
| IV. Balance at the end of the year | 7,819,869,170.00 | 29,644,048,551.50 | 210,930,850.00 | 158,251,774.94 | 31,852,310.79 | 1,908,883,208.67 | 8,595,698,699.52 | 2,124,406,569.55 | 50,072,079,434.97 | |
| Parent Company Statement of Changes in Shareholders’ Equity | |||||||||
| Beijing Shougang Co., Ltd. for the year ended 31 December 2023 | |||||||||
| Unit: RMB Yuan | |||||||||
| Item | 2023 | ||||||||
| Share capital | Capital reserve | Less: treasury shares | Other comprehensive income | Special reserve | Surplus reserve | Retained earnings | Total shareholders’ equity | ||
| I. Balance at the end of previous year | 7,819,869,170.00 | 22,176,353,536.77 | 210,930,850.00 | 158,251,774.94 | 1,908,883,208.67 | 7,460,883,520.03 | 39,313,310,360.41 | ||
| Add: Changes in accounting policies | |||||||||
| Corrections of prior period errors | |||||||||
| Others | |||||||||
| II. Balance at the beginning of the year | 7,819,869,170.00 | 22,176,353,536.77 | 210,930,850.00 | 158,251,774.94 | 1,908,883,208.67 | 7,460,883,520.03 | 39,313,310,360.41 | ||
| III. Increase/(decrease) during the period | -25,257,565.00 | -67,508,258.01 | -80,303,655.91 | 91,322,264.62 | 35,307,283.98 | 317,765,555.82 | 431,932,937.32 | ||
| (1) Total comprehensive income | 91,322,264.62 | 353,072,839.80 | 444,395,104.42 | ||||||
| (2) Shareholders' contributions and reduction | -25,257,565.00 | -67,508,258.01 | -80,303,655.91 | -12,462,167.10 | |||||
| (i) Shareholders’ contributions in ordinary share | -25,257,565.00 | -55,046,090.91 | -80,303,655.91 | ||||||
| (ii) Amount of share-based payments recognized in equity | -12,462,167.10 | -12,462,167.10 | |||||||
| (iii) Others | |||||||||
| (3) Profit distribution | 35,307,283.98 | -35,307,283.98 | |||||||
| (i) Transfer to surplus reserve | 35,307,283.98 | -35,307,283.98 | |||||||
| (ii) Distribution to shareholders | |||||||||
| (iii) Others | |||||||||
| (4) Transfer within equity | |||||||||
| (i) Capital reserves converted to share capital | |||||||||
| (ii) Surplus reserves converted to share capital | |||||||||
| (iii) Loss made up by surplus reserves | |||||||||
| (iv) Other comprehensive income transferred to retained earnings | |||||||||
| (v) Others | |||||||||
| (5) Special reserve | |||||||||
| (i) Additions | |||||||||
| (ii) Utilisation | |||||||||
| (6) Others | |||||||||
| IV. Balance at the end of the year | 7,794,611,605.00 | 22,108,845,278.76 | 130,627,194.09 | 249,574,039.56 | 1,944,190,492.65 | 7,778,649,075.85 | 39,745,243,297.73 | ||
| Parent Company Statement of Changes in Shareholders’ Equity | |||||||||
| Beijing Shougang Co., Ltd. for the year ended 31 December 2023 | |||||||||
| Unit: RMB Yuan | |||||||||
| Item | 2022 | ||||||||
| Share capital | Capital reserve | Less: treasury shares | Other comprehensive income | Special reserve | Surplus reserve | Retained earnings | Total shareholders’ equity | ||
| I. Balance at the end of previous year | 6,750,325,410.00 | 17,070,281,351.14 | 210,930,850.00 | 185,566,210.59 | 1,908,883,208.67 | 8,909,429,239.79 | 34,613,554,570.19 | ||
| Add: Changes in accounting policies | |||||||||
| Corrections of prior period errors | |||||||||
| Others | |||||||||
| II. Balance at the beginning of the year | 6,750,325,410.00 | 17,070,281,351.14 | 210,930,850.00 | 185,566,210.59 | 1,908,883,208.67 | 8,909,429,239.79 | 34,613,554,570.19 | ||
| III. Increase/(decrease) during the period | 1,069,543,760.00 | 5,106,072,185.63 | -27,314,435.65 | -1,448,545,719.76 | 4,699,755,790.22 | ||||
| (1) Total comprehensive income | -27,314,435.65 | -788,835,554.76 | -816,149,990.41 | ||||||
| (2) Shareholders' contributions and reduction | 1,069,543,760.00 | 5,127,355,830.31 | 6,196,899,590.31 | ||||||
| (i) Shareholders’ contributions in ordinary share | 1,069,543,760.00 | 5,062,782,685.03 | 6,132,326,445.03 | ||||||
| (ii) Amount of share-based payments recognized in equity | 43,289,500.60 | 43,289,500.60 | |||||||
| (iii) Others | 21,283,644.68 | 21,283,644.68 | |||||||
| (3) Profit distribution | -659,710,165.00 | -659,710,165.00 | |||||||
| (i) Transfer to surplus reserve | |||||||||
| (ii) Distribution to shareholders | -625,589,533.60 | -625,589,533.60 | |||||||
| (iii) Others | -34,120,631.40 | -34,120,631.40 | |||||||
| (4) Transfer within equity | |||||||||
| (i) Capital reserves converted to share capital | |||||||||
| (ii) Surplus reserves converted to share capital | |||||||||
| (iii) Loss made up by surplus reserves | |||||||||
| (iv) Other comprehensive income transferred to retained earnings | |||||||||
| (v) Others | |||||||||
| (5) Special reserve | |||||||||
| (i) Additions | |||||||||
| (ii) Utilisation | |||||||||
| (6) Others | -21,283,644.68 | -21,283,644.68 | |||||||
| IV. Balance at the end of the year | 7,819,869,170.00 | 22,176,353,536.77 | 210,930,850.00 | 158,251,774.94 | 1,908,883,208.67 | 7,460,883,520.03 | 39,313,310,360.41 | ||
Notes to the Financial StatementsI. General Informantion of the CompanyBeijing Shougang Co., Ltd. (hereinafter referred to as the Company) is a limited liability companyestablished solely by Shougang Group Co., Ltd. through fundraising and with the approval ofBeijing Municipal Government's Jingzheng Letter [1998] No. 34. The Company was approved andregistered by the Beijing Administration for Industry and Commerce on October 15, 1999, with aunified social credit code of 91110007002343182. The registered address is Shijingshan Road,Shijingshan District, Beijing.After years of equity changes such as issuing new shares, as of December 31, 2023, the cumulativetotal issued share capital of the Company is 7,794,611,605 shares. Among them, there are6,013,305,341 unrestricted RMB ordinary shares and 1,781,306,264 restricted RMB ordinaryshares.The Company and its subsidiaries are mainly engaged in the production and sales of steel productsand by-products.This financial statement and its notes have been approved by the 7th meeting of the 8th Board ofDirectors of the Company on April 18, 2024.II. Basis of preparation
The financial statements are prepared in accordance with the latest “China Accounting Standardsfor Business Enterprises” and other issued application guidance, interpretations and other relatedregulations (collectively known as the “CASBE”) issued by the Ministry of Finance of the PRC(MOF). In addition, the Company also discloses relevant financial information in accordance withthe General Provisions on Financial Reporting (Revised in 2023) of the Compilation Rules forInformation Disclosure of Companies Issuing Securities to the Public No. 15 of the China SecuritiesRegulatory Commission.The financial statements are prepared on a going concern basis.The Company adopts the accrual basis of accounting. The financial statements have been preparedunder the historical cost convention, except for certain financial instruments. If the assets areimpaired, corresponding provisions for impairment shall be made in accordance with relatedregulations.III. Significant accounting policies and estimatesThe Company has determined the accounting policies and accounting estimates based on thecharacteristics of the operation, especially those related to depreciation of fixed assets, constructionin progress converted to fixed assets, amortization of intangible assets, capitalization conditions ofR&D expenses and revenue recognition policies, the detailed accounting policies refer to Note III.15, Note III. 16, Note III. 19, Note III. 20 and Note III. 26.
1. Statement of compliance with the CAS
The financial statements have been prepared in accordance with CAS, and present truly andcompletely the financial position of the consolidated and the Company as at 31 December 2023,and the financial performance and cash flows for FY 2023.
2. Accounting period
The accounting year of the Company is from 1 January to 31 Decemeber of each calendar year.
3. Operating cycle
The operating cycle of the Company is 12 months.
4. Functional currency
The Company and domestic subsidiaries use Renminbi (“RMB”) as functional currency. Theoverseas subsidiaries use the currency of the main economic environment in which the businessoperate as the functional currency.The financial statements of the Company have been prepared in RMB.
5. Method for determination and selection criteria of the materiality level
| Item | Materiality Level |
| Material accounts receivable with individual provision for bad debts | ≥RMB 10 million |
| Material accounts receivable written off during current period | ≥RMB 10 million |
| Material construction in progress | 1% of the latest audited net assets attributable to the parent company |
| Material non wholly-owned subsidiary | Single contribution amount exceeding 500 million yuan (inclusive) |
| Material investing activities | 1% of the latest audited net assets attributable to the parent company |
6. Accounting treatments for business combination involving entities under common control andbusiness combination involving entities not under common control.
(1) Business combination involving entities under common control
For the business combination involving entities under common control, the assets and liabilities thatare obtained in the business combination shall be measured at original carrying amounts at thecombination date as recorded by the party being combined. The difference between the carryingamount of the net assets obtained and the carrying amount of consideration paid for the combinationshall be adjusted to capital reserve (equity premium), if the capital reserve (equity premium) is notsufficient to absorb the difference, any excess shall be adjusted to retained earnings.Business combinations involving entities under common control through multiple transactions toachieve in stagesIn the consolidated financial statements, the assets and liabilities obtained at the combination shallbe measured at the carrying value as recorded by the ultimate controlling party at the acquisitiondate. The difference between the sum of the carrying value from original shareholding portion andthe new consideration incurred at the acquisition date and the carrying value of net assets obtainedat acquisition date shall be adjusted to capital reserve (equity premium), if the balance of capitalreserve is not sufficient to absorb the differences, any excess is adjusted to retained earnings. The
long-term investment held by combining party before acquisition of control, the profit or loss,comprehensive income and other change of shareholder’s equity recongnized at the closer date ofthe acquisition date and combination date under common control shall separately offset the openingbalance of retained earnings and profit or loss during comparative statements.
(2) Business combinations involving entities not under common control
For business combinations involving entities not under common control, the consideration costsinclude acquisition-date fair value of assets transferred, liabilities incurred or assumed and equitysecurities issued by the acquirer in exchange for control of the acquiree. The acquirer shallrecognize the acquiree’s identifiable asset, liabilities and contingent liabilities that satisfy therecognition criteria at fair values at the date of acquisition.The excess of combination costs and the acquirer’s interest in the fair value of the acquiree’sidentifiable net assets is recognized as goodwill, which is measured at cost less any accumulatedimpairment losses subsequently. If the acquirer’s interest in the net fair value of the acquiree’sidentifiable net assets exceeds the combination costs, the acquirer shall reassess the measurementand recognize any excess remaining in profit or loss after reassessment.Business combinations involving entities not under common control through multiple transactionsto achieve in stagesIn the consolidated financial statements, the combination cost is the sum of consideration paid atacquisition date and fair value of the acquiree’s equity held prior to acquisition date; the equity ofthe acquiree held prior to acquisition date shall be re-measured at the fair value at acquisition date,the difference between the fair value and book value shall be recognized as investment gain or lossfor the current period. Other comprehensive income and changes of other shareholder’s equityrelated with acquiree’s equity held prior to acquisition date shall be transferred to profit or loss forcurrent period at acquisition date, besides the other comprehensive income arising from theremeasurement of net liabilities or changes in net assets of the defined benefit plan by the investedparty, as well as other comprehensive income related to non trading equity instrument investmentsoriginally designated to be measured at fair value through other comprehensive income.
(3) Transaction costs for business combination
The overheads for the business combination, including the expenses of audit, legal services,valuation advisory, and other related administrative expenses, are recorded in profit or loss for thecurrent period when expenditure incurred. The transaction costs of equity or debt securities issuedas the considerations of business combination are included in the initial recognition amount of theequity or debt securities.
7. Critiria of control and method of preparing consolidated financial statements
(1) Critiria of control
The consolidation scope of the consolidated financial statements is determined based on control.Control refers to the company having the power over the invested entity, enjoying variable returnsthrough participating in related activities of the invested entity, and having the ability to use thepower over the invested entity to influence its return amount. When changes in relevant facts andcircumstances result in changes in the relevant elements involved in the definition of control, theCompany will conduct a reassessment.
When determining whether to include a structured entity in the scope of consolidation, theCompany takes into account all facts and circumstances, including evaluating the purpose anddesign of the establishment of the structured entity, identifying the types of variable returns, andevaluating whether to control the structured entity by participating in its related activities andassuming some or all of the variability of returns.
(2) Scope of consolidated financial statements
The scope of consolidated financial statements is determined on the control basis. Control existswhen the Company has power over the investee, rights to variable returns from involvement withrelated activities of investee and has the ability to affect its returns through its power over theinvestee. A subsidiary is an entity that is controlled by the Company (including separable parts of anenterprise or investee and structured entities controlled by the Company, etc).
(2) Method of preparing consolidated financial statements
The consolidated financial statements are based on the financial statements of the Company and itssubsidiaries, and are prepared by the Company in accordance with other relevant information. Inpreparing the consolidated financial statements, the Company and its subsidiaries are required toapply consistent accounting policy and accounting period, intra-group transactions and balancesshall be offset.The subsidiary acquired through a business combination involving entities under common controlin the reporting period shall be included in the scope of the consolidation from the beginning of thecombination date, the subsidiary’s income, expenses and profits should be included in theconsolidated results of operations and cash flows from the acquisition date respectively.The subsidiary acquired through a business combination involving entities not under commoncontrol in the reporting period, the subsidiary’s income, expenses and profits are included in theconsolidated results of operations, and cash flows are included in the consolidated cash flowstatement from the acquisition date to the end of the reporting date.The portion of the subsidiary’s equity that is not attributable to the Company is treated asnon-controlling interests and separately presented in the consolidated balance sheet withinshareholders’ equity. The portion of a subsidiary’s profit or loss that is attributable tonon-controlling interests presented in the consolidated income statement of net profit or loss as “netprofit attributable to non-controlling interests”. Where the amout of losses of a subsidiaryattributable to the non-controlling shareholders in the current period exceeds the share of theopening balance of owner’s equity of the subsidiary, the excess shall offset non-controllinginterests.
(3) Purchase of the minority equity in the subsidiary
The difference between the long-term equity investments costs acquired by the purchase of minorityequity and the share of the net assets that the subsidiaries have to continue to calculate from the dateof purchase or the date of consolidation in proportion to the new shareholding ratio is adjusted tothe capital reserve (equity premium), if the capital reserve is not sufficient, any excess is adjusted toretained earning. The difference between disposal of partial equity investment without losing
control over its subsidiary and the disposal of long-term equity investment corresponding to theshare of the net assets of the subsidiaries from the date of purchase or the date of consolidation is aswell.
(4) Loss of control of subsidiaries
If the control right is lost due to disposal of partial equity investment or other reasons, theremaining equity shall be re-measured according to its fair value on the date of losing control. Thedifference between the summary of consideration obtained from the disposal of the equity and thefair value of the remaining equity, less the difference between the share of the original assets andthe share of the net assets that have been continuously calculated from the date of purchase from thedate of the original shareholding, is included in the current period profit or loss and; if there is agoodwill for the subsidiary, the amount of the goodwill also shall be deducted.Other comprehensive income related to equity investments in the original subsidiary should beaccounted for on the same basis as the direct disposal of related assets or liabilities by the originalsubsidiary when control is lost. Other changes in other shareholders' equity related to the originalsubsidiary should be transferred to the current period's profit and loss when control is lost.
(5) Treatment of step disposal until the loss of control of subsidiaries
By stepping through multiple transactions to dispose of the equity investment in the subsidiary untilit loses control, if the clauses, conditions and economic impacts of the transaction satisfy one ormore of the following criteria, the Company will consider the transactions as a package transactionfor the accounting treatment:
①The transactions are entered simultaneously or in consideration of the mutual influence;
②Only the transactions as a whole can achieve one complete business outcome;
③The occurrence of a transaction is depending on the occurance of at least one of othertransactions;
④The transaction alone is not economical, however, it becomes economical to consider the othertransactions together.In the consolidated financial statements, the measurement of the remaining equity and treatment ofthe loss of disposal is in accordance to “Treatment of loss of control of subsidiaries” as describedabove. The difference between the disposal consideration and the related share of net assets of thesubsidiaries, which has been continuously calculated since the purchase date corresponding to theequity disposal should be treated as follows:
①When it is a package transaction, the difference shall be recognized as the other comprehensiveincome and transferred to the current period profit or loss of control when the control is lost
②When it is not a package transaction, the difference shall be recorded to capital reserve (sharepremium) as equity transaction and could not be transferred to the current period profit or loss ofcontrol when the control is lost.
8. Joint arrangement and joint operations
Joint arrangement refers to an arrangement under the joint control of two or more entities. The joint
arrangement of the Company is classified as either a joint operation or a joint venture.
(1) Joint operation
Joint operation is a joint arrangement whereby the Company have rights to the assets, andobligations for the liabilities, relating to the arrangement.The Company recognizes the following items in relation to its interest in a joint operation inaccordance with CAS:
A. its solely-held assets, and its share of any assets held jointly;B. its solely-assumed liabilities, and its share of any liabilities incurred jointly;C. its revenue from the sale of its share of the output arising from the joint operation;D. its share of the revenue from the sale of the output by the joint operation;E. its solely-incurred expenses, and its share of any expenses incurred jointly.
(2) Joint venture
A joint venture is a type of joint arrangement whereby the Company that has joint control of thearrangement has rights to the net assets of the joint venture.The Company conducts accounting treatment for the investment of joint ventures in accordancewith the provisions of equity method accounting related to long-term equity investment.
9. Cash and cash equivalents
Cash represents the cash on hand and deposits which are readily available for payment. Cashequivalents represent the Company’s short-term highly liquid investments which are readilyconvertible into known amounts of cash and subject to an insignificant risk of changes in value.
10. Foreign currency transactions and foreign currency statement translation
(1) Foreign currency transactions
When the foreign currency transactions are engaged, the amount shall be converted into thefunctional currency at the spot exchange rate on the transaction date (or using an exchange ratedetermined by a system reasonable method that is similar to the spot exchange rate on thetransaction date).On the balance sheet date, foreign currency monetary items are converted using the spot exchangerate on the balance sheet date. The exchange difference arising from the difference between the spotexchange rate on the balance sheet date and the initial recognition or the spot exchange rate on theprevious balance sheet date shall be recognized in the current period's profit and loss; For foreigncurrency non monetary items measured at historical cost, the spot exchange rate on the transactiondate shall still be used for translation; For foreign currency non-monetary items measured at fairvalue, the spot exchange rate on the date of fair value determination is used for translation. Thedifference between the converted amount in the functional currency and the original amount in thefunctional currency is recognized in the current period's profit or loss or other comprehensiveincome based on the nature of the non-monetary item.
(2) Foreign currency statement translation
On the balance sheet date, when converting the foreign currency financial statements of overseassubsidiaries, the asset and liability items in the balance sheet are converted using the spot exchangerate on the balance sheet date. Except for "undistributed profits", other items in shareholder equityare converted using the spot exchange rate on the date of occurrence.The income and expense items in the income statement are converted using the spot exchange rateon the transaction date (or using an exchange rate determined by a systematic and reasonablemethod that is similar to the spot exchange rate on the transaction date).All items in the cash flow statement are converted at the spot exchange rate on the date of cash flowoccurrence (or an exchange rate determined by a reasonable system method that is similar to thespot exchange rate on the date of cash flow occurrence). The impact of exchange rate changes oncash is treated as an adjustment item and is separately reflected in the cash flow statement under theitem "Impact of exchange rate changes on cash and cash equivalents".The difference arising from the conversion of financial statements is reflected in the "othercomprehensive income" item under the shareholder's equity item on the balance sheet.When disposing of overseas operations and losing control, the foreign currency translationdifferences related to the overseas operations listed under the shareholder's equity item in thebalance sheet shall be fully or proportionally transferred to the current profit and loss for disposal.
11. Financial instruments
A financial instrument is any contract that gives rise to a financial asset of one entity and a financialliability or equity instrument of another entity.
(1) Recognition and derecognition of financial instruments
The Company recognises a financial asset or a financial liability when, and only when, it becomes aparty to the contractual provisions of the instrument.A financial asset will be derecognized when it satisfies one or more of the following conditions:
① The contractual rights to receive cash flows from the financial asset expire;
② The financial asset has been transferred, and it satisfies the following conditions forderecognition.The financial liability (or part of it) is derecognized when its contractual rights (or part of it) expire.If the Company (as a debtor) makes an agreement with the creditor to replace the current financialliability with assuming a new financial liability, and contractual provisions are different insubstance, the current financial liability shall be derecognized and a new financial liability shall berecognized.All financial assets purchased or sold in regular way are recognised or derecognised on the tradingdate when the Company commits to purchase or sell the asset.
(2) Classification and measurement of financial assets
The Company classifies its financial assets, based on the entity's business model for managing the
financial assets and the contractual cash flow characteristics of the financial assets, as financialassets at amortized cost, financial assets at fair value through other comprehensive income andfinancial assets at fair value through profit or loss.Financial assets are measured at fair value at initial recognition. For financial assets measured atfair value with changes recognized in the current period's profit or loss, the relevant transactioncosts are directly recognized in the current period's profit or loss; For other categories of financialassets, relevant transaction costs are included in the initial recognition amount. The initialrecognition amount of accounts receivable arising from the sale of products or provision of services,which do not include or consider significant financing components, shall be the expected amount ofconsideration that the company is entitled to receive.Financial assets measured at amortized costThe Company shall classify financial assets that meet the following conditions and are notdesignated as financial assets at fair value through profit or loss as financial assets measured atamortized cost:
? The financial asset is held whose objective is to collect contractual cash flows;? The contractual terms of the financial asset give rise on specified dates to cash flows that aresolely payments of principal and interest on the principal amount outstanding.After initial recognition, this type of financial asset using effective interest rate method to bemeasured at amortized cost. The gain or loss generated by the financial assets measured atamortized cost and not part of any hedging relationship shall be accounted in the profit or loss forthe year when the financial assets are derecognized, amortized by effective interest method orrecognized impairment.Financial assets measured at fair value through other comprehensive incomeThe Company shall classify financial assets that meet the following conditions and are notdesignated as financial assets at fair value through profit or loss as financial assets measured at fairvalue through other comprehensive income:
? The financial asset is held within a business model whose objective will be achieved by bothcollecting contractual cash flows and trading financial assets;? The contractual terms of the financial asset give rise on specified dates to cash flows that aresolely payments of principal and interest on the principal amount outstanding.After initial recognition, the financial assets are subsequently measured at fair value. Interest,impairment loss/gain and exchange loss/gain calculated by the effective interest rate method arerecognised in profit or loss, while other profit or loss shall be recognised in other comprehensiveincome. When derecognized, the accumulated profit or loss previously recognised in othercomprehensive gains shall be transferred to current profit or loss.Financial assets measured at fair value through profit or lossIn addition to the aboving financial assets which are measured at amortized cost or at fair valuethrough other comprehensive income, the Company classifies all other financial assets as financialassets measured at fair value through profit or loss. In order to eliminate and significantly reduceaccounting mismatches, the Company irrevocably designates some financial assets that should be
measured at amortized cost or at fair value through other comprehensive income as financial assetsat fair value through profit or loss during the initial recognition.After initial recognition, the financial assets are subsequently measured at fair value, and the profitor loss (including interest and dividend income) generated shall be recognised in current profit orloss, unless the financial assets are part of the hedging relationship.The Company evaluates the characteristics of the contract cash flow of financial assets to determinewhether the contract cash flow generated by the relevant financial assets on a specific date is only topay principal and the interest, which is based on the amount of unpaid principal. Among them,principal refers to the fair value of financial assets at initial recognition; interest includes theconsideration of time value of money, credit risk related to the unpaid principal in a specific period,and other basic credit risks, costs and profits. Additionally, the Company evaluates the terms andconditions of the contracts that may alter time distribution or amount of cash flow in financial assetcontracts to determine whether they satisfy the requirements of the aboving contract cash flow’scharacteristics.Only when the Company changes its business model of managing financial assets, all the financialassets affected shall be reclassified on the first day of the first reporting period after the businessmodel alteration, otherwise, financial assets shall not be reclassified after initial recognition.
(3) Classification and measurement of financial liabilities
The Company classifies its financial liabilities at initial recognition as financial liabilities measuredat fair value through profit or loss and financial liabilities at amortized cost. With respect tofinancial liabilities not classified as at fair value through profit or loss, transactions costs arecharged to initial recognition cost.Financial liabilities measured at fair value through profit or lossFinancial liabilities at fair value through profit or loss, including financial liabilities held for tradingand those are designated as at fair value through profit or loss at initial recognition. For thesefinancial liabilities, they are subsequently measured at fair value and gains or lossess from thechange of fair value and related dividend and interest expense are recognized in profit or loss for theyear.Financial liabilities measured at amortized costOther financial liabilities are subsequently measured at amortized cost using the effective interestmethod, the gains and losses arising from derecognition or amortization is recognised in profit orloss for the year.Distinction between financial liabilities and equity instrumentsThe financial liability is the liability that satisfies one of following cateria:
① Contractual obligation to deliver cash or other financial instruments to another entity.
② Under potential adverse conditions, contractual obligation to exchange financial assets orfinancial liabilities with other entity.
③ The contract that will or may be settled in the entity’s own equity instruments and is anon-derivative for which the entity is or may be obliged to deliver a variable number of the entity’s
own equity instruments.
④ The derivative contract that will or may be settled in the entity’s own equity instruments otherthan by the exchange of a fixed number of the entity’s own equity instruments for a fixed amount ofcash or other financial assets.Equity instrument is the contract that evidences the residual equity in the assets of an entity afterdeducting all of its liabilities.If the Company cannot unconditionally avoid fulfilling a contractual obligation by delivering cashor other financial assets, the contractual obligation satisfies the definition of financial liability.If the financial instrument must or could be settled by the Company’s own equity instrument, theCompany should consider whether the Company’s equity instrument as the settlement instrument isa substitute of cash or other financial assets or the residual equity in the assets of an entity afterdeducting all of its liabilities. If it is the former one, the financial instrument is the Company’sfinancial liability; if it is the latter one, the tool is the equity instrument of the Company.
(4) Fair value of financial instruments
For the determination method of fair value of financial assets and financial liabilities, please refer toNote III.12.
(5) Impairment of financial assets
The Company performs impairment assessment and recognizes loss allowance for the followingfinancial assets based on the expected credit losses.? Financial assets measured at amortized cost;? Debt investment and trade receivables measured at fair value through other comprehensiveincome;? Contract assets as defined in Accounting Standards for Enterprises No.14- Revenues;? Lease receivables;? Financial guarantee contracts (expect for the contracts measured at fair value through profit orloss, financial assets transformation not qualify for derecognition and continuing involvementof transferred financial assets).Measurement of expected credit lossThe expected credit loss refers to the weighted average of the credit loss of financial instrumentsthat are weighted by the risk of default. Credit loss refers to the difference between all contractualcash flows receivable from the contracts and all cash flows expected to be received, that is, thepresent value of all cash shortages.The Company considers the reasonable and basis information about past events, current situationand forecast of future economic situation, calculates the probability weighted amount of the presentvalue of the difference between the receivable cash flow of the contract and the expected cash flowwith the risk of default as the weight, and confirms the expected credit loss.The Company separately measures the expected credit losses of financial instruments at different
stages. The credit risk on a financial instrument has not increased significantly since initialrecognition, which is in Stage I. The Company measures the loss provision in accordance withexpected credit losses for the next 12 months. If the credit risk of financial instruments hasincreased significantly since the initial recognition, but no credit impairment has occurred, which isin Stage II. The Company measures the loss provision in accordance with the expected credit lossesfor the whole lifetime of the financial instrument. If the financial instrument has occurred creditimpairment since initial recognition, which is in Stage III, and the Company measures the lossprovision in accordance with the expected credit losses for the whole lifetime of the financialinstrument.For the financial instruments with lower credit risk at the balance sheet date, the Company assumesthat the credit risk has not increased significantly since the initial recognition, and measures the lossprovision in accordance with expected credit losses for the next 12 months.The whole lifetime expected credit loss, refers to the expected credit loss caused by all possibledefaults during the whole expected lifetime. The 12-month expected credit losses, refer to theexpected credit loss caused by all possible defaults during the next 12 months after balance sheetdate (if the expected duration of financial instrument is less than 12 months, then for the expectedduration), which is part of the whole lifetime expected credit losses.When measuring the expected credit loss, the maximum maturity period that the Company needs toconsider is the maximum contract maturity period (including the consideration of option of renewal)the enterprise facing credit risk.For financial instruments in Stage I, Stage II and with lower credit risk, the Company calculatesinterest income on the basis of the book balances without deduction of impairment provisions andwith effective interest rates. For financial instruments in Stage III, the Company calculates interestincome on the basis of the book balances minus the impairment provision and with effective interestrate.For accounts receivable such as notes receivable, accounts receivable, accounts receivable financing,and other receivables, if the credit risk characteristics of a certain customer are significantlydifferent from those of other customers in the portfolio, or if there is a significant change in thecredit risk characteristics of that customer, the Company will make a provision for bad debts on asingle item for that receivables. Except for accounts receivable with individual provision for baddebts, the Company divides accounts receivable into combinations based on credit riskcharacteristics and calculates bad debt provisions on the basis of the combination.Notes Receivable and Accounts ReceivableFor notes receivable, accounts receivable, whether or not there are significant financing elements,the Company always measures the loss provision in accordance with the whole lifetime expectedcredit losses.If the expected credit loss information of the the independent financial asset cannot be evaluated bya reasonable cost, the Company divides and combines notes receivable and accounts receivableaccording to the characteristics of credit risk. On the basis of the combination, the Companycalculates the expected credit losses. The basis of determining combination is as follows:
A. Notes receivable? Notes receivable combination 1: Bank acceptances notes with higher credit ratings
? Notes receivable combination 2: Bank acceptances notes with lower credit ratings and
Commercial acceptancesB. Accounts receivable: Accounts of receivable-tradeFor the notes receivable divided into portfolios, the Company refers to historical credit lossexperience, combines current conditions with predictions of future economic conditions, calculatesexpected credit losses through default risk exposure and expected credit loss rate over the entireduration.For accounts receivable divided into combinations, the Company refers to historical credit lossexperience, combines current conditions with predictions of future economic conditions, andprepares a comparison table between the aging/overdue days of accounts receivable and theexpected credit loss rate for the entire existence period to calculate the expected credit loss. The ageof accounts receivable shall be calculated from the date of recognition.Other receivablesAccording to the characteristics of credit risk, the Company divides other receivables into servalcombinations. On the basis of the combination, the Company calculates the expected credit losses.The basis of determining the combination is as follows:
? Other receivables Combination 1: Imprest and deposit, etc.? Other receivables Combination 2: Other current accountFor other receivables divided into portfolios, the Company calculates expected credit losses basedon default risk exposure and expected credit loss rate over the next 12 months or the entire duration.For other receivables grouped by aging, the aging shall be calculated from the date of recognition.Debt investments and other debt investmentsFor debt investments and other debt investments, the Company calculates expected credit lossesbased on the nature of the investment, various types of counterparty and risk exposure, default riskexposure, and expected credit loss rate for the next 12 months or the entire duration.Assessment of Significant Increase in Credit RiskBy comparing the default risk of financial instruments on balance sheet date with the default risk oninitial recognition date, the Company determines the relative change of default risk of financialinstruments during the expected lifetime of financial instruments to evaluate whether the credit riskof financial instruments has increased significantly since the initial recognition.When determining whether credit risk has increased significantly since the initial recognition, theCompany considers reasonable and valid information, including forward-looking information,which can be obtained without unnecessary additional costs or efforts. Information considered bythe Company includes:
? The debtor cannot pay principal and interest on the expiration date of the contract;? Serious deterioration of external or internal credit ratings (if any) of financial instruments that
have occurred or are expected to occur;
? Serious deterioration of the debtor’s operating results that have occurred or are expected to
occur;? Changes in the existing or anticipated technological, market, economic or legal environmentwill have the significant negative impact on the debtor’s repayment capacity.According to the nature of financial instruments, the Company evaluates whether credit risk hasincreased significantly on the basis of an independent financial instrument or a combination offinancial instruments. When assessing on the basis of the combination of financial instruments, theCompany can classify financial instruments based on common credit risk characteristics, such asoverdue information and credit risk rating.If the delay exceeds 30 days, the Company determines that the credit risk of financial instrumentshas increased significantly.Financial assets that have occured credit impairmentOn the balance sheet date, the Company assesses whether credit impairment has occurred infinancial assets measured at amortized cost and debt investments measured at fair value throughother comprehensive income. When one or more events adversely affect the expected future cashflow of the financial assets occur, the financial assets transfer to the financial assets with creditimpairment. Evidence of credit impairment of financial assets includes the following observableinformation:
? Issuer or debtor suffer from significant financial difficulties;? Debtor breaches any of the contractual stipulations, for example, fails to pay or delays the
payment of interests or the principal, etc.;? In consideration of economic situationand contract related to the financial difficulties of the
debtor, the Company grants concessions to the debtor that will not be made under any other
circumstances.? Debtor is probable to go bankrupt or undergo other financial restructuring.? Financial difficulties of issuer or debtor lead to the disappearance of financial assets active
market.Presentation of expected credit loss reserveIn order to reflect the changes happened to the credit risk of financial instruments since the initialrecognition, the Company recalculates the expected credit loss on each balance sheet date. Theincrease or reversal of the loss provision resulting therefrom is recognised as an impairment loss orgain in the current profit or loss.For financial assets measured at amortized cost, loss provisionoffsets the carrying amount of the financial assets presentated on the balance sheet; for debtinvestments measured at fair value through other comprehensive income, the Company recognizesits loss provision through other comprehensive income and does not offset the financial assets’carrying amount.Write offIf the Company no longer reasonably expects that the financial assets contract cash flow can berecovered fully or partially, the financial assets book balance will be reduced directly. Such
reduction constitutes derecognition of the financial assets. The situation usually occurs when theCompany determines that the debtor has no assets or income to generate sufficient cash flows topay the amount to be reduced. However, in accordance with the Company’s procedures forrecovering due payment, the financial assets reduced may still be affected by enforcement activities.If the reduced financial assets can be recovered later, the returns as impairment losses shall berecorded in the profit or loss.
(6) Transfer of financial assets
Transfer of financial assets is the transfer or delivery of financial assets to another entity (thetransferee) other than the issuer of financial assets.A financial asset is derecognised when the Company has transferred substantially all the risks andrewards of the asset to the transferee. A financial asset is not derecognised when the Companyretains substantially all the risks and rewards of the financial asset.When the Company has neither transferred nor retained substantially all the risks and rewards of thefinancial asset, it either (i) derecognises the financial asset and recognises the assets and liabilitiescreated in the transfer when it has not retained control of the asset; or (ii) continues to recognise thetransferred asset to the extent of the Company’s continuing involvement, in which case, theCompany also recognises an associated liability.
(7) Offsetting of financial assets and financial liabilities
When the Company has currently enforceable legal rights to offset the recognized financial assetsand financial liabilities, and there is an intention to settle on a net basis or to realize the financialassets and settle the financial liabilities, the financial assets and financial liabilities shall bepresented in balance sheet with the amount after offsets. Besides, the financial assets and financialliabilities shall be presented separately in balance sheet and are not allowed to be offset.
12. Fair value measurement
Fair value is the price that would be received to sell an asset or paid to transfer a liability in anorderly transaction between market participants at the measurement date.The Company measures related assets or liabilities at fair value and assumes that selling assets ortransferring liabilities in an orderly transaction in the principal market of related assets or liabilities;in the absence of a principal market, the Company assumes the transaction in the mostadvantageous market. Principal market (or the most advantageous market) is the market that theCompany can enter into on measurement date. The Company adopts the presumptions used bymarket participants in achieving the maximum economic value of pricing the assets or liabilities.For financial assets or financial liabilities in the active market, the Company uses the quoted pricein active market as fair value. Otherwise, the Company uses valuation technique to determine thefair value.Fair value measurement of non-financial assets considers market participants’ ability to generateeconomic benefits by using the assets in its highest and best use or by selling it to another marketparticipant that would use the asset in its highest and best use.The Company adopts the valuation techniques that are appropriate under current circumstances andfor which sufficient data and other supporting information are available to measure fair value,
giving priority to the use of relevant observable inputs, and using unobservable inputs only if theobservable inputs are unavailable or not feasible to obtain.All assets and liabilities for which fair value is measured or disclosed in the financial statements arecategorized within the fair value hierarchy, described as follows, based on the lowest level inputthat is significant to the fair value measurement as a whole: Level 1 inputs are quoted (unadjusted)market prices in active markets for identical assets or liabilities; Level 2 inputs are observableinputs for related assets or liabilities, either directly or indirectly other than the inputs within Level1; Level 3 inputs are unobservable inputs for related assets or liabilities.For assets and liabilities that are recognized in the financial statements on a recurring basis, theCompany determines whether transfers have occurred between levels in the hierarchy byreassessing categorization at the end of each reporting period.
13. Inventories
(1) Classification
Inventories of the Company include raw materials, finished goods, lower-valued consumables andself-made semi-finished goods, etc.
(2) Mesurement method of cost of delivered inventories
Inventories are quoted at actual costs when acquired. Raw materials, finished goods and self-madesemi-finished goods are determined on the weighted average basis.
(3) Determination basis and provision method for inventory impairment provisionOn the balance sheet date, inventory is measured at the lower of cost and net realizable value. Whenits net realizable value is lower than cost, a provision for inventory impairment is made.Net realisable value is the estimated selling price deducted by the estimated costs to completion, theestimated selling expenses and related taxes. The net realisable value is measured on the basis ofobtained verified evidences and considerations for the purpose of holding inventories and the effectof post balance sheet events.The Company usually makes provisions for inventory impairment based on individual inventoryitems. For inventory with a large quantity and low unit price, provision for inventory impairmentshall be made according to the inventory category.On the balance sheet date, if the factors affecting the previous write down of inventory value havedisappeared, the provision for inventory impairment shall be reversed within the originallyprovisioned amount.
(4) Inventory system
Inventories are accounted for using the perpetual inventory system.
(5) Amortization method for consumables
Low-valued consumables are charged with the one-off amortization method and multi-stageamortization method at consumption.
14. Long-term equity investments
Long-term equity investments consist of equity investments in subsidiaries, joint ventures andassociates. An associate is an enterprise over which the Company has significant influence.
(1) Recognition of initial investment cost
Long-term equity investment from the business combination: For a long-term equity investmentacquired through a business combination under common control, the initial investment cost of thelong-term equity investment shall be the absorbing party’s share of the carrying amount of theowners’ equity of the party being absorbed in the consolidated financial statements of the ultimatecontrolling party at combination date. For business combination involving entities not undercommon control, the initial investment cost of long-term equity should be the cost of acquisition.Long-term equity investment from other methods：for a long-term equity investment acquired bypaying cash, the initial investment cost shall be the actual purchase price paid; for those acquired bythe issue of equity securities, the initial investment cost shall be the fair value of the equitysecurities issued.
(2) Subsequent measurement and recognition of profit or loss
The cost method is applied for the investment of subsidiaries unless the investment satisfies theconditions of held for sale; the equity method is applied for the investment of joint ventures andassociates.When the cost method is adopted in long-term equity investments, except for cash dividends orprofit distributions declared but not yet distributed in the purchase price or consideration ofobtaining the investment, profits or cash dividends declared to be distributed by the investee shouldbe recognised as investment income in the current period.When the equity method is adopted in long-term equity investments, the initial cost of aninvestment in excess of the share of investee’s fair value on identifiable net assets remainsunchanged; the initial cost of the investment that falls short of the share of investee’s fair value onidentifiable net assets shall be adjusted, for the difference which had been charged to current profitor loss.When the equity method is adopted, the Company recognises its share of the investee’s profit orloss, as well as its share of the investee’s other comprehensive income, as investment income or lossand other comprehensive income, and adjusts the carrying amount of the investment accordingly;the investor’s share of profit distributions or cash dividends declared by the investee is deductedfrom the carrying amount of the investment. For the changes of equity in an investee other thanprofit or loss, the investor adjusts the carrying amount of the investment and recognised it in capitalreserve (other capital reserves). The recognition of the investee’s results should be based on the fairvalues of the individual identifiable assets of the investee according to the Company’s accountingpolicies and accounting period. Additionally, the recognition should be based on the adjusted net profitof the investee.If the Company has significant influences or can implement joint control over investees due toadditional investment, the initial investment cost is recognized as the sum of the fair value of theoriginal portion of equity investment and the additional investment cost under equity method on thetransformation date. The accumulated fair value changes accounted in other comprehensive incomeof non tradable equity instrument investment which is initially classified as fair value through othercomprehensive income are transferred to retained earnings while accounting by equity methodinstead.
If the Company loses control of an investee with joint control or significant influence retained afterpartial disposal of its shares, the remaining equity after disposal should be accounted in accordancewith the rules “CASBE 22-Recognition and Measurement of Financial Instruments” and thedifference between the fair value on the day of losing control and the book value is recognised inprofit or loss. For the other comprehensive income recognized by equity investment under theequity method, the basis of the accounting treatment is the same as that on disposal of related assetsor liabilities by the investee, the amount recognised in the equity on the changes in other equitymovements should be all charged to the profit or loss for the year.If the Company loses control of an investee after partial disposal of its shares, the remaining equityafter disposal has joint control or significant influence over the investee, the equity method shall beadopted and the remaining equity shall be deemed to be recognized under equity method since theacquisition date; if the remaining equity has no joint control or significant influence over theinvestee, the remaining equity after disposal should be accounted in accordance with therules“CASBE 22-Recognition and Measurement of Financial Instruments” and the differencebetween the fair value on the day of losing control and the book value is recognised in profit or loss.If the shareholding ratio of the Company is reduced due to the increase of investments of otherinvestors and thus the control is lost, but the joint control or significant influence can be exerted onthe investee, the Company should recognize the incremental shares of net assets according to thenew investments. The difference between the original book value of the long-term equityinvestment corresponding to the decrease in the shareholding ratio should be included in the currentprofit or loss; then, the equity shall be deemed to be recognized under equity method since theinvestment date and adjusted according to the new shareholding ratio.Unrealised profit or loss resulting from transactions between the Company and its associates orjoint ventures shall be calculated according to the proportion of its shareholding, which isattributable to the Company, and then to be recognized in investment income after offset. Whileunrealised profit or loss resulting from transactions between the Company and investee belongs toimpairment loss of transferred assets cannot be offset.
(3) Basis of determining the existence of joint control or significant influence over an investeeJoint control is the agreed sharing of control of an arrangement, which exists only when decisionsabout the relevant activities require unanimous consent of the parties sharing control. Indetermining whether there is a joint control, the first judge is determining whether the relevantarrangement is controlled collectively by all the participants involved or the group of theparticipants involved and then to determine whether the decisions related to the basic operatingactivities should require the unanimous consent of the participants involved. If all participants or thegroup of the participants involved must act consistently to determine the relevant arrangement, it isconsidered that all participants or the group of the participants control the arrangement. If two ormore participants in the collectively control of certain arrangement, it shall not be considered asjoint control. Protection of rights shall not be considered in determining whether there is jointcontrol.Significant influence is the power to participate in the financial and operating policy decisions ofthe investee but is not control or joint control over those policies. When determining whether thereis the significant influence over the investee, the voting rights held by the investors or the otherentites and the effect of potential voting rights if it can be converted into the equity of investee,including the effect of current convertible warrants, security option and convertible bonds.When the Company, directly or indirectly through subsidiaries, owns 20% of the investee (including
20% ) or more but less than 50% of the voting shares, it has significant impact on the investeeunless there is clear evidence to show that in this case the Company cannot participate in theproduction and business decisions of the investee, and has no significant influence; when theCompany owns 20% (excluding) or less of the voting shares, it is not considered to have significantimpacts on the investee in general, unless there is clear evidence to show that in this case theCompany can participate in the production and business decisions of the investee so as to have thesignificant influence.
(4) Method of impairment testing and impairment provision
For investment in subsidiaries, associates and joint ventures, refers to Note III, 21 for the method ofasset impairment provision.
15. Fixed assets
(1) Recognition of fixed assets
Fixed assets represent the tangible assets held by the Company for use in production of goods, usein supply of services, rental or for administrative purposes with useful lives over one accountingyear.Fixed assets are recognised when it is probable that the related future economic benefits will flowinto the company, and the cost can be measured reliably.Fixed assets of the Company are initially measured at actual costs in acquisition.The subsequent expenditure related to fixed assets is included in cost of the fixed assets when therelevant economic benefits are likely to flow into the Company and its cost can be measuredreliably; routine repair expenditure of fixed assets that do not meet the conditions for capitalizationis included in the profit and loss or the cost of relevant assets according to the beneficiaries when itoccurs. The book value of the replaced part shall be derecognized.
(2) Depreciation of fixed assets
Depreciation of the fixed assets is calculated on the straight-line basis. The fixed asset isdepreciated since the state of intended use and no longer depreciated when recognition is terminatedor being classified as non-current assets held for sale. Without considering impairment provision,the estimated useful lifetime, estimated residual values, and the annual depreciation rates of eachcategory of fixed assets are as follows:
| Category | Estimated useful life (year) | Estimated residual rate (%) | Annual depreciation rate (%) |
| Pant and buildings | 25-43 | 5 | 3.80-2.21 |
| Machinery and equipment | 12-28 | 5 | 7.92-3.39 |
| Vehicles | 10 | 5 | 9.50 |
| Electronic equipment | 10 | 5 | 9.50 |
| Industrial furnace | 13 | 5 | 7.31 |
| Metallurgical equipment | 19 | 5 | 5.00 |
| Others | 14-22 | 5 | 6.79-4.32 |
The fixed assets that have been withdrawn for impairment provision shall also be deducted from theaccumulative amount of impairment provision to recognize depreciation rate.
(3) Impaitment test and impairment provision of fixed assets refer to Note III, 21.
(4) Useful lives, residual values and the depreciation method are reviewed by the Company at least ateach financial year end.Useful lives are adjusted if the expected useful lives are different from the original estimates; theestimated net residual values are adjusted if they are different from the original estimates.
(5) Disposal of fixed assets
The fixed assets are derecognied when the fixed assets are diposed or when it is not expected togenerate economic benefits through use or disposal of the fixed assets. The amount of the disposalincome from the sale, transfer, scrapping or damage of fixed assets after deducting its book valueand relevant taxes shall be included in the current profit and loss.
16. Construction in progress
Cost of construction in progress is determined based on actual project expenses, includingnecessary project expenses incurred during the construction period, borrowing costs that should becapitalized before the project reaches its intended usable state, and other related expenses.Self-built fixed assets are transferred to fixed assets while reaching the intended usable state, whichwere recognised in construction in progress before transfer to fixed assets and are not subject todepreciation.When the construction in progress reaches the predetermined usable state, it shall be transferred tofixed assets based on the actual cost of the project. For those that have reached the predeterminedusable state but have not yet processed the final accounts for completion, it shall be transferred tofixed assets based on the estimated value. After the final accounts for completion are processed, theoriginal estimated value shall be adjusted based on the actual cost, but the depreciation alreadyprovisioned shall not be adjusted.
| Types | Standards and timing for transferring construction in progress to fixed assets |
| Machinery and equipment | Achieving the design requirements or contractual standards after installation and debugging |
| Plant and buildings | Preliminary acceptance is qualified and meets the predetermined usable state or the standards specified in the contract |
Impairment provision of construction in progress refers to Note III. 21.
17. Materials for construction of fixed assets
The materials for construction of fixed assets of the Company refers to the material prepared forconstruction in progress, including engineering materials, equipments not yet installed and toolsprepared for production, etc.Purchase measured at cost, the recipients transfer to construction in progree, and the remaining
transfer to inventory after the completion of construction.Impairment provision of materials for construction of fixed assets refers to Note III, 21.Closing balance of materials for construction of fixed assets is presented in “Construction inprogress” in balance sheet.
18. Borrowing costs
(1) Principles of capitalising borrowing costs
All the borrowing costs that are directly attributable to construction or production of all qualifyingassets are capitalized and recorded in relevant assets costs. Other borrowing costs are treated as anexpense and recorded in the profit or loss. The capitalization of borrowing costs commences when:
① Expenditures for the assets are incurred, including paying cash, transferring non-cash assets orundertaking interest-bearing debt for acquisition or construction of the assets, which could becapitalized;
② Borrowing costs are incurred; or
③ The acquisition and construction activities that are necessary to bring the assets to get ready forthe intended use or sale have commenced.
(2) Capitalization period of borrowing costs
The capitalization of borrowing costs ceases when the asset being acquired or constructed issubstantially ready for its intended use or sale and borrowing costs incurred thereafter are treated asan expense to be recorded in the profit or loss.Capitalization of borrowing costs is suspended during extended periods in which the acquisition orconstruction of a fixed asset is interrupted abnormally and the interruption lasts for more than threemonths until the acquisition or construction is resumed; borrowing costs in normal interruptionperiod continue to be capitalized.
(3) Calculation of capitalization rate and amount of borrowing costs.
For specific borrowings, the borrowing costs eligible for capitalization are the actual borrowingcosts incurred during the current period deducted by any temporary interest or investment income;for general borrowings, the borrowing costs eligible for capitalization are determined by applying acapitalization rate to the weighted average of capital expenditure that exceeds the specificborrowings. The capitalization rate is calculated based on the weighted average interest rate ofgeneral borrowings.During the capitalization period, exchange differences on foreign currency specific borrowings shallbe capitalized; exchange differences on foreign currency general borrowings shall be recognized ascurrent profit or loss.
19. Intangible assets
(1) Valuation method, service life and impairment test
Intangible assets include land use rights, software and etc.
Intangible assets are measured at cost initially and its useful lifetime shall be analyzed andrecognized when obtained. An intangible asset with finite useful lifetime shall be amortized over theexpected useful life using method which can reflect the expected recognition of economic benefitsrelated to the assets when the intangible asset is available for use; an intangible asset whoseexpected recognition cannot be reliably determined is amortized at straight-line amortizationmethod; an intangible asset with indefinite useful lifetime shall not be amortized.The useful life, determination basis, and amortization method of various intangible assets are:
| Category | Useful life (years) | Amortisation method | Basis for determining useful life |
| Software | 5-10 | Straight line method | Expected period for bringing economic benefits to the company |
| Land use rights | 40-50 | Straight line method | Legal useful life |
The Company reviews the useful lives and amortization method of intangible assets with finiteuseful lifetime, adjusts original estimated amount and processes according to the accountingestimate change if there are any differences with original estimated, at least at the end of eachreporting period.The Company estimates an intangible asset can no longer bring future economic benefits at thebalance sheet date, and then the carrying amount of the intangible asset should be reversed to thecurrent profit or loss.For the impairment provision of intangible assets, refers to Note III, 21.
20. Research and development expenditure
The Company's R&D expenses are directly related to the R&D activities, including employeesalaries, technical service fees, testing fees, etc. The salaries of R&D personnel are allocated toR&D expenses based on project working hours.Expenditure on internal research and development projects is classified into expenditure on theresearch stage and expenditure on the development stage.Expenditure on the research stage is recognised in the profit or loss when incurred.Expenditure on the development stage is capitalized only when: the technical feasibility ofcompleting the intangible asset so that it is available for use or sale; the intention to complete theintangible asset is to use or sell it; the method of generating economic benefits by the intangibleassets, including that the intangible asset can be proved that the output or the intangible asset itselfhas market or, if it is to be used internally, the usefulness of the intangible asset also need to beproved; the availability of adequate technical, financial and other resources to complete thedevelopment and the ability to use or sell the intangible asset; the expenditure attributable to thedevelopment stage can be measured reliably. Otherwise, it shall be presented in the profit or loss.
The research and development projects of the Company will enter into the development stage aftermeeting the above conditions and passing through the studies of technical feasibility and economicfeasibility, and the projects approval.Capitalized expenditure on the development stage is presented as “Development expenditures” inthe balance sheet and shall be transferred to intangible assets when the project is completed to itsintended use state.
21. Impairment of assets
The impairment for the long-term equity investments, fixed assets, construction in progress,right-of-use asset, intangible assets, etc. (excluding inventories, deferred income tax assets andfinancial assets) of subsidiaries, associates and joint ventures are determined as follows:
The Company assesses whether any indicator of impairment exists as of the end of each reportingperiod, and, if yes, performs impairment test by estimation of the asset’s recoverable amount. Forgoodwill acquired in business combinations, intangible assets with indefinite lives and intangibleassets without intended use state, an annual impairment test is performed no matter whether there isany indicator of impairment.An asset’s recoverable amount is calculated as the higher of the asset’s fair value less costs to selland the present value of estimated future cash flows generated from the use of assets. Therecoverable amount is calculated on individual basis unless it is not applicable, in which case therecoverable amount is determined for the asset group to which the asset belongs. An asset group isrecognized based on whether the cash inflows generated by the asset group are largely independentto those of other assets or asset groups.When the recoverable amount of an asset or an asset group is less than its carrying amount, thecarrying amount is reduced to its recoverable amount. The reduction amount is charged to profit orloss and an impairment allowance is provided.In terms of impairment test of the goodwill, the carrying amount of the goodwill arising frombusiness combination shall be allocated to the related asset group in accordance with a reasonablebasis at acquisition date. Those that are difficult to be allocated to relevant assets shall be allocatedto relevant assets groups. Relevant assets or assets groups refer to those that can benefit from thesynergies of business combination and are not larger than the Company’s recognized reportingsegment.When there is an indication that the goodwill related asset and asset group are prone to impair, theCompany should execute impairment test for the asset and asset group excluding goodwill,calculate the recoverable amount and recognize the corresponding impairment loss. The Companyshould execute impairment test for the asset or asset group including goodwill and compare therecoverable amount with carrying amount, provision for impairment of assets shall be recognizedwhen the recoverable amount of assets is lower than its carrying amount.Impairment losses cannot be reversed in subsequent accounting periods after recognition.
22. Long-term prepaid expenses
The long-term prepaid expenses of the Company are recorded as the actual cost and evenlyamortized on straight-line basis over the expected beneficial period. For the long-term prepaid
expense items that cannot benefit the later accounting period, the amortized value is recognized inthe profit or loss.
23. Payroll and employee benefits payable
(1) The scope of employee benefits payable
Payroll and employee benefits payable are all forms of consideration given by an entity in exchangefor service rendered by employees or the termination of employment, including short-termemployee benefits, post-employment benefits, termination benefits and other long-term employeebenefits. The benefits that the Company provides to the spouses, children and dependents ofemployees, the late employees’ family and other beneficiaries also shall be deemed as payroll andemployee benefits payable.According to liquidity, employment benefits are presented separately as “Payroll and employeebenefits payable” and “Long-term payroll and employee benefits payable” in the balance sheet.
(2) Short-term employee benefits payable
A liability when an employee has provided service in exchange for employee benefits, such aswages, bonuses, social security contributions (including medical insurance, injury insurance,maternity insurance, etc.) and house funding to be paid is recognized as the current profit or loss orcosts of related assets.
(3) Post-employment benefits
Post-employment benefit plan includes defined contribution plan and defined benefit plan. Definedcontribution plan is the post-employment benefit plan under which the Company pays fixedcontributions into a separate fund and will have no future obligations to pay the contributions.Defined benefit plan is the post-employment benefit plan other than defined contribution plan.Defined contribution planDefined contribution plan includes basic pension insurance, unemployment insurance, andcorporate pension plans, etc.In addition to basic pension insurance, the Company has established an enterprise pension plan("Pension Plan") in accordance with the relevant policies of the national enterprise pension system,and employees can voluntarily participate in this pension plan. Except above, the Company has noother significant employee social security commitments.During the accounting period of service provided by the employee, the Company shall recognise thecontribution payable according to the defined contribution plan as the liability and record thecorresponding amount in the current profit or loss or the cost of the relevant asset.
(4) Termination benefits
The Company is required to recognize termination benefits with a corresponding charge to profit orloss at the earlier of when the entity can no longer withdraw an offer of those benefits and when itrecognizes any related restructuring costs.For implementing the internal retirement plan, the economic compensation before the officialretirement date belongs to termination benefits. From the date of ceasing service to the normal
retirement date, the wages of the internally retired employees and the social insurance premiums tobe paid are included in the current profit or loss one time. Economic compensation after the officialretirement date (such as normal pension) should be treated as post-employment benefits.
24. Provisions
If the contingent considerations or contingent liabilities satisfy the following conditionssimultaneously, a provision will be recognized by the Company:
(1) The obligation is a present obligation assumed by the Company; and
(2) It is probable that an outflow of resources embodying economic benefits will be required tosettle the obligation; and
(3) A reliable estimate can be made of the amount of the obligation.
Provisions are initially measured at the best estimate of the expenditure required to settle the presentobligation, after considering risks, uncertainties, present value, etc. If the impact of time value ofmoney is significant, the best estimate is determined as its present value of future cash outflow.Provisions shall be reviewed at the end of each reporting period and adjusted to reflect the currentbest estimate.If the settlement of provision is fully or partially compensated by a third party or the others, and thecompensated amount can be definitely received, then the provision can be recognised as assetseparately. The compensated amount shall not be greater than the carrying amount of the recognizedliability.
25. Share-based payments and equity instruments
(1) Category of share-based payments
The Company’s share-based payment is either equity-settled share-based payment or cash-settledshare-based payment.
(2) Determination of fair value of equity instruments
For the existence of an active market for options and other equity instruments granted by theCompany, the fair value is determined at the quoted price in the active market. For options andother equity instruments with no active market, option pricing model shall be used to estimate thefair value of the equity instruments. The following factors shall be taken into account using optionpricing models: A. the exercise price of the option; B. the validity period of the option; C. thecurrent market price of the share; D. the expected volatility of the share price; E. predicted dividendof the share; and F. risk-free rate of the option within the validity period.
(3) Recognition of vesting of equity instruments based on the best estimateOn each balance sheet date within the vesting period, the estimated number of equity instrumentsexpected to vest is revised based on the best estimate made by the Company according to the latestavailable subsequent information as to changes in the number of employees with exercisable rights.On the vesting date, the final estimated number of equity instruments expected to vest should equalthe actual number of equity instruments expected to vest.
(4) Accounting treatment of implementation, modification and termination of share-based paymentEquity-settled share-based payment shall be measured at the fair value of the equity instrumentsgranted to employees. If the right may be exercised immediately after the grant, the fair value ofequity instrument shall, on the date of the grant, be included in the relevant costs or expenses, andthe capital reserve shall be increased accordingly. If the right can not be exercised until the vestingperiod comes to an end or until the specified performance conditions are met, then on each balancesheet date within the vesting period, the services obtained in the current period shall, based on thebest estimate of the number of vested equity instruments, be included in the relevant costs orexpenses and the capital reserve at the fair value of the equity instrument on the date of the grant.After the vesting date, the Company make no adjustment to the relevant costs or expenses as well asthe total amount of the owner’s equities which have been confirmed.Cash-settled share-based payment shall be measured in accordance with the fair value of liabilitycalculated and recognised based on the shares or other equity instruments undertaken by theCompany. If the right may be exercised immediately after the grant, the fair value of the liabilityundertaken by the Company shall, on the date of the grant, be included in the relevant costs orexpenses, and the liabilities shall be increased accordingly. If the right may not be exercised untilthe vesting period comes to an end or until the specified performance conditions are met, on eachbalance sheet date within the vesting period, the services obtained in the current period shall, basedon the best estimate of the information about the exercisable right, be included in the relevant costsor expenses and the corresponding liabilities at the fair value of the liability undertaken by theCompany. On each balance sheet date and on each account date prior to the settlement of therelevant liabilities, the Company re-measures the fair value of the liabilities and include the changesin the current profits and losses.When there are changes in Company’s share-based payment plans, if the modification increases thefair value of the equity instruments granted, corresponding recognition of service increase inaccordance with the increase in the fair value of the equity instruments; if the modificationincreases the number of equity instruments granted, the increase in fair value of the equityinstruments is recognised as a corresponding increase in service achieved. Increase in the fair valueof equity instruments refer to the difference between the fair values of the modified date. If themodification reduces the total fair value of shares paid or not conductive to the use of otheremployees share-based payment plans to modify the terms and conditions of service, it willcontinue to be accounted for in the accounting treatment as if the change had not occurred, unlessthe Company cancelled some or all of the equity instruments granted.During the vesting period, if the cancelled equity instruments (except for failure to meet theconditions of the non-market vesting conditions) granted by the Company to cancel the equityinstruments granted amount treated as accelerated vesting of the remaining period should berecognised immediately in profit or loss, while recognising capital reserves. If employees or otherparties can choose to meet non-vesting conditions but they are not met in the vesting period, theCompany will treat them as cancelled equity instruments granted.
(5) Restricted stock
In the equity incentive plan, the Company grants restricted stocks to the incentivized objects, andthe incentivized objects first subscribe to the stocks. If the unlocking conditions specified in theequity incentive plan are not met in the future, the Company will repurchase the stocks at the preagreed price. If the restricted stocks issued to employees have completed the registration and capitalincrease procedures in accordance with relevant regulations, on the grant date, the Company shall
confirm the share capital and capital reserve (share premium) based on the subscription paymentsreceived from employees; Simultaneously, recognize treasury shares and other payables forrepurchase obligations.
26. Revenue
(1) General principle
Revenue is recognized when the Company has satisfied its performance obligations in the contract,that is, when the customer obtains control of the relevant goods or services.Where a contract has two or more performance obligations, the Company determines thestand-alone selling price at contract inception of the distinct good or service underlying eachperformance obligation in the contract and allocates the transaction price in proportion to thosestand-alone selling prices. The Company recognises as revenue the amount of the transaction pricethat is allocated to each performance obligation.If one of the following conditions is met, it belongs to fulfilling the performance obligation within acertain period of time; Otherwise, it belongs to fulfilling the performance obligation at a certainpoint in time:
① The customer simultaneously receives and consumes the benefits provided by the Company’sperformance as the Company performs;
② The customer can control the asset created or enhanced during the Company’s performance;
③ The Company’s performance does not create an asset with an alternative use to it and theCompany has an enforceable right to payment for performance completed to date.For performance obligation satisfied over time, the Company recognises revenue over time bymeasuring the progress towards complete satisfaction of that performance obligation. When theoutcome of that performance obligation cannot be measured reasonably, but the Company expectsto recover the costs incurred in satisfying the performance obligation, the Company recognisesrevenue only to the extent of the costs incurred until such time that it can reasonably measure theoutcome of the performance obligation.For performance obligation satisfied at a point in time, the Company recognises revenue at the pointin time at which the customer obtains control of relevant goods or services. To determine whether acustomer has obtained control of goods or services, the Company considers the followingindicators:
① The Company has a present right to payment for the goods or services, as the customer obtainsthe current payment obligation for the goods.
② The Company has transferred the legal title of the goods, as the customer has obtained the legaltitle of the goods.
③ The Company has transferred physical possession of the goods to the customer, as the customerhas obtained the physical possession of the goods.
④ The Company has transferred the significant risks and rewards of legal title of the goods to thecustomer, as the customer has obtained the significant risks and rewards of legal title of the goods.
⑤ The customer has accepted the goods or services.
⑥ Other indications that the customer has obtained control of goods.
(2) Specific recognition methods
Contracts for the sale of goodsContracts for the sale of goods between the Company and its customers usually only involves theperformance obligations of the transferring of the goods. The Company generally recognizesrevenue based on the following considerations, taking into account the timing of control transfer.This includes obtaining the current collection rights of the goods, the transfer of the main risks andrewards of the ownership of the goods, the transfer of the legal ownership of the goods, the transferof the physical assets of the goods, and the acceptance of the goods by the customer.Contracts for rendering of servicesThe service contract between the Company and its customers usually includes performanceobligations for labor services, technical consulting or technical services. As a result of thesatisfaction of the performance obligation the Company, the customers obtain and consume theeconomic benefits of the service while the Company provides the service simultaneously. TheCompany is entitled to recover from the accumulative performance of the contract that has beencompleted to date, except when progress of the performance cannot be reasonably determined. TheCompany determines the progress of the performance of the services provided in accordance withthe input method. When the progress of the performance cannot be reasonably determined, and thecosts incurred by the Company are expected to be compensated, the revenue will be recognizedbased on the amount of costs incurred, until the progress of the performance can be reasonablydetermined.
27. Contract cost
Contract costs are either the incremental costs of obtaining a contract with a customer or the costs tofulfil a contract with a customer.Incremental costs of obtaining a contract are those costs that the Company incurs to obtain acontract with a customer that it would not have incurred if the contract had not been obtained e.g.an incremental sales commission. The Company recognises as an asset the incremental costs ofobtaining a contract with a customer if it expects to recover those costs. Other costs of obtaining acontract are expensed when incurred.If the costs to fulfil a contract with a customer are not within the scope of inventories or otheraccounting standards, the Company recognises an asset from the costs incurred to fulfil a contractonly if those costs meet all of the following criteria:
① The costs relate directly to an existing contract or to a specifically identifiable anticipatedcontract, including direct labour, direct materials, allocations of overheads (or similar costs), coststhat are explicitly chargeable to the customer and other costs that are incurred only because theCompany entered into the contract;
② The costs generate or enhance resources of the Company that will be used in satisfying (or incontinuing to satisfy) performance obligations in the future;
③ The costs are expected to be recovered.
Assets recognised for the incremental costs of obtaining a contract and assets recognised for thecosts to fulfill a contract (the “assets related to contract costs”) are amortised on a systematic basisthat is consistent with the transfer to the customer of the goods or services to which the assets relateand recognised in profit or loss for the current period.The Company recognises an impairment loss in profit or loss to the extent that the carrying amountof an asset related to contract costs exceeds:
① Remaining amount of consideration that the Company expects to receive in exchange for thegoods or services to which the asset relates; less
② The costs that relate directly to providing those goods or services that have not yet beenrecognised as expenses.
28. Government grants
Government grants are recognized in profit or loss, when they are highly probable to be receivedand all conditions are fulfilled.If a government grant is in form of monetary asset, it is measured at the amount received orreceivable. If a government grant is in form of nonmonetary asset, it is measured at fair value of theasset. If the fair value cannot be reliably determined, it is measured at the nominal amount as RMB1.Asset-related government grants are recognized when the government document designates that thegovernment grants are used for constructing or forming long-term assets. Otherwise, thegovernment grants should be income-related.If the government document is inexplicit, the Company should recognize the part corresponding toassets value of government grants as asset-related government grants if the conditions are to formlong-term assets and the remaining part as income-related grants. As for indistinguishablegovernment grants, the whole should be recognized as income-related grants.Government grants related to assets are recognized as deferred income and are recognized in profitor loss in a reasonable and systematic manner over the useful life of the relevant assets.Government grants related to income, used to compensate for related costs or losses that havealready occurred, shall be included in the current period's profit and loss; If it is used to compensatefor related costs or losses in the future period, it shall be recognized in deferred income andrecognized in the current period's profit or loss or offset against related costs during the recognitionperiod of related costs or losses. Government grants measured at nominal amounts are directlyrecognized in the current period's profit and loss. The Company adopts a consistent approach forhandling the same or similar government grants businesses.Government grants related to daily activities are recognized in other income based on the essence ofeconomic transactions. Government grants unrelated to daily activities are included in nonoperating income.When the recognized government grants need to be returned, the carrying amount of the assets shallbe adjusted if the carrying amount of related assets is written down during the initial recognition; ifthere is the balance of related deferred income, the book balance of related deferred income shall be
written off, and the excess part shall be recognized in the current profit or loss; for the othercircumstances, the government grants shall be recognized in the current profit or loss directly.
29. Deferred tax assets and deferred tax liabilities
Income tax comprises current tax and deferred tax, and is normally recognized as income taxexpense in profit or loss, except for goodwill generated in a business combination or relateddeferred tax items that have been recognized directly in equity.Based on the differences between the carrying amount of an asset or liability in the statement offinancial position and its tax base, the Company adopts the liability method for the provision ofdeferred tax.A deferred tax liability is recognized in respect of all taxable temporary differences except thosearising from the following transactions:
(1) The initial recognition of goodwill; or the initial recognition of an asset or liability in atransaction which is not a business combination, and at the time of the transaction, affects neitheraccounting profit nor taxable profit (Excluding individual transactions that result in equal taxabletemporary differences and deductible temporary differences due to initially recognized assets andliabilities);
(2) As for the temporary differences associated with subsidiaries, joint ventures and associates: theCompany is able to control the timing of the reversal of the temporary difference and it is probablethat the temporary difference will not reverse in the foreseeable future.A deferred tax asset is recognized in respect of all deductible temporary differences to the extentthat it is probable that taxable profit will be available against which the deductible temporarydifference will be utilized except those arising from the initial recognition of an asset or liability ina transaction which:
(1) The transaction is not a business combination, and at the time of the transaction, affects neitheraccounting profit nor taxable profit (Excluding individual transactions that result in equal taxabletemporary differences and deductible temporary differences due to initially recognized assets andliabilities);
(2) As for deductible temporary differences associated with subsidiaries, joint ventures andassociates: a deferred tax asset is recognized to the extent that it is probable that the temporarydifference will reverse in the foreseeable future, and taxable profit will be available against whichthe temporary difference can be utilized.On the balance sheet date, the Company measures deferred income tax assets and liabilities at theapplicable tax rate during the expected period of asset recovery or liability settlement, and reflectsthe income tax impact of the expected method of asset recovery or liability settlement on thebalance sheet date.On the balance sheet date, the Company reviews the book value of deferred income tax assets. If itis likely that sufficient taxable income will not be obtained in the future period to offset the benefitsof deferred income tax assets, the book value of deferred income tax assets shall be written down.When it is highly possible to obtain sufficient taxable income, the amount of write down shall bereversed.On the balance sheet date, deferred income tax assets and deferred income tax liabilities are
presented at the net amount after offsetting when they simultaneously meet the followingconditions:
(1) The taxpayer within the company has the legal right to settle current income tax assets and
current income tax liabilities on a net basis;
(2) Deferred income tax assets and deferred income tax liabilities are related to the income taxlevied by the same tax administration department on the same taxpayer within the company.
30. Lease
(1) Identification of lease
On the commencement date of the contract, as the lessee or lessor, the Company evaluates whetherthe customer in the contract has the right to obtain almost all the economic benefits arising from theuse of the identified assets during the use period, and has the right to dominate the use of theidentified assets during the use period. If one party in the contract transfers the right to control theuse of one or more identified assets within a certain period in exchange for consideration, theCompany recognizes the contract as lease or includes lease.
(2) The Company as lessee
On the beginning date of the lease, the Company recognises right-of-use assets and lease liabilitiesfor all leases, except for short-term lease and low-value asset lease with simplified approach.For the right-of-use assets, refers to Note III.31.Lease liabilities are initially measured according to the present value of the unpaid lease paymentsat the beginning of the lease term calculated by the embedded interest rate of the lease. Where theembedded interest rate cannot be determined, the incremental loan interest rate shall be used as thediscount rate. Lease payments includes: fixed payments and in-substance fixed payments, andwhere the lease incentives exists, the lease payment is the payment amount less any lease incentivesreceivable; variable lease payments depending on index or ratio; the exercise price of a purchaseoption if the lessee is reasonably certain to exercise that option; payments for terminating the lease,if the lease term reflects the lessee exercising that option of terminating; and amounts expected tobe payable by the lessee under residual value guarantees. Subsequently, the interest expense on thelease liability for each period during the lease term is calculated using a constant periodic rate ofinterest and is recognised in current profit or loss. The variable lease payments that are not includedin the measurement of the lease liability are recognised in profit or loss when actually incurred.Short-term leaseShort-term leases refer to leases with a lease term of less than 12 months from the commencementdate, except for those with a purchase option.Lease payments of short-term leases are recognised in the cost of related assets or current profit orloss on a straight-line basis over the lease term.For short-term leasing, the Company selects the following types of assets that meet the conditionsfor short-term leasing based on the category of leased assets and adopts the simplified processingmethod mentioned above.Low-value asset lease
Low-value asset lease refers to the lease with lower value when the single leased asset is abrand-new asset.Lease payments of low-value asset lease are recognised in the cost of related assets or current profitor loss on a straight-line basis over the lease term.For a low-value asset lease, the Company chooses to adopt the above simplified approach accordingto the specific conditions of each lease.Lease modificationThe Company accounts for a lease modification as a separate lease when the modification occursand the following conditions are met: ① the lease modification expands the scope of lease byadding the right to use one or more of the leased assets; and ② the increased consideration isequivalent to the amount of the separate price for the expansion of the lease scope adjustedaccording to the conditions of the contract.Where the lease modification is not accounted for as a separate lease, on the effective date of thelease modification, the Company will reallocate the consideration of the contract after themodification, redefine the lease term, and remeasure the lease liability based on the present value ofthe lease payments after the modification and the revised discount rate.If a lease modification results in reduction in the scope of the lease or a shortening of the lease term,the Company reduces the carrying amount of the right-of-use asset accordingly and includes theprofit or loss related to the partial or complete termination of the lease is included in the currentprofits and losses.Other lease modifications result in a remeasurement of the lease liability, the Company adjusts thecarrying amount of the right-of-use asset accordingly.
(3) The Company as lessor
When the Company is a lessor, a lease is classified as a finance lease when the terms of the leasetransfer substantially all the risks and rewards of asset ownership to the lessee. All leases other thanfinancial leases are classified as operating leases.Finance leaseUnder finance lease, the Company accounts for finance lease receivables at the beginning of thelease term at the net lease investment, which is the sum of the unsecured residual value and thepresent value of the lease receipts outstanding at the commencement date of the lease, discounted atthe interest rate implicit in the lease. The Company as lessor calculates and recognises interestincome for each period of the lease term based on a fixed periodic interest rate. Variable leasepayments acquired by the Company as lessor that are not included in the net measurement of leaseinvestments are included in profit or loss for the period when actually incurred.Derecognition and impairment of finance lease receivables are accounted for in accordance with therequirements under the Accounting Standard for Business Enterprises No. 22 – Recognition andMeasurement of Financial Instruments and the Accounting Standards for Business Enterprises No.23 – Transfer of Financial Assets.Operating lease
Lease payments under operating lease are recognised in profit or loss on a straight-line basis overthe lease term. Initial direct costs incurred in relation to operating leases are capitalised andamortised over the lease term on the same basis as rental income and recognised in profit or loss forthe according period. The variable lease payments obtained in relation to operating leases that arenot included in the lease payments are recognised in profit or loss in the period when actuallyincurred.Lease modificationWhere the operating lease is modified, the Company accounts for the modification as a new leasefrom the effective date of the modification. The amount of lease receipts received in advance orreceivable in respect of the lease prior to the modification is treated as a receipt under the new lease.Where a finance lease is modified and the following conditions are met, the Company accounts forthe modification as a separate lease: ① the lease modification expands the scope of lease byadding the right to use one or more of the leased assets; and ② the increased consideration isequivalent to the amount of the separate price for the expansion of the lease scope adjustedaccording to the conditions of the contract.Where a finance lease is modified and not accounted for as a separate lease, the Company accountsfor the modified lease in the following circumstances: ① If the modification effectives on thelease commencement date, the lease will be classified as an operating lease, the Company accountsas a new lease from the effective date of the lease modification, and the net amount of the leaseinvestment before the effective date of the lease modification shall be taken as the book value of theleased asset; ② If the modification effectives on the lease commencement date, the lease will beclassified as a finance lease, and the Company conducts accounting treatment in accordance withthe Accounting Standards for Business Enterprises No. 22 – Recognition and Measurement ofFinancial Instruments on modifying or renegotiating contracts.
31. Use-right assets
(1) Recognition conditions of use-right assets
Right-of-use assets refer to the right of the Company as the lessee to use the leased assets during thelease term.On the commencement date of the lease term, the use-right assets shall be initially measured at cost.The cost includes: the initial measurement amount of the lease liability; The lease payment made onor before the commencement date of the lease term, if there is a lease incentive, shall be deductedfrom the amount related to the lease incentive already enjoyed; Initial direct expenses incurred bythe Company as the lessee; The costs expected to be incurred by the Company, as the lessee, todismantle and remove the leased assets, restore the leased assets to the site where they are locatedor restore the leased assets to the state specified in the lease terms. As the lessee, the Company shallrecognize and measure the costs of demolition and restoration in accordance with the rules“CASBE13- Contingencies”. Subsequent adjustments are made for any remeasurement of lease liabilities.
(2) Depreciation method of use-right assets
The Company uses the straight-line method of depreciation. If the Company, as the lessee, canreasonably determine the ownership of the leased asset at the end of the lease term, depreciationshall be calculated and withdrawn during the remaining service life of the leased asset. Where it isnot reasonably certain that the ownership of the leased asset can be acquired at the end of the lease
term, depreciation shall be calculated and withdrawn during the period during which the lease termand the remaining service life of the leased asset are shorter.
(3) For the impairment test method and impairment provision method of use-right assets, please refer toNote III. 20.
32. Safety fund and maintenance fee
The Company has accrued safety production fees in accordance with the relevant provisions of theMinistry of Finance and the Ministry of Emergency Management's Cai Zi [2022] No. 136. Thesafety production expenses and maintenance expenses are included in the cost of relevant productsor current profit and loss when accrued, and are also included in the "special reserve" account.When safety funds and maintenance fees are utilized in compliance with relevant regulations, if thecosts incurred can be categorized as expenditure, the costs incurred should be charged against thespecial reserve; if the reserve is used to build up fixed assets, the costs should be charged toconstruction in progress, and reclassified to fixed assets when the projects reach the status ready forintended use. Meantime, expenditures in building up fixed assets are directly charged against thespecial reserve with the accumulated depreciation recognized at the same amount and the fixedassets will not be depreciated in the future.
33. Share repurchase
The shares repurchased by the Company shall be managed as treasury shares before cancellation ortransfer, and all expenses related to repurchased shares shall be transferred to the cost of treasuryshares. The consideration and transaction costs paid in share repurchase reduce owner's equity, andno gains or losses are recognized when repurchasing, transferring, or canceling the company'sshares.When transferring treasury shares, the difference between the actual amount received and the bookvalue of the treasury shares shall be included in the capital reserve. If the capital reserve isinsufficient to offset, the surplus reserve and undistributed profits shall be offset. Cancellation oftreasury shares shall reduce the share capital based on the face value and number of cancelledshares, and offset the capital reserve based on the difference between the book balance and facevalue of cancelled treasury shares. If the capital reserve is insufficient to offset, offset the surplusreserve and undistributed profits.
34. Significant accounting judgments and estimates
The Company provides continuous assessment of the reasonable expectations of future events, thecritical accounting estimates and key assumptions based on the historical experience and otherfactors. The critical accounting estimates and key assumptions that are likely to lead to significantadjustment risks of the carrying amount of assets and liabilities for the next accounting period arelisted as follows:
Classification of financial assetsThe major judgments of the Company involved in determining the classification of financial assetsincludes the analysis of business models and the characteristics of contract cash flows, etc.At the level of financial assets portfolio, the Company determines the business model for managingfinancial assets, taking into account factors such as methods of evaluating and reporting financialassets performance to key managers, the risks of affecting financial assets performance and risk
management methods, and the way in which relevant business managers are paid.In assessing whether the contract cash flow of financial assets is consistent with the basic lendingarrangements, the Company has the following judgments: whether the principal’s time distributionor amount may change during the lifetime for early repayment and other reasons; whether theinterest only includes the time value of money, credit risk, other basic lending risks and theconsideration with cost and profit. For example, whether the advance payment only reflects theunpaid principals and interests based on the unpaid principal, and reasonable compensation paid forthe early termination of the contract.Measurement of expected credit loss of account receivablesThe Company calculates the expected credit losses of accounts receivable through default riskexposure and expected credit losses rate, and determines the expected credit losses rate on the basisof default probability and default loss rate. In determining the expected credit losses rate, theCompany uses the experience of internal historical credit loss, and adjusts the historical data withcurrent situation and forward-looking information. In considering forward-looking information, theindicators include the risks of economic downturn, external market environment, technologicalenvironment and changes of customer conditions. The Company monitors and reviews regularly theassumptions related to the calculation of expected credit losses.Deferred tax assetsDeferred tax assets are recognized to the extent that it is probable that taxable profit will beavailable against which the deductible temporary difference and unused tax credit can be utilized.Significant management judgement is required to determine the amount of deferred tax assets thatcan be recognized, based upon the likely timing and level of future taxable profits together with taxplanning strategies.Determination of unlisted equity investment fair valueThe fair value of unlisted equity investment is the estimated future cash flow discounted by thecurrent discount rate of the project with similar terms and risk characteristics. The valuationrequires the Company to estimate the expected future cash flow and discount rate and is thereforeuncertain. Under limited circumstances, if the information used to determine the fair value isinsufficient, or the possible estimates of the fair value are widely distributed, and the cost representsthe best estimate of the fair value within the range, the cost could represent the appropriate estimateof the fair value within the distribution range.
35. Changes in significant accounting policies and estimates
(1) Changes in significant accounting policies
① Accounting Standards for Business Enterprises Interpretation No. 16The Ministry of Finance issued Interpretation No. 16 of the Accounting Standards for Enterprises(Caihui [2022] No. 31) in November 2022 (hereinafter referred to as "Interpretation No. 16").Interpretation No. 16 stipulates that for a single transaction that is not a business merger, does notaffect accounting profits or taxable income (or deductible losses) at the time of transaction, andresults in equal taxable temporary differences and deductible temporary differences due to theinitial recognition of assets and liabilities, the corresponding deferred income tax liabilities anddeferred income tax assets shall be recognized separately at the time of transaction in accordance
with relevant provisions such as Enterprise Accounting Standard No. 18- Income Tax. For theabove-mentioned transactions that occurred between the beginning of the earliest period for the firstimplementation of the above regulations in financial statement presentation and the date ofimplementation of this interpretation, the enterprise shall adjust the cumulative impact to thebeginning retained earnings and other related financial statement items in the earliest period forfinancial statement presentation in accordance with the above regulations. The above accountingtreatment regulations will be implemented from January 1, 2023.For the taxable temporary differences and deductible temporary differences arised from therecognision of lease liabilities and right of use assets by the Company for leasing business,adjustments shall be made in accordance with the provisions of Interpretation No. 16.The impact of implementing the above accounting policies on the consolidated balance sheet as ofDecember 31, 2023 and the consolidated income statement for the year 2023 is as follows:
| Consolidated balance sheet items (December 31, 2023) | Affected amount |
| Deferred tax assets | 86,977,838.59 |
| Deferred tax liabilities | 85,684,032.63 |
| Consolidated income statement items (FY 2023) | Affected amount |
| Income tax expense | -1,293,805.96 |
The impact of implementing the above accounting policies on the consolidated balance sheet as ofDecember 31, 2022 and the consolidated income statement for the year 2022 is as follows:
| Consolidated balance sheet items (December 31, 2022) | Before adjustment | Adjustment | After adjustment |
| Deferred tax assets | 402,355,955.31 | 18,075,395.43 | 420,431,350.74 |
| Deferred tax liabilities | 502,268,362.26 | 18,075,395.43 | 520,343,757.69 |
| Consolidated income statement items (FY 2022) | Before adjustment | Adjustment | After adjustment |
| Income tax expense | 283,698,478.31 | -- | 283,698,478.31 |
The impact of implementing the above accounting policies on the consolidated balance sheet as ofJanuary 1, 2022 is as follows:
| Consolidated balance sheet items (January 1, 2022) | Before adjustment | Adjustment | After adjustment |
| Deferred tax assets | 189,721,423.29 | 21,468,073.51 | 211,189,496.80 |
| Deferred tax liabilities | 208,958,292.75 | 21,468,073.51 | 230,426,366.26 |
② The cumulative impact of changes in accounting policies in this periodThe implementation of the above accounting policies has not had a significant impact on thefinancial statements of the Company.
(2) Changes in significant accounting estimates
The Company did not have any change in significant accounting estimates during the year.IV. Tax
1. Main types of taxes and corresponding tax rates
| Tax type | Tax basis | Tax rate% |
| Value-added tax | Taxable Value Added (The taxable amount is calculated by multiplying the taxable sales amount by the applicable tax rate and deducting the input tax allowed for deduction in the current period) | 13/9/6 |
| City construction and maintenance tax | Levy based on the actual paid value-added tax | 7/5 |
| Education surcharge | Levy based on the actual paid value-added tax | 3 |
| Local education surcharge | Levy based on the actual paid value-added tax | 2 |
| Income tax | Taxable Income | 25 |
2. Tax preferential benefits and approvals
On 25 October 2021, the Company obtained the high-tech enterprise certificate issued by Beijing
Municipal Science and Technology Commission with the certificate number of GR202111003103
and the certificate is valid for three years.
On 14 September 2021, Beijing Shougang Cold Rolling Co., Ltd., a subsidiary of the Company
obtained the high-tech enterprise certificate issued by Beijing Municipal Science and Technology
Commission with the certificate number of GR202111000699 and the certificate is valid for three
years.
On 18 September 2021, Shougang Jingtang United Iron & Steel Co., Ltd., a subsidiary of the
Company, obtained the high-tech enterprise certificate issued by Hebei Science and Technology
Commission with the certificate number of GR202113000808 and the certificate is valid for three
years.
On 18 October 2022, Shougang Zhixin Qian'an Electromagnetic Materials Co., Ltd., a subsidiary of
the Company, obtained the high-tech enterprise certificate issued by Hebei Science and Technology
Commission with the certificate number of GR202213001060 and the certificate is valid for three
years.
On September 3, 2023, the Ministry of Finance and the State Administration of Taxation issued a
notice on the policy of adding and deducting value-added tax for advanced manufacturing
enterprises (Caishui [2023] No. 43), allowing advanced manufacturing enterprises to add 5% of the
current deductible input tax to offset the payable value-added tax from January 1, 2023 to
December 31, 2027. According to this policy, our company will enjoy the above preferential
policies for the year 2023.
V. Notes to consolidated financial statements
1. Cash at bank and on hand
| Item | 2023.12.31 | 2022.12.31 |
| Cash on hand | 33,669.68 | 23,581.90 |
| Bank deposits | 8,906,802,642.00 | 8,330,041,178.17 |
| Including: financial companies deposited | 8,900,208,670.91 | 7,693,973,274.02 |
| Other monetary assets | 246,369,314.69 | 1,140,407,761.98 |
| Including: financial companies deposited | 228,400,000.00 | 1,088,690,000.00 |
| Total | 9,153,205,626.37 | 9,470,472,522.05 |
| Including: total amount of funds stored overseas | 1,898,333.02 | -- |
(1) As at December 31, 2023, except for RMB 196,369,301.95 of security deposit, RMB50,000,000.00 of fixed term deposit, the Company has no balance of cash and cash equivalents thatare pledged, guaranteed or blocked frozen or overseas balances that restricted to remittance back.
(2) Bank deposits include interest receivable from deposits of RMB 2,175,646.34. This part ofinterest does not belong to "cash and cash equivalents."
2. Notes receivable
| Item | 2023.12.31 | ||
| Book balance | Bad debt provision | Carrying value | |
| Bank acceptance notes | 1,435,554,918.92 | 1,435,554.92 | 1,434,119,364.00 |
| Commercial acceptance notes | 2,526,542,362.18 | 2,526,542.35 | 2,524,015,819.83 |
| Total | 3,962,097,281.10 | 3,962,097.27 | 3,958,135,183.83 |
Continued:
| Item | 2022.12.31 | ||
| Book balance | Bad debt provision | Carrying value | |
| Bank acceptance notes | 1,096,900,639.55 | 1,096,900.64 | 1,095,803,738.91 |
| Commercial acceptance notes | 5,600,883,165.11 | 5,600,883.17 | 5,595,282,281.94 |
| Total | 6,697,783,804.66 | 6,697,783.81 | 6,691,086,020.85 |
(1) The pledged notes receivable of the Company at the end of the year
| Item | Amount pledged at the end of the year |
| Commercial acceptance notes | 284,201,490.24 |
(2) Outstanding endorsed or discounted notes that have not matured at the end of the year
| Item | Amount derecognized as of December 31, 2023 | Amount not-derecognized as of December 31, 2023 |
| Bank acceptance notes | -- | 1,102,142,826.07 |
| Commercial acceptance notes | -- | 2,354,044,085.43 |
| Total | -- | 3,456,186,911.50 |
(3) Notes transferred to accounts receivable due to non-performance of the issuers at the end of theyear
| Item | Amount transferred to accounts receivable as of December 31, 2023 |
| Commercial acceptance notes | 4,123,997.19 |
(3) Classified by bad debt provision method
| Category | 2023.12.31 | ||||
| Book balance | Bad debt provision | Carrying value | |||
| Amount | Proportion (%) | Amount | Expected credit loss (%) | ||
| Assessed bad debt provision individually | -- | -- | -- | -- | -- |
| Assessed bad debt provision in portfolios based on credit risk characteristics | 3,962,097,281.10 | 100.00 | 3,962,097.27 | 0.10 | 3,958,135,183.83 |
| Portfolio 1 | -- | -- | -- | -- | -- |
| Portfolio 2 | 3,962,097,281.10 | 100.00 | 3,962,097.27 | 0.10 | 3,958,135,183.83 |
| Total | 3,962,097,281.10 | 100.00 | 3,962,097.27 | 0.10 | 3,958,135,183.83 |
Continued:
| Category | 2022.12.31 | ||||
| Book balance | Bad debt provision | Carrying value | |||
| Amount | Proportion (%) | Amount | Expected credit loss (%) | ||
| Assessed bad debt provision individually | -- | -- | -- | -- | -- |
| Assessed bad debt provision in portfolios based on credit risk characteristics | 6,697,783,804.66 | 100.00 | 6,697,783.81 | 0.10 | 6,691,086,020.85 |
| Portfolio 1 | -- | -- | -- | -- | -- |
| Portfolio 2 | 6,697,783,804.66 | 100.00 | 6,697,783.81 | 0.10 | 6,691,086,020.85 |
| Total | 6,697,783,804.66 | 100.00 | 6,697,783.81 | 0.10 | 6,691,086,020.85 |
(5) Provision, recovery or reversal of bad debt
| Item | Bad debt provision |
| Item | Bad debt provision |
| Opening balance | 6,697,783.81 |
| Provision | -- |
| Recovery or reversal | 2,735,686.54 |
| Closing balance | -- |
(6) There is no notes receivable written off during the reporting period.
3. Accounts receivable
(1) Disclosed by the ageing
| Ageing | 2023.12.31 | 2022.12.31 |
| Within 1 year | 1,411,727,072.17 | 1,492,629,056.11 |
| 1 – 2 years | 3,579,859.18 | 13,542,310.43 |
| 2 – 3 years | 7,373,272.12 | 3,980,837.55 |
| Over 3 years | 4,770,547.62 | 13,036,557.92 |
| Subtotal | 1,427,450,751.09 | 1,523,188,762.01 |
| Less: provision for bad debts | 61,817,025.89 | 73,179,864.91 |
| Total | 1,365,633,725.20 | 1,450,008,897.10 |
(2) Disclosed by bad debt provision
| Category | 2023.12.31 | ||||
| Book balance | Bad debt provision | Carrying value | |||
| Amount | Proportion (%) | Amount | Expected credit loss (%) | ||
| Assessed bad debt provision individually | 4,770,547.62 | 0.33 | 4,770,547.62 | 100.00 | -- |
| Assessed bad debt provision in portfolios based on credit risk characteristics | 1,422,680,203.47 | 99.67 | 57,046,478.27 | 4.01 | 1,365,633,725.20 |
| Total | 1,427,450,751.09 | 100.00 | 61,817,025.89 | 4.33 | 1,365,633,725.20 |
Disclosed by bad debt provision (continued):
| Category | 2022.12.31 | ||||
| Book balance | Bad debt provision | Carrying value | |||
| Amount | Proportion (%) | Amount | Expected credit loss (%) | ||
| Assessed bad debt provision individually | 13,036,557.92 | 0.86 | 13,036,557.92 | 100.00 | -- |
| Assessed bad debt provision in portfolios based on credit risk characteristics | 1,510,152,204.09 | 99.14 | 60,143,306.99 | 3.98 | 1,450,008,897.10 |
| Category | 2022.12.31 | ||||
| Book balance | Bad debt provision | Carrying value | |||
| Amount | Proportion (%) | Amount | Expected credit loss (%) | ||
| Total | 1,523,188,762.01 | 100.00 | 73,179,864.91 | 4.80 | 1,450,008,897.10 |
Assessed bad debt provision individually:
| Accounts receivable (by debtor) | 2023.12.31 | |||
| Book balance | Bad debt provision | Expected credit loss (%) | Reason for bad debts | |
| Accounts receivable over 3 years | 646,550.43 | 646,550.43 | 100.00 | Long aging |
| Overdue recourse notes | 4,123,997.19 | 4,123,997.19 | 100.00 | Overdue recourse notes |
| Total | 4,770,547.62 | 4,770,547.62 | 100.00 | |
Continued:
| Accounts receivable (by debtor) | 2022.12.31 | |||
| Book balance | Bad debt provision | Expected credit loss (%) | Reason for bad debts | |
| Accounts receivable over 3 years | 7,362,963.07 | 7,362,963.07 | 100.00 | Long aging |
| Overdue recourse notes | 5,673,594.85 | 5,673,594.85 | 100.00 | Overdue recourse notes |
| Total | 13,036,557.92 | 13,036,557.92 | 100.00 | |
Assessed bad debt provision in portfolios:
| Item | 2023.12.31 | ||
| Accounts receivable | Bad debt provision | Expected credit loss (%) | |
| Within 1 year | 1,411,727,072.17 | 50,467,105.47 | 3.57 |
| 1 – 2 years | 3,579,859.18 | 1,069,967.11 | 29.89 |
| 2 – 3 years | 7,373,272.12 | 5,509,405.69 | 74.72 |
| Over 3 years | -- | -- | -- |
| Total | 1,422,680,203.47 | 57,046,478.27 | 4.01 |
Continued:
| Item | 2022.12.31 | ||
| Accounts receivable | Bad debt provision | Expected credit loss (%) | |
| Within 1 year | 1,492,629,056.11 | 53,147,749.56 | 3.56 |
| 1 – 2 years | 13,542,310.43 | 4,032,265.53 | 29.78 |
| 2 – 3 years | 3,980,837.55 | 2,963,291.90 | 74.44 |
| Over 3 years | -- | -- | -- |
| Item | 2022.12.31 | ||
| Accounts receivable | Bad debt provision | Expected credit loss (%) | |
| Total | 1,510,152,204.09 | 60,143,306.99 | 3.98 |
(3) Provision, recovery or reversal of bad debt
| Item | Bad debt provision |
| Opening balance | 73,179,864.91 |
| Provision | -- |
| Recovery or reversal | 11,362,839.02 |
| Closing balance | -- |
(4) There is no accounts receivable write-off during reporting period.
(5) The top five accounts receivable classified by debtors are as follows:
During the year, the total amount of the top five accounts receivable collected by debtors at the endof the period is RMB735,908,803.70, accounts for 51.55% of the total amount of accountsreceivable at the end of the period, and the total amount of the corresponding bad debt provision atthe end of the period is RMB 26,307,625.57.
| Company Name | Closing balance | Percentage of total accounts receivable (%) | Closing balance of bad debt provision |
| Shougang Casey Steel Co., Ltd. | 264,947,857.43 | 18.56 | 9,471,484.77 |
| China First Automobile Co., Ltd. | 188,849,244.42 | 13.23 | 6,751,074.57 |
| BYD (Shenzhen)Supply Chain Management Co., Ltd. | 100,538,266.93 | 7.04 | 3,594,090.83 |
| BMW Brilliance Automotive Ltd. | 94,541,837.25 | 6.62 | 3,379,727.55 |
| Chongqing Procurement Branch of Great Wall Motors Co., Ltd | 87,031,597.67 | 6.10 | 3,111,247.85 |
| Total | 735,908,803.70 | 51.55 | 26,307,625.57 |
4. Financing receivable
| Item | 2023.12.31 | 2022.12.31 |
| Notes receivable | 2,223,431,426.46 | 3,489,134,871.56 |
| Less：Other comprehensive income - fair value changes | -- | -- |
| Closing balance of fair value | 2,223,431,426.46 | 3,489,134,871.56 |
The Company discounts and endorses a portion of bank acceptance bills based on the needs of dailyfund management, therefore the bank acceptance notes are classified as financial assets at fair valuethrough other comprehensive income.
(1) Classified by bad debt provision method
| Category | 2023.12.31 | ||||
| Book balance | Bad debt provision | Carrying value | |||
| Amount | Proportion (%) | Amount | Expected credit loss (%) | ||
| Assessed bad debt provision individually | -- | -- | -- | -- | -- |
| Assessed bad debt provision in portfolios based on credit risk characteristics | 2,223,876,201.69 | 100.00 | 444,775.23 | 0.02 | 2,223,431,426.46 |
| Portfolio 1 | 2,223,876,201.69 | 100.00 | 444,775.23 | 0.02 | 2,223,431,426.46 |
| Portfolio 2 | -- | -- | -- | -- | -- |
| Total | 2,223,876,201.69 | 100.00 | 444,775.23 | 0.02 | 2,223,431,426.46 |
Continued:
| Category | 2022.12.31 | ||||
| Book balance | Bad debt provision | Carrying value | |||
| Amount | Proportion (%) | Amount | Expected credit loss (%) | ||
| Assessed bad debt provision individually | -- | -- | -- | -- | -- |
| Assessed bad debt provision in portfolios based on credit risk characteristics | 3,489,832,838.11 | 100.00 | 697,966.55 | 0.02 | 3,489,134,871.56 |
| Portfolio 1 | 3,489,832,838.11 | 100.00 | 697,966.55 | 0.02 | 3,489,134,871.56 |
| Portfolio 2 | -- | -- | -- | -- | -- |
| Total | 3,489,832,838.11 | 100.00 | 697,966.55 | 0.02 | 3,489,134,871.56 |
(2) Provision, recovery or reversal of bad debt
| Item | Bad debt provision |
| Opening balance | 697,966.55 |
| Provision | -- |
| Recovery or reversal | 253,191.32 |
| Written-off | -- |
| Closing balance | 444,775.23 |
(3) The pledged notes receivable of the Company at the end of the year
| Item | Pledged amount at the end of the year |
| Bank acceptance notes | 13,000,000.00 |
(4) Outstanding endorsed or discounted notes that have not matured at the end of the year
| Item | Amount derecognized at the end of the year | Amount not-derecognized at the end of the year |
| Bank acceptance notes | 34,352,891,721.24 | -- |
| Commercial acceptance notes | -- | -- |
| Total | 34,352,891,721.24 | -- |
5. Prepayments
(1) Disclosed by the ageing of prepayments
| Ageing | 2023.12.31 | 2022.12.31 | ||
| Amount | Proportion (%) | Amount | Proportion (%) | |
| Within 1 year | 2,095,132,119.83 | 99.21 | 630,526,142.92 | 99.07 |
| 1 – 2 years | 16,029,793.14 | 0.76 | 4,353,052.19 | 0.68 |
| 2 – 3 years | -- | -- | 859,392.60 | 0.14 |
| Over 3 years | 729,631.83 | 0.03 | 730,629.27 | 0.11 |
| Total | 2,111,891,544.80 | 100.00 | 636,469,216.98 | 100.00 |
(2) As at December 31, 2023, there is no material prepayment with an aging of over 1 year.
(3) The top five prepayments classified by debtors are as follows:
During the year, the total amount of the top five prepayments classified by debtors at the end of theperiod is RMB 1,632,577,027.17, accounts for 77.31% of the total amount of prepayments at the endof the period.
| Company Name | 2023.12.31 | Percentage of total prepayments (%) |
| Shougang Group Co., Ltd. | 959,767,074.26 | 45.45 |
| Tangshan Caofeidian Ganglian Logistics Co., Ltd. | 312,574,923.41 | 14.80 |
| Beijing Hegang Steel Trade Co., Ltd. | 256,760,387.02 | 12.16 |
| Shanxi Coking Co., Ltd. | 53,668,861.21 | 2.54 |
| Wuhan Hongda Ruike Automotive Parts Co., Ltd | 49,805,781.27 | 2.36 |
| Total | 1,632,577,027.17 | 77.31 |
6. Other receivables
| Item | 2023.12.31 | 2022.12.31 |
| Dividends receivable | 2,407,634.67 | 200,000.00 |
| Other receivables | 7,102,275.11 | 12,968,697.56 |
| Total | 9,509,909.78 | 13,168,697.56 |
(1) Dividends receivable
| Item | 2023.12.31 | 2022.12.31 |
| Guangzhou Jinghai Shipping Co., Ltd. | -- | 200,000.00 |
| Hebei Jingji Industry & Trading Co., Ltd. | 2,407,634.67 | -- |
| Subtotal | 2,407,634.67 | 200,000.00 |
| Less: bad debt provision | -- | -- |
| Total | 2,407,634.67 | 200,000.00 |
(2) Other receivables
①Disclosed by the ageing of other receivables
| Ageing | 2023.12.31 | 2022.12.31 |
| Within 1 year | 5,120,670.55 | 9,880,237.95 |
| 1 – 2 years | 79,076.40 | 3,309,333.81 |
| 2 – 3 years | 2,293,030.11 | 143,721.00 |
| 3 – 4 years | 1,395.00 | 1,074,861.94 |
| 4 – 5 years | 30,999.94 | 813,907.90 |
| Over 5 years | 6,255,415.11 | 5,143,256.32 |
| Subtotal | 13,780,587.11 | 20,365,318.92 |
| Less: provision for bad debts | 6,678,312.00 | 7,396,621.36 |
| Total | 7,102,275.11 | 12,968,697.56 |
②Disclosed by nature of other receivables
| Item | 2023.12.31 | ||
| Closing balance | Provision for bad debts | Carrying value | |
| Petty cash | 250,018.71 | 20,250.95 | 229,767.76 |
| Deposits | 6,418,024.34 | 785,678.17 | 5,632,346.17 |
| Due from other companies | 4,807,494.46 | 3,567,333.28 | 1,240,161.18 |
| Court debit | 2,305,049.60 | 2,305,049.60 | -- |
| Total | 13,780,587.11 | 6,678,312.00 | 7,102,275.11 |
Continued:
| Item | 2022.12.31 | ||
| Closing balance | Provision for bad debts | Carrying value | |
| Petty cash | 1,550,710.10 | 483,358.60 | 1,067,351.50 |
| Deposits | 11,399,556.26 | 864,254.76 | 10,535,301.50 |
| Due from other companies | 5,110,002.96 | 3,743,958.40 | 1,366,044.56 |
| Item | 2022.12.31 | ||
| Closing balance | Provision for bad debts | Carrying value | |
| Court debit | 2,305,049.60 | 2,305,049.60 | -- |
| Total | 20,365,318.92 | 7,396,621.36 | 12,968,697.56 |
③Provision for bad debts
As at 31 December 2023, Phase I bad debts provision:
| Category | Book balance | Expected credit loss within 12 months (%) | Provision for bad debts | Carrying value |
| Assessed bad debt provision individually | -- | -- | -- | -- |
| Assessed bad debt provision in portfolios | 5,120,670.55 | 5.00 | 256,033.52 | 4,864,637.03 |
| Petty cash and deposits | 4,360,962.05 | 5.00 | 218,048.12 | 4,142,913.93 |
| Due from other companies | 759,708.50 | 5.00 | 37,985.40 | 721,723.10 |
| Total | 5,120,670.55 | 5.00 | 256,033.52 | 4,864,637.03 |
As at 31 December 2023, Phase II bad debts provision:
| Category | Book balance | Expected credit loss within the lifetime (%) | Provision for bad debts | Carrying value |
| Assessed bad debt provision individually | -- | -- | -- | -- |
| Assessed bad debt provision in portfolios | 3,118,409.35 | 28.24 | 880,771.27 | 2,237,638.08 |
| Petty cash and deposits | 2,306,000.00 | 25.45 | 586,800.00 | 1,719,200.00 |
| Due from other companies | 812,409.35 | 36.19 | 293,971.27 | 518,438.08 |
| Total | 3,118,409.35 | 28.24 | 880,771.27 | 2,237,638.08 |
As at 31 December 2023，Phase III bad debts provision:
| Category | Book balance | Expected credit loss over the lifetime (%) | Provision for bad debts | Carrying value |
| Assessed bad debt provision individually | ||||
| Henan Taihang Vibrating Machinery Co., Ltd. | 2,305,049.60 | 100.00 | 2,305,049.60 | -- |
| Due from other companies over 5 years | 3,236,457.61 | 100.00 | 3,236,457.61 | -- |
| Total | 5,541,507.21 | 100.00 | 5,541,507.21 | -- |
As at 31 December 2022, Phase I bad debts provision:
| Category | Book balance | Expected credit loss within 12 months (%) | Provision for bad debts | Carrying value |
| Category | Book balance | Expected credit loss within 12 months (%) | Provision for bad debts | Carrying value |
| Assessed bad debt provision individually | -- | -- | -- | -- |
| Assessed bad debt provision in portfolios | 9,880,237.95 | 5.00 | 494,011.88 | 9,386,226.07 |
| Petty cash and deposits | 9,046,161.66 | 5.00 | 452,308.08 | 8,593,853.58 |
| Due from other companies | 834,076.29 | 5.00 | 41,703.80 | 792,372.49 |
| Total | 9,880,237.95 | 5.00 | 494,011.88 | 9,386,226.07 |
As at 31 December 2022, Phase II bad debts provision:
| Category | Book balance | Expected credit loss within the lifetime (%) | Provision for bad debts | Carrying value |
| Assessed bad debt provision individually | -- | -- | -- | -- |
| Assessed bad debt provision in portfolios | 4,327,962.65 | 17.22 | 745,491.16 | 3,582,471.49 |
| Petty cash and deposits | 3,532,303.64 | 14.82 | 523,504.28 | 3,008,799.36 |
| Due from other companies | 795,659.01 | 27.90 | 221,986.88 | 573,672.13 |
| Total | 4,327,962.65 | 17.22 | 745,491.16 | 3,582,471.49 |
As at 31 December 2022，Phase III bad debts provision:
| Category | Book balance | Expected credit loss over the lifetime (%) | Provision for bad debts | Carrying value |
| Assessed bad debt provision individually | ||||
| Henan Taihang Vibrating Machinery Co., Ltd. | 2,305,049.60 | 100.00 | 2,305,049.60 | -- |
| Petty cash over 5 years | 370,720.00 | 100.00 | 370,720.00 | -- |
| Due from other companies over 5 years | 3,481,348.72 | 100.00 | 3,481,348.72 | -- |
| Total | 6,157,118.32 | 100.00 | 6,157,118.32 | -- |
④Provision, recovery or reversal of bad debt
| Provision for bad debts | Phase I | Phase II | Phase III | Total |
| Expected credit loss within 12 months | Expected credit loss over the lifetime (no credit impairment) | Expected credit loss over the lifetime (credit impairment occurred) | ||
| Beginnging balance | 494,011.88 | 745,491.16 | 6,157,118.32 | 7,396,621.36 |
| Changes during the year | -- | -- | -- | -- |
| -- Shift to Phase II | -- | -- | -- | -- |
| -- Shift to Phase III | -- | -- | -- | -- |
| -- Back to Phase II | -- | -- | -- | -- |
| Provision for bad debts | Phase I | Phase II | Phase III | Total |
| Expected credit loss within 12 months | Expected credit loss over the lifetime (no credit impairment) | Expected credit loss over the lifetime (credit impairment occurred) | ||
| -- Back to Phase I | -- | -- | -- | -- |
| Provision | -- | 135,280.11 | -- | 135,280.11 |
| Reversal | 237,978.36 | -- | 615,611.11 | 853,589.47 |
| Converse | -- | -- | -- | -- |
| Written-off | -- | -- | -- | -- |
| Other movements | -- | -- | -- | -- |
| Closing balance | 256,033.52 | 880,771.27 | 5,541,507.21 | 6,678,312.00 |
⑤There is no write-off of provision for bad debts during reporting period.
⑥The top five other receivables classified by debtors are as follows:
| Company Name | Nature | Closing balance | Ageing | Percentage of total other receivable (%) | Closing balance of bad debt provision |
| Henan Taihang Vibrating Machinery Co., Ltd. | Court debit | 2,305,049.60 | Over 5 years | 16.73 | 2,305,049.60 |
| China Petrochemical International Co., Ltd. | Security fund | 1,875,361.36 | Within 1 year | 13.61 | 93,768.07 |
| China National Chemical Construction International Tendering Co., Ltd | Security fund | 600,000.00 | Within 1 year | 4.35 | 30,000.00 |
| China Railway Major Bridge Engineering Group Co., Ltd. | Security fund | 600,000.00 | Within 1 year | 4.35 | 30,000.00 |
| Zhuzhou Geckor Group Co., Ltd. | Security fund | 525,000.00 | 2-3 years | 3.81 | 52,500.00 |
| Total | 5,905,410.96 | 42.85 | 2,511,317.67 |
7. Inventories
(1) Classification of inventories
| Item | 2023.12.31 | ||
| Book balance | Provision for impairment | Carrying value | |
| Raw materials | 2,646,014,681.91 | 38,073,815.60 | 2,607,940,866.31 |
| Finished goods | 5,140,798,217.37 | 80,895,474.59 | 5,059,902,742.78 |
| Consumables | 673,837,073.34 | -- | 673,837,073.34 |
| Self-made semi-finished goods | 3,952,354,739.89 | 116,424,836.42 | 3,835,929,903.47 |
| Total | 12,413,004,712.51 | 235,394,126.61 | 12,177,610,585.90 |
Continued:
| Item | 2022.12.31 |
| Book balance | Provision for impairment | Carrying value | |
| Raw materials | 2,887,646,758.41 | 42,207,819.20 | 2,845,438,939.21 |
| Finished goods | 5,232,868,448.19 | 109,101,783.90 | 5,123,766,664.29 |
| Consumables | 605,976,815.09 | -- | 605,976,815.09 |
| Self-made semi-finished goods | 3,576,657,167.28 | 191,592,837.72 | 3,385,064,329.56 |
| Total | 12,303,149,188.97 | 342,902,440.82 | 11,960,246,748.15 |
(2) Impairment provision for inventories or performance costs
| Item | 2023.1. 1 | Increase | Decrease | 2023.12.31 | ||
| Provision | Others | Reversal or Write-off | Others | |||
| Raw materials | 42,207,819.20 | 500,634.69 | -- | 4,634,638.29 | -- | 38,073,815.60 |
| Finished goods | 109,101,783.90 | 238,193,699.44 | -- | 266,400,008.75 | -- | 80,895,474.59 |
| Self-made semi-finished goods | 191,592,837.72 | 361,404,731.11 | -- | 436,572,732.41 | -- | 116,424,836.42 |
| Total | 342,902,440.82 | 600,099,065.24 | -- | 707,607,379.45 | -- | 235,394,126.61 |
8. Other current assets
| Item | 2023.12.31 | 2022.12.31 |
| Input value added tax | 3,993,436.29 | 2,814,012.14 |
| Input value added tax to be certified | 1,027,726,549.40 | 655,944,515.37 |
| Prepaid income tax | 42,916,429.07 | 200,264,001.14 |
| Entrusted Loans | -- | 166,880,103.67 |
| Transfer payment for special steel debt | 109,717,639.69 | -- |
| Carbon emission rights assets | 263,718.45 | 40,317.17 |
| Value added tax deduction | 344,710,144.87 | -- |
| Total | 1,529,327,917.77 | 1,025,942,949.49 |
9. Long-term equity investments
| Company Name | 2023.1.1 | Impairment at the beginning of the year | Movements during the year | 2023.12.31 | Impairment at the end of the year | |||||||
| Additional investment | Reduce investment | Investment gains and losses confirmed under the equity method | Adjustment of other comprehensive income | Other equity movement | Cash dividend or profit declared | Provision for impairment | Others | |||||
| ①Joint ventures | ||||||||||||
| Tangshan Guoxing Industrial Co., Ltd. | 38,183,246.93 | -- | -- | -- | 5,996,978.58 | -- | 2,852.23 | 1,500,000.00 | -- | -- | 42,683,077.74 | -- |
| Tangshan Zhonghong Carbon Chemical Co., Ltd. | 9,640,303.21 | -- | -- | 1,083,075.06 | -8,557,228.15 | -- | -- | -- | -- | -- | -- | -- |
| Tangshan Shougang Jingtang Xishan Coking Co., Ltd. | 1,098,143,631.05 | -- | -- | -- | 14,406,512.87 | -- | 368,993.07 | 20,000,000.00 | -- | -- | 1,092,919,136.99 | -- |
| Subtotal | 1,145,967,181.19 | -- | -- | 1,083,075.06 | 11,846,263.30 | -- | 371,845.30 | 21,500,000.00 | -- | -- | 1,135,602,214.73 | -- |
| ②Associates | ||||||||||||
| Tangshan Tangcao Railway Co., Ltd. | 312,745,653.19 | -- | -- | -- | -70,627,099.55 | -- | 46,580.93 | -- | -- | -- | 242,165,134.57 | -- |
| Tangshan Caofeidian Dunshi New Construction Material Co., Ltd. | 67,466,999.44 | -- | -- | -- | -5,227,673.16 | -- | -- | 5,000,000.00 | -- | -- | 57,239,326.28 | -- |
| Qian'an Sinochem Coal Chemical Industrial Co., Ltd. | 891,510,510.32 | -- | -- | -- | -218,489,120.70 | -- | -- | -- | -- | -- | 673,021,389.62 | -- |
| Beijing Shouxin Jinyuan Management Consulting Center (Limited Partnership) | 122,430,402.99 | -- | -- | -- | 84,209,307.09 | -- | -- | 77,539,284.02 | -- | -- | 129,100,426.06 | -- |
| Beijing Dingshengcheng Packaging Materials Co., Ltd. | 16,830,558.74 | -- | -- | -- | 4,597,037.20 | -- | -- | -- | -- | -- | 21,427,595.94 | -- |
| Ningbo Shougang Zhejin Steel Co., Ltd. | 20,211,004.90 | -- | -- | -- | -1,317,064.73 | -- | 5,816.78 | -- | -- | -- | 18,899,756.95 | -- |
| Guangzhou Jinghai Shipping Co., Ltd. | 28,866,411.30 | -- | -- | -- | 22,950.04 | -- | -- | 200,000.00 | -- | -- | 28,689,361.34 | -- |
| Shougang (Qingdao) Steel Industry Co., Ltd. | 58,000,726.24 | -- | -- | -- | 1,414,158.20 | -- | -- | 700,000.00 | -- | -- | 58,714,884.44 | -- |
| Tianjin Shougang Steel Processing&Distribution Co., Ltd. | 16,693,129.11 | -- | -- | -- | 47,862.59 | -- | -49,241.27 | -- | -- | -- | 16,691,750.43 | -- |
| Company Name | 2023.1.1 | Impairment at the beginning of the year | Movements during the year | 2023.12.31 | Impairment at the end of the year | |||||||
| Additional investment | Reduce investment | Investment gains and losses confirmed under the equity method | Adjustment of other comprehensive income | Other equity movement | Cash dividend or profit declared | Provision for impairment | Others | |||||
| Hebei Jingji Industry & Trading Co., Ltd. | 7,828,779.08 | -- | -- | -- | 3,219,444.57 | -- | -- | 5,086,876.25 | -- | -- | 5,961,347.40 | -- |
| Qian'an Jinyu Shougang Environmental Protection Technology Co., Ltd. | 35,734,568.85 | -- | -- | -- | -2,472,660.25 | -- | -- | -- | -- | -- | 33,261,908.60 | -- |
| Subtotal | 1,578,318,744.16 | -- | -- | -- | -204,622,858.70 | -- | 3,156.44 | 88,526,160.27 | -- | -- | 1,285,172,881.63 | -- |
| Total | 2,724,285,925.35 | -- | -- | 1,083,075.06 | -192,776,595.40 | -- | 375,001.74 | 110,026,160.27 | -- | -- | 2,420,775,096.36 | -- |
10. Other equity instrument investments
| Item | 2023.12.31 | 2022.12.31 |
| Beijing TIEKE Shougang RAILWAY-TECH Co., Ltd. | 310,601,456.00 | 197,880,464.00 |
| Minmetals Special Steel (Dongguan) Co., Ltd. | 1,786,138.70 | 4,103,981.86 |
| Qian'an Shoujia Construction Material Co., Ltd. | -- | 5,456,139.10 |
| Qian'an PetroChina Kunlun Gas Co., Ltd | 21,342,418.64 | 19,084,152.28 |
| Minmetals Tianwei Steel Co., Ltd. | 6,474,078.87 | 6,241,396.57 |
| Total | 340,204,092.21 | 232,766,133.81 |
Continued:
| Item | Dividend recognized during the year | Accumulated gain | Accumulated loss | Other comprehensive income transferred to retained earnings | Reasons |
| Beijing TIEKE Shougang RAILWAY-TECH Co., Ltd. | 95,812,843.18 | 255,765,217.54 | 3,937,360.00 | -- | |
| Minmetals Special Steel (Dongguan) Co., Ltd. | -1,970,166.69 | -2,731,782.11 | -- | -- | |
| Qian'an Shoujia Construction Material Co., Ltd. | -4,637,718.24 | -19,436,418.75 | -- | -- | |
| Qian'an PetroChina Kunlun Gas Co., Ltd | 1,919,526.41 | 16,611,055.84 | 3,474,772.80 | -- | |
| Minmetals Tianwei Steel Co., Ltd. | 197,779.96 | -634,032.96 | -- | -- | |
| Total | 91,322,264.62 | 249,574,039.56 | 7,412,132.80 |
11. Other non-current financial assets
| Item | 2023.12.31 | 2022.12.31 |
| Financial assets measured at fair value through profit and loss | 75,009,218.61 | 79,234,007.60 |
Continued:
| Item | 2023.12.31 | 2022.12.31 |
| Beijing Shouxin Jin'an Equity Investment Partnership (Limited Partnership) | 75,009,218.61 | 79,234,007.60 |
Note: The fair value and investment of Beijing Shouxin Jin'an Equity Investment Partnership(Limited Partnership) refer to Note Ⅶ. 4 and Note X.
12. Fixed assets
| Item | 2023.12.31 | 2022.12.31 |
| Fixed assets | 89,895,037,102.17 | 93,331,072,969.17 |
| Fixed assets to be disposed | -- | -- |
| Total | 89,895,037,102.17 | 93,331,072,969.17 |
Fixed assets
①Details of fixed assets
| Item | Plant and buildings | Machinery and equipment | Motor vechiles | Electronic equipment | Industrial furnace | Metallurgical equipment | Other tools | Total |
| Cost： | ||||||||
| 1. At 1 January 2023 | 38,934,539,623.18 | 47,546,349,011.50 | 2,818,452,661.79 | 10,305,684,242.67 | 1,328,119,282.41 | 62,465,727,447.79 | 1,126,504,291.87 | 164,525,376,561.21 |
| 2. Increase | 483,862,736.98 | 5,615,025,448.74 | 1,047,612,440.92 | 1,384,890,184.51 | 111,758,777.97 | -4,355,222,086.31 | 41,185,038.90 | 4,329,112,541.71 |
| (1) Purchase | 79,581,348.67 | 84,459,549.14 | 7,627,492.79 | 48,414,764.43 | 84,938,332.04 | 6,277,432.81 | 311,298,919.88 | |
| (2) Transferred from construction in progress | 404,281,388.31 | 5,530,565,899.60 | 1,039,984,948.13 | 1,336,475,420.08 | 111,758,777.97 | -4,440,160,418.35 | 34,907,606.09 | 4,017,813,621.83 |
| 3. Decrease | 16,606,436.19 | 31,967,740.43 | 46,441,470.62 | 15,779,198.32 | -- | 31,039,860.38 | 4,464,790.86 | 146,299,496.80 |
| (1) Disposal or retirement | 16,606,436.19 | 31,967,740.43 | 46,441,470.62 | 15,779,198.32 | -- | 31,039,860.38 | 4,464,790.86 | 146,299,496.80 |
| 4. At 31 December 2023 | 39,401,795,923.97 | 53,129,406,719.81 | 3,819,623,632.09 | 11,674,795,228.86 | 1,439,878,060.38 | 58,079,465,501.10 | 1,163,224,539.91 | 168,708,189,606.12 |
| Accumulated depreciation: | ||||||||
| 1. At 1 January 2023 | 12,252,168,847.57 | 19,574,553,859.62 | 1,998,285,554.89 | 6,561,030,235.99 | 644,940,661.15 | 29,673,771,570.40 | 489,552,862.42 | 71,194,303,592.04 |
| 2. Increase | 1,301,080,521.41 | 5,058,474,034.97 | 723,463,167.87 | 1,314,428,653.33 | 94,509,563.18 | -849,506,621.19 | 93,089,819.07 | 7,735,539,138.64 |
| (1) Depreciation | 1,281,394,033.31 | 2,494,347,069.38 | 191,390,881.97 | 611,822,015.14 | 75,737,384.05 | 2,994,337,918.40 | 86,509,836.39 | 7,735,539,138.64 |
| (2) Other increases | 19,686,488.10 | 2,564,126,965.59 | 532,072,285.90 | 702,606,638.19 | 18,772,179.13 | -3,843,844,539.59 | 6,579,982.68 | -- |
| 3. Decrease | 3,477,194.33 | 23,692,641.77 | 43,718,891.01 | 14,700,251.00 | -- | 27,679,841.04 | 3,421,407.58 | 116,690,226.73 |
| (1) Disposal or retirement | 3,477,194.33 | 23,692,641.77 | 43,718,891.01 | 14,700,251.00 | -- | 27,679,841.04 | 3,421,407.58 | 116,690,226.73 |
| 4. At 31 December 2023 | 13,549,772,174.65 | 24,609,335,252.82 | 2,678,029,831.75 | 7,860,758,638.32 | 739,450,224.33 | 28,796,585,108.17 | 579,221,273.91 | 78,813,152,503.95 |
| Impaiment | ||||||||
| 1. At 1 January 2023 | -- | -- | -- | -- | -- | -- | -- | -- |
| Item | Plant and buildings | Machinery and equipment | Motor vechiles | Electronic equipment | Industrial furnace | Metallurgical equipment | Other tools | Total |
| 2. Increase | -- | -- | -- | -- | -- | -- | -- | -- |
| 3. Decrease | -- | -- | -- | -- | -- | -- | -- | -- |
| 4. At 31 December 2023 | -- | -- | -- | -- | -- | -- | -- | -- |
| Carrying value | ||||||||
| 1. 31 December 2023 | 25,852,023,749.32 | 28,520,071,466.99 | 1,141,593,800.34 | 3,814,036,590.54 | 700,427,836.05 | 29,282,880,392.93 | 584,003,266.00 | 89,895,037,102.17 |
| 2. 1 January 2023 | 26,682,370,775.61 | 27,971,795,151.88 | 820,167,106.90 | 3,744,654,006.68 | 683,178,621.26 | 32,791,955,877.39 | 636,951,429.45 | 93,331,072,969.17 |
Note: As at 31 December 2023, there is no mortgaged or guaranteed fixed assets.
②As at 31 December 2023, there is no temporarily idle fixed assets.
③As at 31 December 2023, fixed assets leased through operating leases are as follows:
| Item | Carrying value |
| Plant and buildings | 104,212,352.21 |
④Fixed assets pending certificates of ownership
| Item | Carrying value | Reasons for pending certificates |
| Property of Beijing Shougang Cold Rolling Co., Ltd. | 34,888,371.00 | Property certificate is in the process |
| Property of Beijing Shougang Co., Ltd. | 105,814,346.03 | Property certificate is in the process |
| Property of Beijing Shougang Steel Trading Investment Management Co., Ltd. | 72,550,845.23 | Property certificate is in the process |
13. Construction in progress
| Item | 2023.12.31 | 2022.12.31 |
| Construction in progress | 5,279,317,813.90 | 7,598,541,035.50 |
| Construction materials | 41,295,437.98 | 75,108,817.27 |
| Total | 5,320,613,251.88 | 7,673,649,852.77 |
(1) Construction in progress
①Details of construction in progress
| Item | 2023.12.31 | ||
| Book balance | Provision for impairment | Carrying value | |
| Jingtang technical renovation project | 714,355,677.48 | -- | 714,355,677.48 |
| New energy automotive electrical steel project | 84,878,191.46 | -- | 84,878,191.46 |
| Zhixin Co. oriented phase II project | 71,554,023.86 | -- | 71,554,023.86 |
| Zhixin Co. high-end heat treatment engineering project | 1,315,631,740.70 | -- | 1,315,631,740.70 |
| Qiangang technical renovation project | 2,094,608,579.82 | -- | 2,094,608,579.82 |
| Other projects | 998,289,600.58 | -- | 998,289,600.58 |
| Total | 5,279,317,813.90 | -- | 5,279,317,813.90 |
Continued:
| Item | 2022.12.31 | ||
| Book balance | Provision for impairment | Carrying value | |
| Jingtang technical renovation project | 3,076,233,760.72 | -- | 3,076,233,760.72 |
| Item | 2022.12.31 | ||
| Book balance | Provision for impairment | Carrying value | |
| New energy automotive electrical steel project | 37,653,248.54 | -- | 37,653,248.54 |
| Zhixin Co. oriented phase II project | 1,314,052,905.22 | -- | 1,314,052,905.22 |
| Zhixin Co. high-end heat treatment engineering project | 183,731,602.88 | -- | 183,731,602.88 |
| Qiangang technical renovation project | 1,484,877,863.66 | -- | 1,484,877,863.66 |
| Other projects | 1,501,991,654.48 | -- | 1,501,991,654.48 |
| Total | 7,598,541,035.50 | -- | 7,598,541,035.50 |
②The major construction projects in progress are as follows:
| Project name | 2023.1.1 | Additions | Transferred to fixed assets | Other deduction | Accumulated interest capitalization | Capitalized Interest during reporting year | % of interest capitalization | 2023.12.31 |
| Zhixin Co. oriented phase II project | 1,314,052,905.22 | 1,922,416.03 | 1,244,421,297.39 | -- | -- | -- | -- | 71,554,023.86 |
| Zhixin Co. high-end heat treatment engineering project | 183,731,602.88 | 1,131,900,137.82 | -- | -- | -- | -- | -- | 1,315,631,740.70 |
| Total | 1,497,784,508.10 | 1,133,822,553.85 | 1,244,421,297.39 | -- | -- | -- | -- | 1,387,185,764.56 |
The major construction projects in progress are as follows (continued): (Unit: RMB hundredmillion)
| Project name | Budget | The propotion of projects investment account for budget % | Progress (%) | Source of fund |
| Zhixin Co. oriented phase II project | 16.83 | 88.26 | Transfer to fixed assets on estimate value | Selfraised |
| Zhixin Co. high-end heat treatment engineering project | 19.49 | 73.74 | The project is undergoing civil construction | Selfraised |
③As at 31 December 2023, there is no provision for impairment of construction in progress.
(2) Construction materials
| Item | 2023.12.31 | 2022.12.31 |
| Specific materials | 3,298,486.36 | 12,234,976.71 |
| Specific equipments | 37,996,951.62 | 62,873,840.56 |
| Subtotal | 41,295,437.98 | 75,108,817.27 |
| Provision for impairment of construction materials | -- | -- |
| Total | 41,295,437.98 | 75,108,817.27 |
14. Right-of-use assets
| Item | Plant and buildings | Land use rights | Motor vechiles | Total |
| Cost： | ||||
| 1. At 1 January 2023 | 115,976,725.63 | 311,888.26 | 474,802.94 | 116,763,416.83 |
| 2. Increase during the period | 439,100,685.41 | -- | -- | 439,100,685.41 |
| (1) Additional lease | 436,316,890.81 | -- | -- | 436,316,890.81 |
| (2) Adjustment of lease liabilities | 2,783,794.60 | -- | -- | 2,783,794.60 |
| 3. Decrease during the period | 155,885.58 | -- | -- | 155,885.58 |
| Other decrease | 155,885.58 | -- | -- | 155,885.58 |
| 4. At 31 December 2023 | 554,921,525.46 | 311,888.26 | 474,802.94 | 555,708,216.66 |
| Accumulated depreciation | ||||
| 1. At 1 January 2023 | 33,214,718.55 | 111,721.20 | 329,617.63 | 33,656,057.38 |
| 2. Increase during the period | 32,979,389.24 | 55,860.60 | 128,632.46 | 33,163,882.30 |
| Provision | 32,979,389.24 | 55,860.60 | 128,632.46 | 33,163,882.30 |
| 3. Decrease during the period | 155,885.58 | -- | -- | 155,885.58 |
| Other decrease | 155,885.58 | -- | -- | 155,885.58 |
| 4. At 31 December 2023 | 66,038,222.21 | 167,581.80 | 458,250.09 | 66,664,054.10 |
| Impaiment | ||||
| 1. At 1 January 2023 | -- | -- | -- | -- |
| 2. Increase during the period | -- | -- | -- | -- |
| 3. Decrease during the period | -- | -- | -- | -- |
| 4. At 31 December 2023 | -- | -- | -- | -- |
| Carrying value | ||||
| 1. 31 December 2023 | 488,883,303.25 | 144,306.46 | 16,552.85 | 489,044,162.56 |
| 2. 1 January 2023 | 82,762,007.08 | 200,167.06 | 145,185.31 | 83,107,359.45 |
Note: As of December 31, 2023, the Company recognizes lease expenses related to short-termleases and leases of low value assets as shown in Note V, 61.
15. Intangible assets
Details of intangible assets
| Item | Software | Land use rights | Total |
| Cost | |||
| 1. At 1 January 2023 | 497,475,518.39 | 4,591,445,210.91 | 5,088,920,729.30 |
| 2. Increase | 16,806,990.57 | 2,265,472,559.74 | 2,282,279,550.31 |
| (1) Purchase | -- | 3,502,128.00 | 3,502,128.00 |
| (2) Transfer from construction in progress | 16,806,990.57 | 2,261,970,431.74 | 2,278,777,422.31 |
| Item | Software | Land use rights | Total |
| 3. Decrease | -- | -- | -- |
| 4. At 31 December 2023 | 514,282,508.96 | 6,856,917,770.65 | 7,371,200,279.61 |
| Accumulated amortization | |||
| 1. At 1 January 2023 | 201,774,900.38 | 980,238,700.81 | 1,182,013,601.19 |
| 2. Increase | 41,434,224.14 | 143,382,374.06 | 184,816,598.20 |
| Provision | 41,434,224.14 | 143,382,374.06 | 184,816,598.20 |
| 3. Decrease | -- | -- | -- |
| 4. At 31 December 2023 | 243,209,124.52 | 1,123,621,074.87 | 1,366,830,199.39 |
| Impairment | |||
| 1. At 1 January 2023 | -- | -- | -- |
| 2. Increase | -- | -- | -- |
| 3. Decrease | -- | -- | -- |
| 4. At 31 December 2023 | -- | -- | -- |
| Carrying value | |||
| 1. 31 December 2023 | 271,073,384.44 | 5,733,296,695.78 | 6,004,370,080.22 |
| 2. 1 January 2023 | 295,700,618.01 | 3,611,206,510.10 | 3,906,907,128.11 |
As of December 31, 2023, the Company has no intangible assets with any mortgage, guarantee,impairment or other situations.
16. Long-term prepaid expenses
| Item | 2023.1.1 | Increase | Decrease | 2023.12.31 | |
| Amortization | Others | ||||
| Renovation costs | 3,535,748.04 | 2,228,940.09 | 973,269.04 | -- | 4,791,419.09 |
17. Deferred income tax assets and deferred income tax liabilities
(1) Deferred income tax assets and deferred income tax liabilities without offsetting
| Item | 2023.12.31 | 2022.12.31 | ||
| Deductible/taxable temporary differences | Deferred tax assets/liabilities | Deductible/taxable temporary differences | Deferred tax assets/liabilities | |
| Deferred tax assets： | ||||
| Asset impairment provision | 269,626,906.31 | 43,837,995.70 | 505,555,574.09 | 79,322,751.40 |
| Withdrawal amount of payroll payable | 11,968,784.40 | 1,795,317.66 | 11,804,882.71 | 1,770,732.41 |
| Defferred income | 418,032,946.24 | 63,168,702.02 | 376,219,302.71 | 56,819,612.63 |
| Asset amortization difference | 27,650,565.49 | 4,147,584.81 | 5,629,387.82 | 844,408.16 |
| Unrealized internal transaction | 221,305,036.64 | 33,195,755.50 | 269,210,907.64 | 40,381,636.15 |
| Item | 2023.12.31 | 2022.12.31 | ||
| Deductible/taxable temporary differences | Deferred tax assets/liabilities | Deductible/taxable temporary differences | Deferred tax assets/liabilities | |
| Joint commissioning cost | 293,407,102.85 | 44,011,065.43 | 311,745,046.78 | 46,761,757.02 |
| Lease liabilities | 493,493,671.39 | 86,977,838.59 | 3,523,175.04 | 755,873.27 |
| Equity Incentive | 2,074,225.79 | 320,280.51 | 6,855,496.85 | 1,052,157.60 |
| Deferred income assets for loss provision | 1,090,774,966.00 | 163,616,244.90 | 1,164,313,511.12 | 174,647,026.67 |
| Subtotal | 2,828,334,205.11 | 441,070,785.12 | 2,654,857,284.76 | 402,355,955.31 |
| Deferred tax liabilities： | ||||
| Joint commissioning cost | 996,181,065.40 | 149,427,159.81 | 1,085,461,580.60 | 162,819,237.09 |
| Other equity instruments investments | 293,616,517.21 | 44,042,477.65 | 186,178,558.81 | 27,926,783.87 |
| Gain on equity disposal | -- | -- | 83,212,329.87 | 20,803,082.47 |
| Equipment additional deduction | 1,835,794,544.82 | 275,369,181.72 | 1,938,128,392.15 | 290,719,258.83 |
| Right-use assets | 488,963,025.70 | 85,684,032.63 | -- | -- |
| Subtotal | 3,614,555,153.13 | 554,522,851.81 | 3,292,980,861.43 | 502,268,362.26 |
(2) Details of unrecognized deferred tax assets from deductible temporary differences anddeductible tax losses:
| Item | 2023.12.31 | 2022.12.31 |
| Deductible temporary differences | 49,549,392.54 | 56,162,050.68 |
| Deductible tax losses | 1,817,836,980.09 | 2,051,259,102.58 |
| Total | 1,867,386,372.63 | 2,107,421,153.26 |
(3) Unrecognized deferred tax liabilities from deductible tax losses will expire in the followingyears:
| Years | 2023.12.31 | 2022.12.31 | Note |
| 2023 | —— | 33,894,110.96 | |
| 2024 | 33,903,321.35 | 34,063,776.18 | |
| 2025 | 17,290,511.03 | 18,967,253.01 | |
| 2026 | 13,437,096.04 | 14,769,965.09 | |
| 2027 | 1,749,623,032.87 | 1,949,563,997.34 | |
| 2028 | 3,583,018.80 | —— | |
| Total | 1,817,836,980.09 | 2,051,259,102.58 |
18. Restricted assets
| Item | 2023.12.31 | |||
| Book balance | Carrying value | Type of restriction | Reason of restriction | |
| Item | 2023.12.31 | |||
| Book balance | Carrying value | Type of restriction | Reason of restriction | |
| Monetary funds | 246,369,301.95 | 246,369,301.95 | Frozen | Security deposits, fixed term deposits |
| Notes receivable | 297,201,490.24 | 297,201,490.24 | Pledged | Pledge guarantee |
| Total | 543,570,792.19 | 543,570,792.19 | ||
Continued:
| Item | 2022.12.31 | |||
| Book balance | Carrying value | Type of restriction | Reason of restriction | |
| Monetary funds | 1,140,407,749.24 | 1,140,407,749.24 | Frozen | Security deposits, fixed term deposits |
| Notes receivable | 328,829,159.08 | 328,829,159.08 | Pledged | Pledge guarantee |
| Accounts receivable | 24,223,581.32 | 24,223,581.32 | Pledged | Pledge guarantee |
| Total | 1,493,460,489.64 | 1,493,460,489.64 | ||
19. Short-term loans
Classification of short-term loans
| Item | 2023.12.31 | 2022.12.31 |
| Credit loans | 21,282,738,873.29 | 22,671,912,770.04 |
| Pledged loans | 284,201,490.24 | 1,090,000.00 |
| Guaranteed loans | 5,094,415,277.76 | 6,907,003,333.35 |
| Total | 26,661,355,641.29 | 29,580,006,103.39 |
20. Notes payable
| Item | 2023.12.31 | 2022.12.31 |
| Commercial acceptance notes | 3,368,752,366.00 | 7,141,510,000.00 |
| Bank acceptances | 65,000,000.00 | 120,000,000.00 |
| Total | 3,433,752,366.00 | 7,261,510,000.00 |
21. Accounts payable
| Item | 2023.12.31 | 2022.12.31 |
| Payables for goods | 18,592,628,297.35 | 17,215,600,362.40 |
| Payables for construction | 2,141,412,412.23 | 2,594,994,121.65 |
| Total | 20,734,040,709.58 | 19,810,594,484.05 |
Among which, the material trade payables aged over 1 year was as follows:
| Company name | 2023.12.31 | Reason for non-settlement |
| Beijing Shougang Resources Comprehensive | 46,579,401.86 | In the execution |
| Utilization Technology Development Co., Ltd. | ||
| Chengdu Huaxi Chemical Technology Co., Ltd | 16,663,590.20 | In the execution |
| Qinhuangdao Shouqin Metal Materials Co., Ltd. | 13,303,698.08 | In the execution |
| MCC CCID Engineering Technology Co., Ltd | 10,006,250.69 | In the execution |
| Beijing Jingcheng Phoenixfurnace Engineering Technology Co., Ltd | 11,891,531.00 | In the execution |
| Total | 98,444,471.83 |
22. Contract liabilities
| Item | 2023.12.31 | 2022.12.31 |
| Advance from product sales | 4,699,449,813.28 | 4,508,016,725.74 |
| Less: contractual liabilities included in other non-current liabilities | -- | -- |
| Total | 4,699,449,813.28 | 4,508,016,725.74 |
23. Employee benefits payable
| Item | 2023.1.1 | Increase | Decrease | 2023.12.31 |
| Short-term employee benefits | 593,137,177.24 | 4,035,324,305.25 | 3,902,233,288.64 | 726,228,193.85 |
| Post-employment benefits (defined contribution plans) | 21,769,252.36 | 683,416,368.60 | 674,943,017.77 | 30,242,603.19 |
| Termination benefits | -- | 111,933,739.84 | 111,933,739.84 | -- |
| Other retirement benefits due within one year | 5,890,000.00 | 5,890,000.00 | ||
| Total | 620,796,429.60 | 4,830,674,413.69 | 4,689,110,046.25 | 762,360,797.04 |
(1) Short-term employee benefits
| Item | 2023.1.1 | Increase | Decrease | 2023.12.31 |
| Salaries, bonuses and subsidies | 145,764,214.16 | 2,903,844,347.32 | 2,825,179,927.78 | 224,428,633.70 |
| Welfare | -- | 344,895,431.38 | 344,895,431.38 | -- |
| Social insurance | 176,331,327.06 | 341,669,161.11 | 314,282,422.65 | 203,718,065.52 |
| Including: 1.Medical insurance | 176,123,301.26 | 314,484,192.70 | 287,285,145.28 | 203,322,348.68 |
| 2.Work-related injury insurance | 206,530.65 | 27,096,032.02 | 26,908,764.85 | 393,797.82 |
| 3.Maternity insurance | 1,495.15 | 88,936.39 | 88,512.52 | 1,919.02 |
| Housing fund | 52,099.00 | 358,587,957.02 | 358,582,481.02 | 57,575.00 |
| Labor union fee and employee education fee employee education fee | 270,989,537.02 | 97,057,060.52 | 70,022,677.91 | 298,023,919.63 |
| Equity incentive | -- | -12,462,167.10 | -12,462,167.10 | -- |
| Short-term profit-sharing plan | -- | -- | -- | -- |
| Non-monetary benefits | -- | -- | -- | -- |
| Item | 2023.1.1 | Increase | Decrease | 2023.12.31 |
| Other short-term employee benefits | -- | 1,732,515.00 | 1,732,515.00 | -- |
| Total | 593,137,177.24 | 4,035,324,305.25 | 3,902,233,288.64 | 726,228,193.85 |
(2) Defined contribution plans
| Item | 2023.1.1 | Increase | Decrease | 2023.12.31 |
| Post-employment benefits | ||||
| Including: 1.Pension insurance | 9,654,550.87 | 480,833,554.81 | 481,828,073.14 | 8,660,032.54 |
| 2.Unemployment insurance | 12,114,701.49 | 17,379,338.57 | 17,576,106.45 | 11,917,933.61 |
| 3. Enterprise Pension | -- | 185,203,475.22 | 175,538,838.18 | 9,664,637.04 |
| Total | 21,769,252.36 | 683,416,368.60 | 674,943,017.77 | 30,242,603.19 |
(3) Termination benefits
| Item | 2023.1.1 | Increase | Decrease | 2023.12.31 |
| Compensation for employee resettlement | -- | 111,933,739.84 | 111,933,739.84 | -- |
24. Taxes payable
| Item | 2023.12.31 | 2022.12.31 |
| Value-added tax | 137,714,492.68 | 112,823,148.09 |
| City construction and maintenance tax | 777,178.34 | 939,514.85 |
| Corporate income tax | 6,189,412.20 | 6,615,902.30 |
| Land use tax | 440,536.03 | 440,536.03 |
| Real estate tax | 1,361,531.20 | 1,014,521.32 |
| Education surcharge | 600,520.73 | 681,006.31 |
| Resouorce tax | 1,214,784.40 | 4,912,568.40 |
| Stamp duty | 29,910,115.63 | 33,470,591.03 |
| Individual income tax | 872,184.15 | 2,812,207.41 |
| Environment protection tax | 5,828,540.94 | 8,567,976.00 |
| Other taxes | 20,557.38 | 22,444.66 |
| Total | 184,929,853.68 | 172,300,416.40 |
25. Other payables
| Item | 2023.12.31 | 2022.12.31 |
| Dividends payable | -- | 11,440,046.38 |
| Other payables | 431,690,700.91 | 2,750,379,230.31 |
| Total | 431,690,700.91 | 2,761,819,276.69 |
(1) Dividends payable
| Item | 2023.12.31 | 2022.12.31 |
| Shougang Group Co., Ltd. | -- | 2,806,049.55 |
| Beijing Shouxin Jinyuan Management Consulting Center (Limited Partnership) | -- | 6,475,498.15 |
| Qian'an Jingji Equity Investment Fund (Limited Partnership) | -- | 2,158,498.68 |
| Total | -- | 11,440,046.38 |
(2) Other payables
| Item | 2023.12.31 | 2022.12.31 |
| Deposits | 5,749,390.63 | 6,137,315.23 |
| Guarantee | 24,646,861.86 | 35,705,705.74 |
| Due from Shougang Group | 56,517,064.49 | 56,575,231.05 |
| Due from Shougang Mining Corp. | -- | 796,194,091.55 |
| Restricted stock repurchase obligations | 130,627,194.09 | 210,930,850.00 |
| Zhixin Co's second round of financing | -- | 990,787,728.36 |
| Due from other companies | 214,150,189.84 | 654,048,308.38 |
| Total | 431,690,700.91 | 2,750,379,230.31 |
26. Current portion of non-current liabilities
| Item | 2023.12.31 | 2022.12.31 |
| Long-term loans due within one year | 1,315,853,024.03 | 1,480,490,424.42 |
| Bonds payable due within one year | -- | 2,528,468,055.61 |
| Long-term payables due within one year | -- | 15,781,907.85 |
| Lease liabilities due within one year | 21,833,736.47 | 14,027,634.72 |
| Total | 1,337,686,760.50 | 4,038,768,022.60 |
(1) Long-term loans due within one year
| Item | 2023.12.31 | 2022.12.31 |
| Guaranteed loans | 811,562,222.22 | 613,355,833.34 |
| Credit loans | 504,290,801.81 | 867,134,591.08 |
| Total | 1,315,853,024.03 | 1,480,490,424.42 |
(2) Bonds payable due within one year
| Item | 2023.12.31 | 2022.12.31 |
| 20 shouqian 01 | -- | 2,528,468,055.61 |
(3) Long-term payables due within one year
| Item | 2023.12.31 | 2022.12.31 |
| Long-term payables | -- | 15,781,907.85 |
27. Other current liabilities
| Item | 2023.12.31 | 2022.12.31 |
| Short-term bonds payable | 1,003,296,438.41 | 1,006,213,698.66 |
| Tax to be exported | 875,183,618.12 | 724,801,203.37 |
| Undue backed notes | 3,171,985,421.26 | 6,357,735,008.71 |
| Shougang Jing Notes | 1,156,926,762.88 | -- |
| Total | 6,207,392,240.67 | 8,088,749,910.74 |
Short-term bonds payable:
| Bond name | Nominal value | Coupon rate | Issue date | Maturity of bond | Issue amount |
| SCP1 | 1,000,000,000.00 | 2.56% | 2023/11/16 | 155 Days | 1,000,000,000.00 |
| SCP2 | 1,000,000,000.00 | 2.21% | 2023/9/8 | 105 Days | 1,000,000,000.00 |
| SCP3 | 1,000,000,000.00 | 1.68% | 2022/8/19 | 248 Days | 1,000,000,000.00 |
| SCP4 | 1,000,000,000.00 | 2.37% | 2023/4/17 | 186 Days | 1,000,000,000.00 |
| Subtotal | 4,000,000,000.00 | 4,000,000,000.00 |
Short-term Bonds Payable (continued):
| Bond name | 2023.1.1 | Issued during current period | Interest accrued per nominal value | Amortization of premium and discount | Repaid in the current period | 2023.12.31 | Breached or not |
| SCP1 | -- | 1,000,000,000.00 | 3,296,438.41 | -- | -- | 1,003,296,438.41 | No |
| SCP2 | -- | 1,000,000,000.00 | 6,340,163.93 | -- | 1,006,340,163.93 | -- | No |
| SCP3 | 1,006,213,698.66 | -- | 5,201,095.86 | -- | 1,011,414,794.52 | -- | No |
| SCP4 | -- | 1,000,000,000.00 | 12,044,262.30 | -- | 1,012,044,262.30 | -- | No |
| Total | 1,006,213,698.66 | 3,000,000,000.00 | 26,881,960.50 | -- | 3,029,799,220.75 | 1,003,296,438.41 |
28. Long-term loans
| Item | 2023.12.31 | Range of interest rate | 2022.12.31 | Range of interest rate |
| Credit loans | 5,293,350,801.81 | 2.6%-3.7% | 2,661,484,591.08 | 2.85%-3.85% |
| Guaranteed loans | 8,811,562,222.22 | 4.65% | 9,413,355,833.34 | 4.65% |
| Subtotal | 14,104,913,024.03 | 12,074,840,424.42 | ||
| Less: Long-term loans due within one year | 1,315,853,024.03 | 1,480,490,424.42 | ||
| Total | 12,789,060,000.00 | 10,594,350,000.00 |
29. Bonds payable
| Item | 2023.12.31 | 2022.12.31 |
| 20 shouqian 01 | -- | -- |
Increase or decrease in bonds payable
| Bond name | Par value | Coupon rate | Issue date | Term to maturity | Amount on offer |
| 20 shouqian 01 | 2,500,000,000.00 | 3.98% | 2020/9/15 | 5 years | 2,500,000,000.00 |
Bonds payable (continued):
| Bond name | 2023.1.1 | Current year issuance | Accrued interest by par value | Amortisation of discount | Current year repayment | 2023.12.31 | Breached or not |
| 20 shouqian 01 | 2,528,468,055.61 | -- | 71,031,944.39 | -- | 2,599,500,000.00 | -- | No |
| Less: Long-term loans due within one year | 2,528,468,055.61 | -- | -- | -- | -- | -- | |
| Total | -- | -- | -- | -- | -- | -- |
30. Lease liabilities
| Item | 2023.12.31 | 2022.12.31 |
| Lease liabilities | 493,579,496.82 | 86,467,471.51 |
| Less: lease liabilities due within one year | 21,833,736.47 | 14,027,634.72 |
| Total | 471,745,760.35 | 72,439,836.79 |
Note: The amount of interest expense of lease liabilities in 2023 is RMB19,884,783.97, whichis included in financial expense - interest costs.
31. Long-term payables
| Item | 2023.12.31 | 2022.12.31 |
| Special payables | 2,300,000.00 | 2,300,000.00 |
Special payables
| Item | 2023.1.1 | Increase | Decrease | 2023.12.31 |
| Research and development funds | 2,300,000.00 | -- | -- | 2,300,000.00 |
32. Long-term employee benefits payables
| Item | 2023.12.31 | 2022.12.31 |
| Termination benefits | 19,620,436.48 | 23,239,569.30 |
| Other long-term benefits | 63,319,844.40 | 65,216,081.72 |
| Subtotal | 82,940,280.88 | 88,455,651.02 |
| Less: Long-term Employee benefits payables due within one year | 5,890,000.00 | 5,890,000.00 |
| Total | 77,050,280.88 | 82,565,651.02 |
33. Deferred revenue
| Item | 2023.1.1 | Increase | Decrease | 2023.12.31 | Reason |
| Government grant | 472,861,881.90 | 70,475,200.00 | 35,662,925.41 | 507,674,156.49 | |
| Value added tax additional deduction | -- | 702,817,741.40 | 358,107,596.53 | 344,710,144.87 | |
| Total | 472,861,881.90 | 773,292,941.40 | 393,770,521.94 | 852,384,301.36 |
Note: The government grants which recognized as deferred revenue refer to Note Ⅷ. governmentgrants.
34. Other non-current liabilities
| Item | 2023.12.31 | 2022.12.31 |
| Shougang Group advance payment for construction | 3,899,674,951.80 | 4,532,018,467.20 |
35. Share capital
| Item | 2023.1.1 | Changes in current (+/-) | 2023.12.31 | ||||
| Shares issued | Bonus issue | Shares transferred from reserves | Others | Subtotal | |||
| Total amount of shares | 7,819,869,170.00 | -25,257,565.00 | -- | -- | -- | -25,257,565.00 | 7,794,611,605.00 |
Note: On October 18, 2023, through the resolution of the Company's 2022 annual general meetingand the first extraordinary general meeting of shareholders in 2023, a total of 25,257,565 shares ofrestricted stock in the 2021 restricted stock incentive plan were repurchased and cancelled. GrantThornton LLP has conducted an audit on the reduction of share capital and issued a capitalverification report with GTYZ (2023) No. 110C000511.
36. Capital reserve
| Item | 2023.1.1 | Increase | Decrease | 2023.12.31 |
| Share premium | 29,595,169,702.75 | -- | 55,046,090.91 | 29,540,123,611.84 |
| Other capital reserve | 48,878,848.75 | 770,078,729.76 | -- | 818,957,578.51 |
| Total | 29,644,048,551.50 | 770,078,729.76 | 55,046,090.91 | 30,359,081,190.35 |
Note: The change in share capital premium refers to the repurchase and cancellation of restrictedstocks granted in 2021 by the Company; ② Other changes in capital reserves refer to changes inequity of joint ventures and associates recognized by the company based on shareholding ratios,amortization expenses for equity incentives, and changes in equity ratios of subsidiaries.
37. Treasury shares
| Item | 2023.1.1 | Increase | Decrease | 2023.12.31 |
| Restricted stock incentive plan | 210,930,850.00 | -- | 80,303,655.91 | 130,627,194.09 |
Note: Due to the failure of the performance evaluation indicators for the 2022 fiscal year to meetthe Company level of performance evaluation conditions for the first period of lifting restrictions as
stipulated in the Incentive Plan, changes in some incentive objects due to organizational or personalreasons that do not meet the incentive conditions, and the implementation of the employee stockownership plan by Zhixin Co., the Company repurchased and cancelled a total of 25,257,565 sharesof restricted stocks that have been granted but have not yet been released, and paid RMB80,303,655.91 for equity incentive repurchase.
38. Other comprehensive income
Other comprehensive income attributable to the parent company in the balance sheet:
| Item | 2023.1.1 | During the period | 2023.12.31 | |
| Attributable to the parent company after tax | Less: Transferred from other comprehensive income in prior periods to retained earnings during the period | |||
| I. Other comprehensive income which cannot be reclassified into profits or losses | ||||
| Changes in fair value of other equity instrument investments | 158,251,774.94 | 91,322,264.62 | -- | 249,574,039.56 |
| II. Other comprehensive income to be reclassified into profits or losses | ||||
| Translation difference of foreign currency financial statements | -- | -65.91 | -- | -65.91 |
| Total other comprehensive incomes | 158,251,774.94 | 91,322,198.71 | -- | 249,573,973.65 |
Other comprehensive income attributable to the parent company in the income statement:
| Item | During the period | ||||
| Incurred before income tax for the period | Less: Transferred from other comprehensive income in prior periods to profit or loss during the period | Less: Income tax expenses | Less: Attributable to minority shareholders after tax | Attributable to parent company after tax | |
| I. Other comprehensive income which cannot be reclassified into profits or losses | |||||
| Changes in fair value of other equity instrument investments | 107,437,958.40 | -- | 16,115,693.78 | -- | 91,322,264.62 |
| II. Other comprehensive income to be reclassified into profits or losses | |||||
| Translation difference of foreign currency financial statements | -65.91 | -- | -- | -- | -65.91 |
| Total other comprehensive incomes | 107,437,892.49 | -- | 16,115,693.78 | -- | 91,322,198.71 |
The net-of-tax amount of other comprehensive income for the period is RMB91,322,198.71, amongwhich, the net-of-tax amount of other comprehensive income attributable to the parent company isRMB91,322,198.71; and net-of-tax amount of other comprehensive income attributable to minorityshareholders is RMB 0.00.
39. Special reserve
| Item | 2023.1.1 | Increase | Decrease | 2023.12.31 |
| Safety fund | 31,852,310.79 | 166,839,138.29 | 165,878,038.94 | 32,813,410.14 |
40. Surplus reserve
| Item | 2023.1.1 | Increase | Decrease | 2023.12.31 |
| Statutory reserve | 1,908,883,208.67 | 35,307,283.98 | -- | 1,944,190,492.65 |
| Discretionary surplus reserve | -- | -- | -- | -- |
| Total | 1,908,883,208.67 | 35,307,283.98 | -- | 1,944,190,492.65 |
41. Retained earnings
| Item | 2023 | 2022 | Appropriation/ Distribution ratio |
| Retained earnings at previous year before adjustment | 8,595,698,699.52 | 8,130,868,205.38 | -- |
| Adjustment of total retained earnings at previous year (Increase in “+”, decrease in “-”) | -- | -- | -- |
| Retained earnings at previous year after adjustment | 8,595,698,699.52 | 8,130,868,205.38 | |
| Add: Net profit attributable to shareholders of the company | 663,754,519.41 | 1,124,540,659.14 | -- |
| Less: Transfer to statutory surplus reserve | 35,307,283.98 | -- | |
| Transfer to discretionary surplus reserve | -- | -- | |
| Common Stock dividends payable | -- | 625,589,533.60 | |
| Dividends payable to other equity holders | -- | 34,120,631.40 | |
| Common stock dividends converted into share capital | -- | -- | |
| Retained earnings at current year | 9,224,145,934.95 | 8,595,698,699.52 | |
| Including: Surplus reserve attributable to shareholders of the company extracted by subsidiaries |
42. Revenue and cost of sales
(1) Revenue and cost of sales
| Item | 2023 | 2022 | ||
| Revenue | Cost of sales | Revenue | Cost of sales | |
| Main business | 110,360,385,867.79 | 105,336,679,879.43 | 114,602,567,434.30 | 108,013,843,862.04 |
| Other business | 3,401,057,765.64 | 3,114,259,348.92 | 3,539,616,115.17 | 3,053,711,458.24 |
| Total | 113,761,443,633.43 | 108,450,939,228.35 | 118,142,183,549.47 | 111,067,555,320.28 |
(2) Revenue and cost of sales presented as products
| Item | 2023 | 2022 | ||
| Revenue | Cost of sales | Revenue | Cost of sales | |
| Main business: | ||||
| Billet | 420,010,787.22 | 419,214,964.92 | 546,474,748.00 | 473,163,072.64 |
| Hot-rolled steel | 47,572,138,080.78 | 45,948,593,124.43 | 48,304,009,189.85 | 46,623,686,161.87 |
| Cold-rolled steel | 60,288,367,715.32 | 57,068,321,706.00 | 63,569,306,854.33 | 59,017,610,809.13 |
| Other steels | 2,079,869,284.47 | 1,900,550,084.08 | 2,182,776,642.12 | 1,899,383,818.40 |
| Subtotal | 110,360,385,867.79 | 105,336,679,879.43 | 114,602,567,434.30 | 108,013,843,862.04 |
| Other business | ||||
| Power | 1,438,721,205.53 | 1,548,462,791.82 | 1,386,026,949.59 | 1,380,897,100.66 |
| Solid waste | 1,254,710,199.53 | 1,092,896,195.57 | 1,338,134,781.31 | 1,199,982,844.66 |
| Others | 707,626,360.58 | 472,900,361.53 | 815,454,384.27 | 472,831,512.92 |
| Subtotal | 3,401,057,765.64 | 3,114,259,348.92 | 3,539,616,115.17 | 3,053,711,458.24 |
| Total | 113,761,443,633.43 | 108,450,939,228.35 | 118,142,183,549.47 | 111,067,555,320.28 |
(3) Breakdown of revenue information
| Item | 2023 |
| Revenue from main business | 110,360,385,867.79 |
| Including: recognised at a certain point in time | 110,360,385,867.79 |
| recognised during a certain period of time | -- |
| Revenue from other business | 3,401,057,765.64 |
| Total | 113,761,443,633.43 |
As of 31 December 2023, the amount of revenue corresponding to the performance obligationsthat the company has signed but not yet fulfilled is RMB 4,585.0989 million. The Companyexpects to recognize all the revenue in 2024.
(4) Sales revenue for pilot run
| Item | 2023 | 2022 | ||
| Revenue | Cost of sales | Revenue | Cost of sales | |
| Sales revenue for fixed assets pilot run | 727,577,085.52 | 570,215,586.70 | 902,657,089.87 | 897,638,764.80 |
43. Taxes and surcharges
| Item | 2023 | 2022 |
| Environmental protection tax | 29,378,169.09 | 33,744,422.88 |
| Urban maintenance and construction tax | 82,829,113.41 | 101,654,296.06 |
| Education surcharge | 60,232,484.87 | 74,499,878.54 |
| Resources duty | 42,514,815.04 | 41,927,760.60 |
| Property tax | 200,940,588.26 | 197,700,840.52 |
| Land usage tax | 222,030,070.11 | 221,682,543.86 |
| Vehicle and vessel usage tax | 339,296.12 | 336,360.10 |
| Stamp duty | 135,239,940.90 | 151,537,114.35 |
| Other taxes | 283,799.72 | 177,866.02 |
| Total | 773,788,277.52 | 823,261,082.93 |
Note: The provision and payment standards of taxes and surcharges refer to Note IV. Taxation.
44. Selling and distribution expenses
| Item | 2023 | 2022 |
| Staff costs | 177,495,001.31 | 183,609,735.80 |
| Depreciation and amortization | 101,427.85 | 107,397.02 |
| Other regualr expenses | 70,382,183.96 | 54,279,893.40 |
| Total | 247,978,613.12 | 237,997,026.22 |
45. General and administrative expenses
| Item | 2023 | 2022 |
| Staff costs | 662,496,839.12 | 668,044,773.52 |
| Depreciation and amortization | 336,502,316.28 | 336,647,438.61 |
| Other regular expenses | 290,613,854.13 | 266,483,526.93 |
| Total | 1,289,613,009.53 | 1,271,175,739.06 |
46. Research and development expenses
| Item | 2023 | 2022 |
| Staff costs | 418,054,111.94 | 575,278,177.87 |
| Other regular expenses | 73,024,683.39 | 51,645,079.49 |
| Total | 491,078,795.33 | 626,923,257.36 |
47. Financial expenses
| Item | 2023 | 2022 |
| Interest costs | 1,459,986,955.71 | 1,876,045,277.79 |
| Including: Interest expenses on lease liabilities | 19,884,783.97 | 4,408,691.60 |
| Less: interest capitalized | -- | 12,335,416.66 |
| Interest expenses | 1,459,986,955.71 | 1,863,709,861.13 |
| Less:interest income | 107,859,174.95 | 132,829,545.65 |
| Discount on notes acceptance | 69,038,764.98 | 22,128,963.88 |
| Exchange losses and gains | -11,596,478.72 | -29,489,525.05 |
| Bank charges and others | -56,359,813.15 | 8,064,537.04 |
| Total | 1,353,210,253.87 | 1,731,584,291.35 |
Note: Capitalized interest amounts have been accounted for construction in progress. Thecapitalization rate used to calculate and determine the capitalization amount of borrowing costsin previous period is 4.05%.
48. Other income
| Item | 2023 | 2022 |
| Related to assets | 35,422,925.41 | 39,401,467.49 |
| Related to income | 102,064,691.25 | 33,934,028.23 |
| Value added tax deduction | 358,107,596.53 | 646,083.96 |
| Refund of personal income tax commission | 1,570,586.42 | 2,160,426.28 |
| Total | 497,165,799.61 | 76,142,005.96 |
The details of government grants refer to Note Ⅷ government grants.
49. Investment gain
| Item | 2023 | 2022 |
| Investment gain from long-term equity investments under the equity method | -192,776,595.40 | -227,515,854.43 |
| Gain on disposal of long-term equity investments | -1,083,074.06 | -583,440.77 |
| Dividend from other equity instruments investments | 7,412,132.80 | 5,614,882.12 |
| Interest gain from entrusted loans | 8,990,991.36 | 11,275,389.73 |
| Others | 3,816,230.52 | -- |
| Total | -173,640,314.78 | -211,209,023.35 |
50. Gains from changes in fair value
| Sources of gains from changes in fair value | 2023 | 2022 |
| Other non-current financial assets designated as measured at fair value through profit or loss | -4,224,788.99 | -765,992.40 |
51. Credit impairment losses (loss in “-”)
| Item | 2023 | 2022 |
| Provision for bad debts of notes receivable | 2,735,686.54 | 139,430.10 |
| Provision for bad debts of accounts receivable | 11,362,839.02 | 5,013,380.11 |
| Provision for bad debts of financing receivable | 253,191.32 | 104,938.54 |
| Provision for bad debts of other receivables | 718,309.36 | 385,715.13 |
| Provision for bad debts of other current assets | 33,127,315.83 | -- |
| Total | 48,197,342.07 | 5,643,463.88 |
52. Impairment losses on assets (loss in “-”)
| Item | 2023 | 2022 |
| Provision for invertory impairment | -600,099,065.24 | -402,994,496.88 |
53. Gains on disposal of assets
| Item | 2023 | 2022 |
| Gains from disposal of fixed assets (loss in “-”) | 567,839.38 | -611,088.11 |
54. Non-operating income
| Item | 2023 | 2022 | Recognised as non-recurring gains or losses in 2023 |
| Gains on assets scrapping or damage | 908,690.98 | 5,051,368.61 | 908,690.98 |
| Compensation payments | 1,861,990.05 | 243,985.86 | 1,861,990.05 |
| Others | 4,204,805.41 | 6,008,845.31 | 4,204,805.41 |
| Total | 6,975,486.44 | 11,304,199.78 | 6,975,486.44 |
55. Non-operating expenses
| Item | 2023 | 2022 | Recognised as non-recurring gains or losses in 2023 |
| Losses on assets scrapping or damage | 23,542,645.85 | 61,414,433.22 | 23,542,645.85 |
| Compensation and penalty | 1,493,872.04 | 17,550.00 | 1,493,872.04 |
| Carbon emission quota trading | 4,006,315.70 | 5,264,317.89 | -- |
| Others | 415,021.11 | 407,108.31 | 415,021.11 |
| Donation | -- | 978,613.90 | -- |
| Total | 29,457,854.70 | 68,082,023.32 | 25,451,539.00 |
56. Income tax expenses
(1) Details of income tax expenses
| Item | 2023 | 2022 |
| Current tax in accordance with tax laws and related regulations | 112,909,545.39 | 219,005,828.78 |
| Deffered income tax expenses | 33,605,509.90 | 64,692,649.53 |
| Total | 146,515,055.29 | 283,698,478.31 |
(2) Reconciliation between income tax expenses and profit before income tax is as follows:
| Item | 2023 | 2022 |
| Profit before tax | 900,319,899.50 | 1,793,113,877.83 |
| Tax at the applicable tax rate of 15% | 135,047,984.93 | 268,967,081.67 |
| Taxation effect of different tax rates of subsidiaries | 6,900,203.08 | 9,416,049.20 |
| Adjustment of income tax in the prior year | 5,401,974.76 | -167,423.08 |
| Share of profit or loss of joint ventures and associates under the equity method | 41,547,885.35 | 37,956,945.34 |
| Income not subject to tax（expressed in“-”） | -1,111,819.92 | -842,232.32 |
| Non-deductible costs, expenses and losses | 3,612,674.67 | 9,328,763.06 |
| Taxation effect of the change in the applicable tax rate on the Opening balance of the deffered tax | -- | -- |
| Taxation effect of utilizing previous unrecognized tax losses and deductible temporary differences (expressed in “-”) | -23,524,321.54 | -39,016,139.47 |
| Taxation effect of unrecognized tax losses and deductible temporary differences | 9,405,358.55 | 296,879,494.17 |
| Taxation effect of research and development expenses (expressed in “-”) | -8,264,888.30 | -7,022,222.63 |
| Others | -22,499,996.29 | -291,801,837.63 |
| Income tax expenses | 146,515,055.29 | 283,698,478.31 |
57. Notes to cash flow statement
(1) Proceeds from other operating activities
| Item | 2023 | 2022 |
| Government grants received | 173,870,477.67 | 144,356,668.51 |
| Security deposit received | 1,714,500.00 | 7,797,264.28 |
| Other non-operating income received | 5,610,435.02 | 6,252,831.17 |
| Other receivables received | 366,102.15 | 907,256.25 |
| Restricted funds received | 894,038,447.29 | 607,900,032.50 |
| Total | 1,075,599,962.13 | 767,214,052.71 |
(2) Payments for other operating activities
| Item | 2023 | 2022 |
| Expenses paid | 469,828,037.02 | 386,282,467.41 |
| Non-operating expenses paid | 5,914,076.77 | 6,667,590.10 |
| Restricted funds paid | 6,500,000.00 | -- |
| Total | 482,242,113.79 | 392,950,057.51 |
(3) Proceeds from material investing activities
| Item | 2023 | 2022 |
| Proceeds from disposal of equity of Zhixin Co. by New-E Co. | 1,260,401,500.00 | -- |
| Proceeds from disposal of Ordos Baotou Steel Shourui Material Technology Co., Ltd. by Steel Trading | -- | 38,609,883.16 |
| Total | 1,260,401,500.00 | 38,609,883.16 |
(4) Proceeds from other investing activities
| Item | 2023 | 2022 |
| Interest income | 106,533,297.74 | 132,789,335.69 |
(5) Payment for material investing activities
| Item | 2023 | 2022 |
| Entrusted loan payment to Zhonghong | 12,311,109.00 | 7,700,000.00 |
| Purchase payment for ball burning | 650,162,899.68 | 781,780,592.71 |
| Total | 662,474,008.68 | 789,480,592.71 |
(6) Payment for other financing activities
| Item | 2023 | 2022 |
| Financial expenses-commissions fee | 1,203,876.70 | 1,087,113.74 |
| Paying back the borrowings from Shougang Group | 590,000,000.00 | 102,661,561.32 |
| Lease payments | 51,873,444.07 | 18,776,827.47 |
| Payment for non-public offering fees | -- | 14,443,431.52 |
| Investment funds payment to minority shareholders | 364,349,130.58 | -- |
| Payment for equity incentive repurchasement | 80,303,655.91 | -- |
| Cash payment for New Energy Materials Co. splitting | 887,314.66 | -- |
| Total | 1,088,617,421.92 | 136,968,934.05 |
(7) Changes in liabilities arising from financing activities (Unit: RMB 0,000)
| Item | Opening balance | Cash movement | Non-cash movement | Closing balance | |||
| Cash inflow | Cash outflow | Accrued interest | Fair value changes | Others | |||
| Short-term borrowing | 2,958,000.61 | 2,814,572.27 | 3,188,867.58 | 82,430.26 | -- | -- | 2,666,135.56 |
| Long-term borrowing | 1,207,484.04 | 370,183.00 | 218,477.13 | 51,301.39 | -- | -- | 1,410,491.30 |
| Bonds payable | 353,468.18 | 300,000.00 | 562,929.93 | 9,791.39 | -- | -- | 100,329.64 |
| Lease Liabilities | 8,646.75 | -- | 5,187.35 | 1,988.48 | -- | 43,910.07 | 49,357.95 |
| Total | 4,527,599.58 | 3,484,755.27 | 3,975,461.99 | 145,511.52 | -- | 43,910.07 | 4,226,314.45 |
Note: Others refer to the additional lease liabilities for the current period.
58. Supplements to statement of cash flows
(1) Supplementary information
| Supplementary information | 2023 | 2022 |
| 1. Reconciliation of net profit to net cash flows from operating activities: | ||
| Net profit | 753,804,844.21 | 1,509,415,399.52 |
| Add: Impairment losses on assets | 600,099,065.24 | 402,994,496.88 |
| Credit impairment losses | -48,197,342.07 | -5,643,463.88 |
| Depreciation of fixed assets | 7,735,539,138.64 | 7,606,486,882.19 |
| Depreciation of right-of-use assets | 33,163,882.30 | 17,047,777.32 |
| Amortization of intangible assets | 184,816,598.20 | 174,693,821.90 |
| Amortizaiton of long-term deffered expenses | 973,269.04 | 588,715.53 |
| Losses on disposal of fixed assets, intangible assets and other long-term assets (Gains as in “-”) | -567,839.38 | 611,088.11 |
| Losses on written-off fixed assets (Gains as in “-”) | 22,633,954.87 | 56,363,064.61 |
| Losses on fair value changes (Gain as in “-”) | 4,224,788.99 | 765,992.40 |
| Financial expenses (Income as in “-”) | 1,353,210,253.87 | 1,731,584,291.35 |
| Investment losses (Income as in “-”) | 173,640,314.78 | 211,209,023.35 |
| Decrease in deferred tax assets (Increase as in “-”) | -38,714,829.81 | -212,634,532.02 |
| Increase in deferred tax liabilities (Decrease as in “-”) | 56,941,878.24 | 277,327,181.55 |
| Decrease in inventories (Increase as in “-”) | -764,110,188.47 | -344,414,864.08 |
| Decrease in receivables from operating activities (Increase as in “-”) | -551,504,080.80 | 850,893,260.68 |
| Increase in payables from operating activities (Decrease as in “-”) | -4,243,063,771.00 | -2,898,834,775.85 |
| Others | 881,416,134.97 | 665,782,138.24 |
| Net cash flow from operating activities | 6,154,306,071.82 | 10,044,235,497.80 |
| 2. Significant non-cash payments for investing and financing activities: | ||
| Conversion of debt into capital | -- | -- |
| Convertible bonds due within one year | -- | -- |
| Newly added right-of-use assets in the current period | 436,316,890.81 | -- |
| 3. Net changes in cash and cash equivalents: | ||
| Closing balance of cash | 8,904,660,678.08 | 8,329,215,003.68 |
| Less: Opening balance of cash | 8,329,215,003.68 | 8,535,871,373.08 |
| Add: Closing balance of cash equivalents | -- | -- |
| Less: Opening balance of cash equivalents | -- | -- |
| Net increase in cash and cash equivalents | 575,445,674.40 | -206,656,369.40 |
Note: The amount of endorsement and transfer of acceptance notes received from goods sales of the
Company is RMB 7,075,729.08.
(2) Components of cash and cash equivalents
| Item | 2023.12.31 | 2022.12.31 |
| 1. Cash | 8,904,660,678.08 | 8,329,215,003.68 |
| Including: Cash on hand | 33,669.68 | 23,581.90 |
| Digital currency | -- | -- |
| Balances in banks without restriction | 8,904,626,995.66 | 8,329,191,409.04 |
| Other monetary funds without restriction | 12.74 | 12.74 |
| 2. Cash equivalents | ||
| Including: bonds investment due within three months | -- | -- |
| 3. Closing balance of cash and cash equivalents | 8,904,660,678.08 | 8,329,215,003.68 |
| Including: restricted cash and cash equivalents from the parent company or its subsidiaries | -- | -- |
(3) Monetary funds not belong to cash and cash equivalents
| Item | 2023.12.31 | 2022.12.31 | Reasons for monetary funds not belong to cash and cash equivalents |
| Other monetary funds | 246,369,301.95 | 1,140,407,749.24 | Security deposit |
| Accrued interest | 2,175,646.34 | 849,769.13 | Accruing interest based on actual interest rate |
| Total | 248,544,948.29 | 1,141,257,518.37 |
59. Notes to Statement of Changes in Shareholders' Equity
Note: There is no amount in the "Other" item of the statement of changes in shareholder equity Ⅵfor the current period.
60. Foreign currency monetary items
(1) Foreign currency monetary items
| Item | Closing balance for foreign currency | Exchange rate | Closing balance converted to RMB |
| Cash at bank and on hand | |||
| Including: USD | 268,023.92 | 7.0827 | 1,898,333.02 |
| Accounts payable | |||
| Including: USD | 2,020.88 | 7.0827 | 14,313.29 |
(2) Overseas operating entities
Subsidiary of the Company, Zhixin Electromagnetic (Hong Kong) Trading Co., Ltd., mainlyoperates in Hong Kong with the Hong Kong dollar as the functional currency. The functionalcurrency has not changed.
61. Lease
(1) The Company as lessee
| Item | 2023 |
| Short-term leases | 2,949,195.71 |
| Low-value leases | -- |
| Variable lease payments not measured as lease liabilities | - |
(2) The Company as lessor
Operating leases:
① lease revenue
| Item | 2023 |
| Lease revenue | 38,277,615.46 |
| Including: income related to variable lease payments not included in lease receipts | -- |
② The amount of undiscounted lease receipts that will be received in each of the five consecutivefiscal years after the balance sheet date and the total amount of undiscounted lease receipts that willbe received in the remaining fiscal years.
| Item | 2023.12.31 | 2022.12.31 |
| Within 1 year | 35,735,251.77 | 33,328,200.36 |
| 1 – 2 years | 6,920,087.96 | 1,793,773.33 |
| 2 – 3 years | 4,658,975.20 | -- |
| Over 3 years | 37,660,049.61 | -- |
| Total | 84,974,364.53 | 35,121,973.69 |
VI. R&D expenses
| Item | 2023 | 2022 | ||
| Expensed amount | Capitalized amount | Expensed amount | Capitalized amount | |
| Employee benefits payable expenses | 418,054,111.94 | -- | 575,278,177.87 | -- |
| Other expenses | 73,024,683.39 | -- | 51,645,079.49 | -- |
| Total | 491,078,795.33 | -- | 626,923,257.36 | -- |
VII. Interests in other entities
1. Interests in subsidiaries
(1) Composition of the Company
Unit：RMB
| Subsidiary | Registered Capital | Main Operation place | Registration place | Business nature | Shareholding ratio (%) | Acquisition method | |
| Directly | Indirectly | ||||||
| Subsidiary | Registered Capital | Main Operation place | Registration place | Business nature | Shareholding ratio (%) | Acquisition method | |
| Directly | Indirectly | ||||||
| Shougang Jingtang United Iron & Steel Co., Ltd. | 3,582,167.63 | Tangshan, PRC | Tangshan, PRC | Production and sales | 70.18 | 29.82 | Business combination under common control |
| Beijing Shougang Cold Rolling Co., Ltd. | 260,000.00 | Beijing, PRC | Beijing, PRC | Production and sales | 70.28 | -- | Establish or investment, etc. |
| Qian'an Shougang Metallurgical Technology Co., Ltd. | 190.00 | Qian’an, PRC | Qian’an, PRC | Consulting service | 100.00 | -- | Business combination under common control |
| Shougang Zhixin Qian'an Electromagnetic Materials Co., Ltd. | 1,129,982.84 | Qian’an, PRC | Qian’an, PRC | Production and sales | 66.23 | -- | Establish or investment, etc. |
| Beijing Shougang Steel Trading Investment Management Co., Ltd. | 113,679.82 | Beijing, PRC | Beijing, PRC | Production and sales | 100.00 | -- | Business combination under common control |
(2) Significant non-wholly owned subsidiaries
Unit：RMB
| Subsidiary | Proportion of minority shareholders (%) | Net profit/ (loss) attributable to non-controlling interests in reporting period | Dividends declared and distributed to non-controlling interests in reporting period | Non-controlling interests at the end of reporting period |
| Beijing Shougang Cold Rolling Co., Ltd. | 29.72 | 7,621,479.70 | -- | -309,021,464.85 |
| Shougang Zhixin Qian'an Electromagnetic Materials Co., Ltd. | 33.77 | 87,355,475.30 | 155,505,996.34 | 4,906,442,911.49 |
(3) Major financial information of significant non-wholly owned subsidiaries
Unit：RMB
| Subsidiary | 2023.12.31 | |||||
| Current assets | Non-current assets | Total assets | Current liabilities | Non-current liabilities | Total liabilities | |
| Beijing Shougang Cold Rolling Co., Ltd. | 1,523,555,615.93 | 3,650,902,283.79 | 5,174,457,899.72 | 2,216,553,392.64 | 3,993,850,445.05 | 6,210,403,837.69 |
| Shougang Zhixin Qian'an Electromagnetic Materials Co., Ltd. | 5,315,471,057.37 | 15,796,111,190.51 | 21,111,582,247.88 | 5,228,317,348.03 | 1,401,485,982.54 | 6,629,803,330.57 |
Continued (1):
| Subsidiary | 2022.12.31 | |||||
| Current assets | Non-current assets | Total assets | Current liabilities | Non-current liabilities | Total liabilities | |
| Beijing Shougang Cold Rolling Co., Ltd. | 2,317,199,255.15 | 3,836,449,761.31 | 6,153,649,016.46 | 2,646,502,899.97 | 4,570,607,323.65 | 7,217,110,223.62 |
| Shougang Zhixin Qian'an Electromagnetic Materials Co., Ltd. | 5,760,507,592.72 | 15,459,717,661.10 | 21,220,225,253.82 | 7,660,663,373.94 | 1,401,952,326.63 | 9,062,615,700.57 |
Continued (2):
| Subsidiary | 2023 | 2022 |
| Operating revenue | Net profit | Total comprehensive income | Cash flow from operating activities | Operating revenue | Net profit | Total comprehensive income | Cash flow from operating activities | |
| Beijing Shougang Cold Rolling Co., Ltd. | 10,222,499,759.89 | 25,644,278.95 | 25,644,278.95 | 490,942,970.07 | 10,781,367,755.25 | 216,492,299.49 | 216,492,299.49 | 92,949,448.40 |
| Shougang Zhixin Qian'an Electromagnetic Materials Co., Ltd. | 14,317,006,979.29 | 308,135,956.50 | 308,135,856.97 | 1,097,996,701.35 | 13,918,944,889.64 | 1,080,892,444.41 | 1,080,892,444.41 | 1,658,031,259.27 |
2. Changes in the scope of consolidation due to other reasons
In April 2023, the Company completed the separation of its subsidiary Beijing Shougang NewEnergy Automobile Material Technology Co., Ltd. and completed the clear deregistrationprocedures of the separated Beijing Shougang New Energy Materials Technology Co., Ltd. inDecember. After the deregistration, the number of subsidiaries within the scope of consolidation forcurrent period reduced from 6 to 5.
3. Interests in joint ventures and associates
(1) Significant joint ventures and associates
| Joint ventures or associates | Main operating place | Place of registration | Business nature | Shareholding proportion (%) | Accounting method | |
| Direct | Indirect | |||||
| ①Jiont ventures | ||||||
| Tangshan Guoxing Industrial Co., Ltd. | Tangshan, PRC | Tangshan, PRC | Manufacturing | 50.00 | -- | Equity method |
| Tangshan Shougang Jingtang Xishan Coking Co., Ltd. | Tangshan, PRC | Tangshan, PRC | Coking | 50.00 | -- | Equity method |
| ②Associates | ||||||
| Tangshan Tangcao Railway Co., Ltd. | Tangshan, PRC | Tangshan, PRC | Transportation | 16.19 | -- | Equity method |
| Tangshan Caofeidian Dunshi New Construction Material Co., Ltd. | Tangshan, PRC | Tangshan, PRC | Building Material | 25.00 | -- | Equity method |
| Qian'an Sinochem Coal Chemical Industrial Co., Ltd. | Qian’an, PRC | Qian’an, PRC | Coking | 49.82 | -- | Equity method |
| Beijing Shouxin Jinyuan Management Consulting Center (Limited Partnership) | Beijing, PRC | Beijing, PRC | Investment | 20.00 | -- | Equity method |
| Beijing Dingshengcheng Packaging Materials Co., Ltd. | Beijing, PRC | Beijing, PRC | Manufacturing | 45.00 | -- | Equity method |
| Ningbo Shougang Zhejin Steel Co., Ltd. | Ningbo, PRC | Ningbo, PRC | Manufacturing | 40.00 | -- | Equity method |
| Guangzhou Jinghai Shipping Co., Ltd. | Guangzhou, PRC | Guangzhou, PRC | Transportation | 20.00 | -- | Equity method |
| Shougang (Qingdao) Steel Industry Co., Ltd. | Qingdao, PRC | Qingdao, PRC | Manufacturing | 35.00 | -- | Equity method |
| Tianjin Shougang Steel Processing&Distribution Co., Ltd. | Tianjin, PRC | Tianjin, PRC | Manufacturing | 35.00 | -- | Equity method |
| Hebei Jingji Industry & Trading Co., Ltd. | Shijiazhuang, PRC | Shijiazhuang, PRC | Manufacturing | 35.71 | -- | Equity method |
| Qian'an Jinyu Shougang Environmental Protection Technology Co., Ltd. | Tianjin, PRC | Tianjin, PRC | Building Material | 35.00 | -- | Equity method |
(2) Primary financial information of significant joint ventures
| Item | Tangshan Guoxing Industrial Co., Ltd. | Tangshan Zhonghong Carbon Chemical Co., Ltd. | Tangshan Shougang Jingtang Xishan Coking Co., Ltd. | |||
| 2023.12.31 | 2022.12.31 | 2023.12.31 | 2022.12.31 | 2023.12.31 | 2022.12.31 | |
| Item | Tangshan Guoxing Industrial Co., Ltd. | Tangshan Zhonghong Carbon Chemical Co., Ltd. | Tangshan Shougang Jingtang Xishan Coking Co., Ltd. | |||
| 2023.12.31 | 2022.12.31 | 2023.12.31 | 2022.12.31 | 2023.12.31 | 2022.12.31 | |
| Current assets | 87,762,250.00 | 81,326,897.38 | -- | 4,453,756.17 | 2,415,667,328.21 | 2,203,316,115.22 |
| Including： Cash and cash equivalents | 11,831,560.37 | 15,459,879.44 | -- | 4,153,756.17 | 921,218,575.78 | 909,643,194.30 |
| Non-current assets | 67,486,657.73 | 76,981,144.98 | -- | 595,492,113.45 | 1,124,868,967.63 | 1,384,560,026.25 |
| Total assets | 155,248,907.73 | 158,308,042.36 | -- | 599,945,869.62 | 3,540,536,295.84 | 3,587,876,141.47 |
| Current liabilities | 64,953,492.81 | 75,404,455.29 | -- | 580,665,263.21 | 1,340,411,421.87 | 1,384,913,879.38 |
| Non-current liabilities | 4,929,259.45 | 6,537,093.21 | -- | -- | 14,286,600.00 | 6,675,000.00 |
| Total liabilities | 69,882,752.26 | 81,941,548.50 | -- | 580,665,263.21 | 1,354,698,021.87 | 1,391,588,879.38 |
| Net assets | 85,366,155.47 | 76,366,493.86 | -- | 19,280,606.41 | 2,185,838,273.97 | 2,196,287,262.09 |
| Including: Non-controlling interests | -- | -- | -- | -- | -- | -- |
| Equity attributable to shareholders of the company | 85,366,155.47 | 76,366,493.86 | -- | 19,280,606.41 | 2,185,838,273.97 | 2,196,287,262.09 |
| Net assets calculated by shareholding proportion | 42,683,077.74 | 38,183,246.93 | -- | 9,640,303.21 | 1,092,919,136.99 | 1,098,143,631.05 |
| Adjustment | ||||||
| Including: Goodwill | -- | -- | -- | -- | -- | -- |
| Unrealized profit or loss of internal transaction | -- | -- | -- | -- | -- | -- |
| Impairment | -- | -- | -- | -- | -- | -- |
| Others | -- | -- | -- | -- | -- | -- |
| Carrying value of equity investment in the joint venture | 42,683,077.74 | 38,183,246.93 | -- | 9,640,303.21 | 1,092,919,136.99 | 1,098,143,631.05 |
| Fair value of equity investment with quoted market price | -- | -- | -- | -- | -- | -- |
Continued:
| Item | Tangshan Guoxing Industrial Co., Ltd. | Tangshan Zhonghong Carbon Chemical Co., Ltd. | Tangshan Shougang Jingtang Xishan Coking Co., Ltd. | |||
| 2023 | 2022 | 2023 | 2022 | 2023 | 2022 | |
| Operating revenue | 152,846,388.61 | 164,773,046.58 | -- | -- | 11,913,406,274.48 | 13,921,855,400.28 |
| Financial expenses | 67.65 | 188,156.32 | 17,095,669.83 | 23,772,275.17 | 18,636,499.11 | 32,965,577.94 |
| Income tax expense | 4,299,552.60 | 3,565,111.77 | -- | -- | 21,449,766.52 | -5,515,983.23 |
| Net profit | 11,993,957.13 | 7,790,570.91 | -17,114,456.30 | -23,791,852.47 | 28,813,025.73 | 56,141,503.88 |
| Net profit from discontinuing operations | -- | -- | -- | -- | -- | -- |
| Other comprehensive income | -- | -- | -- | -- | -- | -- |
| Total comprehensive income | 11,993,957.13 | 7,790,570.91 | -17,114,456.30 | -23,791,852.47 | 28,813,025.73 | 56,141,503.88 |
| Dividends received from joint venture | 1,500,000.00 | 2,000,000.00 | -- | -- | 20,000,000.00 | 46,000,000.00 |
(3) Primary financial information of significant associates
| Item | Tangshan Tangcao Railway Co., Ltd. | Tangshan Caofeidian Dunshi New Construction Material Co., Ltd. | Qian'an Sinochem Coal Chemical Industrial Co., Ltd. | |||
| 2023.12.31 | 2022.12.31 | 2023.12.31 | 2022.12.31 | 2023.12.31 | 2022.12.31 | |
| Current assets | 11,997,404.09 | 37,615,636.69 | 57,009,150.19 | 77,330,625.86 | 1,684,760,023.03 | 2,071,780,230.13 |
| Non-current assets | 7,954,587,079.21 | 8,175,281,488.59 | 210,901,577.81 | 224,215,514.07 | 2,454,695,383.56 | 2,457,397,455.41 |
| Total assets | 7,966,584,483.30 | 8,212,897,125.28 | 267,910,728.00 | 301,546,139.93 | 4,139,455,406.59 | 4,529,177,685.54 |
| Current liabilities | 2,276,603,433.89 | 1,026,481,331.40 | 23,294,131.49 | 31,678,142.16 | 2,778,212,894.87 | 2,727,774,901.17 |
| Non-current liabilities | 4,194,211,225.00 | 5,254,694,650.00 | 15,659,291.41 | -- | 18,781,936.85 | 20,417,377.09 |
| Total liabilities | 6,470,814,658.89 | 6,281,175,981.40 | 38,953,422.90 | 31,678,142.16 | 2,796,994,831.72 | 2,748,192,278.26 |
| Net assets | 1,495,769,824.41 | 1,931,721,143.88 | 228,957,305.10 | 269,867,997.77 | 1,342,460,574.87 | 1,780,985,407.28 |
| Including: Non-controlling interests | -- | -- | -- | -- | -- | -- |
| Equity attributable to shareholders of the company | 1,495,769,824.41 | 1,931,721,143.88 | 228,957,305.10 | 269,867,997.77 | 1,342,460,574.87 | 1,780,985,407.28 |
| Net assets calculated by shareholding proportion | 242,165,134.57 | 312,745,653.19 | 57,239,326.28 | 67,466,999.44 | 668,873,969.41 | 887,363,090.11 |
| Adjustment | ||||||
| Including: Goodwill | -- | -- | -- | -- | 4,147,420.21 | 4,147,420.21 |
| Unrealized profit or loss of internal transaction | -- | -- | -- | -- | -- | -- |
| Impairment | -- | -- | -- | -- | -- | -- |
| Others | -- | -- | -- | -- | -- | -- |
| Carrying value of equity investment in the associates | 242,165,134.57 | 312,745,653.19 | 57,239,326.28 | 67,466,999.44 | 673,021,389.62 | 891,510,510.32 |
| Fair value of equity investment with quoted market price | -- | -- | -- | -- | -- | -- |
Continued:
| Item | Beijing Shouxin Jinyuan Management Consulting Center (Limited Partnership) | Beijing Dingshengcheng Packaging Materials Co., Ltd. | Qian'an Jinyu Shougang Environmental Protection Technology Co., Ltd. | |||
| 2023.12.31 | 2022.12.31 | 2023.12.31 | 2022.12.31 | 2023.12.31 | 2022.12.31 | |
| Current assets | 49,953,014.72 | 63,963,941.09 | 71,276,041.71 | 59,655,006.56 | 38,020,972.68 | 32,667,291.24 |
| Non-current assets | 748,940,871.51 | 694,420,798.63 | 503,489.11 | 618,495.73 | 243,292,858.01 | 214,254,258.49 |
| Total assets | 798,893,886.23 | 758,384,739.72 | 71,779,530.82 | 60,273,502.29 | 281,313,830.69 | 246,921,549.73 |
| Current liabilities | 159,846,777.25 | 152,354,244.94 | 24,261,639.55 | 22,971,249.27 | 27,238,639.49 | 56,004,281.62 |
| Non-current liabilities | -- | -- | --- | -- | 159,041,166.67 | 88,818,500.00 |
| Total liabilities | 159,846,777.25 | 152,354,244.94 | 24,261,639.55 | 22,971,249.27 | 186,279,806.16 | 144,822,781.62 |
| Net assets | 639,047,108.98 | 606,030,494.78 | 47,517,891.27 | 37,302,253.02 | 95,034,024.53 | 102,098,768.11 |
| Including: Non-controlling interests | -- | -- | -- | -- | -- | -- |
| Equity attributable to shareholders of the | 639,047,108.98 | 606,030,494.78 | 47,517,891.27 | 37,302,253.02 | 95,034,024.53 | 102,098,768.11 |
| Item | Beijing Shouxin Jinyuan Management Consulting Center (Limited Partnership) | Beijing Dingshengcheng Packaging Materials Co., Ltd. | Qian'an Jinyu Shougang Environmental Protection Technology Co., Ltd. | |||
| 2023.12.31 | 2022.12.31 | 2023.12.31 | 2022.12.31 | 2023.12.31 | 2022.12.31 | |
| company | ||||||
| Net assets calculated by shareholding proportion | 129,100,426.06 | 122,430,402.99 | 21,383,051.07 | 16,786,013.87 | 33,261,908.60 | 35,734,568.85 |
| Adjustment | ||||||
| Including: Goodwill | -- | -- | 44,544.87 | 44,544.87 | -- | -- |
| Unrealized profit or loss of internal transaction | -- | -- | -- | -- | -- | -- |
| Impairment | -- | -- | -- | -- | -- | -- |
| Others | -- | -- | -- | -- | -- | -- |
| Carrying value of equity investment in the associates | 129,100,426.06 | 122,430,402.99 | 21,427,595.94 | 16,830,558.74 | 33,261,908.60 | 35,734,568.85 |
| Fair value of equity investment with quoted market price | -- | -- | -- | -- | -- | -- |
Continued:
| Item | Tangshan Tangcao Railway Co., Ltd. | Tangshan Caofeidian Dunshi New Construction Material Co., Ltd. | Qian'an Sinochem Coal Chemical Industrial Co., Ltd. | |||
| 2023 | 2022 | 2023 | 2022 | 2023 | 2022 | |
| Operating revenue | 95,540,290.94 | 93,455,166.47 | 298,428,204.39 | 440,890,510.08 | 7,607,961,864.64 | 8,253,813,834.07 |
| Net profit | -436,239,033.71 | -431,009,356.99 | -20,910,692.67 | 3,700,430.86 | -438,524,832.41 | -414,611,940.11 |
| Net profit from discontinuing operations | -- | -- | -- | -- | -- | -- |
| Other comprehensive income | -- | -- | -- | -- | -- | -- |
| Total comprehensive income | -436,239,033.71 | -431,009,356.99 | -20,910,692.67 | 3,700,430.86 | -438,524,832.41 | -414,611,940.11 |
| Dividend received from associates | -- | -- | 5,000,000.00 | 12,500,000.00 | -- | -- |
Continued:
| Item | Beijing Shouxin Jinyuan Management Consulting Center (Limited Partnership) | Beijing Dingshengcheng Packaging Materials Co., Ltd. | Qian'an Jinyu Shougang Environmental Protection Technology Co., Ltd. | |||
| 2023 | 2022 | 2023 | 2022 | 2023 | 2022 | |
| Operating income | 534,343,438.59 | 167,658,027.20 | 183,268,726.98 | 147,636,999.45 | 83,963,345.96 | 34,551,131.55 |
| Net profit | 416,836,070.09 | 123,487,685.42 | 10,215,638.25 | 6,318,818.62 | -7,064,743.58 | 1,507,371.77 |
| Net profit from discontinuing operation | -- | -- | -- | -- | -- | -- |
| Other comprehensive income | -- | -- | -- | -- | -- | -- |
| Total comprehensive income | 416,836,070.09 | 123,487,685.42 | 10,215,638.25 | 6,318,818.62 | -7,064,743.58 | 1,507,371.77 |
| Dividend received from associates | 77,539,284.02 | 15,232,424.74 | -- | -- | -- | -- |
(4) Summary financial information of no significant joint ventures and associates
| Item | 2023.12.31 or Current period | 2022.12.31 or Pervious period |
| Associates | ||
| Total carrying value of investment | 128,957,100.56 | 131,600,050.63 |
| Items calculated according to shareholding ratio | -- | -- |
| Net profit | 3,387,350.67 | -473,871.48 |
| Other comprehensive income | -- | -- |
| Total comprehensive income | 3,387,350.67 | -473,871.48 |
4. Interests in unconsolidated structured entities
(1) Basic information of unconsolidated structured entities
The unconsolidated structured entities are the Limited Partnership initiated by the Company-Beijing Shouxin Jinyuan Management Consulting Center (Limited Partnership) (Hereinafterreferred to as Shouxin Jinyuan Fund or the Partnership) and Beijing Shouxin Jin'an EquityInvestment Partnership (Limited Partnership) (Hereinafter referred to as Shouxin Jin'an Fund or thePartnership). In accordance with the provisions of the limited partnership agreement, the Companyhas no control over the Partnership.
①The purpose of establishing Shouxin Jinyuan Fund is combining the relevant policies of Beijingon the development of sophisticated industry with the market-oriented operation of M&Ainvestment, actively responding to the strategic goal of Beijing to build a sophisticated industrialstructure, promoting the upgrading and development of Beijing's sophisticated industry,contributing to the local economic development and industrial structure adjustment of Beijing, andcreating satisfactory return on investment for investors.The total subscribed capital of all partners to Shouxin Jinyuan Fund is no less than RMB 1 billion.The partners of the Fund are divided into general partner and limited partner, the contributionagreement is as follows: Beijing Shouyuan New Energy Investment Management Co., Ltd., thegeneral partner, contributes RMB 10,000 thousand; and among the limited partners, the Companyagrees to contribute RMB 200,000 thousand, and the other limited partners agrees to contributeRMB 790,000 thousand in total.As at 31 December 2023, Shouxin Jinyuan Fund has conducted investment activities and threeexternal investment projects has been invested with the amount of RMB 829,432.10 thousand. Nofinancing activity has been conducted by the Fund.
② The purpose of establishing Shouxin Jin'an Fund is to focus on investment in shougang Groupsystem of leading enterprises, to enlarge and strengthen shougang Group new material industry, tofocus on the advanced electrical steel materials, casting superalloys and precision alloys, as well ashigh performance special steel and other metal new materials that Shougang Group has advantagesin.The total subscribed capital of all partners to Shouxin Jin'an Fund is no less than RMB 2,070.5455million. The partners of the Fund are divided into general partner and limited partner, thecontribution agreement is as follows: Beijing Shouyuan Xinneng Investment Management Co., Ltd.,the general partner, contributes RMB 20.7055 million; and among the limited partners, theCompany agrees to contribute RMB 200,000 thousand, and the other limited partners agrees tocontribute RMB 1,849.84 million in total.As of 31 December 2023, Shouxin Jin'an Fund has completed fund raising and registered on TheChinese Association of Securities Investment Funds and two external investment projects has beeninvested with the amount of RMB 230 million. No financing activity has been conducted by the
Fund.
(2) Carrying value and maximum loss exposure of interests related assets and liabilitiesAs of 31 December 2023, no assets and liabilities related to the interests in Shouxin Jinyuan Fundrecognized are recognized in the financial statements of the Company except for the partnercontribution agreed in the partner agreement. The maximum loss exposure of the Company'sinterests in Shouxin Jinyuan Fund is RMB 45.8864 million. The maximum loss exposure of theCompany's interests in Shouxin Jin'an Fund is RMB 22.2164 million.
(3) The support provided to the unconsolidated structured entities
As of 31 December 2023, the Company had no intention to provide financial support or othersupport for Shouxin Jinyuan Fund and Shouxin Jin'an Fund.
(4) Additional information disclosure of unconsolidated structured entitiesAs of 31 December 2023, no additional information related to Shouxin Jinyuan Fund and ShouxinJin'an Fund should be disclosed by the Company.VIII. Government grants
1. Government grants recognized as deferred income
| Items | Opening balance | Increase | Decrease | Closing balance | Reasons |
| Deferred income - Government grants | 472,861,881.90 | 70,475,200.00 | 35,662,925.41 | 507,674,156.49 |
Government grants recognized as deferred income and subsequently measured via gross method.
| Item | Type | 2023.1.1 | Increase | Transfer to profit or loss | Other changes | 2023.12.31 | Item recognized in income statement | Related to assets/ Related to income |
| Discount funds for imported equipments | Financial appropriation | 12,106,230.11 | -- | 1,229,110.56 | -- | 10,877,119.55 | Other income | Related to assets |
| Government grants for engineering informationization project (Qian'an Iron and Steel, Cold-R Co.) | Financial appropriation | 275,000.28 | -- | 99,999.96 | -- | 175,000.32 | Other income | Related to assets |
| Government grants for energy central project from the Ministry of Industry and Information Technology of the People’s Republic of China | Financial appropriation | 1,999,999.88 | -- | 1,000,000.00 | -- | 999,999.88 | Other income | Related to assets |
| Special government grants from the Finance Bureau of Qian'an | Financial appropriation | 4,139,130.42 | -- | 243,478.32 | -- | 3,895,652.10 | Other income | Related to assets |
| Government grants for hot-rolled steel strip TMCP project | Financial appropriation | 1,263,157.88 | -- | 105,263.16 | -- | 1,157,894.72 | Other income | Related to assets |
| Government grants for dedusting system upgrading project (Qian'an Iron and Steel) | Financial appropriation | 24,473,684.32 | -- | 1,631,578.92 | -- | 22,842,105.40 | Other income | Related to assets |
| Government grants for advanced sewage treatment | Financial appropriation | 4,819,629.56 | -- | 342,222.24 | -- | 4,477,407.32 | Other income | Related to assets |
| Special government grants for denitration engineering from the Hebei Provincial Finance Department | Financial appropriation | 490,000.00 | -- | 245,000.00 | -- | 245,000.00 | Other income | Related to assets |
| Government grants for online environmental monitoring project from the Finance Bureau of Caofeidian | Financial appropriation | 2,500,000.00 | -- | 500,000.00 | -- | 2,000,000.00 | Other income | Related to assets |
| The steelmaking technology and facilities demonstration project through carbon dioxide-oxygen mixed injection, funded by University of Science and Technology Beijing | Financial appropriation | 3,719,298.24 | -- | 210,526.32 | -- | 3,508,771.92 | Other income | Related to assets |
| National funds for the national 863 project | Financial appropriation | 556,400.00 | -- | 278,200.00 | -- | 278,200.00 | Other income | Related to assets |
| Government grants for Phase II seawater dsalination project | Financial appropriation | 16,842,105.32 | -- | 1,052,631.56 | -- | 15,789,473.76 | Other income | Related to assets |
| Government grants for cold-rolled intelligent manufacturing project | Financial appropriation | 21,224,552.64 | 2,030,000.00 | 3,026,931.98 | -- | 20,227,620.66 | Other income | Related to assets |
| Government grants for the desulfurization of pelletizing flue gas | Financial appropriation | 20,805,473.66 | -- | 1,486,105.28 | -- | 19,319,368.38 | Other income | Related to assets |
| Environmental protection government grants for closing limestone yards | Financial appropriation | 1,600,000.00 | -- | 80,000.00 | -- | 1,520,000.00 | Other income | Related to assets |
| Government grants for energy-saving incentive for No.3 hydrogen generator | Financial appropriation | 950,305.21 | -- | 67,878.96 | -- | 882,426.25 | Other income | Related to assets |
| Government grants for cold rolling operation department aluminized silicon high strength steel automotive plate renovation project | Financial appropriation | 2,873,684.17 | -- | 191,578.96 | -- | 2,682,105.21 | Other income | Related to assets |
| Government grants for cold rolling operation department high strength steel 18 roll single stand project | Financial appropriation | 11,450,943.40 | 2,100,000.00 | 726,884.37 | -- | 12,824,059.03 | Other income | Related to assets |
| Government grants for the operation-control system of production-marketing integration | Financial appropriation | 19,772,121.20 | -- | 2,471,515.20 | -- | 17,300,606.00 | Other income | Related to assets |
| Item | Type | 2023.1.1 | Increase | Transfer to profit or loss | Other changes | 2023.12.31 | Item recognized in income statement | Related to assets/ Related to income |
| Government grants for the specialized production line project of Zinc-plated high-strengthen auto sheet | Financial appropriation | 84,210,526.36 | -- | 5,263,157.88 | -- | 78,947,368.48 | Other income | Related to assets |
| Government grants for reforming of sinter desulfurization and denitrification | Financial appropriation | 24,210,526.34 | -- | 1,578,947.36 | -- | 22,631,578.98 | Other income | Related to assets |
| Government grants for thin slab casting and rolling engineering | Financial appropriation | 5,179,642.86 | 187,500.00 | 285,714.28 | -- | 5,081,428.58 | Other income | Related to assets |
| Government grants for reform project of reducing oxynitride concentration in emissed flue gas from annealing furnace | Financial appropriation | 5,830,263.31 | -- | 331,578.84 | -- | 5,498,684.47 | Other income | Related to assets |
| Government grants for industrial mechanism model base | Financial appropriation | 4,800,000.00 | -- | 306,382.98 | -- | 4,493,617.02 | Other income | Related to assets |
| Government grants for 10,000 tons/d desalination project | Financial appropriation | 7,963,157.91 | -- | 468,421.04 | -- | 7,494,736.87 | Other income | Related to assets |
| Government grants for sintering waste heat power generation project | Financial appropriation | 19,336,283.19 | -- | 1,074,237.92 | -- | 18,262,045.27 | Other income | Related to assets |
| Government grants for comprehensive optimization and upgrading project of hot blast furnace system in Phase I of ironmaking Operation Department | Financial appropriation | 23,683,382.96 | -- | 1,315,743.48 | -- | 22,367,639.48 | Other income | Related to assets |
| Government grants for energy conservation and emission reduction optimization and improvement projects | Financial appropriation | 13,429,293.94 | 1,500,000.00 | 798,604.47 | -- | 14,130,689.47 | Other income | Related to assets |
| Government grants for Zinc containing solid waste disposal project | Financial appropriation | 4,878,640.78 | -- | 291,262.12 | -- | 4,587,378.66 | Other income | Related to assets |
| Government grants for high-tech industry development projects | Financial appropriation | 7,000,000.00 | -- | -- | -- | 7,000,000.00 | Other income | Related to assets |
| Government grants for new energy automotive electrical steel project | Financial appropriation | 78,890,971.68 | 7,000,000.00 | 4,451,697.84 | -- | 81,439,273.84 | Other income | Related to assets |
| Government grants for high performance oriented silicon steel project | Financial appropriation | 19,640,000.00 | -- | 258,421.05 | -- | 19,381,578.95 | Other income | Related to assets |
| Government grants for hot rolling heating furnace flue gas purification project | Financial appropriation | -- | 30,000,000.00 | 377,497.81 | -- | 29,622,502.19 | Other income | Related to assets |
| Government grants for technical transformation of deep flue gas treatment by adding hot blast furnaces to blast furnaces | Financial appropriation | -- | 23,945,000.00 | 376,113.64 | -- | 23,568,886.36 | Other income | Related to assets |
| Other government grants related to assets | Financial appropriation | 21,907,476.28 | 3,312,700.00 | 3,256,238.91 | -- | 21,963,937.37 | Other income | Related to assets |
| Other government grants related to income | Financial appropriation | 40,000.00 | 400,000.00 | 240,000.00 | -- | 200,000.00 | Other income | Related to income |
| Total | 472,861,881.90 | 70,475,200.00 | 35,662,925.41 | -- | 507,674,156.49 |
2. Government grants directly recorded as profit or loss for the current period and measured via gross method.
| Item | Type | Amount recognised in profit or loss in prior period | Amount recognised in profit or loss in the period | Item recognized in income statement | Related to assets/ Related to income |
| Government grants for steady post | Financial appropriation | 677,779.73 | 7,773,848.31 | Other income | Related to income |
| Government grants for promoting the development of enterprises operate in the region | Financial appropriation | 3,900,000.00 | -- | Other income | Related to income |
| Technology innovation support funds | Financial appropriation | 70,883,400.00 | -- | Other income | Related to income |
| Other government grants related to income | Financial appropriation | 26,363,511.52 | 25,727,347.92 | Other income | Related to income |
| Total | 101,824,691.25 | 33,501,196.23 |
IX. Financial instruments and risk managementThe major financial instruments of the Company include cash and cash equivalents, notesreceivable, accounts receivable, financing receivables, other receivables, current portion ofnon-current assets, other current assets, other equity instrument investments, other non-currentfinancial assets, long-term receivables, notes payable, accounts payable, other payables, short-termborrowings, financial liabilities held for trading, current portion of non-current liabilities, long-termborrowings and bond payables, lease liabilities and long-term payables. The details of financialinstruments are disclosed in the respective notes. Risks relate to these financial instruments and riskmanagement policies used by the Company to minimize the risks are disclosed as below.Management of the Company manages and monitors the risk exposures to ensure the risks arecontrolled in the limited range.
1. Objectives and policies of risk management
The objective of the Company in risk management is to obtain an appropriate equilibrium betweenrisk and return, and also focuses on minimizing potential adverse effects on the financialperformance of the Company bring by the unpredictability of financial risk. Based on the objectivesof risk management, certain policies are established to recognize and analyze the risk. Also, in orderto monitor the risk position of the Company, internal control procedures are designed according toacceptable level of risk. Both the policies and internal control procedures are reviewed and revisedregularly to adapt the changes of the market and business activities of the Company.The primary risks caused by the financial instruments of the Company are credit risk and liquidityrisk.
(1) Credit risk
Credit risk refers to the risk that the counterparty to a financial instrument would fail to dischargeits obligation under the terms of the financial instrument and cause a financial loss to the Company.The Company manages the credit risk on portfolio basis. Credit risks are mainly caused by cash andcash equivalents, notes receivable, accounts receivable, other receivables.The Company mainly deposits in financial institutions with good reputation and high credit ratingtherefore no significant credit risk associated with cash and cash equivalents is expected.In addition, policies related to limit the credit risk exposure on notes receivable, accounts receivableand other receivables are established by the Company. The Company evaluates credit quality andsets credit limits on customers by taking into account the financial position, credit records and otherfactors such as current market conditions. The credit history of the customers is regularly monitoredby the Company. In respect of customers with a poor credit history, the Company will use writtenpayment reminders, or shorten or cancel credit periods, to ensure the overall credit risk of theCompany is limited to a controllable extent.The highest credit risk exposure to the Company is limited to the carrying value of each financialinstrument illustrated in the financial statements. The Company has not provided any guarantee thatmight cause credit risk to the Company.Among the accounts receivable of the Company, the accounts receivable of the top five customersaccounted for 51.55% (2022: 52.28%); among the other receivables of the Company, the otherreceivables of the top five customers accounted for 42.85% (2022: 63.31%).
(2) Liquidity risk
Liquidity risk refers to the risks that the Company will not be able to meet its obligations associatedwith its financial liabilities that are settled by delivering cash or other financial assets.The Company maintains and monitors sufficient level of cash and cash equivalents as considered bythe management while managing liquidity risk in order to meet operational needs of the Companyand reduce the effect of floating cash flow. The usage of bank loan is monitored by the managementof the Company and the loan covenants are ensured to be complied. Meanwhile, primary financialinstitution commits to provide sufficient reserve funds to satisfy the short term and long term fundrequirement of the Company.
2. Capital management
The capital management policies are made to keep the continuous operation of the Company, toenhance the return to shareholders, to benefit other related parties and to maintain the best capitalstructure to minimize the cost of capital.To the maintenance or adjustment of the capital structure, the Company might adjust the amount ofdividends paid to shareholders, return capital to shareholders, issue new shares and other equityinstruments, or make an asset disposal to reduce debt liabilities.The Company monitors the capital structure on the basis of leverage ratio (total liabilities dividedtotal assets). As at 31 December 2023, the leverage ratio of the Company is 60.43% (31 December2022: 65.03%).X. Fair value
Fair value hierarchies are categorized into three levels as the lowest level input that is significant tothe entire fair value measurement.Level 1: inputs are quoted prices (unadjusted) in active markets for identical assets and liabilities.Level 2: inputs are inputs other than quoted prices included within Level 1 that are observable forthe asset or liability, either directly or indirectly.Level 3: inputs are unobservable inputs for the asset or liability.
(1) Fair value of assets and liabilities measured at fair value
As at 31 December 2023, assets and liabilities measured at fair value are shown as follows:
| Item | Level 1 fair value measurement | Level 2 fair value measurement | Level 3 fair value measurement | Total |
| Recurring fair value measurement | ||||
| Financing receivable | -- | -- | 2,223,431,426.46 | 2,223,431,426.46 |
| Other equity instrument investment | 310,601,456.00 | -- | 29,602,636.21 | 340,204,092.21 |
| Other non-current financial assets | -- | -- | 75,009,218.61 | 75,009,218.61 |
| Total assets measured at fair value on a recurring basis | 310,601,456.00 | -- | 2,328,043,281.28 | 2,638,644,737.28 |
(2) Fair values of items not measured at fair value
Financial assets and financial liabilities measured at amortized cost include: cash and cashequivalents, notes receivable, accounts receivable, other receivables, short-term borrowings, notespayable, accounts payable, other payables, long-term borrowings due within one year, long-termborrowings and bonds payable, etc.No additional details of financial assets and financial liabilities should be disclosed since thedifference between the fair value and carrying value of financial assets and financial liabilities ofthe Company is approximately equal.XI. Related parties and related party transactions
1. Information about the parent company of the Company
| Parent company | Registration place | Business nature | Registered capital (RMB 0,000) | Shareholding percentage (%) | Percentage of voting rights (%) |
| Shougang Group Co., Ltd. | Beijing | Company with limited liability(wholly state-owned) | 2,875,502.50 | 56.72 | 56.72 |
The ultimate controlling party of the Company is State-owned Assets Supervision andAdministration Commission of People’s Government of Beijing Municipality.During the reporting period, the change of the registered capital of the parent company is as follows(Unit: RMB 0,000):
| Opening balance | Increase | Decrease | Closing balance |
| 2,875,502.50 | -- | -- | 2,875,502.50 |
2. Information about the subsidiaries of the Company
For information about the subsidiaries of the Company, refer to Note VII, 1.
3. Information about joint ventures and associates of the Company
For information about joint ventures and associates of the Company, refer to Note VII, 3.Joint ventures and associates that have related transactions with the Company in current period orthe previous period are as follows:
| Name of joint venture or associate | Relationship with the Company |
| Tangshan Shougang Jingtang Xishan Coking Co., Ltd. | Joint ventures of the Company |
| Tangshan Guoxing Industrial Co., Ltd. | Joint ventures of the Company |
| Tangshan Tangcao Railway Co., Ltd. | Associates of the Company |
| Qian'an Sinochem Coal Chemical Industrial Co., Ltd. | Associates of the Company |
| Beijing Dingshengcheng Packaging Materials Co., Ltd. | Associates of the Company |
| Guangzhou Jinghai Shipping Co., Ltd. | Associates of the Company |
| Tianjin Shougang Steel Processing&Distribution Co., Ltd. | Associates of the Company |
| Name of joint venture or associate | Relationship with the Company |
| Ningbo Shougang Zhejin Steel Co., Ltd. | Associates of the Company |
| Tangshan Caofeidian Dunshi New Construction Material Co., Ltd. | Associates of the Company |
| Hebei Jingji Industry & Trading Co., Ltd. | Associates of the Company |
| Beijing Shouxin Jinyuan Management Consulting Center (Limited Partnership) | Associates of the Company |
| Shougang (Qingdao) Steel Industry Co., Ltd. | Associates of the Company |
| Qian'an Jinyu Shougang Environmental Protection Technology Co., Ltd. | Associates of the Company |
4. Information about other related parties
| Related party | Relationship with the Company |
| Shougang Group Finance Co., Ltd. | Under the control of the same parent company |
| Shougang Mining Corporation | Under the control of the same parent company |
| China Shougang International Trade&Engineering Corporation | Under the control of the same parent company |
| Beijing Shougang Refractory& Metallurgical Burden Co., Ltd. | Under the control of the same parent company |
| Beijing Shougang Construction Group Co., Ltd. | Under the control of the same parent company |
| Beijing Shougang Gas Co., Ltd. | Under the control of the same parent company |
| Beijing Shougang Automation Information Technology Co., Ltd. | Under the control of the same parent company |
| Beijing Shougang Machinery&Electric Co., Ltd. | Under the control of the same parent company |
| Qinhuangdao Shougang Machinery Co., Ltd. | Under the control of the same parent company |
| Qian'an Shouxin Automation Information Technology Co., Ltd. | Under the control of the same parent company |
| Qian'an First Real Packaging Service Co., Ltd. | Under the control of the same parent company |
| Qian'an Shougang Equipment Structure Co., Ltd. | Under the control of the same parent company |
| Beijing Soly Technology Co., Ltd. | Under the control of the same parent company |
| Beijing Shouye Instruments&Meters Co., Ltd. | Under the control of the same parent company |
| Beijing Shoujian Equipment Maintenance Co., Ltd. | Under the control of the same parent company |
| Beijing Shoujian Hengxin Labor Service Co., Ltd. | Under the control of the same parent company |
| Beijing Shoujian Hengji Construction Engineering Co., Ltd. | Under the control of the same parent company |
| Beijing Shougang Landscaping Co., Ltd. | Under the control of the same parent company |
| Beijing Shougang International Engineering&Technology Co., Ltd. | Under the control of the same parent company |
| Beijing Jinanyuan Automobile Transportation Co., Ltd. | Under the control of the same parent company |
| Beijing Huaxia Technology Co., Ltd. | Under the control of the same parent company |
| Beijing Shougang Catering Co., Ltd. | Under the control of the same parent company |
| Beijing Shoujia Steel Construction Co., Ltd. | Under the control of the same parent company |
| Beijing Shougang Ferroalloy Co., Ltd. | Under the control of the same parent company |
| Lujiashan Limestone Mining of Shougang Beijing Co., Ltd. | Under the control of the same parent company |
| Related party | Relationship with the Company |
| Qinhuangdao Shounai New Materials Co., Ltd | Under the control of the same parent company |
| Yantai Shougang Mining 3D Co., Ltd. | Under the control of the same parent company |
| Tianjin Shougang Electric Equipment Co., Ltd. | Under the control of the same parent company |
| Beijing Chengxin Engineering Supervision Co., Ltd. | Under the control of the same parent company |
| Beijing Shoucheng Packaging Service Co., Ltd. | Under the control of the same parent company |
| Beijing Shougang Materials Trading Co., Ltd. | Under the control of the same parent company |
| Beijing Shougang Futong Elevator Co., Ltd. | Under the control of the same parent company |
| Tangshan Caofeidian Industrial District Shouhanxin Industrial Co., Ltd. | Under the control of the same parent company |
| Tonghua Iron and Steel Co., Ltd. | Under the control of the same parent company |
| Beijing Shougang Huaxia Engineering&Technology Co., Ltd. | Under the control of the same parent company |
| Shougang Environmental Industry Co., Ltd. | Under the control of the same parent company |
| Beijing Teyu Plate Co., Ltd. | Under the control of the same parent company |
| Beijing Shougang Mining Construction Co., Ltd. | Under the control of the same parent company |
| Qinhuangdao Shouqin Metal Materials Co., Ltd. | Under the control of the same parent company |
| Beijing Shougang Industrial Group Co., Ltd. | Under the control of the same parent company |
| Beijing Shougang Cultural Development Co., Ltd. | Under the control of the same parent company |
| Qinhuangdao Shouqin Steel Machining&Delivery Co., Ltd. | Under the control of the same parent company |
| Shougang Casey Steel Co., Ltd. | Under the control of the same parent company |
| Tangshan Caofeidian First Real Industrial Co., Ltd. | Under the control of the same parent company |
| Qiangang Hotel. | Under the control of the same parent company |
| Beijing Shougang Special Steel Co., Ltd. | Under the control of the same parent company |
| Beijing Shougang Yunxiang Industrial Technology Co., Ltd. | Under the control of the same parent company |
| Bohai International Conference Center Co., Ltd. | Under the control of the same parent company |
| Qian'an Shougang Xingkuang Industrial Co., Ltd. | Under the control of the same parent company |
| Shougang Guiyang Special Steel Co., Ltd. | Under the control of the same parent company |
| Beijing Shougang Park Comprehensive Service Co., Ltd. | Under the control of the same parent company |
| Shougang Changzhi Steel&Iron Co., Ltd. | Under the control of the same parent company |
| Beijing Beiye Functional Materials Co., Ltd. | Under the control of the same parent company |
| Beijing Shougang Metal Co., Ltd. | Under the control of the same parent company |
| Tangshan Caofeidian Industrial Zone Jingtang Industrial Co., Ltd. | Under the control of the same parent company |
| Guizhou Bohong Industrial Co., Ltd. | Under the control of the same parent company |
| Dachang Shougang Machinery&Electric Co., Ltd. | Under the control of the same parent company |
| Beijing Shougang Lanzatech Co., Ltd. | Under the control of the same parent company |
| South China International Leasing Co., Ltd | Under the control of the same parent company |
| Related party | Relationship with the Company |
| Jingxi Commercial Factoring Co., Ltd. | Under the control of the same parent company |
| Qinhuangdao Shougang Plate Mill Co., Ltd. | Under the control of the same parent company |
| Bejing Shougang International Travel Co., Ltd. | Under the control of the same parent company |
| Hebei Shougang Jingtang Machinery Co., Ltd. | Under the control of the same parent company |
| Qinhuangdao Shougang Racing Valley Co., Ltd | Under the control of the same parent company |
| Beijing Shougang Property Management Co., Ltd. | Under the control of the same parent company |
| Beijing Shouao Real Estate Co., Ltd | Under the control of the same parent company |
| Beijing Shouronghui Technology Development Co., Ltd. | Under the control of the same parent company |
| Shougang Shuicheng Steel (Group) Co., Ltd | Under the control of the same parent company |
| Shougang Shuicheng Steel (Group) Saide Construction Co., Ltd. | Under the control of the same parent company |
| Beijing Shougang Environmental Engineering Technology Co., Ltd. | Under the control of the same parent company |
| Beijing Shougang Gas Tangshan Co., Ltd. | Under the control of the same parent company |
| Guizhou Shuigang Logistics Co., Ltd. | Under the control of the same parent company |
| Beijing Shouke Xingye Engineering Technology Co., Ltd. | Under the control of the same parent company |
| Beijing Shougang Construction Investment Co., Ltd. | Under the control of the same parent company |
| Shougang Commercial Factoring Co., Ltd. | Under the control of the same parent company |
| Guizhou Liupanshui Shenghongda Mechanical Equipment Manufacturing Co., Ltd | Under the control of the same parent company |
| Guiyang Steel Mills I/E Corp. | Under the control of the same parent company |
| Qinhuangdao Shoufang Property Service Co., Ltd. | Under the control of the same parent company |
| Beijing Shouyi Mining Hospital Co., Ltd. | Under the control of the same parent company |
| Peking University Shougang Hospital | Under the control of the same parent company |
| Shougang Yili Steel Co., Ltd. | Under the control of the same parent company |
| Tangshan Shougang Malanzhuang Iron Ore Co., Ltd. | Under the control of the same parent company |
| Beijing Shougang Gitane New Materials Co., Ltd. | Under the control of the same parent company |
| Beijing Shougang Chengyun Holdings Co., Ltd | Under the control of the same parent company |
| Beijing Shoufang Commercial Management Co., Ltd | Under the control of the same parent company |
| Beijing Aidi Geological Engineering Technology Co., Ltd | Under the control of the same parent company |
| Geological Research Institute of Shougang Geological Exploration Institute | Under the control of the same parent company |
| Beijing Shougang Shape Metal Co., Ltd. | Joint ventures or associates of the Company’s parent company |
| Beijing Jingxi Supply Chain Management Co., Ltd. | Joint ventures or associates of the Company’s parent company |
| Beijing Thermal Zhongda Heat Exchange Equipment Co., Ltd. | Joint ventures or associates of the Company’s parent company |
| PetroChina Shougang (Beijing) Petroleumsales Co., Ltd. | Joint ventures or associates of the Company’s parent company |
| Related party | Relationship with the Company |
| Beijing Shoushe Metallurgical Technology Co., Ltd. | Joint ventures or associates of the Company’s parent company |
| Beijing Shouyu Industry and Trade Co., Ltd. | Joint ventures or associates of the Company’s parent company |
| Beijing Xingyeda Machinery&Electric Equipment Manufacture Co., Ltd. | Joint ventures or associates of the Company’s parent company |
| Chaoyang Shougang Beifang Machinery Co., Ltd. | Joint ventures or associates of the Company’s parent company |
| Tangshan Caofeidian Ganglian Logistics Co., Ltd. | Joint ventures or associates of the Company’s parent company |
| Tangshan Caofeidian Industry Port Co., Ltd. | Joint ventures or associates of the Company’s parent company |
| YASKAWA Shougang Robert Co., Ltd. | Joint ventures or associates of the Company’s parent company |
| Cmi Engineering (Beijing) Co., Ltd. | Joint ventures or associates of the Company’s parent company |
| Qian'an Shoujia Construction Material Co., Ltd. | Joint ventures or associates of the Company’s parent company |
| Shoujia Huanke (Qian'an) Co., Ltd. | Joint ventures or associates of the Company’s parent company |
| Sanhe Shoujia Construction Material Co., Ltd. | Joint ventures or associates of the Company’s parent company |
| Hua Xia Bank Co.,Ltd. | Joint ventures or associates of the Company’s parent company |
| Beijing Shougang Resources Comprehensive Utilization Technology Development Co., Ltd. | Joint ventures or associates of the Company’s parent company |
| Jingxi Shoutang Supply Chain Management Co., Ltd | Joint ventures or associates of the Company’s parent company |
| Beijing Shoubang New Material Co., Ltd. | Joint ventures or associates of the Company’s parent company |
| Jingtang Port Shougang Terminal Co., Ltd. | Joint ventures or associates of the Company’s parent company |
| Beijing Shoutegang Yuandong Magnesium Alloy Products Co., Ltd. | Joint ventures or associates of the Company’s parent company |
| Suzhou Tonggang Shunye Steel Materials Processing Distribution Co., Ltd. | Joint ventures or associates of the Company’s parent company |
| Shougang Shuicheng Iron and Steel (Group) Xingyuan Development Investment Co., Ltd. | Joint ventures or associates of the Company’s parent company |
| Chengde Xintong Shoucheng Mining Co., Ltd. | Joint ventures or associates of the Company’s parent company |
| Gansu Province, Wenxian Million Litie Alloy Co., Ltd. | Joint ventures or associates of the Company’s parent company |
| Tangshan Zhonghong Carbon Chemical Co., Ltd. | Joint ventures or associates of the Company’s parent company |
| Beijing Shoutaizhongxin Science & Technology Co., Ltd | Joint ventures or associates of the Company’s parent company |
| Directors, Supervisors, CFO and Board Secretary | Key management personnel |
5. Information about related party transactions
(1) Details of related purchase and sales
The following transactions with related parties are conducted at market prices or prices agreed uponin relevant agreements.
①Purchase of goods and receiving of services from related parties
| Related party | Nature of transaction | 2023 | 2022 |
| Shougang Group Co., Ltd. | Raw material | 21,943,134,524.17 | 30,738,244,970.15 |
| Shougang Group Co., Ltd. | Fuel material | 33,925,140.63 | 1,755,484,533.11 |
| Shougang Group Co., Ltd. | Spare parts | -- | 288,719.70 |
| Shougang Group Co., Ltd. | Production service | 4,971,874.94 | 24,483,467.94 |
| Shougang Group Co., Ltd. | Fund usage charges | 63,104,733.91 | 71,217,912.21 |
| Shougang Group Finance Co., Ltd. | Fund usage charges | 363,628,875.86 | 308,397,762.40 |
| Shougang Mining Corporation | Raw material | 3,890,862,501.60 | 3,801,893,028.27 |
| Shougang Mining Corporation | Power energy | 66,992,366.05 | -- |
| Shougang Mining Corporation | Spare parts | 62,655,062.81 | 5,484,172.00 |
| Shougang Mining Corporation | Production service | 281,362,511.82 | 113,846,405.24 |
| Shougang Mining Corporation | Engineering equipment | 1,427,460.00 | 1,904,158.00 |
| Shougang Mining Corporation | Fund usage charges | 910,228.06 | 2,210,553.86 |
| China Shougang International Trade&Engineering Corporation | Export cost | 102,473,113.40 | 82,530,156.00 |
| China Shougang International Trade&Engineering Corporation | Raw material | 6,657,720.00 | 2,531,173,902.66 |
| China Shougang International Trade&Engineering Corporation | Fuel material | -- | 96,591,728.29 |
| China Shougang International Trade&Engineering Corporation | Production service | 96,393.44 | -- |
| Qian'an Sinochem Coal Chemical Industrial Co., Ltd. | Fuel material | 6,501,547,316.63 | 7,005,052,052.73 |
| Qian'an Sinochem Coal Chemical Industrial Co., Ltd. | Power energy | 458,568,346.04 | 393,033,410.87 |
| Beijing Shougang Refractory& Metallurgical Burden Co., Ltd. | Production service | -- | 1,458,000.00 |
| Beijing Shougang Refractory& Metallurgical Burden Co., Ltd. | Engineering service | -- | 6,000,851.01 |
| Beijing Shougang Construction Group Co., Ltd. | Production service | 548,842,653.85 | 473,493,304.04 |
| Beijing Shougang Construction Group Co., Ltd. | Spare parts | 35,407,572.28 | 26,646,250.93 |
| Beijing Shougang Construction Group Co., Ltd. | Engineering equipment | 5,292,280.97 | -- |
| Beijing Shougang Construction Group Co., Ltd. | Engineering service | 802,524,280.03 | 704,479,068.44 |
| Beijing Shougang Gas Co., Ltd. | Spare parts | 3,630,225.01 | 3,642,954.04 |
| Beijing Shougang Gas Co., Ltd. | Production service | 65,472,431.39 | 51,120,800.84 |
| Beijing Shougang Gas Co., Ltd. | Power energy | 98,773,465.58 | 94,449,984.15 |
| Beijing Shougang Gas Co., Ltd. | Auxiliary material | 4,766,510.38 | 4,742,161.45 |
| Beijing Shougang Automation Information Technology Co., Ltd. | Production service | 302,133,356.71 | 314,726,062.22 |
| Related party | Nature of transaction | 2023 | 2022 |
| Beijing Shougang Automation Information Technology Co., Ltd. | Spare parts | 13,606,491.82 | 6,119,863.00 |
| Beijing Shougang Automation Information Technology Co., Ltd. | Engineering service | 217,757,953.54 | 164,940,165.69 |
| Beijing Shougang Automation Information Technology Co., Ltd. | Engineering equipment | 77,516,317.08 | 56,830,246.32 |
| Beijing Shougang Machinery&Electric Co., Ltd. | Spare parts | 105,629,947.66 | 108,341,720.51 |
| Beijing Shougang Machinery&Electric Co., Ltd. | Production service | 269,364,838.83 | 269,594,626.52 |
| Beijing Shougang Machinery&Electric Co., Ltd. | Engineering equipment | 26,087,727.28 | 33,623,091.14 |
| Beijing Shougang Machinery&Electric Co., Ltd. | Engineering service | -- | 2,106,619.54 |
| Beijing Shougang Machinery&Electric Co., Ltd. | Fuel material | 36,602,521.60 | 22,308,500.28 |
| Qinhuangdao Shougang Machinery Co., Ltd. | Spare parts | 46,579,351.41 | 49,708,124.60 |
| Qinhuangdao Shougang Machinery Co., Ltd. | Production service | 134,396,914.04 | 164,741,681.95 |
| Qinhuangdao Shougang Machinery Co., Ltd. | Auxiliary material | 3,459,776.00 | 534,000.00 |
| Qinhuangdao Shougang Machinery Co., Ltd. | Engineering equipment | 6,418,986.00 | 2,849,600.00 |
| Qian'an Shouxin Automation Information Technology Co., Ltd. | Production service | 126,551,235.38 | 123,198,193.34 |
| Qian'an First Real Packaging Service Co., Ltd. | Production service | 318,627,092.06 | 330,518,074.43 |
| Qian'an First Real Packaging Service Co., Ltd. | Raw material | 3,473,060.09 | -- |
| Qian'an Shougang Equipment Structure Co., Ltd. | Spare parts | 15,910,347.80 | 16,770,235.00 |
| Qian'an Shougang Equipment Structure Co., Ltd. | Production service | 77,276,252.02 | 74,615,037.69 |
| Qian'an Shougang Equipment Structure Co., Ltd. | Engineering equipment | 4,509,802.74 | 6,099,531.07 |
| Qian'an Shougang Equipment Structure Co., Ltd. | Engineering service | 1,228,547.58 | 688,292.46 |
| Qian'an Shougang Equipment Structure Co., Ltd. | Raw material | 191,600,192.02 | 216,797,429.95 |
| Beijing Soly Technology Co., Ltd. | Engineering equipment | -- | 612,341.00 |
| Beijing Shouye Instruments&Meters Co., Ltd. | Spare parts | 34,462,950.17 | 30,692,578.79 |
| Beijing Shouye Instruments&Meters Co., Ltd. | Engineering equipment | 6,651,902.00 | 4,608,458.59 |
| Beijing Shoujian Equipment Maintenance Co., Ltd. | Production service | 62,908,007.32 | 45,870,911.70 |
| Beijing Shoujian Equipment Maintenance Co., Ltd. | Auxiliary material | 5,037,420.00 | 5,154,000.00 |
| Beijing Shoujian Equipment Maintenance Co., Ltd. | Engineering service | -- | 5,962,127.57 |
| Beijing Shoujian Equipment Maintenance Co., Ltd. | Engineering equipment | 35,208,132.15 | 9,790,200.00 |
| Related party | Nature of transaction | 2023 | 2022 |
| Beijing Shoujian Hengxin Labor Service Co., Ltd. | Production service | 1,688,340.00 | 1,785,000.00 |
| Beijing Shoujian Hengji Construction Engineering Co., Ltd. | Spare parts | 861,565.70 | 573,207.00 |
| Beijing Shougang Landscaping Co., Ltd. | Life service | 23,862,457.96 | 25,701,356.25 |
| Beijing Shougang International Engineering&Technology Co., Ltd. | Spare parts | 16,500,348.33 | 13,777,316.00 |
| Beijing Shougang International Engineering&Technology Co., Ltd. | Engineering equipment | 337,374,815.61 | 197,970,778.68 |
| Beijing Shougang International Engineering&Technology Co., Ltd. | Engineering service | 424,371,608.45 | 475,003,098.49 |
| Beijing Shougang International Engineering&Technology Co., Ltd. | Production service | 5,998,467.72 | 664,296.23 |
| Beijing Jinanyuan Automobile Transportation Co., Ltd. | Production service | 73,364,927.54 | 67,493,491.20 |
| Beijing Huaxia Technology Co., Ltd. | Spare parts | 6,797,312.96 | 3,781,380.33 |
| Beijing Huaxia Technology Co., Ltd. | Engineering equipment | 7,514,099.00 | -- |
| Beijing Huaxia Technology Co., Ltd. | Production service | 1,085,300.00 | 86,000.00 |
| Beijing Shougang Catering Co., Ltd. | Life service | 13,270,186.01 | 14,014,372.50 |
| Beijing Shoujia Steel Construction Co., Ltd. | Production service | 29,492,635.04 | 44,258,026.72 |
| Beijing Shougang Ferroalloy Co., Ltd. | Raw material | 448,730,252.54 | 436,896,664.79 |
| Lujiashan Limestone Mining of Shougang Beijing Co., Ltd. | Raw material | 368,906,926.36 | 350,495,042.52 |
| Lujiashan Limestone Mining of Shougang Beijing Co., Ltd. | Production service | 92,165,010.94 | 53,344,775.21 |
| Lujiashan Limestone Mining of Shougang Beijing Co., Ltd. | Auxiliary material | 9,649,790.64 | 8,312,204.20 |
| Qinhuangdao Shounai New Materials Co., Ltd | Auxiliary material | 119,255,741.87 | 128,141,883.61 |
| Yantai Shougang Mining 3D Co., Ltd. | Spare parts | -- | 577,091.09 |
| Tianjin Shougang Electric Equipment Co., Ltd. | Engineering equipment | 15,148,231.00 | 19,847,769.10 |
| Tianjin Shougang Electric Equipment Co., Ltd. | Spare parts | 12,392,235.00 | 4,465,189.00 |
| Tianjin Shougang Electric Equipment Co., Ltd. | Production service | 750,000.00 | -- |
| Beijing Chengxin Engineering Supervision Co., Ltd. | Engineering service | 6,919,560.20 | 7,529,528.15 |
| Beijing Chengxin Engineering Supervision Co., Ltd. | Production service | 512,000.00 | 3,717,879.25 |
| Beijing Shoucheng Packaging Service Co., Ltd. | Production service | 103,974,097.61 | 107,663,074.01 |
| Beijing Shougang Materials Trading Co., Ltd. | Fuel material | 1,027,466,982.41 | 269,025,918.47 |
| Beijing Shougang Materials Trading Co., Ltd. | Raw material | 11,693,600,440.83 | 996,216,356.30 |
| Tangshan Shougang Jingtang Xishan Coking Co., Ltd. | Power energy | 1,511,756,089.09 | 1,063,798,684.12 |
| Related party | Nature of transaction | 2023 | 2022 |
| Tangshan Shougang Jingtang Xishan Coking Co., Ltd. | Fuel material | 14,807,402,881.55 | 17,586,534,301.71 |
| Tangshan Shougang Jingtang Xishan Coking Co., Ltd. | Raw material | 8,375,359.37 | 3,610,282.21 |
| Tangshan Shougang Jingtang Xishan Coking Co., Ltd. | Production service | 121,400,910.06 | 152,523,150.26 |
| Beijing Shougang Futong Elevator Co., Ltd. | Spare parts | 161,610.00 | 177,460.00 |
| Beijing Shougang Futong Elevator Co., Ltd. | Production service | 795,660.00 | 884,800.00 |
| Tangshan Guoxing Industrial Co., Ltd. | Production service | 139,969,704.64 | 145,637,666.86 |
| Tangshan Guoxing Industrial Co., Ltd. | Engineering service | 3,882,874.50 | 2,236,643.61 |
| Tangshan Caofeidian Industrial District Shouhanxin Industrial Co., Ltd. | Production service | 365,061,060.71 | 386,060,741.11 |
| Tonghua Iron and Steel Co., Ltd. | Steels | -- | 10,109,524.29 |
| Tonghua Iron and Steel Co., Ltd. | Raw material | 3,802,885.87 | 348,504,685.37 |
| Shougang Environmental Industry Co., Ltd. | Production service | 5,359,304.37 | 4,790,641.42 |
| Beijing Shougang Mining Construction Co., Ltd. | Engineering service | 45,415,792.24 | 32,202,238.47 |
| Beijing Shougang Mining Construction Co., Ltd. | Production service | 2,561,705.00 | 3,124,511.85 |
| Qinhuangdao Shouqin Metal Materials Co., Ltd. | Engineering equipment | -- | 2,640,623.65 |
| Qinhuangdao Shouqin Metal Materials Co., Ltd. | Raw material | 4,858,002.24 | -- |
| Beijing Shougang Industrial Group Co., Ltd. | Life service | 2,497,949.85 | 5,463,312.46 |
| Beijing Shougang Shape Metal Co., Ltd. | Raw material | 84,278.76 | 1,157,199.12 |
| Beijing Dingshengcheng Packaging Materials Co., Ltd. | Production service | 139,524,911.82 | 132,716,435.98 |
| Beijing Dingshengcheng Packaging Materials Co., Ltd. | Auxiliary material | 21,935,504.47 | 2,588,730.00 |
| Beijing Dingshengcheng Packaging Materials Co., Ltd. | Engineering equipment | 3,991,680.00 | -- |
| Beijing Shougang Cultural Development Co., Ltd. | Production service | -- | 580,274.11 |
| Jingxi Commercial Factoring Co., Ltd. | Raw material | 34,907,834.40 | 2,294,124.34 |
| Qinhuangdao Shouqin Steel Machining&Delivery Co., Ltd. | Spare parts | 125,823.00 | 202,712.00 |
| Shougang Casey Steel Co., Ltd. | Production service | 89,931,464.45 | 99,663,335.28 |
| Tangshan Caofeidian First Real Industrial Co., Ltd. | Life service | 92,796,533.86 | 103,510,367.58 |
| Tangshan Caofeidian First Real Industrial Co., Ltd. | Spare parts | 899,038.00 | 2,092,860.00 |
| Qiangang Hotel. | Production service | 19,213,783.47 | 20,138,607.00 |
| Beijing Shougang Yunxiang Industrial Technology Co., Ltd. | Spare parts | 698,000.00 | 8,985,583.27 |
| Related party | Nature of transaction | 2023 | 2022 |
| Bohai International Conference Center Co., Ltd. | Life service | 1,709,776.21 | 872,777.64 |
| Hebei Shoulang New Energy Technology Co., Ltd. | Power energy | 6,469,733.18 | 5,228,810.04 |
| Qian'an Shougang Xingkuang Industrial Co., Ltd. | Auxiliary material | 46,113,178.52 | 46,730,677.66 |
| Beijing Thermal Zhongda Heat Exchange Equipment Co., Ltd. | Spare parts | 18,071,736.05 | 21,599,664.94 |
| Beijing Thermal Zhongda Heat Exchange Equipment Co., Ltd. | Production service | 12,965,317.00 | 11,997,608.00 |
| Guangzhou Jinghai Shipping Co., Ltd. | Production service | 287,392,610.41 | 355,036,509.27 |
| PetroChina Shougang (Beijing) Petroleumsales Co., Ltd. | Spare parts | 53,721,366.22 | 61,667,449.21 |
| PetroChina Shougang (Beijing) Petroleumsales Co., Ltd. | Production service | 757,558.65 | 810,772.36 |
| Beijing Shoushe Metallurgical Technology Co., Ltd. | Engineering equipment | 1,221,243.79 | 255,912.13 |
| Beijing Shouyu Industry and Trade Co., Ltd. | Auxiliary material | 15,867,277.30 | 11,422,545.27 |
| Chaoyang Shougang Beifang Machinery Co., Ltd. | Spare parts | -- | 9,600.00 |
| Tangshan Caofeidian Ganglian Logistics Co., Ltd. | Production service | 224,986,462.57 | 179,731,432.37 |
| Tangshan Caofeidian Industry Port Co., Ltd. | Production service | 484,456,068.34 | 476,275,284.06 |
| Tianjin Shougang Steel Processing&Distribution Co., Ltd. | Production service | 3,193,694.14 | 3,093,058.92 |
| Tianjin Shougang Steel Processing&Distribution Co., Ltd. | Raw material | 439,639,719.08 | 137,219.49 |
| Beijing Shoutaizhongxin Science & Technology Co., Ltd | Spare parts | 14,541,804.30 | 20,983,879.94 |
| Chengde Xintong Shoucheng Mining Co., Ltd. | Raw material | -- | 180,923,753.72 |
| Shougang (Qingdao) Steel Industry Co., Ltd. | Raw material | 4,013,015.40 | 908,220.09 |
| Beijing Shougang Park Comprehensive Service Co., Ltd. | Life service | 2,102,293.89 | 1,477,352.85 |
| YASKAWA Shougang Robert Co., Ltd. | Production service | -- | 141,500.00 |
| Qinhuangdao Shougang Racing Valley Co., Ltd | Production service | 377,358.48 | 431,358.48 |
| Hebei Shougang Jingtang Machinery Co., Ltd. | Production service | 82,765,129.40 | 37,269,512.82 |
| Beijing Shouao Real Estate Co., Ltd | Life service | 93,085.00 | 23,794.00 |
| Cmi Engineering (Beijing) Co., Ltd. | Engineering equipment | 17,268,900.00 | 12,892,700.00 |
| Shougang Changzhi Steel&Iron Co., Ltd. | Raw material | -- | 1,509,854.85 |
| South China International Leasing Co., Ltd | Fund usage charges | 373,598.24 | 751,226.41 |
| Beijing Shouxin Jinyuan Management Consulting Center (Limited Partnership) | Fund usage charges | -- | 21,900,000.00 |
| Related party | Nature of transaction | 2023 | 2022 |
| Qinhuangdao Shoufang Property Service Co., Ltd. | Life service | -- | 861,700.00 |
| Qian'an Jinyu Shougang Environmental Protection Technology Co., Ltd. | Production service | 26,093,417.36 | 23,335,032.81 |
| Beijing Shougang Property Management Co., Ltd. | Production service | 2,907,210.97 | 2,935,902.84 |
| Guiyang Steel Mills I/E Corp. | Production service | 8,011,169.36 | 13,153,495.39 |
| Gansu Province, Wenxian Million Litie Alloy Co., Ltd. | Raw material | 326,252,685.09 | 936,100,776.46 |
| Tangshan Caofeidian Dunshi New Construction Material Co., Ltd. | Production service | 2,918,833.30 | 1,858,061.44 |
| Beijing Shouyi Mining Hospital Co., Ltd. | Production service | 2,417,059.93 | 3,486,466.50 |
| Peking University Shougang Hospital | Production service | 512,567.00 | 122,228.18 |
| Beijing Shougang Construction Investment Co., Ltd. | Production service | -- | 15,000.00 |
| Shougang Yili Steel Co., Ltd. | Engineering equipment | -- | 2,096,637.16 |
| Tangshan Shougang Malanzhuang Iron Ore Co., Ltd. | Raw material | 215,116,886.67 | 407,104,956.47 |
| Jingtang Port Shougang Terminal Co., Ltd. | Production service | 2,384,905.66 | 6,091,794.34 |
| Beijing Shoufang Commercial Management Co., Ltd | Production service | 783,360.00 | -- |
②Sale of goods and rendering of services to related parties
| Related party | Nature of transaction | 2023 | 2022 |
| Shougang Group Co., Ltd. | Management service | 122,756,957.25 | 233,378,200.00 |
| Shougang Group Co., Ltd. | Production service | 16,392,473.96 | 16,202,255.66 |
| Shougang Mining Corporation | Steel | 576,096.86 | 2,076,407.04 |
| Shougang Mining Corporation | Raw fuel material | 19,618,852.83 | 11,262,064.60 |
| Shougang Mining Corporation | Power energy | 615,727.71 | 127,160.60 |
| Shougang Mining Corporation | Production service | 14,472,724.25 | 15,600,062.87 |
| Shougang Group Finance Co., Ltd. | Interest income | 105,646,555.72 | 130,624,439.00 |
| Qian'an Sinochem Coal Chemical Industrial Co., Ltd. | Power energy | 233,075,163.68 | 247,263,882.72 |
| Shougang Casey Steel Co., Ltd. | Steel | 288,823,600.47 | 535,645,904.62 |
| Shougang Casey Steel Co., Ltd. | Production service | 1,285,724.26 | 1,136,801.76 |
| Beijing Shougang Construction Group Co., Ltd. | Power energy | 5,179,677.62 | 3,264,125.51 |
| Beijing Shougang Construction Group Co., Ltd. | Steel | 15,705,817.85 | 9,098,035.59 |
| Beijing Shougang Construction Group Co., Ltd. | Production service | 642,905.16 | 1,985,086.15 |
| Related party | Nature of transaction | 2023 | 2022 |
| Beijing Shougang Gas Co., Ltd. | Power energy | 132,914,533.68 | 109,972,645.95 |
| Beijing Shougang Gas Co., Ltd. | Production service | 126,600.27 | 80,800.83 |
| Beijing Shougang Machinery&Electric Co., Ltd. | Steel | 615,820,168.93 | 613,930,630.06 |
| Beijing Shougang Machinery&Electric Co., Ltd. | Power energy | 3,496,581.23 | 3,913,938.59 |
| Beijing Shougang Machinery&Electric Co., Ltd. | Production service | 1,568,551.19 | 1,604,228.13 |
| Beijing Shougang Ferroalloy Co., Ltd. | Power energy | 4,263,420.65 | 3,676,369.55 |
| Beijing Shougang Ferroalloy Co., Ltd. | Raw fuel material | 17,872,976.23 | 21,241,039.12 |
| Beijing Shougang Ferroalloy Co., Ltd. | Production service | 515,191.79 | 473,569.14 |
| Tangshan Shougang Jingtang Xishan Coking Co., Ltd. | Power energy | 943,495,390.00 | 707,298,397.35 |
| Tangshan Shougang Jingtang Xishan Coking Co., Ltd. | Production service | 242,927,266.39 | 221,751,315.34 |
| Tangshan Shougang Jingtang Xishan Coking Co., Ltd. | Raw material | -- | 1,041,626.43 |
| Beijing Beiye Functional Materials Co., Ltd. | Billet | 1,714,757.18 | 8,300,691.98 |
| Beijing Shougang Gitane New Materials Co., Ltd. | Production service | 141,509.43 | -- |
| Beijing Shougang Huaxia Engineering&Technology Co., Ltd. | Raw fuel material | 6,302,931.53 | 6,901,691.83 |
| Beijing Shougang Huaxia Engineering&Technology Co., Ltd. | Production service | -- | 118,539.00 |
| Beijing Shoucheng Packaging Service Co., Ltd. | Steel | 4,424.78 | 3,649,548.62 |
| Beijing Shoucheng Packaging Service Co., Ltd. | Power energy | 306,515.16 | 359,523.37 |
| Beijing Shoucheng Packaging Service Co., Ltd. | Production service | 1,868,192.00 | 1,872,706.78 |
| Qian'an First Real Packaging Service Co., Ltd. | Steel | 124,456,820.34 | 102,754,677.80 |
| Beijing Shouronghui Technology Development Co., Ltd. | Steel | 18,339,265.07 | 41,264,142.20 |
| Tangshan Caofeidian Dunshi New Construction Material Co., Ltd. | Raw fuel material | 66,729,964.35 | 167,597,204.04 |
| Tangshan Caofeidian Dunshi New Construction Material Co., Ltd. | Power energy | 134,503,437.66 | 139,527,704.49 |
| Tangshan Caofeidian Dunshi New Construction Material Co., Ltd. | Production service | 29,024,124.84 | 28,288,337.62 |
| Beijing Shougang International Engineering&Technology Co., Ltd. | Production service | 28,301.89 | 1,342,075.48 |
| Beijing Shougang Metal Co., Ltd. | Steel | 841,013.59 | 40,394,334.29 |
| Beijing Shougang Metal Co., Ltd. | Power energy | 1,090,805.84 | 1,445,681.43 |
| Beijing Shougang Metal Co., Ltd. | Production service | 2,754,311.93 | 2,754,311.93 |
| Beijing Shougang Mining Construction Co., Ltd. | Steel | 420,015.67 | 9,394.34 |
| Related party | Nature of transaction | 2023 | 2022 |
| Tangshan Caofeidian Industrial District Shouhanxin Industrial Co., Ltd. | Steel | 7,901,199.61 | -- |
| Qinhuangdao Shougang Machinery Co., Ltd. | Raw fuel material | 624,127,356.87 | 579,784,184.94 |
| Qinhuangdao Shougang Machinery Co., Ltd. | Power energy | 1,246,694.69 | 541,746.35 |
| Qinhuangdao Shougang Machinery Co., Ltd. | Production service | 1,060,194.56 | 653,463.03 |
| Qian'an Shougang Equipment Structure Co., Ltd. | Production service | 256,293.58 | 221,876.15 |
| Qian'an Shougang Equipment Structure Co., Ltd. | Steel | 2,302,743.68 | 3,027,566.84 |
| Tangshan Guoxing Industrial Co., Ltd. | Power energy | 2,013,000.88 | 1,720,010.15 |
| Tangshan Guoxing Industrial Co., Ltd. | Raw fuel material | 739,083.24 | 1,253,595.05 |
| Tangshan Guoxing Industrial Co., Ltd. | Production service | 1,810,872.92 | 1,736,728.31 |
| Tangshan Caofeidian Industrial Zone Jingtang Industrial Co., Ltd. | Power energy | -- | 55,369.38 |
| Tangshan Caofeidian First Real Industrial Co., Ltd. | Power energy | 855,939.30 | 906,051.87 |
| Tangshan Caofeidian First Real Industrial Co., Ltd. | Production service | 78,840.97 | 14,716.98 |
| Tangshan Caofeidian First Real Industrial Co., Ltd. | Raw fuel material | 20,024.23 | -- |
| Beijing Shougang Automation Information Technology Co., Ltd. | Power energy | 86,227.79 | 23,403.49 |
| Beijing Shougang Automation Information Technology Co., Ltd. | Production service | 1,469,843.53 | 1,045,424.53 |
| Hebei Shoulang New Energy Technology Co., Ltd. | Power energy | 118,774,891.36 | 123,024,177.15 |
| Hebei Shoulang New Energy Technology Co., Ltd. | Production service | -- | 2,142,857.14 |
| Beijing Jinanyuan Automobile Transportation Co., Ltd. | Production service | 198,165.14 | 198,165.14 |
| Beijing Jinanyuan Automobile Transportation Co., Ltd. | Power energy | 1,536,753.62 | 990,792.19 |
| Tonghua Iron and Steel Co., Ltd. | Raw fuel material | 410,849.06 | 283,018.87 |
| Lujiashan Limestone Mining of Shougang Beijing Co., Ltd. | Raw fuel material | -- | 2,764,398.78 |
| Lujiashan Limestone Mining of Shougang Beijing Co., Ltd. | Raw fuel material | 99,056.60 | -- |
| Beijing Shougang Materials Trading Co., Ltd. | Production service | 5,578.30 | 54,194.35 |
| Qinhuangdao Shounai New Materials Co., Ltd | Steel | 6,370,392.42 | -- |
| Qinhuangdao Shounai New Materials Co., Ltd | Raw fuel material | 41,493.59 | -- |
| Shougang Changzhi Steel&Iron Co., Ltd. | 10,970,355.00 | -- | |
| Shougang Changzhi Steel&Iron Co., Ltd. | Production service | 707,547.16 | 141,509.43 |
| Related party | Nature of transaction | 2023 | 2022 |
| Tangshan Caofeidian Industry Port Co., Ltd. | Power energy | 3,464,678.00 | 3,778,635.00 |
| Tangshan Zhonghong Carbon Chemical Co., Ltd. | Interest income | 8,990,991.36 | 11,275,389.73 |
| Ningbo Shougang Zhejin Steel Co., Ltd. | Steel | 228,910,735.54 | 432,375,321.23 |
| Shougang (Qingdao) Steel Industry Co., Ltd. | Steel | 1,587,159,531.37 | 1,935,625,780.26 |
| Shougang (Qingdao) Steel Industry Co., Ltd. | Production service | 212.37 | 7,346,687.79 |
| Tianjin Shougang Steel Processing&Distribution Co., Ltd. | Steel | 478,621,811.95 | 27,569,222.18 |
| Qian'an Shoujia Construction Material Co., Ltd. | Power energy | 22,655,171.59 | 22,884,203.10 |
| Qian'an Shoujia Construction Material Co., Ltd. | Raw fuel material | 18,526,007.89 | 36,514,508.74 |
| Qian'an Shoujia Construction Material Co., Ltd. | Production service | 248,418.37 | 248,418.37 |
| Beijing Dingshengcheng Packaging Materials Co., Ltd. | Power energy | 34,272.49 | 24,442.68 |
| Beijing Dingshengcheng Packaging Materials Co., Ltd. | Production service | 238,634.36 | 19,625.66 |
| Guizhou Bohong Industrial Co., Ltd. | Production service | 97,762.04 | 129,836.50 |
| Beijing Shougang Landscaping Co., Ltd. | Power energy | 1,625.67 | 1,430.47 |
| Dachang Shougang Machinery&Electric Co., Ltd. | Steel | -- | 1,547,925.87 |
| Guangzhou Jinghai Shipping Co., Ltd. | Production service | 40,174,324.26 | 50,495,018.05 |
| PetroChina Shougang (Beijing) Petroleumsales Co., Ltd. | Power energy | 25,430.60 | 32,357.74 |
| PetroChina Shougang (Beijing) Petroleumsales Co., Ltd. | Steel | 31,946,816.54 | 65,202,291.10 |
| Qian'an Shougang Xingkuang Industrial Co., Ltd. | Steel | 30,810,804.11 | 35,007,815.91 |
| Beijing Shougang Gas Tangshan Co., Ltd. | Production service | 565,714.29 | 235,714.29 |
| Beijing Shougang Catering Co., Ltd. | Power energy | 270,031.08 | 524,090.49 |
| Beijing Jingxi Supply Chain Management Co., Ltd. | Steel | -- | 64,207,092.86 |
| Guizhou Liupanshui Shenghongda Mechanical Equipment Manufacturing Co., Ltd | Production service | -- | 65,725.38 |
| Guizhou Shuigang Logistics Co., Ltd. | Production service | 137,151.19 | 157,558.15 |
| Shougang Shuicheng Iron and Steel (Group) Xingyuan Development Investment Co., Ltd. | Production service | -- | 26,335.85 |
| Hebei Jingji Industry & Trading Co., Ltd. | Steel | 4,690,630.50 | 8,578,020.68 |
| Qian'an Jinyu Shougang Environmental Protection Technology Co., Ltd. | Raw fuel material | 22,281,604.59 | 2,194,885.15 |
| Qian'an Jinyu Shougang Environmental Protection Technology Co., Ltd. | Power energy | 31,498,960.08 | 901,796.43 |
| Related party | Nature of transaction | 2023 | 2022 |
| Qian'an Jinyu Shougang Environmental Protection Technology Co., Ltd. | 34,105.09 | -- | |
| Jingtang Port Shougang Terminal Co., Ltd. | Production service | 372,689.61 | 327,224.25 |
| Shoujia Huanke (Qian'an) Co., Ltd. | Raw fuel material | 30,939,313.95 | 26,345,440.31 |
| Beijing Shoujian Equipment Maintenance Co., Ltd. | Production service | 2,343.39 | -- |
| Beijing Shoujia Steel Construction Co., Ltd. | Power energy | 1,436,870.97 | 1,160,424.21 |
| Beijing Thermal Zhongda Heat Exchange Equipment Co., Ltd. | Production service | 12,974.53 | 8,962.26 |
| Beijing Shougang Lanzatech Co., Ltd. | Production service | -- | 727,265.93 |
| Tangshan Tangcao Railway Co., Ltd. | Production service | 323,773.56 | 3,323,611.75 |
| Beijing Shougang Chengyun Holdings Co., Ltd | Steels | 218,448,717.31 | -- |
| Beijing Shougang Resources Comprehensive Utilization Technology Development Co., Ltd. | Raw fuel material | 510,865.44 | -- |
| Shougang Shuicheng Steel (Group) Co., Ltd | Production service | 471,698.12 | -- |
(2) Details of related party leases
① The Company as a lessor
| Lessee | Type of assets leased | Lease income recognized in 2023 | Lease income recognized in 2022 |
| Qian'an Sinochem Coal Chemical Industrial Co., Ltd. | Land use right | 1,065,067.58 | 1,065,067.58 |
| Tangshan Shougang Jingtang Xishan Coking Co., Ltd. | Land use right | 25,046,418.55 | 25,046,418.55 |
| Tangshan Caofeidian Dunshi New Construction Material Co., Ltd. | Land use right | 2,380,761.90 | 2,380,761.90 |
| Beijing Shougang Lanzatech Co., Ltd. | Land use right | 1,879,619.04 | 165,333.33 |
| Hebei Shoulang New Energy Technology Co., Ltd. | Plant and buildings | 2,208,517.11 | -- |
② The Company as a lessee
| Lessor | Type of assets leased | Lease expenses recognized in 2023 | Lease expenses recognized in 2022 |
| Shougang Group Co., Ltd. | Plant and buildings | 25,987,077.88 | 2,856,131.74 |
| Beijing Shougang Construction Investment Co., Ltd. | Plant and buildings | 10,139,897.90 | 10,139,897.90 |
Newly added right-of-use assets during the reporting period
| Lessor | Type of assets leased | increase in the current period | Increase in the previous period |
| Shougang Group Co., Ltd. | Plant and buildings | 363,355,681.31 | -- |
Interest expenses incurred on lease liabilities during the reporting period
| Lessor | Type of assets leased | Interest expenses of the current period | Interest expenses of the previous period |
| Shougang Group Co., Ltd. | Plant and buildings | 17,135,143.96 | 1,470,426.80 |
| Beijing Shougang Construction Investment Co., Ltd. | Plant and buildings | 1,160,311.85 | 1,566,004.04 |
(3) Details of related party guarantees
① The Company as a guarantor
| Guarantee | Amount of guarantee | Beginning date | Maturity date | Status of guarantee |
| Ningbo Shougang Zhejin Steel Co., Ltd. | 32,755,200.00 | 2023/2/15 | 2024/8/28 | Incomplete |
| Shougang (Qingdao) Steel Industry Co., Ltd. | 142,030,000.00 | 2023/9/18 | 2024/12/25 | Incomplete |
| Shanghai Shougang Steel & Iron Trading Co., Ltd. | 48,750,000.00 | 2023/7/17 | 2024/3/22 | Incomplete |
② The Company as a guarantee
| Guarantor | Amount of guarantee | Beginning date | Maturity date | Status of guarantee |
| Shougang Group Co., Ltd. | 5,094,415,277.76 | 2023/3/27 | 2024/11/29 | Incomplete |
| Shougang Group Co., Ltd. | 8,811,562,222.22 | 2019/9/6 | 2031/9/6 | Incomplete |
(4) Related party financing
| Related party | Closing balance | Beginning date | Maturity date | Note |
| Shougang Group Co., Ltd. | 54,107,510.15 | 2022/3/21 | 2026/11/24 | Entrust loans |
| Shougang Group Finance Co., Ltd. | 10,475,231,798.30 | 2023/1/28 | 2024/12/27 | Short-term loans |
| Shougang Group Finance Co., Ltd. | 1,601,119,444.44 | 2022/11/4 | 2026/12/22 | Long-term loans |
| Shougang Group Finance Co., Ltd. | 3,258,752,366.00 | 2023/7/21 | 2024/6/27 | Notes payable |
(5) Asset transfer and debt restructuring of related parties
| Related party | Content of related party transactions | 2023 | 2022 |
| Beijing Shougang Special Steel Co., Ltd. | Sale of equity and debt of Zhonghong Co. | 221,871,680.02 | -- |
| Hebei Shoulang New Energy Technology Co., Ltd. | Purchase of plant and buildings | 49,809,259.88 | -- |
| Shougang Mining Corporation | Purchase of the pelletizing -sintering business | -- | 1,300,325,799.36 |
(6) Remuneration of key management personnel
The Company has 21 key management personnel in 2023, and 22 key management personnel in2022. The remuneration payment is as follows:
| Item | 2023 | 2022 |
| Item | 2023 | 2022 |
| Remuneration of key management personnel (excluding share payment) | 6.4573 million | 8.6681 million |
6. Receivables from and payables to related parties
(1) Receivables from related parties
| Item | Related party | As at 31 December 2023 | As at 31 December 2022 | ||
| Book balance | Provision for bad debts | Book balance | Provision for bad debts | ||
| Bank deposits | Shougang Group Finance Co., Ltd. | 9,128,608,670.91 | -- | 8,782,663,274.02 | -- |
| Bank deposits | Hua Xia Bank Co.,Ltd. | 1,453,039.82 | -- | 6,713,364.79 | -- |
| Accounts receivable | Shougang Group Co., Ltd. | -- | -- | 57,479.37 | 2,047.03 |
| Accounts receivable | Shougang Casey Steel Co., Ltd. | 264,947,857.43 | 9,471,484.77 | 290,361,751.31 | 10,336,878.35 |
| Accounts receivable | Beijing Shougang Huaxia Engineering&Technology Co., Ltd. | 1,748,412.19 | 1,245,897.88 | 1,748,412.19 | 487,967.75 |
| Accounts receivable | Hebei Shoulang New Energy Technology Co., Ltd. | -- | -- | 34,418,648.92 | 1,225,303.90 |
| Accounts receivable | Qian'an Shoujia Construction Material Co., Ltd. | 50,221,363.06 | 1,795,337.69 | 56,221,363.06 | 2,002,230.58 |
| Accounts receivable | Sanhe Shoujia Construction Material Co., Ltd. | -- | -- | 8,775,968.24 | 8,214,183.99 |
| Accounts receivable | Qinhuangdao Shouqin Metal Materials Co., Ltd. | -- | -- | 1,438,064.93 | 1,070,495.53 |
| Accounts receivable | Tonghua Iron and Steel Co., Ltd. | 382,500.00 | 13,673.79 | 506,248.00 | 17,810.17 |
| Accounts receivable | Tangshan Caofeidian Dunshi New Construction Material Co., Ltd. | 1,185,255.36 | 42,195.09 | -- | -- |
| Accounts receivable | Beijing Shougang International Engineering&Technology Co., Ltd. | 354,540.00 | 259,370.68 | 428,540.00 | 297,559.83 |
| Accounts receivable | Qian'an Shougang Xingkuang Industrial Co., Ltd. | 8,776,606.90 | 313,750.41 | 6,617,509.64 | 235,583.34 |
| Accounts receivable | Beijing Shougang Mining Construction Co., Ltd. | -- | -- | 9,958.00 | 349.19 |
| Accounts receivable | Tangshan Shougang Jingtang Xishan Coking Co., Ltd. | -- | -- | 734.50 | 218.70 |
| Accounts receivable | Beijing Shougang Machinery&Electric Co., Ltd. | 53,000.00 | 1,887.51 | 100,000.00 | 3,561.33 |
| Accounts receivable | Beijing Shouke Xingye Engineering Technology Co., Ltd. | 400,000.00 | 298,885.25 | 400,000.00 | 112,210.59 |
| Item | Related party | As at 31 December 2023 | As at 31 December 2022 | ||
| Book balance | Provision for bad debts | Book balance | Provision for bad debts | ||
| Accounts receivable | Tangshan Tangcao Railway Co., Ltd. | 3,866,228.46 | 138,211.81 | 3,523,028.46 | 125,419.81 |
| Accounts receivable | Beijing Shougang Construction Group Co., Ltd. | -- | -- | 37,260.00 | 1,306.55 |
| Accounts receivable | Beijing Shougang Automation Information Technology Co., Ltd. | 1,285,250.00 | 45,945.74 | 771,150.00 | 27,041.00 |
| Accounts receivable | Jingtang Port Shougang Terminal Co., Ltd. | 30,209.98 | 1,079.96 | -- | -- |
| Accounts receivable | Guangzhou Jinghai Shipping Co., Ltd. | 7,594,241.02 | 270,354.98 | -- | -- |
| Prepayments | Tonghua Iron and Steel Co., Ltd. | 15,507,934.68 | -- | 20,254,497.50 | -- |
| Prepayments | Tangshan Caofeidian Ganglian Logistics Co., Ltd. | 312,574,923.41 | -- | 87,043,657.93 | -- |
| Prepayments | Tangshan Caofeidian Industry Port Co., Ltd. | 268,987.95 | -- | 1,760,930.71 | -- |
| Prepayments | Beijing Jinanyuan Automobile Transportation Co., Ltd. | -- | -- | 4,996,705.97 | -- |
| Prepayments | Shougang Group Co., Ltd. | 959,767,074.26 | -- | 74,027,519.11 | -- |
| Prepayments | Cmi Engineering (Beijing) Co., Ltd. | -- | -- | 50,850.00 | -- |
| Prepayments | China Shougang International Trade&Engineering Corporation | -- | -- | 7,633,348.80 | -- |
| Prepayments | Tianjin Shougang Steel Processing&Distribution Co., Ltd. | 2,045,860.74 | -- | 4,171,441.39 | -- |
| Prepayments | Shougang Changzhi Steel&Iron Co., Ltd. | 7,609.04 | -- | 7,609.04 | -- |
| Prepayments | Beijing Shougang International Engineering&Technology Co., Ltd. | 8,894,098.32 | -- | -- | -- |
| Dividend receivable | Guangzhou Jinghai Shipping Co., Ltd. | -- | -- | 200,000.00 | -- |
| Dividend receivable | Hebei Jingji Industry & Trading Co., Ltd. | 2,407,634.67 | -- | -- | -- |
| Other current assets | Tangshan Zhonghong Carbon Chemical Co., Ltd. | -- | -- | 285,013,761.81 | 118,133,658.14 |
| Other current assets | Beijing Shougang Special Steel Co., Ltd. | 109,717,639.69 | -- | -- | -- |
(2) Payables to related parties
| Item | Related party | As at 31 December 2023 | As at 31 December 2022 |
| Accounts payable | Shougang Group Co., Ltd. | 617,236,361.47 | 655,732,407.11 |
| Accounts payable | Shougang Mining Corporation | 4,100,739,052.40 | 4,125,595,337.09 |
| Accounts payable | Qian'an Sinochem Coal Chemical Industrial Co., Ltd. | 348,423,301.67 | 470,845,391.07 |
| Accounts payable | Tangshan Shougang Jingtang Xishan Coking Co., Ltd. | 1,621,788,863.85 | 1,859,004,046.73 |
| Accounts payable | Beijing Shoucheng Packaging Service Co., Ltd. | 21,962,155.16 | 13,350,654.51 |
| Accounts payable | Beijing Shougang Automation Information Technology Co., Ltd. | 214,716,103.28 | 182,889,510.51 |
| Accounts payable | Beijing Shougang Construction Group Co., Ltd. | 759,749,400.49 | 618,622,996.56 |
| Accounts payable | Beijing Shoujian Equipment Maintenance Co., Ltd. | 29,907,449.12 | 25,594,363.58 |
| Accounts payable | Beijing Shougang Landscaping Co., Ltd. | 14,095,207.11 | 23,883,634.56 |
| Accounts payable | Beijing Shougang Catering Co., Ltd. | 1,302,386.27 | 1,327,588.66 |
| Accounts payable | Beijing Huaxia Technology Co., Ltd. | 7,672,411.53 | 5,762,815.76 |
| Accounts payable | Qinhuangdao Shougang Machinery Co., Ltd. | 75,135,460.40 | 64,415,151.43 |
| Accounts payable | Beijing Shougang Machinery&Electric Co., Ltd. | 119,512,621.21 | 162,405,176.47 |
| Accounts payable | Beijing Shouye Instruments&Meters Co., Ltd. | 14,752,752.88 | 13,442,009.63 |
| Accounts payable | Tianjin Shougang Electric Equipment Co., Ltd. | 10,175,030.28 | 9,099,757.38 |
| Accounts payable | Beijing Shougang Gas Co., Ltd. | 71,674,494.52 | 66,619,195.56 |
| Accounts payable | Beijing Shougang International Engineering&Technology Co., Ltd. | 92,902,894.43 | 310,818,935.04 |
| Accounts payable | Beijing Jinanyuan Automobile Transportation Co., Ltd. | 20,439,879.74 | 15,100,355.24 |
| Accounts payable | Lujiashan Limestone Mining of Shougang Beijing Co., Ltd. | 258,149,223.68 | 158,972,406.25 |
| Accounts payable | Qian'an Shougang Equipment Structure Co., Ltd. | 88,296,034.17 | 85,360,764.98 |
| Accounts payable | Yantai Shougang Mining 3D Co., Ltd. | 93,301.72 | 313,811.63 |
| Accounts payable | Beijing Shoujian Hengji Construction Engineering Co., Ltd. | 1,080,783.29 | 1,602,115.93 |
| Accounts payable | Beijing Soly Technology Co., Ltd. | 174,438.35 | 210,904.43 |
| Accounts payable | Qian'an Shouxin Automation Information Technology Co., Ltd. | 22,896,773.32 | 25,515,132.74 |
| Accounts payable | Qian'an First Real Packaging Service Co., Ltd. | 156,728,118.14 | 96,388,811.17 |
| Accounts payable | Beijing Shoujia Steel Construction Co., Ltd. | 10,670,314.99 | 14,995,775.16 |
| Accounts payable | Beijing Shougang Ferroalloy Co., Ltd. | 141,480,547.64 | 73,607,022.86 |
| Accounts payable | Beijing Shougang Materials Trading Co., Ltd. | 2,525,304,259.02 | 426,891,995.64 |
| Accounts payable | Beijing Shougang Resources Comprehensive Utilization Technology Development Co., Ltd. | 47,067,143.46 | 57,690,426.64 |
| Accounts payable | Shougang Environmental Industry Co., Ltd. | 1,216,050.02 | 334,080.00 |
| Item | Related party | As at 31 December 2023 | As at 31 December 2022 |
| Accounts payable | China Shougang International Trade&Engineering Corporation | 686,572,104.40 | 663,787,332.95 |
| Accounts payable | Beijing Chengxin Engineering Supervision Co., Ltd. | 6,158,477.69 | 6,127,851.86 |
| Accounts payable | Qinhuangdao Shounai New Materials Co., Ltd | 54,520,129.50 | 61,808,291.36 |
| Accounts payable | Tangshan Guoxing Industrial Co., Ltd. | 57,113,565.06 | 40,465,093.70 |
| Accounts payable | Tangshan Caofeidian Industrial District Shouhanxin Industrial Co., Ltd. | 161,334,340.20 | 138,903,339.92 |
| Accounts payable | Beijing Shougang Futong Elevator Co., Ltd. | 259,255.15 | 310,319.85 |
| Accounts payable | Beijing Teyu Plate Co., Ltd. | -- | 85,095,430.63 |
| Accounts payable | Jingxi Shoutang Supply Chain Management Co., Ltd | 926,863.54 | 9,289,106.10 |
| Accounts payable | Beijing Shougang Mining Construction Co., Ltd. | 10,935,689.65 | 3,354,289.89 |
| Accounts payable | Qinhuangdao Shouqin Metal Materials Co., Ltd. | 13,995,879.69 | 19,824,419.55 |
| Accounts payable | Qinhuangdao Shouqin Steel Machining&Delivery Co., Ltd. | 75,377.84 | 466,070.62 |
| Accounts payable | Beijing Shoushe Metallurgical Technology Co., Ltd. | 326,107.50 | 14,002.60 |
| Accounts payable | Beijing Shougang Industrial Group Co., Ltd. | 17,093,147.98 | 24,377,193.66 |
| Accounts payable | Bejing Shougang International Travel Co., Ltd. | -- | 8,688.00 |
| Accounts payable | Beijing Shougang Yunxiang Industrial Technology Co., Ltd. | 1,341,229.23 | 3,664,099.23 |
| Accounts payable | Qiangang Hotel. | 10,105,306.58 | 8,662,628.97 |
| Accounts payable | Beijing Dingshengcheng Packaging Materials Co., Ltd. | 22,330,278.82 | 17,452,797.76 |
| Accounts payable | Beijing Shougang Special Steel Co., Ltd. | -- | 94,949,940.33 |
| Accounts payable | Hebei Shougang Jingtang Machinery Co., Ltd. | 22,699,470.87 | 18,999,797.17 |
| Accounts payable | Ningbo Metallurgical Investigation, Design&Research Co., Ltd. | -- | 7,330,595.55 |
| Accounts payable | Qian'an Shougang Xingkuang Industrial Co., Ltd. | 11,977,326.09 | 4,945,999.84 |
| Accounts payable | Bohai International Conference Center Co., Ltd. | 435,200.00 | -- |
| Accounts payable | Beijing Thermal Zhongda Heat Exchange Equipment Co., Ltd. | 15,751,115.32 | 25,442,826.43 |
| Accounts payable | Beijing Shouyi Mining Hospital Co., Ltd. | 2,340,923.44 | 1,958,389.00 |
| Accounts payable | Beijing Shouyu Industry and Trade Co., Ltd. | 8,789,176.18 | 7,177,859.06 |
| Accounts payable | PetroChina Shougang (Beijing) Petroleumsales Co., Ltd. | 15,920,554.74 | 14,973,290.67 |
| Accounts payable | YASKAWA Shougang Robert Co., Ltd. | -- | 235,384.79 |
| Accounts payable | Beijing Shoubang New Material Co., Ltd. | 2,280,758.30 | 2,927,759.28 |
| Accounts payable | Beijing Xingyeda Machinery&Electric Equipment Manufacture Co., Ltd. | 757,903.49 | 1,820,277.82 |
| Accounts payable | Chaoyang Shougang Beifang Machinery Co., Ltd. | 377,661.07 | 931,110.35 |
| Accounts payable | Chengde Xintong Shoucheng Mining Co., Ltd. | -- | 851,714.56 |
| Accounts payable | Guangzhou Jinghai Shipping Co., Ltd. | 119,729,190.80 | 102,688,729.55 |
| Item | Related party | As at 31 December 2023 | As at 31 December 2022 |
| Accounts payable | Jingtang Port Shougang Terminal Co., Ltd. | 2,177,836.25 | -- |
| Accounts payable | Tangshan Caofeidian Industry Port Co., Ltd. | 38,098,492.55 | 55,335,586.91 |
| Accounts payable | Shougang Guiyang Special Steel Co., Ltd. | -- | 6,975,000.00 |
| Accounts payable | Tianjin Shougang Steel Processing&Distribution Co., Ltd. | 183,740.76 | 149,948.85 |
| Accounts payable | Cmi Engineering (Beijing) Co., Ltd. | 3,842,825.00 | 552,200.00 |
| Accounts payable | Beijing Shoutegang Yuandong Magnesium Alloy Products Co., Ltd. | 200,408.00 | 200,408.00 |
| Accounts payable | Shougang (Qingdao) Steel Industry Co., Ltd. | 991,395.09 | 1,545,599.81 |
| Accounts payable | Qinhuangdao Shougang Racing Valley Co., Ltd | -- | 95,860.00 |
| Accounts payable | Beijing Shougang Park Comprehensive Service Co., Ltd. | 39,144.42 | 2,300.00 |
| Accounts payable | Beijing Shouao Real Estate Co., Ltd | 27,360.00 | -- |
| Accounts payable | Beijing Shougang Environmental Engineering Technology Co., Ltd. | 1,109,886.20 | 1,109,886.20 |
| Accounts payable | Guiyang Steel Mills I/E Corp. | 3,941,759.44 | 4,161,841.55 |
| Accounts payable | Qian'an Jinyu Shougang Environmental Protection Technology Co., Ltd. | 5,848,743.70 | 5,274,968.79 |
| Accounts payable | Shougang Commercial Factoring Co., Ltd. | 4,360.34 | 17,148,576.40 |
| Accounts payable | Tangshan Caofeidian Dunshi New Construction Material Co., Ltd. | -- | 1,888,425.49 |
| Accounts payable | Tangshan Shougang Malanzhuang Iron Ore Co., Ltd. | 160,584,083.43 | 132,159,697.12 |
| Accounts payable | Beijing Shoutaizhongxin Science & Technology Co., Ltd | 10,432,612.75 | 6,185,421.93 |
| Accounts payable | Peking University Shougang Hospital | 3,337,370.93 | 3,088,704.96 |
| Accounts payable | Beijing Aidi Geological Engineering Technology Co., Ltd | 251,381.00 | -- |
| Accounts payable | Beijing Shoufang Commercial Management Co., Ltd | 354,240.00 | -- |
| Accounts payable | Hebei Shoulang New Energy Technology Co., Ltd. | 1,428,942.18 | -- |
| Accounts payable | Geological Research Institute of Shougang Geological Exploration Institute | 1,635,972.59 | -- |
| Contract liabilities | Beijing Shoucheng Packaging Service Co., Ltd. | 53,217.02 | 53,217.02 |
| Contract liabilities | Beijing Shougang Huaxia Engineering&Technology Co., Ltd. | 2,081,061.25 | 1,494,914.05 |
| Contract liabilities | Beijing Beiye Functional Materials Co., Ltd. | 62,368.53 | 34,194.22 |
| Contract liabilities | Beijing Shougang Gitane New MATERIALS Co., Ltd. | 69,810.40 | 45,093.66 |
| Contract liabilities | Beijing Shouronghui Technology Development Co., Ltd. | 4,246,745.24 | 6,564,678.23 |
| Contract liabilities | Beijing Shougang Machinery&Electric Co., Ltd. | 17,532,836.64 | 9,143,010.03 |
| Contract liabilities | Beijing Shougang Construction Group Co., Ltd. | 129,036.27 | 385,946.71 |
| Contract liabilities | Tangshan Caofeidian Industrial District Shouhanxin Industrial Co., Ltd. | 173,402.08 | -- |
| Contract liabilities | Qinhuangdao Shougang Machinery Co., Ltd. | 1,488,091.21 | 1,031,671.69 |
| Item | Related party | As at 31 December 2023 | As at 31 December 2022 |
| Contract liabilities | Tangshan Caofeidian Industrial Zone Jingtang Industrial Co., Ltd. | -- | 50,000.00 |
| Contract liabilities | Qian'an First Real Packaging Service Co., Ltd. | 2,145,700.29 | 2,164,319.43 |
| Contract liabilities | Tangshan Caofeidian Dunshi New Construction Material Co., Ltd. | 1,901,702.22 | 1,901,697.48 |
| Contract liabilities | Beijing Shougang Industrial Group Co., Ltd. | 17,356.29 | -- |
| Contract liabilities | Beijing Jinanyuan Automobile Transportation Co., Ltd. | 248,913.41 | 341,185.21 |
| Contract liabilities | Qian'an Shougang Equipment Structure Co., Ltd. | 17,453.73 | 14,753.10 |
| Contract liabilities | Qinhuangdao Shougang Plate Mill Co., Ltd. | -- | 13,028.81 |
| Contract liabilities | Qinhuangdao Shounai New Materials Co., Ltd | 1,329,141.87 | 182,697.15 |
| Contract liabilities | Shougang Changzhi Steel&Iron Co., Ltd. | 33,498.85 | -- |
| Contract liabilities | Lujiashan Limestone Mining of Shougang Beijing Co., Ltd. | 1,378,893.98 | 1,378,893.98 |
| Contract liabilities | Qian'an Shougang Xingkuang Industrial Co., Ltd. | -- | 50,000.00 |
| Contract liabilities | Beijing Shougang Materials Trading Co., Ltd. | 188,861.00 | 188,861.00 |
| Contract liabilities | Guizhou Bohong Industrial Co., Ltd. | 52,093.30 | 50,000.00 |
| Contract liabilities | Beijing Shougang Mining Construction Co., Ltd. | 203,221.14 | 52,088.04 |
| Contract liabilities | Tianjin Shougang Electric Equipment Co., Ltd. | 169.19 | 169.19 |
| Contract liabilities | Shougang Shuicheng Steel (Group) Saide Construction Co., Ltd. | 805.61 | 805.61 |
| Contract liabilities | Dachang Shougang Machinery&Electric Co., Ltd. | 2,503.67 | 2,503.67 |
| Contract liabilities | Ningbo Shougang Zhejin Steel Co., Ltd. | 3,069,243.35 | 18,320,032.79 |
| Contract liabilities | Guangzhou Jinghai Shipping Co., Ltd. | -- | 810,846.20 |
| Contract liabilities | Suzhou Tonggang Shunye Steel Materials Processing Distribution Co., Ltd. | 2,046.68 | 2,046.68 |
| Contract liabilities | Beijing Shougang Shape Metal Co., Ltd. | -- | 995,551.60 |
| Contract liabilities | PetroChina Shougang (Beijing) Petroleumsales Co., Ltd. | 2,026,489.96 | 7,184,262.58 |
| Contract liabilities | Shougang Casey Steel Co., Ltd. | 9,932.40 | 51,682.17 |
| Contract liabilities | Shougang (Qingdao) Steel Industry Co., Ltd. | 173,809,379.60 | 154,086,174.29 |
| Contract liabilities | Tianjin Shougang Steel Processing&Distribution Co., Ltd. | 1,999,256.25 | -- |
| Contract liabilities | Chaoyang Shougang Beifang Machinery Co., Ltd. | 114.02 | 114.02 |
| Contract liabilities | Beijing Shouyu Industry and Trade Co., Ltd. | 58,437.91 | 58,437.91 |
| Contract liabilities | Hebei Jingji Industry & Trading Co., Ltd. | -- | 487,472.16 |
| Contract liabilities | Beijing Thermal Zhongda Heat Exchange Equipment Co., Ltd. | 50,000.00 | 50,000.00 |
| Contract liabilities | Beijing Shoujian Equipment Maintenance Co., Ltd. | 50,000.00 | 50,000.00 |
| Contract liabilities | Qian'an Jinyu Shougang Environmental Protection Technology Co., Ltd. | 252,503.72 | 111,022.04 |
| Item | Related party | As at 31 December 2023 | As at 31 December 2022 |
| Contract liabilities | Shoujia Huanke (Qian'an) Co., Ltd. | 200,000.00 | 200,000.00 |
| Contract liabilities | Beijing Shoujia Steel Construction Co., Ltd. | 249,169.44 | 198,653.22 |
| Contract liabilities | Beijing Huaxia Technology Co., Ltd. | 50,848.96 | 50,000.00 |
| Contract liabilities | Beijing Jingxi Supply Chain Management Co., Ltd. | -- | 747,440.91 |
| Contract liabilities | Beijing Shougang Resources Comprehensive Utilization Technology Development Co., Ltd. | 50,000.00 | -- |
| Contract liabilities | Hebei Shoulang New Energy Technology Co., Ltd. | 26,158,105.48 | -- |
| Contract liabilities | Shougang Mining Corporation | 474,597.55 | -- |
| Contract liabilities | Beijing Shougang Chengyun Holdings Co., Ltd | 4,808.33 | -- |
| Other payables | Shougang Group Co., Ltd. | 56,517,064.49 | 56,575,231.05 |
| Other payables | Shougang Mining Corporation | -- | 796,194,091.55 |
| Other payables | Beijing Shougang Construction Group Co., Ltd. | 3,450,000.00 | 3,450,000.00 |
| Other payables | Beijing Shougang Industrial Group Co., Ltd. | 4,114,347.23 | 3,865,587.23 |
| Other payables | Tangshan Guoxing Industrial Co., Ltd. | 4,450,973.55 | 4,450,973.55 |
| Other payables | Beijing Shougang Gas Co., Ltd. | 1,123,099.67 | 1,123,099.67 |
| Other payables | Hebei Shougang Jingtang Machinery Co., Ltd. | 2,776,577.52 | 2,776,577.52 |
| Other payables | Tangshan Caofeidian Industrial Zone Jingtang Industrial Co., Ltd. | 2,910,814.91 | 2,910,814.91 |
| Other payables | Qinhuangdao Shougang Machinery Co., Ltd. | 536,392.00 | -- |
| Other payables | Guangzhou Jinghai Shipping Co., Ltd. | 357,800.00 | -- |
| Other payables | Beijing Shouxin Jinyuan Management Consulting Center (Limited Partnership) | -- | 341,400,000.00 |
| Other current liabilities | Shougang Commercial Factoring Co., Ltd. | 1,147,263,122.85 | -- |
| Other non-current liabilities | Shougang Group Co., Ltd. | 3,899,674,951.80 | 4,532,018,467.20 |
XII. Share-based payment
1. General information of share-based payment
| Types of object | Current period grants | Current period exercises | Current period unlock | Current period invalid | ||||
| Quantity | Amount | Quantity | Amount | Quantity | Amount | Quantity | Amount | |
| Staff | -- | -- | -- | -- | -- | -- | 25,257,565.00 | 80,303,655.91 |
Stock options or other equity instruments issued to the public at the end of the period
| Types of object | Stock options issued | Other equity instruments issued | ||
| Range of exercise price | Remaining term of the contract | Range of exercise price | Remaining term of the contract | |
| Staff | -- | -- | 3.25 | 11 months (33%), 23 months (34%) |
2. Equity-settled share-based payment
| The method of determining the fair value of equity instrument on the grant date | The price of restricted stock shall be determined at the closing price on the grant date |
| Important parameters of fair value of equity instruments on grant date | N/A |
| Basis for determining the number of exerciseable equity instruments |
Based on the latest changes in the number ofemployees with exerciseable rights andsubsequent information, make the bestestimate of the number of equity instruments
with feasible rights and interests
| Reasons for significant difference between the current estimate and previous estimate | Performance conditions not met |
| Accumulated amount of equity settled share-based payments recognized in capital reserve | 37,992,492.22 |
| The total amount of expenses recognized for equity settled share-based payments in this period | -12,462,167.10 |
3. Current share based payment expenses
Notes: On 29 November 2021, approved by Beijing State Owned Assets Supervision andAdministration Commission, confirmed with no objection and recorded by China SecuritiesRegulatory Commission, Proposal on Beijing Shougang Co., Ltd.2021 Restricted Stock IncentivePlan (Draft Amendment)and its Summary, Proposal of Beijing Shougang Co., Ltd.2021 RestrictedStock Incentive Plan Implementation Assessment Management Method (Revised), BeijingShougang Co., Ltd. 's Proposal on requesting the General Meeting of Shareholders to authorize theBoard of Directors to handle matters related to 2021 Restricted stock Incentive Plan wereconsidered and approved at the seventh meeting of the eleventh Board of Directors and the firstextraordinary General Meeting of the year 2021 of the Company. The grant date was 9 December2021 and a total of 64,901,800.00 restricted stock shares were granted to 386 incentive objects. Thegrant price of the restricted stock is RMB3.25 per share. After the completion of subscription of thisincentive plan, as a result of additional issuance of new shares, the Company's share capital andcapital reserve increased by RMB 64,901,800.00 and RMB 146,029,050.00 respectively, andtreasury shares increased by RMB 210,930,850.00. At the same time, equity incentive repurchaseobligations are recognized in RMB 210,930,850.00 in other payables. The restriction period ofrestricted shares granted by the incentive plan shall be 24 months, 36 months and 48 monthsrespectively from the registration date of the corresponding partial equity grant. The restrictedshares granted under this incentive Plan shall not be transferred, used for security or debt repaymentduring the restricted sale period.The Company has provided lock-up periods and unlock-up conditions for the stock granted to theincentive subjects by way of non-public offering, and the Company has fully recognized otherpayables - restricted stock repurchase obligations and treasury share in respect of the repurchaseobligations based on the subscription amounts received. If the unlocking conditions specified in thefinal Equity Incentive Plan are not met, the Company will repurchase the shares at the grant priceand write down the outstanding shares. The portion of restricted stock that meets the unlockingconditions is offset from the treasury share.Due to the performance in 2022 and 2023 did not meet the incentive conditions, the cost andexpense recognized during current waiting period is RMB -12,462,167.10, and the consolidatedcapital reserve is decreased by RMB 11,692,261.51 according to the shareholding ratio of thesubsidiaries.
4. Current share based payment expenses
| Modification of share-based payment | N/A |
| Termination of share-based payment | N/A |
XIII. Commitments and contingencies
1. Material commitments
As of 31 December 2023, the Company has no commitments that should be disclosed.
2. Contingencies
As of 31 December 2023, the Company has no pending litigation, external guarantees or othercontingencies that should be disclosed.XIV Events after balance sheet date
1. Profit distribution after the balance sheet date
| Proposed profits or dividends to be distributed | 233,838,348.15 |
| Approved profit or dividend declared for distribution | -- |
According to the resolution of the 7th meeting of the 8th board of directors on April 18, 2024, theboard of directors proposes that the Company distribute cash dividends to all shareholders based onthe share capital on the equity registration date when the annual equity distribution is implementedin 2023, and distribute cash dividends of RMB233,838,348.15 (including tax) to all shareholders. Ifcalculated based on the share capital of 7,794,611,605 shares as of April 18, 2024, which isRMB0.3 (including tax) per 10 shares, the remaining undistributed profits will be carried forward tothe next year.If there is a change in the total number of shares of the Company entitled to distribution rightsbefore the implementation of the distribution plan, based on the principle that the total amount ofcash distribution remains unchanged, the cash dividend per share will be adjusted based on the totalnumber of shares entitled to distribution rights on the registration date of dividend distributionequity.The proposed dividend distribution is yet to be approved by the shareholders' meeting and has notbeen recognized as a liability in this financial statement.
2. Explanation of other events after the balance sheet date
As of April 18, 2024, there are no other post balance sheet events that should be disclosed by theCompany.XV. Other significant events
1. The main content and significant changes of pension plans
In order to ensure and improve the level of benefits for employees after retirement, and to stimulatetheir labor enthusiasm, the Company has decided to establish an enterprise pension plan. Theenterprise annuity established by the Company belongs to the defined contribution plan. Theexpenses required for raising enterprise annuities shall be jointly borne by the company andemployees. The payment channels for unit contributions shall be implemented in accordance with
relevant national regulations, and individual employee contributions shall be withheld and paid bythe company from the employee's salary.
2. Segment information
According to internal organizational structure, management requirement and requirement of internalreporting system, the Company divides businesses into iron and steel segment. Therefore, there isno need to present more detailed information on operating segments.
① External revenue of goods and services
| Item | 2023 | 2022 |
| Iron and steel | 113,761,443,633.43 | 118,142,183,549.47 |
② Geographical information
| Current period or end of current period | Mainland China | Hong Kong | Offset | Total |
| External trading revenue | 113,761,182,300.41 | 1,914,228.76 | -1,652,895.74 | 113,761,443,633.43 |
| Non-current assets | 104,990,915,208.22 | -- | -- | 104,990,915,208.22 |
Continued:
| Prior period or end of prior period | Mainland China | Hong Kong | Offset | Total |
| External trading revenue | 118,142,183,549.47 | -- | -- | 118,142,183,549.47 |
| Non-current assets | 108,436,915,079.61 | -- | -- | 108,436,915,079.61 |
XVI. Notes to the financial statements of parent company
1. Notes receivable
| Item | 2023.12.31 | ||
| Book balance | Bad debt provision | Net carrying value | |
| Bank acceptances | -- | -- | -- |
| Commercial acceptances | 826,432,612.58 | 826,432.61 | 825,606,179.97 |
| Total | 826,432,612.58 | 826,432.61 | 825,606,179.97 |
| Item | 2022.12.31 | ||
| Book balance | Bad debt provision | Net carrying value | |
| Bank acceptances | -- | -- | -- |
| Commercial acceptances | 899,539,689.52 | 899,539.69 | 898,640,149.83 |
| Total | 899,539,689.52 | 899,539.69 | 898,640,149.83 |
(1) Outstanding endorsed or discounted notes that have not matured at the end of the year
| Item | Amount derecognized as of December 31, 2023 | Amount not-derecognized as of December 31, 2023 |
| Item | Amount derecognized as of December 31, 2023 | Amount not-derecognized as of December 31, 2023 |
| Commercial acceptances | -- | 756,922,960.96 |
(2) Notes transferred to accounts receivable due to non-performance of the issuers at the end of theyear
| Item | Amount transferred to accounts receivable as of December 31, 2023 |
| Commercial acceptance notes | 2,000,000.00 |
(3) Classified by bad debt provision method
| Category | 2023.12.31 | ||||
| Book balance | Bad debt provision | Net carrying value | |||
| Amount | Proportion (%) | Amount | Expected credit loss (%) | ||
| Assessed bad debt provision individually | -- | ||||
| Assessed bad debt provision in portfolios based on credit risk characteristics | 826,432,612.58 | 100.00 | 826,432.61 | 0.10 | 825,606,179.97 |
| Portfolio 1 | -- | -- | -- | -- | -- |
| Portfolio 2 | 826,432,612.58 | 100.00 | 826,432.61 | 0.10 | 825,606,179.97 |
| Total | 826,432,612.58 | 100.00 | 826,432.61 | 0.10 | 825,606,179.97 |
Continued:
| Category | 2022.12.31 | ||||
| Book balance | Bad debt provision | Net carrying value | |||
| Amount | Proportion (%) | Amount | Expected credit loss (%) | ||
| Assessed bad debt provision individually | -- | -- | -- | -- | -- |
| Assessed bad debt provision in portfolios based on credit risk characteristics | 899,539,689.52 | 100.00 | 899,539.69 | 0.10 | 898,640,149.83 |
| Group 1 | -- | -- | -- | -- | -- |
| Group 2 | 899,539,689.52 | 100.00 | 899,539.69 | 0.10 | 898,640,149.83 |
| Total | 899,539,689.52 | 100.00 | 899,539.69 | 0.10 | 898,640,149.83 |
(4) Provision, recovery or reversal of bad debt
| Item | Bad debt provision |
| Opening balance | 899,539.69 |
| Provision | -- |
| Recovery or reversal | 73,107.08 |
| Item | Bad debt provision |
| Written-off | -- |
| Closing balance | 826,432.61 |
(5) The Company has no notes receivable actually written off in reporting period.
2. Accounts receivable
(1) Disclosed by ageing of account receivables
| Ageing | 2023.12.31 | 2022.12.31 |
| Within 1 year | 1,435,785,435.03 | 1,398,579,212.14 |
| 1 – 2 years | -- | -- |
| 2 – 3 years | -- | 2,197,756.62 |
| Over 3 years | 2,000,000.00 | 8,578,211.62 |
| Subtotal | 1,437,785,435.03 | 1,409,355,180.38 |
| Less: provision for bad debts | 4,457,794.56 | 12,694,254.85 |
| Total | 1,433,327,640.47 | 1,396,660,925.53 |
(2) Disclosed by bad debt provision
| Category | 2023.12.31 | ||||
| Book balance | Bad debt provision | Net carrying value | |||
| Amount | Proportion (%) | Amount | Expected credit loss (%) | ||
| Assessed bad debt provision individually | 2,000,000.00 | 0.14 | 2,000,000.00 | 100.00 | -- |
| Assessed bad debt provision in portfolios based on credit risk characteristics | 1,435,785,435.03 | 99.86 | 2,457,794.56 | 0.17 | 1,433,327,640.47 |
| Portfolio of aging analysis | 68,752,409.77 | 4.78 | 2,457,794.56 | 3.57 | 66,294,615.21 |
| Portfolio of consolidation scope | 1,367,033,025.26 | 95.08 | -- | -- | 1,367,033,025.26 |
| Total | 1,437,785,435.03 | 100.00 | 4,457,794.56 | 0.31 | 1,433,327,640.47 |
Continued:
| Category | 2022.12.31 | ||||
| Book balance | Bad debt provision | Net carrying value | |||
| Amount | Proportion (%) | Amount | Expected credit loss (%) | ||
| Assessed bad debt provision individually | 8,578,211.62 | 0.61 | 8,578,211.62 | 100.00 | -- |
| Category | 2022.12.31 | ||||
| Book balance | Bad debt provision | Net carrying value | |||
| Amount | Proportion (%) | Amount | Expected credit loss (%) | ||
| Assessed bad debt provision in portfolios based on credit risk characteristics | 1,400,776,968.76 | 99.39 | 4,116,043.23 | 0.29 | 1,396,660,925.53 |
| Portfolio of aging analysis | 71,836,571.46 | 5.10 | 4,116,043.23 | 5.73 | 67,720,528.23 |
| Portfolio of consolidation scope | 1,328,940,397.30 | 94.29 | -- | -- | 1,328,940,397.30 |
| Total | 1,409,355,180.38 | 100.00 | 12,694,254.85 | 0.90 | 1,396,660,925.53 |
Assessed bad debt provision individually：
| Accounts receivable (by debtor) | 2023.12.31 | |||
| Book balance | Bad debt provision | Expected credit loss (%) | Reason for bad debts | |
| Recourse for overdue bills | 2,000,000.00 | 2,000,000.00 | 100.00 | Recourse for overdue bills |
Continued:
| Accounts receivable (by debtor) | 2022.12.31 | |||
| Book balance | Bad debt provision | Expected credit loss (%) | Reason for bad debts | |
| Accounts receivable over 3 years | 6,578,211.62 | 6,578,211.62 | 100.00 | Long aging |
| Recourse for overdue bills | 2,000,000.00 | 2,000,000.00 | 100.00 | Recourse for overdue bills |
| Total | 8,578,211.62 | 8,578,211.62 | 100.00 | |
Assessed bad debt provision in portfolios：
| Item | 2023.12.31 | ||
| Accounts receivable | Bad debt provision | Expected credit loss (%) | |
| Within 1 year | 1,435,785,435.03 | 2,457,794.56 | 0.17 |
| 1 – 2 years | -- | -- | -- |
| 2 – 3 years | -- | -- | -- |
| Over 3 years | -- | -- | -- |
| Total | 1,435,785,435.03 | 2,457,794.56 | 0.17 |
Continued:
| Item | 2022.12.31 | ||
| Accounts receivable | Bad debt provision | Expected credit loss (%) | |
| Within 1 year | 1,398,579,212.14 | 2,480,070.86 | 0.18 |
| Item | 2022.12.31 | ||
| Accounts receivable | Bad debt provision | Expected credit loss (%) | |
| 1 – 2 years | -- | -- | -- |
| 2 – 3 years | 2,197,756.62 | 1,635,972.37 | 74.44 |
| Over 3 years | -- | -- | -- |
| Total | 1,400,776,968.76 | 4,116,043.23 | 0.29 |
(3) Provision, recovery or reversal of bad debt
| Item | Bad debt provision |
| Opening balance | 12,694,254.85 |
| Provision | -- |
| Recovery or reversal | 8,236,460.29 |
| Written-off | -- |
| Closing balance | 4,457,794.56 |
(4) The Company has no accounts receivable write-off during the reporting period.
(5) The top five accounts receivable classified by debtors are as follows:
During the year, the total amount of the top five accounts receivable collected by debtors at the endof the period is RMB 1,412,087,165.65, accounting for 98.21% of the total amount of accountsreceivable at the end of the period, and the total amount of the corresponding bad debt provision atthe end of the period is RMB 2,139,000.61.
| Company Name | Closing balance of accounts receivable | Percentage % | Closing balance of provision |
| Beijing Shougang Cold Rolling Co., Ltd. | 1,327,107,169.50 | 92.30 | -- |
| Qian'an Shoujia Construction Material Co., Ltd. | 50,221,363.06 | 3.49 | 1,795,337.69 |
| Shougang Zhixin Qian'an Electromagnetic Materials Co., Ltd. | 25,145,277.41 | 1.75 | -- |
| Xinhui CIMC Container Co., Ltd. | 6,720,973.91 | 0.47 | 240,264.64 |
| Zhangjiagang CIMC Shengdayin Low Temperature Equipment Co., Ltd. | 2,892,381.77 | 0.20 | 103,398.27 |
| Total | 1,412,087,165.65 | 98.21 | 2,139,000.60 |
3. Financing receivables
| Item | 2023.12.31 | 2022.12.31 |
| Notes receivable | 823,200,805.55 | 835,526,685.55 |
| Less：Other comprehensive income - fair value changes | -- | -- |
| Closing balance of fair value | 823,200,805.55 | 835,526,685.55 |
(1) Classified by bad debt provision method
| Category | 2023.12.31 | ||||
| Book balance | Bad debt provision | Net carrying value | |||
| Amount | Proportion (%) | Amount | Expected credit loss (%) | ||
| Assessed bad debt provision individually | -- | -- | -- | -- | -- |
| Assessed bad debt provision in portfolios based on credit risk characteristics | 823,365,478.65 | 100.00 | 164,673.10 | 0.02 | 823,200,805.55 |
| Portfolio 1 | 823,365,478.65 | 100.00 | 164,673.10 | 0.02 | 823,200,805.55 |
| Portfolio 2 | -- | -- | -- | -- | -- |
| Total | 823,365,478.65 | 100.00 | 164,673.10 | 0.02 | 823,200,805.55 |
Continued:
| Category | 2022.12.31 | ||||
| Book balance | Bad debt provision | Net carrying value | |||
| Amount | Proportion (%) | Amount | Expected credit loss (%) | ||
| Assessed bad debt provision individually | -- | -- | -- | -- | -- |
| Assessed bad debt provision in portfolios based on credit risk characteristics | 835,693,824.31 | 100.00 | 167,138.76 | 0.02 | 835,526,685.55 |
| Portfolio 1 | 835,693,824.31 | 100.00 | 167,138.76 | 0.02 | 835,526,685.55 |
| Portfolio 2 | -- | -- | -- | -- | -- |
| Total | 835,693,824.31 | 100.00 | 167,138.76 | 0.02 | 835,526,685.55 |
(2) Provision, recovery or reversal of bad debt
| Item | Bad debt provision |
| Opening balance | 167,138.76 |
| Provision | -- |
| Recovery or reversal | 2,465.66 |
| Written-off | -- |
| Closing balance | 164,673.10 |
(3) The company has no pledged notes receivable at the end of the year
(4) Outstanding endorsed or discounted notes that have not matured at the end of the year
| Item | Amount derecognized as of December 31, 2023 | Amount not-derecognized as of December 31, 2023 |
| Bank acceptance notes | 6,233,990,659.20 | -- |
| Item | Amount derecognized as of December 31, 2023 | Amount not-derecognized as of December 31, 2023 |
| Commercial acceptance notes | -- | -- |
| Total | 6,233,990,659.20 | -- |
4. Other receivables
| Item | 2023.12.31 | 2022.12.31 |
| Dividends receivable | -- | 9,713,244.06 |
| Other receivables | 136,314,481.16 | 1,154,281,751.62 |
| Total | 136,314,481.16 | 1,163,994,995.68 |
(1) Dividends receivable
| Item | 2023.12.31 | 2022.12.31 |
| Beijing Shougang New Energy Automobile Material Technology Co., Ltd. | -- | 9,713,244.06 |
| Less: Bad debt provision | -- | -- |
| Total | -- | 9,713,244.06 |
(2) Other receivables
① Disclosed by the ageing of other receivables
| Ageing | 2023.12.31 | 2022.12.31 |
| Within 1 year | 136,323,182.39 | 1,154,320,981.69 |
| Less: provision for bad debts | 8,701.23 | 39,230.07 |
| Total | 136,314,481.16 | 1,154,281,751.62 |
② Disclosed by nature of other receivables
| Item | 2023.12.31 | ||
| Book balance | Provision for bad debts | Carrying value | |
| Petty cash | 74,024.55 | 3,701.23 | 70,323.32 |
| Deposits | 100,000.00 | 5,000.00 | 95,000.00 |
| Due from intra-companies | 136,149,157.84 | -- | 136,149,157.84 |
| Total | 136,323,182.39 | 8,701.23 | 136,314,481.16 |
Continued:
| Item | 2022.12.31 | ||
| Book balance | Provision for bad debts | Carrying value | |
| Petty cash | 282,590.68 | 14,129.53 | 268,461.15 |
| Item | 2022.12.31 | ||
| Book balance | Provision for bad debts | Carrying value | |
| Deposits | 500,000.00 | 25,000.00 | 475,000.00 |
| Due from other companies | 2,010.86 | 100.54 | 1,910.32 |
| Due from intra-companies | 1,153,536,380.15 | -- | 1,153,536,380.15 |
| Total | 1,154,320,981.69 | 39,230.07 | 1,154,281,751.62 |
③ Provision for bad debts
As at 31 December 2023, bad debts provision for Phase I:
| Category | Book balance | Expected credit loss within 12 months (%) | Provisions | Carrying value |
| Assessed bad debt provision individually | ||||
| Assessed bad debt provision in portfolios | 136,323,182.39 | 0.01 | 8,701.23 | 136,314,481.16 |
| Petty cash and deposits | 174,024.55 | 5.00 | 8,701.23 | 165,323.32 |
| Due from intra-companies | 136,149,157.84 | -- | 136,149,157.84 | |
| Total | 136,323,182.39 | 0.01 | 8,701.23 | 136,314,481.16 |
As at 31 December 2023, the Company has no other receivables in Phase IIAs at 31 December 2023, the Company has no other receivables in Phase IIIAs at 31 December 2022, bad debts provision for Phase I:
| Category | Book balance | Expected credit loss within 12 months (%) | Provisions | Carrying value |
| Assessed bad debt provision individually | -- | -- | -- | -- |
| Assessed bad debt provision in portfolios | 1,154,320,981.69 | -- | 39,230.07 | 1,154,281,751.62 |
| Petty cash and deposits | 782,590.68 | 5.00 | 39,129.53 | 743,461.15 |
| Due from other companies | 2,010.86 | 5.00 | 100.54 | 1,910.32 |
| Due from intra-companies | 1,153,536,380.15 | -- | -- | 1,153,536,380.15 |
| Total | 1,154,320,981.69 | -- | 39,230.07 | 1,154,281,751.62 |
As at 31 December 2022, the Company has no other receivables in Phase IIAs at 31 December 2022, the Company has no other receivables in Phase III
④ Provision, recovery or reversal of bad debt
| Provision for bad debts | Phase I | Phase II | Phase III | Total |
| Expected credit loss within 12 months | Expected credit loss over the lifetime (no credit impairment) | Expected credit loss over the lifetime (credit impairment occurred) | ||
| As at 1 January 2023 | 39,230.07 | -- | -- | 39,230.07 |
| Changes during the year: | -- | -- | -- | -- |
| -- Shift to Phase II | -- | -- | -- | -- |
| -- Shift to Phase III | -- | -- | -- | -- |
| -- Back to Phase II | -- | -- | -- | -- |
| -- Back to Phase I | -- | -- | -- | -- |
| Provision | -- | -- | -- | -- |
| Reversal | 30,528.84 | -- | -- | 30,528.84 |
| Converse | -- | -- | -- | -- |
| Written-off | -- | -- | -- | -- |
| Other movements | -- | -- | -- | -- |
| As at 31 December 2023 | 8,701.23 | -- | -- | 8,701.23 |
⑤ No write-off of provision for bad debts during the reporting period.
⑥ The top five other receivables classified by debtors are as follows:
| Company Name | Nature of transaction | Closing balance | Ageing | Percentage (%) | Closing balance of provisions |
| Shougang Jingtang United Iron & Steel Co., Ltd. | Due from intra-companies | 136,149,157.84 | Within 1 year | 99.88 | -- |
| China Petroleum Materials Company Limited | Deposits | 100,000.00 | Within 1 year | 0.07 | 5,000.00 |
| Petty cash | Petty cash | 74,024.55 | Within 1 year | 0.05 | 3,701.23 |
| Total | 136,323,182.39 | 100.00 | 8,701.23 |
5. Long-term equity investments
| Item | 2023.12.31 | 2022.12.31 | ||||
| Book balance | Provision for impairment | Carrying value | Book balance | Provision for impairment | Carrying value | |
| Investments in subsidiaries | 36,163,368,519.93 | -- | 36,163,368,519.93 | 36,621,384,419.98 | -- | 36,621,384,419.98 |
| Investment in associates | 856,811,320.22 | -- | 856,811,320.22 | 1,066,506,040.90 | -- | 1,066,506,040.90 |
| Total | 37,020,179,840.15 | -- | 37,020,179,840.15 | 37,687,890,460.88 | -- | 37,687,890,460.88 |
(1) Investments in subsidiaries
| Subsidiaries | 2023.1.1 | Increase | Decrease | 2023.12.31 | Provision for impairment | Impairment at the end of the year |
| Subsidiaries | 2023.1.1 | Increase | Decrease | 2023.12.31 | Provision for impairment | Impairment at the end of the year |
| Shougang Jingtang United Iron & Steel Co., Ltd. | 16,308,208,739.58 | -- | 5,449,033.64 | 16,302,759,705.94 | -- | -- |
| Beijing Shougang Cold Rolling Co., Ltd. | 1,832,315,853.00 | -- | 142,337.81 | 1,832,173,515.19 | -- | -- |
| Qian'an Shougang Metallurgical Technology Co., Ltd. | 1,900,000.00 | -- | -- | 1,900,000.00 | -- | -- |
| Shougang Zhixin Qian'an Electromagnetic materials Co., Ltd. | 7,486,106,290.71 | -- | 1,954,794.69 | 7,484,151,496.02 | -- | -- |
| Beijing Shougang New Energy Automobile Material Technology Co., Ltd. | 450,157,812.20 | -- | 450,157,812.20 | -- | -- | -- |
| Beijing Shougang Steel Trading Investment Management Co., Ltd. | 10,542,695,724.49 | -- | 311,921.71 | 10,542,383,802.78 | -- | -- |
| Total | 36,621,384,419.98 | -- | 458,015,900.05 | 36,163,368,519.93 | -- | -- |
(2) Investments in associates
| Associates | 2023.1.1 | Changes during the year | 2023.12.31 | Impairment at the end of the year | |||||||
| Increase | Decrease | Investment income under the equity method | Other comprehensive income | Other equity movement | Cash dividend | Provision for impairment | Others | ||||
| Qian'an Sinochem Coal Chemical Industrial Co., Ltd. | 891,510,510.32 | -- | -- | -218,489,120.70 | -- | -- | -- | -- | -- | 673,021,389.62 | -- |
| Beijing Shouxin Jinyuan Management Consulting Center (Limited Partnership) | 122,430,402.99 | -- | -- | 84,209,307.09 | -- | -- | 77,539,284.02 | -- | -- | 129,100,426.06 | -- |
| Beijing Dingshengcheng Packaging Materials Co., Ltd. | 16,830,558.74 | -- | -- | 4,597,037.20 | -- | -- | -- | -- | -- | 21,427,595.94 | -- |
| Qian'an Jinyu Shougang Environmental Protection Technology Co., Ltd. | 35,734,568.85 | -- | -- | -2,472,660.25 | -- | -- | -- | -- | -- | 33,261,908.60 | -- |
| Total | 1,066,506,040.90 | -- | -- | -132,155,436.66 | -- | -- | 77,539,284.02 | -- | -- | 856,811,320.22 | -- |
6. Operating revenue and costs of sales
(1) Operating revenue and costs of sale
| Item | 2023 | 2022 | ||
| Revenue | Cost of sales | Revenue | Cost of sales | |
| Main business | 37,731,133,730.37 | 36,510,420,909.92 | 37,952,493,407.65 | 37,315,733,518.02 |
| Other business | 1,195,172,491.74 | 1,126,001,960.80 | 1,052,315,697.44 | 880,022,135.85 |
| Total | 38,926,306,222.11 | 37,636,422,870.72 | 39,004,809,105.09 | 38,195,755,653.87 |
(2) Operating revenue and operating costs of sale by product
| Product type | 2023 | 2022 | ||
| Revenue | Cost of sales | Revenue | Cost of sales | |
| Product type | 2023 | 2022 | ||
| Revenue | Cost of sales | Revenue | Cost of sales | |
| Main business: | ||||
| Billet | 420,010,787.22 | 419,214,964.92 | 546,474,748.00 | 473,163,072.64 |
| Hot rolled | 36,572,541,034.81 | 35,338,824,605.16 | 36,748,637,995.88 | 36,218,585,936.96 |
| Cold rolled | 232,556,455.45 | 200,135,560.77 | -- | -- |
| Other steel products | 506,025,452.89 | 552,245,779.07 | 657,380,663.77 | 623,984,508.42 |
| Subtotal | 37,731,133,730.37 | 36,510,420,909.92 | 37,952,493,407.65 | 37,315,733,518.02 |
| Other business: | ||||
| Power | 734,868,775.06 | 832,154,398.91 | 603,897,153.58 | 692,208,727.34 |
| Solid waste | 89,176,748.38 | 82,967,188.13 | 16,142,266.98 | 14,549,025.28 |
| Others | 371,126,968.30 | 210,880,373.76 | 432,276,276.88 | 173,264,383.23 |
| Subtotal | 1,195,172,491.74 | 1,126,001,960.80 | 1,052,315,697.44 | 880,022,135.85 |
| Total | 38,926,306,222.11 | 37,636,422,870.72 | 39,004,809,105.09 | 38,195,755,653.87 |
(3) Breakdown of operating revenue
| Item | 2023 |
| Main operating revenue | 37,731,133,730.37 |
| Including: recognized at a certain point | 37,731,133,730.37 |
| Recognized during a certain period of time | -- |
| Other revenue | 1,195,172,491.74 |
| Total | 38,926,306,222.11 |
7. Investment income
| Item | 2023 | 2022 |
| Investment income from long-term investment under cost method | 492,295,603.66 | 230,168,137.37 |
| Investment income from long-term investment under equity method | -132,155,436.66 | -178,256,786.93 |
| Investment income from disposal of long-term equity investments | 96,523,695.89 | -- |
| Dividend from other equity instruments investments | 7,412,132.80 | 5,614,882.12 |
| Interest income from entrusted loans | 3,951,910.93 | 1,708,741.16 |
| Total | 468,027,906.62 | 59,234,973.72 |
XVII. Supplementary information
1. Non-recurring gains or losses
| Item | 2023 | Note |
| Gains or losses on disposal of non-current assets | -22,066,115.49 |
| Item | 2023 | Note |
| Government grants recognized in profit or loss during reporting period (excluding those close related to the Company’s normal business, conforming to the national policies and regulations and enjoying ongoing fixed amount or quantity according to certain standard) | 137,487,616.66 | |
| Reversal of impairment provisions for separate impairment testing | 33,127,315.83 | |
| Gains or losses from external entrusted loans | 8,990,991.36 | |
| Non-operating income/(expenses) except the above | 4,157,902.31 | |
| Total non-recurring gains or losses | 161,697,710.67 | |
| Less: income tax effect on non-recurring gains or losses | 21,652,772.59 | |
| Net non-recurring gains or losses | 140,044,938.08 | |
| Less: non-recurring gains or losses attributable to non-controlling interests of the Company (after tax) | 3,962,558.39 | |
| Non-recurring gains or losses attributable to shareholders of the Company | 136,082,379.69 |
2. Return on net assets and earnings per share
| Profit of reporting period | Weighted average return on net assets % | Earnings per share | |
| Basic | Diluted | ||
| Net profit/ (loss) attributable to shareholders of the company | 1.35% | 0.0856 | |
| Net profit/ (loss) attributable to shareholders of the Company excluding non-recurring gains or losses | 1.07% | 0.0680 | |
Board of Directors of Beijing Shougang Company Limited18 April 2024