Bengang Steel Plates Co., Ltd.
Annual Report 2021
March, 2022
Ⅰ. Important Notice, Table of Contents, and Definitions
The Board of Directors, the Supervisory Committee and the Directors, members of theSupervisory Committee and senior management of the Company guarantee that thereare no misrepresentations or misleading statements, or material omission in this report,and individually and collectively accept full responsibility for the authenticity, accuracyand integrity of the information contained in this report.Huo Gang, Legal representative, Wang Donghui, Chief financial officer, and LiXiaowei, Chief accountant, (the person in charge of the accounting), make the pledgefor the authenticity, accuracy and integrity of the attached financial statements.All the members of the Board of Directors attended the board meeting on which thisreport was examined.The prospective statements contained in this annual report do not constitute anysubstantial commitment to the investors. Investors should pay attention to the risksattached to investment decisions. This report is prepared in both of Chinese and English.The Chinese version shall prevail when there are any controversial statements in thetwo versions.The company has described the existing risks and countermeasures in detail in thisreport. Please refer to Section 3-11 “Prospects for the Future Development of theCompany”. “China Securities Journal”, “Securities Times”, “Hong Kong CommercialDaily” and Juchao Information Network (www.cninfo.com.cn) are the company'sselected information disclosure media. All information of the company is based on theinformation published in the above-mentioned designated media. Investors are advisedto pay attention to investment risks.The company’s profit distribution plan is approved by the board of directors. Taking4,108,191,379 shares as the base, a cash dividend of 6.0 yuan (tax included) will bedistributed to all shareholders for every 10 shares, and stock dividend is 0 (tax included).The capital reserve will not be converted into share capital.
Table of Contents
Ⅰ. IMPORTANT NOTICE, TABLE OF CONTENTS, AND DEFINITIONS .................................... 2
II. COMPANY PROFILE AND MAIN FINANCIAL INDEX ........................................................... 6
III. MANAGEMENT DISCUSSION AND ANALYSIS ..................................................................... 9
Ⅳ. CORPORATE GOVERNANCE .................................................................................................. 29
V. ENVIRONMENTAL AND SOCIAL RESPONSIBILITY .......................................................... 49
VI. IMPORTANT EVENTS ................................................................................................................ 53
Ⅶ. STATUS OF SHARE CAPITAL CHANGES AND SHAREHOLDERS ................................ 85
Ⅷ. STATUS OF PREFERRED SHARES ...................................................................................... 91
Ⅸ. STATUS OF CONVERTIBLE CORPORATE BONDS ............................................................ 92
Ⅹ. FINANCIAL REPORT ................................................................................................................... 95
Reference File Directory
1. Financial statements signed and sealed by Legal representative, Chief financialofficer, Chief accountant, (the person in charge of the accounting.
2. The original audit report with the seal of the accounting firm and the signature andseal of the certified public accountant.
3. The originals of all company documents and announcements publicly disclosedduring the reporting period.
4. Annual reports published in other securities markets.
Definition
| Terms to be defined | Refers to | Definition |
| Bengang Bancai, Bengang Steel, the Company, the Listed Company | Refers to | Bengang Steel Plates Co., Ltd. |
| Ansteel Group | Refers to | Ansteel Group Co., Ltd. |
| Bengang Group | Refers to | Bengang Group Co., Ltd. |
| Benxi Steel & Iron CO., Bengang Co. | Refers to | Benxi Steel & Iron (Group) Co., Ltd. |
| Liaoning Provincial State-asset Administration | Refers to | Liaoning State-owned Asset Supervisory and Management Committee |
| SSE | Refers to | Shenzhen Stock Exchange |
| Bengang Puxiang | Refers to | Bengang Puxiang Cool Rolling Steel Sheet Co., Ltd. |
II. Company Profile and Main Financial Index
I. Company Information
| Stock abbreviation | Bengang Bancai, Bengangban B | Stock Code | 000761, 200761 |
| Stock exchange for listing | Shenzhen Stock Exchange | ||
| Company name in Chinese | 本钢板材股份有限公司 | ||
| Abbreviation of Company name in Chinese | 本钢板材 | ||
| Company name in English (If any) | BENGANG STEEL PLATES CO., LTD. | ||
| Abbreviation of Company name in English (If any) | BSP | ||
| Legal representative | Huo Gang | ||
| Registration Address | No.16, Renmin Road, Pingshan District, Benxi City, Liaoning Province | ||
| Post Code of registration Address | 117000 | ||
| Changes in the company's registered address history | None | ||
| Office address | No.16, Renmin Road, Pingshan District, Benxi City, Liaoning Province | ||
| Post Code of office address | 117000 | ||
| Web Address | None | ||
| bgbcdm@163.com | |||
II. Contact Information
| Secretary of Board of Directors | Representative of Securities Affairs | |
| Name | Gao Desheng | Chen Liwen |
| Address | No.16, Renmin Road, Pingshan District, Benxi City, Liaoning Province | No.16, Renmin Road, Pingshan District, Benxi City, Liaoning Province |
| Tel | 024-47827003 | 024-47828980 |
| Fax | 024-47827004 | 024-47827004 |
| bgbcdm@163.com | bgbcclw@126.com |
III. Information Disclosure and Place for Consulting
| Press media for information disclosure | China Securities Journal, Securities Times, Hong Kong Commercial Daily |
| Web address for the annual report as assigned by CSRC | http://www.cninfo.com.cn |
| Place for inquiry of the annual report | Secretary Office of the Board, Bengang Steel Plate Co., Ltd. |
IV. Change of Business Registration
| Organization Code | 91210000242690243E |
| Changes of principal business activities since listing (if any) | No change |
| Changes of the controlling shareholder in the past (if any) | On August 20, 2021, the State-owned Assets Supervision and Administration Commission of the Liaoning Provincial People's Government which is the former actual controller of the company, signed the “Free Transfer Agreement on the State-owned Equity of Bengang Group Co., Ltd.” with Ansteel Group Co., Ltd. Liaoning |
State-owned Assets Supervision and Administration Commission transfered its 51%stake of Bengang Group Co., Ltd. to Ansteel Group for free.On October 12, 2021, the industrial and commercial registration of change wascompleted, and Ansteel Group Co., Ltd. became the indirect controlling shareholderof the company. The direct controlling shareholder of the company remainsunchanged, which is still Benxi Iron and Steel (Group) Co., Ltd.
V. Other InformationAccountants’ firm engaged by the Company:
| Name of the accountants’ firm | BDO China Shu Lun Pan Certified Public Accountants LLP |
| Address of the accountants’ firm | Address: 4/F 61 Nanjing Rd. East, Huangpu, Shanghai |
| Signing name of accountants | Li Yongjiang, Li Guiying |
Sponsor engaged by the Company to conduct sustained supervision during the reporting period
√ Applicable □ Not applicable
| Name of the sponsor institution | Address of the sponsor institution | Name of the sponsor representative | Sustained supervision period |
| Guotai Junan Securities Co., Ltd. | No. 768, Nanjing West Road, Jingan District, Shanghai | Yuan Yechen, Yang Keyi | August 5th, 2020 to December 31st, 2021 |
Financial consultancy institution engaged by the Company to conduct sustained supervision during the reportingperiod
□ Applicable √ Not applicable
VI. Main Accounting Data and Financial Index
Whether the company needs to retrospectively adjust or restate accounting data for previous years
□ Yes √ No
| 2021 | 2020 | Changes over last year | 2019 | |
| Operating income（RMB） | 77,912,144,981.46 | 48,684,792,685.58 | 60.03% | 52,741,353,582.28 |
| Net profit attributable to the shareholders of the listed company（RMB） | 2,500,582,902.58 | 384,252,740.78 | 550.77% | 555,646,971.40 |
| Net profit after deducting of non-recurring gain/loss attributable to the shareholders of listed company（RMB） | 2,517,758,656.14 | 381,469,784.99 | 560.02% | 549,528,817.13 |
| Net Cash flow generated by business operation（RMB） | 413,473,454.04 | -2,039,000,213.29 | 120.28% | 6,977,824,041.16 |
| Basic earnings per share (RMB/Share) | 0.60 | 0.10 | 500.00% | 0.143 |
| Diluted earnings per share (RMB/Share) | 0.50 | 0.10 | 400.00% | 0.143 |
| Weighted average net assets yield | 11.88% | 1.90% | 9.98% | 2.88% |
| 2021 | 2020 | Changes over last year | 2019 | |
| Gross assets（RMB） | 55,147,123,275.30 | 65,007,470,749.20 | -15.17% | 60,731,425,193.90 |
| Net assets attributable to shareholders of the listed company（RMB） | 22,500,969,014.30 | 21,018,296,389.10 | 7.05% | 19,487,665,261.17 |
The lower of the company’s net profit before and after deduction of non-recurring gains and losses in the most recentthree fiscal years is negative, and the audit report of the most recent year shows that the company’s ability to continueoperations is uncertain
□ Yes √ No
The lower of the net profit before and after deducting non-recurring gains and losses is negative
□ Yes √ No
VII. Differences between Domestic and Foreign Accounting Standards
1. Differences of net profit and net assets disclosed in financial reports prepared under IFRSand Chinese accounting standards.
□ Applicable √ Not applicable
There are no differences of net profit and net assets disclosed in financial reports prepared under IFRS and Chineseaccounting standards during the reporting period.
2. Differences of net profit and net assets disclosed in financial reports prepared underoverseas and Chinese accounting standards.
□ Applicable √ Not applicable
There are no differences of net profit and net assets disclosed in financial reports prepared under overseas andChinese accounting standards during the reporting period.
VIII. Main Financial Index by Quarters
Unit: Yuan
| First quarter | Second quarter | Third quarter | Fourth quarter | |
| Operation income | 15,252,265,770.99 | 23,335,862,441.15 | 22,839,272,300.53 | 16,484,744,468.79 |
| Net profit attributable to the shareholders of the listed company | 686,599,759.65 | 1,522,198,408.26 | 1,568,670,728.28 | -1,276,885,993.61 |
| Net profit after deducting non-recurring gain/loss attributable to the shareholders of listed company | 678,208,256.33 | 1,520,934,306.97 | 1,564,674,812.54 | -1,246,058,719.70 |
| Net cash flows generated by operating activities | -966,470,265.23 | 2,491,386,485.26 | 18,904,467.35 | -1,130,347,233.34 |
Whether significant variances exist between the above financial index or the index with its sum and the financialindex of the quarterly report as well as semi-annual report index disclosed by the Company
□ Yes √ No
IX. Items and Amount of Non-recurring Profits and Losses
√ Applicable □ Not applicable
Unit: Yuan
| Item | 2021 | 2020 | 2019 | Notes |
| Gains and losses on disposal of non-current assets (including the write off part of the | -60,100,706.71 | -92,695,525.95 | -77,292,030.26 |
| provision for impairment) | ||||
| Government subsidy attributable to profit and loss of current period (except such government subsidy closely related to the company's normal business operation, meeting the regulation of national policy and enjoyed constantly in certain quota or quantity according to a certain standard) | 66,345,976.64 | 81,193,591.56 | 83,914,522.47 | |
| Profit or loss from investment or assets entrusted to others | 2,436,869.33 | 0.00 | 605,795.19 | |
| Gains and losses of debt restructuring | 32,800.02 | 50,640.00 | ||
| Profits excluded effective hedging business related to the company's normal business operations, from holding transactional financial assets, derivative financial assets, transactional financial liabilities, fair value changes in derivative financial liabilities, and disposal of transactional financial assets and derivative financial assets, financial liabilities held for trading, derivative financial liabilities and other debt investments | -37,205,991.34 | 13,500,000.00 | ||
| Other non-operating income and expenses other than above | 5,176,371.41 | 1,592,660.62 | 779,757.58 | |
| Other profit and loss items that meet the definition of non-recurring gains and losses | 2,084.65 | |||
| Less: impact of income tax | -5,969,319.73 | 786,094.20 | 1,818,703.48 | |
| impact of minority equity (after tax) | -202,407.38 | 54,476.26 | 123,911.88 | |
| Total | -17,175,753.56 | 2,782,955.79 | 6,118,154.27 | -- |
Other profit and loss items that meet the definition of non-recurring profit and loss:
□ Applicable√ Not applicable
There exists no situation of other profit and loss items that meet the definition of non-recurring profit and loss.Explanation on defining the non-recurring profit and loss items listed in the "Explanatory Announcement No. 1 onInformation Disclosure of Companies Offering Securities to the Public - Non-recurring Profit and Loss" as recurringprofit and loss items.
□ Applicable√ Not applicable
The company does not define the non-recurring profit and loss items listed in the "Explanatory Announcement No.1 on Information Disclosure of Companies Offering Securities to the Public - Non-recurring Profit and Loss" asrecurring profit and loss items.
III. Management Discussion and Analysis
I. Industry situation of the company during the reporting periodThe industry to which the company belongs is the steel industry. The steel industry is a significant basic industry ofcountry's national economy, a significant support for building a modern and powerful country, and a significant fieldfor realizing green and low-carbon development.
The national economy continued recovery in 2021, and provided a good environment for the development of thesteel industry. With the continuous improvement of the new development pattern of "dual circulation" at domesticand abroad, the supply-side reform and demand-side management have formed a higher level of dynamic balance.The steel industry actively responds to changes in domestic and foreign demand situations, strives to overcome theimpact of Various factors, such as a high price of raw materials and fuels, and a sharp rise in environmental protectioncosts. The industry is generally operating well and in line with policy guidance and market expectations. In the firsthalf of the year, the steel industry worked hard to meet the strong demand for steel market brought about by the rapidgrowth of downstream industries, fully released production capacity, and formed a booming situation in both ofproduction and sales. In the second half of the year, with the implementation of production restriction measures andthe slowdown in demand growth in downstream industries, the steel industry timely controlled production capacity.Throughout the year, country's steel supply and demand were basically balanced and making outstandingcontributions to meeting the steel demand of downstream industries and ensuring the sustained recovery of thenational economy.
The year 2022 is a crucial year for the country to implement the "14th Five-Year Plan", and it is also a crucial yearfor the steel industry to achieve high-quality development. From the perspective of the overall external environment,at the end of 2021, the shock wave of the new coronavirus variant strain Omicron swept the world, adding morevariables to the world economic situation. Under the background of the national "dual carbon" goal, the steel industryhas entered a critical period of high-quality development. Green and low-carbon, intelligent manufacturing, etc. havebrought more severe challenges and disruptive changes, and market uncertainty has further increased. At the sametime, China's economy has a solid foundation and strong resilience, and will remain a long-term improvementfundamental in the future. The National Development and Reform Commission and the Ministry of Industry andInformation Technology issued the "Implementation Plan on Reinvigorating the Operation of the Industrial Economyand Promoting the High-quality Development of the Industry", which proposed policies and measures such as"vigorously increasing the effective supply of the bulk raw material market", "tapping the demand potential andexpanding the market space of the industrial economy", which is conducive to guiding Market expectations andcreate new opportunities for the development of iron and steel enterprises.
Currently, China has entered a critical stage of comprehensive and high-quality development. The country has clearlyput forward the goal of striving to achieve carbon peaking by 2030 and carbon neutrality by 2060, which has putforward new requirements for the development of the iron and steel industry, and has also stimulated new momentumfor the high-quality development of the steel industry. The steel industry is facing a series of changes in the domesticsteel demand structure, steel product supply structure, steel production process structure, and steel productionresource structure.II. The main business of the company during the reporting period
1. Main business, main products and their uses
During the reporting period, the company’s main businesses include iron and steel smelting, rolling processing,power generation, coal chemical industry, special steel profiles, railways, import and export trade, scientific research,product sales, etc. The introduction of world advanced equipment and technology to implement equipment upgradesfor the main iron and steel industry and have built a high-quality steel base, formed more than 60 varieties, morethan 7,500 specifications of product series, the proportion of high value-added and high-tech products reached morethan 80%. The leading products for automotive surface panels, home appliance panels, petroleum pipeline steel,container panels, shipboard, etc. are widely used in the fields of automobiles, home appliances, petrochemicals,aerospace, machinery manufacturing, energy and transportation, building decoration and metal products, and areexported to more than 60 countries and regions.
2. Business model
Procurement model: The company's procurement model includes domestic procurement and foreign procurement.Domestic material procurement is carried out through centralized procurement, unified bidding, price comparison,
and consultation. The procurement of foreign materials is carried out through long-term cooperative procurement,direct procurement, open and invitational bidding, inquiry and price comparison, competitive negotiation,negotiation procurement, etc., which mainly act by Bengang Steel Group International Economic and Trade Co., Ltd.Sales model: The company's sales are divided into domestic sales and export sales. Domestic sales mainly adopt thedirect sales model. The company sells directly to large customers, and other small and medium customers sell tothem through regional sales subsidiaries. Export sales mainly act through the strong marketing network accumulatedin international trade by Bengang Steel Group International Economic and Trade Co., Ltd., which act as agent of theexport sales and charge the agency fee.
3. Key drivers of performance
The company seized the favorable opportunity of the reorganization between Ansteel Group Co., Ltd. and Bengangsteel Group Co., Ltd., deeply carried out the three-year action of state-owned enterprise reform and three systemreforms, with the goal of achieving "five promotions and two reductions", and earnestly implemented the "5+1"work pattern and "1+4" important mission.Implement the "General Plant System", continuously improve management efficiency and benefits, build atechnological innovation system, create innovative platforms such as "Liaoning Bengang Iron and Steel IndustryIndustry-University-Research Alliance", and implement the "R&D personnel delisting system for scientific andtechnological projects" to achieve precise incentives. Continuing to carry out in-depth benchmarking exchanges,adhere to the direction of market-oriented reform, and continuously promote the high-quality development ofdiversified industries, various tasks have achieved relatively gratifying business performance.During the reporting period, the company's main business and business model remained unchanged.III. Analysis on Core CompetitivenessThe company adheres to the innovation-driven and "quality + service" development model, with the strategic goalof building an internationally competitive high-quality plate base, a domestic first-class special steel base and acomprehensive service provider, and exerts a strategic leading role, focusing on improving quality and efficiency, Interms of product upgrades, technological innovation, green and intelligent manufacturing, we will innovatemanagement ideas, enhance the core competitiveness of enterprises, and promote enterprises to achieve high-quality,green and intelligent development.
1. Manufacturing capabilities. Innovate management ideas, strengthen professional management and control of theentire chain, and continuously improve corporate management efficiency. All departments and units interact witheach other, continue to implement the concept of priority on output, adhere to the iron system as the core, focus onthe process connection of iron and steel, and rationally match the production line and resource productionorganization principles of the steel post process, so that the production process and operation Continuouslystandardize and refine, make every effort to maximize quality, efficiency and production scale, and promote theentire production chain toward high-end manufacturing.
2. Equipment transformation and upgrading. In 2021, the company issued a fixed asset investment plan of 3.85billion yuan. Implemented a new round of large-scale technological transformation and ultra-low emissiontransformation projects represented by key projects such as special steel electric furnace upgrading, special steelrolling mill renovation, CCPP power generation project, 220KVA substation project, Taizi River bridge renovation,1700mm production line improvement, and coke oven flue gas desulfurization and denitrification. At present, the1700mm production line has been improved, the CCPP power generation project and the 220KVA substation projectwill be put into operation one after another. The special steel electric furnace upgrade and transformation project willbe commissioned and put a set of electric furnaces and supporting refining equipment, continuous casting equipmentinto production at the end of August 2022.
3. New product development capabilities. So far, 49 grades have been developed. Except for the pre-researched cold-rolled dual-phase steel DP1180, other new products have been sold in the market. Realized the full coverage ofstrength grade series of hot-rolled automobile structural steel represented by "automobile beam" and "steel for boxbody". Successfully developed dual-phase steel of 1180 strength level and hot-dip galvanized composite phase steelCR980T/700Y-MP, which are leading domestically. Developed hot-rolled anti-oxidation coating-free hot-formedsteel CF-PHS1500 to achieve the world's first launch, reaching the international leading level.
4. Technological innovation ability. In terms of scientific and technological cooperation, to undertake meetings ofthe Expert Committee of the Metals, establish the strategic docking between Bengang group and China Iron andSteel Research Group, strengthen cooperation with Northeastern University and other universities and researchinstitutes, and invite national academicians and authoritative experts to discuss the latest technological progress andindustry development trends. , To direct and to promote the high-quality development of Benxi Iron and Steel Group.In terms of scientific and technological achievements, it has won 4 metallurgical science and technology awards and3 scientific and technological progress awards in Liaoning Province. Among them, "the research and developmentof hot stamping steel with the highest strength and extra-thick specifications and its serial development" won thefirst prize in the metallurgical industry. The industry's highest award. In terms of intellectual property rights, 3
national standards and 11 corporate standards were drafted; 211 patents were accepted by the National Bureau, ayear-on-year increase of 21.2%; 108 patents were authorized by the National Bureau, including 16 inventions and92 utility models. Bengang Steel Plate Co., Ltd. won the Quality Award from the Governor of Liaoning Provinceand was identified as "the first batch of high-value patent cultivation centers in Liaoning Province."
5. Green development capability. In combination with the steel industry and local ultra-low emission policyrequirements, the company has the courage to assume social responsibilities, relying on professional planning andresearch institutions to prepare an environmental protection improvement plan and an annual implementation plan.A total of more than 40 ultra-low emission projects have been teased out, all of which have been included in theinvestment plan and are under construction or preliminary work. Through all-round green improvement such ascleaner production level, three waste management, environmental protection management, the company achievecommunity-based environmental quality, promote the integration of industry and city, strive to achieve ultra-lowemission by the end of 2023, and build the company into an "ecological steel" that develops harmoniously with thecity. At present, the two dust collectors of the second sintering product of the iron smelting plant have completed thetransformation to meet the emission standards. The CCPP power generation project using surplus gas is expected tobe completed and put into operation in the first quarter of 2022.
6. Intelligent manufacturing capabilities. The company has vigorously promoted the construction of intelligentmanufacturing related projects such as informatization and intelligence. In 2021, investment has been made to carryout centralized control and intelligent manufacturing of iron, burning, coke, special steel processes, raw materialmanagement, energy management, etc. Carry out the improvement of the basic information platform, production andmanufacturing management, intelligent equipment for cold rolling areas, and the upgrading and transformation ofrailway transportation dispatching and commanding information systems Intelligent transformation in other fields.keep up with the pace of enterprise development in the era of big data, and achieve high-quality development.
IV. Management Discussion and Analysis
1. General
During the reporting period, the company has always adhered to the new development concept, promotedefficient development, and fully implemented the spirit of General Secretary Xi Jinping's instructions onNortheast Revitalization and Liaoning Revitalization. It has carried out a series of fruitful work with thecore of "refining and strengthening listed companies, and promoting high-quality development",overcoming the influence of unfavorable factors such as market shocks, and achieving a high startingpoint for the "14th Five-Year Plan". The annual sales revenue was 77.912 billion yuan, a year-on-yearincrease of 60%; the profit was 3.435 billion yuan, a year-on-year increase of 724%; pig iron completed
9.838 million tons, a year-on-year decrease of 2.3%; crude steel completed 10.438 million tons, a year-on-year increase of 1.24%; Plates completed 13.217 million tons, an increase of 8.02% year-on-year;cold-rolled sheets completed 6.1078 million tons, an increase of 8.1% year-on-year; special steel productscompleted 622,000 tons, a year-on-year decrease of 13.7%. Reviewing the work of the year, it is mainlyreflected in the following aspects:
1. Strengthen process linkage to make production operation more efficient
Among them, the steel plant has established a high-efficiency production model, and the monthly outputhas exceeded 1 million tons, which is the best level in history. The hot continuous rolling mill hascontinuously set new production records, and the production capacity has reached the level of 10 milliontons. The cold rolling plant took multiple measures to break through the "bottleneck" of production. Eachunit has set a record of 40 times of production capacity, and some units have exceeded the designedcapacity by 120%. The steel rolling output of special steel mills has shown a good trend of increasingmonth by month, and the daily output has increased by 165 tons year-on-year. The scrap steel plantrecovered 63,000 tons of non-production scrap, ensuring high production and consumption reduction.
2. Strict process control and more precise cost control
Established the management and control concept of "low cost to win high efficiency", and various costreduction measures have achieved remarkable results. The financial system refines capital managementand saves interest expenses; the production system strictly controls the port transportation consumptionratio to reduce the cost of raw material loss; the equipment system strengthens the repair of spare partsby outsourcing, and reduces the purchase cost of new products; the energy system increases theproportion of self-generated electricity and avoids peak production, direct purchase of electricity andother measures to effectively reduce electricity costs.
3. Implement the innovation-driven strategy, and achieve new results in the field of scientific and
technological research and developmentAdhere to the concept of "strengthening the enterprise with science and technology", carry out scientificresearch and research and development of new products, make every effort to achieve technologicalleadership, promote varieties and create benefits, and effectively improve the enterprise's ability to resistrisks. Throughout the year, 20 grades of cold series products, 15 grades of thermal series products and14 grades of special steel products were developed. Successfully developed domestic leading 1180-strength dual-phase steel and high-performance 50BW470 high-efficiency silicon steel for Ningde Tebo,as well as ultra-deep-drawn electro-galvanized automotive outer panels for Iran's Saipa Automobile. Forthe first time, it cooperated with foreign R&D institutions - General Automobile Research Institute ofNorth America and Northeastern University to develop "coating-free hot-formed steel", breaking throughbarriers to technical cooperation, breaking through patent monopoly, and completing industrializationtests. In the whole year, 100 scientific research projects were established, an increase of 69.5% year-on-year, and the planned implementation rate reached over 90%. Successfully jointly applied for the "13thFive-Year" National Key R&D Program "Genetic Engineering and Artificial Intelligence Design ofAviation Key Materials" and was approved. The linkage of "sales, research and production" was achieved,and 20 certification and delisting projects were completed throughout the year, with a total of 47 brands.Mercedes-Benz certification has made a breakthrough. Users of pickling products have completedstamping certification and assembly, and are conducting road tests in Germany and Turkey. At the sametime, it has passed the Japanese JIS certification, which provides a strong guarantee for the consolidationof overseas markets.
4. Consolidate the construction of the management system, and the level of enterprise management hasclimbed to a new levelBased on the construction of six management systems of safety, quality, energy, environmental protection,integration of industrialization and informatization, and measurement, we constantly improve variousmanagement systems, so as to ensure that there is a basis for doing things, and there is evidence forinvestigations, so as to achieve closed-loop management. Adhere to safety first and build a "red line"awareness. Quickly implement the safety management requirements of "three managements and threemusts", "five cleanups and five eliminations" and "four cannot be relaxed for a moment", andresponsibilities are consolidated layer by layer. Vigorously promote consistent management andstrengthen process compliance. Carry out research on energy conservation and consumption reduction,realize green and low-carbon operation, and make energy management more refined and professional.The investment in metering equipment was increased, and the integration and commissioning of theenergy metering network was completed, laying the foundation for precise control of energy consumption.Continue to explore new paths for legal management of environmental protection work, establish andimprove daily management and control and emergency management systems and measures, fullypromote the construction of key low-carbon energy conservation projects, and promote green and low-carbon development of enterprises. Implement the new development concept and build a digital andintelligent enterprise. Taking solving practical production problems as the focus, sticking to the maindirection of intelligence, taking the cold rolling production line with a high degree of automation as apilot, vigorously promoting the application of innovative technologies such as unmanned driving andindustrial robots, and effectively promoting the improvement of labor productivity.
5. Actively promote the deepening of reform, and make new progress in corporate governanceIn accordance with the goal of "becoming better and stronger to promote the high-quality developmentof listed companies", the key reform work has been determined, which has pointed out the direction fordeepening the reform of Bengang Bancai and solving the problems of enterprise development. Reshapethe organizational structure, achieve lean and efficient management, establish an authorization system,improve decision-making efficiency, and control decision-making risks; strengthen performancemanagement, and promote precise incentives. In accordance with the principle of "complete undertaking,comprehensive decomposition, step-by-step pressure, and differentiated design", the company's operatorperformance and organizational performance indicators will be decomposed and implemented step bystep, giving full play to the motivational role of performance appraisal, realizing the company's benefitsand employees' benefits. Promote management innovation, improve management efficiency, establish amanagement mechanism centered on efficiency and follow the principle of process compliance, andcontinue to improve management effectiveness and efficiency.
6. Highlight the leading role of party building, and show new achievements in group organization workThoroughly study and implement the spirit of the 19th National Congress of the Communist Party ofChina and all previous plenary sessions of the 19th National Congress of the Communist Party of China,as well as the spirit of the National Party Building Work Conference of State-owned Enterprises, give
full play to the fighting fortress of the party organization and the vanguard and exemplary role of partymembers, strengthen cadre evaluation and echelon construction, and establish a leadership managementand evaluation system, by adopting a multi-dimensional work performance evaluation method, andsolidly carry out the selection and recruitment of leading cadres. Adhere to the tracking and training ofyoung cadres, build a platform for talent growth in multiple directions, and create conditions foroutstanding talents to stand out. Comprehensively and strictly manage the party to advance in depth, andcreate a clean and upright business environment; implement the study of the party's history and solve thepeople's worries, and actively do practical things and solve problems for the workers and the masses.
7. Multi-measures are taken at the same time and the organization is closely organized, and the epidemicprevention and control has become normalizedStrictly implement the various epidemic prevention policies of Bengang Group, comprehensivelyconsolidate the foundation of epidemic prevention and control, and ensure that the thinking is not looseand the standards are not lowered. Adhere to daily information control and supervision of epidemicprevention measures, and do a solid job in the reception of foreign personnel and the management ofpersonnel going out, as well as disinfection and personal protection in public places. Establish anemergency response liaison mechanism with the Municipal Health Commission and the hospital,implement measures such as consultation on vaccination matters, and rapid response to emergencies. Atpresent, 9 batches of vaccines have been organized for centralized vaccination, and the vaccination ratiohas reached 98%, which has built a strong anti-epidemic barrier.
2. Income and Cost
(1) Breakdown of Operating Income
Unit: Yuan
| 2021 | 2020 | Change over last year | |||
| Amount | Proportion | Amount | Proportion | ||
| Total operating income | 77,912,144,981.46 | 100% | 48,684,792,685.58 | 100% | 60.03% |
| By industries | |||||
| Industry | 77,912,144,981.46 | 100.00% | 48,684,792,685.58 | 100.00% | 60.03% |
| By products | |||||
| Steel plate | 69,992,675,798.60 | 89.84% | 45,321,849,577.55 | 93.09% | 54.43% |
| Others | 7,919,469,182.86 | 10.16% | 3,362,943,108.03 | 6.91% | 135.49% |
| By regions | |||||
| Northeast | 31,503,298,043.72 | 40.43% | 20,420,940,894.42 | 41.95% | 54.27% |
| North China | 3,199,355,088.45 | 4.11% | 1,608,496,520.50 | 3.30% | 98.90% |
| East China | 33,516,981,788.40 | 43.02% | 21,783,663,312.31 | 44.74% | 53.86% |
| Northwest | 68,888,026.23 | 0.09% | 48,736,790.89 | 0.10% | 41.35% |
| Southwest | 135,459,678.97 | 0.17% | 241,981,145.95 | 0.50% | -44.02% |
| Central south | 3,152,641,431.89 | 4.05% | 25,508,604.19 | 0.05% | 12,259.13% |
| Export | 6,335,520,923.80 | 8.13% | 4,555,465,417.32 | 9.36% | 39.08% |
| By sales model | |||||
| Sales in domestic market | 71,576,624,057.66 | 91.87% | 44,129,327,268.26 | 90.64% | 1.23% |
| Sales in export market | 6,335,520,923.80 | 8.13% | 4,555,465,417.32 | 9.36% | -1.23% |
(2) Industry, Product and Regions Accounting for the Company’s Operating Income or Profitover 10%
√ Applicable □ Not applicable
Unit: Yuan
| Operating income | Operating costs | Gross | Operating | Operating costs | Gross margin |
| margin | income change over last year | change over last year | change over last year | |||
| By industries | ||||||
| Industry | 77,912,144,981.46 | 71,891,598,336.96 | 7.73% | 60.03% | 54.96% | 3.02% |
| By products | ||||||
| Steel plate | 69,992,675,798.60 | 64,770,421,744.20 | 7.46% | 54.43% | 49.51% | 3.05% |
| Others | 7,919,469,182.86 | 7,121,176,592.76 | 10.08% | 135.49% | 131.98% | 1.36% |
| By regions | ||||||
| Northeast | 31,503,298,043.72 | 28,935,779,253.16 | 8.15% | 54.27% | 49.04% | 3.22% |
| North China | 3,199,355,088.45 | 2,932,208,938.56 | 8.35% | 98.90% | 92.03% | 3.28% |
| East China | 33,516,981,788.40 | 31,078,317,077.55 | 7.28% | 53.86% | 49.47% | 2.73% |
| Northwest | 68,888,026.23 | 63,948,754.75 | 7.17% | 41.35% | 37.41% | 2.66% |
| Southwest | 135,459,678.97 | 126,180,690.96 | 6.85% | -44.02% | -45.55% | 2.62% |
| Central south | 3,152,641,431.89 | 2,884,036,381.89 | 8.52% | 12,259.13% | 11,820.00% | 3.37% |
| Export | 6,335,520,923.80 | 5,871,127,240.09 | 7.33% | 39.08% | 34.77% | 2.96% |
| By sales model | ||||||
| Sales in domestic market | 71,576,624,057.66 | 66,020,471,096.87 | 7.76% | 62.20% | 57.06% | 3.02% |
| Sales in export market | 6,335,520,923.80 | 5,871,127,240.09 | 7.33% | 39.08% | 34.77% | 2.96% |
Operating data of recent one year according to adjusted statistics caliber at the year-end in the case that theCompany's main business statistics caliber has changed during the reporting period
□ Applicable √ Not applicable
(3) Whether the Company’s Physical Sales Income Exceeded Service Income
√ Yes □ No
| Industry classification | Item | Unit | 2021 | 20120 | Change over last year |
| Steel rolling processing industry | Sales | ton | 13,883,661.11 | 12,968,385.12 | 7.06% |
| Production | ton | 13,996,055.15 | 12,940,697.06 | 8.16% | |
| Inventory | ton | 601,916.23 | 489,522.19 | 22.96% | |
| Sales | |||||
| Production | |||||
| Inventory | |||||
The main reasons that the relevant data changed more than 30%
□ Applicable √ Not applicable
(4) Performance of Significant Sales and Purchase Contract Signed-up in this ReportingPeriod
□ Applicable √ Not applicable
(5) Breakdown of Operating Cost
Industry classification
Unit: Yuan
| Industry classification | Item | 2021 | 2020 | Change over last year | ||
| Amount | Proportion | Amount | Proportion | |||
| Steel rolling processing industry | Raw material | 37,341,970,406.79 | 51.94% | 23,138,475,447.81 | 49.88% | 2.06% |
| Steel rolling processing industry | Supplementary materials | 2,839,512,165.81 | 3.95% | 2,089,395,547.62 | 4.50% | -0.55% |
| Steel rolling processing industry | Spare parts and tools | 785,960,965.25 | 1.09% | 737,780,144.94 | 1.59% | -0.50% |
| Steel rolling processing industry | Fuel | 22,184,848,601.81 | 30.86% | 12,727,140,058.39 | 27.43% | 3.43% |
| Steel rolling processing industry | Energy | 3,182,838,986.67 | 4.43% | 2,687,362,561.57 | 5.79% | -1.36% |
| Steel rolling processing industry | Salary and benefits | 2,582,531,198.03 | 3.59% | 1,980,205,516.91 | 4.27% | -0.68% |
| Steel rolling processing industry | Depreciation | 2,333,028,229.90 | 3.25% | 2,191,070,638.31 | 4.72% | -1.47% |
| Steel rolling processing industry | Others | 640,907,782.70 | 0.89% | 840,750,647.04 | 1.81% | -0.92% |
| Steel rolling processing industry | Total | 71,891,598,336.96 | 100.00% | 46,392,180,562.59 | 100.00% | 0.00% |
Instruction:
None
(6) Whether Changes Occurred in Consolidation Scope in the Reporting Period
√ Yes □ No
In this period, the wholly-owned subsidiary Xiamen Bengang Iron & Steel Sales Co., Ltd. was cancelled.
(7) Relevant Information of Significant Changes or Adjustment of the Business, Product orService in the Reporting Period
□ Applicable √ Not applicable
(8) Information of Main Customers and Main Suppliers
Information of the Company’s main customers
| Total sales amount of the top five customers (Yuan) | 17,086,188,258.07 |
| Total sales amount of the top five customers accounted for the proportion of total annual sales | 21.93% |
| The proportion of the total sales of the related parties in the top five customers | 7.17% |
Information of the top 5 customers
| No. | Name | Amount (Yuan) | Proportion |
| 1 | Benxi Beiying Steel & Iron (Group) Co., Ltd. | 5,584,776,929.07 | 7.17% |
| 2 | Ouyeel Cloud Trade Co., Ltd. | 3,913,604,189.08 | 5.02% |
| 3 | Shanghai Ouyeel Supply Chain Co., Ltd. | 2,637,122,244.90 | 3.38% |
| 4 | Xiamen Jian Fa Metal Co., Ltd. | 2,554,449,548.71 | 3.28% |
| 5 | Ningbo AUX Trade Co., Ltd. | 2,396,235,346.31 | 3.08% |
| Total | -- | 17,086,188,258.07 | 21.93% |
Other information of principal customers
□ Applicable √ Not applicable
Information of the Company’s main suppliers
| Total purchase amount of the top five suppliers (Yuan) | 33,829,243,762.16 |
| Total purchase amount of the top five suppliers accounted for the proportion of total purchase | 47.06% |
| The proportion of the total purchase of the related parties in the top five suppliers | 40.82% |
Information of the top 5 suppliers
| No. | Name | Amount (Yuan) | Proportion |
| 1 | Bengang Group International Economic and Trading Co., Ltd. | 17,309,186,976.50 | 24.08% |
| 2 | Benxi Steel & Iron (Group) Mining Co., Ltd. | 7,936,735,203.17 | 11.04% |
| 3 | Benxi Beiying Steel & Iron (Group) Co., Ltd. | 4,095,327,573.23 | 5.70% |
| 4 | Heilongjiang Dragon Coal Group Co., Ltd. | 2,294,033,830.68 | 3.19% |
| 5 | Liaoning Electric Power Co., Ltd. Benxi Electric Power Supply Company | 2,193,960,178.58 | 3.05% |
| Total | -- | 33,829,243,762.16 | 47.06% |
Other information of principal suppliers
□ Applicable √ Not applicable
3. Expenses
Unit: Yuan
| 2021 | 2020 | Change over last year | Notes to significant change | |
| Selling and distribution expenses | 141,394,565.57 | 97,279,280.21 | 45.35% | Increase in salary and import and export agency fees |
| General and administrative expenses | 1,187,239,442.10 | 792,826,294.81 | 49.75% | Increase in salary, heating costs, etc. |
| Financial expenses | 536,593,635.06 | 364,775,155.62 | 47.10% | Increase in foreign exchange losses |
| Research and development expenses | 56,401,594.44 | 37,989,623.28 | 48.47% | Increase in R&D investment |
4. Research and Development Input
√ Applicable □ Not applicable
| Main R&D project name | Project purpose | Project Progress | intended goal | Expected impact on the future development of the company |
| Stable and improved quality of high-grade cold-rolled outer sheet | The pass rate of high-grade cold-rolled outer sheet in 2020 is 70.6%. The current main defects and proportions are: 12.78% roll printing, 6.79% inclusions, 2.27% oblique printing, 1.9% scratches, 1.72% rubber roll printing, rust 1.32%, other 2.66%. Special research is needed to reduce the downgrade rate and further improve product quality. | In the first half of the year, a total of 1,724.2 tons of mid-to-high-end cold-rolled automotive outer sheets were produced, with a pass rate of 73.8%, an increase of 6.9% over the same period in 2020. In April, it reached 95.1%, creating the best level in history and ensuring the stable supply of downstream users. | The mass production pass rate reaches 80%. | The annual profit is more than 1.5 million yuan. |
| Bengang Automotive Body-in-White Solution | In today's increasingly homogeneous products, the pursuit of differentiated competition is the key for enterprises to get out of low-level homogeneous | The project objectives have been completed. | Improve Bengang's auto steel material selection data system, and the database contains 100% of auto steel grades. All body-in-white body materials are Benxi Steel's automotive steel products, and high- | It made up for the blank of Bengang, and systematically combined EVI with database establishment and application technology testing for the first time, which led to the overall improvement of Bengang's |
| competition. Therefore, it is necessary to carry out EVI work to enhance the influence of enterprises. | strength and ultra-high-strength automotive steels account for more than 65%. | application technology. | ||
| Research and Development of Steel FAS3420(R)H for 12-speed Transmission Gears of Heavy-Duty Vehicles | In 2020, the output of gearbox gear steel FAS3420(R)H is more than 1,000 tons (accounting for only 3% of gear steel), and the technical quality level is relatively low. The grades have been stably controlled, and the quality of steel has reached the domestic advanced level. | Using narrow hardenability belt control technology, non-metallic inclusion control technology in vulcanized steel, and band structure control technology in heat treatment state, the product quality basically meets the needs of users. | The end hardenability meets the technical requirements, the J9 value of the key control point is not less than 80% of the 4HC bandwidth; the oxygen content is not more than 18ppm, and the proportion below 12ppm is not more than 80%; Other indicators such as inclusions and low magnification structures meet the technical requirements. | The annual profit is more than 2 million yuan. |
| Research on Process Technology of Large Size High Carbon Chromium Bearing Steel GCr15 | The size of the continuous casting billet in the converter process of Benxi Steel is 350×470mm, and it can only produce the national standard high carbon bearing steel with the specification ≤Ф85mm. Specifications>Ф85mm steel center porosity level is too high, and even shrinkage holes exist, which cannot be produced normally. At present, the bearing industry has a large demand for Ф90～Ф150mm national standard materials, so it is necessary to study large-scale bearing steel to meet the market demand. | The end project goal has been completed. | To achieve stable production of national standard materials below Φ150mm, the central porosity level is less than or equal to 1.0, and the residual shrinkage hole level is 0. Ultrasonic flaw detection meets the requirements of GB/T 4162 standard B level. | The product grade of Bengang's bearing steel has been improved, and the specifications of the high-quality national standard material of Bengang's bearing steel have been further expanded. |
| Production technology integration of cold-rolled hot-dip galvanized automobile surface sheet | Due to the existence of defects such as zinc slag, zinc ash and roll printing, it cannot meet the requirements of automobile OEMs. Through the research on the key technology of hot-dip galvanized surface plate, the stable supply of medium and high-end automobile OEMs is realized. | Completed 2 user hot-dip galvanized outer plate certification. | To achieve stable supply, the pass rate is more than 70%. | The annual profit is more than 2.8 million yuan. |
Information of research and development personnel by the company
| 2021 | 2020 | Change over last year | |
| Number of Research and Development staff | 1,798 | 1,732 | 3.81% |
| Proportion of number of Research and Development staff | 9.53% | 10.34% | -0.81% |
| Educational structure of research and development staff | —— | —— | —— |
| Bachelor | 1,233 | 1,208 | 2.07% |
| Master's degree | 162 | 151 | 7.28% |
| Age composition of research and development staff | —— | —— | —— |
| Under the age of 30 | 109 | 132 | -17.40% |
| 30 to 40 years old | 586 | 487 | 20.30% |
Information of research and development input by the company
| 2021 | 2020 | Change over last year | |
| Amount of Research and Development Investment (In RMB) | 2,343,822,000.00 | 1,541,651,000.00 | 52.03% |
| Proportion of Research and Development investment to operating income | 3.01% | 3.17% | -0.16% |
| Amount of capitalized Research and Development investment | 0.00 | 0.00 | 0.00% |
| Proportion of capitalized Research and Development investment accounted to total Research and Development investment | 0.00% | 0.00% | 0.00% |
Illustrations of significant change in the composition of the company's Research and Development personnel
□ Applicable √ Not applicable
Illustrations of the prominent change in proportion of research and development input occupying the operatingincome over same period last year
□ Applicable √ Not applicable
Illustrations of significant change in the research and development input’s capitalization rate and its reasonableness
□ Applicable √ Not applicable
5. Cash Flow
Unit: Yuan
| Item | 2021 | 2020 | Change over last year |
| Subtotal of cash inflows from operating activities | 56,328,587,878.30 | 40,062,379,161.40 | 40.60% |
| Subtotal of cash outflows from operating activities | 55,915,114,424.26 | 42,101,379,374.69 | 32.81% |
| Net cash flows from operating activities | 413,473,454.04 | -2,039,000,213.29 | 120.28% |
| Subtotal of cash inflows from investing activities | 11,402,720,358.72 | 14,037,738.77 | 81,129.04% |
| Subtotal of cash outflows from investing activities | 7,504,976,365.56 | 6,213,928,829.62 | 20.78% |
| Net cash flows from investing activities | 3,897,743,993.16 | -6,199,891,090.85 | 162.87% |
| Subtotal of cash inflows from financing activities | 8,162,945,228.08 | 22,997,390,314.56 | -64.50% |
| Subtotal of cash outflows from financing activities | 15,363,346,740.69 | 18,941,067,286.47 | -18.89% |
| Net cash flows from financing activities | -7,200,401,512.61 | 4,056,323,028.09 | -277.51% |
| Net increase in cash and cash equivalents | -2,930,318,531.64 | -4,211,997,393.46 | -30.43% |
Illustrations of key factors of significant changes over same period last year
√ Applicable □ Not applicable
(1) The subtotal of cash inflows from operating activities increased by 40.6% over the previous period, which wasmainly due to the increase in the sales price of steel products and the substantial increase in income.
(2) The net cash flow from operating activities increased by 120.28% over the previous period, which was mainlydue to the increase in the sales price of steel and the substantial increase in income.
(3) The subtotal of cash inflows from investing activities increased by 81,129.04% over the previous period, whichwas mainly due to the maturity and recovery of large-denomination time deposits.
(4) The net cash flow from investing activities increased by 162.87% compared with the previous period, which wasmainly due to the maturity and recovery of large term deposits.
(5) The subtotal of cash inflows from financing activities decreased by 64.5% compared with the previous period,which was mainly due to the decrease in borrowings in the current period.
(6) The net cash flow from financing activities decreased by 277.51% compared with the previous period, whichwas mainly due to the decrease in borrowings and the payment of dividends in the current period.
(7) The net increase in cash and cash equivalents decreased by 30.43% over the previous period, which was due tothe decrease in borrowings and the payment of dividends in the current period.
Illustrations of significant difference between cash flow from operating activities and net profit during the reportingperiod
□ Applicable √ Not applicable
Ⅴ. Analysis of Non-core Business
√ Applicable □ Not applicable
Unit: yuan
| Amount | Proportion of total profit | Reason for formation | Whether it is sustainable or not | |
| Investment income | -120,519,309.82 | -3.51% | Due to investment income from disposal of financial assets held for trading | No |
| Asset impairment | -113,671,335.02 | -3.31% | Due to the increase in the provision for inventory impairment | No |
| Non-operating income | 7,783,225.80 | 0.23% | Due to the income from disposal of non-current assets | No |
| Operating expenses | 64,272,629.43 | 1.87% | Due to the disposal of assets in the current period | No |
Ⅵ. Assets and Liabilities
1. Significant Change of Assets Components
Unit: Yuan
| Ending balance of 2021 | Beginning balance of 2021 | Proportion change | Notes to significant change | |||
| Amount | Proportion in the total assets (%) | Amount | Proportion in the total assets (%) | |||
| Cash at bank and on hand | 8,831,095,737.85 | 16.01% | 13,126,666,915.26 | 20.58% | -4.57% | The company repays the loan |
| Accounts receivable | 256,850,782.71 | 0.47% | 245,217,182.66 | 0.38% | 0.09% | |
| Inventories | 10,190,166,138.98 | 18.48% | 9,040,065,342.65 | 14.17% | 4.31% | |
| Long-term equity investment | 2,981,784.07 | 0.01% | 2,742,064.73 | 0.00% | 0.01% | |
| Fixed assets | 25,480,674,048.94 | 46.20% | 26,284,567,956.44 | 41.21% | 4.99% | |
| Construction in process | 2,434,182,101.13 | 4.41% | 1,839,933,715.58 | 2.88% | 1.53% | |
| Right-of-use assets | 1,440,365,248.31 | 2.61% | 1,500,739,782.73 | 2.35% | 0.26% | |
| Short-term loans | 4,053,088,140.00 | 7.35% | 10,067,731,000.00 | 15.78% | -8.43% | The company repays the loan |
| Contract liabilities | 4,708,188,093.78 | 8.54% | 4,458,671,819.90 | 6.99% | 1.55% | |
| Long-term loans | 4,222,821,771.74 | 7.66% | 3,502,934,427.65 | 5.49% | 2.17% | |
| Lease liabilities | 1,424,667,169.15 | 2.58% | 1,463,444,635.94 | 2.29% | 0.29% |
High proportion of abroad assets
□ Applicable √ Not applicable
2. Assets and Liabilities Measured at Fair Value
□ Applicable √ Not applicable
3. Restricted Assets by the End of the Period
| Items | Ending balance | Reason |
| Cash at bank and on hand | 2,531,996,674.37 | Deposit for notes and letter of credit |
| Notes Receivable | 1,133,932,188.36 | Notes receivable that the company has endorsed and not yet matured on the balance sheet date were not derecognition at the end of period |
| Other equity instrument investments | 1,037,735,849.00 | Pledged for loans |
| Fixed assets | 89,963,211.93 | Mortgage for fund borrowing |
| Intangible assets | 36,188,476.93 | Mortgage for fund borrowing |
| Total | 4,829,816,400.59 |
Ⅶ. Investment
1. General
□ Applicable √ Not applicable
2. Acquiring Significant Equity Investment in the Reporting Period
□ Applicable √ Not applicable
3. Undergoing Significant Non-Equity Investment in the Reporting Period
□ Applicable √ Not applicable
4. Investment of Financial Assets
(1) Investment in Securities
□ Applicable √ Not applicable
There was no investment in securities during the reporting period.
(2) Investment in Derivatives
□Applicable √ Not applicable
There was no investment in derivatives during the reporting period.
5. Use of Raised Funds
√ Applicable □ Not applicable
(1) Use of Raised Funds
√Applicable □ Not applicable
Unit: 10 thousand yuan
| Year | Method of raising funds | Total amount of raised funds | Used amount of raised fund this period | The total used amount of funds raised | The total amount of funds raised for change of purpose during the reporting period | Cumulative total amount of funds raised for change of purpose | Cumulative proportion of total raised funds for changes of purposes | The total amount of funds raised not used | The purpose and destination of the raised funds not yet used | Amount of funds raised after being idle for more than two years |
| 2018 | Private placement to raise funds | 3,965,799,988.19 | 64,473,992.52 | 3,342,063,034.97 | 623,736,953.22 | Deposit | ||||
| 2020 | Issue of convertible bonds | 6,759,200,000 | 1,147,724,418.83 | 3,610,684,085.61 | 3,148,515,914.39 | Deposit | ||||
| Total | -- | 10,724,999,988.19 | 1,212,198,411.35 | 6,952,747,120.58 | 0 | 0 | 0.00% | 3,772,252,867.61 | -- | 0 |
| Description of the overall use of raised funds | ||||||||||
| 1.Status of use of funds for investment projects with raised funds For the actual use of the company's raised funds in 2021, please refer to the attached table for the use of the raised funds and the commitment projects of the raised funds. 2.Status of changes in the implementation location and implementation method of the projects invested by raised funds During the reporting period, there is no situation of change the investment projects of raised funds or their implementation locations and implementation methods. 3.Status of preliminary investment and replacement of raised funds for investment projects (1) Status of preliminary investment and replacement of funds raised from non-public offering of stocks At the 14th meeting of the 7th Board of Directors and the 10th meeting of the 7th Board of Supervisors of the Company, “t About the use of raised funds to replace pre-invested raised funds for investment projects “was reviewed and approved. Before the raised funds arrive in the account, in order to ensure the smooth implementation of the raised investment projects, the company uses self-raised funds for project construction. As of February 28, 2018, the pre-invested amount of self-raised funds replaced by raised funds was RMB 1,822,749,211.07, including RMB 1,484,133,089.39 for the cold-rolled high-strength steel reconstruction project and RMB 338,616,121.68 for the hot-dip galvanizing production line project of the third cold rolling plant. During the period from March 1, 2018 to February 28, 2019, the company paid RMB 88,296,207.56 for the construction of projects with self-raised funds, of which RMB 86,709,830.40 was invested in the cold-rolled high-strength steel reconstruction project, and the third cold-rolling plant was hot-dip galvanized. The zinc production line project is 1,586,377.16 yuan (not yet replaced from the special account of raised funds). The company has transferred 86,709,830.40 yuan from the fundraising account to the general deposit account in 2020. During the period from March 1, 2019 to May 31, 2021, the company paid RMB 62,608,242.01 for the construction of the project with self-raised funds, of which RMB 50,391,999.49 was invested in the cold-rolled high-strength steel reconstruction project, and the third cold-rolling plant was hot-dip galvanized. The zinc production line project is 12,216,242.52 yuan. The company has transferred the above amount from the fundraising account to the general deposit account in 2021. (2) Status of preliminary investment and replacement of funds raised from public issuance of convertible corporate bonds After the 13th meeting of the 8th Board of Directors and the 11th meeting of the 8th Board of Supervisors of the Company, the "Proposal on Using Raised Funds to Replacing Pre-invested Raised Funds for Investment Projects and Self-raised Funds for which Issuance Fees Have Been Paid" was reviewed and approved. The company used the raised funds to replace the self-raised funds that had been invested in the investment projects with raised funds and had paid the issuance fees, and the total replacement amount was 366,180,860.17 yuan. There is no disguised change in the use of the raised funds in this replacement, and it does not affect the normal progress of the investment projects with the raised funds. The replacement time is less than 6 months from the time when the raised funds arrive in the account, which is in line with the relevant laws and regulations. Before the raised funds arrive in the account, the company has used self-raised funds to pre-invest in the raised investment projects according to the progress of the project. As of May 31, 2020, the pre-invested amount of self-raised funds replaced by raised funds | ||||||||||
(2) Fundraising commitments
√Applicable □ Not applicable
| Commitment to investment projects and over-raised funds | Whether the item has been changed (including some changes) | Total committed investment of raised funds | Adjusted total investment (1) | Amount invested during the reporting period | Cumulative investment amount by the end of the period (2) | Investment progress by the end of the period (3) = (2)/ (1) | Item reaches scheduled availability date | Benefits realized during the reporting period | Whether the expected benefit is achieved | Has the project feasibility changed significantly | |
| Commitment to Investment Projects | |||||||||||
| Cold-rolled high-strength steel renovation project | No | 226,580 | 226,580 | 5,225.78 | 192,692.07 | 85.04% | December 31, 2017 | 55,318.42 | No | No | |
| Hot-dip galvanizing production line project of the third cold rolling plant | No | 70,000 | 70,000 | 1,221.62 | 41,514.24 | 59.31% | December 31, 2018 | 18,241.1 | Yes | No | |
| Repay bank loan | No | 100,000 | 100,000 | 0 | 100,000 | Not applicable | Not applicable | No | |||
| High grade high magnetic induction non-oriented silicon steel engineering project | No | 101,620 | 101,620 | 18 | 141 | 0.14% | Not applicable | No | |||
| Steel Plant No. 8 Casting Machine Project | No | 33,500 | 33,500 | 6,483.67 | 16,348.11 | 48.80% | October 31, 2020 | 55,967.04 | Yes | No | |
| No. 5 blast furnace capacity replacement project in ironworks | No | 96,000 | 96,000 | 63,370.81 | 76,693.55 | 79.89% | November 30, 2020 | 52,879.53 | Yes | No | |
| Special Steel Electric Furnace Upgrade and Reconstruction Project | No | 141,600 | 141,600 | 30,018.62 | 41,721.96 | 29.46% | Not applicable | No | |||
| CCPP power generation project | No | 83,300 | 83,300 | 11,870.16 | 21,440.31 | 25.74% | Not applicable | No | |||
| Environmental protection renovation project of converter No. 4-6 in steelmaking plant | No | 19,900 | 19,900 | 3,011.18 | 4,723.48 | 23.74% | December 31, 2020 | Not applicable | No | ||
| Repay bank loan | No | 200,000 | 200,000 | 0 | 200,000 | 100.00% | Not applicable | No | |||
| Subtotal of Committed Investment Projects | -- | 1,072,500 | 1,072,500 | 121,219.84 | 695,274.72 | -- | -- | 182,406.09 | -- | -- | |
| Over-raised funds are invested in | |||||||||||
| None | Not applicable | No | |||||||||
| Total | -- | 1,072,500 | 1,072,500 | 121,219.84 | 695,274.72 | -- | -- | 182,406.09 | -- | -- | |
| Situations and reasons for not reaching the planned progress or expected benefits (by specific projects) | The market environment has undergone major changes. The cold-rolled high-strength steel reconstruction project and the hot-dip galvanizing production line project of the third cold rolling plant have basically reached their production capacity. During the reporting period, other projects did not meet the planned progress or expected income. | ||||||||||
| Status of description of material changes in project feasibility | None | ||||||||||
| Status of amount, purpose and progress of use of over-raised funds | Not applicable | ||||||||||
| Status of changes in Implementation Locations of Raised Funds Investment Projects | Not applicable |
| A Status of adjustment of the Implementation Method of Raised Funds for Investment Projects | Not applicable |
| Status of preliminary investment and replacement of raised funds for investment projects | Applicable |
| For details, please refer to the special report III. (3) | |
| Status of temporary replenishment of working capital with idle raised funds | Applicable |
| For details, please refer to the special report III. (4) | |
| Reasons and amount for the balance of raised funds in project implementation | Applicable |
| There was no balance of raised funds for project implementation this year. | |
| Use and whereabouts of unused raised funds | For details, please refer to the special report III. (8) |
| Problems or other situations in the use and disclosure of raised funds | There is no problem or otherwise |
(3) The situation for raised funds change project
□ Applicable √ Not applicable
During the reporting period, the company did not have any changes in the fundraising project.
Ⅷ. Significant Assets and Equity Sold in Reporting Period
1. Significant Assets Sold
□ Applicable √ Not applicable
There was no significant asset sold during the reporting period.
2. Substantial Equity Sold
□ Applicable √ Not applicable
Ⅸ. Analysis on Main Subsidiaries and Share Participating Companies
√ Applicable □ Not applicable
Main subsidiaries and the joint-stock companies influencing over 10% net profit of the Company
Unit: Yuan
| Company Name | Company type | Main business | Registered capital | Total assets | Net assets | Operating income | Operating profit | Net Profit |
| Bengang Puxiang Cool Rolling Steel Sheet Co., Ltd. | Subsidiary | Processing and sales of steel | 1,920,000,000 | 4,104,855,060.02 | 2,167,667,196.95 | 11,529,193,715.01 | 296,055,419.59 | 143,131,193.39 |
Acquirement and disposal of subsidiaries during the reporting period
□ Applicable √ Not applicable
Illustration of main joint-stock companiesNoneⅩ. Structure Entities controlled by the Company
□ Applicable √ Not applicable
XI. Prospect for Future Development of the Company
(1) The development trend of the industry and the market competition pattern the company facesThe year 2022 is a crucial year for the country to implement the "14th Five-Year Plan", and it is also a crucial yearfor the steel industry to achieve high-quality development. From the perspective of the overall external environment,at the end of 2021, the shock wave of the new coronavirus variant strain Omicron swept the world, adding morevariables to the world economic situation. Under the background of the national "dual carbon" goal, the steel industryhas entered a critical period of high-quality development. Green and low-carbon, intelligent manufacturing, etc. havebrought more severe challenges and disruptive changes, and market uncertainty has further increased. At the sametime, China's economy has a solid foundation and strong resilience, and will remain a long-term improvementfundamental in the future. The National Development and Reform Commission and the Ministry of Industry andInformation Technology issued the "Implementation Plan on Reinvigorating the Operation of the Industrial Economyand Promoting the High-quality Development of the Industry", which proposed policies and measures such as"vigorously increasing the effective supply of the bulk raw material market", "tapping the demand potential andexpanding the market space of the industrial economy", which is conducive to guiding Market expectations andcreate new opportunities for the development of iron and steel enterprises.
(2) Company development strategy
The overall work idea for 2022: Guided by General Secretary Xi Jinping's new era of socialism with Chinesecharacteristics，study and implement the spirit of the 19th National Congress of the Communist Party of China andthe previous 19th plenary sessions in-depth , adhere to the two "consistent" requirements, adhere to the focus onefficiency, committed to becoming a better and stronger listed company. On the basis of normalized epidemicprevention and control, we will make every effort to promote the key work of "1+2+3", lead development withreform, achieve the future with hard work, and make unremitting efforts to build a high-quality sheet metal base withhigh international competitiveness led by automobile sheets.
(3) Business plan
Production and operation goals in 2022: Strive to complete 10.71 million tons of pig iron, 11.47 million tons of crudesteel, 14.78 million tons of hot-rolled sheets, 6.4 million tons of cold-rolled sheets, and 340,000 tons of special steel,and achieve "three zeros" in safety production.In order to achieve the above goals, we will focus on the following aspects:
1. Focus on efficiency and enhance the competitiveness of the industry
2. Strengthen safety management and realize energy-saving and green development
3. Deepen the linkage of "sales, research and production" and improve the ability of efficiency
4. Strengthen the leadership of the technical system and build a strong digital intelligent enterprise
5. Comprehensively deepen the reform and continuously improve the efficiency of governance
6. Strengthen the Communist Party's leadership over enterprises and provide a strong political guarantee
(4) Maintain the current business and complete the funding arrangements required for the investment projects underconstructionThe company will use its own funds and bank loans to meet the funds required for production and operation andtechnological transformation.
(5) Possible risks
1. Environmental risks
Risk: The state has continuously strengthened the supervision and enforcement of environmental pollution, and thepollutant discharge standards have been continuously improved. The public's awareness of environmental protectionand the requirements of environmental protection for enterprises increase continuous. enterprises belong to Iron andsteel industry are facing huge environmental protection pressure. Reduction of carbon is imperative for the steelindustry, according to the goal of "emission peak" and "carbon neutrality" stated by The China Iron and SteelAssociation, and "14th Five-Year" Industrial Green Development Plan issued by Ministry of Industry andInformation Technology.
Response measures: Adhere to support Xi Jinping's thought on ecological civilization, focus on improving the qualityof the ecological environment, conscientiously implement the decisions and arrangements of the Party CentralCommittee and the State Council, adhere to the concept of "ecological priority and green development", make everyeffort to promote pollution control, focus on source control, and consolidate the environment Protect the basic work,continue to improve the environmental protection management system, and continuously improve the company'senvironmental protection performance level. At the same time, optimize the process structure route, further improvethe recycling rate of various resources, and increase the proportion of scrap steel; pay attention to various nationalenvironmental protection policies, improve enterprise environmental protection standards to meet and appropriatelyexceed national standards; strengthen the company's self-discharge of various pollution sources Supervision and
inspection, strengthen the environmental protection awareness of all employees; accelerate the construction progressof the identified environmental protection projects to ensure that the national environmental protection requirementsare met.
2. Energy Risk
Risk: At present, the contradiction between global energy supply and demand has intensified, and prices of overseasfossil energy have risen sharply. With the implementation of this round of "double control of energy consumption",various provinces have cut off electricity, limited production, and staggered labor. Affected by the dual control ofenergy consumption and the shortage of power supply, the capacity utilization rate continued to decline, and theoutput declined. Due to the characteristics of high load capacity and high emissions, the iron and steel industry issuperior to other companies in its power cutoff. Companies need to solve energy security urgently, reduce energyrisks, and ensure normal production operations.
Response measures: Continuously improve the production process, use off-peak electricity, reduce the energyconsumption of main processes, improve production efficiency, and monitor key energy indicators in real time.Effectively use our own energy to improve the utilization rate of generator sets, and actively build a clean, low-carbon, safe and effective energy system, to help energy structure adjustment and high-quality development ofcarbon peak and carbon neutrality. Ensure energy security while further improving energy efficiency.
3. Market risk
Risks: Affected by the repeated changes in the epidemic, high inflation, and the withdrawal of the Fed's loosemonetary policy, the global economic operation is facing greater uncertainty. Coupled with the tightening ofdomestic policies such as "housing, not speculating," and under the multiple influences of shrinking market consumerdemand and supply shocks, the growth momentum of consumption and investment has weakened, the supply chainhas been blocked, and the operating rates of downstream infrastructure and real estate have fallen across the board.Steel market demand slowed down slightly.
Response measures: The company will continue to consolidate the lean production system, focus on customers, adaptto and lead downstream demand, focus on product structure adjustment, focus on breaking through the productionand sales of high-profitability and high-value-added steel varieties, and increase the proportion of strategic productsand regional markets, Market segment pricing power to deal with the risk of industry homogeneous competition.
4. Foreign trade risk
Risks: Affected by the aftermath of the century-old blockage of the Suez Canal, all ports were severely congested,and the cost of sea transportation increased significantly; secondly, the operation of sea transportation was notsmooth, and there was a gap in transportation capacity, especially the tension between supply and demand of seatransportation; thirdly, all ports across the country implemented epidemic prevention and control measures.Controlling the whole process of closed-loop management, under strict epidemic prevention requirements, the costof port epidemic prevention has suddenly increased, and the operating cost has increased significantly. The companystill needs to actively respond to ensure that the imported ore is stored in a timely manner to prevent normalproduction and operation from being affected, resulting in economic losses and adverse effects on the company.
Response measures: Continuously optimize the logistics system and management methods; at the same time optimizethe raw material supply structure, strengthen resource utilization, comprehensively consider various factors affectinglogistics costs, and make logistics route optimization decisions; build better cooperative relationships with upstreamand downstream enterprises, Actively sign long-term transportation contracts with liner companies to ensure long-term and stable supply chain services.
XII. Researches, visits and interviews received in this reporting period
□ Applicable √ Not applicable
During the reporting period, the Company did not receive any research, communication, interviews and otheractivities.
Ⅳ. Corporate Governance
I. Basic Situation of Corporate GovernanceDuring the reporting period, the Company has been following the laws, regulations and documentssuch as the Company Law, Securities Law, Governance Guidelines for Listed Companies,Guidelines for the Normative Operation of Listed Companies on the Shenzhen Stock Exchange andArticles of Association. Based on the actual situation of the company, the Company has beencontinuously improving the corporate governance structure and internal control system of thecompany, improves the governance level, and promotes the company's standardized operation. Asof the end of the reporting period, the actual situation of corporate governance meets therequirements of the regulatory documents related to the governance of listed companies.
1. Shareholders and Shareholders' General Meeting: The company has formulated the "Rules ofProcedures for General Meetings of Shareholders" in strict accordance with the "Company Law","Rules for Shareholders' General Meetings of Listed Companies" and the company's "Articles ofAssociation" to ensure the exercise of the rights of the company's shareholders and the standardoperation of the shareholders' meeting. The company's previous shareholder meetings have providedtwo attendance channels, on-site voting and online voting, to facilitate shareholders. Involvingmajor issues that affect the interests of small and medium investors, the company counts the votesof small and medium investors individually and discloses them in a timely manner to ensure that allshareholders enjoy equal status and fully exercise their rights. And by hiring lawyers to witness andensure the legal compliance of the convening, convening and voting procedures of the meeting, thelegitimate rights and interests of the company and shareholders have been safeguarded.
2. Directors and the board of directors: the company's board of directors has clear responsibilities,and the company's directors exercise their powers in strict accordance with the "Articles ofAssociation", "Rules of Procedures of the Company's Board of Directors", "Company IndependentDirectors Work System" and other related systems, perform their duties with integrity and diligence,and safeguard the legitimate rights and interests of the company and shareholders. The company'sboard of directors has four special committees, namely audit, strategy, nomination, remunerationand assessment, each of which performs its own responsibilities and functions, and can carry out itswork in accordance with the rules of procedure of each special committee. During the reportingperiod, the convening and holding procedures of the company's board of directors complied withthe “Company Law”, “Articles of Association” and “Rules of Procedure of the Board of Directors”and other relevant laws and regulations.
3. Supervisors and Board of Supervisors: The company's supervisors can earnestly perform theirduties, independently and effectively perform supervision and inspection functions. The company'ssupervisors attend shareholders' meetings, attend board meetings as non-voting delegates, regularlyinspect the company's legal operations and financial conditions, and issue opinions from the boardof supervisors. Supervise the company's finances, the performance of the company's directors andsenior management personnel, and the capital exchanges with related parties, so as to safeguard thelegal rights and interests of the company and shareholders. The number and structure of the boardof supervisors meet the requirements of laws and regulations, and its convening and convening arestrictly implemented in accordance with the "Articles of Association" and "Rules of Procedure ofthe Board of Supervisors" to ensure that the board of supervisors effectively performs its duties.
4. Controlling shareholders and the company: The company has independent and complete businessand independent management capabilities, and is independent of the controlling shareholders andactual controllers in terms of business, personnel, assets, institutions, and finances; The company'sboard of directors, board of supervisors and other internal institutions operate independently; Thecompany's major decisions are made by the board of directors or the general meeting of shareholdersin accordance with the law. Controlling shareholders and actual controllers can strictly regulate theirown behavior. There is no direct or indirect intervention in the company's decision-making and
production and operation activities beyond the general meeting of shareholders, nor does it harmthe interests of the company and other shareholders.
5. Information disclosure and transparency: The company strictly complies with the requirementsof the "Shenzhen Stock Exchange Stock Listing Rules" and the "Information DisclosureManagement System" and other requirements, truthful, accurate, and complete, without falserecords, misleading statements or major omissions in performing information disclosure obligation,"China Securities Journal", "Securities Times", "Hong Kong Commercial Daily" andwww.cninfo.com.cn are the designated media for company information disclosure. The companypublishes regular reports and temporary announcements through the above-mentioned informationdisclosure media to ensure that all shareholders of the company can obtain information with equalopportunities.
6. Investor relationship management: The company continues to strengthen communication withinvestors to deepen investors' understanding and recognition of the company. The company appointsthe secretary of the board of directors as the person in charge of investor relations management, andthe office of the board of directors is the organization that undertakes the daily work of investorrelations management. The company makes full use of on-site meetings, dedicated telephone calls,investor interaction platforms and other methods to communicate with the company's shareholders,listens carefully to the opinions and suggestions of investors on the company's strategic developmentand production and operation, and has established a good communication mechanism with investors,which enhances investors' understanding and investment confidence in the company.
Whether there exists any difference in compliance with corporate governance, PRC Company Lawand relevant provisions of CSRC
□ Yes √ No
There exists no difference in compliance with corporate governance, PRC Company Law andrelevant provisions of CSRC.
II. Explanation on Structural Independence of the Company on Business, Personnel, Assets,Organization and Finance from the Controlling Shareholder and Actual ControllerThe Company is separated from the controlling shareholder in aspects of business, personnel, assets,organization and finance, etc. and has its own independent and complete business operation.
(1) In business operation: The Company has its own production and business planning, financialaffairs check and calculate, labor and personnel, raw material supplies and products selling businesssystem independently and completely.
(2) In personnel: The Company and controlling shareholder are separate in such aspects as labor,personnel and salary management. Such senior executives as general manager, vice general manager,secretary of Board of Directors, etc. get salary from the Company, and none of them hold theimportant position other than a director in shareholder.
(3) In Asset: The Company is separated from the controlling shareholder's clearly in asset. TheCompany has its own independent purchase, production, and marketing system.
(4) In organization: The internal operations of the Company are independent; organization structureand working function are totally independent.
(5) In finance: The company has independent financial management department, the accounting andfinancial management system where are complete and operated independently, and has bank accountand pay taxes independently.
III. Competition Situations of the Industry
√ Applicable □ Not applicable
| Question | Types of | Compan | Company | Cause | Solution | Progress and follow-up |
| type | affiliations with listed companies | y name | Type | plans | ||
| Industry competition | Controlling shareholder | AnSteel Co., Ltd. | Other | In 2021, the company's original actual controller, Liaoning State-owned Assets Supervision and Administration Commission, transfered its 51% stakes in Bengang Group to Ansteel Group for free, and Ansteel Group will become the company's indirect controlling shareholder | Ansteel Group has made commitments to avoid Industry competition.. | Based on the principle of benefiting the development of Bengang Steel and safeguarding the interests of shareholders, especially the interests of small and medium shareholders, Ansteel Group will comprehensively use various methods such as asset restructuring, business adjustment, and entrusted management to steadily promote the integration of related businesses to solve the problem of horizontal competition. |
IV. Annual General Meeting and Extraordinary Shareholders’ Meetings in the ReportingPeriod
1. Annual General Meeting
| Sessions | Type | Investor participation ratio | Meeting Date | Date of disclosure | Index of information disclosure |
| Annual Shareholders General Meeting of 2020 | Annual General Meeting | 80.56% | May 27, 2021 | May 28,2021 | Announcement No.: 2020 |
| First Extraordinary Shareholders General Meeting of 2021 | Extraordinary General Meeting | 66.31% | Sep 15,2021 | Sep 16,2021 | Announcement on Resolutions of First Extraordinary Shareholders General Meeting of 2021 |
| Second Extraordinary Shareholders General Meeting of 2021 | Extraordinary General Meeting | 63.36% | Dec 07,2021 | Dec 08,2021 | Announcement on Resolutions of Second Extraordinary Shareholders General Meeting of 2021 |
| Third Extraordinary Shareholders General Meeting of 2021 | Extraordinary General Meeting | 63.70% | Dec 24,2021 | Dec 25,2021 | Announcement on Resolutions of Third Extraordinary Shareholders General Meeting of 2021 |
2. Request for Extraordinary General Meeting by Preferred Stockholders Whose Voting RightsRestore
□ Applicable √ Not applicable
Ⅴ. Status of Directors, Supervisors, Senior Executives and Employees
1. Basic situation
| Name | Position | Office | Sex | Age | Starting | Expiry | Shares | Shares | Shares | Other | Shares | Reasons |
| status | date of office term | date of office term | held at the year-begin | increased during the reporting period | decreased during the reporting period | increase / decrease | held at the periodr-end | for increase or decrease of shares | ||||
| Huo Gang | Chairman | In office | Male | 48 | Dec 07, 2021 | May 16, 2022 | ||||||
| Wang Shiyou | Director, Deputy General Manager | In office | Male | 47 | Nov 18, 2021 | May 16, 2022 | ||||||
| Niu Li | Director | In office | Male | 53 | Dec 25, 2021 | May 16, 2022 | ||||||
| Lin Dong | Director, Deputy General Manager | In office | Male | 51 | May 27, 2021 | May 16, 2022 | ||||||
| Han Mei | Director | In office | Female | 52 | May 27, 2021 | May 16, 2022 | ||||||
| Gao Desheng | Director, Secretary of the Board | In office | Male | 47 | Dec 07, 2021 | May 16, 2022 | ||||||
| Zhang Suxun | Independent Director | In office | Female | 66 | May 16, 2019 | May 16, 2022 | ||||||
| Yuan Zhizhu | Independent Director | In office | Male | 40 | May 20, 2020 | May 16, 2022 | ||||||
| Zhong Tianli | Independent Director | In office | Female | 65 | May 27, 2021 | May 16, 2022 | ||||||
| Cheng Bin | Chairman of Supervisory Committee | In office | Male | 58 | May 27, 2021 | May 16, 2022 | ||||||
| Zhao Zhonghua | Supervisor | In office | Female | 37 | May 27, 2021 | May 16, 2022 | ||||||
| Lu Weijun | Supervisor | In office | Male | 46 | Dec 07, 2021 | May 16, 2022 | ||||||
| Zhang Yanlong | Supervisor | In office | Male | 49 | Jan 26, 2014 | May 16, 2022 | ||||||
| Zhao Xingtao | Supervisor | In office | Male | 44 | Jun 26, 2019 | May 16, 2022 | ||||||
| Yang Xiaofang | Deputy General Manager | In office | Male | 57 | Apr 16, 2021 | May 16, 2022 | ||||||
| Wang Donghui | Chief accountant | In office | Male | 52 | Nov 18, 2021 | May 16, 2022 | ||||||
| Jin Tao | Deputy General Manager | In office | Male | 51 | Nov 18, 2021 | May 16, 2022 | ||||||
| Gao Lie | Chairman | Leave office | Male | 54 | Mar 14, 2019 | Nov 18, 2021 | ||||||
| Jiang Guangwei | Deputy Chairman | Leave office | Male | 56 | May 27, 2021 | Nov 18, 2021 | ||||||
| Cao Aimin | Deputy Chairman | Leave office | Male | 54 | Jun 03, 2010 | May 27, 2021 | ||||||
| Shen Qiang | Director, General Manager | Leave office | Male | 53 | May 16, 2019 | May 27, 2021 |
| Huang Xinghua | Director | Leave office | Male | 58 | May 24, 2018 | May 28, 2021 | ||||||
| Zhao Xinan | Independent Director | Leave office | Male | 61 | May 21, 2015 | May 27, 2021 | ||||||
| Li Lin | Supervisor | Leave office | Female | 53 | Feb 19, 2014 | May 27, 2021 | ||||||
| Li Xiaowei | Supervisor | Leave office | Male | 46 | Mar 14, 2019 | Sep 13, 2021 | ||||||
| Chen Xin | Deputy General Manager | Leave office | Male | 51 | Apr 26, 2021 | Nov 18, 2021 | ||||||
| Bao Mingwei | Deputy General Manager | Leave office | Male | 58 | Dec 28, 2012 | Apr 26, 2021 | ||||||
| Wang Fengmin | Deputy General Manager | Leave office | Male | 56 | Jan 26, 2014 | Apr 26, 2021 | ||||||
| Cong Yajuan | Chief Financial Officer | Leave office | Female | 51 | Apr 26, 2021 | Sep 13, 2021 |
During the reporting period, is there any resignation of directors and supervisors and dismissal ofsenior management personnel in the report period.
□Yes √ No
Changes in directors, supervisors and senior management of the company
√Applicable □Not applicable
| Name | Position | Office status | Date | Reason |
| Shen Qiang | Director | Leave office | Apr 26, 2021 | Voluntary turnover |
| Bao Mingwei | Deputy General Manager | Leave office | Apr 26, 2021 | Job change |
| Wang Fengmin | Deputy General Manager | Leave office | Apr 26, 2021 | Job change |
| Zhao Xinan | Independent Director | Expiry of term | May 27, 2021 | Leaving office after expiry of term |
| Cao Aimin | Deputy Chairman | Leave office | May 27, 2021 | Voluntary turnover |
| Huang Xinghua | Director | Leave office | May 27, 2021 | Voluntary turnover |
| Cong Yajuan | Chief Financial Officer | Leave office | Sep 13, 2021 | Job change |
| Lin Dong | General Manager | Appoint and remove | Nov 18, 2021 | Job change |
| Chen Xin | Deputy General Manager | Leave office | Nov 18, 2021 | Job change |
| Han Mei | Deputy Chairman | Appoint and remove | Nov 18, 2021 | Voluntary turnover |
| Gao Lie | Chairman | Leave office | Nov 18, 2021 | Voluntary turnover |
| Jiang Guangwei | Deputy Chairman | Leave office | Nov 18, 2021 | Voluntary turnover |
| Wang Donghui | Director | Appoint and remove | Nov 18, 2021 | Voluntary turnover |
| Li Xiaowei | Director | Leave office | Sep 13, 2021 | Voluntary turnover |
| Han Mei | Chairman of Supervisory Committee | Appoint and remove | Apr 26, 2021 | Voluntary turnover |
| Li Lin | supervisor | Leave office | Apr 26, 2021 | Voluntary turnover |
| Huo Gang | Deputy General Manager | Leave office | Apr 26, 2021 | Job change |
2. Posts holding
Work experience, professional background and currently mainly responsibilities of Directors,Supervisors and Senior Executives in current office
Huo Gang, male, 48 years old, Ph. D., professor-researcher-level senior engineer. He successivelyserved as the director of the steel rolling branch of Benxi Iron and Steel Cold Rolling Plant; the
deputy director of the technology department of Benxi Iron and Steel No. 2 Cold Rolling Plant; thedeputy director of the technology department and the director of the inspection laboratory, thedirector of the production department, the assistant to the general manager, the deputy generalmanager, General Manager; Secretary of the Party Committee and Executive Deputy Director andDirector of the Third Cold Rolling Plant of Benxi Steel Plate Company; Deputy General Managerand Director of the Cold Rolling Plant of Bengang Steel Plate Co., Ltd.; Secretary of the PartyCommittee, Chairman and Chairman of the Labor Union of Benxi Iron and Steel International TradeCompany. He is currently the Secretary of the Party Committee and Chairman of Bengang SteelPlate Co., ltd., and Chairman of Bengang Posco Co., ltd.
Wang Shiyou, male, 47 years old, master, senior engineer. He successively served as the director ofthe thermal workshop and the secretary of the party branch of the iron-making plant of BengangSteel Plate Company, the deputy director of the new No. 1 blast furnace workshop, the director ofthe fifth blast furnace workshop and the secretary of the party branch, the chief of the productionsection, the chief of the planning section, and the deputy director; Benxi Steel Director of StandardManagement of the Manufacturing Department of the Plate Company; Director of the Iron-makingPlant of Benxi Iron and Steel Beiying Company; Secretary of the Party Committee and Director ofthe Iron-making General Plant of Benxi Iron and Steel Plate Company. He is currently the deputysecretary of the party committee, director and deputy general manager of Bengang Steel Plate Co.,Ltd. (temporarily responsible for overall production and operation).
Niu Li, male, 54 years old, master, engineer. He successively served as the director of the office ofBenxi Iron and Steel Group Corporation, the secretary of the Party Committee of the organization;the head of the Legal Affairs Department of Benxi Iron and Steel Group Corporation, the secretaryof the Party Committee of the organization; the deputy secretary of the Disciplinary Committee ofBenxi Iron and Steel Group Corporation, the director of the Supervision Department, the director ofthe Office of the Leading Group of the Party Committee Inspection Work, and the secretary of theDisciplinary Committee of Benxi Iron and Steel Company He is currently the deputy secretary ofthe party committee, employee director, head of the preparatory team of the Disciplinary Committeeand chairman of the labor union of Bengang Steel Plate Co., Ltd..
Lin Dong, male, 51 years old, doctoral student, professor-researcher-level senior engineer. Hesuccessively served as deputy director and chief engineer, factory director and deputy secretary ofthe party committee of the steelmaking plant of Benxi Iron and Steel Sheets Co., Ltd.; deputy headof the steelmaking material improvement group of Benxi Iron and Steel; manager of the extensionproject department of the industrial chain of Benxi Iron and Steel; Benxi Iron and Steel Plate Co.,Ltd. Director of the company's technology center; director of the quality management center ofBengang Steel Plate Co., Ltd.; director, deputy secretary of the party committee, general managerand director of the manufacturing department of Bengang Steel Plate Co., Ltd. He is currently thedirector and deputy general manager of Bengang Steel Plate Co., Ltd.
Han Mei, female, 52 years old, Bachelor, senior accountant. She successively served as the deputydirector of the finance department of Bengang Steel Plate Co., Ltd.; the deputy director of the auditdepartment of Benxi Iron and Steel Group Co., Ltd. and the director of the supervisory boardmanagement department, the deputy chairman of the third board of supervisors, the supervisor ofBenxi Iron and Steel Group Finance Company, and the auditor of Benxi Iron and Steel (Group) Co.,Ltd. Director of the Department; Director of the Audit Department of Bengang Group Co., Ltd.,Chairman and Vice Chairman of the Supervisory Committee of Bengang Steel Plate Co., Ltd. Sheis currently the Deputy Chief Accountant of Benxi Iron and Steel Group Corporation, GeneralManager of the Finance Department of Benxi Iron and Steel Group, and Director of Benxi Iron andSteel Plate Company.
Gao Desheng, male, 47 years old, master, senior economist. He successively served as the actingdirector of the Business Planning Division of the Operation Improvement Department of Benxi Ironand Steel Group Corporation, the director of the Property Rights Management Division of theOperation Improvement Department of Benxi Iron and Steel Group Corporation, a director of theAutomobile Transportation Company, the vice chairman of the First Supervisory Committee, andthe secretary of the board of directors of the Benxi Iron and Steel Plate Company. He is currently
the director and board secretary of Bengang Steel Plate Co., Ltd.
Zhang Suxun Female, 66 years old, bachelor degree, professor. She has served as a teacher at theBusiness School of Liaoning University; now she is retired.
Yuan Zhizhu, male, 40 years old, Ph.D., associate professor of accounting at NortheasternUniversity, master tutor, non-practicing member of Chinese certified public accountants. He hasserved as a lecturer in the School of Business Administration of Northeastern University; he iscurrently the director of the Accounting Department of the School of Business Administration ofNortheastern University, and serves as a director of the Liaoning Accounting and Abacus MentalArithmetic Society and a director of the Liaoning Auditing Society.
Zhong Tianli, Female, born in 1965, professor (doctoral supervisor) of Northeastern University. Shesuccessively served as the deputy dean of the School of Business Administration of NortheasternUniversity; the dean of the School of Basic Studies of Northeastern University and the director ofthe Institute of Financial Management of the Business School of Northeastern University; she iscurrently a professor of the Accounting Department of the School of Business Administration ofNortheastern University.
Brief introduction of the members of the supervisory board:
Cheng Bin, male, 58 years old, university degree, senior engineer. He successively served as thedirector of the material supply department of Benxi Iron and Steel; the vice chairman of the board,the secretary of the party committee and the chairman of the labor union, the secretary of theDisciplinary Committee, and the deputy manager of Bengang International Trade Co., Ltd.; thedirector of the customer service department of the sales department of Bengang Steel Plate Co., Ltd.;Secretary of the Party Committee and Manager of the Center; Secretary of the Party Committee andDeputy Director of the Hot Rolling Plant of Bengang Steel Plate Co., Ltd., Ltd.; Director of theAudit Department of Bengang Group; currently Chief Auditor of Bengang Group Corporation andChairman of the Supervisory Board of Bengang Steel Plate Co., Ltd.
Zhao Zhonghua, female, 37 years old, master, senior accountant. She successively served as theassistant to the director of the finance department of Bengang Group Co., Ltd.; the deputy managerof Bengang Group Finance Co., Ltd.; the director of the finance department of Bengang Steel PlateCo., Ltd.; and the deputy director of the finance department of Bengang Group Co., Ltd. She iscurrently the Supervisor and Deputy Manager of the Finance Department of Bengang Steel PlateCo., Ltd.
Lu Weijun, male, 46 years old, master, senior accountant. He successively served as the chief of thecost section of the finance department of Benxi Iron and Steel (Group) Construction Co., Ltd.; thechief business engineer of the audit department of Benxi Iron and Steel Sheet Co., Ltd.; the chiefbusiness engineer of the audit department of Benxi Iron and Steel Group Corporation. He iscurrently the Supervisor and Deputy Manager of the Finance Department of Bengang Steel PlateCo., Ltd.
Zhang Yanlong Male, 44 years old, university degree, senior engineer. He successively served asproduction director of steelmaking workshop of Bengang Steel Plate Co., Ltd. steelmaking plant;deputy section chief of technical quality section of Bengang Steel Plate Co., Ltd. steelmaking plant;director of steelmaking workshop of Bengang Steel Plate Co., Ltd. steelmaking plant; Bengang SteelPlate Co., Ltd. Chief of the production section of the company's steelmaking plant; assistant to thedirector of the steelmaking plant of Bengang Steel Plate Co., Ltd.; currently deputy director of thesteelmaking plant of Bengang Steel Plate Co., Ltd.; supervisor of Bengang Steel Plate Co., Ltd.
Zhao Xingtao Male, 50 years old, university degree, master of engineering, senior engineer. He hassuccessively served as Deputy Chief Engineer of Bengang Posco Company; Deputy GeneralManager of Bengang Posco Company; Deputy Director of Cold Rolling Plant of Bengang SteelSheet Co., Ltd.; Secretary of Party Committee and Chairman of Labor Union of Bengang Steel SheetCo., Ltd. Cold Rolling Plant; currently Bengang Steel Co., Ltd. Deputy Secretary of the Party
Committee of the Cold Rolling General Plant of Plate Co., Ltd., leader of the DisciplinaryCommittee Preparation Team, Chairman of the Labor Union, and Supervisor of Bengang Steel PlateCo., Ltd.
Profile of non-director senior management:
Yang Xiaofang, male, 58 years old, doctoral student, senior engineer. He successively served asdeputy director of Bengang Cold Rolling Plant; deputy general manager of Bengang PoscoCompany; director of cold rolling plant of Bengang Steel Plate Co., Ltd.; manager of assetmanagement company; chairman and manager of Liaoning Henderson asset management company;Executive Deputy Director of No. 3 Cold Rolling Plant of Plate Co., Ltd.; Deputy General Managerand Head of Equipment Department of Bengang Steel Plate Co., Ltd. He is currently the DeputyGeneral Manager of Bengang Steel Plate Co., Ltd.
Wang Donghui, male, 52 years old, bachelor's degree, senior accountant. He successively served asthe director of the general division of the finance department of Benxi Iron and Steel Group; thedirector and chief financial officer of the Mechanism Company of Benxi Iron and Steel Company;the deputy general manager of the finance company of Benxi Iron and Steel Group; the deputydirector of the operation and management department of Benxi Iron and Steel Group; , Director ofOperation Improvement Department; Vice Minister of Finance Department of Benxi Iron and SteelGroup Corporation and Chief Accountant of Beiying Company; Director of Finance Department ofBenxi Iron and Steel Group Corporation; Director of Bengang Steel Plate Co., Ltd. He is currentlythe chief accountant of Bengang Steel Plate Co., Ltd. and director of Bengang Posco Company.
Jing Tao, male, 51 years old, master, senior engineer. He successively served as the director of thefinishing workshop and the deputy secretary of the Party branch, the chief of the technical qualitysection and the secretary of the Party branch, the assistant to the factory manager, and the deputydirector of the hot rolling mill of Benxi Steel Sheet Company; Deputy Director, Manager ofPackaging Project Department, Manager of Packaging Company; Director of Hot Rolling Plant ofBengang Steel Plate Co., Ltd. Secretary of Party Committee and Chairman of Labor Union andVice President of Bengang Plate Company Technology Research Institute; Minister of Science andTechnology Innovation Department of Benxi Iron and Steel Group Company. He is currently theDeputy General Manager of Bengang Steel Plate Co., Ltd.
Positions in shareholder units
√ Applicable □ Not applicable
| Names of the persons in office | Names of the shareholders | Titles engaged in the shareholders | Starting date of office term | Expiry date of office term | Does he /she receive remuneration or allowance from the shareholder |
| Han Mei | Bengang Group Co., Ltd | Deputy Chief Accountant, General Manager of Finance Department | Feb 01, 2021 | Yes | |
| Cheng Bin | Bengang Group Co., Ltd | Chief Auditor | Feb 01, 2021 | Yes | |
| Description of the position in the shareholder | None | ||||
Posts holding in other companies
√Applicable □Not applicable
| Names of the persons in office | Names of the other companies | Titles engaged in other companies | Starting date of office term | Expiry date of office term | Does he /she receive remuneration or allowance from the shareholder |
| Huo Gang | Bengang POSCO Cold-rolled Sheet Co., Ltd. | Chairman | Nov 01, 2021 | No |
| Han Mei | Dongbei Special Steel Group Co., Ltd. | Chairman of the Supervisory Board | Feb 01, 2021 | No | |
| Description of the position in other companies | None | ||||
Punishment by the security’s regulatory authorities in last three years
□ Applicable √ Not applicable
3. Remuneration to Directors, Supervisors and Senior ExecutivesDecision-making procedures, basis of recognition and actual payment of the remuneration to Directors, Supervisorsand Senior Executives
Decision making procedures
1. The Remuneration and Assessment Committee will produce a plan or proposal, which will be implemented uponapproval of the Board or the Shareholders’ Meeting;
2. According to performance assessment criteria and procedures, the Remuneration and Assessment Committeeundertakes assessment on the Directors and Senior Executives;
3. Remuneration amounts and ways of rewards will be proposed according to the assessment and remunerationpolicies for Directors, Supervisors and Senior Executives, and adopted by voting;
4. To be implemented upon approval of the Board.
Basis of recognitionRemuneration scheme for a particular position is recognized basing on the range of responsibilities, duties.Remunerations are distributed based on the assessment results and remuneration policies.
Actual payment of the remunerationRemuneration is paid on monthly basis according to the remuneration allocation policies.Remuneration of Directors, Supervisors and Senior Executives during the reporting period
Unit: in the thousand yuan
| Name | Position | Sex | Age | Office status | Total remuneration received from the shareholder | Whether receive remuneration in the Company's related parties |
| Huo Gang | Chairman | Male | 48 | In office | 18.45 | Yes |
| Wang Shiyou | Director, Deputy General Manager | Male | 47 | In office | 40.2 | No |
| Niu Li | Director | Male | 53 | In office | 0.82 | Yes |
| Lin Dong | Director, Deputy General Manager | Male | 51 | In office | 36.96 | No |
| Han Mei | Director | Female | 52 | In office | Yes | |
| Gao Desheng | Director, Secretary of the Board | Male | 47 | In office | 30.12 | Yes |
| Zhang Suxun | Independent Director | Female | 66 | In office | 5 | No |
| Yuan Zhizhu | Independent Director | Male | 40 | In office | 5 | No |
| Zhong Tianli | Independent Director | Female | 65 | In office | No | |
| Cheng Bin | Chairman of Supervisory Committee | Male | 58 | In office | Yes | |
| Zhao Zhonghua | Supervisor | Female | 37 | In office | Yes | |
| Lu Weijun | Supervisor | Male | 46 | In office | Yes | |
| Zhang Yanlong | Supervisor | Male | 49 | In office | 34.92 | No |
| Zhao Xingtao | Supervisor | Male | 44 | In office | 33 | No |
| Yang Xiaofang | Deputy General Manager | Male | 57 | In office | 27.18 | Yes |
| Wang Donghui | Chief accountant | Male | 52 | In office | 6.16 | Yes |
| Jin Tao | Deputy General Manager | Male | 51 | In office | 6.18 | Yes |
| Gao Lie | Chairman | Male | 54 | Leaving office | Yes | |
| Jiang Guangwei | Deputy Chairman | Male | 56 | Leaving office | Yes | |
| Cao Aimin | Deputy Chairman | Male | 54 | Leaving office | Yes |
| Shen Qiang | Director, General Manager | Male | 53 | Leaving office | 5.8 | Yes |
| Huang Xinghua | Director | Male | 58 | Leaving office | Yes | |
| Zhao Xinan | Independent Director | Male | 61 | Leaving office | 5 | No |
| Li Lin | Supervisor | Female | 53 | Leaving office | 12 | No |
| Li Xiaowei | Supervisor | Male | 46 | Leaving office | Yes | |
| Chen Xin | Deputy General Manager | Male | 51 | Leaving office | 29.1 | Yes |
| Bao Mingwei | Deputy General Manager | Male | 58 | Leaving office | 2.32 | Yes |
| Wang Fengmin | Deputy General Manager | Male | 56 | Leaving office | 2.04 | Yes |
| Cong Yajuan | Chief Financial Officer | Female | 51 | Leaving office | 21.84 | Yes |
| Total | -- | -- | -- | -- | 322.09 | -- |
Ⅵ. Duty fulfillment of directors during the reporting period
1. The situation of Board of Directors during the Reporting Period
| Sessions | Meeting Date | Date of disclosure | Index of information disclosure |
| 17th Eighth plenary session | April 26, 2021 | April 28, 2021 | Announcement on Resolutions of 17th Eighth plenary session |
| 18th Eighth plenary session | May 27, 2021 | May 28, 2021 | Announcement on Resolutions of 18th Eighth plenary session |
| 19th Eighth plenary session | July 28, 2021 | July 29, 2021 | Announcement on Resolutions of 19th Eighth plenary session |
| 20th Eighth plenary session | August 25, 2021 | August 26, 2021 | Announcement on Resolutions of 20th Eighth plenary session |
| 21st Eighth plenary session | September 13, 2021 | September 14, 2021 | Announcement on Resolutions of 21st Eighth plenary session |
| 22nd Eighth plenary session | October 22, 2021 | October 23, 2021 | Announcement on Resolutions of 22nd Eighth plenary session |
| 23rd Eighth plenary session | November 18, 2021 | November 19, 2021 | Announcement on Resolutions of 23rd Eighth plenary session |
| 24th Eighth plenary session | December 7, 2021 | December 7, 2021 | Announcement on Resolutions of 24th Eighth plenary session |
2. The situation of directors attending the BOD and shareholders meeting
| Attendance of Directors at Board of Directors and General Meetings of Shareholders | |||||||
| Director name | Number of Board meetings necessary to be attended during the reporting period | Number of spot attendances | Number of meetings attended by Communication | Number of attendances by representative | Number of absences | Failure to personally attend board meetings successively twice (Yes/No) | Number of general meetings to be attended |
| Huo Gang | 1 | 1 | 0 | 0 | 0 | No | 2 |
| Wang Shiyou | 1 | 1 | 0 | 0 | 0 | No | 2 |
| Niu Li | 0 | 0 | 0 | 0 | 0 | No | 0 |
| Lin Dong | 7 | 2 | 5 | 0 | 0 | No | 4 |
| Han Mei | 7 | 2 | 5 | 0 | 0 | No | 4 |
| Gao Desheng | 1 | 1 | 0 | 0 | 0 | No | 2 |
| Zhang Suxun | 8 | 3 | 5 | 0 | 0 | No | 4 |
| Yuan Zhizhu | 8 | 3 | 5 | 0 | 0 | No | 4 |
| Zhong Tianli | 7 | 2 | 5 | 0 | 0 | No | 4 |
| Gao Lie | 7 | 2 | 5 | 0 | 0 | No | 2 |
| Jiang Guangwei | 6 | 1 | 5 | 0 | 0 | No | 2 |
| Cao Aimin | 1 | 1 | 0 | 0 | 0 | No | 0 |
| Shen Qiang | 1 | 1 | 0 | 0 | 0 | No | 0 |
| Huang Xinghua | 1 | 1 | 0 | 0 | 0 | No | 0 |
| Zhao Xinan | 1 | 1 | 0 | 0 | 0 | No | 1 |
| Wang Donghui | 6 | 1 | 5 | 0 | 0 | No | 2 |
Explanation of two consecutive absences from attending the board of directors in person
3. Objection of Directors on Relevant Issues
Objection of independent directors on some relevant issues
□ Yes √ No
Independent directors proposed no objection against the relevant matters during the reporting period.
4. Other Notes to Duty Fulfillment of Directors
Whether any director’s advice to the company was accepted
√ Yes □ No
Illustration of acceptance of or failure to accept a director’s advice to the companyDirectors have not made recommendations during the reporting period.
Ⅶ. Duty Fulfillment of the Special Committees under the Board during the reporting period
| Committees | Membership | Number of meetings held | Meeting date | Meeting content | Important comments and suggestions raised | Other performance of duties | Specific circumstances of the objection (if any) |
| Audit Committee | Zhang Suxun, Yuan Zhizhu, Cao Aimin | 1 | April 16, 2021 | 1. 2020 annual report and summary; 2. 2020 final financial report; 3. 2020 profit distribution plan; 4. 2021 first quarter report; 5. Proposal on the proposed re-appointment of accounting firms; 6. Proposal on the prediction of daily transactions of related parts in 2021;7. Proposal on re-signing the financial service agreement; 8. Risk disposal plan on handling deposit and loan business in Bengang Group Finance Co., Ltd.; 9. The proposal of framework agreement about financial leasing cooperation with Liaoning Hengyi Financial Leasing Co., Ltd. 10. The proposal on revising the raw material | Agree | Fully communicate with auditors | No |
| and service supply agreement; 11. The company's internal control evaluation report in 2020; 12. The proposal on the provision for asset impairment; 13. Proposal on the use of self-owned short-term idle funds for entrusted financial management; 14. Risk assessment report of Bengang Group Finance Co., Ltd.; 15. Special report on the deposit and use of raised funds in 2020 | |||||||
| Audit Committee | Zhang Suxun, Yuan Zhizhu, Han Mei | 4 | July 21, 2021 | Proposal on using idle raised funds as working capital temporarily | Agree | Not applicable | No |
| August 16, 2021 | 1. 2021 semi-annual report;2, Risk Assessment Report of Bengang Group Finance Co., Ltd.; 3. Special report on the Deposit and Use of Raised Funds in the Semi-annual 2021 | Agree | Not applicable | No | |||
| October 15, 2021 | 2021 third quarter report | Agree | Not applicable | No | |||
| December 01, 2021 | 1. Proposal on the new routine related party transaction; 2. Proposal on signing a financial service agreement with Ansteel Finance Co., Ltd.; 3. Proposal on signing a supply chain financial service framework agreement with Ansteel Group Capital Holdings Co., Ltd. | Agree | Not applicable | No | |||
| Nomination Committee | Yuan Zhizhu, Zhang Suxun, Gao Lie | 3 | April 16, 2021 | 1. Proposal on the nomination of candidates for directors; 2. Proposal on the nomination of candidates for independent directors; 3. Proposal on the appointment of Mr. Lin Dong as the general manager of the company; 4. Proposal on the appointment of senior management personnel of the company | Agree | Not applicable | No |
| September 08, 2021 | Proposal on the appointment Chief Financial Officer of company | Agree | Not applicable | No | |||
| November 12, 2021 | 1. Proposal on the appointment senior manager of the company; 2. Proposal on the nomination of director | Agree | Not applicable | No |
| candidates | |||||||
| Strategy Committee | Gao Lie, Shen Qiang, Zhao Xinan | 1 | April 16, 2021 | 1. 2020 annual report of the board of directors; 2. 2021 investment framework plan proposal | Agree | Not applicable | No |
Ⅷ. Duty Fulfillment of the Supervisory CommitteeWhether the supervisory board made any objection against the supervision issue during the reportingperiod
□ Yes √ No
The Supervisory Board made no objection against the supervision issue during the reporting period.Ⅸ. Staff Condition
1. Staff Population, Professional Structure and Education Level
| Population of in-service staff in parent company | 18,232 |
| Population of in-service staff in main subsidiaries | 626 |
| Total population of in-service staff | 18,858 |
| Total population of staff receiving remuneration in the current period | 18,858 |
| Population of retired staff whose expense was borne by parent company and major subsidiary companies | 23,608 |
| Professional Composition | |
| Type of Professional Composition | Population |
| Production Staff | 15,083 |
| Sales Staff | 181 |
| Technician Staff | 1,480 |
| Financial Staff | 148 |
| Administrative Staff | 1,966 |
| Total | 18,858 |
| Educational Degree | |
| Type of Educational Degree | Population |
| PhD. | 13 |
| Postgraduate | 351 |
| Undergraduate | 4,238 |
| Junior College | 6,668 |
| Technical secondary school | 460 |
| High School and Technical School | 3,743 |
| Middle School and others | 3,385 |
| Total | 18,858 |
2. Remuneration Policies
In 2021, the company establish a complete performance management system which based on thedetermined annual production and operation guidelines, policies and overall management goals. Thecompany evaluate the operation indicators and work tasks of various functional departments,factories and mines, set key performance evaluation indicators, and implement monthly evaluations.Salary based on position, ability and performance. Salary is determined by post, and salary ischanged by post, guide employees to improve their abilities, establish a salary distributionmechanism that relies on competition and income by contribution, and highlights the assessment ofkey performance indicators, so as to truly realize that income can be increased or decreased.Continue to promote the total salary contract, guide all units to rationally allocate human resources,optimize the allocation mechanism and improve labor productivity, and give full play to the role ofsalary incentives and constraints.
3. Training Plan
In 2021, the company aims to deeply implement the talent-first development strategy, significantlyenhance the ability of talent training, take the overall improvement of the overall quality ofemployees as the ultimate goal, focus on meeting training needs, and focus on updating trainingconcepts, innovating training methods, and improving training quality. The focus is to adhere to theprinciple of "controlling the total amount, optimizing the structure, and focusing on practical results",and while closely focusing on the production and operation center, comprehensively carry outsystematic, modular, and precise education and training. Promote the development of trainingproducts that combine long and short, high and low matching, and parallel sizes, and strive to createcharacteristic high-quality training programs, effectively release training effectiveness, and furtherimprove the overall quality of the workforce, laying a solid foundation for the high-qualitydevelopment of the steel sheet.
In 2021, the company completed 80 training projects throughout the year, training 14,474 person-times, the training rate of all employees reached 70%, and the implementation rate of the annualtraining plan will reach 85%. Achieving training objectives in full.
4. Outsourcing
□ Applicable √ Not applicable
Ⅹ. Profit Distribution or Capital Reserve ConversionFormulation, implementation and adjustment of profit distribution policy of common shares especiallycash dividend policy during the reporting period
√ Applicable □ Not applicable
Interim profit distribution in 2021: Based on the total share capital of 3,885,060,605 shares at theend of June 2021, a cash dividend of RMB 5 (tax included) will be distributed to all shareholdersfor every 10 shares, with a total cash dividend of RMB 1,942,530,302.5. No capital reserve will beconverted into share capital for this distribution. The company has completed the implementationon October 13, 2021.Profit distribution in 2021: As audited by BDO China Shu Lun Pan Certified Public AccountantsLLP., the company's net profit attributable to the parent company in 2021 is RMB 2,500,582,902.58,plus the undistributed profit at the beginning of the year of RMB 2,692,018,405.40, and deductingthe actual dividend of RMB 1,981,284,017.82 from the previous year and the statutory surplusreserve of RMB 234,010,992.52, and the undistributed profit at the end of the year isRMB2,977,306,297.64. Profits distribution plan of 2021: based on the company’s existing sharecapital of 4,108,191,379 shares, a cash dividend of 6.0 yuan (including tax) will be distributed to allshareholders for every 10 shares. The proposed distribution of ordinary share dividends is RMB2,464,914,827.40, and the remaining RMB 512,391,470.24 will be carried forward to the next year’sundistributed profits.
| Special description of cash dividend policy | |
| Whether it meets the requirements of the company's articles of association or the resolutions of the shareholders meeting: | Yes |
| Whether the dividend standard and ratio are clear: | Yes |
| Whether the relevant decision-making procedures and mechanisms are complete: | Yes |
| Whether independent directors have performed their duties due diligence and played their due role: | Yes |
| Whether small and medium shareholders have sufficient opportunities to express their opinions and demands, and whether their legitimate rights and interests are fully protected: | Yes |
| If the cash dividend policy is adjusted or changed, whether the conditions and procedures are compliant and transparent: | Yes |
Both the Company’s profit and the parent company’s retained earnings are positive however no proposal of cashdividend distribution was proposed during the reporting period
□ Applicable √ Not applicable
Profit Distribution or Capital Reserve Conversion Proposal in the Reporting Period
√ Applicable □ Not applicable
| Number of bonus shares for every 10 shares (shares) | 0 |
| Dividend per 10 shares (yuan) (tax included) | 6.00 |
| The base of the share capital of the distribution plan (shares) | 4,108,191,379.00 |
| Cash dividend amount (yuan) (tax included) | 2,464,914,827.40 |
| Cash dividend amount in other ways (such as share repurchase) (yuan) | 0.00 |
| Total cash dividends (including other methods) (yuan) | 2,464,914,827.40 |
| Distributable profit (yuan) | 2,977,306,297.64 |
| The ratio of total cash dividends (including other methods) to total profit distribution | 82.79% |
| Cash dividend of the current period | |
| If the company's development stage is in the growth period and has major capital expenditure arrangements, when the profit distribution is carried out, the proportion of cash dividends in this profit distribution should be at least 20%. | |
| Notes to the profit distribution or capital reserve transfer plan | |
| The profit distribution plan or proposal and the plan or proposal of conversion of the capital reserve into share capital in recent three years (including the reporting period) 1.Profit distribution proposal of 2021 As audited by BDO China Shu Lun Pan Certified Public Accountants LLP., the company's net profit attributable to the parent company in 2021 is RMB 2,500,582,902.58, plus the undistributed profit at the beginning of the year of RMB 2,692,018,405.40, and deducting the actual dividend of RMB 1,981,284,017.82 from the previous year and the statutory surplus reserve of RMB 234,010,992.52, and the undistributed profit at the end of the year is RMB2,977,306,297.64. Profits distribution plan of 2021: based on the company’s existing share capital of 4,108,191,379 shares, a cash dividend of 6.0 yuan (including tax) will be distributed to all shareholders for every 10 shares. The proposed distribution of ordinary share dividends is RMB 2,464,914,827.40, and the remaining RMB 512,391,470.24 will be carried forward to the next year’s undistributed profits. 2. The company's 2021 interim profit distribution plan Based on the total share capital of 3,885,060,605 shares at the end of June 2021, a cash dividend of RMB 5 (tax included) will be distributed to all shareholders for every 10 shares, with a total cash dividend of RMB 1,942,530,302.5. No capital reserve will be converted into share capital for this distribution. 3. Profit distribution proposal of 2020 As audited by BDO China Shu Lun Pan Certified Public Accountants LLP., the company's net profit attributable to the parent company in 2020 is RMB 384,252,740.78, plus the undistributed profit at the beginning of the year of RMB 2,307,765,664.62, and the undistributed profit at the end of the year is RMB 2,692,018,405.40. Profits distribution plan of 2020: based on the company’s existing share capital of 3,875,371,532 shares, a cash dividend of 0.1 yuan (including tax) will be distributed to all shareholders for every 10 | |
shares. The proposed distribution of ordinary share dividends is RMB 38,753,715.32, and theremaining RMB 2,653,264,690.08 will be carried forward to the next year’s undistributed profits.
4. Profit distribution proposal of 2019
As audited by BDO China Shu Lun Pan Certified Public Accountants LLP., the net profit attributableto the parent company of the year 2019 was RMB 555,646,971.40. After adding the retained profit ofRMB 1,945,887,269.82 at the beginning of the year, and deducting the actual dividend of RMB193,768,576.6 from the previous year, the balance of undistributed profit was RMB 2,307,765,664.62.Profits distribution plan of 2019: Considering the uncertainty of the Coronavirus on the economy, thecompany did not make profit distribution or convert the provident fund into capital in 2019.
XI. Implementation of company equity incentive plans, employee stock ownership plans orother employee incentives
□ Applicable √ Not applicable
During the reporting period, the company had no equity incentive plan, employee stock ownership planor other employee incentive measures and their implementation.
XII. Construction and implementation of internal control system during the reporting period
1. Construction and implementation of internal control system
In order to further improve the internal management level of the enterprise, standardize the internal control and theorderly operation of various business activities of the enterprise's production and operation, and strengthen theconstruction of the risk prevention and control mechanism, the company has carried out the construction of internalcontrol in an all-round way. The business process and other aspects have been further sorted out and established andimproved the relevant systems of internal control, and a relatively complete internal control system has beenconstructed. On the basis of daily supervision and special supervision of internal control, the soundness andeffectiveness of the construction and supervision of the company's internal control system Evaluate.
2. Significant defects of the internal control found in the internal control self-assessmentreport in the reporting period
□ Yes √ No
XIII. The company's management and control of subsidiaries during the reporting period
| Name | Integration plan | Integration progress | Problems encountered in integration | Solutions implemented | Solutions progress | follow-up resolution plan |
| Xiamen Bengang Steel & Iron Sales Co., Ltd. | Deregistration | Has been cancelled | Not applicable | Not applicable | Not applicable | Not applicable |
XIV. Internal control self-evaluation report or internal control audit report
1. Self-Evaluation Report on Internal Control
| Disclosing date of internal control auditing report full text | March 24, 2022 |
| Index of the internal control auditing report full text | http://www.cninfo.com.cn |
| Proportion of total assets of subsidiaries belong to the scope of self-evaluation | 97.07% |
| report in the total assets of the Company’s consolidated financial statements | ||
| Proportion of operation income of subsidiaries belong to the scope of self-evaluation report in the operation income of the Company’s consolidated financial statements | 89.49% | |
| Standards of Defects Evaluation | ||
| Category | Financial Report | Non-financial Report |
| Qualitative criteria | 1. Material deficiencies: fraud of directors, supervisors and senior management; the company corrects its published financial statements; there is a material misstatement in the financial statements, and the internal control fails to detect the misstatement during the operation; the corporate audit committee and the internal audit institution have no effect on the supervision of internal control. 2. Significant deficiencies: the seriousness and economic consequences of accounting policies, accounting and financial reporting are lower than material deficiencies, but there are still internal control defects that may cause the company to deviate from the control objectives. 3. General deficiencies: other than material and significant deficiencies, other internal control deficiencies in financial reporting. | 1. The company's daily operation internal control defect identification standards: 1) Material deficiencies: have a materrial impact on the normal operation of the company: affect most of the main business types/main functional areas of the company; have a significant impact on the overall operation of the company and are difficult to recover in the long run. 2) Significant deficiencies: have a greater impact on the normal operation of the company: affect some of the company's main business types/main functional areas; have a greater impact on the company's overall operations, and require a greater price to recover in a long period of time. 3) General deficiencies: Moderate or below impact on the normal operation of the company: Affects a certain main business type/main functional area or general business type/general functional area of the company; Moderate or below impact on the overall operation of the company, requiring a certain amount of effort within a certain period of time cost recovery. 2. The company's business objectives to achieve internal control defects identification standards: 1) Material deficiencies: have a significant impact on the company's business objectives: have a significant impact on any type of budget indicators of the |
| deficiencies: affecting some employees/public health/safety, major accidents. 3) General deficiencies: affecting a small number of employees/public health/safety, major accidents. 4. The company's environmental protection internal control defects identification standards: 1) Material deficiencies: serious environmental damage, occurrence of major environmental incidents (national level II) or above environmental protection accidents. 2) Significant deficiencies: large environmental damage and large environmental incidents (national level III). 3) General deficiencies: moderate and below environmental impact, general environmental incidents (national level IV). | ||
| Quantitative criteria | 1. Material deficiencies：1）misstatement≥5% of the total profits; 2）misstatement≥3% of the total assets; 3）misstatement≥1% of the total operating income; 4）misstatement≥1% of the total amount of the owner’s equity. 2. Significant deficiencies：1) 3% of the total profits ≤misstatement＜5% of the total profits；2）0.5% of the total assets ≤misstatement＜3% of the total assets；3）0.5% of the total operating income ≤misstatement＜1% of the total operating income； 4）0.5% of the total amount of the owner’s equity ≤misstatement＜1% of the total amount of the owner’s equity。3. General deficiencies：1）misstatement＜3% of the total profits；2）misstatement＜0.5% of the total assets；3）misstatement＜0.5% of the total operating income；4）misstatement＜0.5% of the total amount of the owner’s equity。 | None |
| Number of material deficiencies in financial reporting(a) | 0 | |
| Number of material deficiencies in non-financial reporting (a) | 0 | |
| Number of significant deficiencies in financial reporting(a) | 0 | |
| Number of significant deficiencies in non-financial reporting(a) | 0 | |
2. Internal Control Audit Report
√√ Applicable □ Not applicable
| Opinion in the internal control audit report | |
| We acknowledge that internal control of Bengang Bancai is effective in all material respects and is compliance with ‘Fundamental Rules of Enterprise Internal Control’ up to December 31, 2021. | |
| Internal Control Audit Report Status | Disclosure |
| Disclosure date of audit report of internal control (full-text) | March 31, 2022 |
| Index of audit report of internal control (full-text) | http://www.cninfo.com.cn |
| Internal audit report’s opinion | Standard unqualified opinion |
| Whether there is significant defect in non-financial report | No |
Whether the accountants’ firm issued a qualified opinion on report of internal control audit
□ Yes √ No
Whether the internal control audit report issued by the accountants’ firm agree with the self-assessment report of the Board of Directors
√ Yes □ No
XV. Self-examination and rectification of listed company governance special actionsDuring the reporting period, the company actively implemented the directive spirit of the "Opinions of the StateCouncil on Further Improving the Quality of Listed Companies". According to the requirements of China SecuritiesRegulatory Commission [2020] No. 69 "Announcement on Carrying out Special Actions on Corporate Governanceof Listed Companies”, the principle of self-examination and self-correction of listed companies' governance has beencarried out, and the "Special Self-examination List of Listed Company Governance" has been compiled, which truly,accurately and completely reflects the legal problems of listed companies and the rectification of relevant norms.Drive, improve the corporate governance system and rules, build a good corporate governance ecology, etc., furtherimprove the listed company governance structure in which each performs its own duties and responsibilities,coordinates operations, and effectively checks and balances, consolidates the foundation for the high-qualitydevelopment of listed companies, and improves the governance level of listed companies.
V. Environmental and Social Responsibility
I. Major environmental issuesWhether the listed company and its subsidiaries belong to the key pollutant discharge units announcedby the environmental protection department
√ Yes □ No
| Company or subsidiary name | Names of major pollutants and characteristic pollutants | Emission method | Number of discharge outlets | Distribution of discharge outlets | Emission concentration | Implemented pollutant discharge standards | Total emissions | Total approved emissions | Excessive emissions |
| Bengang Steel Plates Co.,Ltd. | COD | Continuous | 1 | Energy General Plant Sewage Treatment Plant | 25.3 | 50 | 228.11 | Not approved by the government | None |
| Bengang Steel Plates Co.,Ltd. | Ammonia nitrogen | Continuous | 1 | Energy General Plant Sewage Treatment Plant | 0.96 | 8 | 3.16 | Not approved by the government | None |
| Bengang Steel Plates Co.,Ltd. | Particulate matter | Continuous and intermittent | 183 | Raw material dumper, transfer station, receiving tank, pre-batching; iron-making casting yard, furnace roof, fuel, solvent, granulation, ore coke tank, sintering head dust removal, desulfurization, machine tail dust removal; iron and steel water pretreatment , north-south pouring station, tundish, primary dust removal, secondary | Raw material 14-23; sintering 8-40; iron making 7-35; steel making 20-50; special steel 7-15; coking 5-50; power generation 3-30; cold rolling 4-18; hot rolling 6-15. | Raw material 25; sintering 50-30; iron making 25; steel making 20-50; special steel 20; coking 10-50; power generation 5-30; cold rolling 20-30; hot rolling 20-30. | Particulate matter：13569 | Not approved by the government | None |
| dust removal, refining dust removal; special steel electric furnace, refining furnace; coking coal addition, coke pushing, dry quenching, chimney desulfurization and denitrification; power boiler dust removal, desulfurization and denitrification; cold rolling acid regeneration , pickling, straightening, welding, leveling, annealing, roasting; hot rolling furnace. | ||||
| Bengang Steel Plates Co.,Ltd. | Sulphur dioxide | Continuous and intermittent | 64 |
Sinteringhead; cokeovenchimney;powergenerationboilerdesulfurization; coldrollingroasting andannealing;hot rollingheatingfurnace.
| Sintering head 12-40; coke oven 30-100; power generation 5-70; cold rolling 25-98; hot rolling 48-128. | Sintering head 200; coke oven 30-100; power generation 35-200 cold rolling 100; hot rolling 150. | 4720 | Not approved by the government | None | |||||
| Bengang Steel Plates Co.,Ltd. | Nitrogen oxides | Continuous and intermittent | 57 | Sintering head; coking chimney; power generation boiler; cold rolling roasting, annealing; hot rolling heating furnace. | Sintering head 100-230; coking chimney 150-268; power generation 30-140; cold rolling 60-170; hot rolling 83.5-124. | Sintering head 300; coking chimney 150-500; power generation 50-200; cold rolling 200; hot rolling 300. | 12242 | Not approved by the government | None |
Construction and operation of pollution prevention facilitiesBengang Bancai has a total of 202 sets of environmental pollution prevention and control facilities, and each process
is equipped with dust removal, desulfurization and denitrification, and online facilities in accordance with pollutantdischarge standards. Wet desulfurization of sintering machine head, dry desulfurization and denitrification of cokeoven chimney, wet desulfurization and SCR denitration of power generation, etc. The 2300mm production line ofthe hot rolling plant is designed for use in the production of stainless steel, and the environmental protection facilitiesare normally put into use.
Environmental impact assessment of construction projects and other environmental protection administrativelicensesIn 2021, the EIA registration and filing work of 18 projects including the coke oven flue gas desulfurization anddenitrification transformation project of the iron smelting plant will be completed; 7 EIA report forms including the220KV substation project will be submitted for approval. The environmental protection acceptance work of 8projects including the No. 7 coke oven desulfurization and denitrification project and the No. 5 blast furnace capacityreplacement project of the iron smelting plant was carried out.In 2021, the company completed the renewal of pollutant discharge licenses for 9 units of the company.
Emergency plan for environmental emergenciesThe company and its 14 subordinate units strictly follow the "Emergency Response Law of the People's Republic ofChina", the "Notice on Printing and Distributing the "Guidelines for Risk Assessment of Environmental Emergenciesfor Enterprises (Trial)", and "Enterprise and Institutional Emergency Response Plans for EnvironmentalEmergencies." Management Measures (for Trial Implementation)” and other existing laws and regulations to carryout environmental emergency management work. In 2021, entrust a third-party unit to revise the emergency plan forenvironmental emergencies, carry out risk assessment and emergency resource investigation again, and conductassessments according to the management requirements of the Municipal Bureau., for the record. At the same time,each unit of the company formulates a drill plan according to the pre-plan and carries out the corresponding pre-plandrill work.
Environmental Self-Monitoring ProgramThe 2021 self-monitoring plan is carried out in accordance with the requirements of the discharge permit. Pollutionsource monitoring points: 185 flue gas monitoring points, 10 wastewater monitoring points, 13 boundary noise points,27 atmospheric dust reduction points, and 71 unorganized monitoring points. Monitoring is carried out on a quarterly,semi-annual and annual frequency. There are 27 atmospheric dust fall points distributed in the factory area, and 162monitoring data have been obtained; the routine monitoring tasks of flue gas and atmospheric unorganizedmonitoring have been completed, and a total of 1286 monitoring data have been obtained throughout the year; thenoise monitoring points at the factory boundary 13 monitoring data, 208 monitoring data; 10 wastewater monitoringpoints, 1983 monitoring data. There are 541 temporary monitoring data, and the monitoring station reports a total of4180 monitoring data, forming monthly reports, quarterly reports and separate monitoring reports for each factoryand mine.
Administrative penalties for environmental issues during the reporting period
| Company or subsidiary name | Reason for punishment | Violations | Penalty result | Influence on the production and operation of listed companies | The company's rectification measures |
| None | None | None | None | None | None |
Other environmental information that should be disclosedIn 2021, according to the list of key pollutant discharging enterprises issued by the Municipal EnvironmentalProtection Bureau, the environmental information disclosure of 12 units of the company will be completed. Thecontents of the announcement include basic information, pollution discharge information, construction and operationof pollution prevention and control facilities, environmental impact assessment of construction projects and otherenvironmental protection administrative licenses, emergency plans for environmental emergencies, environmentalself-monitoring plans, and other environmental information that should be disclosed.
Measures taken to reduce carbon emissions during the reporting period and their effects
√ Applicable □ Not applicable
In 2021, the company will invest 44.18 million yuan to implement 6 energy-saving and carbon-reducing projects,including the transformation of high-energy-consuming motors in the coking branch of the iron smelting plant, andthe nitrogen production increase of the pre-cooling system of the No. 8 oxygen generator in the energy managementand control center. The 2021 carbon emission accounting is expected to be completed in June 2022, and the carbonemission reduction amount has not yet been determined.
Other environmental protection related information
None.
Ⅱ. Social responsibility situationThe company actively fulfills its social responsibilities, and has publicly disclosed the 2021 Corporate SocialResponsibility Report of Bengang Steel Plates Co., Ltd. For the full text of the report, please refer tohttp://www.cninfo.com.cn on March 26, 2022.
Ⅲ. Consolidate and expand the achievements of poverty alleviation and ruralrevitalizationThe company has selected 8 outstanding cadres to participate in the rural revitalization work, and there are still 4people who serve as the first secretary in the village. During the special period of normal epidemic prevention andcontrol, the cadres in the village did not forget their original aspirations, kept their mission in mind, strengthenedtheir confidence, and worked tenaciously. The company provides growth points for the rural collective economythrough direct investment in the construction of mushroom greenhouses, employee welfare procurement ofagricultural and sideline products in rural areas, etc., effectively increasing per capita income, and completingpoverty alleviation work for more than 800 people. The company has been rated as "Advanced Unit for Fixed-pointPoverty Alleviation in Liaoning Province" for many consecutive years.
VI. Important Events
I. Performance of Committed Issues
1. The fulfilled commitments during the reporting period and under-fulfillment commitmentsby the end of the period made by actual controller, acquirer, director, supervisor, seniormanagement personnel and other related parties.
| Commitments | Commitment party | Type of commitment | Contents | Commitment time | Commitment period | Performance |
| Commitment of shares reform | ||||||
| Commitment made in the acquisition report or the equity change report | Ansteel Group Co., Ltd. | Other commitment | In order to maintain the independence of Bengang Steel, Ansteel Group undertakes the following: 1. Ansteel Group guarantees to keep separate from Bengang Steel in terms of assets, personnel, finance, organization and business, and strictly abides by the China Securities Regulatory Commission's regulations on the independence of listed companies It does not use its controlling position to interfere with the standard operation of Bengang Steel, interfere with Bengang Steel's business decisions, or damage the legitimate rights and interests of Bengang Steel and other shareholders. Ansteel Group and other subsidiaries controlled by it promise not to illegally occupy the funds of Bengang Plate and its controlled subsidiaries in any way. 2. The above commitments will continue to be effective during the period when Ansteel Group has control over Bengang Steel Sheets. If Ansteel Group fails to fulfill the above-mentioned commitments and causes losses to Bengang Steel Sheets, Ansteel Group | August 20,2021 | Long term | Under normal fulfillment |
| will bear the corresponding liability for compensation. | ||||||
| Ansteel Group Co., Ltd. | Other commitment | In order to avoid horizontal competition matters, Ansteel Group undertakes the following: (1) In view of the overlapping business between Ansteel Group and Bengang Steel after the completion of the acquisition, according to the requirements of existing laws, regulations and relevant policies, Ansteel Group will issue a letter of commitment from this letter of commitment. Within 5 years from the date of issue, and strive to use a shorter time, in accordance with the requirements of the relevant securities regulatory authorities, under the premise of complying with the applicable laws and regulations and relevant regulatory rules at that time, in order to facilitate the development of Bengang Steel Sheets and safeguard the interests of shareholders, especially It is the principle of the interests of small and medium shareholders, and comprehensively uses various methods such as asset restructuring, business adjustment, and entrusted management to steadily promote the integration of relevant businesses to solve the problem of horizontal competition. The aforesaid solutions include but are not limited to: 1) Asset reorganization: purchase assets, asset replacement, asset transfer or other feasible reorganization methods in different ways permitted by relevant laws and regulations, such as cash consideration or issue share consideration, and gradually reorganize Anshan Iron and Steel | August 20,2021 | Long term | Under normal fulfillment |
| priority to develop such opportunities and The right of first refusal to purchase the project makes the price of the relevant transaction fair and reasonable, and will be based on the business practices followed in normal commercial transactions with independent third parties; (4) Ansteel Group guarantees that it will strictly abide by laws, regulations and According to the Articles of Association of Bengang Plate Co., Ltd. and its relevant management system, the company shall not use its position as an indirect controlling shareholder of Bengang Plate to seek illegitimate interests, thereby impairing the rights and interests of other shareholders of Bengang Plate; During the period of control over the steel sheet, the above commitments made by Ansteel Group are all valid. In the event of violation of the above commitments, resulting in damage to the rights and interests of Bengang Steel, Ansteel Group is willing to assume the corresponding liability for damages. | ||||||
| Ansteel Group Co., Ltd. | Other commitment | In order to standardize and reduce the related transactions between Ansteel Group and listed companies, Ansteel Group has made commitments: 1. Ansteel Group will ensure that Bengang Steel’s business is independent, its assets are complete, and it has independent and complete production, supply, sales and other auxiliary facilities. system. 2. Ansteel Group and other enterprises controlled by Ansteel Group will not take advantage of the control over Bengang Steel Sheets to seek preferential transactions with Bengang Steel | August 20,2021 | Long term | Under normal fulfillment |
| Sheets and its subordinate enterprises. 3. Ansteel Group and other enterprises controlled by Ansteel Group will avoid and reduce unnecessary transactions with Bengang Steel Sheets and its subordinate enterprises. If there is a truly necessary and unavoidable transaction, Ansteel Group and other enterprises controlled by Ansteel Group will sign an agreement with Bengang Steel Sheets and its subordinate enterprises in accordance with the principles of fairness, fairness, and compensation for equal value, perform legal procedures, and will comply with the law. According to the requirements of relevant laws, regulations and normative documents and the "Articles of Association of Bengang Plate Co., Ltd.", perform information disclosure obligations and perform relevant internal decision-making and approval procedures in accordance with the law, and ensure that no price is unfair compared with market prices. conditions and conduct transactions with Bengang Steel and its subordinate enterprises, and do not use such transactions to engage in any behavior that damages the legitimate rights and interests of Bengang Steel and other shareholders of Bengang Steel. 4. In the event of violation of the above commitments, resulting in damage to the legitimate rights and interests of Bengang Steel, Ansteel Group will compensate for the losses caused to Bengang according to law. | ||||||
| Commitment made during asset restructuring |
| Commitment made during initial public offering or refinancing | Company directors, senior management | Other commitment | According to the relevant regulations of the China Securities Regulatory Commission, all directors and senior management of the Company have made the following commitments to the Company’s fulfillment of the diluted immediate return measures: 1. I promise to perform my duties faithfully and diligently, and safeguard the legitimate rights and interests of the Company and all shareholders. 2. I promise not to deliver benefits to other units or individuals without compensation or under unfair conditions, nor to use other means to damage the Company's interests. 3. I promise to restrict the position-related consumption behavior of company directors and senior management personnel. 4. I promise not to use the Company’s assets to do investment and consumption activities that are not related to the performance of my duties. 5. Within the scope of my responsibilities and authority, I promise to make every effort to promote the company's board of directors or the remuneration system established by the remuneration and appraisal committee to be linked to the implementation of the company's compensation measures, and vote in favor of the relevant proposals reviewed by the company's board of directors and general meeting (If I have voting rights). 6. If the company intends to implement equity incentives, I promise to, within my own responsibilities and jurisdiction, make every effort to promote the Company’s proposed equity incentive exercise conditions to be linked to | May 22, 2019 | Long term | Under normal fulfillment |
| the Company’s implementation of the return measures, and to review the Company’s board of directors and shareholders’ general meetings and vote in favor of the relevant proposals reviewed by the company's board of directors and general meeting (If I have voting rights). 7. If the future issuance of this commitment and the implementation of the Company’s public issuance of convertible corporate bonds are completed, if the China Securities Regulatory Commission makes other new regulatory provisions on the measures for filling returns and their commitments, and the above commitments cannot meet the requirements of the China Securities Regulatory Commission When other regulations are stipulated, a commitment will be issued in accordance with the latest regulations of the China Securities Regulatory Commission. The company's controlling shareholder, Benxi Iron and Steel (Group) Co., Ltd., promised not to interfere with the company's operation and management activities beyond its authority and not to infringe on the Company's interests. | ||||||
| Benxi Steel & Iron (Group) Co., Ltd. and Bengang Group Co., Ltd. | Other Commitment | The sales companies of Bengang International Trade Co., Ltd. and Bengang Steel plates in the same region guarantee independent personnel, independent business, independent finance, and independent assets, and are guaranteed not to be in the same registration place or in the same office; The filing of foreign economic and trade operators, taking into account the need to | July 24,2019 | Long term | Under normal fulfillment |
| properties under the name of Jiedong County Trading Corporation. However, due to serious local protection, property rights and other factors, the content of the judgment has not been enforceable. Later, after applying again from Guangzhou Free Trade Zone Bengang Sales Co., Ltd., the Intermediate People's Court of Benxi City, Liaoning Province issued an execution ruling again, and 62 properties of Jiedong County Trading Corporation were re-sealed. As of February 4, 2022. Except for participating in the litigation activities for the purpose of realizing creditor's rights, Guangzhou Free Trade Zone Bengang Sales Co., Ltd has not carried out other business activities. After the litigation is completed, the relevant procedures for the cancellation of Guangzhou Free Trade Zone Bengang Sales Co., Ltd. will be handled immediately. | ||||||
| Bengang Group Co., Ltd. & Benxi Steel & Iron (Group) Co., Ltd. | Other Commitment | The Group's horizontal competition with Benxi Steel Plates and the measures and commitments to avoid inter-industry competition 1. During the period when the Group is the controlling shareholder of Bengang Steel Plates, in addition to the matters listed in Article 1 of this Commitment Letter, the Group and other enterprises controlled by the Group other than Bengang Steel Plates no longer produce or develop any products that compete or may compete with the products produced by Bengang Steel Plates and its subsidiaries at home and abroad, and do not directly or indirectly operate any business that competes with Bengang | July 24,2019 | Normal execution | Under normal fulfillment |
| violated, the Group is willing to bear all the responsibilities arising therefrom, and fully compensate or compensate for all direct or indirect losses caused to Bengang Steel Plates. 5. This letter of commitment continues to be effective during the period of the Group as the controlling shareholder of Bengang Steel Plates and cannot be changed or withdrawn | ||||||
| Benxi Steel & Iron (Group) Co., Ltd. and Bengang Group Co., Ltd. | Other Commitment | In order to regulate and reduce the Company ’s transactions with controlling shareholders and other related parties, and to protect the interests of the Company and small and medium shareholders, Benxi Iron and Steel (Group) Co., Ltd. and Bengang Group Co., Ltd. have issued the following commitments: "Benxi Iron and Steel (Group) Co., Ltd. and Bengang Group Co., Ltd. (hereinafter collectively referred to as the "Group"), as a direct controlling shareholder and an indirect controlling shareholder of Bengang Steel Plates Co., Ltd. (hereinafter referred to as "Bengang Steel Plates"), in order to protect the interests of Bengang Steel Plates and other shareholders of Bengang Steel Plates, regulate The Group's related transaction with Bengang Steel Plates hereby promises: 1. The Group will fully respect the independent legal person status of Bengang Steel Plates, ensure the independent operation and independent decision-making of Bengang Steel Plates, ensure the independence of Bengang Steel Plates’ business, asset integrity and personnel Independence and financial independence to avoid and reduce unnecessary related | July 24,2019 | Long term | Under normal fulfillment |
| that the above commitments are continuously effective and irrevocable as long as Bengang Steel Plates is listed on the domestic stock exchange and the Group acts as its direct and indirect controlling shareholder. If any violation of the above commitments occurs, the Group therefore bear all the losses caused to Bengang Steel Plates. | ||||||
| Stock option incentive commitment | ||||||
| Other commitments to the company's minority shareholders | ||||||
| Whether Commitment fulfilled on time or not | No | |||||
2. The Company made illustrations that there are assets or projects which meet the originalprofit forecast and the reasons when there are assets or projects profit forecast of theCompany and the reporting period is still in the forecast period
□ Applicable √ Not applicable
II. Non-operating capital occupation of listed companies by controllingshareholders and other related parties
□ Applicable √ Not applicable
There was no non-operating occupation of funds by the controlling shareholder and related partiesIII. Non-compliance with external guarantees
□ Applicable √ Not applicable
There was no non-operating occupation of funds by the controlling shareholder and related partiesIV. Note by the Board of Directors on the latest "Non-Standard Audit Report"
□ Applicable √ Not applicable
V. Notes by the Board of Directors, the Supervisory Committee and theIndependent Directors (if any) on the "non-standard audit report" of theaccounting firm for the current reporting period
□ Applicable √ Not applicable
VI. Illustrations of Changes in the Accounting Policy, Accounting Estimate andMeasurement Methods as Compared with the Financial Report of Last Year
√Applicable □ Not applicable
(1) Implementation of CAS 21 - Leases (revised in 2018)
The Ministry of Finance revised AS 21 - Leases (the "New Lease Standard") in fiscal 2018. The Companyimplemented the New Lease Standard effective January 1, 2021. Under the revised standard, the Company haselected not to reassess whether a contract that existed prior to the date of first-time implementation is a lease orcontains a lease at the date of first-time implementation.
(2) Implementation of ASBE Interpretation No. 14
On 2 February 2021, the Ministry of Finance issued Interpretation No. 14 of Accounting Standards for BusinessEnterprises (Caihui [2021] No. 1, hereinafter referred to as "Interpretation No. 14"), which is effective from the dateof its issuance. relevant operations added from 1 January 2021 to the date of implementation are adjusted inaccordance with Interpretation No. 14.
(3) Implementation of the Circular on Adjustment of the Scope of Application of the Regulations on Accounting forRent Concessions Related to the New Crown Pneumonia EpidemicThe Ministry of Finance issued the "Regulations on Accounting for Rent Concessions Related to the New CrownPneumonia Epidemic" (Caihui [2020] No. 10) on 19 June 2020, under which enterprises may choose to adopt thesimplified method of accounting for rent concessions such as rent reductions and deferred rent payments that meetthe conditions directly arising from the New Crown Pneumonia Epidemic.VII. Illustrations of Changes of the Consolidation Scope as Compared with theFinancial Report of Last Year
√Applicable □ Not applicable
Xiamen Bengang Steel & Iron Sales Co., Ltd. was written off during the reporting period.
VIII. Appointment and Dismiss of Certified Accountant’s FirmAccountant’s firm currently appointed
| Name of the domestic accountant’s firm | BDO China Shu Lun Pan Certified Public Accountants LLP |
| Payment to the domestic accountant’s firm (in 10 thousand yuan) | 280 |
| Service life of domestic accountant’s firm providing audit service | 14 |
| Name of CPAs from the domestic accountant’s firm | Li Yongjiang, Li Guiying |
| Service life of domestic accountants’ providing audit service | 0 |
| Name of the overseas accountant’s firm (if any) | None |
| Payment to overseas accountant’s firm (in 10 thousand yuan) (if any) | 0 |
| Service life of overseas accountant’s firm providing audit service (if any) | None |
| Name of CPAs from the overseas accountant’s firm (if any) | None |
Whether the accountant’s firm was changed during the reporting period
□ Yes √ No
Engagement of accountant’s firms, financial consultants or sponsors for internal control auditing
√ Applicable □ Not applicable
The Company appointed BDO China Shu Lun Pan Certified Public Accountants LLP as the auditor of internalcontrol auditing at RMB 600,000.
IX. Risk of Suspension or Termination of Listing after the Disclosure of AnnualReport
□ Applicable √ Not applicable
X. Bankrupt and Reforming Events
□ Applicable √ Not applicable
There was no bankrupt and reforming event during the reporting period.XI. Significant Lawsuits and Arbitrations
□ Applicable √ Not applicable
There was no significant lawsuit or arbitrations during the reporting period.XII. Punishment and Rectification
□ Applicable √ Not applicable
There was no punishment or rectification during the reporting period.XIII. Credit Status of the Company and its Controlling Shareholders and ActualControllers
□ Applicable √ Not applicable
XIV. Major Related Party Transactions
1. Related party transactions relevant to daily operations
√ Applicable □ Not applicable
| Related parties | Relationship | Type of related party transactions | Content of related party transactions | Pricing principle of related party transactions | Price of related party transactions | Amount of related party transactions (in 10 thousand) | Proportion of similar transactions | The approved trading limit of transactions (in 10 thousand) | Whether exceed the approved limited (Y/N) | Means of payment of related party transactions | Available market price of similar transactions | Date of disclosure | Index of disclosure |
| Benxi Iron and Steel (Group) Co. | parent company | Purchasing goods / receiving labor services | repair cost | on agreement | Related agreement price | 30,456.09 | 0.00% | 40,000 | No | Execute according to the agreement | Yes | 2021/4/28 | |
| Benxi Iron and Steel (Group) Co. | parent company | Purchasing goods / receiving labor services | Raw and auxiliary materials | on agreement | Related agreement price | 18.13 | No | Execute according to the agreement | Yes | 2021/4/28 | |||
| Bensteel Stainless Steel Cold Rolled Dandong Co. | same controller | Purchasing goods / receiving labor services | Stock goods | on agreement | Related agreement price | 83.1 | 30 | No | Execute according to the agreement | Yes | 2021/4/28 | ||
| Benxi Iron and Steel (Group) | same controller | Purchasing goods / receivin | Labor cost | on agreement | Related agreement price | 3,882.38 | 0.00% | 900,000 | No | Execute according to the | Yes | 2021/4/28 |
| Mining Co. | g labor services | agreement | |||||||||||
| Benxi Iron and Steel (Group) Mining Co. | same controller | Purchasing goods / receiving labor services | Raw and auxiliary materials | on agreement | Related agreement price | 789,791.14 | 0.11% | No | Execute according to the agreement | Yes | 2021/4/28 | ||
| Benxi Iron and Steel (Group) Mining Co. | same controller | Purchasing goods / receiving labor services | freight | on agreement | Related agreement price | No | Execute according to the agreement | Yes | 2021/4/28 | ||||
| Benxi Iron and Steel (Group) Metallurgical Slag Co. | same controller | Purchasing goods / receiving labor services | Raw and auxiliary materials | on agreement | Related agreement price | 48,914.81 | 0.01% | 40,000 | No | Execute according to the agreement | Yes | 2021/4/28 | |
| Benxi Iron and Steel (Group) Steel Processing and Distribution Co. | same controller | Purchasing goods / receiving labor services | process cost | on agreement | Related agreement price | 9.75 | 70 | No | Execute according to the agreement | Yes | 2021/4/28 | ||
| Benxi Iron and Steel (Group) Machinery Manufacturing Co. | same controller | Purchasing goods / receiving labor services | spare part | on agreement | Related agreement price | 7,430.24 | 0.00% | 10,000 | No | Execute according to the agreement | Yes | 2021/4/28 | |
| Benxi Iron and Steel (Group) Machinery Manufacturing Co. | same controller | Purchasing goods / receiving labor services | Repair labor | on agreement | Related agreement price | 7,183.49 | 0.00% | No | Execute according to the agreement | Yes | 2021/4/28 | ||
| Benxi Iron and Steel (Group) Construction Co. | same controller | Purchasing goods / receiving labor services | spare part | on agreement | Related agreement price | 2,177.72 | 0.00% | 50,000 | No | Execute according to the agreement | Yes | 2021/4/28 | |
| Benxi Iron and Steel (Group) Construction Co. | same controller | Purchasing goods / receiving labor services | Engineering cost | on agreement | Related agreement price | 34,708.5 | 0.00% | No | Execute according to the agreement | Yes | 2021/4/28 | ||
| Benxi Iron and Steel (Group) Construction Co. | same controller | Purchasing goods / receiving labor services | Repair labor | on agreement | Related agreement price | 27,810.4 | 0.00% | No | Execute according to the agreement | Yes | 2021/4/28 |
| Benxi Iron and Steel (Group) Construction Co. | same controller | Purchasing goods / receiving labor services | Raw and auxiliary materials | on agreement | Related agreement price | 1,609.79 | 0.00% | No | Execute according to the agreement | Yes | 2021/4/28 | ||
| Benxi Iron and Steel (Group) Construction Co. | same controller | Purchasing goods / receiving labor services | freight | on agreement | Related agreement price | 414.09 | 0.00% | No | Execute according to the agreement | Yes | 2021/4/28 | ||
| Benxi Iron and Steel (Group) Industrial Development Co. | same controller | Purchasing goods / receiving labor services | Raw and auxiliary materials | on agreement | Related agreement price | 19,531.75 | 0.00% | 30,000 | No | Execute according to the agreement | Yes | 2021/4/28 | |
| Benxi Iron and Steel (Group) Industrial Development Co. | same controller | Purchasing goods / receiving labor services | Repair labor | on agreement | Related agreement price | 1,489.9 | 0.00% | No | Execute according to the agreement | Yes | 2021/4/28 | ||
| Benxi Iron and Steel (Group) Industrial Development Co. | same controller | Purchasing goods / receiving labor services | freight | on agreement | Related agreement price | 118.49 | No | Execute according to the agreement | Yes | 2021/4/28 | |||
| Benxi Iron and Steel (Group) Industrial Development Co. | same controller | Purchasing goods / receiving labor services | engineering funds | on agreement | Related agreement price | 141.29 | No | Execute according to the agreement | Yes | 2021/4/28 | |||
| Benxi Iron and Steel (Group) Construction Co. | same controller | Purchasing goods / receiving labor services | Raw and auxiliary materials and spare parts | on agreement | Related agreement price | 314.15 | 20,000 | No | Execute according to the agreement | Yes | 2021/4/28 | ||
| Benxi Iron and Steel (Group) Construction Co. | same controller | Purchasing goods / receiving labor services | Engineering cost | on agreement | Related agreement price | 1,222.33 | 0.00% | No | Execute according to the agreement | Yes | 2021/4/28 | ||
| Benxi Iron and Steel (Group) Construction Co. | same controller | Purchasing goods / receiving labor services | repair cost | on agreement | Related agreement price | 17,249.62 | 0.00% | No | Execute according to the agreement | Yes | 2021/4/28 | ||
| Bensteel Electric Limited Liability Company | Associates of the parent company | Purchasing goods / receiving labor | Raw and auxiliary materials | on agreement | Related agreement price | 14,466.12 | 0.00% | 20,000 | No | Execute according to the agreeme | Yes | 2021/4/28 |
| services | nt | ||||||||||||
| Bensteel Electric Co. | Associates of the parent company | Purchasing goods / receiving labor services | Repair labor | on agreement | Related agreement price | 3,076.64 | 0.00% | No | Execute according to the agreement | Yes | 2021/4/28 | ||
| Benxi High-tech Drilling Tools Manufacturing Co. | It belongs to Benxi Iron and steel group | Purchasing goods / receiving labor services | spare part | on agreement | Related agreement price | 35.5 | 50 | No | Execute according to the agreement | Yes | 2021/4/28 | ||
| Benxi New Business Development Co. | same controller | Purchasing goods / receiving labor services | Repair labor | on agreement | Related agreement price | 22.74 | 21,500 | No | Execute according to the agreement | Yes | 2021/4/28 | ||
| Benxi New Business Development Co. | same controller | Purchasing goods / receiving labor services | Raw and auxiliary materials and meals | on agreement | Related agreement price | 599.56 | 0.00% | No | Execute according to the agreement | Yes | 2021/4/28 | ||
| Liaoning Metallurgical Technician College | same controller | Purchasing goods / receiving labor services | spare part | on agreement | Related agreement price | 0.32 | 1,000 | No | Execute according to the agreement | Yes | 2021/4/28 | ||
| Liaoning Metallurgical Vocational and Technical College | same controller | Purchasing goods / receiving labor services | engineering funds | on agreement | Related agreement price | 700 | No | Execute according to the agreement | Yes | 2021/4/28 | |||
| Liaoning Metallurgical Vocational and Technical College | same controller | Purchasing goods / receiving labor services | Repair labor | on agreement | Related agreement price | 2,084.82 | 0.00% | No | Execute according to the agreement | Yes | 2021/4/28 | ||
| Bensteel Group International Economic and Trade Co. | It belongs to Benxi Iron and steel group | Purchasing goods / receiving labor services | Raw and auxiliary materials | on agreement | Related agreement price | 1,683,663.51 | 0.23% | 1,750,000 | No | Execute according to the agreement | Yes | 2021/4/28 | |
| Bensteel Group International Economic and Trade Co. | It belongs to Benxi Iron and steel group | Purchasing goods / receiving labor services | Agency fee | on agreement | Related agreement price | 7,140.12 | 0.00% | No | Execute according to the agreement | Yes | 2021/4/28 | ||
| Bensteel Group International | It belongs to Benxi Iron and | Purchasing goods / receivin | Port miscellaneous charges | on agreement | Related agreement price | 40,115.06 | 0.01% | No | Execute according to the | Yes | 2021/4/28 |
| Economic and Trade Co. | steel group | g labor services | agreement | ||||||||||
| Benxi Iron and Steel (Group) Information Automation Co. | same controller | Purchasing goods / receiving labor services | spare part | on agreement | Related agreement price | 238.24 | 4,000 | No | Execute according to the agreement | Yes | 2021/4/28 | ||
| Benxi Iron and Steel (Group) Information Automation Co. | same controller | Purchasing goods / receiving labor services | Engineering cost | on agreement | Related agreement price | 773.19 | 0.00% | No | Execute according to the agreement | Yes | 2021/4/28 | ||
| Benxi Iron and Steel (Group) Information Automation Co. | same controller | Purchasing goods / receiving labor services | Repair labor | on agreement | Related agreement price | 5,828.89 | 0.00% | No | Execute according to the agreement | Yes | 2021/4/28 | ||
| Benxi Iron and Steel (Group) Thermal Development Co. | same controller | Purchasing goods / receiving labor services | Heating cost | on agreement | Related agreement price | 193.57 | 200 | No | Execute according to the agreement | Yes | 2021/4/28 | ||
| Benxi Iron and Steel (Group) Thermal Development Co. | same controller | Purchasing goods / receiving labor services | Raw and auxiliary materials | on agreement | Related agreement price | 431.58 | 0.00% | No | Execute according to the agreement | Yes | 2021/4/28 | ||
| Benxi Iron and Steel (Group) Design and Research Institute | same controller | Purchasing goods / receiving labor services | Design fee | on agreement | Related agreement price | 37.08 | 200 | No | Execute according to the agreement | Yes | 2021/4/28 | ||
| Benxi Beiping Iron and Steel (Group) Co. | same controller | Purchasing goods / receiving labor services | Raw and auxiliary materials | on agreement | Related agreement price | 341,396.62 | 0.05% | 350,000 | No | Execute according to the agreement | Yes | 2021/4/28 | |
| Benxi Beiping Iron and Steel (Group) Co. | same controller | Purchasing goods / receiving labor services | Energy power | on agreement | Related agreement price | 57,415.98 | 0.01% | No | Execute according to the agreement | Yes | 2021/4/28 | ||
| Benxi Beiying Iron and | same controller | Purchasing goods / | freight | on agreement | Related agreement price | 503.57 | 0.00% | No | Execute according to | Yes | 2021/4/28 |
| Steel (Group) Co. | receiving labor services | the agreement | |||||||||||
| Benxi Beiying Iron and Steel (Group) Co. | same controller | Purchasing goods / receiving labor services | Labor cost | on agreement | Related agreement price | 8,366.92 | 0.00% | No | Execute according to the agreement | Yes | 2021/4/28 | ||
| Benxi Beiying Iron and Steel (Group) Co. | same controller | Purchasing goods / receiving labor services | spare part | on agreement | Related agreement price | 1,609.04 | 0.00% | No | Execute according to the agreement | Yes | 2021/4/28 | ||
| Benxi Beiying Iron and Steel (Group) Co. | same controller | Purchasing goods / receiving labor services | Agency fee | on agreement | Related agreement price | 240.64 | No | Execute according to the agreement | Yes | 2021/4/28 | |||
| Liaoning Hengtong Metallurgical Equipment Manufacturing Co. | same controller | Purchasing goods / receiving labor services | Raw materials and spare parts | on agreement | Related agreement price | 6,772.47 | 0.00% | 10,000 | No | Execute according to the agreement | Yes | 2021/4/28 | |
| Liaoning Hengtong Metallurgical Equipment Manufacturing Co. | same controller | Purchasing goods / receiving labor services | Repair and labor | on agreement | Related agreement price | 921.44 | 0.00% | No | Execute according to the agreement | Yes | 2021/4/28 | ||
| Liaoning Hengtai Heavy Machinery Co. | same controller | Purchasing goods / receiving labor services | Raw materials and spare parts | on agreement | Related agreement price | 177.97 | 1,000 | No | Execute according to the agreement | Yes | 2021/4/28 | ||
| Liaoning Hengtai Heavy Machinery Co. | same controller | Purchasing goods / receiving labor services | Repair and labor | on agreement | Related agreement price | 2,565.27 | 0.00% | No | Execute according to the agreement | Yes | 2021/4/28 | ||
| Bensteel Group Co. | Controller | Purchasing goods / receiving labor services | Property management fee | on agreement | Related agreement price | 20,000 | No | Execute according to the agreement | Yes | 2021/4/28 | |||
| Bensteel Group Co. | Controller | Purchasing goods / receiving labor services | Labor cost | on agreement | Related agreement price | 10,326.61 | 0.14% | No | Execute according to the agreement | Yes | 2021/4/28 | ||
| Anshan Steel | It belongs | Purchasing | Repair labor | on agreeme | Related agreeme | 109 | No | Execute accordi | Yes | 2021/4/28 |
| Electric Co. | to Angang Group | goods / receiving labor services | nt | nt price | ng to the agreement | ||||||||
| Anshan Iron and Steel Scrap Resources (Anshan) Co. | It belongs to Angang Group | Purchasing goods / receiving labor services | Raw and auxiliary materials | on agreement | Related agreement price | 1,066.43 | 0.00% | 0 | No | Execute according to the agreement | Yes | 2021/4/28 | |
| Anshan Iron and Steel Scrap Resources (Anshan) Co Ltd Chaoyang Branch | It belongs to Angang Group | Purchasing goods / receiving labor services | Raw and auxiliary materials | on agreement | Related agreement price | 605.2 | 0.00% | No | Execute according to the agreement | Yes | 2021/4/28 | ||
| Anshan Steel Rope Co. | It belongs to Angang Group | Purchasing goods / receiving labor services | Raw and auxiliary materials | on agreement | Related agreement price | 1.64 | No | Execute according to the agreement | Yes | 2021/4/28 | |||
| Anshan Iron and Steel Group Engineering and Technology Co. | It belongs to Angang Group | Purchasing goods / receiving labor services | Engineering cost | on agreement | Related agreement price | 415.65 | 0.00% | No | Execute according to the agreement | Yes | 2021/4/28 | ||
| Anshan Iron and Steel Group International Economic and Trade Co. | It belongs to Angang Group | Purchasing goods / receiving labor services | Raw and auxiliary materials | on agreement | Related agreement price | 15,892.03 | 0.00% | No | Execute according to the agreement | Yes | 2021/4/28 | ||
| Anshan Steel Construction Group Co. | It belongs to Angang Group | Purchasing goods / receiving labor services | Engineering cost | on agreement | Related agreement price | 138 | No | Execute according to the agreement | Yes | 2021/4/28 | |||
| Anshan Steel Industrial Group Metallurgical Machinery Co. | It belongs to Angang Group | Purchasing goods / receiving labor services | Repair labor | on agreement | Related agreement price | 62.12 | No | Execute according to the agreement | Yes | 2021/4/28 | |||
| Anshan Steel Steel Processing and Distribution | It belongs to Angang Group | Purchasing goods / receiving labor services | Labor cost | on agreement | Related agreement price | 1.23 | No | Execute according to the agreement | Yes | 2021/4/28 |
| (Dalian) Co. | |||||||||||||
| Anshan Iron and Steel Group Engineering and Technology Development Co. | It belongs to Angang Group | Purchasing goods / receiving labor services | Engineering cost | on agreement | Related agreement price | 6.64 | No | Execute according to the agreement | Yes | 2021/4/28 | |||
| Bensteel Electric Limited Liability Company | Associates of the parent company | Selling goods / providing labor services | Energy power | on agreement | Related agreement price | 94.22 | 100 | No | Execute according to the agreement | Yes | 2021/4/28 | ||
| Benxi Beiying Iron and Steel (Group) Co. | same controller | Selling goods / providing labor services | Raw and auxiliary materials and spare parts | on agreement | Related agreement price | 536,149.62 | 0.07% | 240,000 | No | Execute according to the agreement | Yes | 2021/4/28 | |
| Benxi Beiping Iron and Steel (Group) Co. | same controller | Selling goods / providing labor services | commodity | on agreement | Related agreement price | 3,228.67 | 0.00% | No | Execute according to the agreement | Yes | 2021/4/28 | ||
| Benxi Beiying Iron and Steel (Group) Co. | same controller | Selling goods / providing labor services | Energy power | on agreement | Related agreement price | 19,099.4 | 0.00% | No | Execute according to the agreement | Yes | 2021/4/28 | ||
| Benxi Iron and Steel (Group) Real Estate Development Co. | same controller | Selling goods / providing labor services | Energy power | on agreement | Related agreement price | 3.68 | 10 | No | Execute according to the agreement | Yes | 2021/4/28 | ||
| Benxi Iron and Steel (Group) Steel Processing and Distribution Co. | same controller | Selling goods / providing labor services | Energy power | on agreement | Related agreement price | 0.46 | 30 | No | Execute according to the agreement | Yes | 2021/4/28 | ||
| Benxi Iron and Steel (Group) Machinery Manufacturing Co. | same controller | Selling goods / providing labor services | commodity | on agreement | Related agreement price | 2,699.73 | 0.03% | 5,000 | No | Execute according to the agreement | Yes | 2021/4/28 | |
| Benxi Iron and Steel | same controller | Selling goods / providin | Energy power | on agreement | Related agreement price | 2,213 | 0.00% | No | Execute according to | Yes | 2021/4/28 |
| (Group) Machinery Manufacturing Co. | g labor services | the agreement | |||||||||||
| Benxi Iron and Steel (Group) Machinery Manufacturing Co. | same controller | Selling goods / providing labor services | Raw and auxiliary materials and spare parts | on agreement | Related agreement price | 112.95 | No | Execute according to the agreement | Yes | 2021/4/28 | |||
| Benxi Iron and Steel (Group) Construction Co. | same controller | Selling goods / providing labor services | Energy power | on agreement | Related agreement price | 783.21 | 0.00% | 8,000 | No | Execute according to the agreement | Yes | 2021/4/28 | |
| Benxi Iron and Steel (Group) Construction Co. | same controller | Selling goods / providing labor services | Raw and auxiliary materials and spare parts | on agreement | Related agreement price | 16,451.31 | 0.00% | No | Execute according to the agreement | Yes | 2021/4/28 | ||
| Benxi Iron and Steel (Group) Mining Co. | same controller | Selling goods / providing labor services | Energy power | on agreement | Related agreement price | 71,376.36 | 0.01% | 100,000 | No | Execute according to the agreement | Yes | 2021/4/28 | |
| Benxi Iron and Steel (Group) Mining Co. | same controller | Selling goods / providing labor services | Raw and auxiliary materials and spare parts | on agreement | Related agreement price | 11,481.75 | 0.00% | No | Execute according to the agreement | Yes | 2021/4/28 | ||
| Benxi Iron and Steel (Group) Mining Co. | same controller | Selling goods / providing labor services | Freight income | on agreement | Related agreement price | 963.5 | 0.00% | No | Execute according to the agreement | Yes | 2021/4/28 | ||
| Benxi Iron and Steel (Group) Mining Co. | same controller | Selling goods / providing labor services | commodity | on agreement | Related agreement price | 955.33 | 0.00% | No | Execute according to the agreement | Yes | 2021/4/28 | ||
| Benxi Iron and Steel (Group) Thermal Development Co. | same controller | Selling goods / providing labor services | Energy power | on agreement | Related agreement price | 4,649.93 | 0.00% | 5,000 | No | Execute according to the agreement | Yes | 2021/4/28 | |
| Benxi Iron and Steel (Group) Thermal Development Co. | same controller | Selling goods / providing labor services | Raw and auxiliary materials and spare parts | on agreement | Related agreement price | 3,595.84 | 0.00% | No | Execute according to the agreement | Yes | 2021/4/28 |
| Benxi Iron and Steel (Group) Industrial Development Co. | same controller | Selling goods / providing labor services | Energy power | on agreement | Related agreement price | 972.98 | 0.00% | 3,000 | No | Execute according to the agreement | Yes | 2021/4/28 | |
| Benxi Iron and Steel (Group) Industrial Development Co. | same controller | Selling goods / providing labor services | commodity | on agreement | Related agreement price | 2,506.43 | 0.00% | No | Execute according to the agreement | Yes | 2021/4/28 | ||
| Benxi Iron and Steel (Group) Industrial Development Co. | same controller | Selling goods / providing labor services | Raw and auxiliary materials and spare parts | on agreement | Related agreement price | 1,206.92 | 0.00% | No | Execute according to the agreement | Yes | 2021/4/28 | ||
| Benxi Iron and Steel (Group) Information Automation Co. | same controller | Selling goods / providing labor services | Energy power | on agreement | Related agreement price | 12.73 | 20 | No | Execute according to the agreement | Yes | 2021/4/28 | ||
| Benxi Iron and Steel (Group) Construction Co. | same controller | Selling goods / providing labor services | Energy power | on agreement | Related agreement price | 123.95 | 500 | No | Execute according to the agreement | Yes | 2021/4/28 | ||
| Benxi Iron and Steel (Group) Construction Co. | same controller | Selling goods / providing labor services | Raw and auxiliary materials and spare parts | on agreement | Related agreement price | 346.39 | No | Execute according to the agreement | Yes | 2021/4/28 | |||
| Benxi Iron and Steel (Group) Metallurgical Slag Co. | same controller | Selling goods / providing labor services | Energy power | on agreement | Related agreement price | 565.72 | 0.00% | 30,000 | No | Execute according to the agreement | Yes | 2021/4/28 | |
| Benxi Iron and Steel (Group) Metallurgical Slag Co. | same controller | Selling goods / providing labor services | Raw and auxiliary materials and spare parts | on agreement | Related agreement price | 48,920.96 | 0.01% | No | Execute according to the agreement | Yes | 2021/4/28 | ||
| Benxi Iron and Steel (Group) Metallurgical Slag Limited Liability Company | same controller | Selling goods / providing labor services | commodity | on agreement | Related agreement price | 3,047.73 | 0.00% | No | Execute according to the agreement | Yes | 2021/4/28 |
| Benxi Iron and Steel (Group) Limited Liability Company | parent company | Selling goods / providing labor services | Energy power | on agreement | Related agreement price | 241.94 | 2,000 | No | Execute according to the agreement | Yes | 2021/4/28 | ||
| Benxi Iron and Steel (Group) Limited Liability Company | parent company | Selling goods / providing labor services | Raw and auxiliary materials and spare parts | on agreement | Related agreement price | 599.48 | 0.00% | No | Execute according to the agreement | Yes | 2021/4/28 | ||
| Benxi New Business Development Co. | same controller | Selling goods / providing labor services | Energy power | on agreement | Related agreement price | 22.43 | 50 | No | Execute according to the agreement | Yes | 2021/4/28 | ||
| Dalian Polole Steel Pipe Co. | It belongs to Benxi Iron and Steel Group Co., Ltd | Selling goods / providing labor services | commodity | on agreement | Related agreement price | 1,381.92 | 0.00% | 2,000 | No | Execute according to the agreement | Yes | 2021/4/28 | |
| Benxi Iron and Steel (Group) Zhengtai Building Materials Co. | same controller | Selling goods / providing labor services | Energy power | on agreement | Related agreement price | 10 | No | Execute according to the agreement | Yes | 2021/4/28 | |||
| Liaoning Hengtong Metallurgical Equipment Manufacturing Co. | same controller | Selling goods / providing labor services | Energy power | on agreement | Related agreement price | 0.03 | 2,000 | No | Execute according to the agreement | Yes | 2021/4/28 | ||
| Liaoning Hengtong Metallurgical Equipment Manufacturing Co. | same controller | Selling goods / providing labor services | Raw and auxiliary materials and spare parts | on agreement | Related agreement price | 302.02 | No | Execute according to the agreement | Yes | 2021/4/28 | |||
| Liaoning Hengtong Metallurgical Equipment Manufacturing Co. | same controller | Selling goods / providing labor services | commodity | on agreement | Related agreement price | 2,591.91 | 0.00% | No | Execute according to the agreement | Yes | 2021/4/28 | ||
| Bensteel Stainless Steel Cold Rolled | same controller | Selling goods / providing labor services | commodity | on agreement | Related agreement price | 295.41 | 3,000 | No | Execute according to the agreeme | Yes | 2021/4/28 |
| Dandong Co. | nt | ||||||||||||
| Suzhou Bensteel Industrial Co. | Joint stock company | Selling goods / providing labor services | commodity | on agreement | Related agreement price | 66,835.91 | 0.01% | 55,000 | No | Execute according to the agreement | Yes | 2021/4/28 | |
| Bensteel Group Finance Co. | It belongs to Benxi Iron and steel group | Selling goods / providing labor services | Energy power | on agreement | Related agreement price | 1.39 | 2 | No | Execute according to the agreement | Yes | 2021/4/28 | ||
| Bensteel Group Co. | Controller | Selling goods / providing labor services | Energy power | on agreement | Related agreement price | 12.45 | 2,000 | No | Execute according to the agreement | Yes | 2021/4/28 | ||
| Bensteel Group Co. | Controller | Selling goods / providing labor services | Raw and auxiliary materials and spare parts | on agreement | Related agreement price | 1,282.08 | 0.00% | No | Execute according to the agreement | Yes | 2021/4/28 | ||
| Bensteel Group Co. | Controller | Selling goods / providing labor services | Labor cost | on agreement | Related agreement price | 7,542.32 | 0.00% | No | Execute according to the agreement | Yes | 2021/4/28 | ||
| Bensteel Group Co. | Controller | Selling goods / providing labor services | commodity | on agreement | Related agreement price | 12,781.64 | 0.00% | No | Execute according to the agreement | Yes | 2021/4/28 | ||
| Liaoning Hengtai Heavy Machinery Co. | same controller | Selling goods / providing labor services | Energy power | on agreement | Related agreement price | 50 | No | Execute according to the agreement | Yes | 2021/4/28 | |||
| Liaoning Hengtai Heavy Machinery Co. | same controller | Selling goods / providing labor services | commodity | on agreement | Related agreement price | 38.97 | No | Execute according to the agreement | Yes | 2021/4/28 | |||
| Ansteel Chemical Technology Co. | It belongs to Angang Group | Selling goods / providing labor services | commodity | on agreement | Related agreement price | 1,032.8 | 0.00% | No | Execute according to the agreement | Yes | 2021/4/28 | ||
| Ansteel Energy Technology Co. | It belongs to Angang Group | Selling goods / providing labor services | Raw and auxiliary materials and spare parts | on agreement | Related agreement price | 79.62 | 15,000 | No | Execute according to the agreement | Yes | 2021/4/28 | ||
| Ansteel | It | Selling | Energy | on | Related | 0.01 | No | Execute | Yes | 2021/4/ |
| Electric Co. | belongs to Angang Group | goods / providing labor services | power | agreement | agreement price | according to the agreement | 28 | ||||||
| Panzhong Yihong Metal Products (Chongqing) Co. | It belongs to Angang Group | Selling goods / providing labor services | commodity | on agreement | Related agreement price | 806.99 | 0.00% | No | Execute according to the agreement | Yes | 2021/4/28 | ||
| Deyin Landport Supply Chain Services Co. | It belongs to Angang Group | Selling goods / providing labor services | commodity | on agreement | Related agreement price | 9,987.26 | 0.00 | No | Execute according to the agreement | Yes | 2021/4/28 | ||
| Bensteel Bidding Co. | It belongs to Benxi Iron and Steel Group Co., Ltd | Selling goods / providing labor services | Raw and auxiliary materials and spare parts | on agreement | Related agreement price | 10.8 | No | Execute according to the agreement | Yes | 2021/4/28 | |||
| Total | -- | -- | 4,039,268.72 | -- | 3,741,522 | -- | -- | -- | -- | -- | |||
| Details of any sales return of a large amount | No applicable | ||||||||||||
| Give the actual situation during the reporting period where a forecast had been made for the total amounts of routine related-party transactions，by type to occur in the current period(if any) | No applicable | ||||||||||||
| Reason for any significant difference between the transaction price and the Market price for reference (if applicable) | No applicable | ||||||||||||
2. Related transactions relevant to asset acquisition or sold
□ Applicable √ Not applicable
There was no related transaction relevant to asset acquisition or sold during the reporting period.
3. Related transactions relevant to joint investments
□ Applicable √ Not applicable
There was no related transaction relevant to joint investments during the reporting period.
4. Credits and liabilities with related parties
□ Applicable √ Not applicable
Whether there are non-operating related creditor's rights and debts
5. Transactions with related financial companies
√Applicable □ Not applicable
Deposit business
| Related party | Connection relation | Maximum daily deposit limit (10 thousand yuan) | deposit rate range | Beginning balance (10 thousand yuan) | Amount for this period | Closing balance (ten thousand yuan) | |
| Total deposit amount for the current period (10 thousand yuan) | The total amount withdrawn in the current period (10 thousand yuan) | ||||||
| Ansteel Group Finance Co., Ltd. | Both belong to Ansteel Group | 450,000 | 1.725% | 0 | 467,965.63 | 25,000 | 442,965.63 |
| Bengang Group Finance Co., Ltd. | Both belong to Bengang Group | 1,100,000 | 3.0%~3.5% | 1,332,199.78 | 20,900,552.77 | 22,232,752.56 | 0 |
Loan business
| Related party | Connection relation | Loan Amount (10 thousand yuan) | Loan Interest Rate Range | Beginning balance (10 thousand yuan) | Amount for this period | Closing balance (10 thousand yuan) | |
| Total loan amount for the current period (10 thousand yuan) | Total repayment amount for the current period (10 thousand yuan) | ||||||
Credit or other financial business
| Related party | Connection relation | Business type | Total (ten thousand yuan) | Actual amount (ten thousand yuan) |
6. Other significant related transactions
□Applicable √ Not applicable
There is no deposit, loan, credit or other financial business between the financial company controlled by the companyand its related parties.
7. Transactions between financial companies controlled by the company and related parties
□Applicable √ Not applicable
During the reporting period, the company had no other significant related transactions.XV. Major Contracts and Their Performance
1. Trusteeship, contracting and lease
(1) Trusteeship
□ Applicable √ Not applicable
There was no trusteeship during the reporting period.
(2) Contracting
□ Applicable √ Not applicable
There was no contracting during the reporting period.
(3) Lease
√Applicable □ Not applicable
Description of lease
Company as the lessor
Currency unit: Yuan
| Lessee | Lease capital category | Lease income of 2021 | Lease income of 2020 |
| Benxi Steel & Iron (Group) Steel & Iron Process and Logistics Co., Ltd. | Warehouse and ancillary facilities | 500,000.00 |
Benxi Iron and Steel TenderingCo., Ltd.
| Benxi Iron and Steel Tendering Co., Ltd. | Plants and ancillary facilities | 480,000.00 |
Company as the lessee
Currency unit: Yuan
| Lessor | Lease capital category | Rent paid | |||
| Rental expense for short-term leases and leases of low-value assets and variable lease payments not included in the measurement of lease liabilities | Increased right-of-use assets of 2021 | Assume interest expense on lease liability of 2021 | Confirmed rental fee of 2020 | ||
| Benxi Steel & Iron (Group) Co., Ltd | Land use right 7,669,068.17 square meter. Land use right 42,920.00 square meter | 1,060,272,624.21 | 39,600,209.28 | 57,383,355.31 | |
| Benxi Steel & Iron (Group) Co., Ltd | 2300 Hot rolling product line, related real estate | 208,155,611.73 | 7,982,648.96 | 16,711,424.34 | |
| Benxi Beiying Steel & Iron (Group) Co., Ltd. | 1780 Hot rolling product line, related real estate | 160,309,755.83 | 6,147,787.68 | 15,578,677.65 | |
Bengang GroupCo., Ltd.
| Bengang Group Co., Ltd. | Land use right 728,282.30 square meter. | 72,001,790.96 | 2,666,923.92 | 9,945,423.08 |
Notes:
1. According to the "Land Use Right Leasing Contract" and subsequent supplementary agreements signedbetween the Company and Bengang Steel (Group)on April 7, 1997, December 30, 2005 and subsequent, theCompany leases land from Benxi Steel (Group), with a monthly rent of 0.594 yuan per square meter. The leasedland is 7,669,068.17 square meters and the annual rent is 54,665.10 thousand yuan.
2. On August 14, 2019, the Company signed the "House Lease Agreement" with Benxi Steel (Group) andBeiying Iron and Steel Company, and leased the houses and auxiliary facilities occupied by the 2300 hot rollingmill production line and the 1780 hot rolling mill production line. The lease term of the houses and ancillaryfacilities is until December 31, 2038.
3. On July 15, 2019, the Company signed "Land Lease Agreement" with Bengang Group and Bengang Steel(Group) respectively, leased and used a total of 8 pieces of land from Bengang Group and Bengang GroupCompany, with leased areas of 42,920.00 square meters and 728,282.30 square meters. The lease term is 20years, the rental price is 1.138 yuan per square meter per month.Projects that bring profits and losses to the company reaching more than 10% of the company's total profit duringthe reporting period
□ Applicable √ Not applicable
During the reporting period of the company, there was no leasing project that brought the company's profit and lossto more than 10% of the company's total profit during the reporting period.
2. Guarantee
□ Applicable √ Not applicable
There was no guarantee during the reporting period.
3. Entrusting Others for Managing Cash Asset
(1) Entrusted Finance
√Applicable □ Not applicable
Overview of entrusted wealth management during the reporting period
Unit: In ten thousand yuan
| Specific type | The source of funds for entrusted wealth management | Amount of entrusted wealth management | Outstanding balance | Amount not collected after the due date | Overdue but uncollected amount has been accrued for impairment |
Bank financialproducts
| Bank financial products | self - owned | 95,000 | |||
| Bank financial products | self - owned | 85,000 |
Bank financialproducts
| Bank financial products | self - owned | 430,000 | |||
| Bank financial products | self - owned | 10,000 | |||
| Total | 620,000 | ||||
Specific circumstances of high-risk entrusted wealth management with a single large amount or low security andlow liquidity
□ Applicable √ Not applicable
Entrusted wealth management is expected to be unable to recover the principal or there are other circumstances thatmay lead to impairment
□ Applicable √ Not applicable
(2) Entrusted Loans
□ Applicable √ Not applicable
There was no entrusted loan during the reporting period.
4. Other Major Contracts
□ Applicable √ Not applicable
There was no other major contract during the reporting period.
XVI. Description of other major events
√ Applicable □ Not applicable
On April 15, 2021, the company received the notice from the indirect controlling shareholder Benxi Iron and SteelGroup Co., Ltd. and known that Angang Group Co., Ltd. was planning to restructure Benxi Iron and Steel Group,which may lead to the change of control of the company. The reorganization is still in the planning stage, and theplan needs to be approved by relevant departments after being determined. For details, see the suggestive
announcement on the strategic restructuring of indirect controlling shareholder Benxi Iron and Steel Group Co., Ltd.published on the designated information disclosure media on April 15, 2021.
On July 15, 2021, Benxi Steel Group Co., Ltd., the indirect controlling shareholder of the company, signed theagreement on free transfer of trust beneficial rights with Liaoning Engineering Consulting Group Co., Ltd., Liaoningurban and Rural Construction Group Co., Ltd. and Liaoning Rongda Investment Co., Ltd. respectively. Theprovincial engineering consulting group, Liaoning urban and rural construction group and Liaoning Rongdatransferred their relevant trust beneficial rights to Benxi Steel Group free of charge. For details, please refer to theprompt announcement of Benxi steel plate Co., Ltd. on the change of shareholders' equity (2021-039), the simplifiedreport on the change of shareholders' equity of Benxi steel plate Co., Ltd. and the legal opinion on the exemptionfrom the offer of Benxi Steel Group Co., Ltd. for the increase of shares of Benxi steel plate Co., Ltd. published onthe designated information disclosure media on July 17, 2021.
On July 30, 2021, the state-owned assets supervision and Administration Commission of Liaoning ProvincialPeople's government agreed that Liaoning Communications Investment Co., Ltd. would transfer its 182842883shares of the company to Benxi Iron and Steel Group for free. For details, please refer to the prompt announcementof Benxi steel plate Co., Ltd. on the free transfer of some state-owned equity and the change of shareholders' equity(2021-044), the report on the change of simplified equity of Benxi steel plate Co., Ltd. and the legal opinion on theexemption of Benxi Steel Group Co., Ltd. from issuing an offer for the increase of shares of Benxi steel plate Co.,Ltd. published on the designated information disclosure media on July 31, 2021.
On August 18, 2021, the State-owned Assets Supervision and Administration Commission of the State Council andthe people's Government of Liaoning Province jointly issued a notice agreeing that Anshan Iron and Steel GroupCo., Ltd. would restructure Benxi Iron and Steel Group Co., Ltd. and the Liaoning SASAC would transfer 51% ofthe equity of Benxi Iron and Steel Group to Anshan Iron and Steel Group free of charge. Due to necessary proceduresneed to be performed for this transfer have not been completed, there is still uncertainty whether it can obtain relevantapproval and whether the transfer can be implemented smoothly. For details, please refer to the Company'spublication on 19 August 2021 in the designated information disclosure media” Announcement on the Gratis-freeTransfer of 51% Equity Interest in Bensteel Group, the Indirect Controlling Shareholder, Approved by the State-owned Assets Supervision and Administration Commission of the State Council and the People's Government ofLiaoning Province”.
On August 20, 2021, the State-owned Assets Supervision and Administration Commission of Liaoning ProvincialPeople's government, the actual controller of the company, and Anshan Iron and Steel Group Co., Ltd. signed thefree transfer agreement between the State-owned Assets Supervision and Administration Commission of LiaoningProvincial People's government and Anshan Iron and Steel Group Co., Ltd. on the state-owned equity of Benxi Ironand Steel Group Co., Ltd. According to the free transfer agreement, “Liaoning SASAC will transfer its 51% equityof Benxi Iron and Steel Group Co., Ltd. to Angang Group free of charge.” After the completion of this transfer,Angang Group will hold 51% equity of Benxi Iron and Steel Group, and Benxi Iron and Steel Group will become aholding subsidiary of Angang Group. Angang Group indirectly controls 81.07% of the shares of the company throughBenxi Iron and Steel Group, Benxi Iron and steel (Group) Co., Ltd. and Angang Group Capital Holding Co., Ltd.The direct controlling shareholder of the company remains unchanged and remains Benxi Iron and steel (Group)Co., Ltd. The actual controller of the company is changed to SASAC of the State Council. For details, please referto the suggestive announcement on the free transfer of 51% equity of Benxi Iron and Steel Group Co., Ltd. by thestate owned assets supervision and Administration Commission of Liaoning Provincial People's government to
Anshan Iron and Steel Group Co., Ltd. and Anshan Iron and Steel Group Co., Ltd. becoming the indirect controllingshareholder of the company published on the designated information disclosure media on August 21 and August 24,2021, as well as the short form equity change statement and acquisition report.
On October 12, 2021, the industrial and commercial change registration procedures for free equity transfer werecompleted. For details, please refer to “the announcement on the free transfer of 51% equity of Benxi Iron and SteelGroup Co., Ltd. by the state-owned assets supervision and Administration Commission of Liaoning ProvincialPeople's government to Anshan Iron and Steel Group Co., Ltd. and the industrial and commercial change registrationand change of indirect controlling shareholder” published on the designated information disclosure media on October13, 2021.XVII. Major events of subsidiaries of the company
□ Applicable √ Not applicable
Ⅶ. Status of Share Capital Changes and Shareholders
I. Share Capital Changes
1. Share capital changes
Unit: Share
| Before the change | Increase/decrease(+，-) | After the Change | |||||||
| Quantity | Percentage | Issuing of new share | Bonus shares | Capitalization of common reserve fund | Others | Subtotal | Quantity | Percentage | |
| I. Restricted Shares | |||||||||
| 1. State shareholdings | |||||||||
| 2. State-own Legal-person Shareholding | |||||||||
| 3. Other domestic shareholdings | |||||||||
| Including: Domestic legal person holding | |||||||||
| Domestic person holding | |||||||||
| 3. Foreign shareholding | |||||||||
| Including: Foreign legal person | |||||||||
| Foreign nature person | |||||||||
| II. Non-restricted Shares | 3,875,371,532 | 100.00% | 232,819,847 | 232,819,847 | 4,108,191,379 | 100.00% | |||
| 1. Common shares in RMB | 3,475,371,532 | 89.68% | 232,819,847 | 232,819,847 | 3,708,191,379 | 90.26% | |||
| 2. Foreign shares in domestic market | 400,000,000 | 10.32% | 400,000,000 | 9.74% | |||||
| 3. Foreign shares in foreign market | |||||||||
| 4.Other | |||||||||
| III. Total shares | 3,875,371,532 | 100.00% | 232,819,847 | 232,819,847 | 4,108,191,379 | 100.00% | |||
Causation of share capital changes
√ Applicable □ Not applicable
During the reporting period, 11,688,554 convertible corporate bonds issued by the company were converted into
shares, and the total share capital of the company increased by 232,819,847 shares.Status of approval of share capital changes
□Applicable √Not applicable
Status of registration process of transferred shares
□Applicable √Not applicable
Influences of share capital changes on financial indices such as basic earnings per share, diluted earnings per share,and net asset per share attributed to common shareholders in the most recent year and the most recent period
□Applicable √Not applicable
Other information that the Company deems necessary to be disclosed or required by the authority
□Applicable √Not applicable
2. Changes of Restricted Shares
□ Applicable √ Not applicable
II. Securities Issuance and Listing
1. Status of Security Issuance (Excluding Preferred Shares) in the Reporting Period
□ Applicable √ Not applicable
2. Status of total Share and Shareholder Change and Asset and Liability Structure Change
□ Applicable √ Not applicable
3. Status of existing internal employee shares
□ Applicable √ Not applicable
Ⅲ. Shareholders and actual controllers
1. Status of number of shareholders and shareholding of the company
Unit: shares
| Total number of common shareholders at the end of the reporting period | 69,162 | Total shareholders at the end of the previous month from the date of disclosing the annual report | 67,655 | The total number of preferred shareholders voting rights restored at the end of the reporting period (if any) (refer to Notes 8) | 0 | Total preferred shareholders at the end of the previous month from the date of disclosing the annual report (refer to Notes 8) | 0 | |||||||
| Shareholding of shareholders holding more than 5% or top 10 shareholders | ||||||||||||||
| Name of the shareholder | Nature of shareholder | Holding Percentage (%) | Number of shares held at period-end | Changes in reporting period | Restricted shares held | Un-restricted shares held | Number of pledged or frozen shares | |||||||
| Status | Number | |||||||||||||
| Benxi Steel & Iron (Group) Co., Ltd. | State-owned legal person | 58.65% | 2,409,628,094 | 2,409,628,094 | Pledged | 360,000,000 | ||||||||
| Frozen | 108,326,179 | |||||||||||||
| Bengang steel Group Co., Ltd. | State-owned legal person | 17.95% | 737,371,532 | 737,371,532 | 737,371,532 | |||||||||
| Hong Kong Securities Clearing Company Ltd. | Foreign legal person | 0.78% | 32,029,801 | 32,029,801 | 32,029,801 | |||||||||
| Lyv Ruijun | Domestic natural person | 0.48% | 19,832,700 | 14,823,100 | 19,832,700 | |||||||||
| Zhang Wenyou | Domestic natural person | 0.47% | 19,149,967 | 19,149,967 | 19,149,967 | ||||||
| MORGAN STANLEY & CO. INTERNATIONAL PLC | Foreign legal person | 0.30% | 12,136,919 | 12,136,919 | 12,136,919 | ||||||
| Huatai Securities CO., LTD | State-owned legal person | 0.21% | 8,805,038 | 8,805,038 | 8,805,038 | ||||||
| Zhou Wei | Domestic natural person | 0.19% | 7,632,931 | 7,632,931 | 7,632,931 | ||||||
| Guosen Securities Co., Ltd. | State-owned legal person | 0.18% | 7,500,000 | 7,500,000 | 7,500,000 | ||||||
| CHINA INTERNATIONAL CAPITAL CORPORATION HONG KONG SECURITIES LTD | Foreign legal person | 0.17% | 6,999,972 | 6,999,972 | 6,999,972 | ||||||
| Strategy investors or general legal person becomes top 10 shareholders due to rights issued (if any) (See Notes 3) | None | ||||||||||
| Explanation of relationship or ‘action in concert’ among the top 10 shareholders. | Benxi Iron and Steel (Group) Co., Ltd. has an associated relationship with Benxi Iron and Steel Group Co., Ltd., and is a person acting in concert as stipulated in the "Administrative Measures for the Acquisition of Listed Companies". The company is not aware of whether there is an associated relationship between other shareholders or whether they are persons acting in concert as stipulated in the "Administrative Measures for the Acquisition of Listed Companies". | ||||||||||
| Explanation of the above-mentioned shareholders involving entrusted/entrusted voting rights and abstention from voting rights | The above shareholders do not involve entrustment, entrusted voting rights or abstention from voting rights. | ||||||||||
| Shareholding of top 10 unrestricted shareholders | |||||||||||
| Name of the shareholder | Un-restricted shares held at the end of the reporting period | Category of shares | |||||||||
| Category of shares | Quantity | ||||||||||
| Benxi Steel & Iron (Group) Co., Ltd. | 2,409,628,094 | Common shares in RMB | 2,409,628,094 | ||||||||
| Bengang steel Group Co., Ltd. | 737,371,532 | Common shares in RMB | 737,371,532 | ||||||||
| Hong Kong Securities Clearing Company Ltd. | 32,029,801 | Common shares in RMB | 32,029,801 | ||||||||
| Lyv Ruijun | 19,832,700 | Common shares in RMB | 14,022,700 | ||||||||
| Domestic listed foreign shares | 5,810,000 | ||||||||||
| Zhang Wenyou | 19,149,967 | Common shares in RMB | 19,149,967 | ||||||||
| MORGAN STANLEY & CO. INTERNATIONAL PLC | 12,136,919 | Domestic listed foreign shares | 12,136,919 | ||||||||
| Huatai Securities CO., LTD | 8,805,038 | Common shares in RMB | 8,805,038 | ||||||||
| Zhou Wei | 7,632,931 | Common shares in RMB | 7,632,931 | ||||||||
| Guosen Securities Co., Ltd. | 7,500,000 | Common shares in RMB | 7,500,000 | ||||||||
| CHINA INTERNATIONAL CAPITAL CORPORATION HONG KONG SECURITIES LTD | 6,999,972 | Domestic listed foreign shares | 6,999,972 | ||||||||
| Notes to relationship or ‘action in concert’ among the top 10 non-restricted shareholders, and among the top 10 non-restricted shareholders and top 10 shareholders | Benxi Steel & Iron (Group) Co., Ltd. has an associated relationship with Bengang steel Group Co., Ltd., and is a person acting in concert as stipulated in the "Administrative Measures for the Acquisition of Listed Companies". The company is not aware of whether there is an associated relationship among the remaining shareholders or whether they are parties acting in concert as prescribed in the Measures for the Administration of Acquisitions of Listed Companies. | ||||||||||
| Shareholders among the top 10 participating in securities margin trading (if any) (see Note 4) | Benxi Steel & Iron (Group) Co., Ltd. Holds182,842,833 shares of the Company’s stock through security account and holds 554,528,649 shares of the Company’s stock through the asset management plan, totaling 737,371,532 shares. Lyv Ruijun holds 5,832,900 | ||||||||||
shares of the company's stock through security account and holds 13,999,800sharesthrough investor credit securities account. Zhang Wenyou holds 19,149,967 sharesthrough investor credit securities account. Zhou Wei holds 7,632,931 shares throughinvestor credit securities account.
Whether top 10 common shareholders and top 10 un-restricted common shareholders have a buy-back agreement dealing in reporting period
□ Yes √ No
Top 10 common shareholders and top 10 un-restricted common shareholders had no buy-backagreement dealing in reporting period.
2. Controlling Shareholder
Nature of Controlling Shareholders: Central state-owned holdingsType of Controlling Shareholders: Legal person
| Name of the Controlling shareholder | Legal representative / person in charge | Date of incorporation | Organization Code | Principal business activities |
| Benxi Steel & Iron (Group) Co., Ltd. | Zhai Hongwei | July 10,1996 | 91210500119726263U | Business scope: steel smelt, mine exploitation, panel rolling, oxygen manufacturing, pipe manufacturing, power generating, coal industry, special steel material manufacturing, heating, supply of the water, electricity, wind and gas, metal processing, electro mechanics builds, device manufacturing, architecture installation, railway, highway transportation, import and export trade, traveling industry, construction material, refractory material, measuring device instrument, goods and materials supply and marketing, development of real estate, scientific research, design, information service, property management, telecommunication, processing of waste iron, property leasing, exchange of steel material, and recycling of waste oils (to the extent of licensed to the subsidiary companies) , property management; publishing of Bengang Daily; designing and making of presswork and advertisement, releasing, producing of TV advertisements in the country and abroad. |
Equity ofotherdomestic/foreign listedcompany withsharecontrollingand shareparticipationby controllingshareholder inreportingperiod
None
Changes of controlling shareholders during the reporting period
□Applicable√ Not applicable
The controlling shareholder of the company did not change during the reporting period.
3. Actual Controller
Actual controller nature: Central State-owned Assets Management AgencyActual controller type: Legal person
| Name of the controlling shareholder | Legal representative / Person in charge | Date of incorporation | Organization Code | Principal business activities |
| Ansteel Group Co., Ltd. | Tan Chengxu | July 28, 2010 | 91210000558190456G | Steel, iron, vanadium, titanium, stainless steel, special steel production and manufacturing, non-ferrous metal production and manufacturing, steel rolling processing, iron, vanadium, titanium and other non-ferrous metal, non-metallic mining and comprehensive utilization, mining auxiliary industry, cleaning Energy power generation, sales of coal and products, chemical products and gases (excluding hazardous chemicals), production and sales of refractory materials, industrial and mining engineering, metallurgical engineering construction, engineering and technical services, equipment manufacturing, Internet of Things information services, energy conservation, environmental protection technical services , R&D of new materials, development of renewable resources, mechanical processing, technology development, transfer and services, transportation services, real estate development, urban energy supply, software and information technology services, intelligent manufacturing and services, domestic and foreign trade, financial management, bidding Services, medical and health care services, vocational skills training, economic information consulting services, enterprise management, hotel catering services, operating other state-owned assets and investments within the scope authorized by the State-owned Assets Supervision and Administration Commission of the State Council; branch operations are limited to the following: newspaper distribution, publication printing, Packaging decoration and other print printing. (For projects subject to approval according to law, business activities can only be carried out after approval by relevant departments) |
Equity of otherdomestic/foreign listedcompany with sharecontrolling and shareparticipation bycontrolling shareholderin reporting period
During the reporting period, Ansteel Group Co., Ltd. indirectly held 53.33% of the sharesof Ansteel and indirectly held 58.68% of the shares of Pansteel Vanadium and Titanium.
Change of actual controller during the reporting period
√ Applicable □Not applicable
| Name of the original actual controller: | Liaoning Provincial State-owned Assets Supervision and Administration Commission |
| Name of the new actual controller | Ansteel Group Co., Ltd. |
| Change date | October 12, 2021 |
| Query index in Specify the website | Announcement number:2021-063 |
| Disclosure date in Specify the website | October 13, 2021 |
Block diagram of the ownership and control relations between the Company and the actual controller
Whether the actual controller is controlling the Company through trusteeship or other asset management service
□ Applicable √ Not applicable
4. The company's controlling shareholder or the largest shareholder and its concerted actionperson's cumulative pledged shares account for 80% of the company's shares held by them
□ Applicable √ Not applicable
5. Shareholders holding More than 10% of the Shares
□ Applicable √ Not applicable
6. Status of Share Reduction Limitation of Controlling Shareholders, Actual Controller,Restructuring Party and Other Commitment Subjects
□ Applicable √ Not applicable
IV. The specific implementation of share repurchase during the reporting period
Implementation progress of share repurchase
□ Applicable √ Not applicable
Implementation progress of reducing share repurchased by centralized bidding
□ Applicable √ Not applicable
Ⅷ. Status of Preferred Shares
□ Applicable √ Not applicable
There was no preferred stock in the company during the reporting period.
Ⅸ. Status of Convertible Corporate Bonds
√ Applicable □ Not applicable
Ⅰ. corporate bonds
□ Applicable √ Not applicable
There were no corporate bonds in the company during the reporting period.
Ⅱ. company bonds
□ Applicable √ Not applicable
There were no company bonds in the company during the reporting period.
Ⅲ. Non-financial corporate debt financing instruments
□ Applicable √ Not applicable
There were no non-financial corporate debt financing instruments in the company during the reporting period.
Ⅳ. Convertible corporate bonds
√Applicable □ Not applicable
1. Previous adjustment of conversion price
(1) The initial conversion price of "Bengang Convertible Bonds" is RMB 5.03 per share.
(2) Due to the company's implementation of the 2020 equity distribution plan, the conversion price of "BengangConvertible Bonds" will be adjusted to 5.02 yuan per share on July 19, 2021.
(3) Due to the company's implementation of the 2021 mid-term equity distribution plan, the conversion price of
"Bengang Convertible Bonds" will be adjusted to 4.55 yuan per share on October 13, 2021.
2. Status of cumulative share transfer
√Applicable □ Not applicable
| Convertible bond abbreviation | Conversion starts and end date | Total amount issued (bonds) | Total amount issued | Cumulative share conversion amount (RMB) | Cumulative number of shares converted (shares) | Proportion of the number of converted shares to the total issued shares before conversion | Amount not yet converted (RMB) | Proportion of unconverted amount to total issued amount |
| Bengang Convertible Bonds | 2021-01-04 | 68,000,000 | 6,800,000,000.00 | 1,168,855,400.00 | 232,819,847 | 6.01% | 5,631,144,600.00 | 82.81% |
3. Top ten holders of convertible bonds
Unit: shares
| No. | Convertible bond holders | Nature of convertible bond holders | Number of convertible bonds held at the end of the reporting period (bonds) | Amount of convertible bonds held at the end of the reporting period (yuan) | Percentage of convertible bonds held at the end of the reporting period |
| 1 | China CITIC Group Corporation Limited Enterprise Annuity Plan - China CITIC Bank Corporation Limited | Other | 2,330,006 | 233,000,600.00 | 4.14% |
| 2 | UBS AG | Foreign legal person | 1,738,753 | 173,875,300.00 | 3.09% |
| 3 | Industrial Bank Co., Ltd. - Tianhong Yongli Bond Securities Investment Fund | Other | 1,399,381 | 139,938,100.00 | 2.49% |
| 4 | China Construction Bank Corporation - China Merchants Stable Profit Increase Bond Securities Investment Fund | Other | 1,352,501 | 135,250,100.00 | 2.40% |
| 5 | China Huaneng Group Corporation Enterprise Annuity Plan－Industrial and Commercial Bank of China Limited | Other | 1,244,595 | 124,459,500.00 | 2.21% |
| 6 | China Construction Bank Corporation - Huashang Credit Enhanced Bond Securities Investment Fund | Other | 1,076,193 | 107,619,300.00 | 1.91% |
| 7 | China AMC Yannian Yishou No. 9 Fixed Income Pension Product－China Merchants Bank Co., Ltd. | Other | 995,917 | 99,591,700.00 | 1.77% |
| 8 | Shanghai Pudong Development Bank Co., Ltd. - E Fund Yuxiang Return Bond Securities Investment Fund | Other | 991,760 | 99,176,000.00 | 1.76% |
| 9 | Basic Pension Insurance Fund 107 Portfolio | Other | 963,240 | 96,324,000.00 | 1.71% |
| 10 | Industrial and Commercial Bank of China Limited - Huashang Convertible Bond Bond Securities Investment Fund | Other | 903,820 | 90,382,000.00 | 1.61% |
4. Significant changes in the guarantor's profitability, asset condition and credit standing
□ Applicable √ Not applicable
5. At the end of the reporting period, the company's liabilities, changes in credit and casharrangements and debt repayment in future yearsAt the end of the reporting period, the company's major accounting data and financial indicators and the company'scredit rating of convertible bonds in the past two years have not changed this year.
Ⅴ. The loss in the consolidated statement during the reporting period exceeded 10%of the net assets at the end of the previous year
□ Applicable √ Not applicable
Ⅵ. Overdue Interest-bearing debts except bonds at the end of the reporting period
□ Applicable √ Not applicable
Ⅶ. Status of violation of rules and regulations during the period reporting period
□ Yes √ No
Ⅷ. The main accounting data and financial indicators of the company in thepast two years at the end of the reporting period
| Item | At the end of this period | At the end of last period | Change |
| Current ratio | 113.99% | 104.00% | 9.61% |
| Liabilities to Assets Ratio | 58.17% | 66.85% | -8.68% |
| Quick ratio | 66.12% | 77.00% | -14.13% |
| At the end of this period | At the end of last period | Change | |
| Net profit after deducting non-recurring gains and losses (RMB) | 2,517,758,656.14 | 381,469,784.99 | 560.02% |
| EBITDA total liabilities ratio | 19.23% | 7.00% | 12.23% |
| Interest coverage ratio | 4.37 | 1.4 | 212.14% |
| Cash interest coverage ratio | 2.35 | -0.96 | -344.42% |
| EBITDA interest coverage ratio | 6.12 | 7.91 | -22.63% |
| Loan repayment rate | 100.00% | 100.00% | 0.00% |
| Interest repayment rate | 100.00% | 100.00% | 0.00% |
Ⅹ. Financial Report
| Opinion of audit report | Unqualified audit opinion |
| Date of audit report | 24th March 2022 |
| Name of CPA Firm | BDO China Shu Lun Pan CPAs LLP |
| Audit report number | Xin Kuai Shi Bao Zi [2022] No. ZB10094 |
| Name of CPA | Li Yongjiang; Li Guiying |
Auditor’s Report
(English Translation for Reference Only)
Xin Kuai Shi Bao Zi [2022] No. ZB10094
To the Shareholders of Bengang Steel Plates Co., Ltd.:
Auditor’s Opinion
We have audited the accompanying financial statements of Bengang Steel Plates Co., Ltd.(hereinafter referred to as “the Company” or “Bengang Steel Plates”) which comprise theconsolidated and company’s statements of financial position as at 31 December 2021, theconsolidated and company’s statements of comprehensive income, the consolidated andcompany’s statements of cash flows, and the consolidated and company’s statements of changesin shareholders’ equity, for the year then ended, and notes to the financial statements.
In our opinion, the accompanying financial statements present fairly, in all material respects,the consolidated and company’s financial position as at 31 December 2021, and theconsolidated and company’s financial performance and cash flows for the year then ended inaccordance with the requirements of Accounting Standards for Business Enterprises.
Basis for Opinion
We conducted our audit in accordance with China Standards on Auditing (“CSAs”). Ourresponsibilities under those standards are further described in the Auditor's Responsibilities forthe Audit of the Financial Statements section of our report. We are independent of the Companyin accordance with the Code of Ethics for Professional Accountants of the Chinese Institute ofCertified Public Accountants (“CICPA Code”), and we have fulfilled our other ethicalresponsibilities in accordance with the CICPA Code. We believe that the audit evidence we haveobtained is sufficient and appropriate to provide a basis for our opinion.
Key Audit Matters
Key audit matters are those matters that, in our professional judgment, were of mostsignificance in our audit of the financial statements of the current period. These matters wereaddressed in the context of our audit of the financial statements as a whole, and in forming ouropinion thereon and we do not provide a separate opinion on these matters.
We identified the following key audit matters in our audit.
| Key Audit Matters | Audit Procedure |
| 1. Revenue recognition | |
| Refer to Note (24) Revenue under “3. Significant accounting policies and accounting estimates” and Note (37) Operating income and operating cost under “5. Notes to consolidated financial statements”. For the year ended 31 December 2021, the Company and its subsidiaries generated revenue totaling RMB 77,912,144,981.46, with an increase of 60.03% compared with that of 2020. We identified revenue recognition as a key audit matter because revenue is the key performance indicator for the Company, and there may exists risk of material misstatement in revenue recognition. | Our audit procedures to evaluate revenue recognition included the following: 1. Understanding and evaluating the design and operating effectiveness of key internal controls related to revenue recognition. 2. Checking sales contracts, on sample basis, to identify terms and conditions related to transfer of control of goods, and evaluating whether the Company's revenue recognition policy is in compliance with the relevant requirements of the Accounting Standards for Business Enterprises. 3. Selecting revenues from sales details recorded during the year, on sample basis, to check corresponding sales contracts, invoices, goods delivery notice, acceptance notice, customs declaration, ocean bills of lading and other supporting documents, in order to evaluate whether the relevant revenue was recognized in accordance with the Company's accounting policies on revenue recognition. 4. Performing analytical procedures on revenue in terms of gross profit in main products by comparing with that in previous year and within industry, and performing fluctuation analysis, so as to |
| identify any unusual trend. 5. Confirming revenue recognized in current year by including revenue amount in confirmations sent to selected customers with balance of accounts receivable. 6. Checking sales to related parties to evaluate whether the transactions were conducted at arm’s length. 7. Selecting revenue transactions recorded before and after the balance sheet date, inspecting supporting documents related to revenue recognition, and evaluating whether the relevant revenue was recorded in proper accounting period. 8. Checking presentation of operating income in the financial statements for a proper disclosure. | |
| 2. Inventory provision | |
| Refer to Note （11）Inventory under “3. Significant accounting policies and accounting estimates” and (7) Inventory under “5. Notes to consolidated financial statements”. As at 31 December 2021, the Company and its subsidiaries had a balance of inventory of RMB 10,275,974,432.07 (before provision) with a provision for decline in value of inventory of RMB 85,808,293.09, so that the balance of inventory was RMB 10,190,166,138.98 after provision. Inventory is measured at the lower of cost and net realizable value. The financial | Our audit procedures to evaluate impairment of inventory include: 1. Evaluating the design and operation of internal control related to provision for decline in the value of inventories; 2. Observing inventory count by checking the quantity and status of inventories, especially the long-aging ones; 3. Obtaining the calculation of provision for decline in the value of inventories to check whether the calculation is in |
| statements would be greatly impacted if inventory provision was not sufficiently provided. The net realizable value of inventories is calculated by estimated sale price of inventories less estimated sale expense and relevant taxes. Management determines the estimated selling price of the inventories based on their status, which involved significant judgement. We identified inventory provision as a key audit matter because balance of inventory was significant as at 31 December 2021, which involves estimate for net realizable value. | accordance with the related accounting policies of the Company, and to check changes during current year regarding inventory provision made in prior years so as to analyze whether the provision is sufficient; 4. For inventories with selling price in active market, inquiring the price information independently and comparing that with estimated selling price applied in the calculation of inventory provision. For those without selling price in active market, comparing the estimated selling price with the latest actual selling price or selling price after the reporting period. 5. Comparing the estimated sales expenses and related taxes and fees with historical data of similar products and with the actual costs incurred after the balance sheet date. |
Other Information
Management of the Company (“Management”) is responsible for the other information. Theother information comprises all of the information included in the 2021 annual report of theCompany, other than the financial statements and our auditor's report thereon.
Our opinion on the financial statements does not cover the other information and we do notexpress any form of assurance conclusion thereon.
In connection with our audit of the financial statements, our responsibility is to read the otherinformation and, in doing so, consider whether the other information is materially inconsistentwith the financial statements or our knowledge obtained in the audit or otherwise appears to bematerially misstated.
If, based on the work we have performed, we conclude that there is a material misstatement ofthe other information, we are required to report that fact. We have nothing to report in thisregard.
Responsibilities of Management and Those Charged with Governance for the FinancialStatements
Management is responsible for the preparation and fair presentation of the financial statementsin accordance with the requirements of Accounting Standards for Business Enterprises, and forsuch internal control as management determines is necessary to enable the preparation offinancial statements that are free from material misstatement, whether due to fraud or error.
In preparing the financial statements, Management is responsible for assessing the Company'sability to continue as a going concern, disclosing, if applicable, matters related to going concernand using the going concern basis of accounting unless management either intends to liquidatethe Company or to cease operations, or has no realistic alternative but to do so.
Those charged with governance are responsible for overseeing the Company's financialreporting process.
Auditor's Responsibilities for the Audit of the Financial Statements
Our objectives are to obtain reasonable assurance about whether the financial statements as awhole are free from material misstatement, whether due to fraud or error, and to issue anauditor’s report that includes our opinion. Reasonable assurance is a high level of assurance butis not a guarantee that an audit conducted in accordance with CSAs will always detect a materialmisstatement when it exists. Misstatements can arise from fraud or error and are consideredmaterial if, individually or in aggregate, they could reasonably be expected to influence theeconomic decisions of users taken on the basis of these financial statements.
As part of an audit in accordance with CSAs, we exercise professional judgment and maintainprofessional skepticism throughout the audit. We also:
(1) Identify and assess the risks of material misstatement of the financial statements, whetherdue to fraud or error, design and perform audit procedures responsive to those risks, and obtainaudit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk ofnot detecting a material misstatement resulting from fraud is higher than for one resulting fromerror, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or theoverride of internal control.
(2) Obtain an understand of internal control relevant to the audit in order to design auditprocedures that are appropriate in the circumstances.
(3) Evaluate the appropriateness of accounting policies used and the reasonableness ofaccounting estimates and related disclosures made by management.
(4) Conclude on the appropriateness of management’s use of the going concern basis ofaccounting and, based on the audit evidence obtained, whether a material uncertainty existsrelated to events or conditions that may cast significant doubt on Bengang Steel Plate’s abilityto continue as a going concern. If we conclude that a material uncertainty exists, we are requiredto draw attention in our auditor’s report to the related disclosures in the financial statements or,if such disclosures are inadequate, to modify our opinion. Our conclusions are based on theaudit evidence obtained up to the date of our auditor’s report. However, future events orconditions may cause Bengang Steel Plates to cease to continue as a going concern.
(5) Evaluate the overall presentation (including the disclosures), structure and contents of thefinancial statements, and whether the financial statements represent the underlying transactions
and events in a manner that achieves fair presentation.
(6) Obtain sufficient appropriate audit evidence regarding the financial information of theentities or business activities within Bengang Steel Plates to express an opinion on theconsolidated financial 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, theplanned scope and timing of the audit and significant audit findings, including any significantdeficiencies in internal control that we identify during our audit.
We also provide those charged with governance with a statement that we have complied withrelevant ethical requirements regarding independence, and communicate with them allrelationships and other matters that may reasonably be thought to bear on our independenceand, where applicable, related safeguards.
From the matters communicated with those charged with governance, we determine thosematters that 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 our auditor's reportunless law or regulation precludes public disclosure about the matter or when, in extremely rarecircumstances, we determine that a matter should not be communicated in our report becausethe adverse consequences of doing so would reasonably be expected to outweigh the publicinterest benefits of such communication.
BDO CHINA SHU LUN PAN CERTIFIED Certified Public Accountants of ChinaPUBLIC ACCOUNTANTS LLP (Engagement Partner)
Certified Public Accountants of China
Shanghai, the People’s Republic of China 24 March 2022
BENGANG STEEL PLATES CO., LTD.CONSOLIDATED STATEMENT OF FINANCIAL POSITION
As at 31 December 2021(Expressed in Renminbi unless otherwise indicated)(English Translation for Reference Only)
| Assets | Notes 5 | 31 Dec, 2021 | 31 Dec, 2020 |
| Current assets | |||
| Cash at bank and on hand | (1) | 8,831,095,737.85 | 13,126,666,915.26 |
| Settlement provisions | |||
| Capital lent | |||
| Financial assets held for trading | |||
| Derivative financial assets | |||
| Notes receivable | (2) | 1,540,482,182.07 | |
| Accounts receivable | (3) | 256,850,782.71 | 245,217,182.66 |
| Accounts receivable financing | (4) | 1,530,735,647.38 | 4,189,977,871.92 |
| Prepayments | (5) | 994,370,345.64 | 2,108,044,777.65 |
| Premium receivable | |||
| Reinsurance accounts receivable | |||
| Receivable deposit for reinsurance contract | |||
| Other receivables | (6) | 165,937,280.41 | 142,101,351.27 |
| Redemptory financial assets for sale | |||
| Inventories | (7) | 10,190,166,138.98 | 9,040,065,342.65 |
| Contract assets | |||
| Assets held for sale | |||
| Non-current assets due within one year | |||
| Other current assets | (8) | 754,948,193.56 | 5,523,646,836.01 |
| Total current assets | 24,264,586,308.60 | 34,375,720,277.42 | |
| Non-current assets | |||
| Loan and advances issued | |||
| Debt Investments | |||
| Other debt investments | |||
| Long-term receivables | |||
| Long-term equity investments | (9) | 2,981,784.07 | 2,742,064.73 |
| Other equity instrument investments | (10) | 1,042,024,829.00 | 1,042,024,829.00 |
| Other non-current financial assets | |||
| Investment property | |||
| Fixed assets | (11) | 25,480,674,048.94 | 26,284,567,956.44 |
| Construction in progress | (12) | 2,434,182,101.13 | 1,839,933,715.58 |
| Productive biological assets | |||
| Oil and gas assets | |||
| Right-of-use assets | (13) | 1,440,365,248.31 | |
| Intangible assets | (14) | 297,921,548.81 | 264,932,652.54 |
| Development expenditure | |||
| Goodwill | |||
| Long-term deferred expenses | |||
| Deferred tax assets | (15) | 153,756,548.31 | 201,708,932.84 |
| Other non-current assets | (16) | 30,630,858.13 | 995,840,320.65 |
| Total non-current assets | 30,882,536,966.70 | 30,631,750,471.78 | |
| Total assets | 55,147,123,275.30 | 65,007,470,749.20 |
The notes to the financial statements attached form part of these financial statements.Legal Representative: Chief Financial Officer: Chief Accountant:
BENGANG STEEL PLATES CO., LTD.
CONSOLIDATED STATEMENT OF FINANCIAL POSITION (Continued)
As at 31 December 2021
(Expressed in Renminbi unless otherwise indicated)(English Translation for Reference Only)
| Liabilities and equities | Notes 5 | 31 Dec, 2021 | 31 Dec, 2020 |
| Current Liabilities | |||
| Short-term loans | （17） | 4,053,088,140.00 | 10,067,731,000.00 |
| Loan from central bank | |||
| Loan from other banks | |||
| Financial liability held for trading | |||
| Derivative financial liabilities | |||
| Notes payable | （18） | 4,635,083,376.48 | 9,814,149,348.42 |
| Accounts payable | （19） | 5,352,272,685.89 | 5,914,228,256.82 |
| Advance from customers | |||
| Contract liabilities | （20） | 4,708,188,093.78 | 4,458,671,819.90 |
| Financial assets sold for repurchase | |||
| Deposits from customers and interbank | |||
| Receipt from vicariously traded securities | |||
| Receipt from vicariously underwriting securities | |||
| Employee benefits payable | （21） | 152,095,376.49 | 25,749,485.25 |
| Taxes payable | （22） | 114,267,988.70 | 55,302,080.96 |
| Other payables | （23） | 1,348,025,731.98 | 709,448,301.92 |
| Handling charges and commission payable | |||
| Reinsurance accounts payable | |||
| Liabilities held for sale | |||
| Non-current liabilities due within one year | （24） | 310,780,518.14 | 1,308,030,361.43 |
| Other current liabilities | （25） | 612,064,452.20 | 579,627,336.58 |
| Total current liabilities | 21,285,866,363.66 | 32,932,937,991.28 | |
| Non-current liabilities | |||
| Provision for insurance contract | |||
| Long-term loans | （26） | 4,222,821,771.74 | 3,502,934,427.65 |
| Bonds payable | （27） | 5,054,251,668.83 | 5,752,229,339.52 |
| Including: Preferred stock | |||
| Perpetual bond | |||
| Leasing liabilities | （28） | 1,424,667,169.15 | |
| Long-term payables | （29） | 1,114,232,362.74 | |
| Long-term employee benefits payable | |||
| Estimated liabilities | |||
| Deferred income | （30） | 93,106,285.89 | 154,451,833.23 |
| Deferred tax liabilities | |||
| Other non-current liabilities | |||
| Total non-current liabilities | 10,794,846,895.61 | 10,523,847,963.14 | |
| Total liabilities | 32,080,713,259.27 | 43,456,785,954.42 | |
| Shareholders' equity: | |||
| Share capital | （31） | 4,108,191,379.00 | 3,875,371,532.00 |
| Other equity instruments | （32） | 947,882,663.63 | 1,146,290,662.42 |
| Including: Preferred stock | |||
| Perpetual bond | |||
| Capital reserves | （33） | 13,272,134,173.09 | 12,343,209,847.29 |
| Less: treasury shares | |||
| Other comprehensive income | |||
| Special reserves | （34） | 337,978.57 | 300,412.14 |
| Surplus reserves | （35） | 1,195,116,522.37 | 961,105,529.85 |
| General risk reserve | |||
| Undistributed profits | （36） | 2,977,306,297.64 | 2,692,018,405.40 |
| Total equity attributable to equity holders of the parent company | 22,500,969,014.30 | 21,018,296,389.10 | |
| Non-controlling interests | 565,441,001.73 | 532,388,405.68 | |
| Total shareholder's equity | 23,066,410,016.03 | 21,550,684,794.78 | |
| Total of liabilities and owners’ equity | 55,147,123,275.30 | 65,007,470,749.20 |
The notes to the financial statements attached form part of these financial statements.
Legal Representative： Chief Financial Officer: Chief Accountant:
BENGANG STEEL PLATES CO., LTD.COMPANY’S STATEMENT OF FINANCIAL POSITION
As at 31 December 2021(Expressed in Renminbi unless otherwise indicated)
(English Translation for Reference Only)
| Assets | Notes 14 | 31 Dec, 2021 | 31 Dec, 2020 |
| Current assets | |||
| Cash at bank and on hand | 7,580,872,007.38 | 11,808,618,300.87 | |
| Financial assets held for trading | |||
| Derivative financial assets | |||
| Notes receivable | （1） | 1,514,416,395.80 | |
| Accounts receivable | （2） | 353,631,563.42 | 289,865,462.20 |
| Accounts receivable financing | （3） | 1,504,640,362.79 | 4,143,431,412.08 |
| Prepayments | 1,004,241,075.82 | 2,117,204,935.75 | |
| Other receivables | （4） | 268,606,048.52 | 228,180,190.02 |
| Inventories | 8,289,784,141.78 | 7,420,499,172.20 | |
| Contract assets | |||
| Assets held for sale | |||
| Non-current assets due within one year | |||
| Other current assets | 670,787,069.41 | 5,437,282,088.94 | |
| Total current assets | 21,186,978,664.92 | 31,445,081,562.06 | |
| Non-current assets | |||
| Debt investments | |||
| Other debt investments | |||
| Long-term receivables | |||
| Long-term equity investments | （5） | 2,015,186,190.50 | 2,016,281,902.16 |
| Other equity instrument investments | 1,041,624,829.00 | 1,041,624,829.00 | |
| Other non-current financial assets | |||
| Investment property | |||
| Fixed assets | 24,110,222,815.60 | 24,755,665,765.30 | |
| Construction in progress | 2,401,120,232.45 | 1,798,639,941.58 | |
| Productive biological assets | |||
| Oil and gas assets | |||
| Right-of-use assets | 1,440,365,248.31 | ||
| Intangible assets | 178,414,033.19 | 142,163,903.40 | |
| Development expenditure | |||
| Goodwill | |||
| Long-term deferred expenses | |||
| Deferred tax assets | 124,046,003.13 | 98,480,706.23 | |
| Other non-current assets | 22,010,941.60 | 988,475,426.53 | |
| Total non-current assets | 31,332,990,293.78 | 30,841,332,474.20 | |
| Total assets | 52,519,968,958.70 | 62,286,414,036.26 |
The notes to the financial statements attached form part of these financial statements.Legal Representative: Chief Financial Officer: Chief Accountant:
BENGANG STEEL PLATES CO., LTD.COMPANY’S STATEMENT OF FINANCIAL POSITION (Continued)
As at 31 December 2021(Expressed in Renminbi unless otherwise indicated)
(English Translation for Reference Only)
| Liabilities and shareholders' equities | Notes 14 | 31 Dec, 2021 | 31 Dec, 2020 |
| Current liabilities | |||
| Short-term loans | 3,353,088,140.00 | 9,107,731,000.00 | |
| Financial liability held for trading | |||
| Derivative financial liabilities | |||
| Notes payable | 4,650,517,420.18 | 8,348,607,405.21 | |
| Accounts payable | 5,674,841,169.66 | 6,280,468,684.34 | |
| Advance from customers | |||
| Contract liabilities | 4,660,051,055.89 | 5,324,357,761.83 | |
| Employee benefits payable | 151,595,453.62 | 23,981,010.53 | |
| Taxes payable | 40,949,825.13 | 42,514,891.31 | |
| Other payables | 683,141,570.83 | 368,374,954.61 | |
| Liabilities held for sale | |||
| Non-current liabilities due within one year | 310,780,518.14 | 1,308,030,361.43 | |
| Other current liabilities | 605,806,637.27 | 692,166,509.04 | |
| Total current liabilities | 20,130,771,790.72 | 31,496,232,578.30 | |
| Non-current liabilities | |||
| Long term loans | 4,222,821,771.74 | 3,502,934,427.65 | |
| Bonds payable | 5,054,251,668.83 | 5,752,229,339.52 | |
| Including: Preferred stock | |||
| Perpetual bond | |||
| Lease liabilities | 1,424,667,169.15 | ||
| Long-term payables | 1,108,412,163.50 | ||
| Long-term employee benefits payable | |||
| Estimated liabilities | |||
| Deferred income | 93,106,285.89 | 154,451,833.23 | |
| Deferred tax liabilities | |||
| Other non-current liabilities | |||
| Total non-current liabilities | 10,794,846,895.61 | 10,518,027,763.90 | |
| Total liabilities | 30,925,618,686.33 | 42,014,260,342.20 | |
| Shareholder’s equity: | |||
| Share capital | 4,108,191,379.00 | 3,875,371,532.00 | |
| Other equity instruments | 947,882,663.63 | 1,146,290,662.42 | |
| Including: Preferred stock | |||
| Perpetual bond | |||
| Capital reserves | 12,851,982,490.97 | 11,923,058,165.17 | |
| Less: Treasury shares | |||
| Other comprehensive income | |||
| Special reserves | 155,469.58 | 120,972.62 | |
| Surplus reserves | 1,195,116,522.37 | 961,105,529.85 | |
| Undistributed Profits | 2,491,021,746.82 | 2,366,206,832.00 | |
| Total shareholder's equity | 21,594,350,272.37 | 20,272,153,694.06 | |
| Total liabilities and shareholder’s equity | 52,519,968,958.70 | 62,286,414,036.26 |
The notes to the financial statements attached form part of these financial statements.Legal Representative: Chief Financial Officer: Chief Accountant:
BENGANG STEEL PLATES CO., LTD.CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
For the year ended 31 December 2021
(Expressed in Renminbi unless otherwise indicated)(English Translation for Reference Only)
| Items | Notes 5 | Current period | Previous period |
| 1. Total operating income | 77,912,144,981.46 | 48,684,792,685.58 | |
| Including: Operating income | (37) | 77,912,144,981.46 | 48,684,792,685.58 |
| Interest income | |||
| Premium earned | |||
| Income from handling charges and commission | |||
| 2. Total operating cost | 74,244,688,137.82 | 47,900,922,736.61 | |
| Including: Operating cost | (37) | 71,891,598,336.96 | 46,392,180,562.59 |
| Interest expense | |||
| Expenditure for handling charges and commission | |||
| Surrender value | |||
| Net expenditure for compensation | |||
| Net provision for insurance contract appropriated | |||
| Bonus payment for policy | |||
| Reinsurance premium | |||
| Tax and surcharges | (38) | 431,460,563.69 | 215,871,820.10 |
| Selling and distribution expenses | (39) | 141,394,565.57 | 97,279,280.21 |
| General and administrative expenses | (40) | 1,187,239,442.10 | 792,826,294.81 |
| Research and development expenses | (41) | 56,401,594.44 | 37,989,623.28 |
| Financial expenses | (42) | 536,593,635.06 | 364,775,155.62 |
| Including: Interest expense | 1,007,595,231.75 | 1,028,857,436.14 | |
| Interest income | 393,818,460.36 | 378,523,984.03 | |
| Add: Other income | (43) | 66,345,976.64 | 81,305,181.92 |
| Income on investment（“-” for loss） | (44) | -120,519,309.82 | 13,951,362.33 |
| Including: Income from associates and joint ventures | 520,432.46 | 374,119.86 | |
| Income from derecognition of financial assets measured at amortized cost | |||
| Exchange gains（“-” for loss） | |||
| Net exposure hedge income（“-” for loss） | |||
| Gains from change of fair value （“-” for loss） | |||
| Credit impairment loss （“-” for loss） | (45) | -7,754,375.77 | -304,019,761.75 |
| Assets impairment loss （“-” for loss） | (46) | -113,671,335.02 | -67,185,869.37 |
| Assets disposal gains（“-” for loss） | (47) | 130,675.05 | 325,651.61 |
| 3. Operational profit（“-” for loss） | 3,491,988,474.72 | 508,246,513.71 | |
| Add: Non-operating income | (48) | 7,783,225.80 | 4,328,563.52 |
| Less: Non-operating expenses | (49) | 64,272,629.43 | 95,724,280.44 |
| 4. Total profit (“-” for loss) | 3,435,499,071.09 | 416,850,796.79 | |
| Less: Income tax expenses | (50) | 901,863,572.46 | 25,371,230.56 |
| 5. Net profit（“-” for loss） | 2,533,635,498.63 | 391,479,566.23 | |
| 1.Classification by continuing operating | |||
| 1.Net profit from continuing operation（“-” for loss） | 2,533,635,498.63 | 391,479,566.23 | |
| 2.Net profit from discontinued operation（“-” for loss） | |||
| 2.Classification by ownership | |||
| 1. Net profit attributable to the owners of parent company （“-” for loss） | 2,500,582,902.58 | 384,252,740.78 | |
| 2. Net profit attributable to non-controlling shareholders （“-” for loss） | 33,052,596.05 | 7,226,825.45 | |
| 6.Other comprehensive income | |||
| Other comprehensive income attributable to owners of the parent company after tax | |||
| 1.Other comprehensive income items that will not be reclassified into gains/losses | |||
| 1) Re-measurement of defined benefit plans of changes in net debt or net assets | |||
| 2) Other comprehensive income under the equity method cannot be reclassified into profit or loss | |||
| 3) Changes in fair value of investments in other equity instruments | |||
| 4) Changes in fair value of company's credit risk | |||
| 2.Other comprehensive income that will be reclassified into profit or loss. | |||
| 1) Other comprehensive income under the equity method which can be reclassified into profit or loss | |||
| 2) Changes in fair value of other debt investments | |||
| 3) Amount of financial assets reclassified into other comprehensive income | |||
| 4) Credit impairment provision of other debt investments | |||
| 5) Cash flow hedges reserve | |||
| 6) Translation differences in foreign currency financial statements | |||
| 7) Others | |||
| Other comprehensive income attributable to non-controlling shareholders’ equity after tax | |||
| 7. Total comprehensive income | 2,533,635,498.63 | 391,479,566.23 | |
| Total comprehensive income attributable to the owner of the parent company | 2,500,582,902.58 | 384,252,740.78 | |
| Total comprehensive income attributable to non-controlling shareholders | 33,052,596.05 | 7,226,825.45 | |
| 8. Earnings per share | |||
| 1）Basic earnings per share | (51) | 0.600 | 0.099 |
| 2）Diluted earnings per share | (51) | 0.496 | 0.099 |
The notes to the financial statements attached form part of these financial statements.Legal Representative: Chief Financial Officer: Chief Accountant:
BENGANG STEEL PLATES CO., LTD.COMPANY’S STATEMENT OF COMPREHENSIVE INCOME
For the year ended 31 December 2021(Expressed in Renminbi unless otherwise indicated)
(English Translation for Reference Only)
| Items | Notes 14 | Current period | Previous period |
| 1. Total operating income | (6) | 78,721,461,725.71 | 48,811,106,474.73 |
| Less: Operating cost | (6) | 73,203,463,475.56 | 46,742,700,421.70 |
| Tax and surcharges | 381,385,801.80 | 182,486,280.99 | |
| Selling and distribution expenses | 122,357,594.15 | 86,927,530.44 | |
| General and administrative expenses | 1,123,575,016.51 | 738,689,535.43 | |
| Research and development expenses | 56,401,594.44 | 37,989,623.28 | |
| Financial expenses | 521,028,798.20 | 339,059,288.37 | |
| Including: Interest expense | 971,156,413.61 | 973,520,152.09 | |
| Interest income | 372,598,200.22 | 348,394,576.76 | |
| Add: Other income | 65,897,317.34 | 80,671,964.84 | |
| Income on investment（“-” for loss） | (7) | -123,815,558.88 | 13,577,242.47 |
| Including: Income from associates and joint ventures | |||
| Income from derecognition of financial assets measured at amortized cost | |||
| Net exposure hedge income（“-” for loss） | |||
| Gains from change of fair value （“-” for loss） | |||
| Credit impairment loss（“-” for loss） | -8,563,525.91 | 1,333,341.31 | |
| Assets impairment loss（“-” for loss） | -113,671,335.02 | -67,185,869.37 | |
| Assets disposal gains（“-” for loss） | 130,675.05 | 325,651.61 | |
| 2. Operational profit（“-” for loss） | 3,133,227,017.63 | 711,976,125.38 | |
| Add: Non-operating income | 3,831,724.04 | 3,588,687.69 | |
| Less: Non-operating expenses | 62,183,332.01 | 95,171,437.11 | |
| 3. Total profit (“-” for loss) | 3,074,875,409.66 | 620,393,375.96 | |
| Less: Income tax expenses | 734,765,484.50 | -3,562,037.01 | |
| 4. Net profit（“-” for loss） | 2,340,109,925.16 | 623,955,412.97 | |
| 1.Net profit from continuing operation (“-” for loss) | 2,340,109,925.16 | 623,955,412.97 | |
| 2.Net profit from discontinued operation (“-” for loss) | |||
| 5.Other comprehensive income | |||
| 1.Other comprehensive income items that will not be reclassified into gains/losses | |||
| 1) Re-measurement of defined benefit plans of changes | |||
| 2) Other comprehensive income under the equity method cannot be reclassified into profit or loss | |||
| 3) Changes in fair value of investments in other equity instruments | |||
| 4) Changes in fair value of company's credit risk | |||
| 2.Other comprehensive income that will be reclassified into profit or loss. | |||
| 1) Other comprehensive income under the equity method investee can be reclassified into profit or loss | |||
| 2) Changes in fair value of other debt investments | |||
| 3) Amount of financial assets reclassified into other comprehensive income | |||
| 4) Credit impairment provision of other debt investments | |||
| 5) Cash flow hedges reserve | |||
| 6) Translation differences in foreign currency financial statements | |||
| 7) Others | |||
| 6. Total comprehensive income | 2,340,109,925.16 | 623,955,412.97 | |
| 7. Earnings per share | |||
| 1）Basic earnings per share | |||
| 2）Diluted earnings per share |
The notes to the financial statements attached form part of these financial statements.Legal Representative: Chief Financial Officer: Chief Accountant:
BENGANG STEEL PLATES CO., LTD.CONSOLIDATED STATEMENT OF CASH FLOWS
For the year ended 31 December 2021(Expressed in Renminbi unless otherwise indicated)
(English Translation for Reference Only)
| Items | Notes 5 | Current period | Previous period |
| 1.Cash flow from operating activities | |||
| Cash received from sale of goods or rendering of services | 55,748,897,664.65 | 38,849,024,657.06 | |
| Net increase of customers’ deposit and interbank deposit | |||
| Net increase of loan from central bank | |||
| Net increase of loans from other financial institutions | |||
| Cash received for premium of original insurance contract | |||
| Net cash received for reinsurance business | |||
| Net increase of deposit and investment of the insured | |||
| Cash from receiving interest, handling charge and commission | |||
| Net increase of loans from borrowing funds | |||
| Net increase of fund for repurchase business | |||
| Net cash received from traded securities | |||
| Tax rebate received | 78,323,445.53 | 396,399,799.91 | |
| Other cash received relating to operating activities | (52) | 501,366,768.12 | 816,954,704.43 |
| Subtotal of cash inflows from operating activities | 56,328,587,878.30 | 40,062,379,161.40 | |
| Cash paid for goods and services | 50,647,643,333.57 | 38,688,312,946.57 | |
| Net increase of customer’ s loan and advances | |||
| Net increase of deposit in central bank and interbank deposit | |||
| Cash for payment of compensation for original insurance contract | |||
| Net increase in capital lent | |||
| Cash for payment of interest, handling charge and commission | |||
| Cash for payment of policy bonus | |||
| Cash paid to and on behalf of employees | 2,451,084,010.00 | 1,973,351,870.94 | |
| Cash paid for all types of taxes | 2,673,210,895.18 | 952,434,837.20 | |
| Other cash paid relating to operating activities | (52) | 143,176,185.51 | 487,279,719.98 |
| Subtotal of cash outflows from operating activities | 55,915,114,424.26 | 42,101,379,374.69 | |
| Net cash flows from operating activities | 413,473,454.04 | -2,039,000,213.29 | |
| 2. Cash flows from investing activities | |||
| Cash received from disposal of investments | 11,400,000,000.00 | ||
| Cash received from return on investments | 2,717,582.45 | 13,852,296.30 | |
| Net cash received from disposal of fixed assets, intangible assets and other long-term assets | 2,776.27 | 185,442.47 | |
| Net cash received from disposal of subsidiary and other operating units | |||
| Other cash paid relating to investing activities | |||
| Subtotal of cash inflows from investing activities | 11,402,720,358.72 | 14,037,738.77 | |
| Cash paid for acquisition of fixed assets, intangible assets and other long-term assets | 1,304,976,365.56 | 1,013,928,829.62 | |
| Cash paid for investments | 6,200,000,000.00 | 5,200,000,000.00 | |
| Net increase of mortgage loan | |||
| Net cash received from subsidiary and other operating unit | |||
| Other cash paid relating to investing activities | |||
| Subtotal of cash outflows from investing activities | 7,504,976,365.56 | 6,213,928,829.62 | |
| Net cash flows from investing activities | 3,897,743,993.16 | -6,199,891,090.85 | |
| 3. Cash flows from financing activities | |||
| Proceeds from investment | |||
| Including: Proceeds from investment of non-controlling shareholders of subsidiary | |||
| Proceeds from borrowings | 5,801,673,020.00 | 21,667,514,000.00 | |
| Other proceeds relating to financing activities | (52) | 2,361,272,208.08 | 1,329,876,314.56 |
| Subtotal of cash inflows from financing activities | 8,162,945,228.08 | 22,997,390,314.56 | |
| Cash repayments of borrowings | 12,072,544,553.18 | 18,115,736,896.61 | |
| Cash payments for distribution of dividends, profit or interest expenses | 2,550,802,187.51 | 749,821,254.37 | |
| Including: Cash paid to non-controlling shareholders as dividend and profit by subsidiaries | |||
| Other cash payments relating to financing activities | (52) | 740,000,000.00 | 75,509,135.49 |
| Subtotal of cash outflows from financing activities | 15,363,346,740.69 | 18,941,067,286.47 | |
| Net cash flows from financing activities | -7,200,401,512.61 | 4,056,323,028.09 | |
| 4. Effect of foreign exchange rate changes on cash and cash equivalents | -41,134,466.23 | -29,429,117.41 | |
| 5. Net increase in cash and cash equivalents | -2,930,318,531.64 | -4,211,997,393.46 | |
| Add: Cash and cash equivalents at the beginning of the period | 9,229,417,595.12 | 13,441,414,988.58 | |
| 6. Cash and cash equivalents at the ending of the period | 6,299,099,063.48 | 9,229,417,595.12 |
The notes to the financial statements attached form part of these financial statements.Legal Representative: Chief Financial Officer: Chief Accountant:
BENGANG STEEL PLATES CO., LTD.COMPANY’S STATEMENT OF CASH FLOWS
For the year ended 31 December 2021(Expressed in Renminbi unless otherwise indicated)
(English Translation for Reference Only)
| Items | Notes 14 | Current period | Previous period |
| 1. Cash flow from operating activities | |||
| Cash received from sale of goods or rendering of services | 60,408,664,898.10 | 43,332,373,821.90 | |
| Tax rebate received | 21,209,047.83 | 324,045,932.64 | |
| Other cash received relating to operating activities | 461,672,257.35 | 786,085,304.22 | |
| Subtotal of cash inflows from operating activities | 60,891,546,203.28 | 44,442,505,058.76 | |
| Cash paid for goods and services | 55,735,903,034.60 | 43,585,984,954.05 | |
| Cash paid to and on behalf of employees | 2,345,338,852.62 | 1,870,605,772.33 | |
| Cash paid for all types of taxes | 2,498,120,146.95 | 824,396,654.24 | |
| Other cash paid relating to operating activities | 123,901,730.49 | 476,274,984.82 | |
| Subtotal of cash outflows from operating activities | 60,703,263,764.66 | 46,757,262,365.44 | |
| Net cash flows from operating activities | 188,282,438.62 | -2,314,757,306.68 | |
| 2. Cash flows from investing activities | |||
| Cash received from disposal of investments | 11,400,000,000.00 | ||
| Cash received from return on investments | 2,436,869.33 | 13,577,242.47 | |
| Net cash received from disposal of fixed assets, intangible assets and other long-term assets | 1,637.16 | ||
| Net cash received from disposal of subsidiary and other operating units | |||
| Other cash received relating to investing activities | |||
| Subtotal of cash inflows from investing activities | 11,402,436,869.33 | 13,578,879.63 | |
| Cash paid for acquisition of fixed assets, intangible assets and other long-term assets | 1,304,157,060.45 | 1,013,911,078.29 | |
| Cash paid for investments | 6,200,000,000.00 | 5,200,000,000.00 | |
| Net cash paid for acquisition of subsidiary and other operating unit | |||
| Other cash paid relating to investing activities | |||
| Subtotal of cash outflows paid for investing activities | 7,504,157,060.45 | 6,213,911,078.29 | |
| Net cash flows from investing activities | 3,898,279,808.88 | -6,200,332,198.66 | |
| 3. Cash flows from financing activities | |||
| Proceeds from investment | |||
| Cash received from borrowings | 5,101,673,020.00 | 20,607,514,000.00 | |
| Other cash received relating to financing activities | 1,374,782,185.21 | 1,294,921,225.43 | |
| Subtotal of cash inflows from financing activities | 6,476,455,205.21 | 21,902,435,225.43 | |
| Cash repayments of borrowings | 11,112,544,553.18 | 16,715,736,896.61 | |
| Cash payments for distribution of dividends, profit or interest | 2,518,311,312.47 | 701,262,726.60 | |
| Other cash payments relating to financing activities | 740,000,000.00 | 72,689,078.37 | |
| Subtotal of cash outflows from financing activities | 14,370,855,865.65 | 17,489,688,701.58 | |
| Net cash flows from financing activities | -7,894,400,660.44 | 4,412,746,523.85 | |
| 4. Effect of foreign exchange rate changes on cash and cash equivalents | -41,145,257.65 | -29,414,313.38 | |
| 5. Net increase in cash and cash equivalents | -3,848,983,670.59 | -4,131,757,294.87 | |
| Add: Cash and cash equivalents at the beginning of the period | 8,897,859,003.60 | 13,029,616,298.47 | |
| 6. Cash and cash equivalents at the ending of the period | 5,048,875,333.01 | 8,897,859,003.60 |
The notes to the financial statements attached form part of these financial statements.Legal Representative: Chief Financial Officer: Chief Accountant:
BENGANG STEEL PLATES CO., LTD.CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS’ EQUITY
For the year ended 31 December 2021(Expressed in Renminbi unless otherwise indicated)(English Translation for Reference Only)
| Items | Current period | |||||||||||||
| Owner's equity attributable to parent company | Non-controlling interest | Total of shareholders’ equity | ||||||||||||
| Share capital | Other equity instruments | Capital reserves | Less: Treasury shares | Other comprehensive income | Special reserves | Surplus reserves | General risk reserve | Undistributed profit | Subtotal | |||||
| Preference shares | Perpetual bond | Others | ||||||||||||
| 1. Ending balance of last year | 3,875,371,532.00 | 1,146,290,662.42 | 12,343,209,847.29 | 300,412.14 | 961,105,529.85 | 2,692,018,405.40 | 21,018,296,389.10 | 532,388,405.68 | 21,550,684,794.78 | |||||
| Add: Change of accounting policies | ||||||||||||||
| Correction of errors for last period | ||||||||||||||
| Business consolidation under common control | ||||||||||||||
| Others | ||||||||||||||
| 2. Beginning balance of current year | 3,875,371,532.00 | 1,146,290,662.42 | 12,343,209,847.29 | 300,412.14 | 961,105,529.85 | 2,692,018,405.40 | 21,018,296,389.10 | 532,388,405.68 | 21,550,684,794.78 | |||||
| 3. Changes in current year (“-” for decrease) | 232,819,847.00 | -198,407,998.79 | 928,924,325.80 | 37,566.43 | 234,010,992.52 | 285,287,892.24 | 1,482,672,625.20 | 33,052,596.05 | 1,515,725,221.25 | |||||
| 1) Total comprehensive income | 2,500,582,902.58 | 2,500,582,902.58 | 33,052,596.05 | 2,533,635,498.63 | ||||||||||
| 2) Capital increase and decrease by shareholders | 232,819,847.00 | -198,407,998.79 | 928,924,325.80 | 963,336,174.01 | 963,336,174.01 | |||||||||
| (1) Common share invested by shareholders | ||||||||||||||
| (2) Capital input by the holder of other equity instruments | ||||||||||||||
| (3) Share-based payment attributable to owners’ equity | ||||||||||||||
| (4) Others | 232,819,847.00 | -198,407,998.79 | 928,924,325.80 | 963,336,174.01 | 963,336,174.01 | |||||||||
| 3) Profit distribution | 234,010,992.52 | -2,215,295,010.34 | -1,981,284,017.82 | -1,981,284,017.82 | ||||||||||
| (1) Appropriation to surplus reserves | 234,010,992.52 | -234,010,992.52 | ||||||||||||
| (2) Appropriation to general risk reserve | ||||||||||||||
| (3) Profit distribution to shareholders | -1,981,284,017.82 | -1,981,284,017.82 | -1,981,284,017.82 | |||||||||||
| (4) Others | ||||||||||||||
| 4) Transfers within shareholders’ equity | ||||||||||||||
| (1) Capital reserves transferred into paid-in capital (or stock) | ||||||||||||||
| (2) Surplus reserves transferred into paid-in capital (or stock) | ||||||||||||||
| (3) Surplus reserves to recover loss’ | ||||||||||||||
| (4) Net changes of defined contribution plans transferred into Retained Earnings | ||||||||||||||
| (5) Other comprehensive income transferred into Retained Earnings | ||||||||||||||
| (6) Others | ||||||||||||||
| 5) Special reserves | 37,566.43 | 37,566.43 | 37,566.43 | |||||||||||
| (1) Provision of special reserves | 63,036,424.58 | 63,036,424.58 | 63,036,424.58 | |||||||||||
| (2) Use of special reserves | 62,998,858.15 | 62,998,858.15 | 62,998,858.15 | |||||||||||
| 6) Others | ||||||||||||||
| 4. Ending balance of current year | 4,108,191,379.00 | 947,882,663.63 | 13,272,134,173.09 | 337,978.57 | 1,195,116,522.37 | 2,977,306,297.64 | 22,500,969,014.30 | 565,441,001.73 | 23,066,410,016.03 | |||||
The notes to the financial statements attached form part of these financial statementsLegal Representative: Chief Financial Officer: Chief Accountant:
BENGANG STEEL PLATES CO., LTD.CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS’ EQUITY (Continued)
For the year ended 31 December 2021(Expressed in Renminbi unless otherwise indicated)
(English Translation for Reference Only)
| Items | Previous period | |||||||||||||
| Owner's equity attributable to parent company | Non-controlling interest | Total of shareholders’ equity | ||||||||||||
| Share capital | Other equity instruments | Capital reserves | Less: Treasury shares | Other comprehensive income | Special reserves | Surplus reserves | General risk reserve | Undistributed profit | Subtotal | |||||
| Preference shares | Perpetual bond | Others | ||||||||||||
| 1. Ending balance of last year | 3,875,371,532.00 | 12,343,209,847.29 | 212,687.41 | 961,105,529.85 | 2,307,765,664.62 | 19,487,665,261.17 | 525,161,580.23 | 20,012,826,841.40 | ||||||
| Add: Change of accounting policies | ||||||||||||||
| Correction of errors for last period | ||||||||||||||
| Business consolidation under common control | ||||||||||||||
| Others | ||||||||||||||
| 2. Beginning balance of current year | 3,875,371,532.00 | 12,343,209,847.29 | 212,687.41 | 961,105,529.85 | 2,307,765,664.62 | 19,487,665,261.17 | 525,161,580.23 | 20,012,826,841.40 | ||||||
| 3. Changes in current year (“-” for decrease) | 1,146,290,662.42 | 87,724.73 | 384,252,740.78 | 1,530,631,127.93 | 7,226,825.45 | 1,537,857,953.38 | ||||||||
| 1) Total comprehensive income | 384,252,740.78 | 384,252,740.78 | 7,226,825.45 | 391,479,566.23 | ||||||||||
| 2) Capital increase and decrease by shareholders | 1,146,290,662.42 | 1,146,290,662.42 | 1,146,290,662.42 | |||||||||||
| (1) Common share invested by shareholders | ||||||||||||||
| (2) Capital input by the holder of other equity instruments | 1,146,290,662.42 | 1,146,290,662.42 | 1,146,290,662.42 | |||||||||||
| (3) Share-based payment attributable to owners' equity | ||||||||||||||
| (4) Others | ||||||||||||||
| 3) Profit distribution | ||||||||||||||
| (1) Appropriation to surplus reserves | ||||||||||||||
| (2) Appropriation to general risk reserve | ||||||||||||||
| (3) Profit distribution to shareholders | ||||||||||||||
| (4) Others | ||||||||||||||
| 4) Transfers within shareholders’ equity | ||||||||||||||
| (1) Capital reserves transferred into paid-in capital (or stock) | ||||||||||||||
| (2) Surplus reserves transferred into paid-in capital (or stock) | ||||||||||||||
| (3) Surplus reserves to recover loss | ||||||||||||||
| (4) Net changes of defined contribution plans transferred into Retained Earnings | ||||||||||||||
| (5) Other comprehensive income transferred into Retained Earnings | ||||||||||||||
| (6) Others | ||||||||||||||
| 5) Special reserves | 87,724.73 | 87,724.73 | 87,724.73 | |||||||||||
| (1) Provision of special reserves | 54,000,536.58 | 54,000,536.58 | 54,000,536.58 | |||||||||||
| (2) Use of special reserves | 53,912,811.85 | 53,912,811.85 | 53,912,811.85 | |||||||||||
| 6) Others | ||||||||||||||
| 4. Ending balance of current year | 3,875,371,532.00 | 1,146,290,662.42 | 12,343,209,847.29 | 300,412.14 | 961,105,529.85 | 2,692,018,405.40 | 21,018,296,389.10 | 532,388,405.68 | 21,550,684,794.78 | |||||
The notes to the financial statements attached form part of these financial statementsLegal Representative: Chief Financial Officer: Chief Accountant:
BENGANG STEEL PLATES CO., LTD.COMPANY’S STATEMENT OF CHANGES IN OWNERS’ EQUITY
For the year ended 31 December 2021(Expressed in Renminbi unless otherwise indicated)(English Translation for Reference Only)
| Items | Current period | ||||||||||
| Share capital | Other equity instruments | Capital reserves | Less: Treasury shares | Other comprehensive income | Special reserves | Surplus reserves | Undistributed profits | Total owners’ equity | |||
| Preference shares | Perpetual bond | Others | |||||||||
| 1. Ending balance of last year | 3,875,371,532.00 | 1,146,290,662.42 | 11,923,058,165.17 | 120,972.62 | 961,105,529.85 | 2,366,206,832.00 | 20,272,153,694.06 | ||||
| Add: Change of accounting policies | |||||||||||
| Correction of errors for last period | |||||||||||
| Others | |||||||||||
| 2. Beginning balance of current year | 3,875,371,532.00 | 1,146,290,662.42 | 11,923,058,165.17 | 120,972.62 | 961,105,529.85 | 2,366,206,832.00 | 20,272,153,694.06 | ||||
| 3. Changes in current year (“-” for decrease) | 232,819,847.00 | -198,407,998.79 | 928,924,325.80 | 34,496.96 | 234,010,992.52 | 124,814,914.82 | 1,322,196,578.31 | ||||
| 1) Total comprehensive income | 2,340,109,925.16 | 2,340,109,925.16 | |||||||||
| 2) Capital increase and decrease by shareholders | 232,819,847.00 | -198,407,998.79 | 928,924,325.80 | 963,336,174.01 | |||||||
| (1) Common share invested by shareholders | |||||||||||
| (2) Capital input by the holder of other equity instruments | |||||||||||
| (3) Share-based payment attributable to shareholders’ equity | |||||||||||
| (4) Others | 232,819,847.00 | -198,407,998.79 | 928,924,325.80 | 963,336,174.01 | |||||||
| 3) Profit distribution | 234,010,992.52 | -2,215,295,010.34 | -1,981,284,017.82 | ||||||||
| (1) Appropriation of surplus reserves | 234,010,992.52 | -234,010,992.52 | |||||||||
| (2) Profit distribution to shareholders | -1,981,284,017.82 | -1,981,284,017.82 | |||||||||
| (3) Others | |||||||||||
| 4) Transfers within shareholders’ equity | |||||||||||
| (1) Capital reserves transferred into paid-in capital (or stock) | |||||||||||
| (2) Surplus reserves transferred into paid-in capital (or stock) | |||||||||||
| (3) Surplus reserves to recover loss | |||||||||||
| (4) Net changes of defined contribution plans transferred into Retained Earnings | |||||||||||
| (5) Other comprehensive income transferred into retained earnings | |||||||||||
| (6) Others | |||||||||||
| 5) Special reserves | 34,496.96 | 34,496.96 | |||||||||
| (1) Provision of special reserves | 43,962,017.71 | 43,962,017.71 | |||||||||
| (2) Use of special reserves | 43,927,520.75 | 43,927,520.75 | |||||||||
| 6) Others | |||||||||||
| 4. Ending balance of current year | 4,108,191,379.00 | 947,882,663.63 | 12,851,982,490.97 | 155,469.58 | 1,195,116,522.37 | 2,491,021,746.82 | 21,594,350,272.37 | ||||
The notes to the financial statements attached form part of these financial statementsLegal Representative: Chief Financial Officer: Chief Accountant:
BENGANG STEEL PLATES CO., LTD.COMPANY’S STATEMENT OF CHANGES IN OWNERS’ EQUITY (Continued)
For the year ended 31 December 2021(Expressed in Renminbi unless otherwise indicated)(English Translation for Reference Only)
| Items | Previous period | ||||||||||
| Share capital | Other equity instruments | Capital reserves | Less: Treasury shares | Other comprehensive income | Special reserves | Surplus reserves | Undistributed profits | Total owners’ equity | |||
| Preference shares | Perpetual bond | Others | |||||||||
| 1. Ending balance of last year | 3,875,371,532.00 | 11,923,058,165.17 | 53,330.99 | 961,105,529.85 | 1,742,251,419.03 | 18,501,839,977.04 | |||||
| Add: Change of accounting policies | |||||||||||
| Correction of errors for last period | |||||||||||
| Others | |||||||||||
| 2. Beginning balance of current year | 3,875,371,532.00 | 11,923,058,165.17 | 53,330.99 | 961,105,529.85 | 1,742,251,419.03 | 18,501,839,977.04 | |||||
| 3. Changes in current year (“-” for decrease) | 1,146,290,662.42 | 67,641.63 | 623,955,412.97 | 1,770,313,717.02 | |||||||
| 1) Total comprehensive income | 623,955,412.97 | 623,955,412.97 | |||||||||
| 2) Capital increase and decrease by shareholders | 1,146,290,662.42 | 1,146,290,662.42 | |||||||||
| (1) Common share invested by shareholders | |||||||||||
| (2) Capital input by the holder of other equity instruments | 1,146,290,662.42 | 1,146,290,662.42 | |||||||||
| (3) Share-based payment attributable to shareholders’ equity | |||||||||||
| (4) Others | |||||||||||
| 3) Profit distribution | |||||||||||
| (1) Appropriation of surplus reserves | |||||||||||
| (2) Profit distribution to shareholders | |||||||||||
| (3) Others | |||||||||||
| 4) Transfers within shareholders' equity | |||||||||||
| (1) Capital reserves transferred into paid-in capital (or stock) | |||||||||||
| (2) Surplus reserves transferred into paid-in capital (or stock) | |||||||||||
| (3) Surplus reserves to recover loss’ | |||||||||||
| (4) Net changes of defined contribution plans transferred into Retained Earnings | |||||||||||
| (5) Other comprehensive income transferred into retained earnings | |||||||||||
| (6) Others | |||||||||||
| 5) Special reserves | 67,641.63 | 67,641.63 | |||||||||
| (1) Provision of special reserves | 47,926,472.22 | 47,926,472.22 | |||||||||
| (2) Use of special reserves | 47,858,830.59 | 47,858,830.59 | |||||||||
| 6) Others | |||||||||||
| 4. Ending balance of current year | 3,875,371,532.00 | 1,146,290,662.42 | 11,923,058,165.17 | 120,972.62 | 961,105,529.85 | 2,366,206,832.00 | 20,272,153,694.06 | ||||
The notes to the financial statements attached form part of these financial statementsLegal Representative: Chief Financial Officer: Chief Accountant:
Bengang Steel Plates Co., Ltd.
Notes to the financial statementsFor the year ended 31 December 2021(Expressed in Renminbi unless otherwise indicated)
(English Translation for Reference Only)
1. Basic Information of the Company
(1) Company profile
Bengang Steel Plates Co., Ltd. (hereinafter referred to as “Bengang Steel Plates” or “theCompany”), as approved in Liao-Zheng (1997) No. 57 by Liaoning People’s Government on27 March 1997, was incorporated as a joint stock limited company through public share offerof domestic listed foreign currency denominated shares (B shares) in the People’s Republic ofChina (the “PRC”) on 27 June 1997 by Benxi Steel and Iron (Group) Co., Ltd. (“Benxi Ironand Steel Group”), through reorganization of operations, assets and liabilities of its plants,namely, Steel Smelting Plant, Primary Rolling Plant and Continuous Hot Rolling Plant.
As approved by China Securities Regulatory Commission (hereinafter referred to as “theCSRC”), the Company issued 400,000,000 B-shares at HKD 2.38 each in Shenzhen StockExchange on 10 June 1997. On 3 November 1997, the Company issued another 120,000,000A-shares (Renminbi common Shares) at RMB 5.40 each, and listed in Shenzhen StockExchange since 15 January 1998. The capital shares were totaled to 1,136,000,000 shares.
On 14 March 2006, according to the resolutions of the Shareholders’ Meeting regarding shareequity relocation, the Share Equity Relocation Scheme, Response to Bengang Steel Plate Co.,Ltd. about Share Equity Relocation issued by Liaoning Provincial Government State-ownedAsset Administrative Committee(hereinafter referred to as the Liaoning SASAC), Benxi Ironand Steel Group – the only holder of non-negotiable state-owned legal person shares paid theconsideration to the current shareholders to obtain the current option for the 40,800,000 sharesof the total 616,000,000 shares it was holding. Shareholding positions have been registered withChina Securities Depository & Clearing Corporation Ltd. Shenzhen Office. However, the totalamount of capital shares of Bengang Steel Plates Co., Ltd. was not changed through the shareequity relocation action.
According to the approval document “Zheng-Jian-Gong-Si-Zi [2006] No. 126” by ChinaSecurities Regulatory Commission on 30 June 2006, the Company was approved to place 2billion Renminbi common shares particularly to Benxi Iron and Steel Group and the proceedswould be used to purchase the related assets of the Benxi Iron and Steel Group. On the sameday, Benxi Iron and Steel Group received circular Zheng-Jian-Gong-Si-Zi [2006] No. 127
issued by China Securities Regulatory Committee, On the same day, Benxi Iron and Steel Groupobtained the document "Zheng Jian Company Zi (2006) No. 127" issued by the China SecuritiesRegulatory Commission, which agreed to exempt Benxi Iron and Steel Group from theacquisition of 2 billion new shares issued by the company, resulting in the number of sharesheld by the company reaching 2.5752 billion shares (accounting for the company's 82.12% ofthe total share capital) to fulfill the tender offer obligation. On 28 August 2006, as approved byChina Securities Depository & Clearing Corporation Ltd. Shenzhen Office, the registration andconditional placing procedures of the 2 billion new shares were completed. On 28 September2006, the privately placed shares were approved by Shenzhen Stock Exchange to be placed inthe stock market. The placing price was RMB4.6733 per share.
Approved by the China Securities Regulatory Commission [2017] No. 1476, Bengang SteelPlate Co., Ltd. privately placed no more than 739,371,534 RMB ordinary shares (A shares) tono more than 10 issuers. The non-public offering was completed on 9 February 2018, and739,371,532 shares were actually issued. The placing price was RMB5.41 per share.
On August 20, 2021, Liaoning Provincial State-owned Assets Supervision and AdministrationCommission (hereinafter referred to as the Liaoning SASAC) and Ansteel Group Co., Ltd.(hereinafter referred to as Ansteel Group) signed the "Liaoning Provincial People's GovernmentState-owned Assets Supervision and Administration Commission and Ansteel Group Co., Ltd.on Free Transfer Agreement on the State-owned Equity of Bengang Group Co., Ltd. Accordingto the agreement, Liaoning State-owned Assets Supervision and Administration Commissionwill transfer its 51% shares of Bengang Group Co., Ltd. (hereinafter referred to as BengangGroup) to Angang Group for free. After the completion of the free transfer, Ansteel Group willbecome the controlling shareholder of Bengang Group, and Ansteel Group will hold 81.07% ofthe total share capital of Bengang Group Co., Ltd. indirectly.
As at 31 December 2021, the capital shares were totaled to 4,108,191,379 shares.The Company’s uniform social credit code: 91210000242690243E.The Company’s registered address: 16th Renmin Road, Pingshan District, Benxi, LiaoningProvince.The Company’s legal representative: Huo Gang.The parent company of Bengang Steel Plates Co., Ltd is Benxi Steel and Iron (Group) Co., Ltd.and the actual controller is Ansteel Group Co., Ltd.
Bengang Steel Plates Co., Ltd. belongs to ferrous metal smelting and rolling processing industryand is mainly involved in producing and trading of ferrous metal products.
The financial statements have been approved for reporting by the board of directors of theCompany on 24 March 2022.
(2) Consolidation scope
Please refer to “7. Equity in other entities” in this note for the relevant information of theCompany's subsidiaries.
Please refer to “6. Changes in the scope of consolidation” in this note for the changes in thescope of consolidation during the reporting period.
2. Basis of preparation
(1) Basis of preparation
The financial statements have been prepared on the going concern basis of actual trading andevents in accordance with “Accounting Standards for Business Enterprises – Basic Standard”and relevant specific standards, application materials, interpretations (together hereinafterreferred to as “Accounting Standards for Business Enterprises”) issued by the Ministry ofFinance, and “Information Disclosure Rules for Companies of securities for public issuance No.15 – General Regulations for Financial Statements” issued by the China Securities RegulatoryCommission.
(2) Going concern
The Company is operating normally and in a good condition, and thus has the capability tocontinue to operate in the next twelve months from the end of reporting period.
3. Significant accounting policies and accounting estimates
Notes for specific accounting policies and accounting estimates:
The following disclosed content covers the specific accounting policies and accountingestimates that are adopted by the Company based on the actual production and operationcharacteristics. Please see Note (10) Financial instruments, (11) Inventory, (15) Fixed assets,
(18) Intangible assets, (24) Revenue under “3. Significant accounting policies and accountingestimates” for details.
(1) Statement of compliance with China Accounting Standards for Business Enterprises
The financial statements present truly and completely the financial position, operation resultsand cash flows of the Company during the reporting period in accordance with ChinaAccounting Standards for Business Enterprises.
(2) Accounting year
The Accounting year is from 1 January to 31 December.
(3) Operating period
The operating period is twelve months.
(4) Functional currency
The Company’s functional currency is RMB.
(5) The accounting treatment for Business combination under/not under common controlBusiness combination under common controlThe assets and liabilities that the Company acquired in a business combination shall bemeasured on the basis of their carrying amount of acquiree’s assets, liabilities (as well as thegoodwill arising from the business combination) in the consolidated financial statement of theultimate controller on the combining date. As for the balance between the carrying amount ofthe net assets obtained by the Company and the carrying amount of the consideration paid by it(or the total par value of the shares issued), capital reserve needs to be adjusted. If the capitalreserve is not sufficient, any excess shall be adjusted against retained earnings.
Business combination not under common controlThe Company shall, on the acquisition date, measure the assets given and liabilities incurred orassumed by an enterprise for a business combination in light of their fair values, and shall recordthe balances between them and their carrying amounts into the profits and losses at the currentperiod. The Company shall recognize the positive balance between the combination costs andthe fair value of the identifiable net assets it obtains from the acquiree as goodwill. TheCompany shall treat the negative balance between the combination costs and the fair value ofthe identifiable net assets it obtains from the acquiree into the profits and losses of the currentperiod.
The intermediary costs and relevant fees for the business combination paid by the acquirer,including the expenses for audit, assessment and legal services, shall be recorded into the profitsand losses at the current period. The transaction expenses for the issuance of equity securities
for the business combination shall be recorded into the initial recognition amount of equitysecurities.
(6) Consolidation of Financial Statements
1. Scope of consolidation
The scope of consolidation of consolidated financial statements is determined based on control.All the subsidies (including separable sections of the investees controlled by the Company)have been consolidated into the scope of consolidation for this period ended.
2. Procedure of consolidation
The consolidated financial statements shall be presented by the parent based on the financialstatements of the parent and its subsidiaries, and using other related information. Whenpreparing consolidated financial statements, the parent shall consider the entire group as anaccounting entity, adopt uniform accounting policies and apply the requirements of AccountingStandard for Business Enterprises related to recognition, measurement and presentation. Theconsolidated financial statements shall reflect the overall financial position, operating resultsand cash flows of the group.
The accounting policy and accounting period of the subsidiaries within the consolidation scopeshall be in accordance with those of the Company. If not, it is necessary to make the adjustmentaccording to the Company’s accounting policies and accounting period when preparing theconsolidated financial statements. For subsidiaries through acquisition that are now undercommon control, the financial statements are adjusted according to fair value of identifiable netassets on the acquisition date. For subsidiaries through acquisition that are under commoncontrol, the assets, liabilities (as well as the goodwill arising from purchasing the subsidiary bythe ultimate controller) are adjusted according to book value of net assets in the financialstatements of the ultimate controller.
The owners’ interests, profit or loss, and comprehensive income of the subsidiary attributableto the non-controlling shareholders shall be presented separately in the shareholders’ equity ofthe consolidated balance sheet and under the item of net profit of the consolidated statement ofcomprehensive income and under the item of total comprehensive income. Where lossesassumed by the minority exceed the minority’s interests in the beginning equity of a subsidiary,the excess shall be charged against the minority’s interests.
(1) Increasing new subsidiaries and businesses
If the Company has a new subsidiary due to business combination under common control
during the reporting period, it shall adjust the beginning balance in the consolidated statementof financial position when preparing consolidated statement of financial position. The revenue,expenses and profits of the subsidiaries from the acquisition date to the end of the reportingperiod are included in the Company’s consolidated statement of comprehensive income. Thecash flow of the subsidiaries from the acquisition date to the end of the reporting period isincluded in the Company’s consolidated statement of cash flows. And meanwhile theCompany shall adjust the relevant items of the comparative financial statements as if thereporting entity for the purpose of consolidation has been in existence since the date theultimate controlling party first obtained control.
When the Company becomes capable of exercising control over an investee under commoncontrol due to additional investment or other reasons, adjustment shall be made as if thereporting entity after the combination has been in existence since the date the ultimatecontrolling party first obtained control. The investment income recognized between date ofpreviously obtaining equity investment and the date the acquiree and acquirer are undercommon control, which is later, and the combining date, other comprehensive income andother changes of net assets arising from the equity investment previously-held before obtainingthe control the acquiree shall be adjusted against the prior retained earnings of the comparativefinancial statements and the current profit or loss respectively.
If it is now under common control, the Company shall not adjust the beginning balance in theconsolidated statement of financial position when preparing consolidated statement offinancial position. The revenue, expenses and profits of the subsidiaries from the acquisitiondate to the end of the reporting period are included in the parent company’s consolidatedstatement of comprehensive income. The cash flow of the subsidiaries from the acquisitiondate to the end of the reporting period is included in the Company’s consolidated statement ofcash flows.
When the Company becomes capable of exercising control over an investee now undercommon control due to additional investment or other reasons, the acquirer shall remeasure itspreviously held equity interest in the acquiree to its fair value at the acquisition date. Thedifference between the fair value and the carrying amount shall be recognized as investmentincome for the period when the acquisition takes place. When the previously-held equityinvestment is accounted for under the equity method, any other comprehensive incomepreviously recognized in relation to the acquiree’s equity changes shall be transferred to profitor loss for the current period when the acquisition takes place. Other comprehensive incomearising from remeasurement of defined benefit plan is excluded.
(2) Disposing subsidiaries or businesses
1. General treatment
If the Company disposes a subsidiary during the reporting period, the revenue, expenses andprofits of the subsidiary from the beginning of the reporting period to disposal date areincluded in the Company’s consolidated statement of comprehensive income. The cash flowof the subsidiaries from the beginning of the reporting period to disposal date is included inthe Company’s consolidated statement of cash flows.
When the Company loses control over an investee due to partial disposal or other reasons, theacquirer shall re-measure the remaining equity interests in the acquiree to its fair value at theacquisition date. The difference, between sums of consideration received for disposal equityshares and fair value of the remaining shares, and sums of share of net assets of the subsidiarycalculated continuously from the acquisition date or the combination date based on theprevious shareholding proportion and goodwill, shall be recognized as investment income forthe period when the Company loses control over acquiree. When the previously-held equityinvestment is accounted for under the equity method, any other comprehensive incomepreviously recognized in relation to the acquiree’s equity changes, and other equity changesrather than changes from net profit, other comprehensive income and profit distribution, shallbe transferred to investment income for the current period when the Company loses controlover acquiree. Other comprehensive income arising from re-measurement of defined benefitplan is excluded. When the Company loses control over a subsidiary due to the increase ofcapital from other investors and thus the shareholding ratio of the Company declines,accounting treatment shall be in accordance with the above-mentioned principles.
2. Disposing subsidiaries by multiple transactions
Where the Company loses control of a subsidiary in multiple transactions in which it disposesof its subsidiary in stages, in determining whether to account for the multiple transactions asa single transaction, the Company shall consider all of the terms and conditions of thetransactions and their economic effects. One or more of the following may indicate that theCompany shall account for the multiple arrangements as a single transaction:
(a) Arrangements are entered into at the same time or in contemplation of each other;(b) Arrangements work together to achieve an overall commercial effect;(c) The occurrence of one arrangement is dependent on the occurrence of at least oneother arrangement; and(d) One arrangement considered on its own is not economically justified, but it iseconomically justified when considered together with other arrangements.
If each of the multiple transactions forms part of a bundled transaction which eventuallyresults in loss of control of the subsidiary, these multiple transactions shall be accounted for
as a single transaction. In the consolidated financial statements, the difference between theconsideration received and the corresponding proportion of the subsidiary’s net assets in eachtransaction prior to the loss of control shall be recognized in other comprehensive income andtransferred to the profit or loss when the Company eventually loses control of the subsidiary.
If each of the multiple transactions which eventually results in loss of control of the subsidiarydo not form part of a bundled transaction, apply the treatment of disposing partial long-termequity investments in a subsidiary without loss of control prior to the loss of control. Afterthe loss of control, apply the treatment of disposing the subsidiary in common cases.
(3) Acquiring the subsidiaries’ equity interest held by non-controlling shareholdersWhere the Company has acquired a subsidiary’s equity interest held by non-controllingshareholders, the difference between the increase in the cost of long-term investments as aresult of acquisition of non-controlling interests and the share of net assets of the subsidiarycalculated continuously from the acquisition date or the combination date based on the newshareholding proportion shall be adjusted to the capital reserve( capital premium or sharepremium) in the consolidated financial statements. If the balance of the capital reserve is notsufficient, any excess shall be adjusted against retained earnings.
(4) Disposing portion of equity investments in subsidiaries without losing control
When the Company disposes of a portion of the long-term equity investments in a subsidiarywithout loss of control, the difference between the amount of the consideration received andthe corresponding portion of the nest assets of the subsidiary calculated continuously fromthe acquisition date or the combination date related to the disposal of the long-term equityinvestments shall be adjusted to the capital reserve (capital premium or share premium) in theconsolidated financial statements. If the balance of the capital reserve is not sufficient, anyexcess shall be adjusted against retained earnings.
(7) Classification of joint venture arrangements and accounting treatment
Joint venture arrangements are divided into joint operations and joint ventures.
When the Company is a joint venture party of a joint venture arrangement and have the assetsrelated to the arrangement and assumes the liabilities related to the arrangement, it is a jointoperation.
The Company confirms the following items related to the share of interest in the jointoperation and performs accounting treatment in accordance with the relevant enterpriseaccounting standards:
a. Confirm the assets held by the company separately, and confirm the assets held jointly bythe Company's share;b. Recognize the liabilities assumed by the Company separately and the liabilities jointlyassumed by the company's share;c. Recognize the income generated by the sale of the Company’s share of common operatingoutput;d. Recognize the revenue generated from the sale of joint operations based on the Company'sshare;e. Confirm the expenses incurred separately and the expenses incurred in the joint operationaccording to the Company's share.
(8) Recognition of cash and cash equivalents
The term “cash” refers to the cash on hand and the unrestricted deposit. And the term “cashequivalents” refers to short-term (maturing within three months from acquisition) and highlyliquid investments that are readily convertible to known amounts of cash and which are subjectto an insignificant risk of change in value.
(9) Foreign currency transaction and translation of foreign currency financial statements
1. Foreign currency transaction
Foreign currency transactions are translated into RMB at the current rate at the day oftransactions.
The foreign currency monetary items shall be translated at the spot exchange rate on the balancesheet date. The balance of exchange arising from the difference between the spot exchange rateon the balance sheet date and the spot exchange rate at the time of initial recognition or prior tothe balance sheet date, except those arising from the raising of special foreign debt for thepurchase or construction of capitalizable assets thus shall be capitalized according to theborrowing costs capitalization principle, shall be recorded into the profits and losses at thecurrent period.
2. Translation of foreign currency financial statements
The asset and liability items in the statement of financial position shall be translated at a spotexchange rate on the balance sheet date. Among the owner's equity items, except the ones as"undistributed profits", others shall be translated at the spot exchange rate at the time when theyare incurred. The income and expense items in the income statement shall be translated usingan exchange rate that is determined in a systematic and reasonable manner and approximatesthe spot exchange rate on the transaction date.
When disposing an overseas business, the Company shall shift the balance, which is presentedunder the items of the owner's equities in the statement of financial position and arises from thetranslation of foreign currency financial statements related to this oversea business, into thedisposal profits and losses of the current period.
(10) Financial instruments
Financial instruments include financial assets, financial liabilities and equity instruments
1. Classification of financial instruments
The Company shall classify financial assets on the basis of both the entity’s business model formanaging the financial assets and the contractual cash flow characteristics of the financial assetas: financial assets measured at amortized cost, financial assets measured at fair value throughother comprehensive income and financial assets measured at fair value through profit or lossat initial measurement.
A financial asset shall be measured at amortized cost if both of the following conditions are met.The financial asset is held within a business model whose objective is to hold financial assetsin order to collect contractual cash flows and the contractual terms of the financial asset giverise on specified dates to cash flows that are solely payments of principal and interest on theprincipal amount outstanding.
A financial asset shall be measured at fair value through other comprehensive income if both ofthe following conditions are met. The financial asset is held within a business model whoseobjective is achieved by both collecting contractual cash flows and selling financial assets andthe 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.
The Company may make an election at initial recognition for non-trading equity instrument
investments whether it is designated as a financial asset (equity instrument) that is measured atfair value through other comprehensive income. The designation is made on the basis of a singleinvestment, and the related investment meets the definition of an equity instrument from theissuer's perspective.
Other financial assets other than these are classified as financial assets measured at fair valuethrough profit or loss. At the initial recognition, in order to eliminate or significantly reduceaccounting mismatches, financial assets that should be classified as measured at amortizedvalue or financial assets measured at fair value through other comprehensive income can bedesignated as financial assets measured at fair value through profit or loss.
The Company shall classify financial liabilities as financial liabilities measured at amortizedcost and financial liabilities measured at fair value through profit or loss at initial measurement.In the initial recognition, in order to eliminate or significantly reduce accounting mismatches,financial assets can be designated as financial assets measured at fair value and their changesincluded in the current profit and loss. According to the above conditions, the Company doesnot have such designated financial assets.
The Company may, at initial recognition, designate a financial liability as measured at fair valuethrough profit or loss because either:
(a) it eliminates or significantly reduces an accounting mismatch;(b) a group of financial liabilities or financial assets and financial liabilities is managed andits performance is evaluated on a fair value basis, in accordance with a documented riskmanagement or investment strategy, and information about the group is providedinternally on that basis to the entity’s key management personnel;(c) the financial liability contains embedded derivatives that need to be separated.
2. Recognition and measurement of financial instruments
(1) Financial assets measured at amortized cost
Financial assets measured at amortized cost include notes receivables, accounts receivables,other receivables, long-term receivables, debt investments, etc. At initial recognition, theCompany shall measure a financial asset at its fair value plus or minus transaction costs that are
directly attributable to the acquisition or issue of the financial asset. The Company shallmeasure account receivables at their transaction price if the account receivables do not containa significant financing component and accounts receivables that the company has decided notto consider for a financing component of no more than one year.
Interests calculated by using the effective interest method during the holding period shall be.recognized in profit or loss.
When recovering or disposing the receivables, the difference between the price obtained and.the carrying value shall be recognized in current profit or loss.
(2) Financial assets measured at fair value through other comprehensive income (debtinstruments)Financial assets measured at fair value through other comprehensive income (debt instruments)include receivables financing, other debt investments, etc. At initial recognition, the Companyshall measure a financial asset at its fair value plus transaction costs that are directly attributableto the acquisition or issuance of the financial asset. The financial assets are subsequentlymeasured at fair value. Changes in fair value are included in other comprehensive incomeexcept for interest calculated using the effective interest method, impairment losses or gainsand exchange gains and losses. When the financial assets are derecognized, the accumulatedgain or loss previously recognized in other comprehensive income is transferred from othercomprehensive income and recognized in profit or loss.
(3) Financial assets at fair value through other comprehensive income (equityinstruments)Financial assets at fair value through other comprehensive income (equity instruments). includeother equity instrument investments, etc. At initial recognition, the Company shall measure afinancial asset at its fair value plus transaction costs that are directly attributable to theacquisition or issue of the financial asset. The financial assets are subsequently measured at fairvalue. Changes in fair value are included in other comprehensive income. The dividendsobtained are recognized in profit and loss.
When the financial assets are derecognized, the accumulated gain or loss previously. recognizedin other comprehensive income is transferred from other comprehensive income and recognizedin retained earnings.
(4) Financial assets at fair value through profit or loss
Financial assets at fair value through profit or loss include transactional financial assets,derivative financial assets, other non-current financial assets, etc.
The Company shall measure the financial assets at fair value at initial recognition. Transactioncosts are recognized in profit or loss. Changes in fair value are included in profit or loss.
When the financial assets are derecognized, the difference between the fair value and the.initially recorded amount is recognized as investment income, and the gains and losses fromchanges in fair value are adjusted.
(5) Financial liabilities at fair value through profit or loss
Financial liabilities at fair value through profit or loss include current financial liabilities,derivative financial liabilities, etc.
The Company shall measure the financial assets at fair value at initial recognition. Transactioncosts are recognized in profit or loss. Changes in fair value are included in profit or loss.
When the financial liabilities are derecognized, the difference between the fair value and the.initially recorded amount is recognized as investment income, and the gains and losses fromchanges in fair value are adjusted.
(6) Financial liabilities measured at amortized cost
Financial liabilities measured at amortized cost include short-term borrowings, notes. payables,accounts payables, other payables, long-term borrowings, bonds payables, long-term payables.
At initial recognition, the Company shall measure a financial liability at its fair value plus.
transaction costs that are directly attributable to the acquisition or issue of the financial asset.Interests calculated by using the effective interest method during the holding period shall be.recognized in profit or loss.
When the financial liabilities are derecognized, the difference between the price obtained and.the carrying value shall be recognized in profit and loss.
3. Termination of recognition of financial assets and financial assets transfer
When one of the following conditions is met, the company terminates the recognition offinancial assets.- Termination of contractual rights to receive cash flows from financial assets;- The financial assets have been transferred, and almost all the risks and rewards in theownership of the financial assets have been transferred to the transferee;- The financial assets have been transferred. Although the company has neither transferrednor retained almost all the risks and rewards of the ownership of the financial assets, ithas not retained control of the financial assets.
If it retained nearly all of the risks and rewards related to the ownership of the financial asset,it shall not stop recognizing the financial asset.
To judge whether the transfer of a financial asset can satisfy the conditions as prescribed inthese Standards for stopping the recognition of a financial asset, the Company shall follow theprinciple of the substance over form. Transfer of an entire financial asset can be divided intopartial financial assets transfer and entire financial asset transfer. If the transfer of an entirefinancial asset satisfies the conditions for de-recognition, the difference between the amountsof the following 2 items shall be recorded in the profits and losses of the current period:
(1) The book value of the transferred financial asset; and
(2) The sum of consideration received from the transfer, and the accumulative amount of thechanges of the fair value originally recorded in the owners' equities (in the event that thefinancial asset involved in the transfer is a financial asset Available-for-sale).
If the transfer of partial financial asset satisfies the conditions to derecognize, the entire bookvalue of the transferred financial asset shall, between the portion whose recognition has beenstopped and the portion whose recognition has not been stopped (under such circumstance,the service asset retained shall be deemed as a portion of financial asset whose recognition
has not been stopped), be apportioned according to their respective relative fair value, and thedifference between the amounts of the following 2 items shall be included into the profits andlosses of the current period :
(1) The book value of the portion whose recognition has been stopped; and
(2) The sum of consideration of the portion whose recognition has been stopped, and theportion of the accumulative amount of the changes in the fair value originally recorded in theowner's equities which is corresponding to the portion whose recognition has been stopped (inthe event that the financial asset involved in the transfer is a financial asset Available-for-sale).
If the transfer of financial assets does not satisfy the conditions to stop the recognition, it shallcontinue to be recognized as financial assets and the consideration received shall berecognized as financial liabilities.
4. Termination of recognition of financial liabilities
Only when the prevailing obligations of a financial liability are relieved in all or in part maythe recognition of the financial liability be terminated in all or partly.
Where the Company (debtor) enters into an agreement with a creditor so as to substitute theexisting financial liabilities by way of any new financial liability, and if the contractualstipulations regarding the new financial liability is substantially different from that regardingthe existing financial liability, it shall terminate the recognition of the existing financial liability,and shall at the same time recognize the new financial liability.
Where the Company makes substantial revisions to part or all of the contractual stipulationsof the existing financial liability, it shall terminate the recognition of the existing financialliability or part of it, and at the same time recognize the financial liability after revising thecontractual stipulations as a new financial liability.
Where the recognition of a financial liability is totally or partially terminated, the Companyshall include into the profits and losses of the current period the difference between thecarrying amount which has been terminated from recognition and the considerations it has paid(including the non-cash assets it has transferred out and the new financial liabilities it hasassumed).
Where the Company buys back part of its financial liabilities, it shall distribute, on the date ofrepurchase, the carrying amount of the whole financial liabilities in light of the comparativelyfair value of the part that continues to be recognized and the part whose recognition has alreadybeen terminated. The gap between the carrying amount which is distributed to the part whoserecognition has terminated and the considerations it has paid (including the noncash assets ithas transferred out and the new financial liabilities it has assumed) shall be recorded into theprofits and losses of the current period.
5. Determination of the fair value of the financial assets (liabilities)
If active markets for the financial instruments exist, the fair value shall be measured by quotedprices in the active markets. If active markets for the financial instruments do not exist,valuation techniques shall be applied for the measurement. The Company uses valuationtechniques appropriate in the circumstances and for which sufficient data are available tomeasure fair value. The Company chooses relevant observable inputs for identical or similarassets or liabilities. Only when relevant observable inputs are unavailable or should theCompany use unobservable inputs for the asset or liability.
6. Impairment provision of the financial assets
The Company recognize the expected credit loss on financial assets measured at amortized cost,financial assets measured at fair value through other comprehensive income (debt instruments),financial guarantee contract, and so on, on the individual or portfolio basis.The Company considers all reasonable and relevant information, including past events, currentconditions, and forecasts of future economic conditions, and uses the risk of default as theweight to calculate the probability-weighted amount of present value of difference between thecash flow receivable from the contract and the cash flow expected to be received to confirm theexpected credit loss.
If the credit risk of the financial instrument has increased significantly since the initialconfirmation, the Company shall measure the loss allowance for a financial instrument at anamount equal to the lifetime expected credit losses. If the credit risk on a financial instrumenthas not increased significantly since initial recognition, the Company shall measure the lossallowance for that financial instrument at an amount equal to 12-month expected credit losses.The increase or reversal amount of loss allowance thus formed shall be included in the currentprofits and losses as impairment losses or gains.
The measurement of expected credit loss depends on whether there is a significant increase incredit risk of financial assets since the initial recognition.
The company compares the risk of default on the balance sheet date of financial instrumentswith the risk of default on the date of initial recognition to determine the relative change in therisk of default during the expected life of the financial instrument to assess whether there is asignificant increase in credit risk of financial assets since the initial recognition. Generally, theCompany believes that the credit risk of the financial instrument has significantly increasedover 30 days after the due date, unless there is solid evidence that the credit risk of the financialinstrument has not increased significantly since initial recognition.
If the credit risk of a financial instrument at the reporting date is relatively low, the Companyconsiders that the credit risk of the financial instrument has not increased significantly since theinitial recognition.
If there is objective evidence indicating that a certain financial asset has been impaired, theCompany shall recognize provision for impairment of the financial asset individually.
For account receivables and contract assets recognized according to Accounting Standards forBusiness Enterprises No. 14 Revenue (2017), whether a significant financing component iscontained or not, the Company shall always measure the loss allowance at an amount equal tolifetime expected credit losses.
For lease receivables, the Company shall always measure the loss allowance at an amount equalto lifetime expected credit losses.
(11) Inventory
1. Inventory classification
Inventories include material in transit, raw material, turnover materials, finished goods, workin process, issue commodity, materials for consigned processing, etc.
Inventory is initially measured at cost. Inventory cost includes purchase cost, processing costand other expenditures incurred to bring inventory to its current location and state.
2. Valuation method for inventory dispatched
The weighted average method is used to confirm the actual cost of the inventories dispatched.
3. The basis for confirming the net realizable value of inventories and the methods to makeprovision for the inventory impairment lossOn the balance sheet date, inventories shall be measured at the lower of cost and net realizablevalue. When the cost of inventories is higher than its net realizable value, provision forinventory impairment loss shall be made. The net realizable value refers to the amount of theestimated selling price of the inventory minus the estimated costs that will occur at the time ofcompletion, estimated selling expenses, and relevant taxes in daily activities.
The net realizable value of inventories (finished products, stock commodity, material, etc.) heldfor direct selling in the daily business activity shall be calculated by deducting the estimatedsale expense and relevant taxes from the estimated sale price of inventories; The net realizablevalue of inventories for further processing in the daily business activity shall be calculated bydeducting the estimated cost of completion, estimated sale expense and relevant taxes from theestimated sale price of inventories; The net realizable value of inventories held for the executionof sales contracts or labor contracts shall be calculated on the ground of the contract price. Ifthe Company holds more inventories than the quantities subscribed in the sales contract, the netrealizable value of the excessive part of the inventories shall be calculated on the ground of thegeneral sales price.
After the inventory impairment is withdrawn, if the factors that previously affected the write-down of the inventory value have disappeared, causing the net realizable value of the inventoryto be higher than its book value, it shall be reversed within the amount of the inventoryimpairment that has been withdrawn, and the reverted amount shall be included in the currentprofit and loss.
4. Inventory system
The Company uses perpetual inventory system.
5. Amortization of low-valued consumables and packing materials
(1) Low-valued consumables shall be amortized in full amount on issuance.
(2) Packing materials shall be amortized in full amount on issuance.
(12) Contract asset
1. Recognition methods and criteria of contract assets
When either party to a contract has performed, the Company shall present the contract in thestatement of financial position as a contract asset or a contract liability, depending on therelationship between the Company’s performance and the customer’s payment. If theCompany have the rights to receive consideration (the right is conditioned on factors other
than the passage of time) by transferring goods or services to a customer, the entity shallpresent the contract as a contract asset. Contract assets and contract liabilities under the samecontract are disclosed in net amount. An entity shall present any unconditional rights toconsideration (only the passage of time is required) separately as a receivable.
2. Expected credit loss of contract assets
For the accounting policy of the expected credit loss of contract assets, please refer to Note
(10) 6. Impairment provision of the financial assets under “3. Significant accounting policiesand accounting estimates”.
(13) Long-term equity investment
1. Criteria of joint control and significant influence
Joint control is the contractually agreed sharing of control of an arrangement, which exists onlywhen decisions about the relevant activities require the unanimous consent of the parties sharingcontrol. If the Company and other joint venture have joint control of the investee and have rightsto the net assets of the investee, the investee is a joint venture of the Company.
Significant influence is the power to participate in the financial and operating policy decisionsof the investee but not control or join control of those policies. If the Company could exertsignificant influence over the investee, the investee is the associate of the Company.
2. The initial cost of long-term equity investment from business acquisition
(1) Long-term equity investment from business acquisition
For a business combination under common control, if the consideration of the combination issatisfied by paying cash, transfer of non-cash assets or assumption of liabilities and issue ofequity securities, the initial investment cost of the long-term equity investment shall be theabsorbing party’s share of the carrying amount of the owner’s equity of the party being absorbedin the consolidated financial statements of the ultimate controlling party at combination date.When an investor becomes capable of exercising control over an investee under commoncontrol due to additional investment or other reasons, the initial investment cost shall be theabsorbing party’s share of the carrying amount of the owner’s equity of the party being absorbedin the consolidated financial statements of the ultimate controlling party at combination date.The difference between the initial investment cost and the carrying amount of the previously-held equity investment, together with the additional investment cost for new shares atcombination date, shall be adjusted to the capital reserve. If the balance of capital reserve is notsufficient, any excess shall be adjusted to retained earnings.
For a business combination not under common control, the initial investment cost of the long-term equity investment shall be the acquisition cost at the acquisition date. When an investorbecomes capable of exercising control over an investee due to additional investment or otherreasons, the initial investment cost under the cost method shall be the carrying amount ofpreviously-held equity investment together with the additional investment cost.
(2) The initial cost of the long-term equity investment other than from business acquisition
The initial cost of a long-term equity investment obtained by making payment in cash shall bethe purchase cost which is actually paid.
The initial cost of a long-term equity investment obtained on the basis of issuing equitysecurities shall be the fair value of the equity securities issued.
3. Subsequent measurement and profit or loss recognition
(1) Cost method
The Company adopts cost method for the long-term investment in subsidiary company. Underthe cost method, an investing enterprise shall, in accordance with the attributable share of thenet profits or losses of the invested entity, recognize the investment profits or losses except thedividend declared but unpaid, which is included in the payment when acquiring the investment.
(2) Equity method
A long-term equity investment in an associate or a joint venture shall be accounted for usingthe equity method. Where the initial investment cost of a long-term equity investment exceedsinvestor’s interest in the fair values of an investee’s identifiable net assets at the acquisition date,no adjustment shall be made to the initial investment cost. Where the initial cost is less than theinvestor’s interest in the fair values of the investee’s identifiable net assets at the acquisitiondate, the difference shall be credited to profit or loss for the current period, and the cost of long-term equity investment shall be adjusted accordingly.
The Company shall recognize its share of the investee’s net profits or losses, as well as its shareof the investee’s other comprehensive income, as investment income or losses and othercomprehensive income, and adjust the carrying amount of the investment accordingly. Thecarrying amount of the investment shall be reduced by the portion of any profit distributions orcash dividends declared by the investee that is attributable to the investor. The investor’s shareof the investee’s owners’ equity changes, other than those arising from the investee’s net profitor loss, other comprehensive income or profit distribution, and the carrying amount of the long-term equity investment shall be adjusted accordingly.
The investor shall recognize its share of the investee’s net profits or losses after makingappropriate adjustments according to the Company’s accounting principles and operating periodbased on the fair values of the investee’s identifiable net assets at the acquisition date. Duringthe holding period, if the investee makes consolidated financial statements, the Company shallcalculate its share based on the investee’s net profit, other comprehensive income and theamount of other owners' equity attribute to the investee in the consolidated financial statements.
The unrealized profits or losses resulting from transactions between the investor and itsassociate or joint venture shall be eliminated in proportion to the investor’s equity interest inthe investee, based on which investment income or losses shall be recognized, except thetransaction of investment or sale of assets is a business. Any losses resulting from transactionsbetween the investor and investee which are attributable to asset impairment shall be recognizedin full.
The company’s net losses incurred by joint ventures or associates, in addition to assumingadditional loss obligations, are limited to the book value of long-term equity investments andother long-term equity that essentially constitutes net investment in joint ventures or associates.If a joint venture or associated enterprise realizes net profits in the future, the company resumesrecognizing its share of profits after the share of profits makes up for the share of unrecognizedlosses.
(3) Disposal of long-term equity investment
When disposing long-term equity investment, the difference between the proceeds actuallyreceived and the carrying amount shall be recognized in profit or loss for the current period.
Partial disposal of long-term equity investments accounted for by the equity method, and theremaining equity is still accounted for by the equity method, the other comprehensive incomerecognized by the original equity method shall be carried forward according to the same basisas the direct disposal of related assets or liabilities by the investee. All other changes in theinterests of the holders are carried forward to the current profit and loss on a pro rata basis.
When an investor can no longer exercise joint control of or significant influence over aninvestee due to partial disposal of equity investment or other reasons, any other comprehensiveincome previously recognized shall be accounted for on the same basis as would have beenrequired if the investee had directly disposed of the related assets or liabilities for the currentperiod upon discontinuation of the equity method. Other owner's equity change shall be
transferred into profit or loss of current period in full when the Company cease to adopt theequity method.
When an investor can no longer control the investee due to partial disposal, when the individualfinancial statements are prepared, the remaining equity can exercise joint control or significantinfluence on the investee, the equity method shall be used to account for the remaining equity.It is deemed that the equity method is adopted for adjustment since the acquisition, and the othercomprehensive income recognized before the control of the investee is obtained is carriedforward on the same basis as the direct disposal of related assets or liabilities by the investee,because the equity method is used for accounting. The confirmed changes in other owners’equity are carried forward to the current profit and loss on a pro rata basis. If the remainingequity cannot exercise joint control or exert significant influence on the investee, it shall berecognized as a financial asset, and the difference between its fair value and book value on thedate when control is lost shall be included in the current profit and loss, and othercomprehensive income and other owner’s interests previously recognized shall be transferredto profit or loss in full.
If the equity investment of a subsidiary is disposed through multiple transactions until it losescontrol, which is a package transaction, each transaction shall be accounted as a transaction thatdisposes of the equity investment of the subsidiary and loses control. Each transaction beforethe loss of control, the difference between the disposal price and the book value of thecorresponding disposed part of long-term equity investment is firstly recognized as othercomprehensive income in individual financial statements, and then transferred to the currentprofit and loss when the control is lost. If it is not a package transaction, each transaction shallbe accounted separately.
(14) Investment property
Investment property refers to real estate held for the purpose of earning rent or capitalappreciation, or both, including leased land use rights, land use rights held and prepared fortransfer after appreciation, and leased buildings (Buildings that are leased after completion ofself-construction or development activities and buildings that are being used for rental in thefuture during construction or development).
Subsequent expenditures related to investment property are included in the cost of investmentproperty when the relevant economic benefits are likely to flow in and their costs can be reliablymeasured. Otherwise, they are included in the current profit and loss when incurred.
The company uses the cost model to measure the existing investment property. For investmentproperty measured according to the cost model - the rental building adopts the samedepreciation policy as the fixed assets of the company, and the land use right for rental isamortized according to the same amortization policy as the intangible assets.
(15) Fixed assets
1. Recognition of Fixed assets
The term "fixed assets" refers to the tangible assets held for the sake of producing commodities,rendering labor service, renting or business management and of which useful life is in excessof one fiscal year. No fixed asset may be recognized unless it simultaneously meets theconditions as follows:
(1) The economic benefits pertinent to the fixed asset are likely to flow into the enterprise; and
(2) The cost of the fixed asset can be measured reliably.
Fixed assets are initially measured at cost (and considering the impact of expected dismantlingcost factors).
Subsequent expenditures related to fixed assets are included in the cost of fixed assets when therelated economic benefits are likely to flow in and their costs can be reliably measured; thebook value of the replaced part is derecognized; all other subsequent expenditures are incurredshall be included in the current profit and loss.
2. Fixed assets depreciation
Fixed assets are depreciated under the straight-line method. The depreciation rate is determinedaccording to the category of assets, the useful life and the expected residual rate. If thecomponents of the fixed assets have different useful lives or provide the economic benefits in adifferent way, then different depreciation rate or method shall be applied and the depreciationof the components shall be calculated separately.
Fixed assets acquired under financial leasing is depreciated over the useful life if it is reasonablycertain that the ownership of the leased assets will be acquired upon expiry of lease, or over theshorter of lease term and useful life if it is not reasonably certain that the ownership of the leasedassets will be acquired upon expiry of lease.
Details of classification, depreciation period, residual value rate and annual depreciation rateare as follows:
| Category | Depreciation method | Depreciation Period | Residual Value Rate (%) | Depreciation Rate (%) |
| Plants and Buildings | straight line method | 10-45 years | 0.00 | 2.22-10.00 |
| Machinery | straight line method | 10-28 years | 3.00 | 3.46-9.70 |
| Transportation and other equipment | straight line method | 8-22 years | 3.00 | 4.41-12.13 |
3. Disposal of fixed assets
When a fixed asset is disposed, or it is expected that no economic benefits will be generatedthrough use or disposal, the recognition of fixed asset shall be de terminated. The amount ofdisposal income of fixed assets raising from sell, transfer, scrapping or damage shall be includedin the current profit and loss after deducting its book value and related taxes.
(16) Construction in progress
Construction in progress is measured at the actual cost incurred. The actual cost includesconstruction costs, installation costs, borrowing costs that meet the capitalization conditions,and other necessary expenditures incurred before the construction in progress reaches itsintended use status.
Construction in progress is transferred to fixed asset when it has reached its working conditionfor its intended use and depreciation will be accrued from the next month.
(17) Borrowing costs
1. Principle of the recognition of capitalized borrowing costs
Where the borrowing costs incurred to an enterprise can be directly attributable to theacquisition and construction or production of assets eligible for capitalization, it shall becapitalized and recorded into the costs of relevant assets. Other borrowing costs shall berecognized as expenses on the basis of the actual amount incurred, and shall be recorded intothe current profits and losses.
Assets eligible for capitalization refer to the fixed assets, investment property, inventories andother assets, of which the acquisition and construction or production may take quite a long timeto get ready for its intended use or for sale.
2. The capitalization period of borrowing costs
The capitalization period shall refer to the period from the commencement to the cessation ofcapitalization of the borrowing costs, excluding the period of suspension of capitalization of theborrowing costs.
The borrowing costs shall not be capitalized unless they simultaneously meet the followingrequirements:
(1) The asset disbursements have already incurred, which shall include cash, transferred non-cash assets or interest bearing debts paid for the acquisition and construction or productionactivities for preparing assets eligible for capitalization;
(2) The borrowing costs has already incurred; and
(3) The acquisition and construction or production activities which are necessary to prepare theasset for its intended use or sale have already started.
When the qualified asset under acquisition and construction or production is ready for theintended use or sale, the capitalization of the borrowing costs shall be ceased.
3. The suspension of capitalization of borrowing costs
Where the acquisition and construction or production of a qualified asset is interruptedabnormally and the interruption period lasts for more than 3 months, the capitalization of theborrowing costs shall be suspended. If the interruption is a necessary step for making thequalified asset under acquisition and construction or production ready for the intended use orsale, the capitalization of the borrowing costs shall continue. The borrowing costs incurredduring such period shall be recognized as expenses, and shall be recorded into the profits andlosses of the current period, till the acquisition and construction or production of the assetrestarts.
4. Method of calculating the capitalization rate and capitalized amount of borrowing costsFor interest expense (minus the income of interests earned on the unused borrowing loans as adeposit in the bank or investment income earned on the loan as a temporary investment) andthe ancillary expense incurred to a specifically borrowed loan, those incurred before a qualifiedasset under acquisition, construction or production is ready for the intended use or sale shall becapitalized at the incurred amount when they are incurred, and shall be recorded into the costsof the asset eligible for capitalization.
The Company shall calculate and determine the to-be-capitalized number of interests on thegeneral borrowing by multiplying the weighted average asset disbursement of the part of theaccumulative asset disbursements minus the general borrowing by the capitalization rate of thegeneral borrowing used. The capitalization rate shall be calculated and determined in light ofthe weighted average interest rate of the general borrowing.
During the capitalization period, the exchange difference between the principal and interest ofthe foreign currency special loan is capitalized and included in the cost of the assets that meetthe capitalization conditions. Exchange differences arising from the principal and interest of
foreign currency borrowings other than foreign currency special borrowings are included in thecurrent profits and losses.
(18) Intangible Assets
1. Measurement of Intangible Assets
(1) Initial measurement is based on cost upon acquisition
The cost of an intangible asset on acquisition include the purchase price, relevant taxes andother necessary disbursements which may be directly attributable to bringing the intangibleasset to the conditions for the expected purpose.
(2) Subsequent Measurement
The Company shall analyze and judge the beneficial period of intangible assets upon acquisition.
Intangible assets with finite beneficial period shall be amortized under the straight-line methodduring the period when the intangible asset can bring economic benefits to the enterprise. If itis unable to estimate the beneficial period of the intangible asset, it shall be regarded as anintangible asset with uncertain service life and shall not be amortized.
2. Estimated useful lives of intangible assets with limited useful lives
| Item | Estimated useful life | Criteria |
| Land use right | 50 years | Land use right certificate |
3. Determination of intangible assets with uncertain useful lives
As at the balance sheet date, the Company has no intangible assets with uncertain useful lives.
4. Classification criteria for internal research phase and development phase
The expenditures for its internal research and development projects of an enterprise shall beclassified into research expenditures and development expenditures.
Research phase refers to the phase of creative and planned investigation to acquire and study toacquire and understand new scientific or technological knowledge.
Development phase refers to the phase during which the result of research phase or otherknowledge is applied into certain projects or designs for the manufacturing of new orsubstantially improved material, device and product before commercial manufacturing and use.
(19) Impairment of long-term assetsFor long-term assets such as long-term equity investments, Investment property under the cost
model, fixed assets, construction in progress, intangible assets with limited useful lives etc.,the Company shall perform impairment tests at the period end if there is clear indication ofimpairment. If the recoverable amounts of long-term assets are less than their carrying amounts,the carrying amounts of the assets shall be written down to their recoverable amounts. Thewrite-downs are recognized as impairment losses and charged to current profit and loss. Therecoverable amounts of long-term assets are the higher of their fair values less costs to sell andthe present values of the future cash flows expected to be derived from the assets. TheCompany shall estimate its recoverable amount on an individual basis. Where it is difficult todo so, it shall determine the recoverable amount of the assets on the basis of the asset group towhich the asset belongs. The term "assets group” refers to a minimum combination of assetsby which the cash flows could be generated independently
The goodwill, intangible assets with uncertain useful life and intangible assets not meeting theexpected condition for use they shall be subject to an impairment test at least at the end of eachyear.
When the Company makes an impairment test of assets, it shall, as of the purchasing day,apportion the carrying value of the business reputation formed by merger of enterprises to therelevant asset groups by a reasonable method. Where it is difficult to do so, it shall beapportioned to the relevant combinations of asset groups. When apportioning the carrying valueof the business reputation to the relevant asset groups or combinations of asset groups, it shallbe apportioned on the basis of the proportion of the fair value of each asset group or combinationof asset groups to the total fair value of the relevant asset groups or combinations of asset groups.Where it is difficult to measure the fair value reliably, it shall be apportioned on the basis of theproportion of the carrying value of each asset group or combination of asset groups to the totalcarrying value of the relevant asset groups or combinations of asset groups.
When making an impairment test on the relevant asset groups or combination of asset groupscontaining business reputation, if any evidence shows that the impairment of asset groups orcombinations of asset groups is possible, the Company shall first make an impairment test onthe asset groups or combinations of asset groups not containing business reputation, calculatethe recoverable amount, compare it with the relevant carrying value and recognize thecorresponding impairment loss. Then the Company shall make an impairment test of the assetgroups or combinations of asset groups containing business reputation, and compare thecarrying value of these asset groups or combinations of asset groups (including the carryingvalue of the business reputation apportioned thereto) with the recoverable amount. Where therecoverable amount of the relevant assets or combinations of the asset groups is lower than thecarrying value thereof, it shall recognize the impairment loss of the business reputation.
Impairment losses on long-term assets shall not be reversed in subsequent accounting periodsonce recognized.
(20) Long-term deferred expense
The long-term deferred expense refers to the expenses incurred but shall be borne by currentand subsequent accounting period, which is more than one year.
The long-term deferred expense shall be amortized over its beneficiary period evenly.
(21) Contract liability
When either party to a contract has performed, the Company shall present the contract in thestatement of financial position as a contract asset or a contract liability, depending on therelationship between the Company’s performance and the customer’s payment. If a customerpays consideration, or the Company has a right to an amount of consideration before theCompany transfers a good or service to the customer, the Company shall present the contractas a contract liability. Contract assets and contract liabilities under the same contract aredisclosed in net amount.
(22) Employee benefits
1. Accounting treatment for short employee benefit
The Company shall recognize, in the accounting period in which an employee provides service,actually occurred short-term employee benefits as a liability, with a corresponding charge to theprofit or loss or cost of an asset for the current period.
Payments made by an enterprise of social security contributions for employees, payments ofhousing funds, and union running costs employee education costs provided in accordance withrelevant requirements shall, in the accounting period in which employees provide services, becalculated according to prescribed bases and percentages in determining the amount ofemployee benefits.
The employee welfare expenses incurred by the company are included in the current profit andloss or related asset costs based on the actual amount when they actually occur. Among them,non-monetary benefits are measured at fair value.
2. Accounting treatment of post-employment benefits
(1) Defined contribution plan
The Company shall recognize, in the accounting period in which an employee provides
service, pension fund and unemployment fund for employees as a liability according to thelocal government regulations. The amount shall be calculated according to local prescribedbases and percentages in determining the amount of employee benefits, with acorresponding charge to the profit or loss or cost of an asset for the current period.
(2) Defined benefit plan
None.
3. Accounting treatment of termination benefits
The Company shall recognize an employee benefits liability for termination benefits, with acorresponding charge to the profit or loss for the current period, at the earlier of the followingdates: when the Company cannot unilaterally withdraw the offer of termination benefits becauseof an employment termination plan or a curtailment proposal; or when the Company recognizescosts or expenses related to a restructuring that involves the payment of termination benefits.
(23) Estimated liabilities
The obligation pertinent to a contingency shall be recognized as an estimated liability when thefollowing conditions are satisfied simultaneously:
(1) That obligation is a current obligation of the enterprise;
(2) It is likely to cause any economic benefit to flow out of the enterprise as a result ofperformance of the obligation; and
(3) The amount of the obligation can be measured in a reliable way.
The estimated debts shall be initially measured in accordance with the best estimate of thenecessary expenses for the performance of the current obligation.
To determine the best estimate, an enterprise shall take into full consideration of the risks,uncertainty, time value of money, and other factors pertinent to the Contingencies. If the timevalue of money is of great significance, the best estimate shall be determined after discountingthe relevant future outflow of cash.
The best estimate shall be conducted in accordance with the following situations, respectively:
If there is a continuous range for the necessary expenses and if all the outcomes within thisrange are equally likely to occur, the best estimate shall be determined in accordance with theaverage estimate within the range, that is, the average of the upper and lower limit.
If there is not a sequent range for the necessary expenses and if the outcomes within this rangeare not equally likely to occur, the best estimate shall be determined as follows:
(1) If the Contingencies concern a single item, it shall be determined in the light of the mostlikely outcome.
(2) If the Contingencies concern two or more items, the best estimate shall be calculated anddetermined in accordance with all possible outcomes and the relevant probabilities.
When all or some of the expenses necessary for the liquidation of an estimated debts of anenterprise is expected to be compensated by a third party, the compensation shall be separatelyrecognized as an asset only when it is virtually certain that the reimbursement will be obtained.The amount recognized for the reimbursement shall not exceed the book value of the estimateddebts.
The company reviews the book value of the estimated liabilities on the balance sheet date. Ifthere is conclusive evidence that the book value does not reflect the current best estimate, thebook value will be adjusted according to the current best estimate.
(24) Revenue
1.The general principle of revenue recognition and measurement
The company shall recognize revenue when (or as) the company satisfies a performanceobligation when (or as) the customer obtains control of a promised good or service. Control ofa promised good or service refers to the ability to direct the use of, and obtain substantially allof the remaining benefits from it.
If the contract contains two or more performance obligations, the company shall allocate thetransaction price to each individual performance obligation based on the relative proportion ofthe stand-alone selling price of the goods or services promised by each individual performanceobligation on the date of the contract. The company measures revenue based on the transactionprice allocated to each individual performance obligation.
The transaction price is the amount of consideration to which the company expects to be entitledin exchange for transferring promised goods or services to a customer, excluding amountscollected on behalf of third parties or amounts expected to be returned to customers. Thecompany shall consider the terms of the contract and its customary business practices todetermine the transaction price. When determining the transaction price, the company shallconsider the effects of all of the following: variable consideration, the existence of a significantfinancing component in the contract, non-cash consideration, and consideration payable to acustomer. The company determines the transaction price that includes variable consideration atan amount that does not exceed the amount of accumulated recognized revenue that is unlikelyto be materially reversed when the relevant uncertainty is eliminated. If there is a significant
financing component in the contract, the company shall recognize revenue at an amount thatreflects the price that a customer would have paid for the promised goods or services if thecustomer had paid cash for those goods or services when (or as) they transfer to the customer,and use the effective interest method to amortize the difference between the transaction priceand the contract consideration during the contract period. If the interval between the transfer ofcontrol and the payment by the customer does not exceed one year, the financing componentwill not be considered.
The company transfers control of a good or service over time and, therefore, satisfies aperformance obligation and recognizes revenue over time, if one of the following criteria is met.Otherwise, the company satisfies the performance obligation at a point in time.(a) the customer simultaneously receives and consumes the benefits provided by the company’sperformance as the company performs;(b) the company’s performance creates or enhances an asset that the customer controls as theasset is created or enhanced; or(c) the company’s performance does not create an asset with an alternative use to the companyand the company has an enforceable right to payment for performance completed to date.The company shall recognize revenue over time by measuring the progress towards completesatisfaction of that performance obligation, except where the performance progress cannot bereasonably determined. The company considers the nature of the goods or services and adoptsthe output method or the input method to determine the progress of performance. Where theperformance progress cannot be reasonable determined, but the company expects to recover thecosts incurred in satisfying the performance obligation, the company shall recognize revenueonly to the extent of the costs incurred until such time that it can reasonably measure theoutcome of the performance obligation.For performance obligations satisfied at a certain point in time, the company shall recognizerevenue at the point when the customer obtains control of the relevant goods or services. Todetermine the point in time at which a customer obtains control of a promised goods or services,the company shall consider requirements as follows:
(a) The company has a present right to payment for the promised goods or services and thecustomer is presently obliged to pay for that;(b) The company has transferred the legal title of the goods to the customer, that is, the customerhas the legal title to the goods;(c) The company has transferred physical possession of the goods to the customer, that is, thecustomer has taken possession of the goods;(d) The company has transferred the significant risks and rewards of ownership of the goods tothe customer, that is, the customer has the significant risks and rewards of ownership of thegoods;
(e) The customer has accepted the promised goods or services.
2.The specific criteria of revenue recognition and measurement
Commodity sales contracts between companies and customers usually only includeperformance obligations for the transfer of steel and other commodities or service. This type ofperformance obligation is a performance obligation performed at a certain point in time. Thecompany recognizes revenue when the customer obtains control of the relevant goods orservices. When judging whether the customer has obtained control of goods or services, thecompany considers the following signs:
The company obtains the present right of collection of receivables, the legal ownership of thegoods is transferred to the customer, the physical assets of the goods are transferred to thecustomer, the company transfers the main risks and rewards of the ownership of the goods tothe customer, and the customer has accepted the goods.
(25) Contract costs
Contract costs include costs to fulfill a contract and incremental costs of obtaining a contract.
If the costs incurred in fulfilling a contract with a customer are not within the scope of anotherStandard, for example, Inventories, Property, Plant and Equipment or Intangible Assets, thecompany shall recognize an asset from the costs incurred to fulfil a contract only if those costsmeet all of the following criteria:
(a) the costs relate directly to a contract or to an expected contract;(b) the costs generate or enhance resources of the Company that will be used in satisfyingperformance obligations in the future; and(c) the costs are expected to be recovered.
The company shall recognize as an asset the incremental costs of obtaining a contract with acustomer if the company expects to recover those costs.
An asset recognized in accordance with contract costs shall be amortized in consistent with thetransfer to the customer of the goods or services to which the asset relates. The company mayrecognize the incremental costs of obtaining a contract as an expense when incurred if theamortization period of the asset is one year or less.
The company shall recognize an impairment loss in profit or loss to the extent that the carryingamount of an asset related to contract assets exceeds:
(a) the remaining amount of consideration that the company expects to receive in exchange forthe goods or services to which the asset relates; less(b) the costs that relate directly to providing those goods or services and that have not beenrecognized as expenses.
The company shall recognize in profit or loss a reversal of some or all of an impairment losspreviously recognized when the impairment conditions no longer exist or have improved. Theincreased carrying amount of the asset shall not exceed the carrying amount that if noimpairment loss had been recognized previously.
(26) Government Subsidies
1. Types
A government subsidy means the monetary or non-monetary assets obtained free of charge bythe Company from the government. Government subsidies consist of the government subsidiespertinent to assets and government subsidies pertinent to income.
Government subsidies related to assets are government subsidies whose primarycondition is that an entity qualifying for them should purchase, construct or otherwiseacquire long-term assets. The government subsidies related to incomes refers togovernment subsidies other than those related to assets.
The standard of the Company recognizing the government subsidies related to assets is:
an entity qualifying for them should purchase, construct or otherwise acquire long-termassets.
The standard of the Company recognizing the government subsidies related to income is:
In addition to government subsidies related to assets, government subsidies that have beenclearly targeted for subsidies.
For the the government subsidy which does not specify the subsidy object in governmentdocument will be classified as asset-related or income-related judgment basis: if a long-term asset can be formed, the government subsidy part corresponding to the asset valueshall be regarded as an asset-related subsidy, the rest are regarded as governmentsubsidies related to income; if it is difficult to distinguish, the whole government subsidiesare regarded as government subsidies related to income.
2. Recognition
Government subsidies related to assets are recognized when it actually received, andtransferred the deferred income to the current profit and loss according to the estimatedusing period of the long-term assets from when the long-term assets are available.
Government subsidies related to income are recognized when it actually received. Whichto compensate the relevant expenses or losses in subsequent periods shall be included inthe current non-operating income during the period when the relevant expenses arerecognized. Which to compensate expenses or losses already incurred shall be recognizedin current non-operating income.
3. Accounting treatment
Government subsidies related to assets shall be recognized by deducting the subsidies atthe caring amount of the assets or recognized as deferred income. Subsidies thatrecognized as deferred income shall be recognized in profit or loss on a systematic basisover the periods during the useful lives of the relevant assets (Subsidies related to dailyactivities should be recorded in Other Income. Subsidies that unrelated to daily activitiesshould be recorded in Non-operating Income).
The government subsidies related to incomes to compensate future expenses, shall berecognized as deferred income and transferred to current profit or loss (Subsidies relatedto daily activities should be recorded in Other Income. Subsidies that unrelated to dailyactivities should be recorded in Non-operating Income) in the period during which theexpenses compensation is recognized or deduct relevant cost or loss. Governmentsubsidies to compensate expenses or losses already incurred shall be recognized in currentprofit and loss (Subsidies related to daily activities should be recorded in Other Income.Subsidies unrelated to daily activities should be recorded in Non-operating Income) ordeduct relevant cost or loss.
The policy discount loans obtained by the company are divided into the following twosituations and are separately accounted for:
(a) If the government allocates discounted funds to the loan bank and the loan bankprovides loans to the company at a policy preferential interest rate, the company willtake the actual amount of the loan received as the entry value of the loan and calculatethe relevant borrowing costs based on the loan principal and the policy preferentialinterest rate.(b) If the government directly allocates the discounted funds to the company, thecompany will offset the relevant borrowing costs with the corresponding discounts.
(27) Deferred tax assets and deferred tax liabilities
Income tax includes current income tax and deferred income tax. Except for income tax arisingfrom business mergers and transactions or events that are directly included in owner's equity(including other comprehensive income), the company will include current income tax anddeferred income tax in current profit and loss.
Deferred income tax assets and deferred income tax liabilities are calculated and confirmedbased on the difference (temporary difference) between the tax base of assets and liabilitiesand their book value.
An enterprise shall recognize the deferred income tax assets arising from a deductibletemporary difference to the extent of the amount of the taxable income which it is most likelyto be obtained and which can be deducted from the deductible temporary difference. As forany deductible loss or tax deduction that can be carried forward to the next year, thecorresponding deferred income tax assets shall be determined to the extent that the amount offuture taxable income to be offset by the deductible loss or tax deduction to be likely obtained.
All taxable temporary differences shall be recognized as deferred tax liabilities with certainlimited exceptions.
Exceptions when deferred tax assets and deferred tax liabilities are not recognized include:
initial recognition of goodwill; initial recognition of an asset or liability in a transaction orevent that is not a business combination and at the time of the transaction, affects neitheraccounting profit nor taxable profit (tax loss).
For taxable temporary differences related to investments in subsidiaries, associates and jointventures, deferred income tax liabilities are recognized, unless the company can control thetiming of the reversal of the temporary differences and the temporary differences are likelynot to be transferred back in the foreseeable future. For deductible temporary differencesrelated to investments in subsidiaries, associates and joint ventures, when the temporarydifferences are likely to be reversed in the foreseeable future and are likely to be used to deductthe taxable income of deductible temporary differences in the future, income tax assets arerecognized.On the balance sheet date, deferred income tax assets and deferred income tax liabilities aremeasured at the applicable tax rate during the period when the relevant assets are expected tobe recovered or the relevant liabilities are expected to be recovered in accordance with theprovisions of the tax law.On the balance sheet date, the company reviews the book value of deferred income tax assets.If it is probable that sufficient taxable income cannot be obtained in the future to offset thebenefits of deferred income tax assets, the book value of the deferred income tax assets shallbe written down. When it is possible to obtain sufficient taxable income, the reduced amountshall be reversed.When the Company has the statutory right to offset and intend to offset or obtain assets andpay off liabilities at the same time, the current income tax assets and current income taxliabilities are presented at the net amount after offsetting.
An entity shall offset deferred tax assets and deferred tax liabilities if, and only if: (a) the entityhas a legally enforceable right to set off current tax assets against current tax liabilities; and(b) the deferred tax assets and the deferred tax liabilities relate to income taxes levied by thesame taxation authority on either:(i) the same taxable entity; or (ii) different taxable entitieswhich intend either to settle current tax liabilities and assets on a net basis, or to realize theassets and settle the liabilities simultaneously, in each future period in which significantamounts of deferred tax liabilities or assets are expected to be settled or recovered.
(28) Leases
Accounting policy from January 1, 2021A lease is a contract whereby the lessor transfers the right of usage on asset to the lessee forconsideration within a certain period of time.
On the contract commencement date, the company evaluates whether the contract is a lease orincludes a lease. If one party in the contract transfers the right to control the use of one or moreidentified assets within a certain period in exchange for consideration, the contract is a leaseor includes a lease.If the contract contains multiple separate leases at the same time, the company will split thecontract and conduct accounting treatment for each separate lease. If the contract includes bothlease and non-lease parts, the company, as the lessor and lessee, will split the lease and non-lease parts for accounting treatment.For rent reductions, exemptions, deferred payments and other rental reductions directly causedby the COVID-19 epidemic and reached on existing lease contracts, if the following conditionsare met at the same time, the company adopts a simplified method for all lease selections, anddoes not evaluate whether there is a lease change. Lease classification is not reassessed:
? The lease consideration after the concession is reduced or basically unchanged from thatbefore the concession. The lease consideration may be undiscounted or discounted at thediscount rate before the concession;? The concession is only for lease payments payable before June 30, 2022, an increase in leasepayments payable after June 30, 2022 does not affect meeting this condition, and a decreasein lease payments payable after June 30, 2022 does not satisfy this condition;? The other terms and conditions of the lease have not changed significantly after taking intoaccount both qualitative and quantitative factors.
1. The company as lessee
(1) Right-of-use assets
On the beginning date of the lease term, the Group recognizes the right to use assets for leasesother than short-term leases and low value asset leases. The right of use assets are initiallymeasured at cost. This cost includes:
1) Initial measurement amount of lease liabilities;
2) For the lease payment paid on or before the beginning of the lease term, if there is leaseincentive, the relevant amount of lease incentive enjoyed shall be deducted;
3) Initial direct costs incurred;
4) The estimated costs incurred for dismantling and removing the leased assets, restoringthe site where the leased assets are located or restoring the leased assets to the stateagreed in the lease terms.Depreciation method of right of use assets the company adopts the straight-line method fordepreciation. If it can be reasonably determined that the ownership of the leased asset will beobtained at the expiration of the lease term, the company shall accrue depreciation within theremaining useful life of the leased asset; otherwise, the leased asset shall be depreciated withinthe shorter of the lease term and the remaining useful life of the leased asset.For the principles which company determines whether the right-of-use asset has been impaired,please refer to Note (19) Impairment of long-term assets under “3. Significant accountingpolicies and accounting estimates”.
(2) Lease liabilities
At the beginning of the lease term, the company recognizes the present value of the unpaidlease payments as lease liabilities, except for short-term leases and low value asset leases. Thelease liability is initially measured at the present value of outstanding lease payments. Leasepayments include:
1) Fixed payments (including actual fixed payments), if there is a lease incentive, deductthe relevant amount of the lease incentive;
2) Variable lease payments that depend on an index or ratio;
3) The expected payment according to the residual value of the guarantee provided by the
company;
4) The exercise price of the purchase option, provided that the company is reasonably
certain that the option will be exercised;
5) Payments for exercising the option to terminate the lease, provided that the lease termreflects that the company will exercise the option to terminate the lease.
The company uses the interest rate implicit in the lease as the discount rate, but if the interestrate implicit in the lease cannot be reasonably determined, the company's incrementalborrowing rate is used as the discount rate.The company calculates the interest expense of the lease liability in each period of the leaseterm according to the fixed periodic interest rate, and includes it into the current profit andloss or the cost of related assets.
Variable lease payments that are not included in the measurement of lease liabilities areincluded in the current profit and loss or the cost of related assets when they are actuallyincurred.After the commencement date of the lease term, the Company shall re-measure the leaseliabilities and adjust the corresponding right-of-use assets under the following circumstances.If the book value of the right-of-use assets has been reduced to zero, but the lease liabilitiesstill need to be further reduced, the difference is included in the current profit and loss:
? When there is a change in the evaluation results of the purchase option, lease renewaloption or termination option, or the actual exercise of the aforementioned options isinconsistent with the original evaluation result, the Company shall calculate the leasepayment amount after the change and the revised discounted value. Remeasure the leaseliability at the present value of the rate calculation;? When the actual fixed payment changes, the estimated payable amount of the residualvalue guarantee changes, or the index or ratio used to determine the lease payment changes,the company calculates the present value based on the changed lease payment and theoriginal discount rate Remeasure the lease liability. However, where changes in leasepayments result from changes in floating interest rates, a revised discount rate is used tocalculate the present value.
(3) Short-term leases and low-value asset leases
The company chooses not to recognize right-of-use assets and lease liabilities for short-termleases and low-value asset leases, and includes the relevant lease payments in the current profitand loss or related asset costs on a straight-line basis over each period of the lease term. Short-term leases refer to leases with a lease term of not more than 12 months and excludingpurchase options on the commencement date of the lease term. A low-value asset lease refersto a lease with a lower value when a single leased asset is a brand-new asset. If the companysubleases or expects to sublease the leased assets, the original lease is not a low-value assetlease.
(4) Lease change
If the lease changes and the following conditions are met at the same time, the company willaccount for the lease change as a separate lease:
?The lease modification expands the scope of the lease by adding the right to use one or moreleased assets;
?The increased consideration is equivalent to the amount adjusted by the individual price ofthe expanded part of the lease scope according to the contract.If the lease change is not accounted for as a separate lease, on the effective date of the leasechange, the company re-allocates the consideration of the contract after the change, re-determines the lease term, and calculates the current value based on the lease payment afterthe change and the revised discount rate. value to remeasure the lease liability.If the lease change leads to the narrowing of the lease scope or the shortening of the lease term,the company will reduce the book value of the right-of-use asset accordingly, and include therelevant gains or losses on partial or complete termination of the lease into the current profitand loss. If other lease changes result in re-measurement of lease liabilities, the Companyadjusts the book value of the right-of-use asset accordingly.
(5) Rent concessions related to COVID-19
For those adopting the simplified method of rent reduction related to the new crownpneumonia epidemic, the company does not assess whether there is a lease change, andcontinues to calculate the interest expense of the lease liability at the same discount rate asbefore the reduction and include it in the current profit and loss, and continue to use the samediscount rate as before the reduction. The right-of-use asset is depreciated using the samemethod as before. In the event of rent reduction or exemption, the company will treat thereduced rent as the variable lease payment amount. When the original rent payment obligationis relieved by reaching a concession agreement, the discounted amount at the undiscounted orpre-discount discount rate will be used to offset the cost of relevant assets. or expenses, andadjust the lease liabilities accordingly; if the rent payment is delayed, the company offsets thelease liabilities recognized in the previous period when the actual payment is made.For short-term leases and low-value asset leases, the company continues to include the originalcontract rent in the cost or expense of the relevant assets in the same way as before theconcession. In the event of rent reduction or exemption, the company will take the reducedrent as the variable lease payment, and write down the relevant asset costs or expenses duringthe reduction or exemption period; if the rent payment is delayed, the company will recognizethe rent payable as payable during the original payment period. When the actual payment ismade, the payables recognized in the previous period are offset.
2. The company as lessor
On the lease commencement date, the Company classifies leases into finance leases andoperating leases. A financial lease is a lease that essentially transfers almost all the risks andrewards associated with the ownership of the leased asset, regardless of whether the ownershipis ultimately transferred. Operating leases refer to leases other than finance leases. When thecompany acts as a sublease lessor, it classifies the sublease based on the right-of-use assetarising from the original lease.
(1) Accounting treatment of operating leases
Lease receipts from operating leases are recognized as rental income on a straight-line basisover each period of the lease term. The Company capitalizes the initial direct expensesincurred in relation to operating leases, and is amortized and included in the current profit andloss on the same basis as the rental income is recognized during the lease term. Variable leasepayments not included in lease receipts are included in profit or loss for the period when theyare actually incurred. If the operating lease is changed, the company will account for it as anew lease from the effective date of the change, and the advance receipts or lease receivablesrelated to the lease before the change are regarded as the receipts of the new lease.
(2) Accounting treatment of financial lease
On the lease commencement date, the Company recognizes the finance lease receivables forthe finance lease and derecognizes the finance lease assets. When the Company initiallymeasures the finance lease receivables, the net investment in the lease is regarded as the entryvalue of the finance lease receivables. The net lease investment is the sum of the unguaranteedresidual value and the present value of the lease receipts not yet received at the commencementdate of the lease term, discounted at the interest rate implicit in the lease.The company calculates and recognizes the interest income in each period of the lease periodaccording to the fixed periodic interest rate. For the derecognition and impairment of financelease receivables, please refer to Note (10) Financial instruments under “3. Significantaccounting policies and accounting estimates”.Variable lease payments that are not included in the net lease investment measurement areincluded in the current profit and loss when they are actually incurred.If the financial lease is changed and the following conditions are met at the same time, thecompany will account for the change as a separate lease:
? The change expands the scope of the lease by increasing the right to use one or more of theleased assets;
? The increased consideration is equivalent to the stand-alone price of the expanded lease area,adjusted for the contract.If the modification of a financial lease is not accounted for as a separate lease, the Companyshall deal with the modified lease under the following circumstances:
? If the change takes effect on the lease inception date, the lease will be classified as anoperating lease, and the company will account for it as a new lease from the effective date ofthe lease change, and use the net lease investment before the effective date of the lease changeas the book value of the leased asset;? If the change takes effect on the lease commencement date, the lease will be classified as afinancial lease, and the Company will conduct accounting treatment in accordance with thepolicy on revising or renegotiating contracts in Note (10) Financial instruments under “3.Significant accounting policies and accounting estimates”.
(3) Rent concessions related to COVID-19
For operating leases that adopt the simplified method of rent reduction related to the newcrown pneumonia epidemic, the company continues to recognize the original contract rent asrental income in the same way as before the reduction; if rent reduction or exemption occurs,the company treats the reduced rent as a variable lease The payment amount shall be offsetfrom the lease income during the reduction or exemption period; if the rental collection isdelayed, the company shall recognize the receivable rent as an account receivable during theoriginal collection period, and offset the receivable recognized in the previous period when itis actually received.For financial leases that adopt the simplified method of rent reduction related to the new crownpneumonia epidemic, the company continues to calculate the interest at the same discount rateas before the reduction and recognize it as lease income. In the event of rent reduction orexemption, the company will treat the reduced rent as variable lease payments, and when aconcession agreement is reached, etc. to waive the right to receive the original rent, thediscounted amount at the undiscounted or pre-discount discount rate will be used to offset theoriginally recognized amount. For lease income, the part that is not enough to be written offis included in investment income, and the finance lease receivables are adjusted accordingly;if the rent is delayed, the company offsets the finance lease receivables recognized in theprevious period when it is actually received.
Accounting policies before January 1, 2021
Leases are classified into finance leases and operating leases. A finance lease is a lease thattransfers substantially all the risks and rewards associated with ownership of an asset.Operating leases refer to leases other than finance leases.For rent reductions, exemptions, deferred payments and other rental reductions directly causedby the COVID-19 epidemic and reached on existing lease contracts, if the followingconditions are met at the same time, the company adopts a simplified method for all leaseoptions. Reassess the lease classification:
? The lease consideration after the concession is reduced or basically unchanged from thatbefore the concession. The lease consideration may be undiscounted or discounted at thediscount rate before the concession;? The concession is only for lease payments payable before June 30, 2021, an increase in leasepayments payable after June 30, 2021 does not affect the satisfaction of this condition, and adecrease in lease payments payable after June 30, 2021 does not satisfy this condition;
? The other terms and conditions of the lease have not changed significantly after taking intoaccount both qualitative and quantitative factors.
1. Accounting treatment of operating lease
(1) The lease fee paid by the company for renting assets shall be apportioned on a straight-line basis over the entire lease period without deducting the rent-free period, and shall beincluded in the current expenses. The initial direct expenses related to leasing transactionspaid by the company are included in the current expenses.When the asset lessor bears the lease-related expenses that should be borne by the company,the company deducts the part of the expenses from the total rent, and the deducted rentalexpenses are apportioned during the lease period and included in the current expenses.For operating leases that adopt the simplified method of rent reduction related to the newcrown pneumonia epidemic, the company continues to include the original contract rent in thecost or expense of the relevant assets in accordance with the same method as before thereduction. In the event of rent reduction or exemption, the company will treat the reduced rentas contingent rent, which will be included in profit or loss during the period of reduction orexemption; if the rent payment is delayed, the company will recognize the rent payable aspayable during the original payment period, and offset the previous period when the actualpayment is made. Confirmed payables.
(2) The lease fee charged by the company for leasing assets shall be apportioned on a straight-line basis over the entire lease term without deducting the rent-free period, and recognized aslease-related income. The initial direct expenses related to leasing transactions paid by thecompany are included in the current expenses; if the amount is larger, they shall be capitalizedand included in the current income in installments on the same basis as the lease-relatedincome recognition during the entire lease period.When the company bears the lease-related expenses that should be borne by the lessee, thecompany deducts the part of the expenses from the total rental income, and distributes thededucted rental expenses within the lease term.For operating leases that adopt the simplified method of rent reduction related to the newcrown pneumonia epidemic, the company continues to recognize the original contract rent asrental income in the same way as before the reduction; if there is rent reduction or exemption,the company will treat the reduced rent as contingent rent , and offset the lease income duringthe reduction or exemption period; if the rental collection is delayed, the company recognizesthe rent receivable as an account receivable during the original collection period, and offsetsthe account receivable recognized in the previous period when it is actually received.
2. Accounting treatment of financial leasing
(1) Financial leased assets:
On the lease start date, the company takes the lower of the fair value of the leased asset andthe present value of the minimum lease payment as the entry value of the leased asset, and theminimum lease payment as the long-term payable. The recorded value, and the difference isregarded as unrecognized financing expense. The company adopts the effective interest ratemethod to amortize the unrecognized financing expenses during the asset lease period andinclude them in the financial expenses. The initial direct costs incurred by the company areincluded in the value of the leased assets.For the financing leases that adopt the simplified method of rent reduction related to the newcrown pneumonia epidemic, the company will continue to recognize the unrecognizedfinancing expenses as the current financing expenses at the same discount rate as before thereduction, and continue to use the same method as before the reduction. The leased assets areaccrued for depreciation. For the rent reduction or exemption that occurs, the company regardsthe reduced rent as contingent rent, and when a concession agreement is reached to release theoriginal rent payment obligation, it is included in the current profit and loss, and the long-termpayables are adjusted accordingly. Or discounted at the discount rate before the discount and
included in the current profit and loss and adjusted the unrecognized financing expenses; ifthe rent payment is delayed, the company will offset the long-term payables recognized in theprevious period when the actual payment is made.
(2) Assets leased out by financing:
On the lease start date, the company recognizes the difference between the sum of the financiallease receivables, the sum of the unguaranteed residual value and its present value asunrealized financing income, and it is recognized as an unrealized financing income in eachperiod when the rent is received in the future. rental income. The initial direct expenses relatedto the lease transaction incurred by the company are included in the initial measurement of thefinance lease receivables, and the amount of income recognized during the lease period isreduced.For finance leases that adopt the simplified method of rent reduction related to the new crownpneumonia epidemic, the Company continues to recognize unrealized financing gains as leaseincome at the same interest rate embedded in the lease as before the reduction. In the event ofrent reduction or exemption, the company will treat the reduced rent as contingent rent. Whena concession agreement is reached, etc., when the original rent collection right is waived, theoriginally recognized lease income will be offset, and the insufficient offset will be includedin investment income, and adjusted accordingly. Long-term receivables, or discounted at thediscount rate before discount and included in the current profit and loss and adjusted forunrealized financing income; if the rental collection is delayed, the company will offset thelong-term receivables recognized in the previous period when it is actually received.
(29) Discontinuing operation
Discontinuing operation is a component that has been disposed or classified as held for saleby the Company, and can be distinguished separately in operating and preparing financialstatements when one of the following conditions is met:
(1) The component stands for an independent main business or a major business area;
(2) The component is a part of disposal plan of an independent main business or a majorbusiness area;
(3) The component is a subsidiary which is acquired only for sale again.
The profit and loss from continuing operations and the profit and loss from discontinuedoperations are separately listed in the income statement. Operational gains and losses such asimpairment losses and reversal amount and disposal gains and losses from discontinuedoperations are reported as discontinued operation gains and losses. For the discontinued
operations reported in the current period, the Company adjusts the information previouslydisclosed as continuing operations profits and losses in the current financial statements as thediscontinued operations profits and losses for the comparable accounting period.
(30) Major accounting estimates and judgments
When preparing financial statements, the Company's management needs to use estimates andassumptions, which will affect the application of accounting policies and the amount of assets,liabilities, income and expenses. Actual conditions may differ from these estimates. Themanagement of the company continuously evaluates the judgment of key assumptions anduncertainties involved in the estimation, and the impact of changes in accounting estimateswill be recognized in the current and future periods.
The main uncertainties in the estimated amount are as follows:
(1) Measurement of expected credit losses
The company calculates the expected credit loss through the default risk exposure and theexpected credit loss rate, and determines the expected credit loss rate based on the defaultprobability and the default loss rate. When determining the expected credit loss rate, thecompany uses internal historical credit loss experience and other data, and adjusts thehistorical data in combination with current conditions and forward-looking information. Whenconsidering forward-looking information, the indicators used by the Company include the riskof economic downturn, the expected increase in unemployment rate, changes in the externalmarket environment, technological environment and customer conditions. The Companyregularly monitors and reviews assumptions related to the calculation of expected credit losses.
(2) Inventory Impairment
As mentioned in note (11) Inventory under “3 Significant accounting policies and accountingestimates”, the Company regularly estimates the net realizable value of the inventory, andrecognizes the difference in inventory cost higher than the net realizable value. Whenestimating the net realizable value of inventory, the Company considers the purpose of holdingthe inventory and uses the available information as the basis for estimation, including themarket price of the inventory and the Company's past operating costs. The actual selling price,completion cost, sales expenses and taxes of the inventory may change according to changesin market sales conditions, production technology, or the actual use of the inventory. Therefore,the amount of inventory depreciation reserve may change according to the above reasons.Adjustments to the inventory impairment will affect the current profit and loss.
(3) Impairment of other assets except inventory and financial assets
As mentioned in note (19) Long-term Asset Impairment under “3 Significant accountingpolicies and accounting estimates”, the company performs an impairment assessment onassets other than inventory and financial assets on the balance sheet date to determine whetherthe recoverable amount of the asset has fallen to a lower level than its book value. If thesituation shows that the book value of the long-term assets may not be fully recovered, therelevant assets will be deemed to be impaired and the impairment loss will be recognizedaccordingly.
The recoverable amount is the higher of the net value of the fair value of the asset (or assetgroup) minus the disposal expenses and the present value of the asset (or asset group) 'sexpected future cash flow. Because the Company cannot reliably obtain the public marketprice of assets (or asset groups), and cannot reliably and accurately estimate the fair value ofassets. Therefore, the Company regards the present value of the expected future cash flow asthe recoverable amount. When estimating the present value of future cash flows, it is necessaryto make a significant judgment on the output, selling price, related operating costs of theproducts produced by the asset (or asset group), and the discount rate used in calculating thepresent value. The Company will use all available relevant information when estimating therecoverable amount, including the prediction of output, selling price and related operatingcosts based on reasonable and supportable assumptions.
(4) Depreciation and amortization of assets such as fixed assets and intangible assetsAs described in note (15) Fixed Assets and note (18) Intangible Assets under “3 Significantaccounting policies and accounting estimates”, the company shall accrue depreciation for thefixed assets and amortization for intangible assets within the useful life after considering theirresidual value. The company regularly reviews the useful life of related assets to determinethe amount of depreciation and amortization expenses to be included in each reporting period.The useful life of assets is determined by the company based on past experience with similarassets and in combination with anticipated technological changes. If the previous estimateschange significantly, the depreciation and amortization expenses will be adjusted in the future.
(5) Deferred tax assets
When it is estimated that sufficient taxable income can be obtained in the future to use theunrecovered tax losses and deductible temporary differences, the relevant deferred tax assetsare calculated and confirmed on the basis of the applicable income tax rate during the periodwhen the asset is expected to be recovered and the amount of taxable income is limited todeductible tax losses and deductible temporary differences likely to be obtained by theCompany. The Company needs to use judgment to estimate the time and amount of future
taxable income, and make reasonable estimates and judgments on the future applicable incometax rate according to the current tax policy and other related policies to determine the deferredtax assets that should be recognized. If the time and amount of profits actually generated inthe future period or the actual applicable income tax rate are different from the management'sestimate, the difference will have an impact on the amount of deferred tax assets.
(31) Change of significant accounting policy and accounting estimate
A. Change of major accounting policy during this reporting period
(1) Implementation of “Accounting Standards for Business Enterprises No. 21-Lease”(revised in 2018)The Ministry of Finance revised the "Accounting Standards for Business Enterprises No. 21-Lease" in 2018. The Company implemented the new lease standard from January 1, 2021.According to the revised standard, for contracts that existed before the date of initialapplication, the company chooses not to reassess whether it is a lease or contains a lease onthe date of initial application.
? The company as lesseeThe company chooses to adjust the amount of retained earnings and other related items in thefinancial statements at the beginning of the year in which the new lease standards areimplemented for the first time according to the cumulative impact of the first implementationof the new lease standards, and does not adjust the comparable period information.For operating leases that existed before the date of initial application, the Company measuresthe lease liability on the date of initial application based on the present value of the remaininglease payments discounted at the company's incremental borrowing rate on the date of initialapplication, and for each lease, choose one of the following two methods to measure right-of-use assets.- Assuming that the book value of the new lease standard is adopted from the commencementdate of the lease term, the Company's incremental borrowing rate on the date of initialapplication is used as the discount rate.- An amount equal to the lease liability, adjusted as necessary for prepaid rent.For operating leases prior to the date of initial application, the Company applies one or moreof the following simplified treatments for each lease while applying the above method:
1) Leases that will be completed within 12 months of the date of initial execution are treatedas short-term leases;
2) When measuring lease liabilities, the same discount rate is used for leases with similarcharacteristics;
3) The measurement of the right-of-use asset excludes initial direct costs;
4) If there is an option to renew the lease or to terminate the lease, the lease term shall bedetermined according to the actual exercise of the option and other latest information beforethe date of initial execution;
5) As an alternative to the right-of-use asset impairment test, assess whether a contractinvolving a lease is a onerous contract before the date of initial application and adjust theright-of-use asset based on the amount of the loss allowance recorded on the balance sheet atthe date of initial application;
6) For lease changes that occurred before the date of initial implementation, no retrospectiveadjustment will be made, and accounting treatment will be carried out in accordance with thenew lease standards according to the final arrangements for lease changes.In measuring the lease liability, the Company discounts the lease payments using the lesseeincremental borrowing rate (weighted average: 3.93%) at 1 January 2021.
| Outstanding minimum lease payments for significant operating leases disclosed in the financial statements at December 31, 2020 | 2,473,024,885.15 |
| Present value discounted at the company's incremental borrowing rate as of January 1, 2021 | 1,500,739,782.73 |
| Lease liabilities under the new lease standard 1 January 2021 | 1,500,739,782.73 |
| The difference between the discounted present value of the above and the lease liability | 972,285,102.42 |
For the financial leases that existed before the date of initial application, the Company shallmeasure the right-of-use assets and lease liabilities according to the original book values ofthe assets under the financial lease and the financial lease payments payable on the date ofinitial application.
? The company as lessor
For sub-leases classified as operating leases before the date of initial application andsubsistence after the date of initial application, the Company re-evaluates on the date of initialapplication based on the remaining contract terms and terms of the original lease and sub-lease, and classifies them in accordance with the provisions of the new lease standards. If it isreclassified as a finance lease, the Company will account for it as a new finance lease.Except for sub-lease, the Company does not need to adjust its lease as a lessor in accordancewith the new lease standards. The Company conducts accounting treatment in accordance withthe new lease standards from the date of initial implementation.? The main impacts of the Company's implementation of the new lease standards onthe financial statements are as follows:
| Change of accounting policy content and reason | Affected items | Amount of impact on the balance on Jan 1, 2021 | |
| Consolidated | Parent Company | ||
| Adjustments made by the company as a lessee to operating leases that existed before the date of initial application | Right-of-use assets | 1,500,739,782.73 | 1,500,739,782.73 |
| Lease liability | 1,463,444,635.94 | 1,463,444,635.94 | |
| Non-current liabilities due within one year | 37,295,146.79 | 37,295,146.79 | |
(2) Implementation of “Interpretation of Accounting Standards for Business Enterprises No.14”The Ministry of Finance issued the “Interpretation of Accounting Standards for BusinessEnterprises No. 14” (Caikuai (2021) No.1, hereinafter referred to as “Interpretation No. 14”)at February 2, 2021, which be effective from the date of publication. The relevant businessnewly added from January 1, 2021 to the implementation date shall be adjusted according toInterpretation No. 14.
a. Government-Private Partnership (PPP) project contractInterpretation No. 14 is applicable to PPP project contracts that meet both the "dualcharacteristics" and "dual control" described in the Interpretation. Retrospective adjustmentsshould be made to relevant PPP project contracts that have been implemented beforeDecember 31, 2020 and have not been completed by the implementation date. If retrospectiveadjustment is not practical, the application shall be applied from the beginning of the earliestperiod of retrospective adjustment, and the cumulative impact adjustment shall be made in thecurrent year of the implementation date. The retained earnings at the beginning of the yearand other related items in the financial statements shall not be adjusted for the comparableperiod information. The implementation of this provision has not had a significant impact onthe financial position and operating results of the Company.
b. Reform of base rateInterpretation No. 14 simplifies the accounting treatment for situations in which the reform ofbase rate leads to changes in the basis for determining cash flows related to financialinstrument contracts and lease contracts. According to the provisions of the Interpretation, thebusiness related to the base rate reform that occurred before December 31, 2020 should beadjusted retrospectively, except where retrospective adjustment is not practical, and there isno need to adjust the data in the comparative financial statements of the previous period. Onthe implementation date of the interpretation, the difference between the original book value
and the new book value of financial assets, financial liabilities, etc., is included in the retainedearnings or other comprehensive income at the beginning of the annual reporting period inwhich the interpretation is implemented. The implementation of this provision has not had asignificant impact on the financial position and operating results of the Company.
(3) Implement the “Notice on Adjusting the Scope of Application of the Regulations on theAccounting Treatment of Rent Concessions Related to the New Coronary PneumoniaEpidemic”On June 19, 2020, the Ministry of Finance issued the "Regulations on the AccountingTreatment of Rent Reductions Related to the New Coronary Pneumonia Epidemic" (Cai Kuai[2020] No. 10), for rent concessions directly caused by the New Coronary Pneumoniaepidemic, such as rent reduction or exemption and deferral of payments, etc, businesses canchoose to simplify accounting treatment.On May 26, 2021, the Ministry of Finance issued the "Notice on Adjusting the ApplicationScope of the Regulations on the Accounting Treatment of Rent Concessions Related to theNew Coronary Pneumonia Epidemic" (Cai Kuai [2021] No. 9), which will be implementedon May 26, 2021. Adjusted the scope of application from “Concessions are only for leasepayments payable before 30 June 2021” to “Concessions are only for lease payments payableup to 30 June 2022”, with other applicable conditions unchanged.The company has chosen to adopt the simplified method for accounting treatment of all leasecontracts that meet the conditions before the adjustment of the scope of application, and alsoadopts the simplified method for accounting treatment of all similar lease contracts that meetthe requirements after the adjustment of the scope of application. Retrospective adjustmentswill be made to the relevant lease contracts for which the accounting treatment is changed, butthe comparative financial statement data of the previous period will not be adjusted; therelevant rental concessions that have occurred between January 1, 2021 and theimplementation date of the notice that have not been accounted for in accordance with thenotice, make adjustments based on the notification. The implementation of this provision hasnot had a significant impact on the financial position and operating results of the Company.
(4) Implementation of “Interpretation of Accounting Standards for Business Enterprises No.15”-Presentations related to centralized management of fundsThe Ministry of Finance issued the “Interpretation of Accounting Standards for BusinessEnterprises No. 15” (Cai Kuai (2021) No.35, hereinafter referred to as “Interpretation No. 15”)at December 30, 2021, which be effective from the date of publication and the financialstatement data of the comparable period shall be adjusted accordingly.
Interpretation No. 15 clearly stipulates how the balance involved in the centralized and unifiedmanagement of the funds of the parent company and member units through internal settlementcenters, financial companies, etc., should be presented and disclosed in the balance sheet.The implementation of this provision has not had a significant impact on the financial positionand operating results of the Company.B. Change of accounting estimate during the reporting periodNone.
C. The Adjustment of relevant items in the financial statements at the beginning of theyear in which the new lease standards are implemented for the first time
Consolidated Statement of Financial Position
| Items | Ending balance of the last period | Beginning balance of the current period | Adjusted amounts | ||
| Reclassification | Remeasurement | Total | |||
| Right-of-use assets | Not applicable | 1,500,739,782.73 | 1,500,739,782.73 | 1,500,739,782.73 | |
| Lease liability | 1,308,030,361.43 | 1,345,325,508.22 | 37,295,146.79 | 37,295,146.79 | |
| Non-current liabilities due within one year | Not applicable | 1,463,444,635.94 | 1,463,444,635.94 | 1,463,444,635.94 | |
Statement of Financial Position of the Parent Company
| Items | Ending balance of the last period | Beginning balance of the current period | Adjusted amounts | ||
| Reclassification | Remeasurement | Total | |||
| Right-of-use assets | Not applicable | 1,500,739,782.73 | 1,500,739,782.73 | 1,500,739,782.73 | |
| Lease liability | 1,308,030,361.43 | 1,345,325,508.22 | 37,295,146.79 | 37,295,146.79 | |
| Non- | Not applicable | 1,463,444,635.94 | 1,463,444,635.94 | 1,463,444,635.94 | |
| Items | Ending balance of the last period | Beginning balance of the current period | Adjusted amounts | ||
| Reclassification | Remeasurement | Total | |||
| current liabilities due within one year | |||||
4. Taxes
(1) Major type of taxes and corresponding tax rates
| Tax | Taxation Method | Tax Rate |
Value-added Tax (VAT)
| Value-added Tax (VAT) | The balance of output VAT calculated based on product sales and taxable services revenue in accordance with the tax laws after subtracting the deductible input VAT of the period | 6%, 9%, 13% |
| City maintenance and construction tax | Based on VAT actually paid | 7%, 5% |
| Enterprise income tax | Based on taxable profit | 25% |
(2) Tax Preference
None.
5. Notes to the consolidated financial statements
(3) Cash at bank and on hand
| Items | 20211231 | 201201231 |
| Cash on hand | 24,334.93 | 3,026.68 |
| Cash at bank | 6,299,074,728.55 | 9,229,414,568.44 |
| Including：Deposited with finance company | 4,429,656,296.13 | 5,712,508,430.36 |
| Other monetary funds | 2,531,996,674.37 | 3,897,249,320.14 |
| Total | 8,831,095,737.85 | 13,126,666,915.26 |
| Including: Total amount deposited abroad |
The details of restricted funds resulted from mortgage, pledge or freezing, restrictions onwithdrawals due to centralized management of funds, and monetary funds abroad whichrestricted from repatriation are as follows:
| Items | 20211231 | 20201231 |
Margin for bank acceptance bill
| Margin for bank acceptance bill | 1,492,236,674.37 | 3,306,509,320.14 |
| Margin for letter of credit | 125,000,000.00 | 78,000,000.00 |
| Time deposit or notice deposit for guarantee | 174,000,000.00 | 512,000,000.00 |
| Loan deposit | 760,000.00 | 740,000.00 |
| Restricted deposit | 740,000,000.00 | |
| Total | 2,531,996,674.37 | 3,897,249,320.14 |
(4) Notes receivable
1. Notes receivable disclosed by category
| Items | 20211231 | 20201231 |
| Bank acceptance bill | ||
| Commercial acceptance bill | 1,540,482,182.07 | |
| Total | 1,540,482,182.07 |
2. The company has no pledged notes receivable at the end of period
3. Notes receivable which has been endorsed or discounted by the company and havenot yet matured at the end of period
| Items | Amount confirmed at the end of the period | Amount not confirmed at the end of the period |
| Bank acceptance bill | ||
| Commercial acceptance bill | 1,133,932,188.36 | |
| Total | 1,133,932,188.36 |
4. No Notes receivable has been transferred into accounts receivable due to inability ofdrawer to meet acceptance bill at the end of period
(5) Accounts receivable
1. Accounts receivable disclosed by aging analysis
| Items | 20211231 | 20201231 |
Within 1 year (inclusive)
| Within 1 year (inclusive) | 256,620,123.38 | 245,084,695.28 |
| 1-2 years (inclusive) | 6,224,788.02 | 57,537,987.36 |
| 2-3 years (inclusive) | 57,059,913.27 | 251,762,129.07 |
| Over 3 years | 427,997,121.96 | 179,465,975.74 |
| Sub-total | 747,901,946.63 | 733,850,787.45 |
| Less: Provision for bad debts | 491,051,163.92 | 488,633,604.79 |
| Total | 256,850,782.71 | 245,217,182.66 |
2. Accounts receivable disclosed by bad debt accrual method
| Items | 20211231 | ||||
| Carrying amount | Provision for bad debts | Book value | |||
| Amount | Percentage (%) | Amount | Bad debts ratio (%) | ||
Provision for bad debtsindividually
| Provision for bad debts individually | 352,985,418.30 | 47.20 | 352,985,418.30 | 100.00 | |
| Provision for bad debts based on portfolio | 394,916,528.33 | 52.80 | 138,065,745.62 | 34.96 | 256,850,782.71 |
| Include: | |||||
| Portfolio 1: Aging portfolio | 394,916,528.33 | 52.80 | 138,065,745.62 | 34.96 | 256,850,782.71 |
| Total | 747,901,946.63 | 100.00 | 491,051,163.92 | 256,850,782.71 |
| Items | 20201231 | ||||
| Carrying amount | Provision for bad debts | Book value | |||
| Amount | Percentage (%) | Amount | Bad debts ratio (%) | ||
Provision for bad debtsindividually
| Provision for bad debts individually | 352,985,418.30 | 48.10 | 352,985,418.30 | 100.00 | |
| Provision for bad debts based on portfolio | 380,865,369.15 | 51.90 | 135,648,186.49 | 35.62 | 245,217,182.66 |
| Include: | |||||
| Portfolio 1: Aging portfolio | 380,865,369.15 | 51.90 | 135,648,186.49 | 35.62 | 245,217,182.66 |
| Total | 733,850,787.45 | 100.00 | 488,633,604.79 | 245,217,182.66 |
Accounts receivables tested for impairment individually:
| Items | 20211231 | |||
| Carrying amount | Provision for bad debts | Bad debts ratio (%) | Reason | |
| Brilliance Automotive Group Holdings Co., Ltd. | 305,223,081.12 | 305,223,081.12 | 100.00 | Bankruptcy reorganization |
| Benxi Nanfen Xinhe Metallurgical Furnace Material Co., Ltd | 47,762,337.18 | 47,762,337.18 | 100.00 | Discontinued |
| Total | 352,985,418.30 | 352,985,418.30 | ||
Provision for bad debts by portfolio: Aging analysisPortfolio accrual item: Aging portfolio
| Items | 20201231 | ||
| Account Receivable | Provision for bad debts | Bad debt ratio（%） | |
| Within 1 year (inclusive) | 256,620,123.38 | 2,566,201.23 | 1.00 |
| 1-2 years (inclusive) | 1,380,656.01 | 138,065.60 | 10.00 |
| 2-3 years (inclusive) | 1,942,837.68 | 388,567.53 | 20.00 |
| Over 3 years | 134,972,911.26 | 134,972,911.26 | 100.00 |
| Total | 394,916,528.33 | 138,065,745.62 | |
3. The provision for bad debts accrued, reversed or recovered in the current periodThe amount of bad debt provision accrued in the current period is RMB 2,417,959.10.
4. The amount of accounts receivable has been written off in the current period isRMB 399.97.
5. Top five debtors at the end of period
| Company | 20211231 | ||
| Amount | Percentage of total Accounts receivable (%) | Provision for bad debts | |
| The first | 305,223,081.12 | 40.81 | 305,223,081.12 |
| The second | 99,222,882.66 | 13.27 | 992,228.83 |
| The third | 80,584,547.00 | 10.77 | 805,845.47 |
| The fourth | 47,762,337.18 | 6.39 | 47,762,337.18 |
| The fifth | 30,777,943.03 | 4.12 | 307,779.43 |
| Total | 563,570,790.99 | 75.36 | 355,091,272.03 |
6. Accounts receivable derecognized due to the transfer of financial assetsNone.
7. The amount of assets and liabilities formed by transferring accounts receivable and
continuing to be involvedNone.
(6) Accounts receivable financing
1. Details of accounts receivable financing
| Items | 20211231 | 20201231 |
| Notes Receivable | 1,530,735,647.38 | 4,189,977,871.92 |
| Including: Bank acceptance bill | 1,530,735,647.38 | 1,875,594,439.85 |
| Commercial acceptance bill | 2,314,383,432.07 | |
| Accounts receivable | ||
| Total | 1,530,735,647.38 | 4,189,977,871.92 |
Notes: Accounts receivable financing reflects notes receivable and accounts receivablethat are measured at fair value through other comprehensive income on the balance sheetdate.
2. At the end of the period, the company has no commercial bills pledged in accountsreceivable financing
3. At the end of the period, the company's endorsed or discounted commercial bills in
accounts receivable financing accounting and not yet matured on the balance sheetdate are as follows
| Item | Amount confirmed at the end of the period | Amount not confirmed at the end of the period |
| Bank acceptance bill | 20,681,484,641.73 | |
| Commercial acceptance bill | ||
| Total | 20,681,484,641.73 |
4. No Notes receivable has been transferred into accounts receivable due to inability ofdrawer to meet acceptance bill at the end of period
(7) Prepayments
1. Prepayments disclosed by aging
| Aging | 20211231 | 20201231 | ||
| Amount | Percentage (%) | Amount | Percentage (%) | |
| Within 1 year | 977,541,107.55 | 98.31 | 2,096,232,640.14 | 99.44 |
| 1-2 years | 16,681,487.73 | 1.68 | 11,812,137.51 | 0.56 |
| 2-3 years | 147,750.36 | 0.01 | ||
| Over 3 years | ||||
| Total | 994,370,345.64 | 100.00 | 2,108,044,777.65 | 100.00 |
Notes: As of December 31, 2021, there were no outstanding prepayments over 1 year.
2. Top five prepaid companies at the end of period
| Name of the company | Amount | Percentage (%) |
| The First | 562,083,080.63 | 56.53 |
| The Second | 107,790,801.73 | 10.84 |
| The Third | 46,820,475.20 | 4.71 |
| The Fourth | 46,764,418.62 | 4.70 |
| The Fifth | 39,448,845.58 | 3.97 |
| Total | 802,907,621.76 | 80.75 |
(8) Other receivables
| Items | 20211231 | 20201231 |
| Interest receivables | 2,523,993.39 | 33,685,359.01 |
| Dividend receivables | ||
| Other receivables | 163,413,287.02 | 108,415,992.26 |
| Total | 165,937,280.41 | 142,101,351.27 |
1．Interest receivable
(1) Interest receivable disclosed by category
| Items | 20211231 | 20201231 |
Deposit interest
| Deposit interest | 2,523,993.39 | 33,685,359.01 |
| Subtotal | 2,523,993.39 | 33,685,359.01 |
| Less: provision for bad debts | ||
| Total | 2,523,993.39 | 33,685,359.01 |
(2) The company has no significant provision for overdue interest and bad debts.
2．Other receivables
(1) Other receivables disclosed by aging
| Items | 20211231 | 20201231 |
Within 1 year (inclusive)
| Within 1 year (inclusive) | 153,188,899.24 | 53,420,775.41 |
| 1-2 years (inclusive) | 4,959,792.25 | 42,323,476.43 |
| 2-3 years (inclusive) | 3,778,131.84 | 12,988,305.06 |
| Over 3 years | 74,186,274.07 | 68,267,923.76 |
| Sub-total | 236,113,097.40 | 177,000,480.66 |
| Less: Provision for bad debts | 72,699,810.38 | 68,584,488.40 |
| Total： | 163,413,287.02 | 108,415,992.26 |
（2）Information of provision for bad debts
| Provision for bad debts | Stage one | Stage two | Stage three | Total |
| 12-month expected credit losses | lifetime expected credit losses (Credit impairment has not occurred) | lifetime expected credit losses (Credit impairment has already occurred) | ||
| Beginning balance | 352,376.05 | 9,566,849.71 | 58,665,262.64 | 68,584,488.40 |
| Beginning balance in the current |
| Provision for bad debts | Stage one | Stage two | Stage three | Total |
| 12-month expected credit losses | lifetime expected credit losses (Credit impairment has not occurred) | lifetime expected credit losses (Credit impairment has already occurred) | ||
| period | ||||
| --Transfer to the second stage | -3,525.58 | 3,525.58 | ||
| --Transfer to the third stage | -3,048,177.80 | 3,048,177.80 | ||
| --Write-back to the second stage | ||||
| --Write-back to the first stage | ||||
| Accrual for the current period | 494,264.90 | 1,021,959.28 | 6,040,356.18 | 7,556,580.36 |
| Reversal during the current period | ||||
| Write-back of the current period | 316,314.67 | 1,238,763.21 | 1,886,180.50 | 3,441,258.38 |
| Write-off during the current period | ||||
| Other changes | ||||
| Ending balance | 526,800.70 | 6,305,393.56 | 65,867,616.12 | 72,699,810.38 |
Changes in the book value of other receivables are as follows:
| Book value | Stage one | Stage two | Stage three | Total |
| 12-month expected credit losses | lifetime expected credit losses (Credit impairment has not occurred) | lifetime expected credit losses (Credit impairment has already occurred) | ||
| Beginning balance | 97,730,535.73 | 20,604,580.70 | 58,665,364.23 | 177,000,480.66 |
| Beginning balance in the |
| Book value | Stage one | Stage two | Stage three | Total |
| 12-month expected credit losses | lifetime expected credit losses (Credit impairment has not occurred) | lifetime expected credit losses (Credit impairment has already occurred) | ||
| current period | ||||
| --Transfer to the second stage | -316,691.48 | 316,691.48 | ||
| --Transfer to the third stage | -8,964,690.04 | 8,964,690.04 | ||
| --Write-back to the second stage | ||||
| --Write-back to the first stage | ||||
| Increase | 462,627,944.95 | 3,469,155.79 | 123,742.35 | 466,220,843.09 |
| Termination of confirmation | 400,030,603.31 | 5,191,442.54 | 1,886,180.50 | 407,108,226.35 |
| Other changes | ||||
| Ending balance | 160,011,185.89 | 10,234,295.39 | 65,867,616.12 | 236,113,097.40 |
(3) The amount of other accounts receivable actually written off in the currentperiod is RMB 1,221,094.69.
(4) Other receivables disclosed by nature
| Nature | 20211231 | 20201231 |
| Receivable and payable | 224,540,231.45 | 167,775,115.62 |
| Others | 11,572,865.95 | 9,225,365.04 |
| Total | 236,113,097.40 | 177,000,480.66 |
(5) Top five debtors at the end of period
| Company | Nature | Amount | Aging | Percentage of total other receivables (%) | Provision for bad debts |
| The First | Accounts | 2,819,946.26 | within 1 year | 1.19 | |
| The Second | Accounts | 2,798,975.71 | within 1 year to over 3 years | 1.19 | 2,585,594.69 |
| The Third | Accounts | 2,261,360.00 | over 3 years | 0.96 | 2,261,360.00 |
| The Fourth | Accounts | 1,908,708.06 | over 3 years | 0.81 | 1,908,708.06 |
| The Fifth | Accounts | 1,740,000.00 | over 3 years | 0.74 | |
| Total | 11,528,990.03 | 4.89 | 6,755,662.75 |
(6) There are no other receivables relates to any government subsidies in thereporting period.
(7) There are no other receivables derecognized due to the transfer of financialassets in the reporting period
(8) There no assets and liabilities formed by transfer of other receivables andcontinued involvement in the reporting period
(9) Inventories
1. Inventories disclosed by category
| Items | 20211231 | 20201231 | ||||||
| Carrying amount | Impairment | Book value | Carrying amount | Impairment | Book value | |||
| Raw material and main material | 4,730,515,761.34 | 26,986,533.69 | 4,703,529,227.65 | 4,535,270,857.67 | 26,986,533.69 | 4,508,284,323.98 | ||
| Work in process and self-made semi-finished product | 2,105,832,905.07 | 25,390,821.52 | 2,080,442,083.55 | 1,732,705,334.71 | 1,946,088.69 | 1,730,759,246.02 | ||
| Finished goods | 3,439,625,765.66 | 33,430,937.88 | 3,406,194,827.78 | 2,805,646,918.75 | 4,625,146.10 | 2,801,021,772.65 | ||
| Total | 10,275,974,432.07 | 85,808,293.09 | 10,190,166,138.98 | 9,073,623,111.13 | 33,557,768.48 | 9,040,065,342.65 | ||
2. Provision for inventory impairment and provision for impairment of contract
performance costs
| Category | 20211231 | Increase | Decrease | 20201231 | ||
| Provision | Others | Write-back or write-off | Others | |||
| Raw material and main material | 26,986,533.69 | 26,986,533.69 | ||||
| Work in process and self-made semi-finished product | 1,946,088.69 | 25,390,821.52 | 1,946,088.69 | 25,390,821.52 | ||
| Finished goods | 4,625,146.10 | 33,430,937.88 | 4,625,146.10 | 33,430,937.88 | ||
| Total | 33,557,768.48 | 58,821,759.40 | 6,571,234.79 | 85,808,293.09 |
3. Descriptions on closing balance of inventories containing capitalized amount ofborrowing costsNone
4. Descriptions on current amortization amount of contract performance costsNone
(10) Other current assets
| Items | 20211231 | 20201231 |
| Prepaid tax | 444,009,128.46 | 183,320,437.20 |
| VAT input tax | 310,939,065.10 | 86,091,954.53 |
| Time deposit | 5,254,234,444.28 | |
| Total | 754,948,193.56 | 5,523,646,836.01 |
(11) Long-term equity investment
| Investees | 20201231 | Increase/decrease | 20211231 | Total Impairment Ending Balance | |||||||
| Add Investment | Reduce Investment | Investment Gains and Losses Recognized under the Equity Method | Other Comprehensive Income Adjustment | Other Equity Changes | Declaration of Cash Dividends or Profit | Provision | Others | ||||
| Joint Venture | |||||||||||
| Zhejiang Bengang Jingrui Steel Processing Co., Ltd.. | 2,742,064.73 | 520,432.46 | -280,713.12 | 2,981,784.07 | |||||||
| Subtotal | 2,742,064.73 | 520,432.46 | -280,713.12 | 2,981,784.07 | |||||||
| Total | 2,742,064.73 | 520,432.46 | -280,713.12 | 2,981,784.07 | |||||||
(12) Other equity instrument investments
| Item | 20211231 | 20201231 |
| Equity of Suzhou Bengang Industrial Co., Ltd. | 3,888,980.00 | 3,888,980.00 |
| Equity of Zhonggang Shanghai Steel Processing Co., Ltd. | ||
| Equity of Northeast Special Steel Group Co., Ltd. | 1,037,735,849.00 | 1,037,735,849.00 |
| Equity of Guangzhou Benpu Automobile Panel Sales Co., Ltd. | 200,000.00 | 200,000.00 |
| Equity of Wuhan Bengang Yuanhong Trading Co., Ltd. | 200,000.00 | 200,000.00 |
| Total | 1,042,024,829.00 | 1,042,024,829.00 |
Notes:
The Company holds 15% equity of Zhonggang Shanghai Steel Processing Co., Ltd.
9.93% equity of Northeast Special Steel Group Co., Ltd. held by the Company has beenpledged to Bank of Dalian, Shenyang branch.
(13) Fixed assets
1. Fixed assets and Disposal of fixed assets
| Items | 20211231 | 20201231 |
| Fixed assets | 25,480,674,048.94 | 26,284,567,956.44 |
| Disposal of fixed assets | ||
| Total | 25,480,674,048.94 | 26,284,567,956.44 |
2. Details of fixed assets
| Items | Houses and buildings | Mechanical equipment | Transportation and other equipment | Total |
| 1. Total original value | ||||
| 20201231 | 12,992,173,762.87 | 48,920,259,525.40 | 912,920,312.85 | 62,825,353,601.12 |
| Increase in current period | 335,742,397.75 | 1,299,099,252.52 | 13,828,051.62 | 1,648,669,701.89 |
| Including: Purchase | 21,261,478.78 | 13,462,077.65 | 34,723,556.43 | |
| Transferred from construction in progress | 335,742,397.75 | 1,277,837,773.74 | 365,973.97 | 1,613,946,145.46 |
| Merging |
| Items | Houses and buildings | Mechanical equipment | Transportation and other equipment | Total |
| Decrease in current period | 83,262,784.29 | 737,609,827.88 | 5,789,627.60 | 826,662,239.77 |
| Including: Disposal or scrapping | 83,262,784.29 | 737,609,827.88 | 5,789,627.60 | 826,662,239.77 |
| Others | ||||
| 20211231 | 13,244,653,376.33 | 49,481,748,950.04 | 920,958,736.87 | 63,647,361,063.24 |
| 2.Total accumulated depreciation | ||||
| 20201231 | 6,133,288,869.64 | 29,679,421,087.16 | 629,132,131.82 | 36,441,842,088.62 |
| Increase in current period | 325,467,326.07 | 1,985,674,168.41 | 21,886,735.42 | 2,333,028,229.90 |
| Including: Provision | 325,467,326.07 | 1,985,674,168.41 | 21,886,735.42 | 2,333,028,229.90 |
| Decrease in current period | 47,133,558.25 | 648,898,692.49 | 5,629,149.44 | 701,661,400.18 |
| Including: Disposal or scrapping | 47,133,558.25 | 648,898,692.49 | 5,629,149.44 | 701,661,400.18 |
| 20211231 | 6,411,622,637.46 | 31,016,196,563.08 | 645,389,717.80 | 38,073,208,918.34 |
| 3. Total impairment | ||||
| 20201231 | 36,963,620.92 | 61,979,935.14 | 98,943,556.06 | |
| Increase in current period | 48,396,211.92 | 6,453,363.70 | 54,849,575.62 | |
| Including: accrued | 48,396,211.92 | 6,453,363.70 | 54,849,575.62 | |
| Others | ||||
| Decrease in current period | 1,261,418.52 | 59,053,617.20 | 60,315,035.72 | |
| Including: Disposal or scrapping | 1,261,418.52 | 59,053,617.20 | 60,315,035.72 | |
| 20211231 | 84,098,414.32 | 9,379,681.64 | 93,478,095.96 | |
| 4. Total net book value of Fixed assets | ||||
| 20211231 | 6,748,932,324.55 | 18,456,172,705.32 | 275,569,019.07 | 25,480,674,048.94 |
| 20201231 | 6,821,921,272.31 | 19,178,858,503.10 | 283,788,181.03 | 26,284,567,956.44 |
3. Fixed assets idled temporarily
| Items | Gross value | Accumulated depreciation | Impairment | Net book value | Notes |
| Houses and buildings | 223,416,300.48 | 139,189,651.03 | 84,098,414.32 | 128,235.13 | |
| Mechanical equipment | 100,086,005.34 | 89,198,289.39 | 9,379,681.64 | 1,508,034.31 | |
| Transportation and Other equipment | 1,042,125.89 | 1,042,125.89 | |||
| Total | 324,544,431.71 | 229,430,066.31 | 93,478,095.96 | 1,636,269.44 |
4. Fixed assets leased in through financial leasing
As of the end of last reporting period, the value of the fixed assets leased in through financialleasing was RMB 1,114,232,362.74, all of which were leased from the related party LiaoningHengyi Financial Leasing Co., Ltd. In this period, the company terminated the financial leasingbusiness with Liaoning Hengyi Financial Leasing Co., Ltd., and pay the full amount.
5. Fixed assets leased out through financial leasing
| Item | Ending balance |
| Houses and buildings | 1,239,002.14 |
| Total | 1,239,002.14 |
6. Fixed assets without property rights certificates at the year-end
| Items | Book value | Reason |
| Houses and buildings | 1,062,356,103.50 | Being processed |
(14) Construction in progress
1. Construction in progress and Construction materials
| Items | 20211231 | 20201231 |
| Construction in progress | 2,431,761,889.08 | 1,837,160,389.66 |
| Project materials | 2,420,212.05 | 2,773,325.92 |
| Total | 2,434,182,101.13 | 1,839,933,715.58 |
2. Details of construction in progress
| Items | 20211231 | 20201231 | ||||
| Gross value | Total impairment | Net book value | Gross value | Total impairment | Net book value | |
Cold-rolledhigh-strengthsteelrenovationproject
| Cold-rolled high-strength steel renovation project | 23,961,023.15 | 23,961,023.15 | ||||
| CCPP power generation project | 662,907,316.06 | 662,907,316.06 | 300,907,874.71 | 300,907,874.71 | ||
| Special steel rolling mill renovation project | 225,662,005.25 | 225,662,005.25 | 151,433,585.06 | 151,433,585.06 | ||
| 360 square meter sintering machine | 88,340,997.99 | 88,340,997.99 | 82,878,409.99 | 82,878,409.99 | ||
| Chemical Coke Oven Gas Project – Bengang transferred to Liaoning Coal | 21,840,791.70 | 21,840,791.70 | ||||
| No. 7 blast furnace dry dust removal and energy-saving | 70,402,228.77 | 70,402,228.77 |
| Items | 20211231 | 20201231 | ||||
| Gross value | Total impairment | Net book value | Gross value | Total impairment | Net book value | |
| Environmental protection overhaul project of No. 6 blast furnace | 66,322,604.36 | 66,322,604.36 | ||||
| Flue gas desulfurization and denitrification of No. 7 coke oven in the plate coking plant | 28,774,283.25 | 28,774,283.25 | ||||
| Special Steel Electric Furnace Capacity Replacement Project | 975,649,876.97 | 975,649,876.97 | 358,101,195.01 | 358,101,195.01 | ||
| 220kV Substation Project of General Energy Plant | 23,302,571.03 | 23,302,571.03 | ||||
| Advanced Treatment and Reuse Project of Reclaimed Water in General Energy Plant | 98,563,871.96 | 98,563,871.96 | ||||
| One-tower desulfurization revamp in the coking plant | 31,893,853.65 | 31,893,853.65 | ||||
| The overall improvement of Benxi Steel's manufacturing | 36,748,743.10 | 36,748,743.10 | 29,824,289.00 | 29,824,289.00 | ||
| Energy General Plant No. 1 Converter Gas Tank System Transformation Project | 66,477,477.13 | 66,477,477.13 | 24,008,553.86 | 24,008,553.86 | ||
| Caixi Special Steel Feeding Station of Steel Plate Scrap Plant | 38,375,436.67 | 38,375,436.67 | 1,231,879.70 | 1,231,879.70 | ||
| Coking Plant No. 8 and No. 9 Coke Oven Flue Gas Desulfurization and Denitrification | 12,708,765.66 | 12,708,765.66 | ||||
| Electrostatic precipitator for sintering system in ironworks renovation project | 14,956,633.00 | 14,956,633.00 | ||||
| Manufacturing Management System Improvement (2020) | 16,091,178.68 | 16,091,178.68 | ||||
| Casting of the new No. 1 blast furnace hearth in the Plate Ironworks | ||||||
| Benxi Steel Baojin Processing and Distribution Project | 22,088,294.34 | 22,088,294.34 | 15,998,341.25 | 15,998,341.25 | ||
| Items | 20211231 | 20201231 | ||||
| Gross value | Total impairment | Net book value | Gross value | Total impairment | Net book value | |
| Renovation of Desulfurization System in Purification Zone 2 of Coking Plant | 17,588,986.17 | 17,588,986.17 | ||||
| Improvement of Environmental Protection and Efficiency of 360M2 Sintering Machine in Steel Plate | 19,034,328.00 | 19,034,328.00 | ||||
| Other | 315,511,741.57 | 315,511,741.57 | 427,335,141.70 | 427,335,141.70 | ||
| Total | 2,431,761,889.08 | 2,431,761,889.08 | 1,837,160,389.66 | 1,837,160,389.66 | ||
3. The change of major construction in progress
| Project | Budget (in 10 thousand yuan) | 20201231 | Increase | Transfer to FA | Other decrease | 20211231 | Input of Budget (%) | Progress (%) | Accumulated amount of capitalized interest | Including: capitalized interest of current period | Capitalization rate | Source of fund |
| Cold-rolled high-strength steel renovation project | 701,535.00 | 23,961,023.15 | 67,964,463.27 | 91,925,486.42 | 85.00 | 100.00 | 857,867,059.71 | Self-raised & Other | ||||
| CCPP power generation project | 106,000.00 | 300,907,874.71 | 361,999,441.35 | 662,907,316.06 | 63.00 | 65.00 | 14,497,562.06 | 8,138,558.77 | 3.93 | Self-raised &Loans &Other | ||
| Special steel rolling mill renovation project | 82,386.00 | 151,433,585.06 | 173,423,847.58 | 99,195,427.39 | 225,662,005.25 | 40.00 | 40.00 | 6,770,232.91 | 2,864,335.85 | 3.93 | Loans &Other | |
| 360 square meter sintering machine | 137,723.00 | 82,878,409.99 | 23,551,905.29 | 18,089,317.29 | 88,340,997.99 | 92.00 | 95.00 | 68,627,433.26 | Loans &Other | |||
| Chemical Coke Oven Gas Project – Bengang transferred to Liaoning Coal | 2,557.00 | 21,840,791.70 | 21,840,791.70 | 85.00 | 95.00 | Other | ||||||
| No. 7 blast furnace dry dust removal and energy-saving | 9,267.00 | 70,402,228.77 | 1,590,550.81 | 71,992,779.58 | 78.00 | 95.00 | 455,304.64 | 161,324.57 | 3.93 | Loans &Other | ||
| Environmental protection overhaul project | 25,225.00 | 66,322,604.36 | 188,679.25 | 66,511,283.61 | 76.00 | 100.00 | Other |
| Project | Budget (in 10 thousand yuan) | 20201231 | Increase | Transfer to FA | Other decrease | 20211231 | Input of Budget (%) | Progress (%) | Accumulated amount of capitalized interest | Including: capitalized interest of current period | Capitalization rate | Source of fund |
| of No. 6 blast furnace | ||||||||||||
| Flue gas desulfurization and denitrification of No. 7 coke oven in the plate coking plant | 5,337.38 | 28,774,283.25 | 5,104,951.95 | 33,879,235.20 | 63.00 | 65.00 | Other | |||||
| Special Steel Electric Furnace Capacity Replacement Project | 192,343.00 | 358,101,195.01 | 617,548,681.96 | 975,649,876.97 | 51.00 | 55.00 | Self-raised & Other | |||||
| 220kV Substation Project of General Energy Plant | 31,500.00 | 23,302,571.03 | 135,130,101.16 | 158,432,672.19 | 50.00 | 80.00 | Other | |||||
| Advanced Treatment and Reuse Project of Reclaimed Water in General Energy Plant | 17,570.00 | 98,563,871.96 | 15,375,754.95 | 113,939,626.91 | 65.00 | 85.00 | Other | |||||
| One-tower desulfurization revamp in the coking plant | 9,174.00 | 31,893,853.65 | 22,991,749.16 | 54,885,602.81 | 60.00 | 100.00 | Other |
| Project | Budget (in 10 thousand yuan) | 20201231 | Increase | Transfer to FA | Other decrease | 20211231 | Input of Budget (%) | Progress (%) | Accumulated amount of capitalized interest | Including: capitalized interest of current period | Capitalization rate | Source of fund |
| The overall improvement of Benxi Steel's manufacturing | 5,600.00 | 29,824,289.00 | 6,924,454.10 | 36,748,743.10 | 66.00 | 80.00 | Other | |||||
| Energy General Plant No. 1 Converter Gas Tank System Transformation Project | 16,086.00 | 24,008,553.86 | 42,468,923.27 | 66,477,477.13 | 41.00 | 60.00 | Other | |||||
| Caixi Special Steel Feeding Station of Steel Plate Scrap Plant | 12,114.00 | 1,231,879.70 | 38,839,910.07 | 1,696,353.10 | 38,375,436.67 | 33.00 | 60.00 | Other | ||||
| Coking Plant No. 8 and No. 9 Coke Oven Flue Gas Desulfurization and Denitrification | 9,898.00 | 12,708,765.66 | 59,675,758.76 | 72,384,524.42 | 73.00 | 100.00 | Other | |||||
| Electrostatic precipitator for sintering system in ironworks renovation project | 4,500.00 | 14,956,633.00 | 9,507,953.00 | 24,464,586.00 | 54.00 | 100.00 | Other | |||||
| Manufacturing Management System | 2,639.00 | 16,091,178.68 | 6,718,790.00 | 22,809,968.68 | 86.00 | 100.00 | Other |
| Project | Budget (in 10 thousand yuan) | 20201231 | Increase | Transfer to FA | Other decrease | 20211231 | Input of Budget (%) | Progress (%) | Accumulated amount of capitalized interest | Including: capitalized interest of current period | Capitalization rate | Source of fund |
| Improvement (2020) | ||||||||||||
| Casting of the new No. 1 blast furnace hearth in the Plate Ironworks | 8,200.00 | 47,485,826.92 | 47,485,826.92 | 58.00 | 95.00 | Other | ||||||
| New construction 8# single-strand slab casting machine project | 64,341.00 | 103,473,209.19 | 103,473,209.19 | 70.00 | 80.00 | Self-raised & Other | ||||||
| 5# blast furnace ex-situ overhaul (new 2# blast furnace) | 124,087.00 | 51,731,262.32 | 51,731,262.32 | 72.00 | 90.00 | 31,410,224.05 | Self-raised & Other | |||||
| 1700 Hot Rolling Improvement Transformation | 25,000.00 | 21,789,258.69 | 21,789,258.69 | 80.00 | 90.00 | Other | ||||||
| Environmental protection renovation of No. 4-6 converters | 27,000.00 | 25,042,287.39 | 25,042,287.39 | 70.00 | 95.00 | 2,799,798.26 | Self-raised & Other | |||||
| Renovation of Desulfurization System in Purification Zone 2 of Coking Plant | 6,000.00 | 17,588,986.17 | 13,012,782.04 | 30,601,768.21 | 51.00 | 80.00 | Other | |||||
| Improvement of Environmental Protection and Efficiency of 360M2 Sintering | 5,573.00 | 19,034,328.00 | 14,047,395.24 | 33,081,723.24 | 59.00 | 80.00 | Other |
| Project | Budget (in 10 thousand yuan) | 20201231 | Increase | Transfer to FA | Other decrease | 20211231 | Input of Budget (%) | Progress (%) | Accumulated amount of capitalized interest | Including: capitalized interest of current period | Capitalization rate | Source of fund |
Machine in SteelPlate
| Machine in Steel Plate | ||||||||||||
| Benxi Steel Baojin Processing and Distribution Project | 31,037.39 | 15,998,341.25 | 6,089,953.09 | 22,088,294.34 | 7.00 | 10.00 | Other | |||||
| Total | 1,409,825,247.96 | 1,871,677,890.81 | 1,165,252,991.26 | 2,116,250,147.51 | 982,427,614.89 | 11,164,219.19 |
The main projects that Cold-rolled high-strength steel renovation project and 360 square meter sintering machine and5# blast furnace ex-situ overhaul (new 2# blast
furnace) had been transferred to fixed assets in previous years
4. There is no impairment of construction in progress during the current period.
5. Construction materials
| Items | 20211231 | 20201231 | ||||||
| Gross value | Impairment | Net Book Value | Gross value | Impairment | Net Book Value | |||
| Construction materials | 2,420,212.05 | 2,420,212.05 | 2,773,325.92 | 2,773,325.92 | ||||
| Total | 2,420,212.05 | 2,420,212.05 | 2,773,325.92 | 2,773,325.92 | ||||
(15) Right-of-use assets
| Items | Land | Houses and buildings | Total |
| 1.Total gross value | |||
| 20201231 | 1,132,274,415.17 | 368,465,367.56 | 1,500,739,782.73 |
| Increase | |||
| Including: New lease | |||
| Merger | |||
| Revaluation adjustment | |||
| Decrease | |||
| Including: Transfer to fixed assets | |||
| Disposal | |||
| 20211231 | 1,132,274,415.17 | 368,465,367.56 | 1,500,739,782.73 |
| 2. Total of Accumulated Amortization | |||
| 20201231 | |||
| Increase | 39,904,236.22 | 20,470,298.20 | 60,374,534.42 |
| Including: Accrued | 39,904,236.22 | 20,470,298.20 | 60,374,534.42 |
| Decrease | |||
| Including: Transfer to fixed assets | |||
| Disposal | |||
| 20211231 | 39,904,236.22 | 20,470,298.20 | 60,374,534.42 |
| 3. Total Impairment | |||
| 20201231 | |||
| Increase | |||
| Including: Accrued |
| Decrease | |||
| Including: Transfer to fixed assets | |||
| Disposal | |||
| 20211231 | |||
| 4. Total Net value | |||
| 20211231 | 1,092,370,178.95 | 347,995,069.36 | 1,440,365,248.31 |
| 20201231 | 1,132,274,415.17 | 368,465,367.56 | 1,500,739,782.73 |
(16) Intangible assets
1. Details of intangible assets
| Items | Land use right | Software | Total |
| 1.Total gross value | |||
| 20201231 | 327,028,797.84 | 310,401.55 | 327,339,199.39 |
| Increase | 40,640,000.00 | 40,640,000.00 | |
| Including: Purchase | 40,640,000.00 | 40,640,000.00 | |
| Internal Research and Development | |||
| Merger | |||
| Decrease | |||
| Including: Disposal | |||
| Invalid and terminated confirmation | |||
| 20211231 | 367,668,797.84 | 310,401.55 | 367,979,199.39 |
| 2. Total of Accumulated Amortization | |||
| 20201231 | 62,257,844.20 | 148,702.65 | 62,406,546.85 |
| Increase | 7,624,308.81 | 26,794.92 | 7,651,103.73 |
| Including: Accrued | 7,624,308.81 | 26,794.92 | 7,651,103.73 |
| Decrease | |||
| Including: Disposal | |||
| Invalid and terminated confirmation | |||
| 20211231 | 69,882,153.01 | 175,497.57 | 70,057,650.58 |
| 3. Total Impairment | |||
| 2020231 | |||
| Increase | |||
| Including: Accrued | |||
| Decrease |
| Including: Disposal | |||
| Invalid and terminated confirmation | |||
| 20211231 | |||
| 4. Total Net value | |||
| 20211231 | 297,786,644.83 | 134,903.98 | 297,921,548.81 |
| 20201231 | 264,770,953.64 | 161,698.90 | 264,932,652.54 |
2. Land use right without Certificate of Land use right at the end of period
| Items | Book value | Reason |
| Land use right | 39,556,267.07 | Being processed |
| Total | 39,556,267.07 |
(17) Deferred tax asset and deferred tax liability
1. Undedicated deferred tax asset
| Items | 20211231 | 20201231 | |||
| Deductible temporary differences | Deferred tax asset | Deductible temporary differences | Deferred tax asset | ||
| Impairment of assets | 451,808,313.33 | 112,952,078.33 | 398,431,973.43 | 99,607,993.35 | |
| Internal unrealized profit | 93,178,777.44 | 23,294,694.36 | 74,424,898.92 | 18,606,224.73 | |
| Depreciation of fixed assets | 21,906,259.43 | 5,476,564.86 | 333,978,859.03 | 83,494,714.76 | |
| Other | 48,132,843.04 | 12,033,210.76 | |||
| Total | 615,026,193.24 | 153,756,548.31 | 806,835,731.38 | 201,708,932.84 | |
2. Unrecognized deferred tax assets
| Items | 20211231 | 20201231 |
| Deductible temporary differences | 305,643,743.02 | 305,702,137.30 |
| Deductible losses | 45,093,302.90 | 54,629,940.42 |
| Total | 350,737,045.92 | 360,332,077.72 |
3. The deductible loss of unrecognized deferred tax assets due in the following period
| Items | 20211231 | 20201231 | Notes |
| Year 2021 | 10,945,961.04 | ||
| Year 2022 | 1,001,166.72 | 1,001,166.72 | |
| Year 2023 | 10,336,118.65 | 14,114,953.21 | |
| Year 2024 | 13,696,334.51 | 17,910,573.13 | |
| Year 2025 | 10,723,063.42 | 10,657,286.32 | |
| Year 2026 | 9,336,619.60 | ||
| Total | 45,093,302.90 | 54,629,940.42 |
(18) Other non-current assets
| Items | 20211231 | 20201231 | |||||
| Gross value | Impairment | Net book value | Gross value | Impairment | |||
Prepaidlong-termassets
| Prepaid long-term assets | 30,630,858.13 | 30,630,858.13 | 995,840,320.65 | ||
| Total | 30,630,858.13 | 30,630,858.13 | 995,840,320.65 |
(19) Short-term loans
1. Short-term loan disclosed by type
| Items | 20211231 | 20201231 |
| Pledge loans | ||
| Mortgage loans | ||
| Guaranteed loans | 3,823,088,140.00 | 9,687,731,000.00 |
| Credit loans | 230,000,000.00 | 380,000,000.00 |
| Total | 4,053,088,140.00 | 10,067,731,000.00 |
2.There is no short-term loans that were overdue at the end of the reporting period
(20) Notes payable
| Items | 20211231 | 20201231 |
Bank acceptance bill
| Bank acceptance bill | 2,286,000,000.00 | 7,747,043,186.29 |
| Commercial acceptance bill | 1,724,083,376.48 | 857,106,162.13 |
| Domestic letter of credit | 625,000,000.00 | 1,210,000,000.00 |
| Total | 4,635,083,376.48 | 9,814,149,348.42 |
At the end of the reporting period, there is no notes payable due and unpaid.
(21) Accounts payable
(1) Accounts payable disclosed by category
| Items | 20211231 | 20201231 |
| Accounts payable for goods | 4,272,890,365.57 | 5,122,416,750.84 |
| Accounts payable for labor | 51,392,037.81 | 18,697,483.74 |
| Accounts payable for project and equipment | 557,316,885.80 | 513,842,739.32 |
| Repair expense and others | 470,673,396.71 | 259,271,282.92 |
| Total | 5,352,272,685.89 | 5,914,228,256.82 |
(2) Significant accounts payable aging over one year
| Items | Ending balance | Of which: more than one year |
Company 1
| Company 1 | 20,685,977.47 | 16,579,573.22 |
| Company 2 | 14,200,000.00 | 14,200,000.00 |
| Company 3 | 14,519,435.78 | 13,946,435.78 |
| Company 4 | 227,930,805.86 | 10,163,913.21 |
| Total | 277,336,219.11 | 54,889,922.21 |
Other notes: The above significant accounts payable aged over one year have not yetreached the settlement conditions.
(22) Contract liabilities
1. Details of contract liabilities
| Items | 20211231 | 20201231 |
Advance for goods
| Advance for goods | 4,708,188,093.78 | 4,458,671,819.90 |
| Total | 4,708,188,093.78 | 4,458,671,819.90 |
As at December 31, 2021, the value-added tax received in advance from customers was RMB612,064,452.20 (December 31, 2020: RMB 579,627,336.58) and disclosed as other currentliabilities.
(23) Employee benefits payable
1. Employee benefits payable
| Items | 20201231 | Increase | Decrease | 20211231 |
Short-term employeebenefits
| Short-term employee benefits | 25,748,902.30 | 2,356,609,073.18 | 2,230,262,598.99 | 152,095,376.49 |
| Post-employment benefits - defined contribution plans | 582.95 | 221,340,145.12 | 221,340,728.07 | |
| Termination benefits | 25,981.50 | 25,981.50 | ||
| Other benefits due within one year | ||||
| Total | 25,749,485.25 | 2,577,975,199.80 | 2,451,629,308.56 | 152,095,376.49 |
2. Short-term employee benefits
| Items | 20201231 | Increase | Decrease | 20211231 | |
| (1) Salary, bonus, allowance and subsidy | 16,591,117.11 | 1,860,128,031.35 | 1,737,972,314.57 | 138,746,833.89 | |
| (2) Employee welfare | 147,741,924.10 | 147,741,924.10 | |||
| (3) Social Insurance | 653,712.74 | 146,522,560.74 | 147,176,273.48 | ||
| Including: Medical insurance | 3,683.11 | 112,150,597.68 | 112,154,280.79 | ||
| Work injury insurance | 650,029.63 | 34,351,650.00 | 35,001,679.63 | ||
| Maternity insurance | 20,313.06 | 20,313.06 | |||
| (4) Housing funds | 6,859,195.00 | 131,612,225.64 | 131,608,625.64 | 6,862,795.00 | |
| (5) Union funds and staff education fee | 1,644,877.45 | 48,124,295.36 | 43,283,425.21 | 6,485,747.60 | |
| (6) Short-term compensated absences | |||||
| (7) Short-term profit - sharing scheme | |||||
| (8) Other | 22,480,035.99 | 22,480,035.99 | |||
| Total | 25,748,902.30 | 2,356,609,073.18 | 2,230,262,598.99 | 152,095,376.49 | |
3. Defined contribution plans
| Items | 20201231 | Increase | Decrease | 20211231 |
Basic pension fund
| Basic pension fund | 565.28 | 213,156,905.63 | 213,157,470.91 | |
| Unemployment insurance | 17.67 | 8,183,239.49 | 8,183,257.16 | |
| Total | 582.95 | 221,340,145.12 | 221,340,728.07 |
(24) Taxes payable
(25) Other payables
| Items | 20211231 | 20201231 |
Interest payables
| Interest payables | ||
| Dividend payables | ||
| Other payables | 1,348,025,731.98 | 709,448,301.92 |
| Total | 1,348,025,731.98 | 709,448,301.92 |
1. Other payables
(1) Other payables disclosed by nature
| Items | 20211231 | 20201231 |
Deposit
| Deposit | 1,556,363.89 | 1,713,563.89 |
| Margin | 127,642,584.79 | 98,316,454.89 |
| Accounts | 1,133,934,695.19 | 525,775,209.97 |
| Others | 84,892,088.11 | 83,643,073.17 |
Items
| Items | 20211231 | 20201231 |
| Value-added tax | 29,696,795.33 | 22,541,925.74 |
| Corporate income tax | 35,810,190.67 | 9,589,798.62 |
| City maintenance and construction tax | 2,362,795.25 | 4,490,656.56 |
| House property tax | 16,819,232.89 | 3,661,600.13 |
| Educational surcharges | 1,710,729.40 | 3,211,296.48 |
| Land holding tax | 2,878,545.36 | 1,180,402.66 |
| Environmental tax | 9,935,977.17 | 8,398,902.77 |
| Others | 15,053,722.63 | 2,227,498.00 |
| Total | 114,267,988.70 | 55,302,080.96 |
| Total | 1,348,025,731.98 | 709,448,301.92 |
(2) At the end of period, no significant other payables aged over one year
(26) Non-current liabilities due within one year
| Items | 20211231 | 20201231 |
| Long-term loans due within one year | 246,949,595.95 | 1,287,630,361.43 |
| Bond payables due within one year | 25,053,455.40 | 20,400,000.00 |
| Lease liabilities due within one year | 38,777,466.79 | |
| Total | 310,780,518.14 | 1,308,030,361.43 |
(27) Other current liabilities
| Items | 20211231 | 20201231 |
| Output tax to be transferred | 612,064,452.20 | 579,627,336.58 |
| Total | 612,064,452.20 | 579,627,336.58 |
(28) Long-term loans
Long-term loans disclosed by category
| Categories | 20211231 | 20201231 |
Pledged loans
| Pledged loans | 622,600,000.00 | 622,600,000.00 |
| Mortgage loan | ||
| Guaranteed loans | 595,921,771.74 | 798,714,362.65 |
| Credit loans | 3,004,300,000.00 | 2,081,620,065.00 |
| Total | 4,222,821,771.74 | 3,502,934,427.65 |
(29) Bonds payables
1.Bonds payables disclosed by category
| Items | 20211231 | 20201231 |
| Convertible Bond | 5,054,251,668.83 | 5,752,229,339.52 |
| Total | 5,054,251,668.83 | 5,752,229,339.52 |
2. Changes in Bonds payables (Excluding other financial instruments such as preferred stocks and perpetual bonds classified as financial liabilities)
| Items | Book value | Issue date | Term to maturity | Issuance amount | Balance at the end of the previous year | Current issue | Interest accrued at face value | Premium and discount amortization | Repayment this period | Convert to stock this period | Balance at the end of the current year |
| Convertible Bond (Bond code:127018) | 6,800,000,000.00 | Jun 29, 2020 | 6 years | 6,800,000,000.00 | 5,752,229,339.52 | 45,161,128.80 | 516,038,858.11 | 1,168,855,400.00 | 5,054,251,668.83 | ||
| Total | 6,800,000,000.00 | 5,752,229,339.52 | 45,161,128.80 | 516,038,858.11 | 1,168,855,400.00 | 5,054,251,668.83 |
3.Description of the conditions and time for conversion of convertible corporate bondsApproved by Shenzhen Stock Exchange "Shen Zheng Shang [2020] No. 656", the Company’s RMB 6.80 billion convertible corporate bonds were listed on theShenzhen Stock Exchange on August 4, 2020, and the abbreviation is "Bengang Convertible Bonds". The bond code is "127018". The conversion period of theconvertible corporate bonds issued this time is from the first trading day after six months of the issuance of the convertible corporate bonds (July 3, 2020) to thematurity date of the convertible corporate bonds, that is, from January 4, 2021 to June 28, 2026. The initial conversion price of the convertible bonds is RMB 5.03per share.During the period from January 1, 2021 to December 31, 2021, the Company's A-share convertible bonds of RMB 1,168,855,400.00 were converted into theCompany's A-share ordinary shares, and the number of converted shares was 232,819,847 shares. Of which:
In the first quarter of 2021, Bengang's convertible bonds decreased by RMB 2,656,000.00 (26,560 bonds) due to share conversion, the number of shares converted
was 527,021 shares, and the conversion price was RMB 5.03 per share;In the second quarter of 2021, Bengang's convertible bonds decreased by RMB 46,087,200.00 (460,872 bonds) due to share conversion, the number of sharesconverted was 9,162,052 shares, and the conversion price was RMB 5.03 per share;In the third quarter of 2021, Bengang's convertible bonds decreased by RMB 1,119,957,200.00 (11,199,572 bonds) due to share conversion, the number of sharesconverted was 223,096,752 shares, and the conversion price was RMB 5.02 per share;In the fourth quarter of 2021, Bengang's convertible bonds decreased by RMB 155,000.00 (1,550 bonds) due to share conversion, the number of shares convertedwas 34,022 shares, and the conversion price was RMB 4.55 per share;As at December 31, 2021, the company's remaining balance of convertible bonds was RMB 5,631,144,600.00 (56,311,446 bonds).
4.Notes to other financial instruments classified as financial liabilities
(30) Lease liabilities
| Items | 20211231 |
| Lease liabilities | 1,463,444,635.94 |
| Include: lease liabilities due within 1 year | 38,777,466.79 |
| Lease liabilities ending balance | 1,424,667,169.15 |
(31) Long-term payables
| Items | 20211231 | 20201231 |
| Long-term payables | 1,114,232,362.74 | |
| Special payables | ||
| Total | 1,114,232,362.74 |
Notes：At the end of the reporting period, the company has repaid all the financial lease payments
1.long-term payables
| Items | 20211231 | 20201231 |
| Financing lease payments | 1,114,232,362.74 | |
| Including: unrealized financing expenses | 779,232,152.85 | |
| Total | 1,114,232,362.74 |
Notes: At the end of the reporting period, the amount of financing lease payment and the amountof unrealized financing expenses and the minimum amount of financial lease payment to be paidafter the balance sheet date was zero.
(32) Deferred income
| Items | 20201231 | Increase | Decrease | 20211231 | Reason |
| Government Subsidy | 154,451,833.23 | 3,793,520.00 | 65,139,067.34 | 93,106,285.89 | |
| Total | 154,451,833.23 | 3,793,520.00 | 65,139,067.34 | 93,106,285.89 |
Projects of government subsidies:
| Items | 20201231 | Increase | Transfer to current profit and loss | Other decrease | 20211231 | Related to assets or income |
| Liaoning Province "Hundred, Thousand, Thousand, Thousand Talents Project" funding project in 2018 | 250,000.00 | 30,000.00 | 220,000.00 | Assets | ||
| 2018 Municipal Skill Master Workstation Fee | 66,616.34 | 7,850.00 | 58,766.34 | Assets | ||
| 2019 Municipal Skill Master Workstation Fee | 180,000.00 | 81,915.84 | 98,084.16 | Assets | ||
| 2020 Ecological Civilization Construction Project (Special Steel Electric Furnace Upgrade Project) | 20,000,000.00 | 20,000,000.0 | Assets | |||
| Advanced Treatment Project of Carbon Fiber Wastewater in Dongfeng Plant Area of Plate Coking Plant | 9,500,000.00 | 1,900,000.00 | 7,600,000.00 | Assets | ||
| Desulfurization and Denitrification Project of Coal-fired Boiler in High-pressure Workshop of Bengang Power Plant | 3,600,000.00 | 600,000.00 | 3,000,000.00 | Assets | ||
| Research and development of high-strength steel for the third generation of automobiles | 2,320,000.00 | 580,000.00 | 1,740,000.00 | Assets |
| Items | 20201231 | Increase | Transfer to current profit and loss | Other decrease | 20211231 | Related to assets or income |
| 7 sets of 130 tons combustion boiler flue gas desulfurization project in power plant | 9,600,000.00 | 4,800,000.00 | 4,800,000.00 | Assets | ||
| Power plant three power plant cogeneration reform project | 4,000,000.00 | 2,000,000.00 | 2,000,000.00 | Assets | ||
| Industrial enterprise energy management center construction demonstration project | 2,320,000.00 | 2,320,000.00 | Assets | |||
| Automatic air quality monitoring system | 35,000.00 | 35,000.00 | Assets | |||
| Cold-rolled high-strength steel renovation project | 100,000,000.00 | 50,000,000.00 | 50,000,000.00 | Assets | ||
| Liaoning Artisan Subsidy | 21.89 | 21.89 | Assets | |||
| Construction of professional technology innovation platform for automobile steel industry | 200,000.00 | 200,000.00 | Assets | |||
| Research on the Influence Mechanism and Control of Rare Earth Oxide Sulfide on Automobile Steel Plasticity | 349,517.26 | 189,520.00 | 81,623.76 | 457,413.50 | Assets | |
| Introduce special funds for overseas advanced and applicable technologies | 2,000,000.00 | 2,000,000.00 | Assets |
| Items | 20201231 | Increase | Transfer to current profit and loss | Other decrease | 20211231 | Related to assets or income |
| “Steel for high-strength pipelines under low-temperature and high-pressure service conditions” Project national support funds | 30,677.74 | 62,000.00 | 92,677.74 | Assets | ||
| Design of metallurgical slag system of rare earth steel and research on its chemical properties | 340,000.00 | 340,000.00 | Income | |||
| Provincial Science and Technology Department National Natural Science Foundation of China-Liaoning Provincial Government Joint Fund Project | 334,000.00 | 334,000.00 | Income | |||
| 2019 Provincial Skilled Master Workstation Fee | 200,000.00 | 200,000.00 | Income | |||
| 2020 Provincial Skilled Master Workstation Fee | 100,000.00 | 100,000.00 | Income | |||
| Basic research on new technology of composite iron coke low carbon ironmaking charge | 168,000.00 | 168,000.00 | Income | |||
| The second batch of planned projects of the 2020 Liaoning Provincial Central Government to guide local science and technology development funds | 300,000.00 | 300,000.00 | Income |
| Items | 20201231 | Increase | Transfer to current profit and loss | Other decrease | 20211231 | Related to assets or income |
| 2020 Liaoning Province "Hundreds of Thousands of Talents Project" Funding Project | 50,000.00 | 50,000.00 | Income | |||
| Air Pollution Prevention and Control Fund-Second Burning Finishing Dust Removal Ultra-Low Emission Transformation Project | 2,050,000.00 | 410,000.00 | 1,640,000.00 | Assets | ||
| Total | 154,451,833.23 | 3,793,520.00 | 65,139,067.34 | 93,106,285.89 |
(33) Share capital
Notes：
The increase in the current period was due to the conversion of the A-share convertible bonds issued by the company into 232,819,847 A-share ordinary shares in the current period. Fordetails, please refer to “Note 5 (27) Bonds Payable”.
(34) Other equity instruments
1. Information of other financial instruments such as preferred stocks and perpetual bonds issued at the end of the periodThe Company’s other equity instruments at the end of the period are the equity part of convertible corporate bonds. For details, please refer to “Note 5 (27) Bondspayable”.
2. Changes in financial instruments such as preferred stocks and perpetual bonds issued at the end of the period
| Items | 20201231 | Increase/decrease (+, -) | |||||
| Issuing of new share | Bonus shares | Transferred from reserves | Others | Subtotal | 20211231 | ||
| Capital shares | 3,875,371,532.00 | 232,819,847.00 | 232,819,847.00 | 4,108,191,379.00 | |||
Items
| Items | 20201231 | Increase | Decrease | 20211231 | ||||
| Number | Book value | Number | Book value | Number | Book value | Number | Book value | |
| Convertible corporate | 68,000,000.00 | 1,146,290,662.42 | 11,688,554.00 | 198,407,998.79 | 56,311,446.00 | 947,882,663.63 | ||
Notes:
The decrease in the current period is due to the accumulative amount of RMB 1,168,855,400.00 (11,688,554 bonds) of A-share convertible bonds issued by the company being converted intothe company’s A-share ordinary shares. As at December 31 2021, the remaining convertible bond balance of the company is RMB5,631,144,600.00(56,311,446 bonds). For details, pleaserefer to “Note 5. (27) Bonds Payable”.
| Items | 20201231 | Increase | Decrease | 20211231 | ||||
| Number | Book value | Number | Book value | Number | Book value | Number | Book value | |
| bonds | ||||||||
| Total | 68,000,000.00 | 1,146,290,662.42 | - | - | 11,688,554.00 | 198,407,998.79 | 56,311,446.00 | 947,882,663.63 |
(35) Capital reserves
Notes:
The increase in the current period is due to the conversion of the A-share convertible bonds issued bythe company into A-share ordinary shares in the current period. For details, please refer to “Note 5.
(27) Bonds Payable”.
(36) Special Reserves
| Items | 20201231 | Increase | Decrease | 20211231 |
Safety production cost
| Safety production cost | 300,412.14 | 63,036,424.58 | 62,998,858.15 | 337,978.57 |
| Total | 300,412.14 | 63,036,424.58 | 62,998,858.15 | 337,978.57 |
(37) Surplus Reserves
| Items | 20201231 | 20210101 | Increase | Decrease | 20211231 |
Statutorysurplus reserves
| Statutory surplus reserves | 961,105,529.85 | 961,105,529.85 | 234,010,992.52 | 1,195,116,522.37 | |
| Total | 961,105,529.85 | 961,105,529.85 | 234,010,992.52 | 1,195,116,522.37 |
(38) Undistributed Profits
| Items | 2021 | 2020 |
Before adjustments: undistributed profits at last year-end
| Before adjustments: undistributed profits at last year-end | 2,692,018,405.40 | 2,307,765,664.62 |
| Adjustments of the beginning distributed profits (increase + / decease -) | ||
| After adjustments: undistributed profit at this year-beginning | 2,692,018,405.40 | 2,307,765,664.62 |
| Add: undistributed profit belonging to parent company | 2,500,582,902.58 | 384,252,740.78 |
| Less: Statutory surplus reserves | 234,010,992.52 | |
| Discretionary reserves | ||
| General risk reserves |
Items
| Items | 20201231 | Increase | Decrease | 20211231 |
| Capital premium | 12,227,292,378.47 | 928,924,325.80 | 13,156,216,704.27 | |
| Other capital reserves | 115,917,468.82 | 115,917,468.82 | ||
| Total | 12,343,209,847.29 | 928,924,325.80 | 13,272,134,173.09 |
| Items | 2021 | 2020 |
| Common shares dividend payable | 1,981,284,017.82 | |
| Common shares dividend transferred to paid-in capital | ||
| Ending balance of undistributed profits | 2,977,306,297.64 | 2,692,018,405.40 |
(39) Operating income and operating cost
| Items | 2021 | 2020 | ||
| Revenue | Cost | Revenue | Cost | |
| Principal business | 69,992,675,798.60 | 64,770,421,744.20 | 45,321,849,577.55 | 43,322,474,075.93 |
| Other business | 7,919,469,182.86 | 7,121,176,592.76 | 3,362,943,108.03 | 3,069,706,486.66 |
| Total | 77,912,144,981.46 | 71,891,598,336.96 | 48,684,792,685.58 | 46,392,180,562.59 |
Details for operating income:
| Item | Principal business | Other business |
| Classified by business area | 69,992,675,798.60 | 7,919,469,182.86 |
| Including：Domestic | 63,657,154,874.80 | 7,919,469,182.86 |
| Abroad | 6,335,520,923.80 | - |
| Classified by the time of commodity transfer | 69,992,675,798.60 | 7,919,469,182.86 |
| Including: recognize at a certain point in time | 69,992,675,798.60 | 7,916,590,751.39 |
| recognize over a certain period of time | 2,878,431.47 | |
| Total | 69,992,675,798.60 | 7,919,469,182.86 |
(40) Tax and surcharges
| Items | 2021 | 2020 |
| City maintenance and construction tax | 123,495,868.43 | 39,002,807.95 |
| Educational surcharge | 88,373,442.32 | 28,155,477.26 |
| Housing property tax | 81,377,911.78 | 79,753,764.80 |
| Land use right tax | 13,696,962.53 | 13,090,099.93 |
| Environmental tax | 41,124,449.80 | 28,417,193.46 |
| Stamp duty | 82,245,033.15 | 26,523,801.64 |
| Others | 1,146,895.68 | 928,675.06 |
| Total | 431,460,563.69 | 215,871,820.10 |
(41) Selling and distribution expenses
| Items | 2021 | 2020 |
Import and export agency fee
| Import and export agency fee | 73,807,602.10 | 55,316,442.53 |
| Salary and benefits | 35,270,978.16 | 25,955,134.20 |
| Package fee | 6,901,048.55 | 6,179,183.22 |
| Others | 25,414,936..76 | 9,828,520.26 |
| Total | 141,394,565.57 | 97,279,280.21 |
(42) General and administrative expenses
| Items | 2021 | 2020 |
Salary and benefits
| Salary and benefits | 656,796,852.87 | 368,149,507.51 |
| Repair expense | 249,469,415.56 | 216,309,807.28 |
| Land use right fee | 39,930,546.94 | 65,600,418.40 |
| Depreciation | 42,367,710.99 | 39,060,982.28 |
| Heating fee | 91,825,534.38 | 25,929,633.73 |
| Water resources fee | 7,059,455.17 | 18,956,412.81 |
| Sewage charges | 14,522,765.23 | 13,186,781.11 |
| Others | 85,267,160.96 | 45,632,751.69 |
| Total | 1,187,239,442.10 | 792,826,294.81 |
(43) Research and development expenses
| Items | 2021 | 2020 |
| Depreciation, materials and compensation, etc. | 56,401,594.44 | 37,989,623.28 |
| Total | 56,401,594.44 | 37,989,623.28 |
(44) Financial expenses
| Items | 2021 | 2020 |
| Interest expenditure | 1,007,595,231.75 | 1,028,857,436.14 |
| Including：Lease liability interest expense | 56,397,569.84 | |
| Less: Interest income | 393,818,460.36 | 378,523,984.03 |
| Exchange loss | -86,313,266.83 | -307,919,937.19 |
| Others | 9,130,130.50 | 22,361,640.70 |
| Total | 536,593,635.06 | 364,775,155.62 |
(45) Other income
| Items | 2021 | 2020 |
| Government subsidy | 66,345,976.64 | 81,193,591.56 |
| Others | 111,590.36 | |
| Total | 66,345,976.64 | 81,305,181.92 |
(46) Income on investment
| Items | 2021 | 2020 |
| Income on long-term equity investment by equity method | 520,432.46 | 374,119.86 |
| Income from disposal of long-term equity investment | 1,434,393.28 | |
| Income on disposal of financial assets holding for trading | -124,911,004.89 | 13,500,000.00 |
| Dividend income obtained during the holding period of other equity instrument investments | 77,242.47 | |
| Other | 2,436,869.33 | |
| Total | -120,519,309.82 | 13,951,362.33 |
(47) Credit impairment losses
| Items | 2021 | 2020 |
| Loss from bad debts of account receivable | 2,417,959.10 | 302,302,638.01 |
| Loss from bad debts of other receivables | 5,336,416.67 | 1,717,123.74 |
| Total | 7,754,375.77 | 304,019,761.75 |
Note: Loss is shown as positive figures
(48) Assets impairment loss
| Items | 2021 | 2020 |
| Impairment of inventory and contract performance costs | 58,821,759.40 | 6,571,234.79 |
| Impairment of fixed assets | 54,849,575.62 | 60,614,634.58 |
| Total | 113,671,335.02 | 67,185,869.37 |
Note: Loss is shown as positive figures
(49) Asset disposal income
| Items | 2021 | 2020 | The amount recognized in non-recurring profit |
| Disposal gains or losses arising from disposal of fixed assets | 130,675.05 | 325,651.61 | 130,675.05 |
| Items | 2021 | 2020 | The amount recognized in non-recurring profit |
| not held for sale | |||
| Total | 130,675.05 | 325,651.61 | 130,675.05 |
Note: Loss is shown as positive figures
(50) Non-operating income
| Items | 2021 | 2020 | The amount recognized in non-recurring profit |
| Non-current assets scrapped gains | 2,606,854.39 | 2,703,102.88 | 2,606,854.39 |
| Debt restructuring gain | 32,800.02 | ||
| Others | 5,176,371.41 | 1,592,660.62 | 5,176,371.41 |
| Total | 7,783,225.80 | 4,328,563.52 | 7,783,225.80 |
(51) Non-operating expense
| Items | 2021 | 2020 | The amount recognized in non-recurring profit |
| Donations | |||
| Non-current assets scrapped loss | 64,272,629.43 | 95,724,280.44 | 64,272,629.43 |
| Others | |||
| Total | 64,272,629.43 | 95,724,280.44 | 64,272,629.43 |
(52) Income tax expenses
1. Income tax expenses
| Items | 2021 | 2020 |
| Income tax payable for the current year | 853,911,187.93 | 35,594,567.91 |
| Adjustment of deferred income tax | 47,952,384.53 | -10,223,337.35 |
| Total | 901,863,572.46 | 25,371,230.56 |
2. Accounting profit and income tax expense adjustment process
| Items | 2021 |
| Total profit | 3,435,499,071.09 |
| Income tax expense calculate according to the official or applicable tax rate | 858,874,767.77 |
| Effect of different tax rates applied by subsidiaries |
| Items | 2021 |
| Effect of adjustment of the income tax expense of prior period | 5,955,617.82 |
| Effect of non-taxable income | -824,062.27 |
| Effect of undeductible costs, expenses or losses | 130,996.77 |
| Effect of use of deductible losses of unrecognized deferred tax asset of prior period | |
| Effect of deductible temporary differences or deductible losses of unrecognized deferred tax asset of current period | 163,459.93 |
| Changes in the balance of deferred income tax assets and liabilities at the beginning of the period due to the additional deductible expenses and tax rate adjustments required by the tax law | |
| Others | 37,562,792.44 |
| Income tax expenses | 901,863,572.46 |
(53) Earnings per share
1. Basic earnings per share
The basic earnings per share is calculated by dividing the consolidated net profit attributableto the common stock shareholders of the parent company by the weighted average number ofcommon stocks issued by the company:
| Items | 2021 | 2020 |
| Consolidated net profit attributable to ordinary shareholders of parent company | 2,500,582,902.58 | 384,252,740.78 |
| The weighted average number of common shares issued by the company | 4,168,950,364.25 | 3,875,371,532.00 |
| Basic earnings per share | 0.600 | 0.099 |
| Including: basic earnings per share for continuing operations | 0.600 | 0.099 |
| Basic earnings per share for discontinued operations |
2. Diluted earnings per share
Diluted earnings per share is calculated by dividing the consolidated net profit attributable.to the common shareholders of the parent company (diluted) by the weighted averagenumber of ordinary shares issued by the company (diluted):
| Items | 2021 | 2020 |
| Consolidated net profit attributable to ordinary | 2,735,242,850.60 | 384,252,740.78 |
| Items | 2021 | 2020 |
| shareholders of parent company (diluted) | ||
| The weighted average number of common shares issued by the company (diluted) | 5,509,699,078.54 | 3,875,371,532.00 |
| Diluted earnings per share | 0.496 | 0.099 |
| Including: Diluted earnings per share for continuing operations | 0.496 | 0.099 |
| Diluted earnings per share for discontinued operations |
Other instructions: Since convertible bonds have caused anti-dilution in previous period,diluted earnings per share are disclosed in accordance with basic earnings per share.
(54) Notes of statement of cash flows
1. Cash received related to other operating activities
| Items | 2021 | 2020 |
| Withdraw of current accounts, advance for another | 4,269,927.26 | 415,131,996.05 |
| Interest income | 424,979,825.98 | 365,343,047.49 |
| Special subsidy income | 3,752,120.00 | 27,624,696.63 |
| Non-operating income | 3,029,073.33 | 673,106.88 |
| Others | 65,335,821.55 | 8,181,857.38 |
| Total | 501,366,768.12 | 816,954,704.43 |
2. Cash paid related to other operating activities
| Items | 2021 | 2020 |
| Current accounts, advance for another | 19,482,383.93 | 347,552,655.29 |
| Sales expenses | 14,638,578.99 | 72,862,184.48 |
| Administrative expenses | 86,597,752.51 | 44,664,338.51 |
| Charges | 22,157,726.11 | 20,710,711.34 |
| Others | 299,743.97 | 1,489,830.36 |
| Total | 143,176,185.51 | 487,279,719.98 |
3. Cash received related to other financing activities
| Items | 2021 | 2020 |
Margin for bill, letter of guarantee and letter of credit
| Margin for bill, letter of guarantee and letter of credit | 2,105,252,645.77 | 1,076,807,422.35 |
| Proceeds from negotiation | 41,310,294.37 | 253,068,892.21 |
| Items | 2021 | 2020 |
| Others | 214,709,267.94 | |
| Total | 2,361,272,208.08 | 1,329,876,314.56 |
4. Cash paid related to other financing activities
| Items | 2021 | 2020 |
| Margin for bill, letter of guarantee and letter of credit | 34,424,434.31 | |
| Convertible bond issuance fees | 41,084,701.18 | |
| Targeted Payment to short-term borrowing | 740,000,000.00 | |
| Total | 740,000,000.00 | 75,509,135.49 |
(55) Supplementary details of statement of cash flows
1. Supplementary details for statement of cash flows
| Items | 2021 | 2020 |
| 1. A reconciliation of net profit to cash flows from operating activities: | ||
| Net profit | 2,533,635,498.63 | 391,479,566.23 |
| Add: Credit impairment loss | 7,754,375.77 | 304,019,761.75 |
| Impairment of assets | 113,671,335.02 | 67,185,869.37 |
| Depreciation of fixed assets | 2,333,028,229.90 | 2,191,070,638.31 |
| Depreciation of productive biological assets | ||
| Depletion of oil and gas properties | ||
| Depreciation of right-of-use assets | 60,374,534.42 | |
| Amortization of intangible assets | 7,651,103.73 | 6,567,370.80 |
| Amortization of long-term deferred expenses | ||
| Losses proceeds from disposal of fixed assets, intangible assets and other long-term assets (Earnings marked“－”) | -130,675.05 | -325,651.61 |
| Scrapped losses from fixed assets (Earnings marked“－”) | 61,665,775.04 | 93,021,177.56 |
| Loss from changes in fair value (Earnings marked“－”) | ||
| Financial expenses (Earnings marked“－”) | 921,281,964.92 | 720,937,498.95 |
| Investment losses (Earnings marked“－”) | 120,519,309.82 | -13,951,362.33 |
| Deferred tax assets reduction (Addition marked“－”) | 47,952,384.53 | -10,223,337.35 |
| Deferred tax liabilities increased (Reduction marked“－”) | ||
| Reduction of inventory (Addition marked“－”) | -1,202,351,320.94 | -1,302,981,909.11 |
| Operating receivable items reduction (Addition marked“－”) | 2,159,270,698.56 | -2,847,086,786.29 |
| Operating payable items increase (Less marked"－") | -6,750,849,760.31 | -1,638,713,049.57 |
| Others | ||
| Net cash flows generated from operating activities | 413,473,454.04 | -2,039,000,213.29 |
| Items | 2021 | 2020 |
| 2. Payments of investing and financing activities not involving cash: | ||
| Liabilities transferred to capital | ||
| Convertible corporate bonds due within one year | ||
| Fixed assets financed by leasing | ||
| 3. The net increase in cash and cash equivalents: | ||
| Ending balance of cash | 6,299,099,063.48 | 9,229,417,595.12 |
| Less: Beginning balance of cash | 9,229,417,595.12 | 13,441,414,988.58 |
| Add: Ending balance of cash equivalents | ||
| Less: Opening balance of cash equivalents | ||
| The net increase in cash and cash equivalents | -2,930,318,531.64 | -4,211,997,393.46 |
2. The structure of cash and cash equivalents
| Items | 20211231 | 20201231 |
| 1. Cash | 6,299,099,063.48 | 9,229,417,595.12 |
| Including: Cash on hand | 24,334.93 | 3,026.68 |
| Bank deposits available on demand | 6,299,074,728.55 | 9,229,414,568.44 |
| Other monetary funds available on demand | ||
| Central bank deposits available on demand | ||
| Balances with other financial institutions | ||
| Loans to other financial institutions | ||
| 2. Cash equivalents | ||
| Including: Investment of securities due within 3 months | ||
| 3. Ending balance of cash and cash equivalents | 6,299,099,063.48 | 9,229,417,595.12 |
| Including: Cash and cash equivalents limited to use by the parent company of another subsidiary in the group |
(56) Assets of which ownership or right to use are restricted
| Items | Ending balance | Reason |
| Cash at bank and on hand | 2,531,996,674.37 | Deposit for notes and letter of credit |
| Notes Receivable | 1,133,932,188.36 | Notes receivable that the company has endorsed and not yet matured on the balance sheet date were not derecognition at the end of period |
| Other equity instrument investments | 1,037,735,849.00 | Pledged for loans |
| Fixed assets | 89,963,211.93 | Mortgage for fund borrowing |
| Intangible assets | 36,188,476.93 | Mortgage for fund borrowing |
| Items | Ending balance | Reason |
| Total | 4,829,816,400.59 |
(57) Foreign currency monetary items
1. Foreign currency monetary items
| Items | Ending balance in foreign currency | Exchange rate at the year-end | Ending balance translated to RMB |
| Cash at bank and on hand | 21,926,797.58 | ||
| Including: USD | 2,815,562.23 | 6.3757 | 17,951,179.87 |
| EUR | 15,038.78 | 7.2197 | 108,575.47 |
| HKD | 4,729,748.36 | 0.8176 | 3,867,042.24 |
| Short-term loans | 575,088,140.00 | ||
| Including: USD | 90,200,000.00 | 6.3757 | 575,088,140.00 |
| EUR | |||
| JPY | |||
| Non-current liabilities due within one year | 99,549,595.95 | ||
| Including: USD | 4,700,000.00 | 6.3757 | 29,965,790.00 |
| EUR | 9,460,158.72 | 7.2197 | 68,299,507.91 |
| JPY | 23,176,000.00 | 0.0554 | 1,284,298.04 |
| Long-term loans | 354,971,367.69 | ||
| Including: USD | 11,850,000.00 | 6.3757 | 75,552,045.00 |
| EUR | 37,635,017.31 | 7.2197 | 271,713,534.45 |
| JPY | 139,056,000.00 | 0.0554 | 7,705,788.24 |
2. The Company has no overseas operating entities.
(58) Government subsidies
1. Government subsidies related to assets
| Item | Amount | Items listed on the balance sheet | The amount included in the current profit or loss or offsetting the loss of related costs | Items included in the current profit or loss or offsetting the loss of related costs | |
| 2021 | 2020 | ||||
| Liaoning Province "Hundred, Thousand, Thousand, Thousand Talents Project" funding project in 2018 | 250,000.00 | Deferred Income | 30,000.00 | Other income | |
| 2018 Municipal Skill Master Workstation Fee | 240,000.00 | Deferred Income | 7,850.00 | 120,423.00 | Other income |
| 2019 Municipal Skill Master Workstation Fee | 180,000.00 | Deferred Income | 81,915.84 | Other income | |
| Advanced Treatment Project of Carbon Fiber Wastewater in Dongfeng Plant Area of Plate Coking Plant | 9,500,000.00 | Deferred Income | 1,900,000.00 | Other income | |
| Desulfurization and Denitrification Project of Coal-fired Boiler in High-pressure Workshop of Bengang Power Plant | 6,000,000.00 | Deferred Income | 600,000.00 | 600,000.00 | Other income |
| Research and development of high- | 2,900,000.00 | Deferred Income | 580,000.00 | 580,000.00 | Other income |
| Item | Amount | Items listed on the balance sheet | The amount included in the current profit or loss or offsetting the loss of related costs | Items included in the current profit or loss or offsetting the loss of related costs | |
| 2021 | 2020 | ||||
strength steel for thethird generation ofautomobiles
| strength steel for the third generation of automobiles | |||||
| 7 sets of 130 tons combustion boiler flue gas desulfurization project in power plant | 24,000,000.00 | Deferred Income | 4,800,000.00 | 4,800,000.00 | Other income |
| Power plant three power plant cogeneration renovation project | 10,000,000.00 | Deferred Income | 2,000,000.00 | 2,000,000.00 | Other income |
| Industrial enterprise energy management center | 11,600,000.00 | Deferred Income | 2,320,000.00 | 2,320,000.00 | Other income |
| Research and development of anti-oxidation hot forming steel PHS1500A | 250,000.00 | Deferred Income | 84,847.73 | Other income | |
| Automatic air quality monitoring system | 350,000.00 | Deferred Income | 35,000.00 | 70,000.00 | Other income |
| Cold-rolled high-strength steel renovation project | 250,000,000.00 | Deferred Income | 50,000,000.00 | 50,000,000.00 | Other income |
| Liaoning Artisan Subsidy | 100,002.97 | Deferred Income | 99,981.08 | Other income | |
| Construction of professional technology innovation platform for automobile steel industry | 1,000,000.00 | Deferred Income | 200,000.00 | 800,000.00 | Other income |
| Research on the Influence | 547,040.00 | Deferred Income | 81,623.76 | Other income |
| Item | Amount | Items listed on the balance sheet | The amount included in the current profit or loss or offsetting the loss of related costs | Items included in the current profit or loss or offsetting the loss of related costs | |
| 2021 | 2020 | ||||
| Mechanism and Control of Rare Earth Oxide Sulfide on Automobile Steel Plasticity | |||||
| Introduce special funds for overseas advanced and applicable technologies | 14,420,000.00 | Deferred Income | 2,000,000.00 | 2,000,000.00 | Other income |
| Steel for high-strength pipelines under low-temperature and high-pressure service conditions Project national support funds | 188,000.00 | Deferred Income | 92,677.74 | 90,322.26 | Other income |
| Finishing Dust Removal Ultra-Low Emission Transformation Project | 2,050,000.00 | Deferred Income | 410,000.00 | Other income | |
| High-grade electro-galvanized sheet production line project for automobiles | 41,040,000.00 | Deferred Income | 8,208,000.00 | Other income | |
| Energy saving and environmental protection project of sintering machine in ironworks | 5,800,000.00 | Deferred Income | 1,160,000.00 | Other income | |
| Benxi Iron and Steel Group Co., Ltd. | 1,000,000.00 | Deferred Income | 1,000,000.00 | Other income | |
| Item | Amount | Items listed on the balance sheet | The amount included in the current profit or loss or offsetting the loss of related costs | Items included in the current profit or loss or offsetting the loss of related costs | |
| 2021 | 2020 | ||||
| Auto Sheet Engineering Laboratory Engineering Construction | |||||
2. Government subsidies related to income
| Items | Amount | The amount included in the current profit or loss or offsetting the loss of related costs | Items included in the current profit or loss or offsetting the loss of related costs | |
| 2021 | 2020 | |||
| Additional tax relief for retired soldiers in 2021 | 758,250.00 | 758,250.00 | 758,250.00 | |
| Tax refund | 569,547.42 | 440,059.30 | 569,547.42 | 440,059.30 |
| work-for-training grants | 44,400.00 | 8,600.00 | 44,400.00 | 8,600.00 |
| Relocation compensation of railway company | 1,626,919.00 | 1,626,919.00 | - | |
| Liaoning Provincial Local Financial Supervision and Administration Bureau | 5,000,000.00 | 5,000,000.00 | - | |
| Items | Amount | The amount included in the current profit or loss or offsetting the loss of related costs | Items included in the current profit or loss or offsetting the loss of related costs | |
| 2021 | 2020 | |||
| supports special funds for the development of enterprises listed on the market | ||||
| Stable Job Subsidy | 19,151.07 | 19,151.07 | - | |
3. Return of government subsidies during the reporting period
None
(59) Lease
As a lessee
| Item | 2021 |
| Interest expense from lease liability | 56,397,569.84 |
| Short-term lease expenses from simplified treatment included in the cost of related assets or the current profit and loss | 1,919,704.52 |
| Low-value asset lease expenses from simplified treatment included in the cost of related assets or the current profit and loss (Except short- term lease expenses from low-value asset) | |
| Variable lease payments without including in the measurement of the lease liability included in the cost of related assets or the current profit and loss | |
| Including：sale-leaseback transaction generation part | |
| Income from subletting the right-of-use assets | |
| Total cashflow out related to leasing | 1,919,704.52 |
| Profit and loss from sale-leaseback transactions | |
| Cash inflows from sale-leaseback transactions | |
| Cash outflows from leaseback |
6. Changes in the scope of consolidation
There was no changes to the scope of consolidation during the current period.
7. Equity in other entities
(1) Equity in subsidiaries
1. Constitution of enterprise group
| Name of the subsidiaries | Principal place of business | Registered address | Notes of business | Shareholding ratio | Acquiring method | ||
| Direct | Indirect | ||||||
| Wuxi Bengang Steel & Iron Sales Co., Ltd. | Wuxi | Wuxi | Sales | 100.00 | Business combination under common control | ||
| Tianjin Bengang Steel & Iron Trading Co., Ltd. | Tianjin | Tianjin | Sales | 100.00 | Business combination under common control | ||
| Nanjing Bengang Materials Sales Co., Ltd. | Nanjing | Nanjing | Sales | 100.00 | Business combination under common control | ||
| Yantai Bengang Steel & Iron Sales Co., Ltd. | Yantai | Yantai | Sales | 100.00 | Business combination under common control | ||
| Harbin Bengang Economic and Trading Co., Ltd. | Harbin | Harbin | Sales | 100.00 | Business combination under common control | ||
| Changchun Bengang Steel & Iron Sales Co., Ltd. | Changchun | Changchun | Sales | 100.00 | Business combination under common control | ||
| Guangzhou Bengang Steel & Iron Trading Co., Ltd. | Guangzhou | Guangzhou | Sales | 100.00 | Establishment | ||
| Shanghai Bengang Metallurgy Science and Technology Co., Ltd. | Shanghai | Shanghai | Sales | 100.00 | Establishment | ||
| Bengang Steel Plates Liaoyang Pellet Co., Ltd. | Liaoyang | Liaoyang | Manufacturing | 100.00 | Establishment | ||
| Dalian Benruitong Automobile Material Technology Co., Ltd. | Dalian | Dalian | Manufacturing | 65.00 | Establishment | ||
| Bengang POSCO Cold-rolled Sheet Co., Ltd. | Benxi | Benxi | Manufacturing | 75.00 | Business combination under common control | ||
| Benxi Bengang Steel Sales Co., Ltd | Benxi | Benxi | Sales | 100.00 | Establishment | ||
| Shenyang Bengang Metallurgical Science and Technology Co., Ltd. | Shenyang | Shenyang | Sales | 100.00 | Establishment | ||
| Name of the subsidiaries | Principal place of business | Registered address | Notes of business | Shareholding ratio | Acquiring method | ||
| Direct | Indirect | ||||||
| Chongqing Liaoben Steel & Iron Trading Co., Ltd. | Chongqing | Chongqing | Sales | 100.00 | Establishment | ||
| Bengang Baojin (Shenyang) auto new material technology Co., Ltd. | Shenyang | Shenyang | Manufacturing | 85.00 | Business combination under common control | ||
2. Significant but not wholly-owned subsidiaries
| Name of the subsidiaries | Proportion of non-controlling interests (%) | Profits and losses attributing to non-controlling shareholders | Dividend declared to distribute to non-controlling shareholders | Ending balance of non-controlling interests |
Bengang POSCO Cold-rolled Sheet Co., Ltd.
| Bengang POSCO Cold-rolled Sheet Co., Ltd. | 25.00 | 35,782,798.35 | 541,916,799.24 |
3. Financial information of significant but not wholly-owned subsidiaries
| Name of the subsidiaries | 20211231 | |||||
| Current assets | Non-current assets | Total assets | Current liabilities | Non-current liabilities | Total liabilities | |
Bengang POSCOCold-rolled SheetCo., Ltd.
| Bengang POSCO Cold-rolled Sheet Co., Ltd. | 2,969,950,327.43 | 1,134,904,732.59 | 4,104,855,060.02 | 1,937,187,863.07 | 1,937,187,863.07 |
| 20201231 | ||||||||
| Name of the subsidiaries | Current assets | Non-current assets | Total assets | Current liabilities | Non-current liabilities | Total liabilities | ||
| Bengang POSCO Cold- | 3,799,519,376.39 | 1,384,600,108.47 | 5,184,119,484.86 | 3,159,583,481.30 | 3,159,583,481.30 | |||
| 20201231 |
rolled Sheet Co.,Ltd.
rolled Sheet Co.,Ltd.
| Name of the subsidiaries | 2021 | |||
| Operating income | Net profit | Total comprehensive income | Net cash flows from operating activities | |
| Bengang POSCO Cold-rolled Sheet Co., Ltd. | 11,529,193,715.01 | 143,131,193.39 | 143,131,193.39 | 205,955,801.18 |
| Name of the subsidiaries | 2020 | |||
| Operating income | Net profit | Total comprehensive income | Net cash flows from operating activities | |
Bengang POSCO Cold-rolledSheet Co., Ltd.
| Bengang POSCO Cold-rolled Sheet Co., Ltd. | 7,327,060,880.66 | 42,005,550.17 | 42,005,550.17 | 301,022,342.34 |
4. Significant restrictions on the use of enterprise group assets and the settlement ofenterprise group debtsNone.
5. Financial or other support provided to structured entities included in the scope of
consolidated financial statementsNone.
(2) The shareholder's equity in the subsidiary has changed and still control the subsidiary'stransactions
The Company does not exist such matters.
(3) Equity in joint venture or associates
1. Important joint ventures and associates
The Company has no important joint ventures or associates
2. Summary of financial information of unimportant joint ventures and associates
| 20211231/2021 | 20201231/2020 | |
| Joint ventures: | ||
| Total book value of investment: | 2,981,784.07 | 2,742,064.73 |
| The total amount of the following items calculated according to the shareholding ratio | ||
| —Net profit | 520,432.46 | 374,119.86 |
| —Other comprehensive income | ||
| —Total comprehensive income | 520,432.46 | 374,119.86 |
3. Explanation on the significant limitation of the ability of the joint venture or associate totransfer funds to the company
The Company does not exist such matters.
4. Excess losses incurred by joint ventures or associates
The Company does not exist such matters.
5. Unconfirmed commitments related to joint venture investment
The Company does not exist such matters.
6. Contingent liabilities related to joint venture or associate investment
The Company does not exist such matters.
(4) Important joint operations
The Company does not exist such matters.
(5) Equity in structured entities that not included in the scope of consolidated financialstatements
The Company does not exist such matters.
8. Risks associated with financial instruments
The company faces various financial risks in its operation: credit risk, market risk and liquidityrisk. The company's board of directors is fully responsible for the determination of riskmanagement objectives and policies, and assumes ultimate responsibility for the riskmanagement objectives and policies. However, the board of directors has authorized thecompany's planning and development department to design and implement procedures thatensure the effective implementation of risk management objectives and policies. The board ofdirectors reviews the effectiveness of the implemented procedures and the rationality of riskmanagement objectives and policies through reports submitted by the planning anddevelopment department. The company's internal auditors also audit risk management policiesand procedures, and report relevant findings to the audit committee.The overall goal of the company's risk management is to formulate a risk management policythat minimizes risks without excessively affecting the company's competitiveness and resilience.
(1) Credit risk
Credit risk refers to a financial loss to a party due to failure to discharge an obligation by thecounterparties. The Company is exposed to credit risk arising from customers’ failure todischarge an obligation in sales on credit. Before signing a new contract, the company willassess the credit risk of new customers, including external credit ratings and bank creditcertificates in certain cases (when this information is available). The company has set a creditlimit for each customer, which is the maximum amount that does not require additional approval.
The Company ensures that the company's overall credit risk is within a controllable rangethrough regular monitoring of existing customers' credit ratings and periodic review of aginganalysis of accounts receivable. In addition, the Company strictly approves the line of credit,and only sells on credit to important customers for newly-developed products. In the monitoringof credit risk of customers, the Company sorts customers into groups by their creditcharacteristics. Those customers which are rated as “high risk” will be put in the restricted clientlist. The Company can only sell to these customers on credit with additional approval; otherwise,the Company must ask for a corresponding deposit in advance.
(2) Liquidity risk
Liquidity risk refers to the risk of a shortage of funds when an enterprise fulfills its obligationto settle by delivering cash or other financial assets. It is the Company's policy to ensure thatsufficient cash is available to meet debt obligations as they fall due. Liquidity risk is centrallycontrolled by the Company's financial department. The finance department ensures that thecompany has sufficient funds to repay its debts under all reasonable forecasts by monitoring
unrestricted monetary fund balances, bank acceptance bills that will be realized when due, androlling forecasts of cash flows for the next 12 months.
The following table sets forth the remaining contractual maturity dates of the Company's non-derivative financial liabilities that should be repaid in accordance with the terms of theagreement. The table has been prepared based on the undiscounted cash flows of financialliabilities based on the earliest date on which the Company can be required to pay. Cash flowincluding interest and principal:
(In 10 thousand Yuan)
| Items | 20211231 | ||||||
| Instant repayment | Within 1 year | 1-2years | 2-5years | Over 5 years | Total | ||
| Trade and other payables | 1,133,538.18 | 1,133,538.18 | |||||
| Borrowing and Interest | 441,115.83 | 226,971.68 | 832,756.07 | 1,500,843.58 | |||
| Total | 1,574,654.01 | 226,971.68 | 832,756.07 | 2,634,381.76 | |||
| Items | 20201231 | ||||||
| Instant repayment | Within 1 year | 1-2years | 2-5years | Over 5 years | Total | ||
| Trade and other payables | 1,643,593.66 | 111,423.24 | 1,755,016.90 | ||||
| Borrowing and Interest | 1,137,576.14 | 25,647.04 | 321,586.21 | 3,060.20 | 1,487,869.59 | ||
| Total | 2,781,169.80 | 25,647.04 | 321,586.21 | 114,483.44 | 3,242,886.49 | ||
(3) Market risk
Market risk of financial instruments refers to fluctuations of fair value or future cash flows dueto market price changes, including currency risk, interest rate risk, and other price risk.
1. Interest rate risk
Interest rate risk refers to fluctuations of fair value or future cash flows due to market ratechanges. The Company’s exposure to currency risk is primarily arising from variable-rate bankbalances and variable-rate borrowings. Currently, the Company does not have a specific policyto manage its interest rate risk. The management will carefully choose financing methods, andcombine fixed interest rate with variable interest rate, short-term obligations with long-termobligations. By using effective interest rate risk management methods, the Company closelymonitors interest rate risk and will consider interest-rate swaps to acquire an expected structureof interest rates shall the need arise.
2. Currency risk
Currency risk refers to fluctuations of fair value or future cash flows due to exchange ratechanges. The Company has been constantly working on the adjustment of the organizationalframework of risk management and optimization of debt structures to lower the currency risk.
The currency risk facing the Company originates from the assets and liabilities measured byUS dollars, Euro, Hongkong dollars and Japanese Yen. The ending balance of the assets andliabilities after converted in RMB is shown as below:
(In 10 thousand Yuan)
| Items | 20211231 | ||
| USD | Others | Total | |
Assets
| Assets | 1,795.12 | 397.56 | 2,192.68 |
| Liabilities | 68,060.60 | 34,900.31 | 102,960.91 |
| Total | 69,855.72 | 35,297.87 | 105,153.59 |
| Items | 20201231 | ||
| USD | Others | Total | |
| Assets | 46,968.50 | 63.75 | 47,032.25 |
| Liabilities | 134,771.81 | 38,819.77 | 173,591.58 |
| Total | 181,740.31 | 38,883.52 | 220,623.83 |
On December 31, 2021, with all other variables held constant, if the relevant currencyappreciates or depreciates against RMB by 5%, the company will decrease or increase the netprofit of RMB 3,778.81 in 10 thousand (On December 31, 2020: RMB 4,745.98 in 10 thousand).Management believes that 5% reasonably reflects the reasonable range of possible currency-to-renminbi changes in the next year.
9. Disclosure of fair value
The input value used in fair value measurement is divided into three levels:
The input value of the first level is the unadjusted quotation of the same asset or liability thatcan be obtained on the measurement date in an active market.The input value of the second level is the input value of the related assets or liabilities that isdirectly or indirectly observable except the input value of the first level.The third level of input value is the unobservable input value of related assets or liabilities.The level to which the fair value measurement result belongs is determined by the lowest levelto which the input value that is important to the fair value measurement as a whole belongs.
(1) Fair value of assets and liabilities measured at fair value
| Item | Fair value at the end of the period | |||
| Fair value measurement in the first level | Fair value measurement in the second level | Fair value measurement in the third level | Total | |
| 1. Continuous fair value measurement | ||||
| ◆Financial assets held for trading | ||||
| (1) Financial assets measured at fair value and whose changes are included in the current profit and loss | ||||
| (a) Investment in debt instruments | ||||
| (b) Investment in equity instruments | ||||
| (c) Derivative financial assets | ||||
| (d) Others | ||||
| (2) Designated as a financial asset measured at fair value and its changes are included in the current profit | ||||
| Item | Fair value at the end of the period | |||
| Fair value measurement in the first level | Fair value measurement in the second level | Fair value measurement in the third level | Total | |
| and loss | ||||
| (1) Investment in debt instruments | ||||
| (2) Others | ||||
| ◆ Accounts receivable financing | 1,530,735,647.38 | 1,530,735,647.38 | ||
| ◆ Other debt investments | ||||
| ◆ Investment in other equity instruments | 1,042,024,829.00 | 1,042,024,829.00 | ||
| ◆ Other non-current financial assets | ||||
| (1) Financial assets measured at fair value and whose changes are included in the current profit and loss | ||||
| (a) Investment in debt instruments | ||||
| (b) Investment in equity | ||||
| Item | Fair value at the end of the period | |||
| Fair value measurement in the first level | Fair value measurement in the second level | Fair value measurement in the third level | Total | |
| instruments | ||||
| (c) Derivative financial assets | ||||
| (d) Others | ||||
| (2) Designated as a financial asset measured at fair value and its changes are included in the current profit and loss | ||||
| (a) Investment in debt instruments | ||||
| (b) Others | ||||
| Total assets continuously measured at fair value | 2,572,760,476.38 | 2,572,760,476.38 | ||
| ◆Financial liabilities held for trading | ||||
| Including: Issued trading bonds | ||||
| Derivative financial liabilities | ||||
| Others | ||||
| Item | Fair value at the end of the period | |||
| Fair value measurement in the first level | Fair value measurement in the second level | Fair value measurement in the third level | Total | |
| ◆Designated as a financial liability measured at fair value and its changes included in the current profit and loss | ||||
| Total liabilities continuously measured at fair value | ||||
| 2. Non-continuous fair value measurement | ||||
| (1) Assets held for sale | ||||
| Total assets not measured continuously at fair value | ||||
| For example: Liabilities held for sale | ||||
| Total liabilities not measured continuously at fair value | ||||
(2) The basis for determining the market value of the continuous and non-continuous first-level fair value measurement projectsThe Company has no first level fair value measurement project.
(3) Continuous and non-continuous second-level fair value measurement items, usingvaluation techniques and qualitative and quantitative information on important parameters
The Company has no second level fair value measurement items.
(4) Continuous and non-continuous third-level fair value measurement items, using valuationtechniques and qualitative and quantitative information on important parameters
Other equity instrument investments that are continuously measured at level 3 fair value areunlisted equity investments held by the Company. Receivable financing with continuous third-level fair value measurement is the bank acceptance bill held by the company, and its fair valueis confirmed with reference to the par value.The Company adopted valuation techniques for fair value measurement, mainly using thevaluation technique of the listed company comparison method, referring to the stock prices ofsimilar securities and taking into account liquidity discounts.
(5) For continuous fair value measurement projects, where conversion between various levelsoccurs during the period, the reason for the conversion and the policy for determining thetiming of conversion
During the current period, there was no conversion between various levels.
(6) Changes in valuation techniques and reasons for changes during the period
No changes during the period.
(7) Fair value of financial assets and financial liabilities not measured at fair value
No
10. Related party transactions
(1) Details of parent company
| Name of parent company | Place of Registry | Notes of Business | Registered Capital （billion） | Share proportion (%) | Voting rights (%) |
| Benxi Steel & Iron (Group) Co., Ltd. | Benxi, Liaoning | Manufacturing | 6.292 | 58.65 | 58.65 |
Note:
The ultimate controlling party of the Company is Ansteel Group Co., Ltd.
(2) Details of the subsidiaries
For details of subsidiaries of the company please refer to Note 7 “Equity in other entities”.
(3) The company's joint ventures and associates
For details of significant joint ventures and associates of the company please refer to Note 7“Equity in other entities”.Other joint ventures or associates that have related party transactions with the company in thecurrent period, or have related party transactions with the company in the previous period andformed a balance are as follows:
| Name of joint ventures and associates | Relationship |
| Zhejiang Bengang Jingrui Steel Processing Co., Ltd. | Associate |
(4) Details of other related parties
| Name of other related parties | Relationship |
| Bengang Group Co., Ltd. (hereinafter referred to as “Bengang Group”) | Parent company &controlling shareholder |
| Benxi Steel Stainless Steel Cold Rolling Dandong Co., Ltd. | same parent company |
| Benxi Iron and Steel (Group) Mining Co., Ltd. | same parent company |
| Benxi Iron and Steel (Group) Metallurgical Slag Co., Ltd. | same parent company |
| Benxi Iron and Steel (Group) Steel Processing and Distribution Co., Ltd. | same parent company |
| Benxi Iron and Steel (Group) Real Estate Development Co., Ltd. | same parent company |
| Benxi Iron and Steel (Group) Machinery Manufacturing Co., Ltd. | same parent company |
| Benxi Iron and Steel (Group) Construction Co., Ltd. | same parent company |
| Name of other related parties | Relationship |
| Benxi Iron and Steel (Group) Industrial Development Co., Ltd. | same parent company |
| Benxi Iron and Steel (Group) Construction Co., Ltd. | same parent company |
| Bengang Electric Co., Ltd. | Associates of the parent company |
| Benxi High-tech Drilling Tools Manufacturing Co., Ltd. | Both belong to Bengang Group |
| Benxi New Business Development Co., Ltd. | same parent company |
| Liaoning Metallurgical Technician College | same parent company |
| Liaoning Metallurgical Vocational and Technical College | same parent company |
| Benxi Iron and Steel Group International Economic and Trade Co., Ltd. | Both belong to Bengang Group |
| Benxi Iron and Steel (Group) Information Automation Co., Ltd. | same parent company |
| Benxi Iron and Steel (Group) Thermal Development Co., Ltd. | same parent company |
| Benxi Iron and Steel (Group) Design and Research Institute | same parent company |
| Benxi Beiying Iron and Steel (Group) Co., Ltd. | Both belong to Bengang Group |
| Liaoning Hengtong Metallurgical Equipment Manufacturing Co., Ltd. | same parent company |
| Liaoning Hengtai Heavy Machinery Co., Ltd. | same parent company |
| Angang Electric Co., Ltd. | Both belong to Ansteel Group |
| Ansteel Scrap Resources (Anshan) Co., Ltd. | Both belong to Ansteel Group |
| Chaoyang Branch of Ansteel Scrap Resources (Anshan) Co., Ltd. | Both belong to Ansteel Group |
| Angang Steel Rope Co., Ltd. | Both belong to Ansteel Group |
| Ansteel Group Engineering Technology Co., Ltd. | Both belong to Ansteel Group |
| Ansteel Group International Economic and Trade Co., Ltd. | Both belong to Ansteel Group |
| Ansteel Construction Group Co., Ltd. | Both belong to Ansteel Group |
| Ansteel Industrial Group Metallurgical Machinery Co., Ltd. | Both belong to Ansteel Group |
| Ansteel Steel Processing and | Both belong to Ansteel Group |
| Name of other related parties | Relationship |
| Distribution (Dalian) Co., Ltd. | |
| Ansteel Group Engineering Technology Development Co., Ltd. | Both belong to Ansteel Group |
| Dalian Boroller Steel Pipe Co., Ltd. | Same parent company |
| Liaoning Benxi Iron and Steel Trading Co., Ltd. | Same parent company |
| Benxi Iron and Steel (Group) Chint Building Materials Co., Ltd. | Same parent company |
| Suzhou Bengang Industrial Co., Ltd. | Shareholding company |
| Benxi Iron and Steel Group Finance Co., Ltd. | Both belong to Bengang Group |
| Ansteel Chemical Technology Co., Ltd. | Both belong to Ansteel Group |
| Ansteel Energy Technology Co., Ltd. | Both belong to Ansteel Group |
| Panzhong Yihong Metal Products (Chongqing) Co., Ltd. | Both belong to Ansteel Group |
| Delin Land Port Supply Chain Service Co., Ltd. | Both belong to Ansteel Group |
| Benxi Iron and Steel Tendering Co., Ltd. | Both belong to Bengang Group |
| Anshan Iron and Steel Co., Ltd. | Both belong to Ansteel Group |
| Liaoning Hengyi Financial Leasing Co., Ltd. | Both belong to Bengang Group |
| Ansteel Group Finance Co., Ltd. | Both belong to Ansteel Group |
| Ansteel Scrap Resources (Anshan) Co., Ltd. | Both belong to Ansteel Group |
| Ansteel Heavy Machinery Co., Ltd. | Both belong to Ansteel Group |
| Ansteel Mining Machinery Manufacturing Co., Ltd. | Both belong to Ansteel Group |
| Benxi Iron and Steel (Group) Engineering Construction Supervision Co., Ltd. | Same parent company |
| Tianjin Angang Steel Processing and Distribution Co., Ltd. | Both belong to Ansteel Group |
| Guangzhou Free Trade Zone Benxi Steel Sales Co., Ltd. | Same parent company |
(5) Related Party Transactions
1. Related party transactions of purchasing goods and services
Company as the purchaser
(In 10 thousand Yuan)
| Name | The content of related party transactions | 2021 | 2020 |
| Benxi Steel & Iron (Group) Co., Ltd. | Repair expense | 30,456.09 | 30,206.47 |
| Benxi Steel & Iron (Group) Co., Ltd. | Raw material and supplementary material | 18.13 | 2,121.13 |
| Bengang Cold-rolled Stainless Steel Dandong Co., Ltd. | Products | 83.10 | 22.39 |
| Benxi Steel & Iron (Group) Mining Co., Ltd. | Labor cost | 3,882.38 | 3,213.23 |
| Benxi Steel & Iron (Group) Mining Co., Ltd. | Raw material and supplementary material | 789,791.14 | 514,193.50 |
| Benxi Steel & Iron (Group) Mining Co., Ltd. | Freight | 1,227.47 | |
| Benxi Steel & Iron (Group) Metallurgy Residues Co., Ltd. | Raw material and supplementary material | 48,914.81 | 34,303.84 |
| Benxi Steel & Iron (Group) Steel & Iron Process and Logistics Co., Ltd. | Processing fee | 9.75 | 63.22 |
| Benxi Steel & Iron (Group) Machinery Manufacture Co., Ltd. | Spare parts | 7,430.24 | 5,984.04 |
| Benxi Steel & Iron (Group) Machinery Manufacture Co., Ltd. | Repair services | 7,183.49 | 2,773.62 |
| Benxi Steel & Iron (Group) Construction Co., Ltd. | Spare parts | 2,177.72 | 1,624.97 |
| Benxi Steel & Iron (Group) Construction Co., Ltd. | Project fee | 34,708.50 | 20,274.33 |
| Benxi Steel & Iron (Group) Construction Co., Ltd. | Repair services | 27,810.40 | 18,022.98 |
| Benxi Steel & Iron (Group) Construction Co., Ltd. | Raw material and supplementary material | 1,609.79 | 1,241.22 |
| Benxi Steel & Iron (Group) Construction Co., Ltd. | Freight | 414.09 | 51.39 |
| Benxi Steel & Iron (Group) Industrial Development Co., Ltd. | Raw material and supplementary material | 19,531.75 | 21,095.06 |
| Benxi Steel & Iron (Group) Industrial Development Co., Ltd. | Repair services | 1,489.90 | 1,537.66 |
| Benxi Steel & Iron (Group) Industrial Development Co., Ltd. | Freight | 118.49 | |
| Benxi Steel & Iron (Group) Industrial Development Co., Ltd. | Project fee | 141.29 | 107.01 |
| Name | The content of related party transactions | 2021 | 2020 |
| Benxi Steel & Iron (Group) Construction and Repairing Co., Ltd. | Raw material & supplementary materials & spare parts | 314.15 | 228.18 |
| Benxi Steel & Iron (Group) Construction and Repairing Co., Ltd. | Project fee | 1,222.33 | 1,911.38 |
| Benxi Steel & Iron (Group) Construction and Repairing Co., Ltd. | Repair expense | 17,249.62 | 17,475.94 |
| Bengang Electronics and Gas Co., Ltd. | Raw material and supplementary material | 14,466.12 | 13,856.30 |
| Bengang Electronics and Gas Co., Ltd. | Repair services | 3,076.64 | 3,063.31 |
| Benxi High-tech Drilling Tools Manufacture Co., Ltd. | Spare parts | 35.50 | 39.00 |
| Benxi New Career Development Co., Ltd. | Repair services | 22.74 | |
| Benxi New Career Development Co., Ltd. | Raw material and supplementary material and food | 599.56 | 1,028.90 |
| Liaoning Metallurgy Technician College | Spare parts | 0.32 | 933.26 |
| Liaoning Metallurgy Vocational Technical College | Repair services | 2,084.82 | 648.24 |
| Bengang Group International Economic and Trading Co., Ltd. | Raw material and supplementary material | 1,683,663.51 | 508,961.39 |
| Bengang Group International Economic and Trading Co., Ltd. | Agency fee | 7,140.12 | 5,531.64 |
| Bengang Group International Economic and Trading Co., Ltd. | Port surcharges | 40,115.06 | 9,279.98 |
| Benxi Steel & Iron (Group) Information and Automatic Tech Co., Ltd. | Spare parts | 238.24 | 850.35 |
| Benxi Steel & Iron (Group) Information and Automatic Tech Co., Ltd. | Project fee | 773.19 | 1,121.38 |
| Benxi Steel & Iron (Group) Information and Automatic Tech Co., Ltd. | Repair services | 5,828.89 | 1,732.50 |
| Benxi Steel & Iron (Group) Thermal Power Development Co., Ltd. | Heating costs | 193.57 | 119.00 |
| Name | The content of related party transactions | 2021 | 2020 |
| Benxi Steel & Iron (Group) Thermal Power Development Co., Ltd. | Raw material and supplementary material | 431.58 | 71.04 |
| Benxi Steel & Iron (Group) Designing Institute | Design fees | 37.08 | 125.98 |
| Benxi Beiying Steel & Iron (Group) Co., Ltd. | Raw material and supplementary material | 341,396.62 | 492,390.02 |
| Benxi Beiying Steel & Iron (Group) Co., Ltd. | Energy & Power | 57,415.98 | 46,589.86 |
| Benxi Beiying Steel & Iron (Group) Co., Ltd. | Freight | 503.57 | 407.53 |
| Benxi Beiying Steel & Iron (Group) Co., Ltd. | Labor cost | 8,366.92 | 7,190.62 |
| Benxi Beiying Steel & Iron (Group) Co., Ltd. | Spare parts | 1,609.04 | 1,710.81 |
| Benxi Beiying Steel & Iron (Group) Co., Ltd. | Agency fee | 240.64 | |
| Liaoning Hengtong Metallurgical Equipment Manufacture Co., Ltd. | Raw material and spare parts | 6,772.47 | 8,336.02 |
| Liaoning Hengtong Metallurgical Equipment Manufacture Co., Ltd. | Repair services | 921.44 | 661.14 |
Liaoning Hengtai Heavy Machinery Co., Ltd.
| Liaoning Hengtai Heavy Machinery Co., Ltd. | Raw material and spare parts | 177.97 | 138.59 |
| Liaoning Hengtai Heavy Machinery Co., Ltd. | Repair and labor cost | 2,565.27 | 716.99 |
| Bengang Group Co., Ltd. | Labor cost | 10,326.61 | 18,876.38 |
| Angang Electric Co., Ltd. | Repair labor | 109.00 | |
| Ansteel Scrap Resources (Anshan) Co., Ltd. | Raw materials | 1,066.43 | |
| Chaoyang Branch of Ansteel Scrap Resources (Anshan) Co., Ltd. | Raw materials | 605.20 | |
| Angang Steel Rope Co., Ltd. | Raw materials | 1.64 | |
| Ansteel Group Engineering Technology Co., Ltd. | Project costs | 415.65 | |
| Ansteel Group International Economic and Trade Co., Ltd. | Raw materials | 15,892.03 | |
| Ansteel Construction Group Co., Ltd. | Project costs | 138.00 | |
| Ansteel Industrial Group Metallurgical Machinery Co., Ltd. | Repair labor | 62.12 | |
| Ansteel Steel Processing and Distribution (Dalian) Co., Ltd. | labor fee | 1.23 |
Company as the seller(In 10 thousand Yuan)
| Name | The content of related party transactions | 2021 | 2020 |
| Bengang Electronics and Gas Co., Ltd. | Energy & Power | 94.22 | 72.4 |
| Benxi Beiying Steel & Iron (Group) Co., Ltd. | Raw material & supplementary materials & spare parts | 536,149.62 | 138,409.84 |
| Benxi Beiying Steel & Iron (Group) Co., Ltd. | Products | 3,228.67 | 2,150.96 |
| Benxi Beiying Steel & Iron (Group) Co., Ltd. | Energy & Power | 19,099.40 | 22,602.26 |
| Benxi Steel & Iron (Group) Real-estate Development Co., Ltd. | Energy & Power | 3.68 | 8.65 |
| Benxi Steel & Iron (Group) Steel & Iron Process and Logistics Co., Ltd. | Energy & Power | 0.46 | 25.88 |
| Benxi Steel & Iron (Group) Machinery Manufacture Co., Ltd. | Products | 2,699.73 | 1,898.85 |
| Benxi Steel & Iron (Group) Machinery Manufacture Co., Ltd. | Energy & Power | 2,213.00 | 2,088.72 |
| Benxi Steel & Iron (Group) Machinery Manufacture Co., Ltd. | Raw material & supplementary materials & spare parts | 112.95 | 338.56 |
| Benxi Steel & Iron (Group) Construction Co., Ltd. | Energy & Power | 783.21 | 699.16 |
| Benxi Steel & Iron (Group) Construction Co., Ltd. | Raw material & supplementary materials & spare parts | 16,451.31 | 6,452.06 |
| Benxi Steel & Iron (Group) Mining Co., Ltd. | Energy & Power | 71,376.36 | 62,020.89 |
Name
| Name | The content of related party transactions | 2021 | 2020 |
| Ansteel Group Engineering Technology Development Co., Ltd. | Project costs | 6.64 |
| Name | The content of related party transactions | 2021 | 2020 |
| Benxi Steel & Iron (Group) Mining Co., Ltd. | Raw material & supplementary materials & spare parts | 11,481.75 | 9,678.23 |
| Benxi Steel & Iron (Group) Mining Co., Ltd. | Freight revenue | 963.50 | 743.9 |
| Benxi Steel & Iron (Group) Mining Co., Ltd. | Products | 955.33 | 1,107.48 |
| Benxi Steel & Iron (Group) Thermal Power Development Co., Ltd. | Energy & Power | 4,649.93 | 2,995.62 |
| Benxi Steel & Iron (Group) Thermal Power Development Co., Ltd. | Raw material & supplementary materials & spare parts | 3,595.84 | 1,750.62 |
| Benxi Steel & Iron (Group) Industrial Development Co., Ltd. | Energy & Power | 972.98 | 824.47 |
| Benxi Steel & Iron (Group) Industrial Development Co., Ltd. | Products | 2,506.43 | 3.97 |
| Benxi Steel & Iron (Group) Industrial Development Co., Ltd. | Raw material & supplementary materials & spare parts | 1,206.92 | 1,914.44 |
| Benxi Steel & Iron (Group) Information and Automatic Tech Co., Ltd. | Energy & Power | 12.73 | 14.64 |
| Benxi Steel & Iron (Group) Construction and Repairing Co., Ltd. | Energy & Power | 123.95 | 125.15 |
| Benxi Steel & Iron (Group) Construction and Repairing Co., Ltd. | Raw material & supplementary materials & spare parts | 346.39 | 368.03 |
| Benxi Steel & Iron (Group) Metallurgy Residues Co., Ltd. | Energy & Power | 565.72 | 659.84 |
| Benxi Steel & Iron (Group) Metallurgy Residues Co., Ltd. | Raw material & supplementary materials & spare parts | 48,920.96 | 26,839.91 |
| Benxi Steel & Iron (Group) Metallurgy Residues Co., Ltd. | Products | 3,047.73 | 423.53 |
| Benxi Steel & Iron (Group) Co., Ltd. | Energy & Power | 241.94 | 205.47 |
| Name | The content of related party transactions | 2021 | 2020 |
| Benxi Steel & Iron (Group) Co., Ltd. | Raw material & supplementary materials & spare parts | 599.48 | 1,013.53 |
| Benxi New Career Development Co., Ltd. | Energy & Power | 22.43 | 38.37 |
| Dalian Boluole Steel Tube Co., Ltd. | Products | 1,381.92 | 1,136.33 |
| Benxi Steel & Iron (Group) Zhengtai Construction Materials Co., Ltd. | Energy & Power | 2.16 | |
| Liaoning Hengtong Metallurgical Equipment Manufacture Co., Ltd. | Energy & Power | 0.03 | |
| Liaoning Hengtong Metallurgical Equipment Manufacture Co., Ltd. | Raw material & supplementary materials & spare parts | 302.02 | 731.86 |
| Liaoning Hengtong Metallurgical Equipment Manufacture Co., Ltd. | Products | 2,591.91 | 908.89 |
| Bengang Cold-rolled Stainless Steel Dandong Co., Ltd. | Raw material & supplementary materials & spare parts | ||
| Bengang Cold-rolled Stainless Steel Dandong Co., Ltd. | Products | 295.41 | 2,716.09 |
| Suzhou Bengang Industrial Co., Ltd. | Products | 66,835.91 | 49,983.82 |
| Bengang Group Finance Co., Ltd. | Energy & Power | 1.39 | 1.3 |
| Bengang Group Co., Ltd. | Energy & Power | 12.45 | 7.33 |
| Bengang Group Co., Ltd. | Raw material & supplementary materials & spare parts | 1,282.08 | 1,539.32 |
| Bengang Group Co., Ltd. | labor fee | 7,542.32 | |
| Bengang Group Co., Ltd. | products | 12,781.64 | |
| Liaoning Hengtai Heavy Machinery Co., Ltd. | products | 38.97 | 29.54 |
| Ansteel Chemical Technology Co., Ltd. | commodity | 1,032.80 | |
| Ansteel Energy Technology Co., Ltd. | Raw materials and spare parts | 79.62 | |
| Angang Electric Co., Ltd. | energy power | 0.01 |
| Name | The content of related party transactions | 2021 | 2020 |
| Panzhong Yihong Metal Products (Chongqing) Co., Ltd. | commodity | 806.99 | |
| Delin Land Port Supply Chain Service Co., Ltd. | commodity | 9,987.26 | |
| Benxi Iron and Steel Tendering Co., Ltd. | Raw materials and spare parts | 10.80 |
2. Lease information of related parties
Company as the lessorCurrency unit: Yuan
| Lessee | Lease capital category | Lease income of 2021 | Lease income of 2020 |
| Benxi Steel & Iron (Group) Steel & Iron Process and Logistics Co., Ltd. | Warehouse and ancillary facilities | 500,000.00 | |
| Benxi Iron and Steel Tendering Co., Ltd. | Plants and ancillary facilities | 480,000.00 |
Company as the lessee
Currency unit: Yuan
| Lessor | Lease capital category | Rental expense for short-term leases and leases of low-value assets and variable lease payments not included in the measurement of lease liabilities | Rent paid | Increased right-of-use assets of 2021 | Interest expense on lease liability of 2021 | Rental fee of 2020 |
| Benxi Steel & Iron (Group) Co., Ltd | Land use right 7,669,068.17 square meter. Land use right 42,920.00 square meter | 1,060,272,624.21 | 39,600,209.28 | 57,383,355.31 | ||
| Benxi Steel & Iron (Group) Co., Ltd | 2300 Hot rolling product line, related real estate | 208,155,611.73 | 7,982,648.96 | 16,711,424.34 |
| Benxi Beiying Steel & Iron (Group) Co., Ltd. | 1780 Hot rolling product line, related real estate | 160,309,755.83 | 6,147,787.68 | 15,578,677.65 | ||
| Bengang Group Co., Ltd. | Land use right 728,282.30 square meter. | 72,001,790.96 | 2,666,923.92 | 9,945,423.08 |
Notes:
1. According to the "Land Use Right Leasing Contract" and subsequent supplementary agreements signed between the Company and Bengang Steel (Group)onApril 7, 1997, December 30, 2005 and subsequent, the Company leases land from Benxi Steel (Group), with a monthly rent of 0.594 yuan per square meter. Theleased land is 7,669,068.17 square meters and the annual rent is 54,665.10 thousand yuan.
2. On August 14, 2019, the Company signed the "House Lease Agreement" with Benxi Steel (Group) and Beiying Iron and Steel Company, and leased the housesand auxiliary facilities occupied by the 2300 hot rolling mill production line and the 1780 hot rolling mill production line. The lease term of the houses and ancillaryfacilities is until December 31, 2038.
3. On July 15, 2019, the Company signed "Land Lease Agreement" with Bengang Group and Bengang Steel (Group) respectively, leased and used a total of 8pieces of land from Bengang Group and Bengang Group Company, with leased areas of 42,920.00 square meters and 728,282.30 square meters. The lease term is20 years, the rental price is 1.138 yuan per square meter per month.
3. Information of Guarantee among related parties
Company as a guarantor:
None
Company as the warrantee
| Warrantor | Amount of guarantee | Starting date of Guarantee | Ending date of Guarantee | Has the guarantee been fulfilled |
| Benxi Iron and Steel Group Co., Ltd., Benxi Iron and Steel (Group) Co., Ltd. | CNY 588,000,000.00 | 2021/9/30 | 2022/9/15 | not fulfilled |
| Benxi Iron and Steel Group Co., Ltd., Benxi Iron and Steel (Group) Co., Ltd. | CNY 200,000,000.00 | 2021/10/15 | 2022/10/14 | not fulfilled |
| Benxi Iron and Steel Group Co., Ltd., Benxi Iron and Steel (Group) Co., Ltd. | CNY 200,000,000.00 | 2021/10/21 | 2022/10/20 | not fulfilled |
| Benxi Iron and Steel Group Co., Ltd., Benxi Iron and Steel (Group) Co., Ltd. | CNY 200,000,000.00 | 2021/10/20 | 2022/10/19 | not fulfilled |
| Benxi Iron and Steel Group Co., Ltd. | CNY 420,000,000.00 | 2021/11/29 | 2022/11/29 | not fulfilled |
| Benxi Iron and Steel Group Co., Ltd. | CNY 200,000,000.00 | 2021/12/3 | 2022/12/3 | not fulfilled |
| Warrantor | Amount of guarantee | Starting date of Guarantee | Ending date of Guarantee | Has the guarantee been fulfilled |
| Benxi Iron and Steel Group Co., Ltd. | CNY 490,000,000.00 | 2021/12/30 | 2022/12/30 | not fulfilled |
| Benxi Iron and Steel Group Co., Ltd. | CNY 250,000,000.00 | 2021/12/30 | 2022/12/30 | not fulfilled |
| Benxi Iron and Steel Group Co., Ltd. | USD 90,000,000.00 | 2021/2/1 | 2022/2/19 | not fulfilled |
| Benxi Iron and Steel Group Co., Ltd. | USD 200,000.00 | 2021/7/30 | 2022/7/31 | not fulfilled |
| Benxi Iron and Steel Group Co., Ltd. | CNY 11,700,000.00 | 2015/3/26 | 2022/3/21 | not fulfilled |
| Benxi Iron and Steel Group Co., Ltd. | CNY 76,200,000.00 | 2016/12/27 | 2024/6/21 | not fulfilled |
| Benxi Iron and Steel Group Co., Ltd., Benxi Iron and Steel (Group) Co., Ltd. | CNY 60,000,000.00 | 2016/3/30 | 2025/3/20 | not fulfilled |
| Benxi Iron and Steel Group Co., Ltd., Benxi Iron and Steel (Group) Co., Ltd. | CNY 340,000,000.00 | 2017/2/27 | 2025/2/20 | not fulfilled |
| Benxi Iron and Steel Group Co., Ltd. | EUR 4,686,195.91 | 2015/3/12 | 2025/9/30 | not fulfilled |
| Warrantor | Amount of guarantee | Starting date of Guarantee | Ending date of Guarantee | Has the guarantee been fulfilled |
| Benxi Iron and Steel Group Co., Ltd. | EUR 8,356,120.03 | 2015/3/12 | 2026/4/30 | not fulfilled |
| Benxi Iron and Steel Group Co., Ltd. | EUR 9,309,597.54 | 2015/3/12 | 2025/10/30 | not fulfilled |
| Benxi Iron and Steel Group Co., Ltd. | EUR 7,938,531.19 | 2015/3/12 | 2025/6/30 | not fulfilled |
| Benxi Iron and Steel Group Co., Ltd. | EUR 7,344,572.64 | 2015/3/12 | 2025/8/29 | not fulfilled |
| Benxi Iron and Steel Group Co., Ltd. | USD 11,850,000.00 | 2016/12/27 | 2024/6/21 | not fulfilled |
| Benxi Iron and Steel Group Co., Ltd. | JPY 139,056,000.00 | 1999/10/10 | 2027/9/10 | not fulfilled |
| Benxi Iron and Steel Group Co., Ltd. | CNY 100,000,000.00 | 2021/2/1 | 2022/2/1 | not fulfilled |
| Benxi Iron and Steel Group Co., Ltd., Benxi Iron and Steel (Group) Co., Ltd. | CNY 200,000,000.00 | 2021/7/9 | 2022/7/8 | not fulfilled |
| Benxi Iron and Steel Group Co., Ltd., Benxi Iron and Steel (Group) Co., Ltd. | CNY 200,000,000.00 | 2021/7/13 | 2022/7/12 | not fulfilled |
| Warrantor | Amount of guarantee | Starting date of Guarantee | Ending date of Guarantee | Has the guarantee been fulfilled |
| Benxi Iron and Steel Group Co., Ltd., Benxi Iron and Steel (Group) Co., Ltd. | CNY 200,000,000.00 | 2021/10/13 | 2022/8/10 | not fulfilled |
4. Remuneration of key management personnel
(In 10 thousand Yuan)
| Name | 2021 | 2020 |
Remuneration of key managementpersonnel
| Remuneration of key management personnel | 322.09 | 309.04 |
5. Receivables and payables of the related parties
1、Receivables of the Company(In 10 thousand yuan)
| Items | Name | 20211231 | 20201231 | ||
| Carrying amount | Provision for bad debts | Carrying amount | Provision for bad debts | ||
| Notes receivable | Benxi Beiying Iron and Steel (Group) Co., Ltd. | 114,601.96 | 230,217.55 | ||
| Notes receivable | Benxi Iron and Steel (Group) Mining Co., Ltd. | 690.65 | |||
| Notes receivable | Benxi Steel & Iron (Group) Co., Ltd. | 81.99 | |||
| Notes receivable | Suzhou Bengang Industrial Co., Ltd. | 658.00 | |||
| Receivables Financing | Benxi Beiying Steel & Iron (Group) Co., Ltd. | 230.00 | |||
| Receivables Financing | Benxi Iron and Steel (Group) Co., Ltd. | 50.00 | |||
| Items | Name | 20211231 | 20201231 | ||
| Carrying amount | Provision for bad debts | Carrying amount | Provision for bad debts | ||
| Accounts receivable | Benxi Iron and Steel Group International Economic and Trade Co., Ltd. | 3,077.79 | 30.78 | 10,463.45 | 104.63 |
| Accounts receivable | Benxi Iron and Steel (Group) Thermal Development Co., Ltd. | 700.71 | 7.01 | 2,692.94 | 26.93 |
| Accounts receivable | Benxi Steel Stainless Steel Cold Rolling Dandong Co., Ltd. | 188.46 | 1.88 | ||
| Accounts receivable | Benxi Iron and Steel (Group) Metallurgical Slag Co., Ltd. | 0.10 | |||
| Prepayments | Benxi Iron and Steel Group International Economic and Trade Co., Ltd. | 56,208.31 | 114,662.12 | ||
| Prepayments | Benxi Iron and Steel (Group) Machinery Manufacturing Co., Ltd. | 4,676.44 | 6,470.61 | ||
| Prepayments | Benxi New Business Development Co., Ltd. | 252.52 | |||
| Prepayments | Liaoning Hengtong Metallurgical Equipment Manufacturing Co., Ltd. | 36.50 | |||
| Other receivables | Benxi Iron and Steel (Group) Real Estate Development Co., Ltd. | 279.90 | 258.56 | 278.31 | 253.84 |
| Other receivables | Benxi Iron and Steel Group Co., Ltd. | 140.35 | |||
| Other receivables | Benxi Iron and Steel Tendering Co., Ltd. | 60.20 | 0.60 | ||
| Other receivables | Anshan Iron and Steel Co., Ltd. | 42.11 | 42.11 | ||
| Items | Name | 20211231 | 20201231 | ||
| Carrying amount | Provision for bad debts | Carrying amount | Provision for bad debts | ||
| Other receivables | Benxi Iron and Steel (Group) Chint Building Materials Co., Ltd. | 27.05 | 21.12 | 27.05 | 19.96 |
| Other receivables | Liaoning Metallurgical Technician College | 5.80 | 5.80 | 5.80 | 5.80 |
| Other non-current assets | Benxi Iron and Steel Group International Economic and Trade Co., Ltd. | 601.21 | |||
| Other receivables | Ansteel Construction Group Co., Ltd. | 922.21 | |||
| Other non-current assets | Liaoning Hengyi Financial Leasing Co., Ltd. | 86,459.06 | |||
2、 Payables of the Company
(In 10 thousand yuan)
| Items | Name | 2021.12.31 | 2020.12.31 |
| Notes payable | Benxi Iron and Steel Group International Economic and Trade Co., Ltd. | 259,100.00 | 345,103.76 |
| Notes payable | Benxi Iron and Steel (Group) Industrial Development Co., Ltd. | 2,732.32 | 5,253.76 |
| Notes payable | Liaoning Metallurgical Vocational and Technical College | 289.19 | 47.90 |
| Notes payable | Benxi Iron and Steel (Group) Construction Co., Ltd. | 244.15 | |
| Notes payable | Liaoning Metallurgical Technician College | 108.72 | 133.27 |
| Notes payable | Ansteel Industrial Group Metallurgical Machinery Co., Ltd. | 61.63 |
| Items | Name | 2021.12.31 | 2020.12.31 |
| Notes payable | Liaoning Hengtai Heavy Machinery Co., Ltd. | 53.26 | 84.78 |
| Notes payable | Bengang Electric Co., Ltd. | 37.13 | 6,414.33 |
| Notes payable | Liaoning Hengtong Metallurgical Equipment Manufacturing Co., Ltd. | 6.37 | 868.28 |
| Notes payable | Benxi Iron and Steel (Group) Mining Co., Ltd. | 3.09 | 91,857.00 |
| Notes payable | Benxi Iron and Steel (Group) Machinery Manufacturing Co., Ltd. | 1.55 | 255.94 |
| Notes payable | Liaoning Hengyi Financial Leasing Co., Ltd. | 4,602.43 | |
| Notes payable | Benxi Steel & Iron (Group) Metallurgy Residues Co., Ltd. | 16.62 | |
| Accounts payable | Benxi Iron and Steel (Group) Mining Co., Ltd. | 22,793.08 | 20,807.68 |
| Accounts payable | Liaoning Hengyi Financial Leasing Co., Ltd. | 24,364.64 | 5,799.10 |
| Accounts payable | Benxi Iron and Steel (Group) Construction Co., Ltd. | 17,733.28 | 5,182.75 |
| Accounts payable | Benxi Iron and Steel (Group) Construction Co., Ltd. | 12,738.21 | 2,394.63 |
| Accounts payable | Benxi Beiying Iron and Steel (Group) Co., Ltd. | 15,853.11 | 3,172.95 |
| Accounts payable | Benxi Iron and Steel (Group) Metallurgical Slag Co., Ltd. | 8,511.25 | 1,645.14 |
| Accounts payable | Benxi Iron and Steel (Group) Industrial Development Co., Ltd. | 6,550.57 | 385.20 |
| Accounts payable | Benxi Iron and Steel (Group) Information Automation Co., Ltd. | 6,447.06 | 1,852.50 |
| Accounts payable | Bengang Electric Co., Ltd. | 1,862.72 | 1,500.74 |
| Accounts payable | Liaoning Hengtai Heavy Machinery Co., Ltd. | 1,736.69 | 2,171.25 |
| Accounts payable | Benxi Iron and Steel Group Co., Ltd. | 1,626.00 | 1,246.38 |
| Items | Name | 2021.12.31 | 2020.12.31 |
| Accounts payable | Benxi Iron and Steel Group International Economic and Trade Co., Ltd. | 1,168.49 | 579.53 |
| Accounts payable | Liaoning Metallurgical Technician College | 1,129.01 | 1,388.84 |
| Accounts payable | Benxi Iron and Steel (Group) Machinery Manufacturing Co., Ltd. | 686.96 | 964.33 |
| Accounts payable | Benxi Steel Stainless Steel Cold Rolling Dandong Co., Ltd. | 610.83 | 616.72 |
| Accounts payable | Ansteel Scrap Resources (Anshan) Co., Ltd. | 425.75 | |
| Accounts payable | Liaoning Metallurgical Vocational and Technical College | 350.93 | 746.81 |
| Accounts payable | Liaoning Hengtong Metallurgical Equipment Manufacturing Co., Ltd. | 252.71 | 1,297.91 |
| Accounts payable | Benxi Iron and Steel (Group) Thermal Development Co., Ltd. | 243.04 | 178.73 |
| Accounts payable | Ansteel Heavy Machinery Co., Ltd. | 157.25 | |
| Accounts payable | Angang Electric Co., Ltd. | 123.17 | |
| Accounts payable | Ansteel Industrial Group Metallurgical Machinery Co., Ltd. | 112.51 | |
| Accounts payable | Angang Steel Rope Co., Ltd. | 91.35 | |
| Accounts payable | Benxi Iron and Steel (Group) Real Estate Development Co., Ltd. | 61.52 | 61.52 |
| Accounts payable | Ansteel Mining Machinery Manufacturing Co., Ltd. | 30.45 | |
| Accounts payable | Benxi High-tech Drilling Tools Manufacturing Co., Ltd. | 22.12 | 38.60 |
| Accounts payable | Benxi New Business Development Co., Ltd. | 6.76 | 415.37 |
| Accounts payable | Benxi Iron and Steel (Group) Engineering Construction Supervision Co., Ltd. | 3.91 | 65.51 |
| Items | Name | 2021.12.31 | 2020.12.31 |
| Accounts payable | Benxi Iron and Steel (Group) Chint Building Materials Co., Ltd. | 0.24 | 0.24 |
| Contract liabilities/other current liabilities | Suzhou Bengang Industrial Co., Ltd. | 2,350.61 | 5,374.03 |
| Contract liabilities/other current liabilities | Delin Land Port Supply Chain Service Co., Ltd. | 2,039.21 | |
| Contract liabilities/other current liabilities | Benxi Iron and Steel Group Co., Ltd. | 1,567.51 | |
| Contract liabilities/other current liabilities | Panzhong Yihong Metal Products (Chongqing) Co., Ltd. | 722.78 | |
| Contract liabilities/other current liabilities | Dalian Boroller Steel Pipe Co., Ltd. | 236.19 | 181.60 |
| Contract liabilities/other current liabilities | Benxi Iron and Steel (Group) Metallurgical Slag Co., Ltd. | 112.40 | 161.66 |
| Contract liabilities/other current liabilities | Benxi Iron and Steel (Group) Industrial Development Co., Ltd. | 74.55 | 55.77 |
| Contract liabilities/other current liabilities | Ansteel Energy Technology Co., Ltd. | 44.52 | |
| Contract liabilities/other current liabilities | Benxi Steel Stainless Steel Cold Rolling Dandong Co., Ltd. | 37.73 | |
| Contract liabilities/other current liabilities | Tianjin Angang Steel Processing and Distribution Co., Ltd. | 26.00 |
| Items | Name | 2021.12.31 | 2020.12.31 |
| Contract liabilities/other current liabilities | Liaoning Hengtong Metallurgical Equipment Manufacturing Co., Ltd. | 19.99 | 52.81 |
| Contract liabilities/other current liabilities | Ansteel Chemical Technology Co., Ltd. | 12.74 | |
| Contract liabilities/other current liabilities | Benxi Iron and Steel Group International Economic and Trade Co., Ltd. | 43.70 | |
| Other payables | Benxi Iron and Steel (Group) Co., Ltd. | 24,973.92 | 13,013.80 |
| Other payables | Benxi Iron and Steel Group International Economic and Trade Co., Ltd. | 2,808.40 | 1,277.85 |
| Other payables | Benxi Iron and Steel (Group) Construction Co., Ltd. | 2,483.47 | 436.25 |
| Other payables | Benxi Iron and Steel (Group) Industrial Development Co., Ltd. | 1,828.37 | 31.33 |
| Other payables | Benxi Iron and Steel (Group) Steel Processing and Distribution Co., Ltd. | 1,686.92 | 1,681.17 |
| Other payables | Guangzhou Free Trade Zone Benxi Steel Sales Co., Ltd. | 267.44 | 267.44 |
| Other payables | Benxi Iron and Steel (Group) Thermal Development Co., Ltd. | 218.75 | 561.73 |
| Other payables | Benxi New Business Development Co., Ltd. | 206.91 | 197.61 |
| Other payables | Benxi Iron and Steel (Group) Real Estate Development Co., Ltd. | 143.59 | 143.59 |
| Other payables | Ansteel Scrap Resources (Anshan) Co., Ltd. | 50.00 | |
| Other payables | Liaoning Metallurgical Technician College | 19.05 | 1.34 |
| Other payables | Benxi Iron and Steel Group Co., Ltd. | 15.57 |
| Items | Name | 2021.12.31 | 2020.12.31 |
| Other payables | Benxi Iron and Steel (Group) Machinery Manufacturing Co., Ltd. | 1.01 | 1.01 |
| Other payables | Liaoning Hengyi Financial Leasing Co., Ltd. | 208.60 | |
| Other payables | Benxi Iron and Steel Group Finance Co., Ltd. | 0.98 | |
| Other payables | Liaoning Hengyi Financial Leasing Co., Ltd. | 111,423.24 |
6. Centralized management of funds
1、 The main contents of the centralized management of funds that the company participates
in and implements are as follows:
In April 2021, after negotiation with Bengang Group Finance Co., Ltd. (hereinafter referredto as Bengang Finance Co., Ltd.), the Financial Services Agreement was signed to stipulatethe relevant financial business terms and related transactions between the company and itssubsidiaries and Bengang Finance Co., Ltd. Amount cap. The agreement stipulates that themaximum daily deposit balance of the company and its controlled subsidiaries in the nexttwelve months will be 11 billion yuan, the maximum loan and other credit business will be8 billion yuan, and the maximum credit line will be 8 billion yuan.
In December 2021, after negotiation with Ansteel Group Finance Co., Ltd. (hereinafterreferred to as Ansteel Finance Co., Ltd.), the Financial Services Agreement (2022-2024) wassigned to agree on the agreement between the company and its subsidiaries and Ansteel in2022, 2023, and 2024. Relevant financial business terms and relevant transaction amountcaps between financial companies. The agreement stipulates that the maximum daily depositbalance of the company and its holding subsidiaries in Ansteel Finance Company in the nexttwelve months is 4.5 billion yuan, and the maximum credit limit of loans, bills and otherforms is 5 billion yuan, and Ansteel Finance Company provides entrusted loans to thecompany. The maximum limit is 2 billion yuan.
2、 Funds collected by the company to the group
Funds deposited by the company directly into the finance company without being collectedinto the account of the parent company of the group
| Items | 20211231 | 20201231 | ||
| Amount | Provision | Amount | Provision | |
Cash at bank (deposited in AnsteelGroup Finance Co., Ltd.)
| Cash at bank (deposited in Ansteel Group Finance Co., Ltd.) | 442,965.63 | |||
| Cash at bank (deposited in Bengang Group Finance Co., Ltd.) | 1,332,199.78 | |||
| Total | 442,965.63 | 1,332,199.78 | ||
| Including：Restricted funds due to centralized management of funds | 240,882.28 |
Notes: The company will transfer funds to Ansteel Group Finance Co., Ltd. at the end of 2021
3、 Funds collected by the company to the group
| Items | 20211231 | 20201231 |
| Other payables | 82,081,562.50 | 78,545,625.00 |
| Total | 82,081,562.50 | 78,545,625.00 |
Dalian Benruitong Automotive Materials Technology Co., Ltd., a subsidiary of the company,borrowed RMB 75,000,000.00 from Benxi Iron and Steel (Group) Co., Ltd. As of December31, 2021, the company's unpaid interest was RMB7,081,562.50 (as of December 31, 2020,the company's unpaid interest was RMB3,535,937.50).
11. Commitments and Contingencies
(1) Commitments
1. Lease contracts in progress or to be performed and their financial impacts
(1) According to the "Land Use Right Leasing Contract" and subsequent supplementaryagreements signed by the company and Benxi Steel (Group) on April 7, 1997, December 30,2005, the Company leased land from Benxi Steel (Group). The monthly rent is 0.594 yuan
per square meters, the leased land area is 7,669,068.17 square meters, and the annual rent is54,665,100 yuan.
（2）On August 14, 2019, the Company signed the "House Lease Agreement" with BenxiSteel (Group) and Beiying Steel respectively, leasing the houses and auxiliary facilitiesoccupied by 2300 and 1780 hot rolling mill production lines, and the lease term ends onDecember 31, 2038. The rental fee is based on the depreciation of the original rent value andthe national additional tax, plus reasonable profit negotiation. The estimated annual rent isnot more than 20 million yuan and 18 million yuan respectively. The rental fee is settled andpaid monthly. This related party transaction has been reviewed and approved at the fourthmeeting of the eighth board of directors of the Company.
(3) On July 15, 2019, the Company signed "Land Lease Agreement" with Bengang Groupand Benxi Steel (Group) respectively, and leased and used a total of 8 pieces of land of thetwo companies. The lease areas are 42,920.00 square meters and 728,282.30 square metersrespectively, with a lease term of 20 years, and a rental price of 1.138 yuan per square meterper month. After the agreement comes into effect, considering the national law and policyadjustments every five years, both parties should determine whether the rent needs to beadjusted according to the pricing basis stipulated in Article 2 of this agreement. This relatedparty transaction has been reviewed and approved at the third meeting of the eighth boardof directors of the company.
2. Irrevocable letter of credit
As at December 31, 2021, the amount of irrevocable letter of credit that was not fulfilled
was 0.625 billion yuan.
(2) Contingencies
As at December 31, 2021, no significant contingencies need to be disclosed.
12. Subsequent events
(1) Important non-adjustment matters
None
(2) Profit Distribution
| Profit or dividend to be distributed | On March 24, 2022, the 2021 annual dividend distribution plan was approved by the resolution of the 27th meeting of the company’s 8th board of directors. It is planned to distribute cash dividends of RMB6.00 (tax included) to all shareholders for every 10 shares based on 4,108,191,379 shares at the end of 2021. A total of common stock dividends distribution of RMB2,464,914,827.40, this distribution will not be converted into share capital from capital reserves. The above profit distribution plan still needs to be reviewed and approved by the general meeting of shareholders. |
(3) Sales Return
Not applicable.
(4) Divided into assets held for sale and disposal portfolio
Not applicable.
(5) Other subsequent events
Not applicable.
13. Other significant events
(1) Correction of previous accounting errors
None
(2) Debt restructuring
None
(3) Asset replacement
None
(4) Annuity plan
None
(5) Termination of business
None
(6) Segment information
Since the Company's main product is steel, other products account have a small proportion of sales,the main production base is in Liaoning, and the disclosure of the segment report is not applicable.
(7) Other important matters that have an impact on investor decisions
1. The controlling shareholder pledges the Company's shares
As of the balance sheet date, the Company's controlling shareholder Benxi Iron and Steel (Group)Co., Ltd. held 2,409,628,094 shares of the Company, of which 360,000,000 shares were in pledgedstatus and 108,326,179 shares were in restricted sales and frozen status.
14. Notes to the financial statements of parent company
(1) Notes receivable
1. Notes receivable disclosed by category
| Items | 20211231 | 20201231 |
| Bank acceptance bill | ||
| Commercial acceptance bill | 1,514,416,395.80 | |
| Total | 1,514,416,395.80 |
2.The company has no pledged notes receivable at the end of period
3.Notes receivable which have been endorsed or discounted by the company and have notyet matured at the end of period
| Items | Derecognition amount at the end of period | Amount not derecognition amount at the end of period |
| Bank acceptance bill | ||
| Commercial acceptance bill | 1,107,866,402.09 | |
| Total | 1,107,866,402.09 |
4. No Notes receivable has been transferred into accounts receivable due to inability ofdrawer to meet acceptance bill at the end of period
(2) Accounts receivable
1.Accounts receivable disclosed by aging
| Items | 20211231 | 20201231 |
| Within 1 year (inclusive) | 352,756,383.14 | 283,561,303.90 |
| 1-2 years (inclusive) | 1,380,655.78 | 2,420,511.80 |
| 2-3 years (inclusive) | 1,942,837.68 | 6,500,255.55 |
| Over 3 years | 180,383,550.49 | 177,111,797.34 |
| Sub-total | 536,463,427.09 | 469,593,868.59 |
| Less: Provision for bad debts | 182,831,863.67 | 179,728,406.39 |
| Total | 353,631,563.42 | 289,865,462.20 |
2. Accounts receivable disclosed by category
| Items | 20211231 | 20201231 | ||||||||
| Carrying amount | Provision for bad debts | Book value | Carrying amount | Provision for bad debts | Book value | |||||
| Amount | Percentage (%) | Amount | Bad debts ratio (%) | Amount | Percentage (%) | Amount | Bad debts ratio (%) | |||
| Provision for Bad Dept individually | 47,762,337.18 | 8.90 | 47,762,337.18 | 100.00 | 47,762,337.18 | 10.17 | 47,762,337.18 | 100.00 | ||
| Provision for Bad Dept by portfolio | 488,701,089.91 | 91.10 | 135,069,526.49 | 27.64 | 353,631,563.42 | 421,831,531.41 | 89.83 | 131,966,069.21 | 31.28 | 289,865,462.20 |
| Include: | ||||||||||
| Portfolio 1: Aging | 328,112,713.51 | 61.16 | 135,069,526.49 | 41.17 | 193,043,187.02 | 245,720,903.60 | 52.33 | 131,966,069.21 | 53.71 | 113,754,834.39 |
| Portfolio 2: Combined related party | 160,588,376.40 | 29.93 | 160,588,376.40 | 176,110,627.81 | 37.50 | 176,110,627.81 | ||||
| Total | 536,463,427.09 | 100.00 | 182,831,863.67 | 353,631,563.42 | 469,593,868.59 | 100.00 | 179,728,406.39 | 289,865,462.20 | ||
| Items | 20211231 | |||
| Accounts receivable | Provision for bad debts | Bad debts ratio（%） | Reason | |
| Benxi Nanfen Xinhe Metallurgical Co., Ltd. | 47,762,337.18 | 47,762,337.18 | 100.00 | Benxi Nanfen Xinhe has halt operation. |
| Total | 47,762,337.18 | 47,762,337.18 | ||
Accounts receivable tested for impairment by portfolio:
Portfolio tested by aging
| Items | 20211231 | ||
| Carrying amount | Provision for bad debts | Bad debts ratio (%) | |
| Within 1 year | 192,168,006.74 | 1,921,680.07 | 1.00 |
| 1-2 years | 1,380,655.78 | 138,065.58 | 10.00 |
| 2-3 years | 1,942,837.68 | 388,567.53 | 20.00 |
| Over 3 years | 132,621,213.31 | 132,621,213.31 | 100.00 |
| Total | 328,112,713.51 | 135,069,526.49 | |
(3) Information of provision, reversal or recovery of bad debts of current period.The amount of bad debt provision reversed in the current period is RMB3,103,457.28
(4) No accounts receivable has been written off this year.
(5) Top five debtors at the year-end
| Company | 20211231 | ||
| Amount | Percentage of total accounts receivable (%) | Provision for bad debts | |
| The first | 160,588,376.40 | 29.93 | |
| The second | 99,222,882.66 | 18.50 | 992,228.83 |
| The third | 80,584,547.00 | 15.02 | 805,845.47 |
| The fourth | 47,762,337.18 | 8.90 | 47,762,337.18 |
| The fifth | 9,008,967.00 | 1.68 | 9,008,967.00 |
| Company | 20211231 | ||
| Amount | Percentage of total accounts receivable (%) | Provision for bad debts | |
| Total | 397,167,110.24 | 74.03 | 58,569,378.48 |
(6) There are no accounts receivable derecognized due to the transfer of financial assets
in the current period.
(7) There is no assets and liabilities formed by continued involvement due to the
transfer of Account receivables.
(3) Accounts receivable financing
1. Details of accounts receivable financing
| Items | 20211231 | 20201231 |
| Notes receivable | 1,504,640,362.79 | 4,143,431,412.08 |
| Include: Bank acceptance bill | 1,504,640,362.79 | 1,876,753,316.46 |
| Commercial acceptance bill | 2,266,678,095.62 | |
| Total | 1,504,640,362.79 | 4,143,431,412.08 |
Other information: The "receivable financing" item reflects the notes and accounts receivablethat are measured at fair value at the balance sheet date and whose changes are included in othercomprehensive income.
2. At the end of the period, the company has no commercial bills pledged in accountsreceivable financing
3. At the end of the period, the company's endorsed or discounted commercial bills inaccounts receivable financing accounting and not yet matured on the balance sheetdate are as follows
| Items | Derecognized amount | Not derecognized amount |
| Bank acceptance bill | 17,940,518,873.62 | |
| Commercial acceptance bill | ||
| Total | 17,940,518,873.62 |
4.No Notes receivable has been transferred into accounts receivable due to inability ofdrawer to meet acceptance bill at the end of period
(4) Other receivables
| Item | 20211231 | 20201231 |
| Interest receivables | 2,014,931.61 | 23,028,942.73 |
| Dividend receivables | ||
| Other receivables | 266,591,116.91 | 205,151,247.29 |
| Total | 268,606,048.52 | 228,180,190.02 |
1. Interest receivables
(1) Interest receivable disclosed by category
| Items | 20211231 | 20201231 |
| Deposit interest | 2,014,931.61 | 23,028,942.73 |
| Subtotal | 2,014,931.61 | 23,028,942.73 |
| Less: provision for bad debt | ||
| Total | 2,014,931.61 | 23,028,942.73 |
(2) There is no significant provision for overdue interest and bad debt provision.
(3) There is no provisions for interest receivable
2. Other receivables disclosed by aging
| Items | 20211231 | 20201231 |
| Within 1 year (inclusive) | 144,080,381.27 | 35,550,478.46 |
| 1-2 years (inclusive) | 4,002,692.25 | 42,319,451.22 |
| 2-3 years (inclusive) | 3,776,577.88 | 13,842,023.46 |
| Over 3 years | 186,249,689.29 | 180,717,695.14 |
| Sub-total | 338,109,340.69 | 272,429,648.28 |
| Less: Provision for bad debts | 71,518,223.78 | 67,278,400.99 |
| Total | 266,591,116.91 | 205,151,247.29 |
(1) Provision for bad debt provision
| Provision for bad debts | Stage one | Stage two | Stage three | Total |
| 12-month expected credit losses | Lifetime expected credit losses (no credit impairment) | Lifetime expected credit losses (credit impairment occurred) | ||
| Beginning balance | 352,376.05 | 9,475,267.75 | 57,450,757.19 | 67,278,400.99 |
| Beginning balance in current period | ||||
| --Transfer to Stage two | -3,525.58 | 3,525.58 | ||
| --Transfer to Stage three | -3,036,762.80 | 3,036,762.80 | ||
| --Reversal to Stage two | ||||
| --Reversal to Stage one | ||||
| Current period provision | 494,264.90 | 1,021,959.28 | 6,028,941.18 | 7,545,165.36 |
| Current period reversal | ||||
| Current period write-back | 316,314.67 | 1,158,596.25 | 1,830,431.65 | 3,305,342.57 |
| Current period write-off | ||||
| Other change | ||||
| Ending balance | 526,800.70 | 6,305,393.56 | 64,686,029.52 | 71,518,223.78 |
(2) Changes of other receivables
| Provision for bad debts | Stage one | Stage two | Stage three | Total |
| 12-month expected credit losses | Lifetime expected credit losses (no credit impairment) | Lifetime expected credit losses (credit impairment occurred) | ||
| Beginning balance | 194,557,372.69 | 20,421,416.81 | 57,450,858.78 | 272,429,648.28 |
| Beginning balance in current period | ||||
| --Transfer to Stage two | -316,691.48 | 316,691.48 | ||
| --Transfer to Stage three | -8,941,860.04 | 8,941,860.04 | ||
| --Reversal to Stage two | ||||
| --Reversal to Stage one | ||||
| Current period increase | 312,200,678.92 | 3,469,155.79 | 123,742.35 | 315,793,577.06 |
| Current period derecognition | 243,252,344.35 | 5,031,108.65 | 1,830,431.65 | 250,113,884.65 |
| Other change | ||||
| Ending balance | 263,189,015.78 | 10,234,295.39 | 64,686,029.52 | 338,109,340.69 |
(3) The amount of other accounts receivable actually written off in the current period isRMB 1,220,245.84.
(4) Other receivables disclosed by nature
| Nature | 20211231 | 20201231 |
| Receivable and payable | 327,876,947.80 | 264,617,899.56 |
| Other | 10,232,392.89 | 7,811,748.72 |
| Total | 338,109,340.69 | 272,429,648.28 |
(5) Top five debtors at the year-end
| Company | Nature or content | Amount | Aging | Percentage of total other receivables (%) | Provision for bad debts |
| The First | Receivable and payable | 2,462,794.16 | Within 1 year to 3 years | 0.73 | 2,249,413.14 |
| The Second | Receivable and payable | 2,261,360.00 | Over 3 years | 0.67 | 2,261,360.00 |
| The Third | Receivable and payable | 1,908,708.06 | Over 3 years | 0.56 | 1,908,708.06 |
| The Fourth | Receivable and payable | 1,740,000.00 | Over 3 years | 0.51 | |
| The Fifth | Receivable and payable | 1,503,037.23 | Within 1 year to 3 years | 0.44 | 1,202,429.78 |
| Total | 9,875,899.45 | 2.91 | 7,621,910.98 |
（6）No other receivables involving government subsidies in the current period.
（7）There are no other receivables derecognized due to the transfer of financial assets inthe current period.
（8）No assets and liabilities formed by continued involvement due to the transfer of otherreceivables in the current period.
(5) Long-term equity investment
| Items | Ending balance | Beginning balance | ||||
| Carrying amount | Impairment | Book value | Carrying amount | Impairment | Book value | |
| Subsidiaries | 2,015,186,190.50 | 2,015,186,190.50 | 2,016,281,902.16 | 2,016,281,902.16 | ||
| Joint Venture | ||||||
| Total | 2,015,186,190.50 | 2,015,186,190.50 | 2,016,281,902.16 | 2,016,281,902.16 | ||
Details of investment in subsidiaries
| Name of entity | Beginning balance | Increase | Decrease | Ending balance | Impairment of current period | Ending balance of impairment |
| Guangzhou Bengang Steel & Iron Trading Co., Ltd. | 30,000,000.00 | 30,000,000.00 | ||||
| Shanghai Bengang Metallurgy Science and Technology Co., Ltd. | 30,000,000.00 | 30,000,000.00 | ||||
| Bengang Steel Plates Liaoyang Pellet Co., Ltd. | 529,899,801.38 | 529,899,801.38 | ||||
| Dalian Benruitong Automobile Material Technology Co., Ltd. | 65,000,000.00 | 65,000,000.00 | ||||
| Bengang POSCO Cold-rolled Sheet Co., Ltd. | 1,019,781,571.10 | 1,019,781,571.10 | ||||
| Changchun Bengang Steel & Iron Sales Co., Ltd. | 28,144,875.36 | 28,144,875.36 | ||||
| Harbin Bengang Economic and Trading Co., Ltd. | 29,923,398.23 | 29,923,398.23 | ||||
| Nanjing Bengang Materials Sales Co., Ltd. | 2,081,400.65 | 2,081,400.65 |
| Name of entity | Beginning balance | Increase | Decrease | Ending balance | Impairment of current period | Ending balance of impairment |
| Wuxi Bengang Steel & Iron Sales Co., Ltd. | 29,936,718.57 | 29,936,718.57 | ||||
| Xiamen Bengang Steel & Iron Sales Co., Ltd. | 1,095,711.66 | 1,095,711.66 | ||||
| Yantai Bengang Steel & Iron Sales Co., Ltd. | 49,100,329.41 | 49,100,329.41 | ||||
| Tianjin Bengang Steel & Iron Trading Co., Ltd. | 60,318,095.80 | 60,318,095.80 | ||||
| Benxi Bengang Steel Sales Co., Ltd | 30,000,000.00 | 30,000,000.00 | ||||
| Shenyang Bengang Metallurgical Science and Technology Co., Ltd. | 30,000,000.00 | 30,000,000.00 | ||||
| Chongqing Liaoben Steel & Iron Trade Co., Ltd. | 30,000,000.00 | 30,000,000.00 | ||||
| Bengang Baojin (Shenyang) Automobile New Materials Technology Co., Ltd. | 51,000,000.00 | 51,000,000.00 | ||||
| Total | 2,016,281,902.16 | 1,095,711.66 | 2,015,186,190.50 |
(6) Operating Income and Operating Cost
Operating income and operating cost
| Items | 2021 | 2020 | ||
| Revenue | Cost | Revenue | Cost | |
| Principal business | 69,727,193,761.59 | 65,005,072,705.35 | 44,436,384,616.09 | 42,659,983,317.54 |
| Other business | 8,994,267,964.12 | 8,198,390,770.21 | 4,374,721,858.64 | 4,082,717,104.16 |
| Total | 78,721,461,725.71 | 73,203,463,475.56 | 48,811,106,474.73 | 46,742,700,421.70 |
Details for operating income:
| Items | Principal Business | Other Business |
| Classified by business area | 69,727,193,761.59 | 8,994,267,964.12 |
| Including：Domestic | 64,316,404,987.60 | 8,994,267,964.12 |
| Abroad | 5,410,788,773.99 | |
| Classified by the time of commodity transfer | 69,727,193,761.59 | 8,994,267,964.12 |
| Including: recognize at a certain point in time | 69,727,193,761.59 | 8,991,389,532.65 |
| recognize over a certain period of time | 2,878,431.47 | |
| Total | 69,727,193,761.59 | 8,994,267,964.12 |
(7) Income on investment
| Items | 2021 | 2020 |
Income from disposal of long-term equityinvestment
| Income from disposal of long-term equity investment | -1,341,423.32 | |
| Income on disposal of financial assets holding for trading | -124,911,004.89 | 13,500,000.00 |
| Dividend income obtained during the holding period of other equity instrument investments | 77,242.47 | |
| Other | 2,436,869.33 | |
| Total | -123,815,558.88 | 13,577,242.47 |
15. Supplementary information
(1) Details of non-recurring profit and loss
| Items | Amount | Notes |
| Profit or loss from disposal of non-current assets | -60,100,706.71 | |
| Tax refund, reduction or exemption of unauthorized approval or no formal approval document | ||
| Government subsidy attributable to profit and loss of current period (except such government subsidy closely related to the company's normal business operation, meeting the regulation of national policy and enjoyed constantly in certain quota or quantity according to a certain standard) | 66,345,976.64 | |
| Fund occupation fee charged to non-financial enterprises included in current profit and loss | 2,436,869.33 | |
| Except for the effective hedging business related to the normal operation of the company, the fair value changes arising from the holding of held-for-trading financial assets, derivative financial assets, held-for-trading financial liabilities, and derivative financial liabilities, and the disposal of held-for-trading financial assets, derivative financial Investment income from assets, held-for-trading financial liabilities, derivative financial liabilities and other debt investments | -37,205,991.34 | |
| Other non-operating revenue and expenditure other than above items | 5,176,371.41 | |
| Subtotal | -23,347,480.67 | |
| Impact of income tax | 5,969,319.73 | |
| Impact of minority interests | 202,407.38 | |
| Total | -17,175,753.56 |
(2) Net asset yield and earnings per share
| Profit in the Reporting Period | Weighted average net assets yield (%) | Earnings per share (Yuan) | |
| Basic EPS | Diluted EPS | ||
| Net profit attributable to ordinary shareholders | 11.88 | 0.600 | 0.496 |
| Net profit attributable to ordinary shareholders after deducting non-recurring profit and loss | 11.96 | 0.604 | 0.500 |
Bengang Steel Plates Co., Ltd.
24 March 2022