Bengang Steel Plates Co., Ltd.
2023 Semi-Annual Report
August, 2023
Section I Important Notice, Contents and Definitions
The Company’s Board of Directors, Board of Supervisors, directors, supervisors, and seniormanagers guarantee that the content of the semi-annual report is true, accurate, and complete, andthere are no false records, misleading statements, or major omissions, and assume individual andjoint legal responsibilities.
Li Yan, legal representative, Zheng Zhengli, Chief financial officer, and Sun Yanbin, Chiefaccountant (the person in charge of the accounting), hereby declare that they guarantee theauthenticity, accuracy and completeness of the financial report in this semi-annual report.
All directors have attended the board meeting for reviewing the semi-annual report.This report involves forward-looking statements such as future plans, and does not constitute asubstantial commitment by the Company to investors. Investors are reminded to pay attention toinvestment risks. This report is compiled in Chinese and English respectively. The Chineseversion shall prevail when there are any controversial statements in the two versions.The Company has described the existing risks and countermeasures in detail in this report, pleaserefer to Section III-X “Risks Faced by the Company and Countermeasures”. “China SecuritiesJournal”, “Securities Times”, Shenzhen Stock Exchange website and Juchao Information Networkare the media selected by the company for information disclosure. All the information of theCompany is subject to the information published in the above-mentioned designated media.Investors are reminded to pay attention to investment risks.The Company does not have any significant risks that require investors’ attention.The Company plans not to distribute cash dividends, bonus shares, and convert capital reserveinto share capital.
Contents
Section I Important Notice, Contents and Definitions ...... 2
Section II Company Profile and Main Financial Index ...... 6
Section III Management Discussion and Analysis ...... 9
Section IV Corporate Governance ...... 28
Section V Environmental and Social Responsibility ...... 30
Section VI Important Events ...... 38
Section VII Changes in Share Capital and Shareholders ...... 61
Section VIII Preference Shares Related Situation ...... 66
Section IX Bonds Related Situation ...... 67
Section Ⅹ Financial Report ...... 70
Reference File Directory
1. Financial statements signed and sealed by Legal representative, Chief financial officer, Chief accountant;
2. The originals of all company documents and announcements publicly disclosed during the reporting period;
3. Semi-annual reports published in other securities markets.
Definition
| Terms to be defined | Refers to | Definition |
| Bengang Bancai, Bengang Steel, the |
Company, the Listed Company
Refers to Bengang Steel Plates Co., Ltd.
| Ansteel Group | Refers to | Ansteel Group Co., Ltd. |
| Bensteel Group | Refers to | Bensteel Group Co., Ltd. |
| Benxi Steel and Iron Co., Bengang Co. | Refers to | Benxi Steel and Iron (Group) Co., Ltd. |
| SSE | Refers to | Shenzhen Stock Exchange |
| Liaoning Provincial State-asset |
Administration
Refers to
and Management CommitteeBengang Puxiang Refers to
| Liaoning State-owned Asset Supervisory |
| Bengang Puxiang Cool Rolling Steel |
Sheet Co., Ltd.
| Ansteel Finance Company | Refers to | Ansteel Group Finance Co., Ltd. |
| Ansteel Co. | Refers to | Ansteel Co., Ltd. |
Vanadium and Titanium Co. Refers to
Resources Co., Ltd.
Section II Company Profile and Main Financial Index
I. Company ProfileStock abbreviation
Stock code 000761, 200761Stock exchange for listing Shenzhen Stock Exchange
Bengang Bancai,Bengangban BCompany name in Chinese
本钢板材股份有限公司
| Company name in Chinese | |
| Abbreviation of Company name in Chinese |
本钢板材
BENGANG STEEL PLATES CO.,LTD
| Company name in English (If any) |
| Abbreviation of Company name in English (If any) |
BSP
| Legal representative | Li Yan |
II. Contact Person and Contact Information
| Secretary of Board of Directors | Representative of Securities Affairs |
Name Zheng Zhengli Chen LiwenContact address
No. 1-1 Steel Road, Pingshan District,
No. 1-1 Steel Road, Pingshan District,
| Benxi City, Liaoning Province | Benxi City, Liaoning Province |
Telephone number 024-47827003 024-47828980Fax024-47827004 024-47827004E-mail zhengzhengli76@126.com bgbc000761@126.com
III. Other Information
1. Contract Information of the Company
Whether the Company’s registered address, Company’s office address and mail code, Company website, E-mail address, etc. havechanged during the reporting period
□Applicable ?Not applicable
The Company's registered address, Company office address and mail code, Company website, E-mail, etc. have not changedduring the reporting period. For details, please refer to the 2022 annual report.
2. Information Disclosure and Preparation Location
Whether the location of information disclosure and preparation changed during the reporting period
□Applicable ?Not applicable
The stock exchange website and media name and website where the Company discloses the semi-annual report, and the locationwhere the Company’s semi-annual report is prepared has not changed during the reporting period. For details, please refer to the2022 annual report.
3. Other Relevant Information
Whether other relevant information has changed during the reporting period
□Applicable ?Not applicable
IV. Main Financial Data and Financial IndexWhether the company needs to retrospectively adjust or restate accounting data for previous years
□Yes ?No
Current period Previous period Changes over previous periodOperating income (RMB) 30,567,409,205.03 35,015,177,304.98 -12.70%Net profit attributable to theshareholders of the listedcompany (RMB)
-1,004,945,623.68 564,435,010.86 -278.04%Net profit after deducting ofnon-recurring gains or lossesattributable to theshareholders of listedcompany (RMB)
-1,038,332,938.51 522,219,426.93 -292.88%Net cash flow from operatingactivities (RMB)
4,662,637,281.81 227,451,842.21 1,949.94%Basic earnings per share(RMB/Share)
-0.2446 0.1400 -274.71%Diluted earnings per share(RMB/Share)
-0.1558 0.1400 -211.29%Weighted average return onequity
-5.49% 2.60% -8.09%
30 June 2023 31 December 2022
Changes over 31 December
2022Total assets (RMB)45,871,498,081.84 44,114,652,440.64 3.98%Net assets attributable toshareholders of the listedcompany (RMB)
17,811,005,923.44 18,789,151,216.62 -5.21%
V. Differences in Domestic and Foreign Accounting Data
1. Differences of Net Profit and Net Assets Disclosed in Financial Reports Prepared under IFRS and
Chinese Accounting Standards
□Applicable ?Not applicable
There are no differences of net profit and net assets disclosed in financial reports prepared under IFRS and Chinese accountingstandards during the reporting period.
2. Differences of Net Profit and Net Assets Disclosed in Financial Reports Prepared under Overseas
and Chinese Accounting Standards
□Applicable ?Not applicable
There are no differences of net profit and net assets disclosed in financial reports prepared under overseas and Chinese accountingstandards during the reporting period.VI. Items and Amount of Non-recurring Profits and Losses?Applicable □Not applicable
Unit: yuan
| Items | Amount | Notes |
Profit or loss from disposal of non-current assets (including the reversal partof the provision for asset impairment)
31,053,599.66Government grants attributable to profitand loss of current period (except suchgovernment subsidy closely related to thecompany's normal business operation,meeting the regulation of national policyand enjoyed constantly in certain quotaor quantity according to a certainstandard)
3,518,092.14
Profit and loss from entrusting others toinvest or manage assets
-2,796,530.07Debt restructuring profit and loss 694,683.35Other non-operating revenue andexpenditure other than above items
-30,054,378.76
75,725.75
| Less: Impact of income tax |
| Less: Impact of minority interests (net of |
tax)
6,025.40Total 2,333,715.17
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 “Interpretive Announcement No. 1 on InformationDisclosure of Companies Offering Securities to the Public - Non-recurring Profit and Loss” as recurring profit and loss items
□Applicable ?Not applicable
The Company does not define the non-recurring profit and loss items listed in the “Interpretive Announcement No. 1 onInformation Disclosure of Companies Offering Securities to the Public - Non-recurring Profit and Loss” as recurring profit andloss items.
Section III Management Discussion and Analysis
I. Main Business of the Company During the Reporting Period
1. Industry Development Situation
In the first half of 2023, the iron and steel industry showed a situation of rebounding production and weak consumption internallyand externally strong, which fell short of expectations as a whole. Especially in the second quarter, the demand of the downstreamsteel industry is insufficient, the fundamentals of steel products are gradually deteriorating, and the overall steel price is runningweak. In the first half of the year, the steel market was still in a state of "high cost" and "low profit".
2. Main Business, Main Products and their Uses
During the reporting period, the main businesses engaged in by the company 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., and basically established a high-quality steel base mainly for automobile steel. More than 60 varieties and more than 7,500specifications of product series have been formed, and the proportion of high value-added and high-tech products has reachedmore than 80%. Leading products such as automotive surface panels, home appliance panels, oil pipeline steel, container panels,and ship panels are widely used in the fields of automobiles, home appliances, petrochemicals, aerospace, machinerymanufacturing, energy transportation, architectural decoration, and metal products, and exported to more than 60 countries andregions. During the reporting period, there was no major change in the company's main business.
3. Business Model
Procurement mode: The company's procurement mode includes domestic procurement and foreign procurement. Domesticmaterial procurement is carried out through centralized procurement, unified bidding, price comparison, and negotiation. Theprocurement of foreign materials is carried out through long-term association procurement, direct procurement, open and invitedbidding, price inquiry and comparison, competitive negotiation, consultation procurement and other modes, and is mainlyrepresented by Bensteel Group International Economic and Trade Co., Ltd.Sales model: The company's sales are divided into domestic sales and export sales. The domestic sales mainly adopt the directsales model. The company directly sells to large customers, and other small and medium customers sell to them through regionalsales subsidiaries. The export mainly utilizes the powerful marketing network accumulated by Bensteel Group InternationalEconomic and Trade Co., Ltd. in international trade for many years, and its agent company exports the products and pays theagency fee to Bensteel Group International Economic and Trade Co., Ltd.
4. Key Drivers of Performance
During the reporting period, in the face of the severe steel market situation, the company closely focused on the "7531" strategicgoal of Ansteel Group and the "1357" work guidelines of Bensteel Group, maintained strategic determination, enhanceddevelopment confidence, and established "cash is king, customer first" ", keep an eye on the market, pay close attention to the field,anchor the advanced level of the industry, and use the two hard measures of "benchmarking + lean" to promote extreme costreduction and quality improvement, to promote vitality through reform, and to increase efficiency with efficiency. We spared no
effort to prevent risks and plug loopholes, and achieved hard-won achievements in production and operation and enterprise reform,and the level of corporate governance was significantly improved.The company's main operating indicators were completed: the output of pig iron was 5.0294 million tons, an increase of 79,300tons year-on-year, an increase of 1.6% year-on-year; the output of crude steel was 5.6688 million tons, an increase of 470,600 tonsyear-on-year, an increase of 9.05% year-on-year; the output of steel products was 8.1371 million tons, an increase of 42,700 tonsor 0.52% year-on-year. Looking back on the work in the first half of the year, it is mainly reflected in the following aspects:
(1) Implement the strategy of high-quality products, and the output and quality of automobile sheets have reached new heights. A
total of 1.249 million tons of auto sheets were produced, an increase of 244,000 tons year-on-year. The user and productconnotation have been significantly improved, the proportion of direct-supply users' orders has increased to 84%, and theproportion of competitive products has increased to 35.28%. Obtained the exclusive contracting share of 38 parts of Mercedes-Benz heavy truck CXT new model; successfully passed BMW, SAIC Passenger Vehicle and other production line certificationsand 11 product certifications, and completed GM, Ideal, and Chery Automobile certifications.
(2) Adhere to the needs of users, and the level of physical quality has been greatly improved. Fully implement the "seven iron
laws" of Bengang steel and plates's quality and service, adhere to customer needs as the center, vigorously promote thestandardized construction of "system + lean", and enhance the hard power of Bengang steel and plates's brand. The one-time passrate of original varieties in the whole process has been greatly improved, and the quality cost has been reduced by 15%; thedelivery rate of Class A direct supply user contracts and main engine factory contracts has reached 100%.
(3) Promote extreme cost reduction, and the process cost reduction effect is remarkable. Relying on the Nissin and Nissin
settlement system, we will keep a close eye on procurement, manufacturing, and sales, adhere to benchmarking and tappingpotentials, and use the concept of "zero waste" to break down cost reduction indicators to positions. The company's 19 indicatorssuch as power consumption per ton of steel, turnover rate of torpedo tanks, converter gas recovery, and first hot rolling productionhave reached the best level in history, creating profits of 134 million yuan, and process quota indicators have decreased by 160million yuan year-on-year.
(4) Continuing to concentrate superior forces and create a "star production line". Guided by the "star production line", through the
inclination of resources and policies, on the basis of realizing economic operation, the production efficiency has been greatlyimproved, and key indicators have continued to improve. The "star production line" of each process has set new productioncapacity records many times.
(5) Carry out lean reform and promote management upgrading. Promote the separation of the main and auxiliary, the separation of
management and office, and professional integration, and optimize the establishment of 118 government departments. Establish alogistics center and resource service branch, promote the separation of main and auxiliary, and realize the deep integration oflogistics resources and renewable resources. Carry out actions related to building a world-class enterprise in an all-round way, andimplement 108 promotion tasks, with a completion rate of over 93%. Organized a special training camp for operation managers,carried out problem-oriented "red card combat" activities, found 456 abnormal items, and completed 95% of the rectification;promoted 82 lean topics and improved 1,077 proposals. Carry out the "two systems and one contract" innovative penetratingassessment mode, with a signing rate of 100%.
(6) Hold the bottom line of safety and build a modern green steel enterprise. In accordance with the requirements of the "four
unifications", strengthen the management and control of related parties, and implement the "blacklist" system and regionalrestrictive management. Carry out risk identification of all elements and processes, accumulatively identify 11,353 safety risks,
and implement dynamic management on all of them. Adhere to the "six combinations", establish the concept of "active work, allstaff work, fast work", and vigorously promote the construction of garden-style factories. According to the "Four Modernizations"list, the overall construction progress has been completed by 89%, the newly added green area is 290,000 square meters, and thegreen rate has reached 14.53%.II. Analysis on Core Competitiveness
The company adheres to the innovation-driven and "high-quality goods + service" development model, with the strategic goal ofbuilding a highly internationally competitive high-quality plate base, a domestic first-class special steel base and a comprehensiveservice provider, and plays a strategic leading role, focusing on improving quality and efficiency, variety upgrading, technologicalinnovation, green and intelligent manufacturing, etc., innovate management ideas, enhance the core competitiveness of enterprises,and promote enterprises to achieve high-quality, green and intelligent development.
1. Manufacturing capacity. Guided by "star production lines", the division of labor in production lines will be refined to promote
economic operation. Adhere to the iron system as the core, focus on the connection of iron and steel processes, reasonably matchthe steel post-process production lines and resources, take the improvement of the fist product increment represented by theautomobile sheet as the main line, continue to optimize the product and user structure, and promote the maximization of benefits .Grasp the "lifeline" of quality, take the "seven iron laws" of company quality and service as the fundamental starting point,comprehensively improve product quality, adhere to customer-centricity, promote the standardized construction of "system + lean",and enhance brand market competitiveness.
2. Equipment transformation and upgrading. Adhere to the efficiency as the center, proceed from the long-term development of the
company, unify the thinking, clarify the positioning, and accelerate the upgrading of equipment as a whole. In 2023, the companyissued a fixed asset investment plan of 1.52 billion yuan, focusing on the implementation of items such as the environmentalprotection and intelligent upgrade of the stockyard, the upgrade of the 1780 production line, the transformation of the first coldrolling main body of the cold rolling plant, and the ultra-low emission transformation. Adhere to high-starting planning and high-standard construction, strictly control the level of technology, energy consumption, and environmental protection, and the level ofkey technology and equipment has reached the industry's advanced level. At present, a number of key projects such as the No. 5RH refining transformation of the steel plant and the new tertiary dust removal system of the steel plant have been put intooperation. Projects such as the environmental protection transformation of the material yard of the Ironmaking General Plant andthe energy centralized control of the energy management and control center will enter the commissioning stage in September 2023.
3. New product development capabilities. Successfully developed 26 brands of new products, of which 24 brands achieved market
sales, a year-on-year increase of 105%. The successful development of galvanized high-strength QP980+Z added another memberto the company's third-generation automotive steel family. The special steel products represented by 18CrNiMo7-6 fill the blank ofsteel for wind power gears in Benxi Iron and Steel. Breed the first product, complete Delta-TRIP780 laboratory research andindustrial trial production of high-strength and high-fatigue performance rim steel BG650LW.
4. Technological innovation ability. Relying on the Liaoning Provincial Industry-University-Research Innovation Alliance
Platform, we carried out new product development and cutting-edge technology research, and signed 10 industry-university-research cooperation projects with Dalian University of Technology, Northeastern University, and Liaoning University of Scienceand Technology. In terms of standards, 60 enterprise standards have been drafted, 2 international standards are under research, 18national and industry group standards are under research, and 2 newly released and implemented group standards. In terms ofintellectual property rights, the number of patents accepted in the first half of the year was 210, and the number of authorizedpatents was 100, including 36 authorized invention patents and 2 overseas patent authorizations. In terms of scientific and
technological achievements, 9 scientific and technological achievements including "Development of Intensive Ultra-High-StrengthSteel Galvanized Dual-Phase Steel Series Based on Pre-oxidation Technology" were nominated for the 2022 Liaoning ProvincialScience and Technology Progress Award, reaching the best level in history. "2000MPa Hot Formed Steel" won the first prize inthe 5th China Automobile Lightweight Design Competition, and "Hot Stamping Steel Series Product Development" was includedin the "Science and Technology of China" Pilot Technology List in the field of advanced materials.
5. Green development capability. In accordance with the policy requirements of the country and Liaoning Province on ultra-low
emissions in the iron and steel industry, relying on professional planning and research institutions to scientifically prepareenvironmental protection improvement plans and project implementation plans, through clean production, treatment of threewastes, environmental protection management, "AAA" scenic garden factory construction and other all-round green improvements,the community of environmental quality has been realized. Promote the integration of industry and city, and strive to build thecompany into an "ecological steel factory" that develops harmoniously with the city.
6. Intelligent manufacturing capability. Taking "digitalization and intelligence" as the starting point, promote the in-depth
application of 10 business systems including sales management, scientific research management, and production management ofthe "Benxi Iron and Steel Industry Management and Informatization Overall Improvement Project". Promote the implementationof smart quality demonstration projects such as the quality consistency system, energy centralized control, and iron frontcentralized control projects, and promote the company's digital transformation. Guided by the core indicators of the 14th Five-Year Plan, promote the construction of "four modernizations" indicators such as automation, informatization, digitalization, andintelligence. The automatic control rate of production lines in key areas of production units has increased by 30%, and thecoverage rate of production execution system construction has reached 100%. The 3D job replacement rate, the constructioncompletion rate of the four production lines and the four chemical plants increased by 30%.
III. Main Business Analysis
Please refer to the relevant content in "I. Main Business of the Company During the Reporting Period ".Changes in main financial data
Unit: yuan
Current period Previous period Fluctuations
Reasons forfluctuationsOperating income30,567,409,205.03 35,015,177,304.98 -12.70%Operating costs 30,714,640,963.91 33,377,477,540.63 -7.98%Selling expenses69,901,883.24 67,430,875.17 3.66%Administrativeexpenses
339,569,021.49 352,304,684.10 -3.61%Finance costs161,557,765.87 293,093,407.82 -44.88%
Income tax expenses 33,191,710.84 200,505,321.15 -83.45%
| Mainly affected by exchange rate changes. |
| Mainly due to changes in profits. |
Research anddevelopmentinvestment
969,879,939.00 963,465,760.00 0.67%Net cash flow fromoperating activities
4,662,637,281.81 227,451,842.21 1,949.94%
Mainly due to theincrease in bills issuedand the decrease in
Net cash flows frominvesting activities
-893,054,682.05 -755,346,775.62Net cash flow fromfinancing activities
-1,961,254,120.62 -1,022,947,841.22Net increase in cashand cash equivalents
1,838,873,251.94 -1,548,625,764.97Significant changes in the company's profit composition or profit sources during the reporting period
□Applicable ?Not applicable
There was no major change in the company's profit structure or profit sources during the reporting period.Composition of Operating Income
Unit: yuan
Current period Previous period
FluctuationsAmount
Proportion ofOperating Income
Amount
Proportion ofOperating IncomeTotal operatingincome
30,567,409,205.03 100% 35,015,177,304.98 100% -12.70%Classified by industries
| Industry | 30,567,409,205.03 | 100.00% | 35,015,177,304.98 | 100.00% | 0.00% |
Classified by products
| Steel plate | 29,094,813,444.07 | 95.18% | 33,109,977,666.90 | 92.77% | 2.41% |
| Others | 1,472,595,760.96 | 4.82% | 1,905,199,638.08 | 7.23% | -2.41% |
Classified by areas
| Northeast | 10,681,770,567.78 | 34.94% | 12,303,656,651.85 | 35.14% | -0.20% |
| North China | 3,691,103,918.34 | 12.08% | 4,208,207,527.97 | 12.02% | 0.06% |
| East China | 11,397,086,053.98 | 37.29% | 13,168,521,446.80 | 37.61% | -0.32% |
| Northwest | 69,757,642.43 | 0.23% | 75,492,130.13 | 0.22% | 0.01% |
| Central south | 1,160,763,129.06 | 3.80% | 1,323,870,974.23 | 3.78% | 0.02% |
| Export | 3,566,927,893.44 | 11.67% | 3,935,428,574.00 | 11.24% | 0.43% |
The industry, product or region accounting for more than 10% of the company's operating income or operating profit?Applicable □Not applicable
Unit: yuan
Operating income Operating costs
Grossprofitmargin
Changes inoperating incomecompared to the
previous year
Changes inoperating costscompared to theprevious year
Changes in gross
profit margincompared to the
previous yearClassified by industries
| Industry | 30,567,409,205.03 | 30,691,860,493.93 | -0.41% | -12.70% | -7.98% | -5.09% |
Classified by products
| Steel plate | 29,094,813,444.07 | 29,253,134,435.47 | -0.54% | -12.13% | -7.16% | -5.37% |
| Others | 1,472,595,760.96 | 1,461,506,528.44 | 0.75% | -22.71% | -21.75% | -1.22% |
Classified by areas
| Northeast | 10,681,770,567.77 | 10,737,315,774.72 | -0.52% | -13.18% | -8.64% | -5.00% |
| North China |
3,691,103,918.34 3,707,111,460.10 -0.43% -12.29% -7.37% -5.33%
| East China | 11,397,086,053.98 | 11,453,189,153.09 | -0.49% | -13.45% | -8.70% | -5.23% |
| Northwest | 69,757,642.43 | 70,190,139.81 | -0.62% | -7.60% | -2.45% | -5.31% |
| Central south |
1,160,763,129.06 1,168,540,242.02 -0.67% -12.32% -7.47% -5.28%
| Export | 3,566,927,893.44 | 3,578,294,194.17 | -0.32% | -9.36% | -4.42% | -5.19% |
In the event that the statistical caliber of the company's main business data is adjusted during the reporting period, the company'smain business data for the latest period adjusted according to the caliber at the end of the reporting period
□Applicable ? Not applicable
IV. Non-core Business Analysis?Applicable □Not applicable
Unit: yuan
Amount
Proportion of totalprofit
Explanation of the
causes
Whether it is
sustainableInvestment income-2,541,506.30 0.27%
accounting for long-term equity investment,
| etc. |
NoAsset impairment-84,458,260.66 8.89%
for price of inventory
| decline |
NoNon-operating income51,584,548.03 -5.42%
Gains on disposal of
NoNon-operatingexpenses
50,585,327.13 -5.32%
| fixed assets |
| Non-current asset |
damage and scrapping
No
V. Analysis of Assets and Liabilities
1. Significant Changes in Asset Composition
Unit: yuan
30 June 2023 31 December 2022
Fluctuations
Reasons forfluctuationsAmount
Proportion oftotal assets
Amount
Proportion of
total assetsMonetary funds 3,656,559,532.07 7.97% 4,805,370,697.71 10.22% -2.25%Accountsreceivable
914,407,662.17 1.99% 307,887,350.08 0.65% 1.34%Inventories 7,602,269,679.35 16.57% 8,740,534,055.47 18.59% -2.02%Long-term equityinvestments
47,556,655.02 0.10% 3,067,239.29 0.01% 0.09%Fixed assets 24,254,961,069.74 52.86% 24,397,907,946.02 51.89% 0.97%Construction inprogress
4,151,149,369.23 9.05% 3,012,446,289.29 6.41% 2.64%Right-of-useassets
1,349,803,446.63 2.94% 1,410,177,981.09 3.00% -0.06%Short-termborrowings
300,020,000.00 0.65% 3,349,342,280.00 7.12% -6.47%Contract liabilities3,733,739,770.22 8.14% 3,977,011,514.55 8.46% -0.32%Long-termborrowings
959,713,911.60 2.09% 3,002,383,788.13 6.39% -4.30%Lease liabilities 1,364,333,523.13 2.97% 1,404,900,432.63 2.99% -0.02%
2. Main Overseas Assets
□Applicable ?Not applicable
3. Assets and Liabilities Measured at Fair Value
□Applicable ?Not applicable
4. Restricted Property Rights as of the End of the Reporting Period
| Items | Balance as at 30 June 2023 | Reason for restriction |
| Monetary funds | 521,023,596.93 | Deposit for notes and letter of credit |
| Notes receivable | 255,189,626.40 | Pledge for banker's acceptance bill |
| Total | 776,213,223.33 |
VI. Investment Situation Analysis
1. General Situation
□Applicable ?Not applicable
2. Significant Equity Investment Acquired During the Reporting Period
□Applicable ?Not applicable
3. Significant Non-equity Investments in Progress During the Reporting Period
□Applicable ?Not applicable
4. Financial Assets Investment
(1) Securities investment
□Applicable ?Not applicable
There was no securities investment in the company during the reporting period.
(2) Derivatives Investment Situation
□Applicable ?Not applicable
There was no derivative investment in the reporting period of the company.
5. Use of raised funds
?Applicable □Not applicable
(1) Overall use of raised funds
?Applicable □Not applicable
Unit: ten thousand yuanYear
Method ofraising funds
Totalamount ofraisedfunds
Used amount
of raisedfund thisperiod
The totalused amountof funds
raised
of funds raised forchange of purposeduring the
| reporting period |
Cumulative totalamount of fundsraised for change
of purpose
proportion of totalraised funds forchanges of
| purposes |
The totalamount offunds raisednot used
The purpose anddestination ofthe raised fundsnot yet used
funds raisedafter being idlefor more than
| two years |
2018
offering of
| stocks |
396,580 4,520.32 338,726.62 57,853.38Deposit
2020
issuance ofconvertiblecorporate
| bonds |
675,920 62,608.05 423,676.46 252,243.54Deposit101,479Total -- 1,072,500 67,128.37 762,403.08 0 0 0.00% 310,096.92 -- 101,479
Description of the overall use of raised funds
For the actual use of the company's raised funds in 2022, please refer to Attachment 1 "Comparison Table of Use of Funds Raised from Non-public Issuance of Stocks" and Attachment 2"Comparison Table of Use of Funds Raised from Public Issuance of Convertible Corporate Bonds".
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, “About the use of raised funds to replace pre-invested raised funds forinvestment 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 usesself-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 RMB1,484,133,089.39 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 wasinvested 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 RMB 12,216,242.52. Thecompany has transferred the above amount from the fundraising account to the general deposit account in 2021.
From June 1, 2021 to May 31, 2022, the company will use self-raised funds to pay the construction amount of the raised funds investment project of RMB 37,435,207.38, all of which will beused for the construction of cold-rolled high-strength steel transformation projects. As of December 31, 2022, the company has transferred the above amount from the fund-raising account to thegeneral deposit account in 2022.
(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-investedRaised 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-raisedfunds 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 disguisedchange 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 monthsfrom 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 was 365,630,860.17 yuan, including 76,278,945.59 yuan for the No. 8 casting machine project of the steelmaking plant,119,043,290.09 yuan for the No. 5 blast furnace capacity replacement project in the ironmaking plant, and special The steel electric furnace upgrade and reconstruction project is 59,948,807.90yuan, the CCPP power generation project is 95,098,084.16 yuan, and the steel plant No. 4-6 converter environmental protection renovation project is 15,261,732.43 yuan. As of July 6, 2020, theabove-mentioned issuance fee of RMB 550,00.00 paid by the company's own funds will be replaced with the raised funds.
During the period from March 1, 2019 to May 31, 2021, the company used self-raised funds to pay the raised funds to invest in the project construction amount of RMB 1,082,356,809.47. TheNo. 5 casting machine project is RMB 55,364,729.08 the No. 5 blast furnace capacity replacement project in the iron plant is RMB 628,049,033.12, the special steel electric furnace upgradingproject is RMB 253,298,156.22, the CCPP power generation project is RMB 115,353,050.36, and the No. 4-6 converter environmental protection renovation project in the steel plant Item RMB30,111,840.69. The company has transferred the above amount from the fundraising account to the general deposit account in 2021.
During the period from June 1, 2021 to May 31, 2022, the company will use self-raised funds to pay the construction amount of the raised funds investment project of RMB 614,208,698.23,among them: RMB 12,881,890.61 for the No. 8 casting machine project of the steel plant, RMB 17,508,088.97 for the capacity replacement project of the No. 5 blast furnace of the Iron Plant,RMB 364,155,482.35 for the special steel electric furnace upgrading project, RMB 186,441,497.75 for the CCPP power generation project, RMB 33,221,738.55 for the environmental protectionrenovation project of No. 4 and No. 6 converters in the steelmaking plant. The company has transferred the above amount from the fund-raising account to the general deposit account in 2022.
4. Status of temporary replenishment of working capital with idle raised funds
During the reporting period, according to the construction progress of the company's raised funds investment projects and the use plan of raised funds, part of the funds raised by the company'snon-public offering is temporarily idle. According to the China Securities Regulatory Commission's "Listed Company Supervision Guidelines No. 2 - Regulatory Requirements for the
the interests of shareholders, on the premise of ensuring the capital demand of the investment projects of the raised funds and the normal progress of the investment projects of the raised funds,in order to improve the efficiency of the use of raised funds and further reduce the company's financial costs, to reduce financial expenses and protect the interests of investors, the companyintends to temporarily supplement working capital with idle raised funds. The use period shall not exceed 12 months from the date of deliberation and approval by the board of directors.Supplementing working capital will save the company financial expenses.
(1) Temporary replenishment of working capital with funds raised from non-public offering of stocks
1) In March 2018, the funds raised by the non-public offering of shares temporarily supplemented the working capital
In 2018, the company used 530,000,000.00 yuan of idle raised funds to temporarily supplement working capital, and the period of use shall not exceed 12 months from the date of approval bythe board of directors (March 13, 2018). As of March 11, 2019, the company has returned all the above-mentioned idle raised funds of RMB 530,000,000.00 used to temporarily supplementworking capital to the company's special account for raised funds.
2) In March 2019, the funds raised from the non-public offering of shares temporarily supplemented working capital
In 2019, the company used idle raised funds of RMB 742,000,000.00 to temporarily supplement working capital, and the period of use shall not exceed 12 months from the date of approval bythe board of directors (March 21, 2019). As of March 23, 2020, the company has returned all the above-mentioned idle raised funds of RMB 742,000,000.00 used to temporarily supplementworking capital to the company's special account for raised funds.
3) In March 2020, the funds raised by the non-public offering of stocks temporarily supplement the working capital
The company used idle raised funds of RMB666,000,000.00 (RMB370,000,000.00 for the cold-rolled high-strength steel reconstruction project, and RMB296,000,000.00 for the hot-dipgalvanizing production line project of the third cold rolling plant) to temporarily supplement the working capital. It was reviewed and approved at the ninth meeting and the eighth meeting ofthe eighth supervisory committee. The independent directors of the company issued a clear agreement, and the replenishment of working capital should not exceed 12 months.The sponsor of the company's non-public offering agreed to the company's use of idle raised funds to temporarily supplement working capital and issued "Guotai Junan Securities Co., Ltd.'sVerification Opinions on the Company's Use of Idle Raised Funds to Temporarily Supplement Working Capital".As of July 27, 2020, the company has returned all the above-mentioned idle raised funds of RMB 666,000,000.00 used to temporarily supplement working capital to the company's specialaccount for raised funds.
4) In July 2020, the funds raised by the non-public offering of stocks temporarily supplement the working capital
The company used idle raised funds of 666,000,000.00 yuan (370,000,000.00 yuan for the cold-rolled high-strength steel renovation project, and 296,000,000.00 yuan for the hot-dip galvanizingproduction line project of the third cold rolling plant) to temporarily supplement the working capital. The fourth meeting and the 12th meeting of the 8th Supervisory Committee have reviewedand approved, and the independent directors of the company have issued a clear agreement, and the time for replenishing working capital should not exceed 12 months.The sponsor of the company's non-public offering agreed to the company's use of idle raised funds to temporarily supplement working capital and issued "Guotai Junan Securities Co., Ltd.'sVerification Opinions on the Company's Use of Idle Raised Funds to Temporarily Supplement Working Capital".As of July 27, 2021, the company has returned all the above-mentioned idle raised funds of RMB 666,000,000.00 used to temporarily supplement working capital to the company's specialaccount for raised funds.
5) In July 2021, the funds raised from the non-public offering of stocks will be temporarily supplemented with working capital
The company used 604,000,000.00 yuan of idle raised funds (320,000,000.00 yuan for the cold-rolled high-strength steel transformation project, 284,000,000.00 yuan for the hot-dip galvanizing
the seventeenth meeting of the eighth board of supervisors held on July 28, 2021.The company's independent directors have issued a clear consent, and the replenishment of working capital shall not exceed 12 months.
The sponsor of the company's non-public offering agreed to the company's use of idle raised funds to temporarily replenish working capital and issued the "Guotai Junan Securities Co., Ltd.Verification Opinion on the Company's Use of Idle Raised Funds to Temporarily Supplement Working Capital".
As of December 31, 2021, the company has returned all the above-mentioned idle raised funds of 604,000,000.00 yuan for temporary supplementary working capital to the company's specialaccount for raised funds.
6) In July 2022, the funds raised from the non-public offering of stocks will be temporarily supplemented with working capital
The company used idle raised funds of 592,000,000.00 yuan (308,000,000.00 yuan for the cold-rolled high-strength steel transformation project, and 284,000,000.00 yuan for the hot-dipgalvanizing production line project of the third cold-rolling plant) to temporarily supplement working capital matters, it was deliberated and approved at the third meeting of the ninth board ofdirectors and the third meeting of the ninth board of supervisors held on July 28, 2022. The company's independent directors have issued a clear consent, and the replenishment of workingcapital shall not exceed 12 months.
The sponsor of the company's non-public offering agreed to the company's use of idle raised funds to temporarily replenish working capital and issued the "Guotai Junan Securities Co., Ltd.Verification Opinion on the Company's Use of Idle Raised Funds to Temporarily Supplement Working Capital".
As of December 31, 2022, the balance of the company's temporary replenishment of working capital using idle raised funds from non-public issuance of stocks was 592,000,000.00 yuan.
(2). Temporary replenishment of working capital with funds raised from public issuance of convertible corporate bonds
1) Public issuance of convertible corporate bonds in July 2020 to raise funds to temporarily supplement working capital
The company used idle raised funds of RMB4,180,000,000.00 (RMB1,010,000,000.00 yuan for the high-grade high magnetic induction non-oriented silicon steel project, RMB220,000,000.00for the No. 8 casting machine project of the steelmaking plant, RMB800,000,000.00 for the production capacity replacement project of the No. 5 blast furnace in the ironmaking plant, andRMB1,300,000,000.00 for special steel electric furnace upgrade and reconstruction project, RMB700,000,000.00 for CCPP power generation project, RMB150,000,000.00 for steel plant No. 4-6 converter environmental protection renovation project) Temporarily supplementing working capital matters was approved on the 14th meeting of the 8th Board of Directors of the companyheld on July 28, 2020, It was reviewed and approved at the 12th meeting of the 8th Supervisory Committee, and the independent directors of the company have issued a clear agreement, and thereplenishment of working capital shall not exceed 12 months. The sponsor of the company's public offering of convertible corporate bonds agreed that the company will use idle raised funds totemporarily supplement working capital and issued the "Guotai Junan Securities Co., Ltd.'s Verification Opinions on the Company's Use of Idle Raised Funds to Temporarily SupplementWorking Capital". As of July 27, 2021 , the company has returned all the above-mentioned idle raised funds of RMB 4,180,000,000.00 used to temporarily supplement working capital to thecompany's special account for raised funds.
2) The public offering of convertible corporate bonds in July 2021 to raise funds to temporarily supplement working capital
The company used idle raised funds of 3,030,000,000.00 yuan (1,010,000,000.00 yuan for the high-grade high magnetic induction non-oriented silicon steel project, 150,000,000.00 yuan for the
electric furnace upgrade and reconstruction project. 1,000,000,000.00 yuan, CCPP power generation project 590,000,000.00 yuan, steel plant No. 4-6 converter environmental protectionrenovation project 120,000,000.00 yuan) Temporary replenishment of working capital The nineteenth meeting of the eighth board of directors of the company held on July 28, 2021 It wasreviewed and approved at the 17th meeting of the 8th Supervisory Committee, and the independent directors of the company have issued a clear agreement, and the time for replenishingworking capital should not exceed 12 months.
The sponsor of the company's public offering of convertible corporate bonds agreed that the company will use idle raised funds to temporarily supplement working capital and issued the "GuotaiJunan Securities Co., Ltd.'s Verification Opinions on the Company's Use of Idle Raised Funds to Temporarily Supplement Working Capital".As of December 31, 2021, the company used the idle funds raised from the public issuance of convertible corporate bonds to temporarily supplement the balance of working capital of RMB3,030,000,000.00.
3) In July 2022, the funds raised from the public issuance of convertible corporate bonds will be temporarily supplemented with working capital
The company used idle raised funds of 3,014,000,000.00 yuan (1,015,000,000.00 yuan for the high-grade high magnetic induction non-oriented silicon steel project, 165,000,000.00 yuan for theNo. 8 casting machine project of the steel plant, and 175,000,000.00 yuan for the No.Special steel electric furnace upgrading and transformation project 933,000,000.00 yuan, CCPP powergeneration project 578,000,000.00 yuan, steelmaking plant No. 4-6 converter environmental protection renovation project 148,000,000.00 yuan). The matter of temporarily supplementingworking capital was considered and approved at the third meeting of the ninth board of directors and the third meeting of the ninth board of supervisors held on July 28, 2022.The company's independent directors have issued a clear consent, and the replenishment of working capital shall not exceed 12 months.The sponsor of the company's public issuance ofconvertible corporate bonds agreed to the company's use of idle raised funds to temporarily replenish working capital and issued the "Guotai Junan Securities Co., Ltd. Verification Opinion onthe Company's Use of Idle Raised Funds to Temporarily Supplement Working Capital". As of December 31, 2022, the balance of the company's temporary replenishment of working capitalusing idle proceeds from public issuance of convertible corporate bonds was RMB 3,014,000,000.00.
5. Cash management with idle raised funds
The Company does not use idle raised funds for cash management.
6. Use of surplus raised funds
The Company does not use the surplus funds of raised fund investment projects for other raised fund investment projects or non-raised fund investment projects.
7. Use of over-raised funds
There exists no over-raised funds.
8. Purpose and whereabouts of unused raised funds
As of December 31, 2022, in addition to the above-mentioned "3.Status of preliminary investment and replacement of raised funds investment projects", "4.Status of temporary replenishment ofworking capital with idle raised funds", the company has raised funds. In addition to replacing and temporarily supplementing working capital with idle raised funds, the remaining raised fundsare temporarily deposited in a special account for raised funds.
9. Other information on the use of raised funds
(2) Fund Raising Commitments
?Applicable □Not applicable
Unit: ten thousand yuanCommitment to investmentprojects and over-raised
funds
item has been
changed(includingsomechanges)
Totalcommittedinvestmentof raisedfunds
Adjustedtotalinvestment(1)
Amountinvestedduring thereportingperiod
Cumulativeinvestmentamount by the
end of theperiod (2)
Investmentprogress bythe end of theperiod (3) =
(2)/ (1)
Item reaches
scheduledavailability
date
Benefitsrealizedduring thereporting
period
Whether the
expectedbenefit isachieved
Has theprojectfeasibilitychangedsignificantlyCommitment to Investment Projects
Whether the
Cold-rolled high-strength
steel renovation project
No 226,580 226,580 4,520.32 197,212.39 87.04% -14,582.14 No No
| Cold-rolled high-strength |
| Hot-dip galvanizing |
production line project ofthe third cold rolling plant
No 70,000 70,000 41,514.24 59.31% -1,797.61 Yes NoRepay bank loan No 100,000 100,000 100,000 100.00%
applicable
No
| Not | ||
| High grade high magnetic |
induction non-orientedsilicon steel engineeringproject
No 101,620 101,620 141 0.14%
Notapplicable
No
Machine Project
No 33,500 33,500 1,300.8 17,648.91 52.68% -8,801.71 Yes No
| Steel Plant No. 8 Casting |
| No. 5 blast furnace capacity |
replacement project inironworks
No 96,000 96,000 1,805.68 78,499.23 81.77% -8,672.7 No No
| Special Steel Electric | No | 141,600 | 141,600 | 37,182.68 | 78,904.64 | 55.72% | Not | No |
Reconstruction Project
| Furnace Upgrade and | applicable | |
| CCPP power generation |
project
No 83,300 83,300 18,996.71 40,437.02 48.54%
applicable
No
| Not | ||
| Environmental protection |
renovation project ofconverter No. 4-6 insteelmaking plant
No 19,900 19,900 3,322.17 8,045.66 40.43%
Notapplicable
NoRepay bank loan No 200,000 200,000 200,000 100.00%
applicable
No
| Not | ||
| Subtotal of Committed |
Investment Projects
-- 1,072,500 1,072,500 67,128.36 762,403.09-- ---33,854.16-- --Over-raised funds are invested in
| None |
Total--1,072,500 1,072,500 67,128.36 762,403.09-- ---33,854.16-- --Situations and reasons fornot reaching the plannedprogress or expectedbenefits by specific projects(including the reason forchoosing "Not applicable" in"Whether the expectedbenefits are achieved")
The market environment has undergone major changes, and the cold-rolled high-strength steel renovation project and the hot-dip galvanizing production lineproject of the third cold-rolling plant have basically reached production capacity. The high-grade high magnetic induction non-oriented silicon steel engineeringproject is still in the ice-breaking period due to the application of the product market. In order to avoid investment risks, the project construction has not yetstarted in 2022. The company expects to invest RMB 350 million yuan in 2023. The company will pay close attention to the relevant product market.
material changes in projectfeasibility
None
| Status of description of |
| Status of amount, purpose |
and progress of use of over-raised funds
Not applicable
Implementation Locations ofRaised Funds InvestmentProjects
Not applicable
| Status of changes in |
| A Status of adjustment of the |
Implementation Method ofRaised Funds for InvestmentProjects
Not applicable
investment and replacementof raised funds forinvestment projects
| Status of preliminary | Applicable |
For details, please refer to the situation mentioned in the special report III. (3).
replenishment of workingcapital with idle raised funds
| Status of temporary | Applicable |
For details, please refer to the special report III. (4).
balance of raised funds inproject implementation
| Reasons and amount for the | Not applicable |
unused raised funds
For details, please refer to the special report III. (8)
| Use and whereabouts of |
| Problems or other situations |
in the use and disclosure ofraised funds
There is no problem or otherwise.
(3) Situation for Raised Funds Change Project
□Applicable ?Not applicable
During the reporting period, the company did not have any changes in the fund raising project.
VII. Major Assets and Shares Sold
1. Significant Assets Sold
□Applicable ?Not applicable
There was no significant asset sold during the reporting period.
2. 2. Substantial Equity Sold
□Applicable ?Not applicable
VIII. Analysis on Main Subsidiaries and Share Participating Companies
?Applicable □Not applicableMain 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 ProfitBengangPuxiangCoolRollingSteelSheet Co.,
Subsidiary
Processingand salesof steel
1,920,000,000.00 4,595,704,365.54 2,382,481,844.84 4,253,071,574.21 96,776,624.18 69,847,227.23Acquirement and disposal of subsidiaries during the reporting period?Applicable □Not applicable
Company Name
Ways of acquiring and disposing ofsubsidiaries during the reporting period
Impact on overall production operations
and performanceZhejiang Jingrui Steel Processing Co.,Ltd.
Equity transfer
Ltd.
Non-important share participating
subsidiaries have no significant impacton the company's production, operation
| and performance. |
Illustration of main joint-stock companiesNone.IX. Structure Entities Controlled by the Company
□Applicable ?Not applicable
X. Risks Faced by the Company and Countermeasures
1. Macroeconomic policy risks
In 2023, the Russia-Uzbekistan war and geopolitical conflicts will continue, the century-old changes will accelerate, the FederalReserve will continue to raise interest rates, and the recovery of the world economy will be weak. The foundation for my country'seconomic recovery is not yet solid. Economic development is facing triple pressures of demand contraction, supply shocks, andweakening expectations. The external export environment is severe and the downward pressure on the economy is increasing. Thedownstream demand of the domestic iron and steel industry is generally weak, and the market pattern of supply exceeding demandhas not changed fundamentally. The optimization and adjustment of domestic iron and steel layout is accelerating, the strategicrestructuring of iron and steel enterprises continues to advance, and changes in domestic fiscal and financial policies to stabilizegrowth will bring many uncertain factors to the development of the iron and steel industry.Countermeasures: First, strengthen research on national fiscal, financial and industrial policies, fully, accurately andcomprehensively implement new development concepts, and continuously improve the forward-looking and effectiveness ofpolicy research. The second is to seize the opportunities for macro policy adjustment and development, optimize and adjuststrategic planning in a timely manner, focus on key areas such as safety, greenness, efficiency, intelligence, and high-qualityproducts, adhere to extreme thinking, deepen lean operations, accelerate the conversion of old and new growth drivers, andactively promote green and low-carbon transformation and upgrading , create more comparative advantages, continuously improvecore competitiveness, and strive to achieve high-quality development of the enterprise.
2. Raw material and fuel prices and supply risks
The monopoly situation of global iron ore supply is difficult to change in the short term, domestic iron ore demand is highlydependent on foreign countries, and strategic resources such as coal and coke have obvious shortcomings. The implementationtime of the "Cornerstone Plan" of my country's steel industry is short, and the independent controllability of the supply chain of thesteel industry chain is relatively weak. The financial attributes of black ore and coal coke resources have been enhanced, anddomestic and foreign hot money speculation is frequent. Energy conservation and emission reduction policies continue to deepen,the production capacity of upstream coal coke enterprises is limited, various internal and external factors lead to frequentfluctuations in the price of raw materials and fuels, and the risk of raw materials and fuel prices and security supply increases.Countermeasures: First, adhere to the "predictive" business procurement concept, strengthen the analysis and judgment of rawmaterial supply and market demand, build a raw material procurement model, scientifically control the procurement timing, andadjust the procurement strategy in a timely manner. The second is to strengthen strategic cooperation in the supply of rawmaterials and fuels, consolidate and expand domestic raw and fuel procurement channels, deeply aggregate raw and fuel resources,accelerate the formation of a domestic and foreign dual-cycle supply chain security guarantee pattern, and enhance the priceadvantage of large-scale procurement. The third is to optimize the structure of production furnace materials, adjust theprocurement structure of raw materials and fuels, reasonably control the inventory of raw materials and fuels, effectively reducethe adverse effects caused by fluctuations in the prices of raw materials and fuels, and minimize the cost of raw materials and fuels.3.Environmental protection risksWith the continuous strengthening of the country's environmental protection and the promotion of "carbon peaking and carbonneutrality", the environmental protection department continues to increase the supervision of pollution control in the iron and steel
industry, and the investment in environmental protection and operating costs of iron and steel enterprises have increased, and ironand steel enterprises will face increasing pressure on environmental protection and governance.Countermeasures: The first is to establish a sound production and operation system for green and low-carbon circular development,that is, to further improve resource and energy utilization efficiency, promote ultra-low emission transformation andcomprehensive pollutant management, and continue to reduce carbon emission intensity through equipment energy-saving andenvironmental protection upgrades and advanced technology promotion and application. The second is to actively carry outproduct ecological design and life cycle assessment to create green and low-carbon products. The third is to strengthen theoperation and maintenance and standardized operation control of existing environmental protection equipment and facilities,focusing on strengthening the monitoring of air pollution sources. The fourth is to build a "AAA" scenic garden-style factory as astarting point, and strive to improve the environment of the factory area.
Section IV Corporate GovernanceI. Annual General Meeting and Extraordinary Meetings of Shareholders in the Reporting
Period
1. Annual General Meeting of Shareholders During the Reporting Period
Sessions Type
Meeting Date Date of disclosureMeeting DecisionFirst ExtraordinaryGeneral Meetingof Shareholders in2023
ExtraordinaryGeneral Meeting
76.81% March 16, 2023 March 17, 2023
| Investor participation ratio | ||
| Announcement on |
Resolutions ofFirst ExtraordinaryShareholdersGeneral Meeting
Annual GeneralMeeting ofShareholders in2022
Annual GeneralMeeting
76.73% April 27, 2023 April 28, 2023
| of 2023 |
| Announcement on |
Resolutions of the2022 AnnualGeneral Meeting
SecondExtraordinaryGeneral Meetingof Shareholders in2023
ExtraordinaryGeneral Meeting
76.74% May 18, 2023 May 19, 2023
Announcement onResolutions ofSecondExtraordinaryShareholdersGeneral Meeting
| of Shareholders |
| of 2023 |
2. Request for Extraordinary General Meeting by Preferred Stockholders Whose Voting Rights
Restore
□Applicable ?Not applicable
II. Changes in Directors, Supervisors and Senior Management of the Company?Applicable □Not applicable
| Name | Position | Office status | Date | Reasons |
| Huo Gang | Chairman | Resigned | February 28, 2023 | Voluntary resignation |
| Han Mei | Director | Resigned | February 28, 2023 | Voluntary resignation |
Wang Shiyou
Resigned April 27, 2023 Voluntary resignation
| Director, Deputy General Manager | ||||
| Bai Yufei | Supervisor | Resigned | April 27, 2023 | Voluntary resignation |
Jiang Xiaoyu
Officer, Secretary of
| the Board of Directors |
Dismissed February 28, 2023 Job changes
| Li Yan | Chairman | Elected | March 16, 2023 | Elected |
| Wang Donghui | Director | Elected | March 16, 2023 | Elected |
Huang Zuowei
Elected May 18, 2023 Elected
| Director, Deputy General Manager | ||||
| Lu Xuezhu | Supervisor | Elected | May 18, 2023 | Elected |
Zheng Zhengli
Officer,Secretary of the
| Board of Directors |
Appointed February 28, 2023 Appointment
III. Profit Distribution and Capital Reserve Conversion
□Applicable ?Not applicable
There exists no plan for the company to distribute cash dividends ,bonus shares or convert capital reserve into share capital.
IV. Implementation of Company Equity Incentive Plans, Employee Stock Ownership Plans
or Other Employee Incentives
□Applicable ?Not applicable
During the reporting period, the company had no equity incentive plan, employee stock ownership plan or other employeeincentive measures and their implementation.
Section V Environmental and Social Responsibility
I. Major Environmental Issues
Whether the listed company and its subsidiaries belong to the key pollutant discharge units announced by the environmentalprotection department?Yes □NoEnvironmental protection related policies and industry standardsThe company implements the "Environmental Protection Law of the People's Republic of China", "Environmental ImpactAssessment Law of the People's Republic of China", "Water Pollution Prevention and Control Law of the People's Republic ofChina", "Air Pollution Prevention and Control Law of the People's Republic of China", "Soil Pollution Prevention and ControlLaw of the People's Republic of China" , "The Law of the People's Republic of China on the Prevention and Control ofEnvironmental Pollution by Solid Waste" and other relevant ecological and environmental policies, and implement the "DischargeStandards for Water Pollutants in the Iron and Steel Industry" (GB13456-2012) and "Discharge Standards for Pollutants in theCoking Chemical Industry" (GB 16171-2012) , "Emission Standards of Air Pollutants for Sintering and Sintering Pellets in Ironand Steel Industry" (GB28662-2012), "Emission Standards of Air Pollutants for Ironmaking Industry" (GB28663-2012),"Emission Standards for Air Pollutants for Steel Rolling Industry" (GB28665-2012 ), "Emission Standards of Air Pollutants forThermal Power Plants" (GB13223-2011) and other related industry standards.Environmental Protection Administrative LicensingThe company involves 14 pollutant discharge units, 11 of which are key pollutant discharge units. The license was obtained for thefirst time in December 2018. In December 2021, the license management requirements were extended to December 2026. In 2022,the modification of 2 companies will be postponed to December 2027, and in 2023, the modification of 1 company will bepostponed to July 2028; 3 units are subject to registration management, and they will obtain the receipt of registration of pollutantdischarge from stationary pollution sources in March 2020, valid until 2025. All units strictly implement the standard and stableoperation of environmental protection facilities, and strictly control the discharge of pollutants. Every year, the plates companydischarges pollutants within the scope of the permit. All units submit quarterly execution reports and annual reports online asrequired.
Industry discharge standards and the specific situation of pollutant discharge involved in production and operation activitiesCompanyorsubsidiaryname
Types of mainpollutants andcharacteristic
pollutants
Names of
mainpollutants andcharacteristicpollutants
Emission
method
Number
ofoutlets
Distribution of outlets
Emissionconcentration/intensity
PollutantEmissionStandardsExecuted
Totalemissions
ApprovedTotalEmissions
ExcessiveemissionsBengangSteelPlates Co.,
Wastewaterpollutants
CODContinuous
Energy General Plant SewageTreatment Plant
5.83 50 8.75 tons
Notapproved bythegovernment
None
| Ltd. |
| Bengang |
SteelPlates Co.,
Wastewaterpollutants
Ammonianitrogen
Continuous
Energy General Plant SewageTreatment Plant
0.35 8 0.54 tons
Notapproved bythegovernment
| Ltd. | None |
BengangSteelPlates Co.,Ltd.
Exhaustpollutants
Particulates
Continuousandintermittent
station, receiving tank, pre-batching; iron-making castingyard, furnace roof, fuel,solvent, granulation, ore coketank, sintering head dustremoval, desulfurization,machine tail dust removal; ironand steel water pretreatment ,north-south pouring station,tundish, primary dust removal,secondary dust removal,refining dust removal; specialsteel electric furnace, refiningfurnace; coking coal addition,coke pushing, dry quenching,chimney desulfurization anddenitrification; power boilerdust removal, desulfurizationand denitrification; coldrolling acid regeneration ,pickling, straightening,welding, leveling, annealing,
| roasting; hot rolling furnace. |
Raw material <20;sintering 8-26; ironmaking 8-9; steelmaking 3-20; specialsteel 2-15; coking 4-30;power generation 3-8;cold rolling 3-20; hotrolling 5-18.
Raw material25; sintering10-50; ironmaking 25;steel making20-50; special
steel 20;coking 30;
powergeneration 5-
30; coldrolling 20-30;hot rolling 20-
30.
Smok:
580;dust：
5875
Notapproved bythegovernment
BengangSteelPlates Co.,Ltd.
Exhaustpollutants
Sulfur dioxide
Continuousandintermittent
Sintering head; coke ovenchimney; power generationboiler desulfurization; coldrolling roasting and annealing;hot rolling heating furnace.
Sintering head 48-174;coke oven 24-48;power generation 3-55;cold rolling 24-95; hotrolling 50-125.
200; cokeoven 30-100;powergeneration100-200 coldrolling 150;hot rolling
| 150. |
1666 tons
Notapproved bythegovernment
BengangSteelPlates Co.,Ltd.
Exhaustpollutants
Nitrogenoxides
Continuousandintermittent
Sintering head; cokingchimney; power generationboiler; cold rolling roasting,annealing; hot rolling heatingfurnace.
Sintering head 110-150; coking chimney99-148; powergeneration 10-103; coldrolling 50-150; hotrolling 80-120.
| None | ||
| Sintering head |
300; cokingchimney 150;powergeneration100-200; coldrolling 200;hot rolling
4394 tons
Notapproved bythegovernment
| 300. | None |
Treatment of Pollutants2023 involves 32 ultra-low emission items under construction, 4 of which have been completed, involving the third dust removalof steelmaking 1#2#3#7# converters, the upgrading and transformation of Pohang acid mist purification system, and the upgradingand transformation of three cooling acid mist purification systems 1. Upgrading and transformation of the acid mist purificationsystem for cold silicon steel; the remaining 25 projects are under construction, and 3 projects are being tendered. After theconstruction of the ultra-low emission project is completed by the end of 2023, all the main discharge outlets and generaldischarge outlet treatment facilities of the panel company will meet the requirements of the ultra-low emission standard. Thepollution prevention and control facilities of the 23 ultra-low emission projects that have been completed so far are in stableoperation and meet the requirements of ultra-low emission standards. In the first half of 2023, the total amount of pollutantemissions will be reduced by 7.94% year-on-year.Emergency plan for environmental emergenciesThe company and its 14 affiliated units strictly follow the "Emergency Response Law of the People's Republic of China", "Noticeon Printing and Distributing the "Guidelines for Risk Assessment of Environmental Emergencies for Enterprises (Trial)", thecurrent laws and regulations such as the "Administrative Measures for the Recordation of Emergency Plans for EnvironmentalEmergencies in Enterprises and Institutions (Trial)" carry out environmental emergency management work, and the revision ofemergency plans for environmental emergencies has been completed. The risk assessment and emergency resource investigationwork has been carried out again, and the assessment and filing work have been completed according to the managementrequirements of the Municipal Bureau. At the same time, each unit of the plate company formulates a drill plan according to theplan, and carries out the corresponding plan drill.
Investment in environmental governance and protection and the payment of environmental protection taxIn the first half of 2023, the operating cost of environmental protection facilities will be 645 million yuan, the investment inenvironmental governance and protection will be 426 million yuan, and the environmental protection tax will be 17.97 millionyuan.
Environmental self-monitoring programDuring the reporting period, manual monitoring of pollution source monitoring points: 250 flue gas monitoring points, 13 wastewater monitoring points, 13 factory boundary noise points, 15 atmospheric dust reduction points, 195 flue gas organizedmonitoring points, there are 55 flue gas unorganized monitoring points, which are divided into weekly, monthly, quarterly, half-yearly, and annual frequency monitoring according to the monitoring plan, and the routine monitoring tasks of atmospheric dustfall have been completed, and a total of 90 monitoring data have been obtained in half a year; completed the routine monitoringtasks of atmospheric unorganized and organized flue gas, and obtained a total of 1301 monitoring data in half a year; 208monitoring data were obtained for plant boundary noise monitoring; 1616 monitoring data were obtained for wastewatermonitoring, and monthly, quarterly and annual monitoring reports were formed.During the reporting period, automatic monitoring of pollution source monitoring points: 64 organized monitoring points for fluegas and 2 monitoring points for waste water, realizing continuous automatic monitoring.
Administrative penalties for environmental issues during the reporting periodCompany orsubsidiaryname
Reason forpunishment
Violations
Penaltyresult
production andoperation of
| listed companies |
The company's rectification measures
BengangSteel PlatesCo., Ltd.
UnorganizedEmissionsProblem
Scrap steel pipes with rust and impurities werecut in the open air at the No. 3 site of the scrapsteel factory, resulting in unorganized emissionof smoke and dust and polluting theenvironment.
A fine ofRMB80,000
None
management responsibilities, strictly control the entry gate, and strictlycontrol the entry of super-sized scrap steel with grease and rubberproducts that pollute the environment. During the cutting operation, theon-site personnel strictly select and confirm, the scrap steel that maycause environmental pollution shall be stored separately and shall not beprocessed. 2. Rolls, slag lumps, and waste coils recovered internally areprocessed in the cutting room of the dust collector in our factory; cutand process the pure steel scrap with low dust such as middle plate andtail roll recovered by internal production at the existing site; the non-production recycled and engineering maintenance large scrap steel willbe processed by the scrap producer and handed over to the scrap steel
| factory. |
BengangSteel PlatesCo., Ltd.
UnorganizedEmissionsProblem
raw material plant in the Coking Dongfeng plantarea of the Ironmaking General Plant are stackedin the open air, and no effective coveringmeasures have been taken to prevent dust
| generation. |
A fine ofRMB30,000
None
The rectification has been completed. Make immediate changes andimplement cover-ups.
BengangSteel PlatesCo., Ltd.
UnorganizedEmissionsProblem
of the 8# and 9# coke screen dust collectors inthe Coking Branch Plant of the IronmakingGeneral Plant, resulting in unorganized dischargeof smoke and dust and polluting the
| environment. |
A fine ofRMB60,000
None
The rectification has been completed. Rectification measures: Use theultra-low emission transformation of dry quenching dust removalscraper to improve the old, after replacing the scraper, discharge ash ontime to avoid the occurrence of soot spillover.
BengangSteel PlatesCo., Ltd.
Online FacilityFailure Issues
The 360 sintering desulfurization outlet onlinefacility in the third sintering operation area of theiron-making sub-plant of the Iron-makingGeneral Plant failed. During the failure period,manual monitoring was not carried out asrequired, resulting in the loss of some data.
A fine ofRMB60,000
None
organized ice removal work. Due to the cold weather and safetyconsiderations, the ice removal work was completed on the morning ofJanuary 13, and manual monitoring was carried out in the afternoon ofthe same day. The monitoring results showed that the pollutant emissionconcentrations were all within the limit, and the emissions met thestandards. Currently, the 360 desulfurization outlet online equipment is
| operating normally. |
BengangSteel PlatesCo., Ltd.
PollutantDischargeIssues
Law enforcement officers from the EcologicalBureau of Benxi City inspected the 2022emissions of the Coking Branch of theIronmaking General Plant and found that theactual emissions of particulate matter exceededthe amount.
A fine ofRMB300,000
None
4 dry quenching and dust removal and 4 coke oven desulfurization anddenitrification treatment facilities are under construction in the cokingbranch plant. According to the regulations on discharge permitmanagement, if no online facilities are installed, only the pollutionproduction coefficient can be used for accounting, so the total amount ofparticulate matter exceeds the standard. At present, the construction andinstallation of coke oven desulfurization and denitrification treatmentfacilities and dry quenching desulfurization treatment facilities areunder way, and the transformation will be completed in December 2023.After the transformation, the online method is used to calculate the
Other environmental information that should be disclosedNone.Measures and effects taken to reduce its carbon emissions during the reporting period?Applicable □Not applicable
1. From January to June, the comprehensive energy consumption per ton of steel was 546kgce, which was 19.5kgce lower than the
plan and 41.6kgce lower than the same period last year. The main work is that the iron-to-steel ratio is 0.887, which is 0.03 lowerthan the plan, and the comprehensive energy consumption is reduced by 11kgce; the second is to strengthen the economicoperation of each main production process, improve the recovery of residual energy, and the energy consumption of sintering,coking, blast furnace, steelmaking and other processes have all completed the plan, and the year-on-year reductions have beendifferent.
2. According to the maintenance situation of each production line and the gas balance plan, adjust the gas consumption of users
and boilers according to the time node, and at the same time give full play to the peak-shaving ability of the gas cabinet to reducethe gas emission index. From January to June, the blast furnace gas release rate was 0.27%, 0.4% lower than the plan, and 0.45%year-on-year; the coke oven gas release rate was 0.14%, 0.31% lower than the plan, and 0.35% year-on-year.
3. Through adjusting the maintenance time of gas furnaces and adjusting converter gas recovery parameters, the recovery of
converter gas per ton of steel was 135.3m3 from January to June, an increase of 3.3m3 compared with the plan and 9.5m3 year-on-year.
4. Each process strictly implements the economic operation plan and strengthens the management of daily electricity consumption.
In the first half of the year, the power consumption per ton of steel was 500kWh, which was 28.5kWh lower than the plan and27kWh lower than the same period last year.
5. Take measures such as strictly controlling the amount of externally supplied steam and reducing the pressure of the steam pipe
network. In the first half of the year, thermal coal consumption was 62,900 tons, a decrease of 42,100 tons compared with the planand a year-on-year decrease of 42,500 tons.
6. In the first half of 2023, 4 energy-saving and carbon-reduction projects will be started, including the frequency conversion
transformation of the primary dust removal fan of the converter, the boosting transformation of the 1# CDQ boiler, thetransformation of the Xing'an raw material district heating method, and the heating transformation of a new high-temperature slagflushing water plate.The annual profit is 26.79 million yuan, and the annual standard coal is 26,800 tons.
Other environmental related informationNone.II. Social Responsibility Situation
1. The panel company set up a voluntary service detachment to recruit volunteers to participate in social public welfare
undertakings and city creation activities, assist in traffic assistance at the intersection of Shifu Road and General Hospital, preventcitizens from crossing the intersection, and ensure the safety of personnel.
2. Organize volunteers from the plate company to participate in the ecological and environmental protection voluntary service
activity of "Protecting the Mother River and Co-creating an Eco-City" carried out by the Benxi Iron and Steel Volunteer ServiceTeam, picking up garbage along the Taizi River.
3. The assistance of needy workers is effectively connected with the improvement of the quality of life of workers, and the needy
workers are identified according to the review and identification standards of various needy workers, and the working principle of"doing everything that should be built, helping as much as possible, dynamic management, and precise policy implementation" isstrictly implemented, establish a long-term mechanism for doing practical and good things for employees, and effectively solveproblems for employees in difficulties.
Section VI Important Events
I. Commitments made by the company’s actual controller, shareholders, related parties, acquirers, and the company and other
related parties that have been fulfilled during the reporting period and that have not been fulfilled by the end of the reportingperiod?Applicable □Not applicableCommitments
| Commitment party | Type of commitment |
Contents
| Commitment time | Commitment period |
Performance
Commitment made inthe acquisition reportor the equity changereport
Ansteel GroupCo., Ltd.
Othercommitment
the following: 1. Ansteel Group guarantees to keep separate from Bengang Steel interms of assets, personnel, finance, organization and business, and strictly abidesby the China Securities Regulatory Commission's regulations on the independenceof listed companies It does not use its controlling position to interfere with thestandard operation of Bengang Steel, interfere with Bengang Steel's businessdecisions, or damage the legitimate rights and interests of Bengang Steel and othershareholders. Ansteel Group and other subsidiaries controlled by it promise not toillegally occupy the funds of Bengang Plate and its controlled subsidiaries in anyway. 2. The above commitments will continue to be effective during the periodwhen Ansteel Group has control over Bengang Steel Sheets. If Ansteel Group failsto fulfill the above-mentioned commitments and causes losses to Bengang Steel
| Sheets, Ansteel Group will bear the corresponding liability for compensation. |
August20,2021
Long term
Under normalfulfillment
Commitment made inthe acquisition reportor the equity changereport
Ansteel GroupCo., Ltd.
Othercommitment
following: (1) In view of the overlapping business between Ansteel Group andBengang Steel after the completion of the acquisition, according to therequirements of existing laws, regulations and relevant policies, Ansteel Group willissue a letter of commitment from this letter of commitment. Within 5 years fromthe date of issue, and strive to use a shorter time, in accordance with therequirements of the relevant securities regulatory authorities, under the premise ofcomplying with the applicable laws and regulations and relevant regulatory rules atthat time, in order to facilitate the development of Bengang Steel Sheets andsafeguard the interests of shareholders, especially It is the principle of the interestsof small and medium shareholders, and comprehensively uses various methodssuch as asset restructuring, business adjustment, and entrusted management tosteadily promote the integration of relevant businesses to solve the problem ofhorizontal competition. The aforesaid solutions include but are not limited to: 1)Asset reorganization: purchase assets, asset replacement, asset transfer or otherfeasible reorganization methods in different ways permitted by relevant laws and
| regulations, such as cash consideration or issue share consideration, and gradually |
August20,2021
Long term
Under normalfulfillment
and reorganize the assets of the overlapping parts of the business of the sheet metalto eliminate the overlapping of some businesses; 2) Business adjustment: Sort outthe business boundaries and try our best to achieve differentiated operations, suchas through asset transactions, business division and other different methods.Business distinction, including but not limited to business composition, productgrade, application field and customer groups, etc.; 3) Entrusted management: bysigning an entrustment agreement, one party will make decisions related to theoperation of some related assets with overlapping businesses 4) Other feasiblesolutions within the scope permitted by laws, regulations and relevant policies. Theimplementation of the above-mentioned solutions is premised on performing thenecessary deliberation procedures for listed companies and the approvalprocedures of securities regulatory authorities and relevant competent authorities inaccordance with relevant laws and regulations. (2) Anshan Iron and Steel Grouphas not yet formulated a specific implementation plan and time arrangement forsolving the problem of partial business overlap between Anshan Iron and SteelGroup and Bengang Steel. (3) In addition to the above circumstances, whenAnsteel Group or other subsidiaries obtain business opportunities that maycompete with the business of Bengang Steel, Ansteel Group will do its best to giveBengang Steel the priority to develop such opportunities and The right of firstrefusal to purchase the project makes the price of the relevant transaction fair andreasonable, and will be based on the business practices followed in normalcommercial transactions with independent third parties; (4) Ansteel Groupguarantees that it will strictly abide by laws, regulations and According to theArticles of Association of Bengang Plate Co., Ltd. and its relevant managementsystem, the company shall not use its position as an indirect controllingshareholder of Bengang Plate to seek illegitimate interests, thereby impairing therights and interests of other shareholders of Bengang Plate; During the period ofcontrol over the steel sheet, the above commitments made by Ansteel Group are allvalid. In the event of violation of the above commitments, resulting in damage tothe rights and interests of Bengang Steel, Ansteel Group is willing to assume the
| corresponding liability for damages. |
Commitment made inthe acquisition reportor the equity changereport
Ansteel GroupCo., Ltd.
Othercommitment
and listed companies, Ansteel Group has made commitments: 1. Ansteel Groupwill ensure that Bengang Steel’s business is independent, its assets are complete,and it has independent and complete production, supply, sales and other auxiliaryfacilities. system. 2. Ansteel Group and other enterprises controlled by AnsteelGroup will not take advantage of the control over Bengang Steel Sheets to seekpreferential transactions with Bengang Steel 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 subordinateenterprises. If there is a truly necessary and unavoidable transaction, Ansteel Groupand other enterprises controlled by Ansteel Group will sign an agreement withBengang Steel Sheets and its subordinate enterprises in accordance with theprinciples of fairness, fairness, and compensation for equal value, perform legal
| procedures, and will comply with the law. According to the requirements of |
August20,2021
Long term
Under normalfulfillment
Association of Bengang Plate Co., Ltd.", perform information disclosureobligations and perform relevant internal decision-making and approval proceduresin accordance with the law, and ensure that no price is unfair compared withmarket prices. conditions and conduct transactions with Bengang Steel and itssubordinate enterprises, and do not use such transactions to engage in any behaviorthat damages the legitimate rights and interests of Bengang Steel and othershareholders of Bengang Steel. 4. In the event of violation of the abovecommitments, resulting in damage to the legitimate rights and interests of BengangSteel, Ansteel Group will compensate for the losses caused to Bengang according
| to law. |
Commitment madeduring initial publicoffering orrefinancing
Companydirectors,seniormanagement/Controllingshareholders
Othercommitment
Commission, all directors and senior management of the Company have made thefollowing commitments to the Company’s fulfillment of the diluted immediatereturn measures: 1. I promise to perform my duties faithfully and diligently, andsafeguard 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 theCompany's interests. 3. I promise to restrict the position-related consumptionbehavior of company directors and senior management personnel. 4. I promise notto use the Company’s assets to do investment and consumption activities that arenot related to the performance of my duties. 5. Within the scope of myresponsibilities and authority, I promise to make every effort to promote thecompany's board of directors or the remuneration system established by theremuneration and appraisal committee to be linked to the implementation of thecompany's compensation measures, and vote in favor of the relevant proposalsreviewed by the company's board of directors and general meeting (If I have votingrights). 6. If the company intends to implement equity incentives, I promise to,within my own responsibilities and jurisdiction, make every effort to promote theCompany’s proposed equity incentive exercise conditions to be linked to theCompany’s implementation of the return measures, and to review the Company’sboard of directors and shareholders’ general meetings and vote in favor of therelevant proposals reviewed by the company's board of directors and generalmeeting (If I have voting rights). 7. If the future issuance of this commitment andthe implementation of the Company’s public issuance of convertible corporatebonds are completed, if the China Securities Regulatory Commission makes othernew regulatory provisions on the measures for filling returns and theircommitments, and the above commitments cannot meet the requirements of theChina Securities Regulatory Commission When other regulations are stipulated, acommitment will be issued in accordance with the latest regulations of the ChinaSecurities Regulatory Commission. The company's controlling shareholder, BenxiSteel and Iron (Group) Co., Ltd., promised not to interfere with the company'soperation and management activities beyond its authority and not to infringe on the
| Company's interests. |
May 22,2019
Long term
Under normalfulfillment
Commitment made
| Benxi Steel & Iron (Group) | Other Commitment | The sales companies of Bengang International Trade Co., Ltd. and Bengang Steel plates in the same region guarantee independent personnel, independent business, | July 24,2019 |
Long term
during initial publicoffering orrefinancing
BengangGroup Co.,Ltd.
| Co., Ltd. and | 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 andtrade operators, taking into account the need to gradually improve the qualificationcertification of raw material suppliers, customs import and export qualificationcertification, etc. In the short term, the actual conditions and capabilities forindependent import and export business are still lacking. In order to ensure thenormal business development of Benxi Steel Plate, the Group agrees that withinthe period of not more than 5 years from the date of issuance of this commitment,the main import and export business of Benxi Steel Plate will still be representedby Bengang International Trade until Bengang Steel Plates can be independentlydeveloped Import and export business, and during this period, BengangInternational Trade will provide the necessary support for the establishment andimprovement of Bengang's import and export business. In addition, the salescompany under Bengang International Trade is only responsible for selling theproducts of Beiying Iron and Steel Group, and never sells third-party steelproducts. 3. The three sales companies under the Group, Shanghai Bengang Ironand Steel Sales Co., Ltd., Shanghai Bengang Iron and Steel Materials Co., Ltd.,and Guangzhou Free Trade Zone Bengang Sales Co., Ltd., are currently no longeractually engaged in any business activities, as follows: (1 ) Shanghai Bengang Iron& Steel Sales Co., Ltd. filed for bankruptcy in 2014, and the Shanghai ChangningDistrict People's Court issued an announcement to appoint Guohao Lawyer(Shanghai) Office as the bankruptcy administrator. After communication with thebankruptcy administrator, it is expected that the bankruptcy and liquidation ofShanghai Bengang Iron and Steel Sales Co., Ltd. will be completed by the end of2020. Upon completion of the aforementioned bankruptcy liquidation procedures,the relevant procedures for cancellation of Shanghai Bengang Iron and Steel SalesCo., Ltd. will be handled immediately. (2) Shanghai Bengang Iron & SteelMaterials Co., Ltd. is a holding subsidiary of Shanghai Bengang Iron & Steel SalesCo., Ltd., and its business license has been revoked. As the shareholder ShanghaiBengang Iron & Steel Sales Co., Ltd. is in the process of bankruptcy andliquidation, Shanghai Bengang Iron & Steel Materials Co., Ltd. was unable toconvene a shareholders' meeting to cancel the company and establish a liquidationgroup according to law. Therefore, the cancellation has not yet been completed.After the aforementioned bankruptcy and liquidation procedures of ShanghaiBengang Iron & Steel Sales Co., Ltd. are completed, the relevant procedures forcancellation of Shanghai Bengang Iron & Steel Materials Co., Ltd. will beprocessed immediately. (3) Guangzhou Free Trade Zone Bengang Sales Co., Ltd.has a contract arrears dispute with Jiedong County Trading Corporation. Accordingto the Civil Judgment ((1999) Ben Jing No. 116), Guangzhou Free Trade ZoneBengang Sales Co., Ltd. applied to the court to seal 62 properties under the nameof Jiedong County Trading Corporation. However, due to serious local protection,property rights and other factors, the content of the judgment has not beenenforceable. Later, after applying again from Guangzhou Free Trade Zone BengangSales Co., Ltd., the Intermediate People's Court of Benxi City, Liaoning Provinceissued an execution ruling again, and 62 properties of Jiedong County Trading
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. |
Commitment madeduring initial publicoffering orrefinancing
BengangGroup Co.,Ltd. & BenxiSteel & Iron(Group) Co.,Ltd.
OtherCommitment
commitments to avoid inter-industry competition 1. During the period when theGroup is the controlling shareholder of Bengang Steel Plates, in addition to thematters listed in Article 1 of this Commitment Letter, the Group and otherenterprises controlled by the Group other than Bengang Steel Plates no longerproduce or develop any products that compete or may compete with the productsproduced by Bengang Steel Plates and its subsidiaries at home and abroad, and donot directly or indirectly operate any business that competes with Bengang SteelPlates and its subsidiaries. Businesses that may constitute competition, nor are theyinvolved in investing in any other enterprise that competes with or may competewith products or businesses produced by Bengang Steel Plates and its subsidiaries.
2. If Bengang Steel Plates and its subsidiaries further expand their business scope,
the Group and other enterprises controlled by the Group will not compete with theexpanded business of Bengang Steel Plates and its subsidiaries; they may competewith Bengang Steel Plates and its subsidiaries If the company's expanded businessproduces competition, it will withdraw from the competition with Bengang SteelPlates as follows: (1) Stop business that may or may compete with Bengang SteelPlates and its subsidiaries; (2) Will compete The business is incorporated intoBengang Steel Plates and its subsidiaries in a legal and compliant manner; (3)Competitive business is transferred to unrelated third parties. 3. If the Group hasany business opportunities to engage in or participate in the competition withBengang Steel Plates’ operations, the Group shall immediately notify BengangSteel Plates of the above commercial opportunities. Within a reasonable periodspecified in the notice, Bengang Steel Plates If an affirmative answer is made totake advantage of the business opportunity, the Group will endeavor to give thebusiness opportunity to Bengang Steel Plates on terms not less than that providedto any independent third party. 4. If the above commitments are violated, the Groupis willing to bear all the responsibilities arising therefrom, and fully compensate orcompensate for all direct or indirect losses caused to Bengang Steel Plates. 5. Thisletter of commitment continues to be effective during the period of the Group asthe controlling shareholder of Bengang Steel Plates and cannot be changed or
| withdrawn |
July24,2019
Normalexecution
Under normalfulfillment
Commitment madeduring initial publicoffering orrefinancing
Benxi Steel &Iron (Group)Co., Ltd. andBengangGroup Co.,Ltd.
OtherCommitment
shareholders and other related parties, and to protect the interests of the Companyand small and medium shareholders, Benxi Steel and Iron (Group) Co., Ltd. andBengang Group Co., Ltd. have issued the following commitments: "Benxi Steeland Iron (Group) Co., Ltd. and Bengang Group Co., Ltd. (hereinafter collectivelyreferred to as the "Group"), as a direct controlling shareholder and an indirectcontrolling shareholder of Bengang Steel Plates Co., Ltd. (hereinafter referred to as"Bengang Steel Plates"), in order to protect the interests of Bengang Steel Platesand other shareholders of Bengang Steel Plates, regulate The Group's related
| transaction with Bengang Steel Plates hereby promises: 1. The Group will fully |
July24,2019
Long term
Under normalfulfillment
independent operation and independent decision-making of Bengang Steel Plates,ensure the independence of Bengang Steel Plates’ business, asset integrity andpersonnel Independence and financial independence to avoid and reduceunnecessary related transactions; the Group will strictly control related transactionswith Bengang Steel Plates and its subsidiaries. 2. The Group and other controlledcompanies promise not to use loans or occupy or misappropriate the funds ofBengang Steel Plates and its subsidiaries to repay debts, substitute funds orotherwise, nor We ask Bengang Steel Plates and its subsidiaries to provide illegalguarantees for the Group and other companies under its control. 3. The Group andother controlled companies and Bengang Steel Plates will minimize relatedtransactions. It is indeed necessary and unavoidable to carry out in the related partytransactions, strictly implement the decision-making authority, decision-makingprocedures, avoidance system and other contents stipulated in Bengang's "Articlesof Association" and related party transaction decision-making system, give fullplay to the role of the board of supervisors and independent directors, and earnestlyfulfill the obligation of information disclosure To ensure that transactions areconducted in accordance with the open, fair, and fair principles of markettransactions and normal commercial terms, the Group and other companies undercontrol will not require or accept Bengang Steel Sheets to give preferentialtreatment to third parties in any fair market transaction Conditions to protect othershareholders of Benxi Steel Plates and the interests of Benxi Steel Plates fromdamage. 4. The Group guarantees that the above commitments are continuouslyeffective and irrevocable as long as Bengang Steel Plates is listed on the domesticstock exchange and the Group acts as its direct and indirect controllingshareholder. If any violation of the above commitments occurs, the Group therefore
| bear all the losses caused to Bengang Steel Plates. |
WhetherCommitment fulfilledon time or not
Yes
II. Non-operating Capital Occupation of Listed Companies by Controlling Shareholders
and Other Related Parties
□Applicable ?Not applicable
There was no non-operating occupation of funds by the controlling shareholder and related parties.
III. Non-compliant External Guarantees
□Applicable ?Not applicable
During the reporting period, the company had no non-compliant external guarantees.IV. Appointment and Dismissal of Accounting Firms
Whether the semi-annual financial report has been audited
□Yes ?No
The semi-annual financial report of the company was not audited.
V. Explanation of the Board of Directors and the Board of Supervisors on the "Non-standard Audit Report" of the Accounting Firm for the Reporting Period
□Applicable ?Not applicable
VI. Explanation of the Board of Directors on the Relevant Situation of the "Non-standard
Audit Report" of the Previous Year
□Applicable ?Not applicable
VII. Matters Related to Bankruptcy and Reorganization
□Applicable ?Not applicable
During the reporting period, there were no matters related to bankruptcy and reorganization of the company.VIII. LitigationMajor litigation and arbitration matters
□Applicable ?Not applicable
During the reporting period, the company had no major lawsuits or arbitrations.Other litigation matters?Applicable □Not applicable
Basicinformationon litigation(arbitration)
Amountinvolved(RMB’0,000)
Whether toformprovisions
Litigation(arbitration)progress
Litigation(arbitration)trial resultsand impact
Litigation(arbitration)
judgment
execution
Disclosure
date
Disclosure
index
matters thatthe companyfailed tomeet thedisclosurestandards formajorlitigation
| (arbitration) |
4,281.6 No
Under reviewandexecution
Becausemost of thecases werewon, it didnot affect thecompany.
According tothe law
IX. Punishment and Rectification
□Applicable ?Not applicable
X. Integrity Status of the Company and its Controlling Shareholders and Actual
Controllers
□Applicable ?Not applicable
XI. Major Related Party Transactions
1. Related Party Transactions Relevant to Ordinary Operations
?Applicable □Not applicable
Relatedparties
Relationship
Type ofrelated partytransactions
Content ofrelatedpartytransactions
Pricingprinciple ofrelated partytransactions
Price ofrelatedpartytransactions
Amount ofrelated partytransactions(RMB’0,000)
Proportion ofsimilartransactions
Theapprovedtradinglimit oftransactions(RMB’0,000)
| Whethe |
rexceedtheapprovedlimited
Means ofpaymentof relatedpartytransactions
Available marketprice ofsimilartransactions
Date ofdisclosure
Index ofdisclosure
| (Y/N) | ||
| Ansteel |
ScrapResources(Anshan)
Bothbelong toAnsteelGroup
Purchase ofgoods/receiving of services
Procurement of mainrawmaterials
Agreement
Relatedagreement price
37,008.21 1.21% 130,000 No
Executeaccordingto theagreement
Yes
December14, 2022
2022-73
| Co., Ltd. |
| Angang Steel |
ProcessingandDistribution(Changchun)
Bothbelong toAnsteelGroup
Purchase ofgoods/receiving of services
Receivesupportiveservices
Agreement
Relatedagreement price
1,300 No
Executeaccordingto theagreement
Yes
December14, 2022
2022-73Ansteel RopeCo., Ltd.
| Co., Ltd. | |
| Both |
belong toAnsteel
Purchase ofgoods/receiving of services
Purchasingauxiliarymaterials
Agreement
Relatedagreement price
16.95 0.00% 1,000 No
| Group | Execute |
accordingto the
Yes
December14, 2022
2022-73
| agreement | ||
| Ansteel Co., |
Ltd.
belong toAnsteel
| Group |
Purchase ofgoods/receiving of services
nt of mainraw
| materials |
Agreement
Relatedagreement price
10,000 No
accordingto the
| agreement |
Yes
December14, 2022
2022-73
GroupEngineeringTechnology
| Co., Ltd. |
Associate
Group
Purchase ofgoods/receiving of services
Receivesupportiveservices
Agreement
Relatedagreement price
19,506.93 0.64% 2,300 No
Executeaccordingto theagreement
Yes
December14, 2022
2022-73
GroupInternationalEconomic
| and Trade Co., Ltd. |
Bothbelong toAnsteelGroup
Purchase ofgoods/receiving of services
Procurement of mainrawmaterials
Agreement
Relatedagreement price
30,000 No
Executeaccordingto theagreement
Yes
December14, 2022
2022-73
GroupMiningGongchangli
| ng Co., Ltd. |
Bothbelong toAnsteelGroup
Purchase ofgoods/receiving of services
Procurement of mainrawmaterials
Agreement
Relatedagreement price
20,040.83 0.65% 50,000 No
Executeaccordingto theagreement
Yes
December14, 2022
2022-73AnsteelGroup
Ltd.
| Mining Co., | Both |
belong toAnsteel
Purchase ofgoods/receiving of services
| Group | Procureme |
nt of mainraw
Agreement
Relatedagreement price
10,000 No
| materials | Execute |
accordingto the
Yes
December14, 2022
2022-73Othersubsidiaries
| agreement | ||
| of Ansteel |
Group
belong toAnsteel
| Group |
Purchase ofgoods/receiving of services
Purchasingauxiliarymaterials
Agreement
Relatedagreement price
168.29 0.01% 550 No
accordingto the
| agreement |
Yes
December14, 2022
2022-73Othersubsidiaries
Group
| of Ansteel | Both |
belong toAnsteel
Purchase ofgoods/receiving of services
Receivesupportiveservices
Agreement
Relatedagreement price
389.61 0.01% 2,100 No
| Group | Execute |
accordingto the
Yes
December14, 2022
2022-73AnsteelGroupAutomationCo., Ltd.
Bothbelong toAnsteel
| agreement | ||
| Group |
Purchase ofgoods/receiving of services
Receivesupportiveservices
Agreement
Relatedagreement price
4,705.5 0.15% 23,000 No
Executeaccordingto the
Yes
December14, 2022
2022-73AnsteelConstruction
| agreement | ||
| Group Co., |
Ltd.
belong toAnsteel
| Group |
Purchase ofgoods/receiving of services
Receivesupportiveservices
Agreement
Relatedagreement price
5,500 No
accordingto the
| agreement |
Yes
December14, 2022
2022-73
Kurita(Anshan)WaterTreatment
| Co., Ltd. |
Bothbelong toAnsteelGroup
Purchase ofgoods/receiving of services
Receivesupportiveservices
Agreement
Relatedagreement price
1,200 No
Executeaccordingto theagreement
Yes
December14, 2022
2022-73
Lianzhong(Guangzhou)Stainless
| Steel Co., Ltd. |
Bothbelong toAnsteelGroup
Purchase ofgoods/receiving of services
Purchasingsteelproducts
Agreement
Relatedagreement price
16,000 No
Executeaccordingto theagreement
Yes
December14, 2022
2022-73
IndustrialGroup(Anshan)EquipmentOperationandMaintenance
| Co., Ltd. |
Bothbelong toAnsteelGroup
Purchase ofgoods/receiving of services
Receivesupportiveservices
Agreement
Relatedagreement price
325.33 0.01% 1,000 No
Executeaccordingto theagreement
Yes
December14, 2022
2022-73
IndustrialGroupMetallurgicalMachinery
| Co., Ltd. |
Bothbelong toAnsteelGroup
Purchase ofgoods/receiving of services
Purchasingauxiliarymaterials
Agreement
Relatedagreement price
509.71 0.02% 1,500 No
Executeaccordingto theagreement
Yes
December14, 2022
2022-73NorthHengdaLogisticsCo., Ltd.
Bothbelong toBengang
Purchase ofgoods/receiving of services
Receivesupportiveservices
Agreement
Relatedagreement price
6,810.5 0.22% 3,000 No
Executeaccordingto the
| Group | agreement |
Yes
December14, 2022
2022-73Bengang
Ltd.
Associate
| Electric Co., | of parent |
company
Purchase ofgoods/receiving of services
Purchasingauxiliarymaterials
Agreement
Relatedagreement price
5,759.31 0.19% 20,000 No
accordingto the
| agreement |
Yes
December14, 2022
2022-73
GroupInternationalEconomic
| and Trade Co., Ltd. |
Bothbelong toBengangGroup
Purchase ofgoods/receiving of services
Receivesupportiveservices
Agreement
Relatedagreement price
3,246.44 0.11% 20,000 No
Executeaccordingto theagreement
Yes
December14, 2022
2022-73
Bengang
Ltd.
| Group Co., | Controllin |
gshareholde
parent
| company |
Purchase ofgoods/receiving of services
Receivesupportiveservices
Agreement
Relatedagreement price
497.27 0.02% 10,000 No
Executeaccordingto theagreement
Yes
December14, 2022
2022-73
Beiying Iron
| and Steel (Group) Co., Ltd. |
Bothbelong toBengangGroup
Purchase ofgoods/receiving of services
Procurement of mainrawmaterials
Agreement
Relatedagreement price
617,788.13 20.13% 1,508,000 No
Executeaccordingto theagreement
Yes
December14, 2022
2022-73
Bothbelong toBengangGroup
Purchase ofgoods/receiving of services
Purchasingauxiliarymaterials
Agreement
Relatedagreement price
2,000 No
Executeaccordingto theagreement
Yes
December14, 2022
2022-73
| Benxi Beiying Iron and Steel (Group) Co., Ltd. |
| Benxi Beiying Iron and Steel (Group) Co., Ltd. |
Bothbelong toBengangGroup
Purchase ofgoods/receiving of services
PurchasingEnergyPower
Agreement
Relatedagreement price
32,921.6 1.07% 80,000 No
Executeaccordingto theagreement
Yes
December14, 2022
2022-73
Bothbelong toBengangGroup
Purchase ofgoods/receiving of services
Receivesupportiveservices
Agreement
Relatedagreement price
821.5 0.03% 10,000 No
Executeaccordingto theagreement
Yes
December14, 2022
2022-73
| Benxi Beiying Iron and Steel (Group) Co., Ltd. |
| Benxi Iron and Steel |
(Group)MachineryManufacturin
Sameparentcompany
Purchase ofgoods/receiving of services
Purchasingauxiliarymaterials
Agreement
Relatedagreement price
4,127.51 0.13% 12,000 No
Executeaccordingto theagreement
Yes
December14, 2022
2022-73
| g Co., Ltd. |
| Benxi Iron and Steel |
(Group)MachineryManufacturin
Sameparentcompany
Purchase ofgoods/receiving of services
Receivesupportiveservices
Agreement
Relatedagreement price
2,103.49 0.07% 8,000 No
Executeaccordingto theagreement
Yes
December14, 2022
2022-73
| g Co., Ltd. |
| Benxi Iron and Steel |
(Group)Construction
Sameparentcompany
Purchase ofgoods/receiving of services
Receivesupportiveservices
Agreement
Relatedagreement price
25,410.48 0.83% 58,500 No
Executeaccordingto theagreement
Yes
December14, 2022
2022-73
| Co., Ltd. |
| Benxi Iron and Steel |
(Group)
Sameparentcompany
Purchase ofgoods/receiving of services
Procurement of mainrawmaterials
Agreement
Relatedagreement price
198,159.23 6.46% 895,000 No
Executeaccordingto theagreement
Yes
December14, 2022
2022-73
(Group)
| Mining Co., Ltd. |
Sameparentcompany
Purchase ofgoods/receiving of services
Receivesupportiveservices
Agreement
Relatedagreement price
5,000 No
Executeaccordingto theagreement
Yes
December14, 2022
2022-73
(Group)EquipmentEngineering
| Co., Ltd. |
Sameparentcompany
Purchase ofgoods/receiving of services
Receivesupportiveservices
Agreement
Relatedagreement price
18,600.42 0.61% 10,000 No
Executeaccordingto theagreement
Yes
December14, 2022
2022-73
(Group)IndustrialDevelopment
| Co., Ltd. |
Sameparentcompany
Purchase ofgoods/receiving of services
Procurement of mainrawmaterials
Agreement
Relatedagreement price
1,592.38 0.05% 60,000 No
Executeaccordingto theagreement
Yes
December14, 2022
2022-73
(Group) NewBusinessDevelopment
| Co., Ltd. |
Sameparentcompany
Purchase ofgoods/receiving of services
Receivesupportiveservices
Agreement
Relatedagreement price
77.43 0.00% 7,000 No
Executeaccordingto theagreement
Yes
December14, 2022
2022-73
(Group)InformationAutomation
| Co., Ltd. |
Bothbelong toBengangGroup
Purchase ofgoods/receiving of services
Receivesupportiveservices
Agreement
Relatedagreement price
7,693.92 0.25% 10,000 No
Executeaccordingto theagreement
Yes
December14, 2022
2022-73
(Group)Metallurgical
| Slag Co., Ltd. |
Sameparentcompany
Purchase ofgoods/receiving of services
Procurement of mainrawmaterials
Agreement
Relatedagreement price
12,315.31 0.40% 30,000 No
Executeaccordingto theagreement
Yes
December14, 2022
2022-73
Parentcompany
Purchase ofgoods/receiving of services
Receivesupportiveservices
Agreement
Relatedagreement price
12,529.34 0.41% 35,000 No
| Benxi Steel and Iron (Group) Co., Ltd. | Execute |
accordingto the
Yes
December14, 2022
2022-73
| agreement | ||
| Liaoning |
HengtaiHeavyMachinery
Sameparentcompany
Purchase ofgoods/receiving of services
Receivesupportiveservices
Agreement
Relatedagreement price
3,941.52 0.13% 5,000 No
Executeaccordingto theagreement
Yes
December14, 2022
2022-73
DelinIndustrialProducts Co.,Ltd.
Bothbelong toAnsteel
Purchase ofgoods/receiving of services
Purchasingauxiliarymaterials
Agreement
Relatedagreement price
1,513.86 0.05% Yes
Executeaccordingto the
| Group | agreement |
Yes
December14, 2022
2022-73
HengtongMetallurgicalEquipmentManufacturin
| g Co., Ltd. |
Bothbelong toBengangGroup
Purchase ofgoods/receiving of services
Purchasingauxiliarymaterials
Agreement
Relatedagreement price
20,000 No
Executeaccordingto theagreement
Yes
December14, 2022
2022-73LiaoningMetallurgicalTechnicianCollege
Sameparentcompany
Purchase ofgoods/receiving of services
Receivesupportiveservices
Agreement
Relatedagreement price
1,000 No
accordingto the
| agreement |
Yes
December14, 2022
2022-73
GroupVanadiumand TitaniumResources
| Co., Ltd. |
Bothbelong toAnsteelGroup
Purchase ofgoods/receiving of services
Procurement of mainrawmaterials
Agreement
Relatedagreement price
4,000 No
Executeaccordingto theagreement
Yes
December14, 2022
2022-73
ProcessingandDistribution
| (Dalian) Co., Ltd. |
Bothbelong toAnsteelGroup
Sale ofgoods/renderof services
Sales ofgoods
Agreement
Relatedagreement price
2,757.78 0.09% 8,000 No
Executeaccordingto theagreement
Yes
December14, 2022
2022-73
ProcessingandDistribution(Changchun)
| Co., Ltd. |
Bothbelong toAnsteelGroup
Sale ofgoods/renderof services
Sales ofgoods
Agreement
Relatedagreement price
200.35 0.01% 4,300 No
Executeaccordingto theagreement
Yes
December14, 2022
2022-73
ProcessingandDistribution(Zhengzhou)
| Co., Ltd. |
Bothbelong toAnsteelGroup
Sale ofgoods/renderof services
Sales ofgoods
Agreement
Relatedagreement price
1,043.34 0.03% 30,000 No
Executeaccordingto theagreement
Yes
December14, 2022
2022-73AnsteelDistribution
Ltd.
Bothbelong toAnsteel
| (Hefei) Co., | Group |
Sale ofgoods/renderof services
Sales ofgoods
Agreement
Relatedagreement price
910.95 0.03% 36,000 No
Executeaccordingto the
Yes
December14, 2022
2022-73
AnsteelDistribution(Wuhan) Co.,Ltd.
Bothbelong toAnsteel
Sale ofgoods/renderof services
Sales ofgoods
Agreement
Relatedagreement price
5,510.35 0.18% 30,000 No
Executeaccordingto the
| Group | agreement |
Yes
December14, 2022
2022-73
Ltd.
| Ansteel Co., | Both |
belong toAnsteel
Sale ofgoods/renderof services
Sales ofgoods
Agreement
Relatedagreement price
9.43 0.00% 10,000 No
| Group | Execute |
accordingto the
Yes
December14, 2022
2022-73AnsteelChemicalTechnologyCo., Ltd.
| agreement | ||
| Both |
belong toAnsteel
Sale ofgoods/renderof services
Sales ofgoods
Agreement
Relatedagreement price
4,685.85 0.15% 150,000 No
| Group | Execute |
accordingto the
Yes
December14, 2022
2022-73
| agreement | ||
| Ansteel |
GroupInternationalEconomic
Bothbelong toAnsteelGroup
Sale ofgoods/renderof services
Sales ofgoods
Agreement
Relatedagreement price
30,000 No
Executeaccordingto theagreement
Yes
December14, 2022
2022-73Othersubsidiaries
| and Trade Co., Ltd. |
| of Ansteel |
Group
Bothbelong toAnsteel
Sale ofgoods/renderof services
Sales ofgoods
Agreement
Relatedagreement price
322.99 0.01% 2,200 No
Executeaccordingto the
| Group | agreement |
Yes
December14, 2022
2022-73
GreenResourcesTechnology
| Co., Ltd. |
Bothbelong toAnsteelGroup
Sale ofgoods/renderof services
Sales ofgoods
Agreement
Relatedagreement price
7,951.55 0.26% 25,000 No
Executeaccordingto theagreement
Yes
December14, 2022
2022-73AnsteelEnergyTechnologyCo., Ltd.
belong toAnsteel
| Group |
Sale ofgoods/renderof services
Sales ofgoods
Agreement
Relatedagreement price
777.23 0.03% 2,700 No
accordingto the
| agreement |
Yes
December14, 2022
2022-73
ShenyangSteelProcessingandDistribution
| Co., Ltd. |
Bothbelong toAnsteelGroup
Sale ofgoods/renderof services
Sales ofgoods
Agreement
Relatedagreement price
3,000 No
Executeaccordingto theagreement
Yes
December14, 2022
2022-73NorthHengdaLogisticsCo., Ltd.
belong toBengang
| Group |
Sale ofgoods/renderof services
Sales ofgoods
Agreement
Relatedagreement price
164,663.22 5.39% 200,000 No
accordingto the
| agreement |
Yes
December14, 2022
2022-73
Bengang
Ltd.
Controllingshareholde
| Group Co., | r of the |
parent
Sale ofgoods/renderof services
Providesupportservices
Agreement
Relatedagreement price
10.17 0.00% 8,000 No
Executeaccordingto theagreement
Yes
December14, 2022
2022-73
| company | |
| Benxi Beiying Iron and Steel (Group) Co., Ltd. |
Bothbelong toBengangGroup
Sale ofgoods/renderof services
Sales ofgoods
Agreement
Relatedagreement price
13,354.7 0.44% 180,000 No
Executeaccordingto theagreement
Yes
December14, 2022
2022-73
(Group)MachineryManufacturin
| g Co., Ltd. |
Sameparentcompany
Sale ofgoods/renderof services
Sales ofgoods
Agreement
Relatedagreement price
652.2 0.02% 9,400 No
Executeaccordingto theagreement
Yes
December14, 2022
2022-73
(Group)Construction
| Co., Ltd. |
Sameparentcompany
Sale ofgoods/renderof services
Sales ofgoods
Agreement
Relatedagreement price
375.65 0.01% 10,000 No
Executeaccordingto theagreement
Yes
December14, 2022
2022-73
and Steel(Group)MiningYanjiagouLimestone
| Mine Co., Ltd. |
Sameparentcompany
Sale ofgoods/renderof services
Sales ofgoods
Agreement
Relatedagreement price
201.77 0.01% 1,000 No
Executeaccordingto theagreement
Yes
December14, 2022
2022-73
(Group)
| Mining Co., Ltd. |
Sameparentcompany
Sale ofgoods/renderof services
Sales ofgoods
Agreement
Relatedagreement price
46,603.88 1.52% 79,000 No
Executeaccordingto theagreement
Yes
December14, 2022
2022-73
and Steel(Group)
| Mining Co., Ltd. |
Sameparentcompany
Sale ofgoods/renderof services
Providesupportservices
Agreement
Relatedagreement price
39.1 0.00% 1,000 No
Executeaccordingto theagreement
Yes
December14, 2022
2022-73
(Group)ThermalPowerDevelopment
| Co., Ltd. |
Sameparentcompany
Sale ofgoods/renderof services
Sales ofgoods
Agreement
Relatedagreement price
3,456.29 0.11% 10,000 No
Executeaccordingto theagreement
Yes
December14, 2022
2022-73
and Steel(Group)IndustrialDevelopment
| Co., Ltd. |
Sameparentcompany
Sale ofgoods/renderof services
Sales ofgoods
Agreement
Relatedagreement price
1,811.1 0.06% 5,000 No
Executeaccordingto theagreement
Yes
December14, 2022
2022-73
and Steel(Group)Metallurgical
| Slag Co., Ltd. |
Sameparentcompany
Sale ofgoods/renderof services
Sales ofgoods
Agreement
Relatedagreement price
5,233.69 0.17% 15,000 No
Executeaccordingto theagreement
Yes
December14, 2022
2022-73
and Iron
| (Group) Co., Ltd. |
Parentcompany
Sale ofgoods/renderof services
Sales ofgoods
Agreement
Relatedagreement price
224.88 0.01% 2,000 No
accordingto the
| agreement |
Yes
December14, 2022
2022-73DalianBorolle Steel
Ltd.
Sameparentcompany
Sale ofgoods/renderof services
Sales ofgoods
Agreement
Relatedagreement price
798.23 0.03% 2,000 No
| Pipe Co., | Execute |
accordingto the
Yes
December14, 2022
2022-73
| agreement | ||
| Delin |
LugangSupply Chain
Bothbelong toAnsteelGroup
Sale ofgoods/renderof services
Sales ofgoods
Agreement
Relatedagreement price
16,290.14 0.53% 190,000 No
Executeaccordingto theagreement
Yes
December14, 2022
2022-73GuangzhouAngang SteelProcessingCo., Ltd.
| Service Co., Ltd. | |
| Both |
belong toAnsteel
Sale ofgoods/renderof services
Sales ofgoods
Agreement
Relatedagreement price
1,013.16 0.03% 3,000 No
| Group | Execute |
accordingto the
Yes
December14, 2022
2022-73
| agreement | ||
| Liaoning |
HengtongMetallurgicalEquipmentManufacturin
Bothbelong toBengangGroup
Sale ofgoods/renderof services
Sales ofgoods
Agreement
Relatedagreement price
1,646.08 0.05% 5,000 No
Executeaccordingto theagreement
Yes
December14, 2022
2022-73
YihongMetalProducts(Chongqing)
| Co., Ltd. |
Bothbelong toAnsteelGroup
Sale ofgoods/renderof services
Sales ofgoods
Agreement
Relatedagreement price
1,000 No
Executeaccordingto theagreement
Yes
December14, 2022
2022-73SuzhouLongbenMetalMaterialsCo., Ltd.
equity
| interest in |
thecompany
Sale ofgoods/renderof services
Sales ofgoods
Agreement
Relatedagreement price
1,000 No
Executeaccordingto theagreement
Yes
December14, 2022
2022-73
FAW AngangSteelProcessingandDistribution
| Co., Ltd. |
Bothbelong toAnsteelGroup
Sale ofgoods/renderof services
Sales ofgoods
Agreement
Relatedagreement price
9.99 0.00% 5,000 No
Executeaccordingto theagreement
Yes
December14, 2022
2022-73Zhejiang
ProcessingCo., Ltd.
| Jingrui Steel | Both |
belong toBengang
Sale ofgoods/renderof services
Sales ofgoods
Agreement
Relatedagreement price
130,000 No
| Group | Execute |
accordingto the
Yes
December14, 2022
2022-73
| agreement | ||
| Tianjin |
AnsteelInternationalNorth
Bothbelong toAnsteelGroup
Sale ofgoods/renderof services
Sales ofgoods
Agreement
Relatedagreement price
24,951.28 0.82% No
Executeaccordingto theagreement
Yes
December14, 2022
2022-73Total -- -- 1,344,086.35 -- 4,287,550 -- -- -- -- --Details of large-value sales returns NoneThe actual performance during the reporting period (if any)if the total amount of the daily related party transactionsthat will occur in the current period is estimated bycategory
NoneThe reason for the large difference between the transactionprice and the market reference price (if applicable)
None
2. Related Transactions Relevant to Asset Acquisition or Sold
□Applicable ?Not applicable
There was no related transaction relevant to asset acquisition or sold during the reporting period.
3. Related Transactions Relevant to Joint Investments
□Applicable ?Not applicable
There was no related transaction relevant to joint investments during the reporting period.
4. Credits and Liabilities with Related Parties
?Applicable □Not applicableWhether there are non-operating credits and liabilities with related parties
□Yes ?No
There exists no non-operating credits and liabilities with related parties.
5. Transactions with Related Financial Companies
?Applicable □Not applicableDeposit businessRelated party
Connection
relation
Maximumdaily deposit
limit(RMB’0,000)
Deposit rate
range
Openingbalance(RMB’0,000)
Amount for this period
Closingbalance(RMB’0,000)Total deposit
amount forthe current
period(RMB’0,000)
amountwithdrawn in
the current
period
| (RMB’0,000) | ||
| Ansteel |
GroupFinance Co.,
Both belongto AnsteelGroup
450,000 1.9% 107,491.85 6,716,387.67 6,583,046.96 240,832.56Loan businessRelated party
Connection
relation
LoanAmount(RMB’0,000)
Loan InterestRate Range
Openingbalance(RMB’0,000)
Amount for this period
Closingbalance(RMB’0,000)Total loanamount forthe current
period(RMB’0,000)
Ltd.
Total
repaymentamount forthe current
period
| (RMB’0,000) |
Credit or other financial businessRelated party Connection relation Business type Total (RMB’0,000)
| Actual amount (RMB’0,000) | ||
| Ansteel Group Finance Co., Ltd. |
Both belong to Ansteel
Group
Credit400,000 79,527.07
6. Transactions between Financial Companies Controlled by the Company and Related Parties
□Applicable ?Not applicable
During the reporting period, the company had no other significant related transactions.
7. Other Significant Related Transactions
□Applicable ?Not applicable
The company had no other significant related transactions during the reporting period.
XII. Significant Contracts and their Performance
1. Trusteeship, Contracting and Leasing Matters
(1) Trusteeship
□Applicable ?Not applicable
There was no trusteeship during the reporting period.
(2) Contracting
□Applicable ?Not applicable
There was no contracting during the reporting period.
(3) Lease
?Applicable □Not applicableDescription of leaseCompany as the lessor:
Lessee
Lease capital
category
Lease income recognized in
Lease income recognized in
| the current period | the previous period |
Benxi Iron and Steel Tendering Co., Ltd.
| Plants and ancillary facilities | 250,917.43 |
Company as the lessee:
Lessor
Lease capitalcategory
| Current period | Previous period | |
| Simplified | ||
treatment of
rentalexpenses forshort-termleases andleases oflow-value
Variable leasepayments notincluded in themeasurementof the leaseliabilities
Rent paid
Interestexpenses onlease liabilities
assumed
Increasedright-of-use assets
| assets | Simplified |
treatment ofrentalexpenses for
short-termleases andleases oflow-value
Variable leasepayments notincluded in themeasurement
of the lease
liabilities
Rent paid
Interestexpenses onlease liabilities
assumed
Increasedright-of-use assetsBenxiSteel andIron(Group)Co., Ltd.
assets
Land use
right7,669,068.17square meter.Land useright42,920.00
| square meter |
27,627,809.26 19,750,096.20 27,625,616.70 19,500,054.00
Steel andIron(Group)Co., Ltd.
2300 Hotrollingproduct line,related realestate
8,049,080.53 3,736,932.14 8,049,080.53 3,870,344.33
| Benxi |
| Benxi |
BeiyingSteel &Iron(Group)
1780 Hotrollingproduct line,related realestate
7,557,730.91 2,877,975.14 6,198,949.54 2,980,721.72BensteelGroupCo., Ltd.
| Co., Ltd. | |
| Land use |
right728,282.30
4,972,711.54 1,315,378.20 4,972,711.54 1,224,959.39
Description of related leases:
1. According to the "Land Use Right Leasing Contract" and subsequent supplementary agreements signed between the Company
and Bengang Steel (Group)on April 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. The leased land is 7,669,068.17 square meters and the annual rent is54,665.10 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 houses and auxiliary facilities occupied by the 2300 hot rolling mill production line and the 1780 hotrolling mill production line. The lease term of the houses and ancillary facilities is until December 31, 2038.
3. On July 15, 2019, the Company signed "Land Lease Agreement" with Bengang Group and Bengang Steel (Group) respectively,
leased and used a total of 8 pieces of land from Bengang Group and Bengang Group Company, with leased areas of 42,920.00square meters and 728,282.30 square meters. The lease term is 20 years, the rental price is 1.138 yuan per square meter per month.Projects that bring profits and losses to the company reaching more than 10% of the company's total profit during the reportingperiod
□Applicable ?Not applicable
During the reporting period of the company, there was no leasing project that brought the company's profit and loss to more than10% of the company's total profit during the reporting period.
2. Significant Guarantees
□Applicable ?Not applicable
During the reporting period, the company had no significant guarantees.
3. Entrusted Financial Management
□Applicable ?Not applicable
There was no entrusted wealth management in the reporting period of the company.
4. Other Major Contracts
□Applicable ?Not applicable
There was no other major contract during the reporting period.
XIII. Description of Other Major Events?Applicable □Not applicableOn 21 March 2023, the company disclosed the "Informative Announcement on Planning for Major Asset Replacement andRelated Transactions", planning to conduct asset replacement with Benxi Steel and Iron (Group) Co., Ltd. (hereinafter referred toas "Benxi Iron and Steel"), the assets to be exchanged into the company are 100% equity of Benxi Iron and Steel (Group) MiningCo., Ltd., the assets of the company to be exchanged out are all assets and liabilities of the listed company except retained assets
and liabilities, the difference between the assets to be exchanged in and the assets to be exchanged out shall be made up by oneparty to the other in cash. The company held the 16th meeting of the 9th Board of Directors and the 11th meeting of the 9th Boardof Supervisors on 20 June 2023, the proposals related to the "Proposal on the "Major Assets Replacement and Related PartyTransaction Plan of Bengang Steel Plates Co., Ltd." and its summary", were reviewed and approved, and signed the "Major AssetsReplacement Framework Agreement between Benxi Iron and Steel Co., Ltd. and Benxi Steel and Iron (Group) Co., Ltd." withBenxi Iron and Steel. On 21 June 2023, the company received the "Letter of Concern on the Major Assets Replacement andRelated Transaction Plan of Bengang Plates Co., Ltd." from Shenzhen Stock Exchange, at present, the company is conductingfurther demonstration, communication and negotiation on the transaction plan, and the scope of the subject assets of thetransaction, transaction price and other elements have not been finalized. After the relevant matters are determined, the companywill reconvene the Board of Directors for review.
XIV. Major Events of Subsidiaries of the Company?Applicable □Not applicableOn February 28, the company transferred 20% of the equity of its subsidiary Zhejiang Jingrui Steel Processing Co., Ltd., andcompleted the industrial and commercial change on March 6. The company no longer holds the equity of Zhejiang Jingrui SteelProcessing Co., Ltd.
Section VII Changes in Share Capital and ShareholdersI. Share Capital Changes
1. Share Capital Changes
Unit: share
| Before the change | Increase/decrease(+，-) | After the Change |
Quantity Percentage
Issuing of new
share
Bonusshares
common reserve
| fund |
Others Subtotal Quantity Percentage
| I. Restricted Shares | |||||||||
| 1. State shareholdings | |||||||||
| 2. State-own Legal-person Shareholding |
| 3. Other domestic shareholdings | |||||||||
| Including: Domestic legal person holding |
| Domestic person holding | |||||||||
| 3. Foreign shareholding | |||||||||
| Including: Foreign legal person | |||||||||
| Foreign nature person | |||||||||
| II. Non-restricted Shares | 4,108,212,217 | 100.00% | 2,530 | 2,530 | 4,108,214,747 | 100.00% | |||
| 1. Common shares in RMB | 3,708,212,217 | 90.26% | 2,530 | 2,530 | 3,708,214,747 | 90.26% | |||
| 2. Foreign shares in domestic market |
400,000,000 9.74% 400,000,000 9.74%
| 3. Foreign shares in foreign market | |||||||||
| 4.Other | |||||||||
| III. Total shares | 4,108,212,217 | 100.00% | 2,530 | 2,530 | 4,108,214,747 | 100.00% |
Reasons for share change?Applicable □Not applicableDuring the reporting period, 100 convertible corporate bonds publicly issued by the company were converted into shares, and thecompany's total share capital increased by 2,530 shares.Status of approval of share capital changes
□Applicable ?Not applicable
Status of registration process of transferred shares
□Applicable ?Not applicable
Implementation progress of share repurchase
□Applicable ?Not applicable
The progress of the implementation of the reduction of repurchased shares by means of centralized bidding
□Applicable ?Not applicable
The impact of shareholding changes on financial indicators such as basic earnings per share, diluted earnings per share, and netassets per share attributable to ordinary shareholders of the company in the last year and the latest period
□Applicable ?Not applicable
Other content that the company deems necessary or required by securities regulators to disclose
□Applicable ?Not applicable
2. Changes of Restricted Shares
□Applicable ?Not applicable
II. Securities Issuance and Listing
□Applicable ?Not applicable
III. Number of Shareholders and Shareholding Status of the Company
单位：股
51,840
| Total number of common shareholders at the end of the reporting period | The total number of Preferred shareholders voting rights restored at the end of the reporting period (if any) (refer to Notes 8) |
Shareholding of shareholders holding more than 5% or top 10 shareholdersName of the shareholder
Nature ofshareholder
HoldingPercentage (%)
Number of sharesheld at period-end
Changes in reportingperiod
Restricted sharesheld
Un-restricted shares
held
Number of pledged or frozen shares
| Status | Number |
Benxi Steel and Iron (Group) Co., Ltd.
State-ownedlegal person
58.65% 2,409,628,094 2,409,628,094
| Pledged | 110,000,000 |
| Frozen | 102,100,000 |
Bensteel Group Co., Ltd.
17.95% 737,371,532 737,371,532Guan Hui
| State-owned legal person |
| Domestic natural person |
0.63% 25,970,000 8,570,000 25,970,000Gao Tao
0.56% 23,000,000 23,000,000 23,000,000Zhang Wenyou
| Domestic natural person |
| Domestic natural person |
0.47% 19,149,967 19,149,967Hong Kong Securities Clearing Company
Foreign legalperson
0.42% 17,094,730 5,823,596 17,094,730Zhou Wei
| Limited | |
| Domestic natural person |
0.22% 9,081,800 250,000 9,081,800Industrial Bank Co., Ltd.-Wanjia dual-engine flexible allocation hybrid
Others
0.18% 7,442,889 7,442,889 7,442,889Li Chunhou
| securities investment fund | |
| Domestic natural person |
0.17% 7,000,000 -550,000 7,000,000Agricultural Bank of China Co., Ltd.-Wanjia Beijing Stock Exchange Huixuantwo-year regular open hybrid securities
Others
0.15% 6,198,111 6,198,111 6,198,111Strategic investors or general legal persons who become thetop 10 ordinary shareholders due to allotment of new shares(if any) (see Note 3)
NoneExplanation on the related relationship or concerted action ofthe above-mentioned shareholders
Benxi Steel and Iron (Group) Co., Ltd. has an associated relationship with Bengang Group Co., Ltd., and is a person acting in concert as stipulated in the
"Administrative Measures for the Acquisition of Listed Companies". The company does not know whether there is an associated relationship among
investment fundother 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 involved inentrusted/entrusted voting rights and waiver of voting rights
The above-mentioned shareholders are not involved in entrustment, entrusted voting rights, or waiver of voting rights.
Special instructions for repurchase accounts among the top10 shareholders (if any) (see Note 11)
None
Shareholding of top 10 unrestricted shareholdersName of the shareholder Un-restricted shares held at the end of the reporting period
Category of shares
QuantityBenxi Steel and Iron (Group) Co., Ltd. 2,409,628,094
| Category of shares |
| Common shares in RMB |
2,409,628,094Bengang Group Co., Ltd. 737,371,532
737,371,532Guan Hui 25,970,000
| Common shares in RMB |
| Common shares in RMB |
25,970,000Gao Tao 23,000,000
23,000,000Zhang Wenyou 19,149,967
| Domestic listed foreign shares |
| Common shares in RMB |
19,149,967Hong Kong Securities Clearing Company Limited 17,094,730
17,094,730Zhou Wei 9,081,800
| Common shares in RMB |
| Common shares in RMB |
9,081,800Industrial Bank Co., Ltd.-Wanjia dual-engine flexible
7,442,889
Common sharesin RMB
7,442,889Li Chunhou 7,000,000
| allocation hybrid securities investment fund | ||
| Common shares in RMB |
7,000,000Agricultural Bank of China Co., Ltd.-Wanjia Beijing StockExchange Huixuan two-year regular open hybrid securities
6,198,111
Common shares
in RMB
6,198,111Explanation on the associated relationship or concertedaction among the top 10 shareholders of ordinary shares notsubject to sales restrictions, and between the top 10shareholders of ordinary shares not subject to restrictions onsales and the top 10 shareholders of ordinary shares
Benxi Steel and Iron (Group) Co., Ltd. has an associated relationship with Bensteel 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 amongother shareholders or whether they are persons acting in concert as stipulated in the "Administrative Measures for the Acquisition of Listed Companies".Explanation on the participation of the top 10 ordinaryshareholders in the margin financing and securities lendingbusiness (if any) (see note 4)
Guan Hui holds 25,970,000 shares of the company through an investor credit securities account. Zhang Wenyou held 19,149,967 shares of the companythrough an investor credit securities account. Zhou Wei holds 250,000 shares of the company's stock through the investor's ordinary account, and holds8,831,800 shares of the company's stock through the investor's credit securities account.
Whether the company's top 10 shareholders of common shares and top 10 shareholders of common shares not subject to sales restrictions conducted agreed repurchase transactions during thereporting period
□Yes ?No
The company's top 10 shareholders of common shares and top 10 shareholders of common shares not subject to sales restrictions did not conduct agreed repurchase transactions during thereporting period.
IV. Changes in Shareholding of Directors, Supervisors and Senior Management
□Applicable ?Not applicable
There was no change in the shareholding of the directors, supervisors and senior management of the company during the reportingperiod. Please refer to the 2022 annual report for details.V. Changes in Controlling Shareholders or Actual ControllersChanges of controlling shareholders during the reporting period
□Applicable ?Not applicable
During the reporting period, the controlling shareholder of the company remained unchanged.Changes in the actual controller during the reporting period
□Applicable ?Not applicable
The actual controller of the company did not change during the reporting period.
Section VIII Preference Shares Related Situation
□Applicable ?Not applicable
During the reporting period, the company had no preference shares.
Section IX Bonds Related Situation
?Applicable □Not applicableI. Enterprise Bonds
□Applicable ?Not applicable
During the reporting period, the company did not have enterprise bonds.
II. Corporate Bonds
□Applicable ?Not applicable
During the reporting period, the company did not have any corporate bonds.III. Non-financial Corporate Debt Financing Instruments
□Applicable ?Not applicable
During the reporting period, the company did not have non-financial enterprise debt financing instruments.
IV. Convertible Corporate Bonds
?Applicable □Not applicable
1. Previous adjustments and revisions of the 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 "Bengang Convertible
Bonds" will be adjusted to RMB 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 RMB 4.55 yuan per share on October 13, 2021.
(4) Due to the company's implementation of the 2021 equity distribution plan, the conversion price of "Benxiu Convertible Bonds"
will be adjusted to RMB 3.95 yuan per share on October 13, 2021.
2. Status of cumulative share transfer
?Applicable □Not applicable
Convertible
bondabbreviation
Conversionstarts andend date
Totalamountissued(bonds)
Total amountissued
Cumulative share
conversionamount (RMB)
Cumulativenumber of
sharesconverted(shares)
the numberof convertedshares to thetotal issuedshares before
| conversion |
Amount not yetconverted (RMB)
Proportion ofunconverted
amount tototal issued
amountBengangConvertibleBonds
January 4,2021 toJune 28,
68,000,000 6,800,000,000.00 1,168,957,900.00 232,843,215 6.01% 5,631,042,100.00 82.81%
3. Top ten holders of convertible bonds
No.
Convertible bond
holders
Nature ofconvertible bond
holders
2026Number of
convertible bondsheld at the end of
the reporting
| period (bonds) | Amount of |
convertible bondsheld at the end of
the reporting
| period (yuan) | Percentage of |
convertible bondsheld at the end of
the reporting
| period | ||
| Bank of China |
Limited - YifangdaSteady IncomeBond Securities
Others 1,909,631 190,963,100.00 3.39%
| Investment Fund |
| Agricultural Bank |
of China Co., Ltd.- Southern XiyuanConvertible BondBond Securities
Others 1,585,975 158,597,500.00 2.82%
| Investment Fund |
| China CITIC |
Group Co., Ltd.Enterprise AnnuityPlan - ChinaCITIC Bank Co.,
Others 1,405,380 140,538,000.00 2.50%
| Ltd. |
| China AMC Yan |
Nian Yi Shou No.9 Fixed IncomePension Product -China Merchants
Others 1,362,468 136,246,800.00 2.42%
| Bank Co., Ltd. |
| Bank of China |
Limited - SouthernChangyuanConvertible BondSecurities
Others 1,206,048 120,604,800.00 2.14%
| Investment Fund |
| Industrial and |
Commercial Bankof China Limited -Boshi Credit Bond
Others 1,200,006 120,000,600.00 2.13%
| Investment Fund |
| China |
Construction BankCorporation -Huashang Credit
Others 1,109,058 110,905,800.00 1.97%
| Securities Investment Fund |
| Industrial Bank |
Co., Ltd. -TianhongyongliBond Securities
Others 957,185 95,718,500.00 1.70%
Great Wall GuoruiSecurities Co.,
| Investment Fund | |
| Ltd. | Domestic non- |
state-owned legal
853,440 85,344,000.00 1.52%
| person | |
| Pacific Asset |
Management -China MerchantsBank - PacificExcellenceConvertible Bond
Others 839,615 83,961,500.00 1.49%
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 cash
arrangements and debt repayment in future yearsAs of the end of the reporting period, the company's main accounting data and financial indicators for the past two years, thecompany's convertible bond credit rating for this year has not changed.V. The Loss in the Consolidated Statement During the Reporting Period Exceeded 10% ofthe Net Assets at the End of the Previous Year
□Applicable ?Not applicable
VI. The Main Accounting Data and Financial Indix of the Company in the Past Two Years
at the End of the Reporting Period
Unit: ten thousand yuanItem30 June 2023 31 December 2022
Changes over 31 December
2022
ProductsCurrent ratio
| Current ratio | 0.73 | 0.81 | -8.16% |
| Liabilities to Assets Ratio | 59.83% | 56.07% | 3.76% |
| Quick ratio | 0.29 | 0.21 | 8.04% |
| Current period | Previous period |
Changes over previous period
non-recurring gains and
| losses (RMB) |
-103,833.29
54,044.79
-292.12%
1.99%
| EBITDA total liabilities ratio |
9.15%
-7.16%
| Interest coverage ratio |
-3.05
3.29
-192.71%
| Cash interest coverage ratio |
20.09
1.24
1,520.16%
| EBITDA interest coverage ratio |
2.33
6.61
-64.75%
100.00%
| Loan repayment rate |
100.00%
| Interest repayment rate |
100.00%
100.00%
Section Ⅹ Financial ReportI. Audit report
Whether the semi-annual report is audited
□Yes ?No
The semi-annual report is not audited.
II. Financial Statements
The unit of the statement in the financial notes is: RMB yuan
1. Consolidated Statement of Financial Position
Prepared by: Bengang Steel Plates Co., Ltd.
30 June 2023
Unit: yuanItems 30 June 2023 1 January 2023
| CURRENT ASSETS: | ||
| Monetary funds | 3,656,559,532.07 | 1,461,145,641.87 |
| Settlements provision | ||
| Loans to banks and other financial |
institutions
| Financial assets held-for-trading | ||
| Derivative financial assets | ||
| Notes receivable | 87,391,995.82 | 429,707,174.70 |
| Accounts receivable | 914,407,662.17 | 897,230,896.06 |
| Accounts receivable financing | 953,938,535.80 | 137,591,996.02 |
| Prepayments | 937,624,582.00 | 1,247,177,748.33 |
| Premiums receivable | ||
| Reinsurance accounts receivable | ||
| Reinsurance contract reserves receivable | ||
| Other receivables | 98,776,833.29 | 127,198,692.92 |
Including: Interests receivable
Dividends receivable
agreements
| Financial assets purchased under resale | ||
| Inventories | 7,602,269,679.35 | 8,463,728,475.18 |
| Contract assets | ||
| Assets held for sale | ||
| Non-current assets maturing within one |
year
| Other current assets | 39,068,241.10 | 395,441,136.26 |
| TOTAL CURRENT ASSETS | 14,290,037,061.60 | 13,159,221,761.34 |
| NON-CURRENT ASSETS: | ||
| Disbursement of advances and loans | ||
| Debt investments | ||
| Other debt investments | ||
| Long-term receivables | ||
| Long-term equity investments | 47,556,655.02 | 51,030,777.18 |
| Other equity instrument investments | 1,020,418,482.31 | 1,020,418,482.31 |
| Other non-current financial assets | ||
| Investment properties | ||
| Fixed assets | 24,254,961,069.74 | 24,836,556,422.90 |
| Construction in progress | 4,151,149,369.23 | 3,158,195,899.65 |
| Productive biological assets | ||
| Oil and natural gas assets | ||
| Right-of-use assets | 1,349,803,446.63 | 1,379,990,713.89 |
| Intangible assets | 259,745,931.54 | 262,784,937.41 |
| Development costs | ||
| Goodwill | ||
| Long-term deferred expenses | ||
| Deferred tax assets |
148,010,869.57
136,387,885.28
| Other non-current assets |
349,815,196.20
110,065,560.68
| TOTAL NON-CURRENT ASSETS |
31,581,461,020.24
30,955,430,679.30
| TOTAL ASSETS |
45,871,498,081.84
44,114,652,440.64
| CURRENT LIABILITIES: | ||
| Short-term borrowings | 300,020,000.00 | 49,200,000.00 |
| Borrowings from central bank | ||
| Loans from banks and other financial institutions |
| Financial liabilities held-for-trading | ||
| Derivative financial liabilities | ||
| Notes payable | 7,719,942,239.59 | 4,389,336,619.36 |
| Accounts payable | 4,092,895,525.39 | 3,696,420,463.85 |
| Advances from customers | ||
| Contract liabilities | 3,733,739,770.22 | 3,794,115,592.29 |
| Financial assets sold under repurchase agreements |
| Deposits and balances from customers and banks | ||
| Customer securities brokerage deposits | ||
| Customer securities underwriting deposits | ||
| Employee benefits payable | 12,952,463.97 | 10,046,363.27 |
| Taxes and surcharges payable | 106,443,329.12 | 44,392,920.78 |
| Other payables | 1,639,486,201.24 | 1,247,722,165.47 |
| Including: Interests payable | ||
| Dividends payable | ||
| Fees and commissions payable | ||
| Reinsurance payables | ||
| Liabilities held for sale | ||
| Non-current liabilities maturing within one year |
1,613,201,458.81 2,586,250,886.43
| Other current liabilities | 485,575,516.40 | 493,235,027.03 |
| TOTAL CURRENT LIABILITIES | 19,704,256,504.74 | 16,310,720,038.48 |
| NON-CURRENT LIABILITIES: | ||
| Insurance contract reserve | ||
| Long-term borrowings | 959,713,911.60 | 1,726,938,302.30 |
| Bonds payable | 5,382,304,119.20 | 5,276,502,232.78 |
| Including: Preferred stock | ||
| Perpetual bonds | ||
| Lease liabilities | 1,364,333,523.13 | 1,384,348,462.18 |
| Long-term payables | ||
| Long-term employee benefits payable | ||
| Provision | ||
| Deferred income | 41,387,816.78 | 42,377,015.51 |
| Deferred tax liabilities | 27,309.01 | 27,309.01 |
| Other non-current liabilities |
| TOTAL NON-CURRENT LIABILITIES | 7,747,766,679.72 | 8,430,193,321.78 |
| TOTAL LIABILITIES | 27,452,023,184.46 | 24,740,913,360.26 |
| OWNERS' EQUITY: | ||
| Share capital | 4,108,214,747.00 | 4,108,212,217.00 |
| Other equity instruments | 947,861,798.36 | 947,863,834.02 |
| Including: Preferred stocks | ||
| Perpetual bonds | ||
| Capital reserves | 13,272,212,557.25 | 13,272,205,160.21 |
| Less: treasury stock | ||
| Other comprehensive income | -15,904,760.02 | -15,904,760.02 |
| Special reserves | 29,010,352.89 | 2,217,913.77 |
| Surplus reserves | 1,195,116,522.37 | 1,195,116,522.37 |
| General risk reserves | ||
| Undistributed profits | -1,725,505,294.41 | -720,559,670.73 |
| Total equity attributable to the owners of the parent company |
17,811,005,923.44 18,789,151,216.62
| Non-controlling interests | 608,468,973.94 | 584,587,863.76 |
| TOTAL OWNERS' EQUITY | 18,419,474,897.38 | 19,373,739,080.38 |
| TOTAL LIABILITIES AND OWNERS' EQUITY |
45,871,498,081.84 44,114,652,440.64Legal Representative: Li Yan Chief financial officer: Zheng Zhengli Chief accountant: Sun Yanbin
2. Parent Company's Statement of Financial Position
Unit: yuanItems 30 June 2023 1 January 2023
| CURRENT ASSETS: | ||
| Monetary funds | 2,494,741,609.19 | 585,125,555.12 |
| Financial assets held-for-trading | ||
| Derivative financial assets | ||
| Notes receivable | 877,829,539.94 | 669,193,401.02 |
| Accounts receivable | 693,637,618.60 | 931,035,796.58 |
| Accounts receivable financing | 827,579,316.11 | 127,468,835.80 |
| Prepayments | 922,061,764.36 | 1,247,084,271.88 |
| Other receivables | 166,743,093.49 | 150,724,545.56 |
Including: Interests receivable
Dividends receivable
| Inventories | 6,714,763,093.25 | 6,988,993,205.61 |
| Contract assets | ||
| Assets held for sale | ||
| Non-current assets maturing within one year | ||
| Other current assets | 848,555.43 | 310,293,996.25 |
| TOTAL CURRENT ASSETS | 12,698,204,590.37 | 11,009,919,607.82 |
| NON-CURRENT ASSETS: | ||
| Debt investments | ||
| Other debt investments | ||
| Long-term receivables | ||
| Long-term equity investments | 2,269,838,245.27 | 2,270,277,904.85 |
| Other equity instrument investment | 1,020,418,482.31 | 1,020,418,482.31 |
| Other non-current financial assets | ||
| Investment properties | ||
| Fixed assets | 23,245,968,241.40 | 23,777,736,434.39 |
| Construction in progress | 4,120,300,973.77 | 3,127,247,793.98 |
| Productive biological assets | ||
| Oil and natural gas assets |
| Right-of-use assets | 1,349,803,446.63 | 1,379,990,713.89 |
| Intangible assets | 172,578,872.34 | 174,295,096.19 |
| Development costs | ||
| Goodwill | ||
| Long-term deferred expenses | ||
| Deferred tax assets | 145,264,403.37 | 115,126,210.76 |
| Other non-current assets | 349,815,196.20 | 110,065,560.68 |
| TOTAL NON-CURRENT ASSETS | 32,673,987,861.29 | 31,975,158,197.05 |
| TOTAL ASSETS | 45,372,192,451.66 | 42,985,077,804.87 |
| CURRENT LIABILITIES: | ||
| Short-term borrowings | 300,020,000.00 | 49,200,000.00 |
| Financial liabilities held-for-trading | ||
| Derivative financial liabilities | ||
| Notes payable | 7,715,109,085.39 | 3,982,738,952.59 |
| Accounts payable | 4,236,729,868.04 | 3,821,848,200.25 |
| Advances from customers | ||
| Contract liabilities | 4,845,887,001.18 | 4,805,281,178.80 |
Employee benefits payable
| 12,147,392.67 | 9,901,551.31 | |
| Taxes and surcharges payable | 80,296,377.93 | 22,518,649.65 |
Other payables
| 1,481,659,234.98 | 861,392,691.88 |
Including: Interests payable
Dividends payable
| Liabilities held for sale | ||
| Non-current liabilities maturing within one year |
1,613,201,458.81 2,586,250,886.43Other current liabilities
| 629,965,310.15 | 624,686,553.24 | |
| TOTAL CURRENT LIABILITIES | 20,915,015,729.15 | 16,763,818,664.15 |
| NON-CURRENT LIABILITIES: | ||
| Long-term borrowings | 959,713,911.60 | 1,726,938,302.30 |
| Bonds payable | 5,382,304,119.20 | 5,276,502,232.78 |
| Including: Preferred stock | ||
| Perpetual bonds | ||
| Lease liabilities | 1,364,333,523.13 | 1,384,348,462.18 |
Long-term payables
| Long-term employee benefits payable | ||
| Provision | ||
| Deferred income | 41,387,816.78 | 42,377,015.51 |
Deferred tax liabilities
| 27,309.01 | 27,309.01 | |
| Other non-current liabilities | ||
| TOTAL NON-CURRENT LIABILITIES | 7,747,766,679.72 | 8,430,193,321.78 |
| TOTAL LIABILITIES | 28,662,782,408.87 | 25,194,011,985.93 |
| OWNERS' EQUITY: | ||
| Share capital | 4,108,214,747.00 | 4,108,212,217.00 |
| Other equity instrument | 947,861,798.36 | 947,863,834.02 |
| Including: Preferred stocks |
Perpetual bonds
| Capital reserves | 12,852,060,875.13 | 12,852,053,478.09 |
| Less: treasury stock | ||
| Other comprehensive income | -15,904,760.02 | -15,904,760.02 |
Special reserves
| 19,831,812.69 | 58,212.15 | |
| Surplus reserves | 1,195,116,522.37 | 1,195,116,522.37 |
| Undistributed profits | -2,397,770,952.74 | -1,296,333,684.67 |
| TOTAL OWNERS' EQUITY | 16,709,410,042.79 | 17,791,065,818.94 |
| TOTAL LIABILITIES AND OWNERS' EQUITY |
45,372,192,451.66 42,985,077,804.87
3. Consolidated Statement of Profit or Loss and Other Comprehensive Income
Unit: yuan
Items Current period Previous periodI. REVENUE30,567,409,205.03 35,015,177,304.98Including: Operating income30,567,409,205.03 35,015,177,304.98Interests income
Earned premiums
| Income from handling charges and commissions |
II. COST OF SALES31,417,700,991.35 34,212,560,449.82Including: Operating costs
| 30,714,640,963.91 | 33,377,477,540.63 |
Interest expenses
| Handling charges and commissions expenses |
Surrender value
Net amount of insurance claims
Net provision of insurance contract reserve
Policy dividend payment
Reinsurance expense
Taxes and surcharges
| 99,040,677.75 | 99,885,445.23 |
Selling expenses
| 69,901,883.24 | 67,430,875.17 |
Administrative expenses339,569,021.49 352,304,684.10Research and development expenses32,990,679.09 22,368,496.87Finance costs
| 161,557,765.87 | 293,093,407.82 |
Including: Interest expenses
| 234,419,462.35 | 342,674,208.42 |
Interest income27,351,519.21 61,019,147.27Add: Other income3,518,092.14 30,655,542.92Investment income ("-" for losses)
| -2,541,506.30 | 115,842.84 | |
| Including: Income from investment in associates and joint ventures |
-439,659.58 85,455.22
Foreign exchange gains ("-" for losses)
Income /(losses) from net exposure hedging
Gains /(losses) from derecognition of financial
assets measured at amortised cost
Gains from changes in fair value ("-" for losses)
Credit impairment losses ("-" for losses)-17,450,773.47 -793,906.73Asset impairment losses ("-" for losses)-84,458,260.66 -72,880,991.53Gains on disposal of assets ("-" for losses)
| 3,648,546.62 |
III. PROFIT FROM OPERATIONS ("-" For Losses)
| -951,224,234.61 | 763,361,889.28 |
Add: Non-operating income51,584,548.03 30,572,281.35Less: Non-operating expenses50,585,327.13 10,765,339.79IV. PROFIT BEFORE TAX ("-" For Total Losses)
| -950,225,013.71 | 783,168,830.84 |
Less: Income tax expenses
| 33,191,710.84 | 203,204,954.60 |
V. NET PROFIT ("-" For Net Loss)-983,416,724.55 579,963,876.24I. Classified by going concern:
-983,416,724.55
579,963,876.24
| Net profit from the continuing operations("-" for net loss) |
| Net profit from the discontinued operations("-" for net loss) |
II. Classified by ownership:
-1,004,945,623.68
561,735,377.41Non-controlling interests("-" for net loss)
| Net profit attributable to the owners of the parent company("-" for net loss) | ||
| 21,528,899.13 | 18,228,498.83 | |
| VI. NET AMOUNT OF OTHER COMPREHENSIVE INCOME AFTER TAX |
attributable to owners of the parent company, net of
| tax |
| (i) Other comprehensive incomes that cannot be reclassified into profit or loss |
| 1. Changes arising from recalculating defined benefit plans |
reclassified into profit or loss under equity
| accounting method |
| 3. Changes in fair value of other equity instrument investment |
| 4. Changes in fair value of the company’s own credit risks |
5.Others
| (ii) Other comprehensive incomes that will be reclassified into profit or loss |
reclassified into profit or loss under equity
| accounting method |
| 2. Changes in fair value of other debt instrument investment |
| 3. Other comprehensive income arising from the reclassification of financial assets |
5. Cash flow hedge reserve
| 4. Provision for credit impairment in other debt investments | ||
| 6. Foreign currency translation differences in financial statements |
7. Others
| Net amount of other comprehensive income attributable to minority shareholders, net of tax |
VII. TOTAL COMPREHENSIVE INCOME
| -983,416,724.55 | 579,963,876.24 | |
| Total comprehensive income attributable to owners of the parent company |
-1,004,945,623.68 561,735,377.41
21,528,899.13 18,228,498.83VIII. EARNINGS PER SHARE:
1. Basic earnings per share (yuan/share)
Total comprehensive income attributable to minority
shareholders-0.2446
| -0.2446 | 0.1400 |
2. Diluted earnings per share (yuan/share)
| -0.1558 | 0.1400 |
Legal Representative: Li Yan Chief financial officer: Zheng Zhengli Chief accountant: Sun Yanbin
4. Parent Company's Statement of Profit or Loss and Other Comprehensive Income
Unit: yuan
Items Current period Previous period
| I. REVENUE | 30,351,590,885.27 | 35,774,038,070.43 |
| Less: Operating costs | 30,725,796,931.13 | 34,404,712,933.07 |
Taxes and surcharges
| 70,444,069.04 | 74,061,344.22 | |
| Selling expenses | 72,626,552.38 | 58,854,346.91 |
| Administrative expenses | 320,165,443.13 | 323,747,875.71 |
| Research and development expenses | 32,990,679.09 | 22,368,496.87 |
Finance costs
| 168,567,801.72 | 290,720,557.98 | |
| Including: Interest expenses | 233,021,988.80 | 327,728,944.07 |
| Interest income | 18,139,148.26 | 48,263,709.87 |
| Add: Other income | 2,943,726.56 | 30,272,965.00 |
Investment income ("-" for losses)
| -2,247,043.73 | 59,198,924.51 | |
| Including: Income from investment in associates and joint ventures |
-439,659.58Gains from derecognition of
financial assets measured at
| amortized cost |
| Income from net exposure hedging ("-" for losses) |
| Gains from changes in fair value ("-" for losses) |
| Credit impairment losses ("-" for losses) |
-11,635,010.35 -1,392,974.69
| Asset impairment losses ("-" for losses) | -84,458,260.66 | -72,880,991.53 |
| Gains on disposal of assets ("-" for losses) |
3,669,258.68
| II. PROFIT FROM OPERATIONS ("-" | -1,134,397,179.40 | 618,439,697.64 |
| For Losses) | ||
| Add: Non-operating income | 51,556,172.07 | 24,296,108.68 |
| Less: Non-operating expenses | 50,585,327.13 | 10,736,478.75 |
| III. PROFIT BEFORE TAX ("-" For Total Losses) |
-1,133,426,334.46 631,999,327.57
| Less: Income tax expenses | -31,989,066.39 | 150,685,673.12 |
| IV. NET PROFIT ("-" For Net Loss) | -1,101,437,268.07 | 481,313,654.45 |
| 1. Net profit/(loss) from continuing operation |
-1,101,437,268.07 481,313,654.45
| 2. Net profit/(loss) from discontinued operation |
| V. NET AMOUNT OF OTHER |
COMPREHENSIVE INCOME AFTER
| TAX |
| (i) Other comprehensive incomes that cannot be reclassified into profit or loss |
| 1. Changes arising from recalculating defined benefit plans |
| 2. Other comprehensive incomes that |
cannot be reclassified into profit or
| loss under equity accounting method |
| 3. Changes in fair value of other equity instrument investment |
| 4. Changes in fair value of the company’s own credit risks | ||
| 5.Others | ||
| (ii) Other comprehensive incomes that will be reclassified into profit or loss |
will be reclassified into profit or loss
| under equity accounting method |
| 2. Changes in fair value of other debt instrument investment |
| 3. Other comprehensive income arising |
from the reclassification of financial
| assets |
| 4. Provision for credit impairment in other debt investments |
5. Cash flow hedge reserve
| 6. Foreign currency translation differences in financial statements |
7. Others
| VI. TOTAL COMPREHENSIVE INCOME | -1,101,437,268.07 | 481,313,654.45 |
| VII. EARNINGS PER SHARE: | ||
| 1. Basic earnings per share (yuan/share) |
2. Diluted earnings per share (yuan/share)
5. Consolidated Statement of Cash Flows
Unit: yuan
Items Current period Previous period
| I. CASH FLOWS FROM OPERATING ACTIVITIES: |
| Cash received from sale of goods and rendering of services |
28,113,350,099.51 30,399,917,736.81
| Net increase in deposits from customers and other banks |
| Net increase in borrowings from central bank |
| Net increase in loans from other financial institutions |
| Cash received from receiving insurance premium of original insurance contracts |
| Net cash received from reinsurance business |
| Net increase in deposits and investments from policyholders |
| Cash received from interest, handling charges and commissions |
| Net increase in loans from banks and other financial institutions |
| Net increase in repurchase business funds | ||
| Net cash received from securities trading brokerage business |
| Cash received from tax refund | 152,957,619.94 | 411,362,662.88 |
| Cash received from other operating activities |
66,147,192.05 168,719,124.22
28,332,454,911.50 30,979,999,523.91
| SUB-TOTAL OF CASH INFLOWS FROM OPERATING ACTIVITIES |
| Cash paid for goods purchased and services received |
22,042,504,737.63 28,939,015,822.97
| Net increase in loans and advances to customers |
| Net increase in deposits in central bank and other banks |
| Cash paid for original insurance contract claims |
| Net increase in loans to banks and other financial institutions |
| Cash paid for interest, handling charges and commissions | ||
| Cash paid for policy dividends | ||
| Cash paid to and on behalf of employees | 1,233,151,555.08 | 1,281,589,573.82 |
| Cash paid for taxes and surcharges | 216,708,235.51 | 282,883,307.60 |
| Cash paid for other operating activities | 177,453,101.47 | 249,058,977.31 |
| SUB-TOTAL OF CASH OUTFLOWS FROM OPERATING ACTIVITIES |
23,669,817,629.69 30,752,547,681.70
4,662,637,281.81 227,451,842.21
| NET CASH FLOWS FROM OPERATING ACTIVITIES |
| II. CASH FLOWS FROM INVESTING ACTIVITIES: |
| Cash received from disposal of investments | 1,843,800.00 | |
| Cash received from returns on investments | 896,200.00 | |
| Net cash received from disposal of fixed |
assets, intangible assets and other long-term
31,053,599.66 60,800.00
| assets |
| Net cash received from disposal of subsidiaries and other business units |
| Cash received from other investing activities |
| SUB-TOTAL OF CASH INFLOWS FROM INVESTING ACTIVITIES |
33,793,599.66 60,800.00
assets, intangible assets and other long-term
| assets |
926,848,281.71 755,407,575.62
| Cash paid for investments | ||
| Net increase in pledge loans | ||
| Net cash paid to acquire subsidiaries and other business units |
| Cash paid for other investing activities | ||
| SUB-TOTAL OF CASH OUTFLOWS FROM INVESTING ACTIVITIES |
926,848,281.71 755,407,575.62
-893,054,682.05 -755,346,775.62
| NET CASH FLOWS FROM INVESTING ACTIVITIES |
| III. CASH FLOWS FROM FINANCING ACTIVITIES: |
| Cash from absorption of investments | ||
| Including: Cash received by subsidiaries |
from investments by minority
| shareholders | ||
| Cash received from borrowings | 300,000,000.00 | 602,067,123.44 |
| Cash received from other financing activities |
299,914,718.38 2,548,792,921.60
599,914,718.38 3,150,860,045.04
| SUB-TOTAL OF CASH INFLOWS FROM FINANCING ACTIVITIES | ||
| Cash paid for debt repayments | 1,691,272,090.32 | 1,393,191,834.05 |
| Cash paid for distribution of dividends and | 174,775,117.17 | 2,708,922,405.78 |
| profits or payment of interest |
| Including: Dividends and profits paid to minority shareholders by subsidiaries |
| Cash paid for other financing activities | 695,121,631.51 | 71,693,646.43 |
| SUB-TOTAL OF CASH OUTFLOWS FROM FINANCING ACTIVITIES |
2,561,168,839.00 4,173,807,886.26
-1,961,254,120.62 -1,022,947,841.22
| NET CASH FLOWS FROM FINANCING ACTIVITIES |
| IV. EFFECT OF FLUCTUATION IN |
EXCHANGE RATE ON CASH AND
30,544,772.80 2,217,009.66
| CASH EQUIVALENTS |
| V. NET INCREASE IN CASH AND CASH EQUIVALENTS |
1,838,873,251.94 -1,548,625,764.97
1,296,662,683.20 6,299,099,063.48
| Add: Balance of cash and cash equivalents at the beginning of the period |
| VI. BALANCE OF CASH AND CASH |
EQUIVALENTS AT THE END OF THE
3,135,535,935.14 4,750,473,298.51
6. Parent Company's Statement of Cash Flows
Unit: yuan
ItemsCurrent period Previous periodI. CASH FLOWS FROM OPERATING
PERIODACTIVITIES:
| ACTIVITIES: |
| Cash received from sale of goods and rendering of services |
27,625,067,518.78 30,919,471,674.38
| Cash received from tax refund | 144,310,086.64 | 406,487,928.59 |
| Cash received from other operating activities |
55,780,538.64 155,803,337.55SUB-TOTAL OF CASH INFLOWS FROM
27,825,158,144.06 31,481,762,940.52
| OPERATING ACTIVITIES |
| Cash paid for goods purchased and services received |
22,087,125,206.72 29,479,472,246.34
| Cash paid to and on behalf of employees | 1,169,170,038.27 | 1,197,357,426.66 |
| Cash paid for taxes and surcharges | 64,558,833.83 | 102,560,662.62 |
| Cash paid for other operating activities | 159,109,487.43 | 138,755,917.63 |
SUB-TOTAL OF CASH OUTFLOWS
23,479,963,566.25 30,918,146,253.25NET CASH FLOWS FROM OPERATING
| FROM OPERATING ACTIVITIES |
| ACTIVITIES |
4,345,194,577.81 563,616,687.27II. CASH FLOWS FROM INVESTING
| ACTIVITIES: | ||
| Cash received from returns on investments | ||
| Cash received from returns on investments | 53,139,377.16 | |
| Net cash received from disposal of fixed |
assets, intangible assets and other long-term
31,053,599.66 60,800.00
| assets |
| Net cash received from disposal of subsidiaries and other business units |
33,061,417.35
17,624,754.20
| Cash received from other investing activities |
| SUB-TOTAL OF CASH INFLOWS FROM INVESTING ACTIVITIES |
48,678,353.86 86,261,594.51
assets, intangible assets and other long-term
| assets |
925,373,942.02 749,875,275.53
| Cash paid for investments | 850,000,000.00 | |
| Net cash paid to acquire subsidiaries and other business units |
| Cash paid for other investing activities | ||
| SUB-TOTAL OF CASH OUTFLOWS FROM INVESTING ACTIVITIES |
925,373,942.02 1,599,875,275.53
NET CASH FLOWS FROM INVESTING
-876,695,588.16 -1,513,613,681.02III. CASH FLOWS FROM FINANCING
| ACTIVITIES |
| ACTIVITIES: |
| Cash from absorption of investments | ||
| Cash received from borrowings | 300,000,000.00 | 602,067,123.44 |
| Cash received from other financing activities |
299,914,718.38 2,548,792,921.60
599,914,718.38 3,150,860,045.04Cash paid for debt repayments
| SUB-TOTAL OF CASH INFLOWS FROM FINANCING ACTIVITIES | ||
| 1,691,272,090.32 | 1,293,191,834.05 | |
| Cash paid for distribution of dividends and profits or payment of interest |
174,775,117.17 2,695,763,155.78
| Cash paid for other financing activities | 678,225,192.33 | 71,693,646.43 |
SUB-TOTAL OF CASH OUTFLOWS
2,544,272,399.82 4,060,648,636.26NET CASH FLOWS FROM FINANCING
| FROM FINANCING ACTIVITIES |
| ACTIVITIES |
-1,944,357,681.44 -909,788,591.22IV. EFFECT OF FLUCTUATION INEXCHANGE RATE ON CASH AND
28,934,107.60 1,506,171.92V. NET INCREASE IN CASH AND CASH
| CASH EQUIVALENTS |
| EQUIVALENTS |
1,553,075,415.81 -1,858,279,413.05
420,642,596.45 5,048,875,333.01
| Add: Balance of cash and cash equivalents at the beginning of the period |
| VI. BALANCE OF CASH AND CASH |
EQUIVALENTS AT THE END OF THE
1,973,718,012.26 3,190,595,919.96
7. Consolidated Statement of Changes in Equity
Current period
Unit: yuanItems
Current periodOwner's equity attributable to parent company
Non-controlling
interest
Total ofshareholders’equityShare capital
Capital reserves
| Other equity instruments | Less: | |
Treasury
| shares | Other |
comprehensive
Specialreserves
Surplus reserves
| income | General |
risk
Undistributedprofits
Others Subtotal
reservesPreferenceshares
| Preference shares | Perpetual bond |
Others
| I. Ending balance of last year | 4,108,212,217.00 | 947,863,834.02 | 13,272,205,160.21 | -15,904,760.02 | 2,217,913.77 | 1,195,116,522.37 | -720,559,670.73 | 18,789,151,216.62 | 584,587,863.76 | 19,373,739,080.38 | |||||
| Add: Change of accounting policies | |||||||||||||||
| Correction of errors for last period |
| Business consolidation under common control | |||||||||||||||
| Others | |||||||||||||||
| II. Opening balance of current year | 4,108,212,217.00 | 947,863,834.02 | 13,272,205,160.21 | -15,904,760.02 | 2,217,913.77 | 1,195,116,522.37 | -720,559,670.73 | 18,789,151,216.62 | 584,587,863.76 | 19,373,739,080.38 | |||||
| III. Changes in current year (“-” for decreases) |
2,530.00 -2,035.66 7,397.04 26,792,439.12 -1,004,945,623.68 -978,145,293.18 23,881,110.18 -954,264,183.00
| 1. Total comprehensive income | -1,004,945,623.68 | -1,004,945,623.68 | 21,528,899.13 | -983,416,724.55 | |||||||||||
| 2. Capital increases and decreases by shareholders |
2,530.00 -2,035.66 7,397.04 7,891.38 7,891.38
| (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 | 2,530.00 | -2,035.66 | 7,397.04 | 7,891.38 | 7,891.38 | ||||||||||
| 3. Profit distribution | |||||||||||||||
| (1) Appropriation to surplus reserves |
| (2) Appropriation to general risk reserves |
| (3) Profit distribution to shareholders |
| (4) Others | |||||||||||||||
| 4. Transfers within shareholders’ equity |
| (1) Capital reserves transferred into paid-in capital (or share capital) |
| (2) Surplus reserves transferred into paid-in capital (or share capital) |
| (3) Surplus reserves to recover losses |
| (4) Net changes of defined |
contribution plans transferred into
| retained earnings |
| (5) Other comprehensive income transferred into retained earnings |
| (6) Others | |||||||||||||||
| 5. Special reserves | 26,792,439.12 | 26,792,439.12 | 2,352,211.05 | 29,144,650.17 | |||||||||||
| (1) Provision of special reserves | 34,099,757.81 | 34,099,757.81 | 2,472,551.75 | 36,572,309.56 | |||||||||||
| (2) Use of special reserves | 7,307,318.69 | 7,307,318.69 | 120,340.70 | 7,427,659.39 | |||||||||||
| 6. Others | |||||||||||||||
| IV. Ending balance of current year | 4,108,214,747.00 | 947,861,798.36 | 13,272,212,557.25 | -15,904,760.02 | 29,010,352.89 | 1,195,116,522.37 | -1,725,505,294.41 | 17,811,005,923.44 | 608,468,973.94 | 18,419,474,897.38 |
Previous period
Unit: yuan
Items
Previous periodOwner's equity attributable to parent company
Non-controlling
interest
Total ofshareholders’equityShare capital
Other equity instruments
Capital reserves
Less:
Treasuryshares
Othercomprehensiveincome
Specialreserves
Surplus reserves
General
riskreserves
Undistributed
profits
Others Subtotal
| Preference shares | Perpetual bond |
OthersI. Ending balance of last year 4,108,191,379.00 947,882,663.63 13,272,134,173.09 337,978.57 1,195,116,522.37 2,977,306,297.64 22,500,969,014.30 565,441,001.73 23,066,410,016.03Add: Change of accounting policies
| Correction of errors for last period |
| Business consolidation under common control |
OthersII. Opening balance of current year 4,108,191,379.00 947,882,663.63 13,272,134,173.09 337,978.57 1,195,116,522.37 2,977,306,297.64 22,500,969,014.30 565,441,001.73 23,066,410,016.03
17,727.00 -16,325.76 61,887.86 31,151,584.66 -1,903,179,449.99 -1,871,964,576.23 20,714,933.09 -1,851,249,643.14
1. Total comprehensive income 561,735,377.41 561,735,377.41 18,228,498.83 579,963,876.24
III. Changes in current year (“-” fordecreases)
2. Capital increases and decreases
by shareholders
17,727.00 -16,325.76 61,887.86 63,289.10 63,289.10
| 2. Capital increases and decreases by shareholders |
| (1) Common share invested by shareholders |
| (2) Capital input by the holder of other equity instruments |
| (3) Share-based payment attributable to owners’ equity |
(4) Others 17,727.00 -16,325.76 61,887.86 63,289.10 63,289.10
3. Profit distribution -2,464,914,827.40 -2,464,914,827.40 -2,464,914,827.40
| (1) Appropriation to surplus reserves |
| (2) Appropriation to general risk reserves |
-2,464,914,827.40 -2,464,914,827.40 -2,464,914,827.40
(4) Others
(3) Profit distribution to
shareholders
4. Transfers within shareholders’
equity
| 4. Transfers within shareholders’ equity |
| (1) Capital reserves transferred into paid-in capital (or share capital) |
| (2) Surplus reserves transferred into paid-in capital (or share capital) |
| (3) Surplus reserves to recover losses |
contribution plans transferred into
| retained earnings |
(6) Others
5. Special reserves 31,151,584.66 31,151,584.66 2,486,434.26 33,638,018.92
(1) Provision of special reserves 38,838,893.44 38,838,893.44 2,489,359.76 41,328,253.20
(2) Use of special reserves 7,687,308.78 7,687,308.78 2,925.50 7,690,234.28
6. OthersIV. Ending balance of current year 4,108,209,106.00 947,866,337.87 13,272,196,060.95 31,489,563.23 1,195,116,522.37 1,074,126,847.65 20,629,004,438.07 586,155,934.82 21,215,160,372.89
8. Parent Company's Statement of Changes in Equity
Current period
Unit: yuanItems
Current periodShare capital
Other equity instruments
Capital reserves
Less: Treasuryshares
Other comprehensiveincome
Specialreserves
Surplus reserves
Undistributedprofits
Others
Total ofshareholders’
equity
| Preference shares | Perpetual bond |
OthersI. Ending balance of last year 4,108,212,217.00 947,863,834.02 12,852,053,478.09 -15,904,760.02 58,212.15 1,195,116,522.37 -1,296,333,684.67 17,791,065,818.94Add: Change of accounting policiesCorrection of errors for last periodOthersII. Opening balance of current year 4,108,212,217.00 947,863,834.02 12,852,053,478.09 -15,904,760.02 58,212.15 1,195,116,522.37 -1,296,333,684.67 17,791,065,818.94III. Changes in current year (“-” for decreases) 2,530.00 -2,035.66 7,397.04 19,773,600.54 -1,101,437,268.07 -1,081,655,776.15
1. Total comprehensive income -1,101,437,268.07 -1,101,437,268.07
2. Capital increases and decreases by shareholders 2,530.00 -2,035.66 7,397.04 7,891.38
(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 2,530.00 -2,035.66 7,397.04 7,891.38
3. Profit distribution
(1) Appropriation to surplus reserves
(2) Appropriation to general risk reserves
(3) Profit distribution to shareholders
5. Transfers within shareholders’ equity
(1) Capital reserves transferred into paid-in capital (or share capital)
(2) Surplus reserves transferred into paid-in capital (or share capital)
(3) Surplus reserves to recover losses
(5) Other comprehensive income transferred into retained earnings
(6) Others
5. Special reserves 19,773,600.54 19,773,600.54
(1) Provision of special reserves 26,797,787.85 26,797,787.85
(2) Use of special reserves 7,024,187.31 7,024,187.31
6. OthersIV. Ending balance of current year 4,108,214,747.00 947,861,798.36 12,852,060,875.13 -15,904,760.02 19,831,812.69 1,195,116,522.37 -2,397,770,952.74 16,709,410,042.79
Previous period
Unit: yuan
Items
Previous periodShare capital
Other equity instruments
Capital reserves
Less: Treasury
shares
Other comprehensive
income
Specialreserves
Surplus reserves
Undistributedprofits
Others
shareholders’equity
Total ofPreference
shares
| Preference shares | Perpetual bond |
OthersI. Ending balance of last year 4,108,191,379.00 947,882,663.63 12,851,982,490.97 155,469.58 1,195,116,522.37 2,491,021,746.82 21,594,350,272.37Add: Change of accounting policiesCorrection of errors for last periodOthersII. Opening balance of current year 4,108,191,379.00 947,882,663.63 12,851,982,490.97 155,469.58 1,195,116,522.37 2,491,021,746.82 21,594,350,272.37III. Changes in current year (“-” for decreases) 17,727.00 -16,325.76 61,887.86 22,374,153.44 -1,983,601,172.95 -1,961,163,730.41
1. Total comprehensive income 481,313,654.45 481,313,654.45
2. Capital increases and decreases by shareholders 17,727.00 -16,325.76 61,887.86 63,289.10
(1) Common share invested by shareholders
(2) Capital input by the holder of other equity instruments
(3) Share-based payment attributable to owners’ equity
(4) Others 17,727.00 -16,325.76 61,887.86 63,289.10
3. Profit distribution -2,464,914,827.40 -2,464,914,827.40
(1) Appropriation to surplus reserves
(2) Appropriation to general risk reserves -2,464,914,827.40 -2,464,914,827.40
(3) Profit distribution to shareholders
5. Transfers within shareholders’ equity
(1) Capital reserves transferred into paid-in capital (or share capital)
(2) Surplus reserves transferred into paid-in capital (or share capital)
(3) Surplus reserves to recover losses
(5) Other comprehensive income transferred into retained earnings
(6) Others
5. Special reserves 22,374,153.44 22,374,153.44
(1) Provision of special reserves 30,052,685.76 30,052,685.76
(2) Use of special reserves 7,678,532.32 7,678,532.32
6. OthersIV. Ending balance of current year 4,108,209,106.00 947,866,337.87 12,852,044,378.83 22,529,623.02 1,195,116,522.37 507,420,573.87 19,633,186,541.96
III. Company's Basic Information
1. Company Profile
Bengang Steel Plates Co., Ltd. (hereinafter referred to as “Bengang Steel Plates” or “Company” or “theCompany”) was approved by the People's Government of Liaoning Province on March 27, 1997 in “Liao Zheng[1997] No. 57”. Benxi Steel and Iron (Group) Co., Ltd. (hereinafter referred to as Benxi Iron and Steel) will bereorganized with the assets and liabilities of its steelmaking plant, preliminary rolling plant and hot continuousrolling plant in relation to the steel plate business, it is a joint stock limited company established on June 27,1997 by issuing domestically listed foreign shares (B shares) by way of public offering.Approved by the China Securities Regulatory Commission, Benxi Iron and Steel Co., Ltd. publicly issued400,000,000 B shares on the Shenzhen Stock Exchange on June 10, 1997, at an issue price of HK$2.38 pershare. On November 3, 1997, it successfully issued 120,000,000 RMB ordinary shares (A shares) to the publicat an issue price of RMB 5.4 per share. The A shares were listed on the Shenzhen Stock Exchange on January15, 1998. The total share capital is 1,136,000,000 shares. According to the resolutions of the relevantshareholders' meeting of Bengang Steel Plates Co., Ltd. on the shareholding structure reform, the “BengangSteel Plates Co., Ltd. shareholding structure reform plan”, the State-owned Assets Supervision andAdministration Commission “Reply on Relevant Issues Concerning Bengang Steel Plates Co., Ltd.’s EquitySeparation Reform”, Benxi Iron and Steel, the only non-tradable state-owned legal person shareholder ofBengang Steel Plates Co., Ltd., in order to obtain the circulation right of the shares held, on 14 March 2006,40,800,000 of the 616,000,000 shares of Bengang Steel Plates were paid to shareholders of Bengang SteelPlates’ A-share tradable shares. The total share capital of Bengang Steel Plates has not changed in thisshareholding reform.On July 6, 2006, Benxi Steel Plates obtained the “Zheng Jian Company Zi (2006) No. 126” document issued bythe China Securities Regulatory Commission on June 30, 2006.The article approved the issuance of 2 billion RMB ordinary shares by Benxi Iron and Steel to Benxi Iron andSteel for the acquisition of relevant assets of Benxi Iron and Steel. On the same day, Benxi Iron and Steelobtained the document “Zheng Jian Company Zi (2006) No. 127” issued by the China Securities RegulatoryCommission, the article agreed to exempt Benxi Iron and Steel from the obligation of tender offer due to theacquisition of 2 billion new shares issued by the Company, resulting in the number of shares held reaching
2.5752 billion shares (accounting for 82.12% of the Company's total share capital). On August 28, 2006, with
the approval of Shenzhen Branch of China Securities Depository and Clearing Co., Ltd., Benxi Steel Platescompleted the registration of the newly issued 2 billion shares and restricted sales of shares. On September 28,2006, the listing procedures for the non-public issuance of new shares of Benxi Steel Plates Co., Ltd. wereapproved by the Shenzhen Stock Exchange. The new issue price: 4.6733 yuan / share.Approved by the China Securities Regulatory Commission’s Zhengjian Xuke [2017] No. 1476, Benxi SteelPlate will issue no more than 739,371,534 RMB ordinary shares (A shares) in a non-public manner to no morethan 10 issuers. This non-public offering was completed on February 9, 2018, and 739,371,532 shares wereactually issued. The new issue price: 5.41 yuan / share. On August 20, 2021, the State-owned Assets
Supervision and Administration Commission of the Liaoning Provincial People's Government (hereinafterreferred to as the Liaoning Provincial SASAC) and Ansteel Group Co., Ltd. (hereinafter referred to as theAnsteel Group) signed the “National Assets Supervision and Administration Commission of the People'sGovernment of Liaoning Province and Ansteel Group Co., Ltd. on the gratuitous transfer of state-owned equityof Bengang Group Co., Ltd.”. According to the agreement, the State-owned Assets Supervision andAdministration Commission of Liaoning Province transferred its 51% equity of Bengang Group Co., Ltd.(hereinafter referred to as Bengang Group) to Ansteel Group for free. After the completion of this gratuitoustransfer, Ansteel Group will become the controlling shareholder of Bengang Group, and Ansteel Group willindirectly hold 81.07% of the total share capital of Bengang Iron and Steel Plates.As of June 30, 2023, the Company has issued a total of 4,108,214,747.00 shares, with a registered capital ofRMB 4,108,214,700 yuan. The registered place is No. 16, Renmin Road, Pingshan District, Benxi City,Liaoning Province. The Company's main business activities are: ferrous metal smelting and rolling processing.The parent company of the Company is Benxi Steel and Iron (Group) Co., Ltd., and the actual controller of thecompany is Ansteel Group Co., Ltd.
For details about the relevant information of the Company's subsidiaries, please refer to “IX. Interests in OtherEntities” in this note.For details of changes in the scope of consolidation during the reporting period, please refer to “VIII. Changesin the Scope of Consolidation” in this note.
IV. Basis of Preparation of Financial Statements
1. Basis of Preparation
The financial statements are prepared in accordance with the “Accounting Standards for Business Enterprises -Basic Standards” and relevant specific accounting standards, application guidance for Accounting Standards forBusiness Enterprises, interpretations for Accounting Standards for Business Enterprises and other relatedprovisions issued by the Ministry of Finance (hereinafter collectively referred to as “Accounting Standards forBusiness Enterprises”), and “Information Disclosure Rules for Companies of Securities for Public Issuance No.15 – General Regulations for Financial Statements” issued by the China Securities Regulatory Commission.
2. Going Concern
These financial statements are prepared on going concern basis. The Company has evaluated that it has theability to continue operating within 12 months from the end of the reporting period, and there are no mattersthat cause serious doubts about the ability to continue as going concern.
V. Significant Accounting Policies and Accounting EstimatesNotes for specific accounting policies and accounting estimates:
The following disclosures have covered the specific accounting policies and accounting estimates that areadopted by the Company based on the actual production and operation characteristics. For details, please referto Note V.10 Financial instruments, V.11 Inventories, V.15 Fixed assets, V.24 Revenue in this notes.
1. Statement of Compliance with the Accounting Standards for Business Enterprises
The financial statements have been prepared in compliance with the requirements of the Accounting Standardsfor Business Enterprises by the Ministry of Finance to truly and completely present the consolidated and theparent company’s financial position of the Company as at 30 June 2023 and of the consolidated and the parentcompany’s financial performance and cash flows from January to June 2023.
2. Accounting Period
The Company's accounting year is from 1 January to 31 December.
3. Operating Cycle
The Company's operating cycle is 12 months.
4. Functional Currency
The Company adopts RMB as the functional currency.
5. Accounting Treatment of Business Combinations under Common Control and not under Common
ControlBusiness combination under common control: The assets and liabilities acquired by the merging party in thebusiness combination (including the goodwill formed by the acquisition of the merged party by the ultimatecontrolling party) shall be measured on the basis of the book value of the assets and liabilities of the mergedparty on the merger date in the consolidated financial statements of the ultimate controlling party. Thedifference between the book value of the net assets obtained in the merger and the book value of the mergerconsideration paid (or the total par value of the issued shares) is adjusted to the share premium in the capitalreserve, and if the share premium in the capital reserve is not enough to offset, the retained earnings areadjusted.Business combination not under common control: The combination cost is the fair value of the assets paid,liabilities incurred or assumed, and equity securities issued by the purchaser in order to obtain the control of thepurchased party on the date of purchase. The Company shall recognize the positive balance between thecombination costs and the 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 of the identifiablenet assets it obtains from the acquiree into the profits and losses of the current period. The identifiable assets,liabilities and contingent liabilities of the acquiree acquired in the merger that meet the recognition conditionsare measured at fair value on the date of purchase.
The direct related expenses incurred for the business combination shall be included in the current profit and losswhen incurred. The transaction costs of issuing equity securities or debt securities for business combinationshall be included in the initial recognition amount of equity securities or debt securities.
6. Preparation Method of Consolidated Financial Statements
(1) Scope of consolidation
The scope of consolidation of consolidated financial statements is determined on the basis of control, and thescope of consolidation includes the Company and all subsidiaries. Control means that the company has powerover the investee, enjoys variable returns by participating in the relevant activities of the investee, and has theability to use its power over the investee to affect its return.
(2) Consolidation procedure
The Company regards the entire enterprise group as an accounting entity, and prepares consolidated financialstatements in accordance with unified accounting policies to reflect the overall financial status, operating resultsand cash flow of the enterprise group. The impact of internal transactions between the Company and itssubsidiaries and between subsidiaries shall be offset. If the internal transaction shows that the relevant asset hasan impairment loss, the full amount of the loss shall be recognized.If the accounting policy and accounting period adopted by the subsidiary are inconsistent with the Company,necessary adjustments shall be made in accordance with the Company's accounting policy and accountingperiod when preparing the consolidated financial statements.Subsidiary owners' equity, net profit and loss for the current period and the share of minority shareholders in thecurrent comprehensive income are listed separately under the owner's equity item in the consolidated balancesheet, the net profit item in the consolidated income statement, and the total comprehensive income item. Thecurrent loss shared by the minority shareholders of the subsidiary exceeds the balance formed by the minorityshareholders in the initial owner's equity of the subsidiary, offsetting the minority shareholders' equity.
1) Add a subsidiary or business
During the reporting period, if a subsidiary or business is added due to a business combination under the samecontrol, the operating results and cash flows of the subsidiary or business combination from the beginning of thecurrent period to the end of the reporting period shall be included in the consolidated financial statements. Atthe same time, the opening balance of the consolidated financial statements and the relevant items in thecomparative statements shall be adjusted, as if the consolidated reporting entity has always existed since thetime when the ultimate controlling party began to control it.During the reporting period, if a subsidiary or business is added due to a business combination not under thesame control, it shall be included in the consolidated financial statements from the purchase date on the basis ofthe fair value of each identifiable asset, liability and contingent liability determined on the purchase date.
2) Disposal of subsidiaries
①General treatment
When the control of the investee is lost due to the disposal of part of the equity investment or other reasons, theremaining equity investment after disposal shall be remeasured according to its fair value on the date of loss ofcontrol.The difference between the sum of the consideration obtained from the disposal of equity and the fair value ofthe remaining equity, minus the share of the original subsidiary’s net assets calculated continuously from thepurchase date or the merger date and the sum of goodwill calculated according to the original shareholding ratio,the difference will be included in the investment income of the period when the control right is lost. Othercomprehensive income related to the equity investment of the original subsidiary that can be reclassified intoprofit or loss, and other changes in owner's equity accounted for under the equity method are converted intocurrent investment income when control is lost.
②Step-by-step disposal of subsidiaries
Where the equity investment in a subsidiary is disposed of step by step through multiple transactions until itloses control, the terms, conditions and economic impact of each transaction for disposing of the equityinvestment in a subsidiary meet one or more of the following conditions, it usually indicates that the multipletransactions are a package deal:
ⅰ．These transactions were entered into simultaneously or taking into account the mutual influence;ⅱ．These transactions were entered into simultaneously or taking into account the mutual influence;ⅲ．The occurrence of one transaction depends on the occurrence of at least one other transaction;ⅳ．A transaction is not economical alone, but it is economical when considered together with othertransactions.If each transaction belongs to a package deal, each transaction shall be accounted for as a transaction fordisposing of a subsidiary and losing control; The difference between each disposal price before the loss ofcontrol and the share of the subsidiary's net assets corresponding to the disposal investment is recognized asother comprehensive income in the consolidated financial statements, and is transferred to the current profit andloss of the loss of control when the control is lost.If each transaction does not belong to a package deal, before the loss of control, the equity investment of thesubsidiary is partially disposed without losing control; when the control is lost, the accounting treatment iscarried out according to the general treatment method for disposing of subsidiaries.
3) Purchase a minority stake in a subsidiary
The difference between the newly acquired long-term equity investment due to the purchase of minority sharesand the share of net assets that should be enjoyed by the subsidiary continuously calculated from the purchasedate or the merger date based on the newly increased shareholding ratio will adjust the share premium in the
capital reserve in the consolidated balance sheet, and if the share premium in the capital reserve is insufficientto offset, the retained earnings will be adjusted.
4) Partial disposal of an equity investment in a subsidiary without loss of control
The difference between the disposal price and the share of the subsidiary’s net assets that has been continuouslycalculated since the purchase date or the merger date corresponding to the disposal of the long-term equityinvestment will adjust the share premium in the capital reserve in the consolidated balance sheet, and if theshare premium in the capital reserve is insufficient to offset, the retained earnings will be adjusted.
7. Classification of Joint Arrangements and Accounting Treatment of Joint Operations
Joint arrangements are divided into joint operations and joint ventures.Joint operation refers to a joint venture arrangement in which the joint venture party enjoys the assets related tothe arrangement and assumes the liabilities related to the arrangement.The Company confirms the following items related to the interest share in the joint operation:
(1) Confirm the assets held individually by the Company and the assets jointly held by the Company;
(2) Confirm the liabilities borne by the Company alone and the liabilities jointly borne by the Company;
(3) Recognition of income from the sale of the Company's share of the output of joint operations;
(4) Recognize the income generated by the joint operation from the sale of output according to the share of the
Company;
(5) Confirm the expenses incurred independently, and confirm the expenses incurred in joint operation
according to the share of the Company.The Company's investment in joint ventures is accounted for using the equity method. For details, please referto “V.13 Long-term equity investments” in this note.
8. Determination Criteria for Cash and Cash Equivalents
Cash refers to the Company's cash on hand and deposits that can be used for payment at any time. Cashequivalents refer to short-term, highly liquid investments held by the Company that are easily convertible intoknown amounts of cash and have little risk of value change.
9. Foreign Currency Transactions and Translation of Foreign Currency Financial Statements
(1) Foreign currency business
For foreign currency business, the spot exchange rate on the transaction date is used as the conversion rate toconvert the foreign currency amount into RMB for bookkeeping.The balance of foreign currency monetary items on the balance sheet date is translated at the spot exchange rateon the balance sheet date. The resulting exchange differences, except for the exchange differences arising fromforeign currency special loans related to the acquisition and construction of assets eligible for capitalization aretreated in accordance with the principle of capitalization of borrowing costs, are included in the current profitand loss.
(2) Translation of foreign currency financial statements
The asset and liability items in the statement of financial position are converted at the spot exchange rate on thebalance sheet date; the owner's equity items are converted at the spot exchange rate at the time of occurrenceexcept for “Undistributed profit”. The income and expense items in the statement of profit or loss and othercomprehensive income shall be converted at the spot exchange rate on the transaction date.When disposing of an overseas operation, the translation difference of the foreign currency financial statementsrelated to the overseas operation shall be transferred from the owner's equity item to the current profit and lossof the disposal.
10. Financial Instruments
When the Company becomes a party to a financial instrument contract, it recognizes a financial asset, financialliability or equity instrument.
(1) Classification of financial instruments
According to the Company's business model for managing financial assets and the contractual cash flowcharacteristics of financial assets, financial assets are classified into: financial assets measured at amortized cost,financial assets measured at fair value through other comprehensive income and financial assets at fair valuethrough profit or loss.The Company classifies financial assets that meet the following conditions and are not designated as financialassets at fair value through profit or loss as financial assets at amortized cost:
－ The business model is to collect contractual cash flows;－ Contractual cash flows are only payments of principal and interest on the principal amount outstanding.
The Company classifies financial assets that meet the following conditions and are not designated as financialassets at fair value through profit or loss as financial assets at fair value through other comprehensive income(debt instruments):
－ The business model aims at both collecting contractual cash flows and selling the financial asset;－ Contractual cash flows are only payments of principal and interest on the principal amount outstanding.For non-trading equity instrument investments, the Company can irrevocably designate them as financial assets(equity instruments) measured at fair value and whose changes are included in other comprehensive income atthe time of initial recognition. The designation is made on an individual investment basis, and the underlyinginvestment meets the definition of an equity instrument from the perspective of the issuer.Except for the above financial assets measured at amortized cost and at fair value through other comprehensiveincome, the Company classifies all other financial assets as financial assets at fair value through profit or loss.Financial liabilities are classified at initial recognition into: financial liabilities at fair value through profit orloss and financial liabilities at amortized cost.Financial liabilities that meet one of the following conditions can be designated as financial liabilities at fairvalue through profit or loss at the time of initial measurement:
1) Financial liabilities that meet one of the following conditions can be designated as financial liabilities at fair
value through profit or loss at the time of initial measurement:
2) According to the corporate risk management or investment strategy stated in formal written documents,
manage and evaluate the performance of financial liability portfolios or financial assets and financial liabilityportfolios based on fair value, and report to key management personal within the Company on this basis.
3) This financial liability contains embedded derivatives that need to be separated separately.
(2) Recognition basis and measurement method of financial instruments
1) Financial assets measured at amortized cost
Financial assets measured at amortized cost include notes receivable, accounts receivable, other receivables,long-term receivables, debt investments, etc., and are initially measured at fair value, and relevant transactioncosts are included in the initially recognized amount; excluding that the accounts receivable of the majorfinancing component and the accounts receivable of the financing component that the Company decides not toconsider for no more than one year shall be initially measured at the contract transaction price.The interest calculated using the effective interest rate method during the holding period is included in thecurrent profit and loss.When recovering or disposing, the difference between the price obtained and the book value of the financialasset is included in the current profit and loss.
2) Financial assets at fair value through other comprehensive income (debt instruments)
Financial assets (debt instruments) measured at fair value and whose changes are included in othercomprehensive income include receivables financing, other debt investments, etc., and are initially measured atfair value, and relevant transaction costs are included in the initial recognition amount. The financial assets aresubsequently measured at fair value, and changes in fair value are included in other comprehensive income,except for interest calculated using the effective interest rate method, impairment losses or gains, and exchangegains and losses.When derecognition is terminated, the accumulated gains or losses previously included in other comprehensiveincome are transferred out of other comprehensive income and included in current profit and loss.
3) Financial assets (equity instruments) measured at fair value through other comprehensive income
Financial assets (equity instruments) measured at fair value through other comprehensive income, includingother equity instrument investments, are initially measured at fair value, and relevant transaction costs areincluded in the initially recognized amount. The financial assets are subsequently measured at fair value, andchanges in fair value are included in other comprehensive income. Dividends obtained are included in currentprofit and loss.When derecognition is terminated, the accumulated gains or losses previously included in other comprehensiveincome are transferred out of other comprehensive income and included in retained earnings.
4) Financial assets measured at fair value through profit or loss
Financial assets measured at fair value through profit or loss include transactional financial assets, derivativefinancial assets, and other non-current financial assets, etc., and are initially measured at fair value, and relevanttransaction costs are included in current profit or loss. The financial assets are subsequently measured at fairvalue, and changes in fair value are included in current profit and loss.
5) Financial liabilities measured at fair value through profit or loss
Financial liabilities measured at fair value and whose changes are included in current profit and loss includetrading financial liabilities and derivative financial liabilities, etc., and are initially measured at fair value, andrelevant transaction costs are included in current profit and loss. The financial liabilities are subsequentlymeasured at fair value, and changes in fair value are included in current profit and loss.When derecognition is terminated, the difference between its book value and the consideration paid is includedin the current profit and loss.
6) Financial liabilities measured at amortized cost
Financial liabilities measured at amortized cost include short-term loans, notes payable, accounts payable, otherpayables, long-term loans, bonds payable, and long-term payables, and are initially measured at fair value, andrelevant transaction costs are included in the initial recognition amount.
The interest calculated using the effective interest rate method during the holding period is included in thecurrent profit and loss.When derecognition is terminated, the difference between the consideration paid and the book value of thefinancial liability is included in the current profit and loss.
(3) Derecognition of financial assets and transfer of financial assets
When one of the following conditions is met, the Company derecognizes financial assets:
－ Termination of contractual rights to receive cash flows from financial assets;－ The financial asset has been transferred, and almost all the risks and rewards of ownership of the financialasset have been transferred to the transferee;－ The financial assets have been transferred. Although the Company neither transfers nor retains almost all therisks and rewards of ownership of the financial assets, it does not retain control over the financial assets.When a financial asset is transferred, if almost all the risks and rewards of ownership of the financial asset areretained, the financial asset will not be derecognized.When judging whether the transfer of financial assets meets the above conditions for derecognition of financialassets, the principle of substance over form is adopted. The Company distinguishes the transfer of financialassets into the transfer of financial assets as a whole and the transfer of parts. If the overall transfer of financialassets meets the conditions for derecognition, the difference between the following two amounts shall beincluded in the current profit and loss:
1) The book value of the financial asset transferred;
2) The consideration received due to the transfer, and the cumulative amount of changes in fair value that were
originally included in the owner’s equity (if the financial asset involved in the transfer is a financial asset (debtinstrument) that is measured at fair value and whose changes are included in other comprehensive income).If the partial transfer of financial assets meets the conditions for derecognition, the overall book value of thetransferred financial assets shall be apportioned between the derecognized part and the unterminated partaccording to their respective relative fair values, and the difference between the following two amounts shall beincluded in current profit and loss:
1) The book value of the derecognized portion;
2) The consideration for the derecognition part, and the amount corresponding to the derecognition part of the
accumulative amount of fair value changes that were originally included in the owner’s equity (the financialassets involved in the transfer are financial assets that are measured at fair value and whose changes areincluded in other comprehensive income ( in the case of debt instruments)).
If the transfer of financial assets does not meet the conditions for derecognition, the financial assets shallcontinue to be recognized, and the consideration received shall be recognized as a financial liability.
(4) Derecognition of financial liabilities
If all or part of the current obligation of a financial liability has been discharged, the financial liability or a partthereof shall be derecognized; if the Company signs an agreement with the creditor to replace the existingfinancial liability by assuming a new financial liability, and if the contract terms of the new financial liabilityand the existing financial liability are substantially different, the existing financial liability shall bederecognized and the new financial liability shall be recognized at the same time.If a substantive modification is made to all or part of the contract terms of an existing financial liability, theexisting financial liability or a part thereof shall be derecognized, and the financial liability after the modifiedterms shall be recognized as a new financial liability.When all or part of a financial liability is derecognized, the difference between the book value of thederecognized financial liability and the consideration paid (including non-cash assets transferred out or newfinancial liabilities assumed) is included in the current profit and loss.If the Company repurchases part of the financial liabilities, the book value of the financial liabilities as a wholeshall be allocated on the date of repurchase according to the relative fair value of the part that continues to berecognized and the part that is derecognized. The difference between the book value allocated to thederecognized part and the consideration paid (including non-cash assets transferred out or new financialliabilities assumed) is included in the current profit and loss.
(5) Determination of fair value of financial assets and financial liabilities
For financial instruments with an active market, their fair value is determined by the quoted price in the activemarket. For financial instruments that do not have an active market, valuation techniques are used to determinetheir fair value. When valuing, the Company adopts valuation techniques that are applicable in the currentsituation and supported by sufficient available data and other information, and select inputs consistent with thecharacteristics of assets or liabilities considered by market participants in transactions of related assets orliabilities, and give preference to relevant observable inputs. Use unobservable input values only when therelevant observable input values are not available or practicable to obtain.
(6) Test method and accounting treatment method for impairment of financial assets
The Company estimates the expected credit losses of financial assets measured at amortized cost, financialassets at fair value through other comprehensive income (debt instruments) and financial guarantee contracts,either individually or in combination.The Company considers reasonable and well-founded information about past events, current conditions, andforecasts of future economic conditions, and uses the risk of default as the weight to calculate the differencebetween the cash flow receivable by the contract and the cash flow expected to be received. The probability-weighted amount of the present value of the recognized expected credit loss. If the credit risk of the financial
instrument has increased significantly since the initial recognition, the Company shall measure its loss provisionat an amount equivalent to the expected credit loss of the financial instrument throughout its duration. If thecredit risk of the financial instrument has not increased significantly since the initial recognition, the Companyshall measure its loss provision at an amount equivalent to the expected credit loss of the financial instrumentwithin the next 12 months. The resulting increase or reversal of the loss provision is included in the currentprofit and loss as an impairment loss or gain.The Company compares the default risk of financial instruments on the balance sheet date with the risk ofdefault on the initial recognition date to determine the relative change in the default risk of financial instrumentsduring the expected duration, and to assess the credit risk of financial instruments has increased significantlysince initial recognition. Usually overdue for more than 30 days, the Company considers that the credit risk ofthe financial instrument has increased significantly, unless there is conclusive evidence to prove that the creditrisk of the financial instrument has not increased significantly since the initial recognition.If the credit risk of a financial instrument is relatively low on the balance sheet date, the Company considersthat the credit risk of the financial instrument has not increased significantly since initial recognition.If there is objective evidence that a certain financial asset has been credit-impaired, the Company shall makeprovision for impairment of the financial asset on an individual basis. For the accounts receivables and contractassets formed by the transactions regulated by “Accounting Standards for Business Enterprises No. 14 –Revenue” (2017), regardless of whether they contain significant financing components, the Company calculatesthem according to the expected credit loss equivalent to the entire duration to measure its loss allowance.For lease receivables, the Company chooses to measure its loss provision at an amount equivalent to theexpected credit loss during its full lifetime.If the Company no longer reasonably expects that the cash flow of the financial asset contract can be recoveredin whole or in part, it will directly write down the book balance of the financial assets.
11. Inventories
(1) Classification and costs of inventories
Inventory is classified into: materials in transit, raw materials, turnover materials, stock goods, work in progress,goods delivered, and materials for commissioned processing, etc.Inventories are initially measured at cost, and inventory costs include purchase costs, processing costs and otherexpenses incurred to bring the inventories to their current location and state.
(2) Valuation method for dispatched inventory
Inventories are priced using the weighted average method when they are dispatched.
(3) Basis for determining the net realizable value of different categories of inventories
On the balance sheet date, inventories shall be measured at the lower of cost and net realizable value. When thecost of inventory is higher than its net realizable value, a provision for price of inventory decline shall be made.The net realizable value of inventories refers to the estimated selling price of inventories in ordinary activitiesminus the estimated costs to be incurred until completion, estimated sales expenses and related taxes.Inventories of finished goods, goods in stock and materials for sale, etc., which are directly used for sale, aredetermined by the estimated selling price of the inventory minus the estimated sales expenses and relevant taxesand fees during the normal production and operation process to determine the net realizable value. Inventory ofmaterials that need to be processed, in the normal production and operation process, is determined by theestimated selling price of the finished product minus the estimated cost to be incurred until completion,estimated sales expenses and related taxes and fees to determine the net realizable value. For inventories heldfor the execution of sales contracts or service contracts, the net realizable value is calculated based on thecontract price. If the quantity of inventories held exceeds the quantity ordered in the sales contract, the netrealizable value of the excess inventory is calculated based on the general sales price.After provision for inventory decline, if the factors affecting the reduction of inventory value before havedisappeared, resulting in the net realizable value of the inventory being higher than its book value, it shall bereversed within the amount of the original provision for inventory decline and the reversed amount is includedin the current profit and loss.
(4) Inventory system
The Company adopts the 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 Costs
Contract costs are divided into contract fulfillment costs and contract obtaining costs.
If the cost incurred by the Company for the contract fulfillment costs does not fall within the scope of relevantstandards such as inventory, fixed assets or intangible assets, it shall be recognized as an asset as a contractfulfillment costs when the following conditions are met:
? The cost is directly related to a current or anticipated contract;? The cost increases the company's future resources to meet performance obligations;? The cost is expected to be recoverable.
If the incremental cost incurred by the Company to acquire the contract is expected to be recoverable, it isrecognized as an asset as the cost of obtaining the contract.
Assets related to contract costs are amortized on the same basis as the recognition of goods or service revenuerelated to the assets; however, if the amortization period of contract acquisition costs does not exceed one year,the Company will include them in the current profit and loss when incurred.
For assets related to contract costs, if the book value is higher than the difference between the following twoitems, the Company will make provision for impairment for the excess part and recognize it as asset impairmentloss:
1. The remaining consideration expected to be obtained from the transfer of goods or services related to the
asset;
2. The estimated costs to be incurred for the transfer of the related good or service.
If the depreciation factor in the previous period changes later, so that the aforementioned difference is higherthan the book value of the asset, the Company will reverse the original depreciation provision and include it inthe current profit and loss, but the book value of the asset after the reversal shall not exceed the book value ofthe asset on the transfer-back date assuming no provision for impairment is made.
13. Long-term Equity Investments
(1) Judgment criteria for joint control and significant influence
Joint control refers to the shared control of an arrangement in accordance with the relevant agreement, and therelevant activities of the arrangement must be unanimously agreed by the parties sharing the control right beforedecisions can be made. If the Company and other joint venture parties exercise joint control over the investedunit and have rights to the net assets of the invested unit, the invested unit is a joint venture of the Company.Significant influence refers to the right to participate in the decision-making of the investee's financial andoperating decisions, but cannot control or jointly control the formulation of these policies with other parties. Ifthe Company is able to exert significant influence on the invested unit, the invested unit is an associate of theCompany.
(2) Determination of initial investment cost
1) Long-term equity investment formed by business combination
For a long-term equity investment in a subsidiary formed by a business combination under the same control, theinitial investment cost of the long-term equity investment shall be the share of the book value of the owner'sequity of the merged party in the consolidated financial statements of the ultimate controlling party on the dateof combination. For the difference between the initial investment cost of long-term equity investment and thebook value of the consideration paid, the equity premium in the capital reserve shall be adjusted; if the equitypremium in the capital reserve is insufficient to offset, the retained earnings shall be adjusted.
For a long-term equity investment in a subsidiary formed by a business combination not under the same control,the initial investment cost of the long-term equity investment shall be the combination cost determined on thepurchase date.
2) Long-term equity investment obtained through other means than business combination
For long-term equity investment acquired by cash payment, the actual purchase price paid shall be regarded asthe initial investment cost.For long-term equity investment obtained by issuing equity securities, the initial investment cost shall be thefair value of the issued equity securities.
(3) Subsequent measurement and profit or loss recognition method
1) Long-term equity investment accounted for by cost method
The Company's long-term equity investment in subsidiaries is accounted for using the cost method, unless theinvestment meets the conditions of being held for sale. Except for the price actually paid when acquiring theinvestment or the cash dividends or profits that have been declared but not yet distributed included in theconsideration, the Company recognizes the current investment income according to the cash dividends or profitsdeclared by the invested unit.
2) Long-term equity investment accounted for by equity method
Long-term equity investments in associates and joint ventures are accounted for using the equity method. If theinitial investment cost is greater than the difference between the share of the fair value of the identifiable netassets of the investee that should be enjoyed at the time of investment, the initial investment cost of the long-term equity investment will not be adjusted; The difference between the initial investment cost and the share ofthe fair value of the identifiable net assets of the investee that should be enjoyed at the time of investment shallbe included in the current profit and loss, and the cost of long-term equity investment shall be adjusted at thesame time.The Company recognizes the investment income and other comprehensive income respectively according to theshare of the net profit or loss and other comprehensive income realized by the invested unit that it should enjoyor share, and adjust the book value of the long-term equity investment at the same time; The book value of thelong-term equity investment shall be correspondingly reduced according to the portion of the profits or cashdividends declared by the investee to be distributed; For other changes in the owner's equity of the investeeother than net profit and loss, other comprehensive income and profit distribution (referred to as “other changesin owner’s equity”), the book value of the long-term equity investment is adjusted and included in the owner'sequity.When confirming the share of the investee's net profit or loss, other comprehensive income and other changes inowner's equity, it is based on the fair value of the investee's identifiable net assets when the investment isobtained, and in accordance with the Company's accounting policies and accounting periods. It is confirmedafter adjusting the net profit and other comprehensive income of the invested unit.
The unrealized profit and loss of internal transactions between the Company and its associates and jointventures shall be calculated according to the share attributable to the Company and offset, investment income isrecognized on this basis, except that the assets invested or sold constitute a business. If the unrealized internaltransaction loss with the invested unit is an asset impairment loss, it shall be recognized in full.The Company’s net losses to joint ventures or joint ventures, in addition to the obligation to bear additionallosses, are limited to zero when the book value of long-term equity investments and other long-term intereststhat substantially constitute net investments in joint ventures or joint ventures are reduced to zero. If the jointventure or associated enterprise realizes net profit in the future, the Company shall restore the recognition of theprofit share after the share of the profit makes up for the share of the unrecognized loss.
3) Disposal of long-term equity investment
For the disposal of long-term equity investment, the difference between its book value and the actual acquisitionprice shall be included in the current profit and loss.If part of the long-term equity investment accounted for by the equity method is disposed of, and the remainingequity is still accounted for by the equity method, the other comprehensive income recognized by the originalequity method shall be carried forward on the same basis as the invested entity’s direct disposal of related assetsor liabilities and shall be carried forward in corresponding proportions, changes in other owners' equity aretransferred to the current profit and loss in proportion.If the joint control or significant influence on the invested unit is lost due to the disposal of equity investmentand other reasons, other comprehensive income recognized by the original equity investment due to theadoption of equity method accounting, when the equity method of accounting is terminated, the accountingtreatment is carried out on the same basis as the investee directly disposing of related assets or liabilities, andother changes in owner's equity are all transferred to the current profit and loss when the equity method ofaccounting is terminated.If the control over the invested unit is lost due to the disposal of part of the equity investment, etc., whenpreparing individual financial statements, if the remaining equity can exercise joint control or significantinfluence on the invested unit, it shall be accounted for using the equity method. And the remaining equity isdeemed to be adjusted using the equity method since it is acquired, and other comprehensive income recognizedbefore obtaining the control of the invested company is carried forward on the same basis as the investedcompany's direct disposal of related assets or liabilities. Changes in other owners' equity due to the adoption ofequity method accounting and confirmation are carried forward to the current profit and loss in proportion; Ifthe remaining equity cannot exercise joint control or exert significant influence on the invested unit, it isrecognized as a financial asset. The difference between the fair value and the book value on the date when thecontrol is lost is included in the current profit and loss, and all other comprehensive income and other changesin owner's equity recognized before obtaining the control of the invested entity are all carried forward.If the equity investment in a subsidiary is disposed of step by step through multiple transactions until the controlis lost, if it belongs to a package deal, each transaction shall be accounted for as a transaction for disposing ofthe equity investment in the subsidiary and losing control; The difference between each disposal price beforethe loss of control and the book value of the long-term equity investment corresponding to the disposed equity
is first recognized as other comprehensive income in the individual financial statements. When the control rightis lost, it will be transferred to the current profit and loss of the loss of control right. If it does not belong to apackage deal, each transaction shall be accounted for separately.
14. Investment properties
Investment properties refers to properties held for the purpose of earning rent or capital appreciation, or both,including leased land use rights, land use rights held and prepared to be transferred after appreciation, leasedbuildings (Including buildings that are built for rent after self-construction or development activities arecompleted, and buildings that are in the process of being built or developed for future rent).Subsequent expenditures related to investment properties are included in the cost of investment properties whenthe relevant economic benefits are likely to flow in and the cost can be measured reliably; otherwise, they areincluded in the current profit and loss when incurred.The Company adopts the cost model to measure the existing investment properties. The same depreciationpolicy as the Company's fixed assets is adopted for the investment properties measured according to the costmodel - buildings for lease, and the same amortization policy as for intangible assets is adopted for the land useright for lease.
15. Fixed Assets
(1) Recognition criteria
Fixed assets refer to tangible assets that are held for the production of goods, provision of labor services, leaseor operation and management, and have a useful life of more than one accounting year.Fixed assets are recognized when the following conditions are met at the same time: 1) The economic benefitsrelated to the fixed assets are probable to flow into the Company;
2) The cost of the fixed asset can be measured reliably.
Fixed assets are initially measured at cost (and taking into account the impact of estimated disposal costs).Subsequent expenditures related to fixed assets are included in the cost of fixed assets when the relatedeconomic benefits are likely to flow in and the cost can be reliably measured; for the replaced part, its bookvalue is derecognized;All other subsequent expenses are included in the current profit and loss when incurred.
(2) Depreciation method
Category Depreciation method
| Depreciation period (years) | Scrap value rate (%) | Annual depreciation rate (%) | ||
| Property and plant | Average Years Method | 5 | 2.38% | 40 |
| Mechanical equipment |
Average Years Method5 3.96%-5.59% 17-24
Average Years Method5 7.92%-19.00% 5-12The depreciation of fixed assets is classified and accrued using the average-year method, and the depreciationrate is determined according to the category of fixed assets, estimated service life and estimated net residualvalue rate. For fixed assets with provision for depreciation, the depreciation amount will be determinedaccording to the book value after deduction of provision for depreciation and the remaining useful life in thefuture period. If the service life of each component of the fixed asset is different or it provides economicbenefits to the Company in different ways, different depreciation rates or depreciation methods should beselected to accrue depreciation separately.
(3) Disposal of fixed assets
When a fixed asset is disposed of, or it is not expected to generate economic benefits through use or disposal,the fixed asset is derecognized. The income from the sale, transfer, retirement or damage of fixed assets afterdeducting their book value and related taxes and fees is included in the current profit and loss.
16. Construction in Progress
The cost of construction in progress is measured by the actual cost incurred. Actual costs include constructioncosts, installation costs, borrowing costs eligible for capitalization and other necessary expenditures incurredbefore the construction in progress reaches the intended usable state. When the construction in progress reachesthe intended usable state, it will be transferred to fixed assets and depreciation will be accrued from the nextmonth.
17. Borrowing Costs
(1) Recognition principles for capitalization of borrowing costs
The borrowing expenses incurred by the Company, which can be directly attributable to the purchase,construction or production of assets eligible for capitalization, shall be capitalized and included in the cost ofrelevant assets; other borrowing expenses shall be recognized as expenses based on the amount incurred whenthey occur, and shall be calculated and included in current profit and loss.
Assets eligible for capitalization refer to assets such as fixed assets, investment real estate, and inventories thatrequire a long period of purchase, construction or production activities to reach the intended usable or salablestate.
(2) Period of capitalization of borrowing costs
The capitalization period refers to the period from the start of capitalization of borrowing costs to the cessationof capitalization, excluding the period of suspension of capitalization of borrowing costs.Borrowing costs start to be capitalized when the following conditions are met at the same time:
1) Asset expenditures have occurred, and asset expenditures include expenditures incurred in the form of cash
payments, transfer of non-cash assets, or assumption of interest-bearing debts for the purchase, construction orproduction of assets eligible for capitalization;
2) Borrowing costs have been incurred;
3) The acquisition, construction or production activities necessary to make the asset ready for use or sale have
started.Capitalization of borrowing costs stops when the purchased, constructed or produced assets eligible forcapitalization have reached the intended usable or salable state.
(3) Suspension of capitalization period
Capitalization of borrowing costs shall be suspended if the acquisition, construction or production process of anasset eligible for capitalization is interrupted abnormally and the interruption lasts for more than 3 months; Ifthe interruption is a necessary procedure for the purchased, constructed or produced assets eligible forcapitalization to reach the intended usable state or salable state, the borrowing costs will continue to becapitalized. Borrowing costs incurred during the interruption period are recognized as current profit and loss,and the borrowing costs continue to be capitalized after the acquisition and construction of assets or productionactivities resume.
(4) Calculation method of borrowing cost capitalization rate and capitalized amount
For special loans borrowed for the purchase, construction or production of assets eligible for capitalization, thecapitalized amount of borrowing costs is determined by the amount of the borrowing costs actually incurred inthe current period of the special borrowing minus the interest income obtained by depositing the unusedborrowing funds in the bank or the investment income obtained from the temporary investment.For general borrowings used for the acquisition, construction or production of assets eligible for capitalization,calculate and determine the amount of borrowing costs that should be capitalized for general borrowings bymultiplying the weighted average of asset expenditures that exceed the portion of special borrowings multipliedby the capitalization rate of general borrowings. The capitalization rate is determined based on the weightedaverage actual interest rate of general borrowings.
During the capitalization period, the exchange difference between the principal and interest of foreign currencyspecial loans shall be capitalized and included in the cost of assets eligible for capitalization. The exchangedifference arising from the principal and interest of other foreign currency loans other than foreign currencyspecial loans is included in the current profit and loss.
18. Intangible Assets
(1) Measurement method, useful life, impairment test
A. Valuation method of intangible assets
1) Initially measured at cost when the Company acquires intangible assets
The cost of purchased intangible assets includes the purchase price, relevant taxes and other expenditures thatare directly attributable to making the asset reach its intended use.
2) Subsequent measurement
When acquiring intangible assets, analyze and judge their service life.For intangible assets with limited service life, they are amortized within the period of bringing economicbenefits to the enterprise; if the period of intangible assets bringing economic benefits to the enterprise cannotbe foreseen, they are regarded as intangible assets with indefinite service life and shall not be amortized.B. Estimated useful life of intangible assets with limited useful life
Item
Amortization method Residual rate
| Expected useful life | Basis for expected useful life |
Land use rights 50 years Average age method 0
C. Judgment basis for intangible assets with indefinite useful life and procedures for reviewing theiruseful lifeAs of the end of the reporting period, the Company had no intangible assets with indefinite useful life.
(2) Accounting policy for internal research and development expenditures
A. Specific criteria for dividing the research phase and development phaseThe Company's internal research and development project expenditures are divided into research phaseexpenditures and development phase expenditures.Research phase: The phase of original planned investigation and research activities to acquire and understandnew scientific or technical knowledge, etc.
Development stage: Before commercial production or use, research results or other knowledge are applied to acertain plan or design to produce new or substantially improved materials, devices, products, etc.
B. Development phase expenditures qualify for capitalization specific conditionsExpenditures in the research stage are included in the current profit and loss when incurred. Expenditures in thedevelopment stage that meet the following conditions at the same time are recognized as intangible assets, andexpenditures in the development stage that cannot meet the following conditions are included in the currentprofit and loss:
1) It is technically feasible to complete the intangible asset so that it can be used or sold;
2) It has the intention to complete the intangible asset and use or sell it;
3) The way intangible assets generate economic benefits, including the ability to prove that there is a market for
the products produced by using the intangible asset or the intangible asset itself has a market, and if theintangible asset will be used internally, it can prove its usefulness;
4) Have sufficient technical, financial and other resource support to complete the development of the intangible
asset and have the ability to use or sell the intangible asset;
5) The expenditure attributable to the development stage of the intangible asset can be reliably measured.
19. Impairment of Long-term Assets
For long-term equity investment, investment real estate measured by the cost model, fixed assets, constructionin progress, right-of-use assets, intangible assets with limited service life, oil and gas assets and other long-termassets, if there is any sign of impairment on the balance sheet date, an impairment test is required. If the resultsof the impairment test show that the recoverable amount of the asset is lower than its book value, the differenceshall be recognized as an impairment provision and included in the impairment loss. The recoverable amount isthe higher of the net amount of the asset's fair value minus disposal costs and the present value of the estimatedfuture cash flow of the asset. Asset impairment provision is calculated and confirmed on the basis of individualassets. If it is difficult to estimate the recoverable amount of a single asset, the recoverable amount of the assetgroup is determined based on the asset group to which the asset belongs. An asset group is the smallestcombination of assets that can independently generate cash inflows.For goodwill formed by business combination, intangible assets with indefinite useful life, and intangible assetsthat have not yet reached the usable state, regardless of whether there is any sign of impairment, an impairmenttest shall be conducted at least at the end of each year.The Company carries out the goodwill impairment test, and the book value of the goodwill formed by thebusiness combination shall be apportioned to the relevant asset groups according to a reasonable method fromthe date of purchase. If it is difficult to allocate to the relevant asset group, it shall be allocated to the relevantasset group combination. The related asset group or asset group combination is the asset group or asset groupcombination that can benefit from the synergistic effect of the business combination.
When performing an impairment test on the relevant asset group or combination of asset groups containinggoodwill, if there is any sign of impairment in the asset group or combination of asset groups related togoodwill, first perform an impairment test on the asset group or combination of asset groups that does notcontain goodwill, calculate the recoverable amount and compare it with the relevant book value to confirm thecorresponding impairment loss. Then conduct an impairment test on the asset group or asset group combinationcontaining goodwill, compare its book value with the recoverable amount, if the recoverable amount is lowerthan the book value, the amount of the impairment loss shall first be deducted from the book value of thegoodwill apportioned to the asset group or asset group combination, then according to the proportion of thebook value of other assets except goodwill in the asset group or asset group combination, the book value ofother assets shall be offset in proportion. Once the above asset impairment loss is confirmed, it will not bereversed in the subsequent accounting period.
20. Long-term Deferred Expenses
Long-term deferred expenses refer to various expenses that have occurred but should be borne by the currentand subsequent periods with an amortization period of more than one year.Long-term deferred expenses are amortized evenly during the beneficiary period.
21. Contract Liabilities
The Company presents contract assets or contract liabilities in the balance sheet according to the relationshipbetween performance obligations and customer payments. The Company has received or receivable thecustomer's consideration and the obligation to transfer goods or provide services to the customer is listed ascontract liabilities. Contract assets and contract liabilities under the same contract are presented on a net basis.
22. Employee Benefits
(1) Accounting treatment of short-term employee benefits
During the accounting period when employees provide services to the Company, the Company recognizes theactual short-term remuneration as a liability, and includes it in the current profit and loss or related asset costs.The social insurance premiums and housing provident funds paid by the Company for employees, as well aslabor union funds and employee education funds drawn according to regulations, are paid according toregulations during the accounting period when employees provide services to the Company. The accrual basisand accrual ratio are calculated to determine the corresponding amount of employee remuneration.The employee welfare expenses incurred by the Company are included in the current profit and loss or the costof related assets according to the actual amount when they actually occur. Among them, non-monetary benefitsare measured at fair value.
(2) Accounting treatment of post-employment benefits
1) Defined contribution plans
The Company pays the basic endowment insurance and unemployment insurance for employees according tothe relevant regulations of the local government. During the accounting period when the employees provideservices to the Company, the amount payable is calculated according to the payment base and proportionstipulated by the local government, recognized as liabilities, and included in current profit or loss or relatedasset cost. In addition, the Company also participates in the enterprise annuity plan/supplementary pensioninsurance fund approved by the relevant state departments. The Company pays premiums to the annuityplan/local social insurance agency according to a certain percentage of the total salary of employees, and thecorresponding expenditure is included in the current profit and loss or the cost of related assets.
2) Defined benefit plans
The Company has no defined benefit plan.
(3) Accounting treatment of termination benefits
If the Company provides termination benefits to employees, the employee salary liabilities arising from thetermination benefits shall be recognized on the earlier of the following two dates and included in the currentprofit and loss: when the Company cannot unilaterally withdraw the termination benefits provided due to thetermination of labor relationship plans or layoff proposals; when the Company recognizes costs or expensesassociated with a restructuring involving the payment of termination benefits.
23. Provisions
When the obligations related to contingencies meet the following conditions at the same time, the Company willrecognize them as provision:
1) The obligation is a present obligation of the Company;
2) It is probable that the performance of the obligation will result in an outflow of economic benefits from the
Company;
3) The amount of the obligation can be measured reliably.
Estimated liabilities are initially measured based on the best estimate of the expenditure required to fulfill therelevant current obligations.
When determining the best estimate, factors such as risks, uncertainties and time value of money related tocontingencies shall be considered comprehensively. If the time value of money has a significant impact, the bestestimate is determined after discounting the relevant future cash outflows.If there is a continuous range of required expenditures, and the possibility of occurrence of various outcomeswithin this range is the same, the best estimate shall be determined according to the median value within therange; in other cases, the best estimate shall be dealt with in the following situations:
? If a contingency involves a single item, it shall be determined according to the most likely amount;? If a contingency involves multiple projects, it shall be calculated and determined according to variouspossible results and related probabilities.If all or part of the expenditure required to pay off the estimated liability is expected to be compensated by athird party, the compensation amount shall be recognized as an asset separately when it is basically confirmedthat it can be received, and the confirmed compensation amount shall not exceed the book value of theestimated liability.The Company shall review the book value of estimated liabilities on the balance sheet date. If there isconclusive evidence that the book value cannot reflect the current best estimate, the book value shall be adjustedaccording to the current best estimate.
24. Revenue
(1) Accounting policies adopted for revenue recognition and measurement
The Company recognizes revenue when the Company fulfills the performance obligations in the contract, that is,when the customer obtains control over the relevant goods or services. Obtaining the right to control therelevant goods or services refers to being able to dominate the use of the goods or services and obtain almost alleconomic benefits from them.If the contract contains two or more performance obligations, the Company will allocate the transaction price toeach individual performance obligation in accordance with the relative proportion of the stand-alone sellingprice of the goods or services promised by each individual performance obligation on the inception date of thecontract. The Company measures revenue based on the transaction price allocated to each individualperformance obligation.The transaction price refers to the amount of consideration to which the Company is expected to be entitled forthe transfer of goods or services to the customer, excluding amounts collected on behalf of third parties andamounts expected to be refunded to the customer. The Company determines the transaction price in accordancewith the terms of the contract and in combination with its previous practices, and when determining thetransaction price, it takes into account the influence of factors such as variable consideration, significantfinancing components in the contract, non-cash consideration, and consideration payable to customers. TheCompany determines the transaction price including the variable consideration at an amount that does notexceed the amount that the accumulated recognized revenue is unlikely to be significantly reversed when the
relevant uncertainties are eliminated. If there is a significant financing component in the contract, the Companydetermines the transaction price based on the amount payable in cash when the customer obtains the control ofthe goods or services, and uses the actual interest rate method to amortize the difference between the transactionprice and the contract consideration during the contract period.If one of the following conditions is met, the performance obligation shall be fulfilled within a certain period oftime; otherwise, the performance obligation shall be fulfilled at a certain point in time:
?The customer obtains and consumes the economic benefits brought by the Company's performance at the sametime as the Company's performance of the contract.?The customer is able to control the goods under construction during the Company's performance.?The goods produced by the Company during the performance of the contract have irreplaceable uses, and theCompany has the right to collect payment for the performance part that has been completed so far during theentire contract period.For performance obligations fulfilled within a certain period of time, the Company recognizes revenueaccording to the progress of the performance within that period of time, except that the progress of theperformance of the contract cannot be reasonably determined. The Company considers the nature of the goodsor services and adopts the output method or input method to determine the performance progress. When theperformance progress cannot be reasonably determined, and the incurred costs are expected to be compensated,the Company shall recognize the revenue according to the incurred cost amount until the performance progresscan be reasonably determined.For performance obligations fulfilled at a certain point in time, the Company recognizes revenue at the point intime when the customer obtains control over the relevant goods or services. When judging whether thecustomer has obtained control of the goods or services, the Company considers the following signs:
? The Company has the current right to receive payment for the goods or services, that is, the customer has acurrent payment obligation for the goods or services.? The Company has transferred the legal title to the product to the customer, that is, the customer already hasthe legal title to the product.? The Company has transferred the product to the customer in kind, that is, the customer has takenpossession of the product in kind.? The Company has transferred the main risks and rewards of the ownership of the commodity to thecustomer, that is, the customer has obtained the main risks and rewards of the ownership of the commodity.? The customer has accepted the good or service, etc.Contracts for the sale of goods between companies and customers often contain only performance obligationsfor the transfer of goods or services such as steel. Such performance obligations are performance obligationsperformed at a certain point in time, and the Company recognizes revenue at the point in time when the
customer obtains control over the relevant goods or services. When judging whether the customer has obtainedcontrol of the goods or services, the Company considers the following signs: the Company obtains the currentright to collect the goods, the legal ownership of the goods is transferred to the customer, the physical assets ofthe goods are transferred to the customer, the Company transfers the main risks and rewards of the ownership ofthe goods to the customer, and the customer has accepted the goods.
25. Government Grants
(1) Categories
Government grants are monetary assets or non-monetary assets obtained by the Company from the governmentfor free. It is divided into government grants related to assets and government grants related to income.Asset-related government grants refer to government grants obtained by the Company for purchase andconstruction or to form long-term assets in other ways. Government grants related to income refer togovernment grants other than government grants related to assets.The Company classifies government grants as assets-related specific criteria: government grants obtained by theenterprise and used to purchase and construct or form long-term assets in other ways.The specific criteria for the Company to classify government grants as income-related are: government grantswith specified grant targets other than asset-related government grants.For government documents that do not clearly specify the grants object, the Company's judgment basis forclassifying the government grants as asset-related or income-related is as follows: for those that can form long-term assets, the part of the government grants corresponding to the asset value shall be regarded as thegovernment grants related to assets, and the rest shall be regarded as the government grants related to income; ifit is difficult to distinguish, the government grants as a whole shall be regarded as the government grants relatedto income.
(2) Timing of recognition
The Company's asset-related government grants are recognized when the government grants are actuallyreceived, and the deferred income is evenly amortized and transferred to the current profit and loss according tothe expected service life of the long-term assets from the time the long-term assets are available for use.The Company’s government grants related to income are recognized at the following points: if the governmentgrants are actually received and used to compensate the Company’s related expenses or losses in the future, itwill be included in the current non-operating income during the period when the relevant expenses areconfirmed; if it is used to compensate the relevant expenses or losses incurred by the Company, it shall bedirectly included in the non-operating income of the current period when it is obtained.
(3) Accounting treatment
Government grants related to assets are offset against the book value of related assets or recognized as deferredincome. If it is recognized as deferred income, it shall be included in the current profit and loss in stages in areasonable and systematic manner within the useful life of the relevant assets (if it is related to the Company'sordinary activities, it will be included in other income; if it is not related to the Company's ordinary activities, itwill be included in non-operating income).Government grants related to income, which are used to compensate the relevant costs or losses of theenterprise in the future period, shall be recognized as deferred income, and shall be included in the current profitand loss during the period when the relevant costs or losses are recognized (if it is related to the Company'sordinary activities, it will be included in other income; if it is not related to the Company's ordinary activities, itwill be included in non-operating income) or offset related costs or losses; If it is used to compensate therelevant costs or losses incurred by the Company, it shall be directly included in the current profit and loss (if itis related to the Company's ordinary activities, it will be included in other income; if it is not related to theCompany's ordinary activities, it will be included in non-operating income) or offset related costs or losses.The policy-based preferential loan interest discount obtained by the Company is divided into the following twosituations, and the accounting treatment is carried out separately:
1) If the finance department allocates interest discount funds to the lending bank, and the lending bank provides
loans to the Company at a preferential policy rate, the Company takes the actual amount of the loan received asthe entry value of the loan, and calculates it based on the principal of the loan and the policy preferential raterelated borrowing costs.
2) If the finance department directly allocates the interest discount funds to the Company, the Company will
offset the corresponding borrowing costs with the corresponding discount interest.
26. Deferred Tax Assets / Deferred Tax Liabilities
Income tax includes current income tax and deferred tax. Except for the income tax arising from businessmergers and transactions or events that are directly included in owner's equity (including other comprehensiveincome), the Company includes current income tax and deferred tax in current profit and loss.Deferred tax assets and deferred tax liabilities are calculated and recognized based on the difference (temporarydifference) between the tax basis of assets and liabilities and their book value.Deferred tax assets recognized for deductible temporary differences shall be limited to the amount of taxableincome that is likely to be obtained in the future to offset the deductible temporary differences. For thedeductible losses and tax credits that can be carried forward to the following years, the corresponding deferredtax assets are recognized within the limit of the future taxable income that is likely to be used to offset thedeductible losses and tax credits .For taxable temporary differences, except for special circumstances, deferred income tax liabilities arerecognized.
The special circumstances that do not recognize deferred tax assets or deferred tax liabilities include:
? Initial recognition of goodwill;? Transactions or events that are neither business combinations nor affect accounting profits and taxableincome (or deductible losses) when they occur.For taxable temporary differences related to investments in associates and joint ventures, deferred tax liabilitiesare recognized, unless the Company is able to control the timing of the reversal of the temporary difference andthe temporary difference is likely not to be transferred back in the foreseeable future. For the deductibletemporary difference related to the investment in associates and joint ventures, when the temporary difference islikely to be reversed in the foreseeable future and the taxable income used to offset the deductible temporarydifference is likely to be obtained in the future, the deferred tax assets are recognized.On the balance sheet date, the deferred tax assets and deferred tax liabilities shall be measured at the applicabletax rate during the period when the relevant assets are expected to be recovered or the relevant liabilities areexpected to be paid off in accordance with the provisions of the tax law.On the balance sheet date, the Company reviews the book value of the deferred tax assets. If it is likely thatsufficient taxable income will not be obtained in the future to offset the benefits of the deferred tax asset, thebook value of the deferred tax asset shall be written down. When it is probable that sufficient taxable incomewill be obtained, the reduced amount shall be reversed.When there is a legal right to settle on a net basis and there is an intention to settle on a net basis or to obtainassets and pay off liabilities simultaneously, the current income tax assets and current income tax liabilities arepresented as the net amount after offsetting.On the balance sheet date, the deferred income tax assets and deferred income tax liabilities are presented as thenet amount after offsetting when the following conditions are met at the same time:
? The taxpayer has the legal right to settle the current income tax assets and current income tax liabilities ona net basis;? Deferred tax assets and deferred tax liabilities are related to the income tax levied on the same taxpayer bythe same tax collection authority or to different taxpayers, but each important deferred tax asset and liabilitywill be reversed in the future, the taxpayers involved intend to settle the current income tax assets and liabilitieson a net basis or acquire assets and pay off liabilities at the same time.
27. Leases
(1) Accounting Treatment for Operating Leases
Accounting Policy from 1 January 2021
? Lease refers to a contract in which the lessor transfers the right to use an asset to the lessee for
consideration within a certain period of time. On the inception date of the contract, the Companyassesses whether the contract is or contains a lease. A contract is, or contains, a lease if one party to thecontract transfers the right to control the use of one or more identified assets for a period of time inexchange for consideration.
? If the contract contains multiple separate leases at the same time, the Company will split the contractand conduct accounting treatment for each separate lease separately. If the contract contains both leaseand non-lease parts, the lessee and lessor will separate the lease and non-lease parts.? For rental concessions, such as rent reductions, deferred payments, etc., directly caused by the COVID-
19 Epidemic, the Company adopts a simplified method for all lease options, and does not evaluatewhether there is a lease change and lease classification will not be reassessed if the followingconditions are met at the same time:
? The lease consideration after the concession is reduced or basically unchanged from that before theconcession, and the lease consideration can be undiscounted or discounted at the discount rate beforethe concession;
? The concession is only for the lease payments payable before 30 June 30 2022. An increase in the leasepayments payable after 30 June 2022 does not affect the fulfillment of this condition, and a decrease inthe lease payments payable after 30 June 30 2022 does not meet this condition;? After comprehensive consideration of qualitative and quantitative factors, it is determined that there is
no significant change in other terms and conditions of the lease.
1) The Company acts as the lessee
① Right-of-use assets
On the commencement date of the lease term, the Company recognizes right-of-use assets for leases other thanshort-term leases and low-value asset leases. Right-of-use assets are initially measured at cost. This costincludes:
? The initial measurement amount of the lease liability;? For the lease payment paid on or before the start date of the lease term, if there is a lease incentive, the
relevant amount of the lease incentive already enjoyed shall be deducted;
? Initial direct costs incurred by the Company;? The cost expected to be incurred by the Company for dismantling and removing the leased asset,
restoring the site where the leased asset is located, or restoring the leased asset to the state stipulated inthe lease terms. However, costs incurred for the production of inventories are not included.
The Company subsequently adopts the straight-line method to depreciate the right-of-use assets. If it can bereasonably determined that the ownership of the leased asset will be obtained when the lease term expires, theCompany shall accrue depreciation within the remaining useful life of the leased asset. Otherwise, the leasedasset is depreciated over the shorter period of the lease term or the remaining useful life of the leased assetThe company determines whether the right-of-use asset has been impaired in accordance with the principlesstated in “V. (19) Impairment of Long-term Assets” in this note, and conducts accounting treatment for theidentified impairment loss.
② Lease liability
On the commencement date of the lease term, the Company recognizes lease liabilities for leases other thanshort-term leases and low-value asset leases. The lease liability is initially measured at the present value of theunpaid lease payments. Lease payments include:
? Fixed payments (including substantive fixed payments), if there is a lease incentive, deduct the relevant
amount of the lease incentive;? Variable lease payments that depend on an index or rate;? The amount expected to be paid according to the residual value of the guarantee provided by theCompany;
? The exercise price of the option to purchase, if the Company is reasonably certain that the option will
be exercised;? Amounts payable for exercising the option to terminate the lease, provided the term of the lease reflects
the exercise of the option to terminate the lease.The Company uses the lease implicit interest rate as the discount rate, but if the lease implicit interest ratecannot be reasonably determined, the Company's incremental borrowing rate is used as the discount rate.The Company calculates the interest expense of the lease liability in each period of the lease period according tothe fixed periodic interest rate, and includes it in the current profit and loss or the cost of related assets.Variable lease payments that are not included in the measurement of lease liabilities are included in currentprofit or loss or related asset costs when they actually occur. After the start date of the lease term, if thefollowing circumstances occur, the Company will remeasure the lease liability and adjust the correspondingright-of-use asset. If the book value of the right-of-use asset has been reduced to zero, but the lease liability stillneeds to be further reduced, the difference is included in the current profit and loss:
? When the evaluation results of the purchase option, lease renewal option or termination option change,
or the actual exercise of the aforementioned options is inconsistent with the original evaluation results,
the Company will use the lease payment amount after the change and the revised discount rate to
calculate the present value and remeasure the lease liability;
? When the actual fixed payment amount changes, the estimated payable amount of the residual value of
the guarantee changes, or the index or ratio used to determine the lease payment changes, the Company
recalculates the present value based on the changed lease payment amount and the original discount
rate and measure the lease liability. However, where changes in lease payments arise from changes infloating interest rates, a revised discount rate is used to calculate the present value.
③ Short-term leases and leases of low-value assets
The Company chooses not to recognize right-of-use assets and lease liabilities for short-term leases and low-value asset leases, and includes the relevant lease payments in the current profit and loss or related asset costson a straight-line basis during each period of the lease term. Short-term lease refers to a lease with a lease termof no more than 12 months on the commencement date of the lease term and does not include the option topurchase. Lease of low-value assets refers to a lease with a relatively low value when the single leased asset is abrand new asset. Where a company subleases or expects to sublease leased assets, the original lease does notbelong to low-value asset leases.
④ Lease change
If the lease is changed and the following conditions are met at the same time, the Company will account for thelease change as a separate lease:
? The lease modification expands the scope of the lease by increasing the use rights of one or more
leased assets;
? The increased consideration is equal to the individual price of the extended part of the leased scopeafter adjustment according to the conditions of the contract.
If the lease change is not accounted for as a separate lease, on the effective date of the lease change, theCompany re-allocates the consideration of the changed contract, re-determines the lease term, and calculates thecash value based on the changed lease payment and the revised discount rate to remeasure the lease liability.If the change of the lease results in a reduction in the scope of the lease or a shortening of the lease term, theCompany shall reduce the book value of the right-of-use asset accordingly, and include the relevant gains orlosses related to the partial or complete termination of the lease in the current profit and loss. If other leasechanges lead to the remeasurement of lease liabilities, the Company shall adjust the book value of the right-of-use asset accordingly.
⑤ Rent concessions related to COVID-19 epidemic
For those who adopt the simplified method of rent reduction related to the COVID-19 epidemic, the Companywill not evaluate whether there is a lease change, and continue to calculate the interest expense of the leaseliability at the same discount rate as before the reduction and include it in the current profit and loss. The right-of-use asset is depreciated in the same way as before. In the event of rent reduction or exemption, the Companywill use the reduced or exempt rent as the variable lease payment, and when the original rent paymentobligation is terminated by reaching a reduction agreement, the discounted amount at the undiscounted or pre-reduction discount rate will be used to offset the cost of the relevant assets or expenses, and adjust the leaseliabilities accordingly; if the rent payment is deferred, the Company will offset the lease liabilities recognized inthe previous period when the actual payment is made.
For short-term leases and leases of low-value assets, the Company will continue to include the original contractrent in the cost or expense of the relevant assets in the same way as before the reduction. In case of rentreduction or exemption, the Company will use the reduced rent as the variable lease payment, and offset thecost or expenses of related assets during the reduction or exemption period. The payables confirmed in theprevious period are deducted when the actual payment is made.
2) The Company acts as the lessor
On the commencement date of the lease, the Company classifies leases into finance leases and operating leases.Finance lease refers to a lease that substantially transfers almost all the risks and rewards related to theownership of the leased asset, regardless of whether the ownership is ultimately transferred. Operating leasesrefer to leases other than finance leases. When the Company acts as the lessor of the sublease, it classifies thesublease based on the right-of-use assets arising from the original lease.Accounting for operating leaseThe lease receipts from operating leases are recognized as rental income on a straight-line basis during eachperiod of the lease term. The Company capitalizes the initial direct expenses related to operating leases, andamortizes them in the current profit and loss on the same basis as the recognition of rental income during thelease period. Variable lease payments not included in lease receipts are included in current profit or loss whenactually incurred. If the operating lease is changed, the Company will take it as a new lease for accountingtreatment from the effective date of the change, and the pre-receipt or receivable lease receipts related to thelease before the change will be regarded as the receipts of the new lease.
(2) Accounting Treatment of Finance Lease
1) Accounting treatment of finance lease
On the commencement date of the lease, the Company recognizes the finance lease receivable for the financelease and derecognizes the finance lease assets. When the Company initially measures the receivable financelease, it takes the net lease investment as the entry value of the finance lease receivable. The net leaseinvestment is the sum of the unguaranteed residual value and the present value of the unreceived lease receiptsat the commencement date of the lease period discounted at the interest rate implicit in the lease.The Company calculates and recognizes the interest income in each period of the lease term according to thefixed periodic interest rate. The derecognition and impairment of finance lease receivables shall be accountedfor in accordance with “V.10 Financial Instruments” in this note.Variable lease payments that are not included in the measurement of net lease investment are included incurrent profit or loss when they actually occur.If the financial lease is changed and meets the following conditions at the same time, the Company shall treatthe change as a separate lease for accounting treatment:
? The change expands the scope of the lease by adding the right to use one or more of the leased assets;
? The increased consideration is equal to the individual price of the expanded part of the leased scope after
adjustment according to the conditions of the contract.If the modification of the financial lease is not accounted for as a separate lease, the Company handles themodified lease according to the following circumstances:
? If the change takes effect on the lease commencement date, the lease will be classified as an operating
lease, and the Company will account for it as a new lease from the lease change effective date, and the
lease investment net amount before the lease change becomes effective as the lease the book value of the
asset;? If the change takes effect on the lease commencement date, the lease will be classified as a finance lease,
and the Company will conduct accounting treatment in accordance with the policy on modifying or
renegotiating the contract in “V.10 Financial Instruments” in this note.
2) Rent concessions related to COVID-19 Epidemic
? For operating leases that adopt the simplified method of rent reduction related to the COVID-19 Epidemic,
the Company will continue to recognize the original contract rent as lease income in accordance with the
method before the reduction. The amount of payment shall be offset against the rental income during the
reduction or exemption period; if the rent is deferred, the Company shall recognize the rent payable as an
account receivable during the original collection period, and offset the previously confirmed account
receivable when it is actually received.? For financial leases that adopt the simplified method of rental concessions related to the COVID-19
epidemic, the Company continues to calculate interest at the same discount rate as before the concession
and recognize it as lease income. In the event of rent reduction or exemption, the Company will use the
reduced or exempt rent as the variable lease payment, and when the right to collect the original rent is
waived after reaching a concession agreement, the discounted amount at the undiscounted or pre-reduction
discount rate will offset the originally recognized lease income, the part that is not enough to be offset is
included in investment income, and the financial lease receivables are adjusted accordingly; if the rent is
deferred, the Company will offset the financial lease receivables confirmed in the previous period when it
is actually received.
(3) Sale and leaseback transactions
The Company evaluates and determines whether the asset transfer in the sale and leaseback transaction is a salein accordance with the principles stated in “V.24 Revenue” in this note.
1) As lessee
If the asset transfer in the sale-and-leaseback transaction is a sale, the Company, as the lessee, measures theright-of-use asset formed by the sale-and-leaseback based on the part of the book value of the original assetrelated to the right to use acquired by the leaseback and recognize the relevant gain or loss only for the rightsassigned to the lessor; If the asset transfer in the sale-and-leaseback transaction is not a sale, the Company, as
the lessee, shall continue to recognize the transferred asset and at the same time recognize a financial liabilityequal to the transfer income. For the accounting treatment of financial liabilities, please refer to “V.10 FinancialInstruments" in this note.
2) As lessor
If the asset transfer in the sale-and-leaseback transaction is a sale, the Company, as the lessor, conductsaccounting treatment for the asset purchase, and conducts accounting treatment for the asset lease in accordancewith the policy of "2. The Company as the lessor; If the transfer of assets in a sale-and-leaseback transaction isnot a sale, the Company, as the lessor, does not recognize the transferred asset, but recognizes a financial assetequal to the transfer income. For the accounting treatment of financial assets, please refer to “V.10 FinancialInstruments” in this note.
Accounting Policies Before January 1, 2021Leases are divided into finance leases and operating leases. A financial lease is a lease that substantiallytransfers all the risks and rewards associated with ownership of an asset. Operating leases are leases other thanfinance leases.For rental concessions such as rent reductions and deferred payments that are directly triggered by the newcrown pneumonia epidemic and reached on existing lease contracts, if the following conditions are met at thesame time, the Company applies the simplified approach to all lease options and does not assess whether a leasemodification has occurred or reassess lease classification:
? The lease consideration after the concession is reduced or basically unchanged from that before theconcession, and the lease consideration can be undiscounted or discounted at the discount rate beforethe concession;
? The concession is only for the lease payments payable before June 30, 2021. An increase in the leasepayments payable after June 30, 2021 does not affect the fulfillment of this condition, and a decrease inthe lease payments payable after June 30, 2021 does not meet the condition; and
? After comprehensive consideration of qualitative and quantitative factors, it is determined that there isno significant change in other terms and conditions of the lease.
1) Accounting for operating leases
① The lease fee paid by the Company for leased assets shall be amortized on a straight-line basis during the
entire lease period without deducting the rent-free period, and included in current expenses. The initial directexpenses paid by the Company related to the leasing transaction shall be included in the current expenses.When the asset lessor bears the lease-related expenses that should be borne by the Company, the Companydeducts this part of the expenses from the total rent, and the deducted rent expenses are apportioned during thelease period and included in the current expenses.For operating leases that adopt the simplified method of rental concessions related to the COVID-19 epidemic,the Company will continue to include the original contract rents in the relevant asset costs or expenses in
accordance with the same method as before the concessions. In the event of rent reduction or exemption, theCompany will take the reduced rent as contingent rent and include it in profit or loss during the reduction orexemption period. If the payment of rent is postponed, the Company will recognize the payable rent as anaccount payable during the original payment period, and offset the payable account recognized in the previousperiod when the actual payment is made.
② The lease fees collected by the Company for leasing assets shall be amortized on a straight-line basis over
the entire lease period without deducting the rent-free period, and shall be recognized as lease-related income.The initial direct expenses paid by the Company related to leasing transactions are included in the currentexpenses; if the amount is relatively large, they are capitalized and included in the current income in stages onthe same basis as the recognition of lease-related income throughout the lease period.When the Company bears the lease-related expenses that should be borne by the lessee, the Company deductsthis part of the expenses from the total rental income, and distributes the deducted rental expenses during thelease period. For operating leases that adopt the simplified method of rent reduction related to the new crownpneumonia epidemic, the Company will continue to recognize the original contract rent as lease income inaccordance with the same method as before the reduction; In the event of rent reduction or exemption, theCompany will use the reduced or reduced rent as contingent rent, and offset the rental income during thereduction or exemption period;If the collection of rent is postponed, the Company will recognize the rent payable as an account receivableduring the original collection period, and offset the account receivable confirmed in the previous period when itis actually received.
2) Accounting for finance leases
① Finance leased assets: On the date of commencement of the lease, the Company takes the lower of the fair
value of the leased asset and the present value of the minimum lease payment as the entry value of the leasedasset, and takes the minimum lease payment as the entry value of the long-term payables, the difference isregarded as unrecognized financing expenses. The Company uses the actual interest rate method to amortizeunrecognized financing expenses during the asset lease period and include them in financial expenses. Theinitial direct expenses incurred by the Company shall be included in the value of leased assets.
For financial leases that adopt the simplified method of rental concessions related to the new crown pneumoniaepidemic, the Company will continue to recognize unrecognized financing expenses as current financingexpenses at the same discount rate as before the reduction, continue to depreciate the financial leased assets inaccordance with the same method as before the concession. For the rent reduction or exemption, the Companyregards the rent reduction or exemption as the contingent rent, when the original rent payment obligation isterminated by reaching a concession agreement, it will be included in the current profit and loss, and the long-term payables will be adjusted accordingly, or it will be discounted according to the pre-reduction discount rateand included in the current profit and loss, and the unrecognized financing expenses will be adjusted; if the rentpayment is deferred, the Company will offset the long-term payables confirmed in the previous period when theactual payment is made.
② Assets leased out by finance: On the lease commencement date, the Company recognizes the difference
between the sum of the receivable finance lease, the unguaranteed residual value and its present value asunrealized financing income, and recognizes it as lease income in each period when rent is received in thefuture. The initial direct expenses incurred by the Company related to the leasing transaction shall be includedin the initial measurement of finance lease receivables, and the amount of income recognized during the leaseperiod shall be reduced. For financial leases that adopt the simplified method of rental concessions related to theCOVID-19 epidemic, the Company will continue to recognize unrealized financing income as lease income atthe same lease implicit interest rate as before the concessions. In the event of rent reduction or exemption, theCompany will use the reduced rent as contingent rent, when reaching a concession agreement or giving up theright to collect the original rent, the originally recognized rental income will be offset, and the part not offsetwill be included in investment income, and the long-term receivables will be adjusted accordingly, or it will bediscounted according to the pre-reduction discount rate and included in the current profit and loss and adjust theunrealized financing income; if the rent is deferred, the Company will offset the long-term receivablesconfirmed in the previous period when the actual receipt is actually received.
28. Other Important Accounting Policies and Accounting Estimates
When preparing financial statements, the Company's management needs to use estimates and assumptions,which will affect the application of accounting policies and the amount of assets, liabilities, income andexpenses. Actual results may differ from these estimates. The management of the Company conductscontinuous evaluation on the key assumptions and uncertain factors involved in the estimation, and the impactof changes in accounting estimates is confirmed in the current and future periods of the changes.The main uncertain factors of the estimated amount are as follows:
(1) Measurement of expected credit losses
The Company calculates expected credit losses through default risk exposure and expected credit loss rate, anddetermines expected credit loss rate based on default probability and default loss rate. When determining theexpected credit loss rate, the Company uses data such as internal historical credit loss experience, and adjustshistorical data in combination with current conditions and forward-looking information. In considering forward-looking information, the Company uses indicators including the risk of economic downturn, the expectedincrease in the unemployment rate, changes in the external market environment, technological environment andcustomer conditions, etc. The Company regularly monitors and reviews assumptions related to the calculationof expected credit losses.
(2) Provision for price of inventory decline
As mentioned in “V. (11) Inventories” in this note, the Company regularly estimates the net realizable value ofthe inventory, and recognizes the loss for price of inventory decline for the difference between the inventorycost and the net realizable value. When estimating the net realizable value of inventories, the Companyconsiders the purpose of holding the inventories and uses the available information as the basis for theestimation, including the market price of the inventories and the Company's past operating costs. The actualselling price, cost of completion, sales expenses and taxes of inventories may change with changes in marketsales conditions, production technology or actual use of inventories, so the amount of provision for price of
inventory decline may change due to the above reasons. The adjustment to the provision for price of inventorydecline will affect the profit and loss of the period when the estimate is changed.
(3) Impairment of assets other than inventories and financial assets
As described in “V. (19) Impairment of Long-term Assets" in this note, the Company conducts impairmentassessment on assets other than inventories and financial assets on the balance sheet date to determine whetherthe recoverable amount of the asset has fallen below its book value. Where circumstances indicate that thecarrying amount of a long-term asset may not be recoverable in full, the asset is considered to be impaired andan impairment loss is recognized accordingly.The recoverable amount is the higher of the net amount of the fair value of the asset (or asset group) minus thedisposal costs and the present value of the expected future cash flow of the asset (or asset group). Because theCompany cannot reliably obtain the public market price of the asset (or asset group), and cannot reliably andaccurately estimate the fair value of the asset. Therefore, the Company regards the present value of estimatedfuture cash flow as the recoverable amount. When estimating the present value of future cash flows, it isnecessary to make major judgments on the output, selling price, related operating costs, and discount rate usedin calculating the present value of the asset (or asset group). When estimating the recoverable amount, theCompany will use all available relevant information, including the prediction of production, selling price andrelated operating costs based on reasonable and supportable assumptions.
(4) Depreciation and amortization of assets such as fixed assets and intangible assets
As described in “V. (15) Fixed Assets” and “V. (18) Intangible Assets” in this note, the Company accruesdepreciation and amortization within the useful life of assets such as fixed assets and intangible assets afterconsidering their scrap value. The Company regularly reviews the useful life of the relevant assets to determinethe amount of depreciation and amortization expense to be included in each reporting period. The service life ofassets is determined by the Company based on past experience of similar assets and in combination withexpected technological changes. The depreciation and amortization expense is adjusted in future periods if thereare material changes from previous estimates.
(5) Deferred tax assets
When it is estimated that sufficient taxable income can be obtained in the future period to utilize unrecoveredtax losses and deductible temporary differences, the Company is limited to the amount of taxable income that islikely to be obtained to offset unrecovered tax losses and deductible temporary differences, and calculates andrecognizes the relevant deferred income tax assets on the basis of the applicable income tax rate during theperiod in which the assets are expected to be recovered .The Company needs to use judgment to estimate the time and amount of taxable income to be obtained in thefuture, and make reasonable estimates and judgments on the future applicable income tax rate according to thecurrent tax policy and other relevant policies.
To determine the amount of deferred income tax assets that should be recognized. If there is a differencebetween the time and amount of profit actually generated in the future or the actual applicable income tax rateand the management's estimate, the difference will have an impact on the amount of deferred tax assets.
29. Changes in significant accounting policies and accounting estimates
(1) Significant accounting policy changes
?Applicable □Not applicableContents and reasons for changes in
accounting policies
Approval procedure Notes
adjustment of “Accounting treatment ofdeferred tax related to assets andliabilities arising from a singletransaction not applicable to initialrecognition exemption” of“Interpretation No. 16 of Accounting
| Standards for Business Enterprises” |
Board approval
The Ministry of Finance issued the “Interpretation No. 16 of Accounting Standards for Business Enterprises”(Cai Kuai [2022] No. 31, hereinafter referred to as "Interpretation No. 16") on November 30, 2022, the contentof “Accounting treatment of deferred tax related to assets and liabilities arising from a single transaction notapplicable to initial recognition exemption” will be implemented from January 1, 2023.If the transaction is not a business combination and does not affect accounting profits or taxable income (ordeductible losses), and the initially recognized assets and liabilities result in an equal taxable temporarydifference and a single transaction that can be deducted from the temporary difference (including leasetransactions where the lessee initially recognizes the lease liability on the lease commencement date andincludes it in the right-of-use asset, and transactions in which estimated liabilities are recognized and includedin the cost of related assets due to the obligation to abandon fixed assets, etc., hereinafter referred to asindividual transactions to which this Interpretation applies), Interpretation No. 16 does not apply the provisionsof Article 11 (2) and Article 13 of “Accounting Standards for Business Enterprises No. 18 - Income Taxes” onthe exemption from the initial recognition of deferred income tax liabilities and deferred income tax assets. Forthe taxable temporary difference and deductible temporary difference arising from the initial recognition ofassets and liabilities for the transaction, the enterprise shall recognize the corresponding deferred tax liabilitiesand deferred tax assets when the transaction occurs in accordance with relevant regulations such as “AccountingStandards for Business Enterprises No. 18 - Income Taxes” and other relevant provisions.For a single transaction to which this regulation is applicable that occurs between the beginning of the earliestperiod in which the regulation is first implemented and the date of implementation, and the lease liabilities and
right-of-use assets recognized at the beginning of the earliest period in which the financial statements arepresented due to the application of this regulation, as well as the recognized estimated liabilities andcorresponding related assets of the disposal obligation, where there are taxable temporary differences anddeductible temporary differences, the enterprise shall make adjustments in accordance with this regulation.
(2) Changes in significant accounting estimates
□Applicable ?Not applicable
(3) From 2023 the first implementation of new accounting standards will adjust the situation of the first implementation of
the financial statement items at the beginning of the year
□Applicable?Not applicable
30. Others
Discontinued operation is a separately distinguishable component that meets one of the following conditions,and the component has been disposed of by the Company or classified as held for sale by the Company:
(1) The component represents an independent principal business or a separate principal area of operation;
(2) The component is a part of an associated plan to dispose of an independent main business or a separate main
business area;
(3) This component is a subsidiary acquired exclusively for resale.
Profit and loss from continuing operations and profit and loss from discontinued operations are presentedseparately in the income statement. Operating profit and loss such as impairment loss and reversal amount ofdiscontinued operation and disposal profit and loss are presented as discontinued operation profit and loss. Forthe discontinued operations reported in the current period, the Company re-reported the information originallypresented as continuing operating profit and loss in the current financial statements as the discontinuedoperating profit and loss of the comparable accounting period.
VI. Taxation
1. Major Types of Taxes and Tax Rates
Tax type Tax basis
Value-added Tax(‘VAT’)
Output VATs are calculated based on the sales of goods and taxable service income calculatedaccording to the Tax Law. After deducting the input VATs that are allowed to be deducted in thecurrent period, the difference is the VAT payable.
6%、9%、13%
Tax rate
(%)City maintenance andconstruction tax
Based on actual payment of VAT and consumption tax
7%、5%Corporate income tax
Based on taxable profits
25%
2. Tax Incentives
None.
VII. Notes to Consolidated Financial Statements Items
1. Monetary Funds
Unit: yuanItems Balance as at 30 June 2023 Balance as at 1 January 2023
| Bank deposits | 3,135,535,935.14 | 1,296,662,683.20 |
| Other monetary fund | 521,023,596.93 | 164,482,958.67 |
Total 3,656,559,532.07 1,461,145,641.87
521,023,596.93 164,482,958.67
Other notes:
Among them, there are restrictions on use due to mortgage, pledge or freezing, restrictions on withdrawals dueto centralized management of funds, and details of monetary funds placed overseas and restricted onrepatriation of funds are as follows:
The total amount of funds restricted foruse due to mortgage, pledge or freezing
Items
| Items | Balance as at 30 June 2023 | Balance as at 1 January 2023 |
| Margin for bank acceptance bill | 421,023,596.93 | 163,297,958.67 |
| Margin for letter of credit | 100,000,000.00 | |
| Margin for performance | ||
| Time deposit or notice deposit for guarantee | ||
| Money placed offshore with restrictions on repatriation of funds | ||
| Restricted funds due to centralized management of funds | 1,185,000.00 | |
| Total | 521,023,596.93 | 164,482,958.67 |
2. Notes Receivable
(1) Notes receivable presented by category
Unit: yuanItems Balance as at 30 June 2023 Balance as at 1 January 2023
| Banker's acceptance bill | 20,000.00 | 139,442,122.88 |
| Acceptance bill of finance company | 87,371,995.82 | 290,265,051.82 |
Total 87,391,995.82 429,707,174.70
Unit: yuanIf the bad debt provision for bills receivable is accrued according to the general model of expected credit losses, please refer to thedisclosure method of other receivables to disclose the relevant information of bad debt provision:
□Applicable ?Not applicable
(2) Notes receivable pledged by the company at the end of the period
Unit: yuanItems Amount pledged at the end of the period
| Banker's acceptance bill | 255,189,626.40 |
Total 255,189,626.40
(3) Bills receivable that have been endorsed or discounted by the company at the end of the period and
have not yet expired on the balance sheet date
Unit: yuanItems
| Amount derecognized at the end of the period | Amount not derecognized at the end of the period | |
| Banker's acceptance bill | 5,623,759,903.70 | |
| Acceptance bill of finance company | 82,950,793.43 |
Total 5,623,759,903.70 82,950,793.43
3. Accounts Receivable
(1) Disclosure by aging of accounts receivable
Unit: yuanTypes
Balance as at 30 June 2023 Balance as at 1 January 2023
| Book balance | Bad debt provision |
Book value
| Book balance | Bad debt provision |
Book valueAmount
Amount
| Percentage (%) | Bad debts ratio (%) |
Amount
Amount
| Percentage (%) | Bad debts ratio (%) | |||
| Bad debt provisions |
made on an
367,153,964.12 17.52% 367,153,964.12 100.00% 353,419,325.80 25.82% 353,419,325.80 100.00%
| individual basis | ||||||||||
| Including: |
Bad debt provisionsmade on thecombination
998,981,920.44 73.12% 84,574,258.27 8.47% 914,407,662.17 1,015,413,788.67 74.18% 118,182,892.61 11.64% 897,230,896.06Total1,366,135,884.56 100.00% 451,728,222.39 914,407,662.17 1,368,833,114.47 100.00% 471,602,218.41 897,230,896.06
Bad debt provisions made on an individual basis: RMB 367,153,964.12
Unit: yuanName
Balance as at 30 June 2023Book balance Bad debt provision Bad debts ratio (%)Reason for provision
Metallurgical Charge
| Co., Ltd. |
48,196,244.68 48,196,244.68 100.00%
Discontinued, no returnexpected
(Group) ThirdConstruction
| Engineering Co., Ltd. |
10,613,567.47 10,613,567.47 100.00%
reorganization of theenterprise is expected
| to be irrecoverable | ||
| Benxi Iron and Steel |
(Group) FirstConstruction
3,121,070.85 3,121,070.85 100.00%
| Engineering Co., Ltd. | Bankruptcy and |
reorganization of theenterprise is expected
Huachen Auto GroupHoldings Limited
305,223,081.12 305,223,081.12 100.00%
| to be irrecoverable |
| Bankruptcy and |
reorganization of theenterprise is expected
Total 367,153,964.12 367,153,964.12
Bad debt provisions made on the combination: 106,088,027.72
Unit: yuanName
Balance as at 30 June 2023
to be irrecoverableAccounts receivable
| Accounts receivable | Bad debt provision | Bad debts ratio (%) | |
| Within 1 year | 920,913,586.81 | 9,209,135.87 | 1.00% |
| 1 to 2 years | 865,863.89 | 86,586.39 | 10.00% |
| 2 to 3 years | 2,404,917.15 | 480,983.42 | 20.00% |
| More than 3 years | 74,797,552.59 | 74,797,552.59 | 100.00% |
| Total | 998,981,920.44 | 84,574,258.27 |
Notes to determining the combination basis:
If the bad debt provision for accounts receivable is accrued according to the general model of expected credit losses, please refer tothe disclosure method of other receivables to disclose the relevant information of bad debt provision:
□Applicable ?Not applicable
Disclosure by aging
Unit: yuanAging Balance as at 30 June 2023Within 1 year (including 1 year) 1,633,791,080.62
| 1 to 2 years | 1,943,328.50 |
| 2 to 3 years | 4,684,675.99 |
| More than 3 years | 455,784,820.74 |
3 to 4 years455,784,820.74Total 2,096,203,905.85
(2) The provision for bad debts accrued, reversed or recovered in the current period
Provision for bad debts in this period:
Unit: yuanType
Balance as at 1January 2023
Balance as at30 June 2023Accrued
| Amount changed during the period | |||
| Reversed or recovered | Transferred or written-off | ||
Other changes
bad debts ofaccounts
| receivable |
471,602,218.41 18,426,234.94 1,447,761.08 451,728,222.39
| Total | 471,602,218.41 | 18,426,234.94 | 1,447,761.08 | 451,728,222.39 |
(3) Actual written-off of accounts receivable in the current period
Unit: yuanItems Amount of written-off
| Actual written-off of accounts receivable | 1,447,761.08 |
Important write-off of accounts receivable:
Unit: yuanName of debtor
Nature of accountsreceivable
Amount ofwritten-off
Reason of written-
off
Written-offproceduresperformed
payment isgenerated by a
related party
| transaction | ||
| Jining Forging Center |
Sales of products461,229.33Deregistered
No
| General Manager Office Meeting | ||
| Xuzhou |
JinshanqiaoDevelopment ZoneYongan Metal
Sales of products200,265.48Revoked
General Manager
Office Meeting
No
| Material Co., Ltd. |
| Shanghai Benxi |
Iron and SteelIndustry and Trade
Sales of products193,625.29Deregistered
General ManagerOffice Meeting
No
| Company |
| China Ordnance |
MaterialsNortheastCompany FushunTechnology and
Sales of products155,616.74Revoked
General ManagerOffice Meeting
No
| Trade Center |
| Tonghua Grain and |
Oil Machinery
Sales of products141,139.39Deregistered
General Manager
Office Meeting
No
| Factory |
| Benxi Steel Yantai |
Marketing Co.,
Sales of products138,378.96Deregistered
General ManagerOffice Meeting
No
| Ltd. |
| Shandong |
ZhuchengIndustrial Supplyand Marketing
Sales of products87,085.43Revoked
General Manager
Office Meeting
No
Petroleum PipelineMachinery Product
| Distribution Office |
Sales of products24,608.99Deregistered
General Manager
Office Meeting
No
ZhongtiandaMaterials Industryand Trade Co.,
| Ltd. |
Sales of products20,441.96Deregistered
General Manager
Office Meeting
No
Xinqiangsheng
| Mold Co., Ltd. |
Sales of products12,635.20Deregistered
General Manager
Office Meeting
No
Material
| Distribution Office |
Sales of products7,167.87Revoked
General Manager
Office Meeting
No
ZhaoqingTownshipEnterpriseBuilding Materialsand Minerals
| Company |
Sales of products5,566.44Deregistered
General Manager
Office Meeting
No
| Total | 1,447,761.08 |
(4) The top five units with the ending balance of accounts receivable collected by the debtor
Unit: yuanName of debtor
Book balance as at 30 June
2023
% of the total closing balanceof accounts receivable
Bad debt provision balance as
at 30 June 2023
| The first | 640,621,130.96 | 46.89% | 6,406,211.31 |
| The second | 305,223,081.12 | 22.34% | 305,223,081.12 |
| The third | 76,326,718.36 | 5.59% | 763,267.18 |
| The fourth | 50,834,840.47 | 3.72% | 508,348.40 |
| The fifth | 48,196,244.68 | 3.53% | 48,196,244.68 |
| Total | 1,121,202,015.59 | 82.07% |
4. Accounts Receivable Financing
Unit: yuanItems Balance as at 30 June 2023 Balance as at 1 January 2023
| Notes receivable | 953,938,535.80 | 137,591,996.02 |
Total 953,938,535.80 137,591,996.02Changes in increase and decrease of receivables financing in the current period and changes in fair value:
□Applicable ?Not applicable
If the account receivable financing impairment provision is made according to the general model of expected credit losses, pleaserefer to the disclosure method of other receivables to disclose the relevant information of the impairment provision:
□Applicable ?Not applicable
5. Prepayments
(1) Disclosure by aging of prepayments
Unit: yuanAging
Balance as at 30 June 2023 Balance as at 1 January 2023
| Amount | Percentage | Amount | Percentage | |
| Within 1 year | 932,168,955.31 | 99.42% | 1,235,907,044.32 | 99.10% |
| 1 to 2 years | 5,128,693.51 | 0.55% | 8,892,828.10 | 0.71% |
| 2 to 3 years | 20,696.05 | 2,301,638.78 | 0.18% | |
| More than 3 years | 306,237.13 | 0.03% | 76,237.13 | 0.01% |
Total937,624,582.00
1,247,177,748.33
Explanation on the reasons why the prepayments with an age of more than 1 year and an important amountwere not settled in time:
As of the end of the reporting period, there were no prepayments with an age of more than one year andsignificant amounts.
(2) The top five units of the ending balance of prepayments collected by the debtor
Name of debtor Balance as at 30 June 2023
The first
| % of the total closing balance of prepayments(%) | |
| 104,332,332.83 | 15.62 |
The second
| 103,804,229.89 | 15.54 |
The third
| 88,096,459.67 | 13.19 |
The fourth
| 80,010,275.85 | 11.98 |
The fifth
| 58,014,169.46 | 8.69 |
Total
| 434,257,467.70 | 65.02 |
6. Other Receivables
Unit: yuanItems Balance as at 30 June 2023 Balance as at 1 January 2023Other receivables
| 98,776,833.29 | 127,198,692.92 | |
| Total | 98,776,833.29 | 127,198,692.92 |
(1) Other receivables
1) Disclosure by nature of other receivables
Unit: yuanNature of other receivables Balance as at 30 June 2023 Balance as at 31 December 2022Temporary trading
| 164,622,765.92 | 181,771,075.61 |
Others
| 33,356,356.95 | 9,560,814.07 |
Total 197,979,122.87 191,331,889.68
2) Situation of bad debt provisions
Unit: yuanBad debt provision
| The first stage | The second stage | The third stage |
TotalExpected credit losses
over the next 12
months
over the entire duration(no credit impairment
occurred)
| Expected credit losses | Expected credit loss |
over the entire duration(credit impairment hasoccurred)
December 2022
850,661.71 1,353,672.38 61,928,862.67 64,133,196.76
| Balance as at 31 |
| Balance as at 31 |
December 2022 is inthe current period
second stage
-199,513.15 199,513.15
| -- Transfer to the |
| -- Transfer to the third |
stage
-931,818.80 931,818.80Provision for thisperiod
306,730.06 125,274.81 35,445,003.54 35,877,008.41
period
807,915.59 807,915.59
| Derecognition in this |
| Balance as at 30 June |
2023
957,878.62 746,641.53 97,497,769.42 99,202,289.58Changes in the book balance of loss provisions with significant changes in the current period
□Applicable ?Not applicable
Disclosure by aging
Unit: yuanAging Balance as at 30 June 2023Within 1 year (including 1 year) 95,787,862.39
| 1 to 2 years | 1,920,566.77 |
| 2 to 3 years | 2,772,924.29 |
| More than 3 years | 97,497,769.42 |
3 to 4 years 97,497,769.42
Total197,979,122.87
3) The provision for bad debts accrued, reversed or recovered in the current period
Provision for bad debts in this period:
Unit: yuanType
Balance as at31 December2022
Amount changed during the period
Balance as at30 June 2023Accrued
| Reversed or recovered | Transferred or written-off |
Other changes
bad debts ofother
| receivables |
64,133,196.76 35,877,008.41 807,915.59 99,202,289.58
| Total | 64,133,196.76 | 35,877,008.41 | 807,915.59 | 99,202,289.58 |
4) Other receivables actually written off in the current period
Unit: yuanItems Amount written off
| Other receivables actually written off | 807,915.59 |
Important write-off of other receivables:
Unit: yuanName of debtor
Nature of other
receivables
Amount ofwritten-off
Reason of written-
off
Written-offproceduresperformed
payment isgenerated by a
related party
transaction
| Whether the | ||
| Beijing Bensteel |
Material SalesCenter
Sales of products
807,915.59
Revoked
General Manager
Office Meeting
NoTotal
807,915.59
5) The top five units with the ending balance of other receivables collected by the debtor
Unit: yuanName of debtor
Nature of other
receivables
Balance as at 30June 2023
Aging
closing balance ofother receivables
| % of the total | Provision for bad |
debts as at 30 June
2023The first
payment
14,431,832.25
Within 1 year
7.29% 144,318.32
The second
| Temporary |
| Temporary |
payment
12,212,650.80
Within 1 year
6.17% 122,126.51
The third
payment
4,532,904.80
Within 1 year
2.29% 45,329.05
The fourth
| Temporary |
| Temporary |
payment
4,609,686.93
Within 1 year
2.33% 46,096.87
The fifth
payment
4,399,240.94
Within 1 year
2.22% 43,992.41
Total
40,186,315.72
20.30% 401,863.16
7. Inventories
Does the Company need to comply with the disclosure requirements of the property industry?No
(1) Inventory classification
Unit: yuan
Items
Balance as at 30 June 2023 Balance as at 1 January 2023Book balance
Temporary
Provision for
price of inventorydecline/provisionfor impairment of
contractperformance cost
Book value Book balance
| Provision for | Provision for |
price of inventorydecline/provisionfor impairment of
contractperformance cost
Book value
and mainmaterials
4,361,671,293.63 24,954,852.46 4,334,684,759.94 4,215,260,584.25 24,954,852.46 4,190,305,731.79
| Raw materials |
| Work in progress |
and self-madesemi-finishedproducts
1,776,598,180.55 9,135,627.05 1,760,358,607.69 2,070,182,298.44 18,271,254.09 2,051,911,044.35
1,606,888,537.54 108,797,852.86 1,507,226,311.72 2,236,715,664.20 15,203,965.16 2,221,511,699.04
| Stock goods |
| Total |
7,745,158,011.72 142,888,332.37 7,602,269,679.35 8,522,158,546.89 58,430,071.71 8,463,728,475.18
(2) Provision for price of inventory decline and provision for impairment of contract performance cost
Unit: yuanItems
Balance as at 1January 2023
| Additions in this period | Reductions in this period |
Balance as at30 June 2023Accrued Others
back or written-off
Others
| Transferred | ||
| Raw materials |
and mainmaterials
24,954,852.46 24,954,852.46
progress andself-made semi-finishedproducts
18,271,254.09 9,135,627.05 18,271,254.09 9,135,627.05
| Work in |
| Stock goods |
15,203,965.16 108,797,852.86 15,203,965.16 108,797,852.86
58,430,071.71 117,933,479.91 33,475,219.25 142,888,332.37
8. Other Current Assets
Unit: yuanItems Balance as at 30 June 2023 Balance as at 1 January 2023
TotalPrepaid tax
| Prepaid tax | 408,957.27 | 166,991,140.45 |
| VAT input tax | 38,659,283.83 | 228,449,995.81 |
Total39,068,241.10 395,441,136.26
9. Long-term Equity Investments
Unit: yuanInvestees
Balance as at 1January2023(Book value)
Changes in current period
Balance as at 30June 2023(Bookvalue)
Balance ofprovision forimpairment as at30 June 2023Additionalinvestment
Reducedinvestment
and lossesrecognized underthe equity method
| Investment Gains | Other |
comprehensive
incomeadjustment
Otherequitychanges
or profit
Provision forimpairment
Others
1. Joint ventures
2. Associates
Declaration ofcash dividendsBensteel Baojin
(Shenyang)Automotive NewMaterial TechnologyCo., Ltd.
47,996,314.61 -439,659.59 47,556,655.02
| Bensteel Baojin |
| Zhejiang Jingrui |
Steel Processing Co.,Ltd.
3,034,462.57 -2,740,000.00 -294,462.57Subtotal51,030,777.18 -2,740,000.00 -734,122.16 47,556,655.02Total51,030,777.18 -2,740,000.00 -734,122.16 47,556,655.02
10. Other Equity Instrument Investments
Unit: yuanItems Balance as at 30 June 2023 Balance as at 1 January 2023
Materials Co., Ltd.
3,998,216.04 3,998,216.04
| Equity of Suzhou Longben Metal |
| Equity of Northeast Special Steel Group |
Co., Ltd.
1,016,420,266.27 1,016,420,266.27Total 1,020,418,482.31 1,020,418,482.31
11. Fixed Assets
Unit: yuanItems Balance as at 30 June 2023 Balance as at 1 January 2023
| Fixed assets | 24,254,087,872.28 | 24,836,556,422.90 |
| Disposal of fixed assets | 873,197.46 | |
| Total | 24,254,961,069.74 | 24,836,556,422.90 |
(1) Situation of fixed assets
Unit: yuanItems Property and plant Mechanical equipment
and other equipment
Total
| Transport equipment | ||
| 1 |
．
| Original book value | ||||
| (1) Balance as at 31 |
December 2022
12,443,526,672.94 51,336,275,140.55 598,601,340.47 64,378,403,153.96
period
562,119,788.26 588,245,439.05 890,384.03 1,151,255,611.34
| (2) Additions in this | ||||
| —Purchase | 243,362.83 | 243,362.83 | ||
| —Construction in |
progress transferred in
562,119,788.26 588,245,439.05 647,021.20 1,151,012,248.51
business mergers
| —Increase in |
| (3) Reductions in this |
period
320,593,768.57 783,359,987.04 7,217,992.84 1,111,171,748.45
scrapping
320,593,768.57 783,359,987.04 7,217,992.84 1,111,171,748.45
| —Disposal or |
| (4) Balance as at 30 |
June 2023
12,685,052,692.63 51,141,160,592.56 592,273,731.66 64,418,487,016.85
．
| Accumulated |
depreciation
December 2022
6,322,977,252.32 32,708,591,476.02 416,799,906.76 39,448,368,635.10
| (1) Balance as at 31 |
| (2) Additions in this |
period
313,255,445.84 899,386,391.18 16,612,386.86 1,229,254,223.88
| —Accrued | 313,255,445.84 | 899,386,391.18 | 16,612,386.86 | 1,229,254,223.88 |
| (3) Reductions in this |
period
83,842,247.55 515,897,099.77 5,846,606.81 605,585,954.13
scrapping
83,842,247.55 515,897,099.77 5,846,606.81 605,585,954.13
| —Disposal or |
| (4) Balance as at 30 |
June 2023
6,552,390,450.61 33,092,080,767.43 427,565,686.81 40,072,036,904.85
．
| Provision for |
impairment
December 2022
84,098,414.32 9,379,681.64 93,478,095.96
| (1) Balance as at 31 |
| (2) Additions in this |
period
| —Accrued | ||||
| (3) Reductions in this |
period
849,152.24 266,704.00 1,115,856.24
scrapping
849,152.24 266,704.00 1,115,856.24
| —Disposal or |
| (4) Balance as at 30 |
June 2023
83,249,262.08 9,112,977.64 92,362,239.72
．
| Carrying value |
30 June 2023
6,049,412,979.94 18,039,966,847.49 164,708,044.85 24,254,087,872.28
| (1) Carrying value as at |
| (2) Carrying value as at |
31 December 2022
6,036,451,006.30 18,618,303,982.89 181,801,433.71 24,836,556,422.90
(2) Temporarily idle fixed assets
Unit: yuanItems
value
| Original book | Accumulated |
depreciation
impairment
Book value Notes
| Provision for | |||||
| Property and plant | 219,866,137.05 | 136,754,246.14 | 83,111,890.91 | ||
| Mechanical |
equipment
81,371,079.50 74,206,339.46 5,656,705.72 1,508,034.32
| Total | 301,237,216.55 | 210,960,585.60 | 88,768,596.63 | 1,508,034.32 |
(3) Fixed assets leased out through operating leases
Unit: yuanItems Carrying value as at 30 June 2023
| Property and plant | 1,239,002.14 |
(4) Fixed assets with title certificates not yet completed
Unit: yuanItems Book value
of title
| Reasons for not handling the certificate | ||
| Property and plant | 1,263,898,352.97 | In progress |
(5) Disposal of fixed assets
Unit: yuanItems Balance as at 30 June 2023 Balance as at 1 January 2023
| Mechanical equipment | 873,197.46 | |
| Total | 873,197.46 |
12. Construction in Progress
Unit: yuanItems Balance as at 30 June 2023 Balance as at 1 January 2023Construction in progress 4,151,149,369.23 3,158,195,899.65
Total 4,151,149,369.23 3,158,195,899.65
(1) Situation of construction in progress
Unit: yuanItems
Balance as at 30 June 2023 Balance as at 1 January 2023Book balance
Book value Book balance
| Provision for impairment | Provision for impairment |
Book value
| Special Steel Electric Furnace Upgrading Project | 1,468,183,183.99 | 1,468,183,183.99 | 1,437,078,751.92 | 1,437,078,751.92 | ||
| Special steel rolling mill renovation project | 496,329,489.14 | 496,329,489.14 | 470,182,411.88 | 470,182,411.88 | ||
| Environmental protection transformation of sheet metal raw material yard |
370,260,075.28 370,260,075.28 165,792,014.40 165,792,014.40
| A cold rolling transformation project | 212,176,267.19 | 212,176,267.19 | 90,087,329.61 | 90,087,329.61 | ||
| 566 square meters sintering waste heat utilization project | 92,259,450.24 | 92,259,450.24 | 92,259,450.24 | 92,259,450.24 | ||
| Environmental protection and intelligent upgrading of board material |
yard——Environmental protection renovation project of No. 2 Coal
90,337,806.17 90,337,806.17 19,266.06 19,266.06
| Storage Yard | ||||||
| 1780 production line upgrade | 77,088,750.00 | 77,088,750.00 | ||||
| The ABC and DEF stockyards of the Plate Ironmaking Plant are closed | 69,735,369.56 | 69,735,369.56 | 150,000.00 | 150,000.00 | ||
| Caixi Special Steel Feeding Station of Plate Scrap Steel Plant | 68,245,410.08 | 68,245,410.08 | 51,959,719.57 | 51,959,719.57 | ||
| New tertiary dedusting system for 1#2#3#7# converter in steelmaking plant |
67,696,017.28 67,696,017.28 42,834,455.31 42,834,455.31
50,522,370.80 50,522,370.80 20,249,501.21 20,249,501.21
| Plate company's No. 1 CDQ boiler pressure boost transformation and new No. 34 unit project | ||||||
| The integrated construction of Anben restructuring information system | 49,170,020.61 | 49,170,020.61 | ||||
| Desulfurization Waste Liquid Acid Production Project of Plate Ironmaking Plant |
47,798,252.00 47,798,252.00 30,000.00 30,000.00
| Plate energy centralized control project | 40,945,397.20 | 40,945,397.20 | ||||
| The overall improvement of the production and manufacturing management of Benxi Iron and Steel Co., Ltd. |
39,756,485.12 39,756,485.12 39,756,485.12 39,756,485.12
30,542,546.40 30,542,546.40 27,093,496.08 27,093,496.08
| Benxi Iron and Steel Posco Cold Rolling Quality Improvement Improvement Project |
| Flue gas desulfurization and desulphurization project of 4B and 5 furnace groups of Benxi Steel Plate Ironmaking Plant |
30,342,580.00 30,342,580.00
| Cold-rolled high-strength steel project of cold-rolling general plant | 27,466,133.97 | 27,466,133.97 | ||||
| Bensteel Plate Ironmaking General Plant Nanfen Pipe Concentrate Outbound Supporting Project |
26,722,444.32 26,722,444.32
25,712,793.58 25,712,793.58 9,792,793.58 9,792,793.58
| Relocation and transformation of ladle hot repair station in steelmaking plant | ||||||
| Others | 769,858,526.30 | 769,858,526.30 | 710,910,224.67 | 710,910,224.67 | ||
| Total | 4,151,149,369.23 | 4,151,149,369.23 | 3,158,195,899.65 | 3,158,195,899.65 |
(2) The change of major construction in progress
Unit: yuan
Project name Budget amount
Balance as at 31December 2022
Additions inthis period
Transfer tofixed assets in
this period
Otherdecrease
in
current
period
Balance as at 30
June 2023
ofcumulative
projectinvestment
| to budget |
Projectprogress
Accumulated
amount of
interestcapitalized
Including:
capitalizedamount ofinterest in thecurrent period
Currentinterestcapitalization
rate (%)
Sources of
fundsSpecial SteelElectric Furnace
1,732,481,000.00 1,437,078,751.92 31,104,432.07 1,468,183,183.99 84.74% 84.74% 14,566,446.28 6,489,004.08 FundraisingSpecial steelrolling mill
| Upgrading Project |
| renovation project |
734,730,000.00 470,182,411.88 26,147,077.26 496,329,489.14 67.55% 67.55% 17,363,637.07 4,198,950.69 OthersEnvironmentalprotectiontransformation ofsheet metal raw
1,286,370,000.00 165,792,014.40 204,468,060.88 370,260,075.28 28.78% 28.78% 10,710,578.63 6,408,379.79 OthersA cold rollingtransformationproject
843,640,000.00 90,087,329.61 122,088,937.58 212,176,267.19 25.15% 25.15% 10,565,776.04 4,688,814.80 Others566 square meterssintering wasteheat utilization
material yardproject
1,247,841,000.00 92,259,450.24 92,259,450.24 7.39% 7.39% 68,627,433.26 OthersEnvironmentalprotection andintelligentupgrading ofboard materialyard——Environmentalprotectionrenovation projectof No. 2 Coal
| project |
| Storage Yard |
310,000,000.00 19,266.06 90,318,540.11 90,337,806.17 29.14% 29.14% Others
1780 production
193,000,000.00 77,088,750.00 77,088,750.00 39.94% 39.94% OthersThe ABC andDEF stockyardsof the PlateIronmaking Plantare closed
125,000,000.00 150,000.00 69,585,369.56 69,735,369.56 55.79% 55.79% OthersCaixi SpecialSteel FeedingStation of Plate
line upgradeScrap Steel Plant
118,453,701.00 51,959,719.57 26,633,367.20 10,347,676.69 68,245,410.08 66.35% 66.35% OthersNew tertiarydedusting systemfor 1#2#3#7#converter in
| Scrap Steel Plant |
| steelmaking plant |
111,310,000.00 42,834,455.31 36,432,354.59 11,570,792.62 67,696,017.28 71.21% 71.21% 2,357,404.64 1,397,589.10 OthersPlate company'sNo. 1 CDQ boilerpressure boosttransformationand new No. 34
93,270,000.00 20,249,501.21 30,272,869.59 50,522,370.80 54.17% 54.17% OthersThe integratedconstruction ofAnbenrestructuringinformationsystem
232,100,000.00 49,170,020.61 49,170,020.61 21.18% 21.18% 3,961,087.97 2,115,020.61 OthersDesulfurizationWaste LiquidAcid ProductionProject of Plate
unit projectIronmaking Plant
99,760,000.00 30,000.00 47,768,252.00 47,798,252.00 47.91% 47.91% OthersPlate energycentralized
| Ironmaking Plant |
| control project |
119,730,000.00 40,945,397.20 40,945,397.20 34.20% 34.20% Others
The overallimprovement ofthe productionandmanufacturingmanagement ofBenxi Iron and
56,000,000.00 39,756,485.12 39,756,485.12 70.99% 70.99% Others
Benxi Iron andSteel Posco ColdRolling QualityImprovementImprovementProject
69,820,000.00 27,093,496.08 3,449,050.32 30,542,546.40 43.74% 43.74% OthersFlue gasdesulfurizationanddesulphurizationproject of 4B and5 furnace groupsof Benxi SteelPlate Ironmaking
Steel Co., Ltd.Plant
120,679,500.00 30,342,580.00 30,342,580.00 25.14% 25.14% Others
Cold-rolled high-strength steelproject of cold-rolling general
| Plant |
| plant |
6,169,170,000.00 27,466,133.97 27,466,133.97 0.45% 0.45% 867,286,087.53 OthersBensteel PlateIronmakingGeneral PlantNanfen PipeConcentrateOutboundSupporting
49,553,200.00 26,722,444.32 26,722,444.32 53.93% 53.93% Others
Relocation andtransformation ofladle hot repairstation in
31,160,000.00 9,792,793.58 15,920,000.00 25,712,793.58 82.52% 82.52% OthersTotal 13,744,068,401.00 2,447,285,674.98 955,923,637.26 21,918,469.31 3,381,290,842.93 995,438,451.42 25,297,759.07
13. Right-of-use Assets
Unit: yuanItems Land Property and plant Total
．
| Original book value | |||
| (1) Balance as at 31 |
December 2022
1,132,274,415.17 368,465,367.56 1,500,739,782.73
| (2) Additions in this period | |||
| (3) Reductions in this period | |||
| (4) Balance as at 30 June |
2023
1,132,274,415.17 368,465,367.56 1,500,739,782.73
．
| Accumulated depreciation | |||
| (1) Balance as at 31 |
December 2022
79,808,472.44 40,940,596.40 120,749,068.84
| (2) Additions in this period | 19,952,118.12 | 10,235,149.14 | 30,187,267.26 |
| —Accrued | 19,952,118.12 | 10,235,149.14 | 30,187,267.26 |
| (3) Reductions in this period | |||
| —Disposal | |||
| (4) Balance as at 30 June |
2023
99,760,590.56 51,175,745.54 150,936,336.10
．
| Provision for impairment | |||
| (1) Balance as at 31 |
December 2022
| (2) Additions in this period | |||
| —Accrued | |||
| (3) Reductions in this period | |||
| —Disposal | |||
| (4) Balance as at 30 June |
2023
．
| Carrying value | |||
| (1) Carrying value as at 30 |
June 2023
1,032,513,824.61 317,289,622.02 1,349,803,446.63
December 2022
1,052,465,942.73 327,524,771.16 1,379,990,713.89
14. Intangible Assets
(1) Situation of intangible assets
Unit: yuanItems Land use rights Patent right
Unpatentedtechnology
Software andothers
Total
．
| Original book value |
336,885,314.76 267,948.72 337,153,263.48
| (1) Balance as at 31 December 2022 |
| (2) Additions in this period |
| —Purchase | |||||
| —Internal |
research and
| development |
| —Increase in business mergers |
| (3) Reductions in this period | |||||
| —Disposal | |||||
| (4) Balance as at 30 June 2023 |
336,885,314.76 267,948.72 337,153,263.48
．
| Accumulated depreciation |
74,208,486.41 159,839.66 74,368,326.07
| (1) Balance as at 31 December 2022 |
| (2) Additions in this period |
3,025,608.41 13,397.46 3,039,005.87
| —Accrued | 3,025,608.41 | 13,397.46 | 3,039,005.87 | ||
| (3) Reductions in this period |
| —Disposal | |||||
| (4) Balance as at 30 June 2023 |
77,234,094.82 173,237.12 77,407,331.94
．
| Provision for impairment |
| (1) Balance as at 31 December 2022 |
| (2) Additions in this period |
| —Accrued | |||||
| (3) Reductions in this period |
| —Disposal | |||||
| (4) Balance as at 30 June 2023 |
．
| Carrying value | |||||
| (1) Carrying value as at 30 June 2023 |
259,651,219.94 94,711.60 259,745,931.54
as at 31 December
| 2022 |
262,676,828.35 108,109.06 262,784,937.41
(2) Situation of land use rights without title certificates
Unit: yuanItems Book value
of title
| Reasons for not handling the certificate | ||
| Land use rights | 38,743,466.68 | In progress |
| Total | 38,743,466.68 |
15. Deferred Tax Assets / Deferred Tax Liabilities
(1) Deferred tax assets not offset
Unit: yuanItems
Balance as at 30 June 2023 Balance as at 1 January 2023
differences
Deferred tax assets
| Deductible temporary | Deductible temporary |
differences
Deferred tax assets
impairment of assets
518,167,260.88 129,541,815.22 396,834,109.83 99,208,527.46
| Provision for |
| Unrealized profits from |
internal transactions
859,549.28 214,887.32 80,751,325.52 20,187,831.38
of other financial assetsincluded in othercomprehensive income
21,315,582.72 5,328,895.68 21,315,582.73 5,328,895.68
| Changes in fair value |
| Lease liabilities |
1,349,803,446.64
337,450,861.66
1,379,990,713.88
344,997,678.47
| Others |
51,701,085.40
12,925,271.35
46,650,523.04
11,662,630.76
| Total |
1,941,846,924.92
485,461,731.23
1,925,542,255.00
481,385,563.75
(2) Deferred tax liabilities not offset
Unit: yuanItems
Balance as at 30 June 2023 Balance as at 1 January 2023
differences
Deferred tax liabilities
| Taxable temporary | Taxable temporary |
differences
Deferred tax liabilities
1,349,803,446.63 337,450,861.66 1,379,990,713.89 344,997,678.47
| Right-of-use assets |
| Changes in fair value |
of other financial assetsincluded in othercomprehensive income
109,236.04 27,309.01 109,236.04 27,309.01
1,349,912,682.67 337,478,170.67 1,380,099,949.93 345,024,987.48
(3) Deferred tax assets or liabilities presented in net amount after offset
Unit: yuanItems
Offsetting amount ofdeferred tax assets andliabilities
Balance of deferred taxassets or liabilities afteroffset as at 30 June2023
Offsetting amount ofdeferred tax assets andliabilities
Balance of deferred taxassets or liabilities afteroffset as at 1 January
2023
337,450,861.66 148,010,869.57 344,997,678.47 136,387,885.28
| Deferred tax assets |
| Deferred tax liabilities |
337,450,861.66 27,309.01 344,997,678.47 27,309.01
(4) Details of unrecognized deferred tax assets
Unit: yuanItems Balance as at 30 June 2023 Balance as at 1 January 2023
305,227,125.75 305,224,166.01
| Deductible temporary difference |
| Deductible loss |
2,599,959,695.35 1,349,817,349.12
2,905,186,821.10 1,655,041,515.13
(5) Deductible losses for unrecognized deferred tax assets will expire in the following years
Unit: yuanYear Balance as at 30 June 2023
TotalBalance as at 31 December
2022
Notes
| Balance as at 31 December 2022 | |||
| Year 2023 | 4,678,743.89 | 6,836,473.11 | |
| Year 2024 | 12,164,389.35 | 12,164,389.35 | |
| Year 2025 | 8,257,832.98 | 8,257,832.98 | |
| Year 2026 | 6,799,314.77 | 6,799,314.77 | |
| Year 2027 | 1,315,759,338.91 | 1,315,759,338.91 | |
| Year 2028 | 1,252,300,075.45 | ||
| Total | 2,599,959,695.35 | 1,349,817,349.12 |
16. Other Non-current Assets
Unit: yuanItems
Balance as at 30 June 2023 Balance as at 1 January 2023Book balance
impairment
Book value Book balance
| Provision for | Provision for |
impairment
Book value
for long-termassets
349,815,196.20 349,815,196.20 110,065,560.68 110,065,560.68
| Prepayments |
| Total |
349,815,196.20 349,815,196.20 110,065,560.68 110,065,560.68
17. Short-term Borrowings
(1) Classification of short-term borrowings
Unit: yuanItems Balance as at 30 June 2023 Balance as at 1 January 2023
| Credit loan | 300,000,000.00 | |
| Discounted undue notes | 20,000.00 | 49,200,000.00 |
| Total | 300,020,000.00 | 49,200,000.00 |
18. Notes Payable
Unit: yuanTypesBalance as at 30 June 2023 Balance as at 1 January 2023
| Banker's acceptance bill | 750,527,835.47 | 1,407,117,263.33 |
| Commercial acceptance bill | 4,929,414,404.12 | 2,242,219,356.03 |
| Domestic letter of credit | 2,040,000,000.00 | 740,000,000.00 |
| Total | 7,719,942,239.59 | 4,389,336,619.36 |
19. Accounts Payable
(1) Details of accounts payable
Unit: yuanItems Balance as at 30 June 2023 Balance as at 1 January 2023
| Accounts payable | 3,394,258,784.62 | 2,650,335,777.91 |
| Service | 174,409,816.97 | 60,238,703.49 |
| Payables for engineering and equipment | 299,798,220.11 | 767,867,762.87 |
| Repair costs and others | 224,428,703.69 | 217,978,219.58 |
| Total | 4,092,895,525.39 | 3,696,420,463.85 |
(2) Important accounts payable aged over 1 year
Unit: yuanItems Balance as at 30 June 2023
| Reasons for non-payment or carryover | ||
| The first |
9,014,897.80
| Billing conditions have not been met | ||
| The second |
4,193,831.29
| Billing conditions have not been met | ||
| The third |
4,091,809.05
| Billing conditions have not been met | ||
| The fourth |
3,127,924.07
| Billing conditions have not been met | ||
| The fifth |
1,342,440.00
| Billing conditions have not been met | ||
| Total |
21,770,902.21
20. Contract Liabilities
Unit: yuanItems Balance as at 30 June 2023 Balance as at 1 January 2023
3,733,739,770.22 3,794,115,592.29
| Advances from customers | ||
| Total | 3,733,739,770.22 | 3,794,115,592.29 |
21. Employee Benefits Payable
(1) Employee benefits payable presentation
Unit: yuanItems
Balance as at 1 January
2023
Additions in this period
Reductions in this
period
Balance as at 30 June
2023
benefits
10,046,363.27 1,101,071,973.76 1,098,165,873.06 12,952,463.97
| I. Short-term employee |
| II. Post-employment |
benefits - definedcontribution plans
138,804,290.70 138,804,290.70
benefits
8,183,513.99 8,183,513.99Total 10,046,363.27 1,248,059,778.45 1,245,153,677.75 12,952,463.97
(2) Short-term employee benefits presentation
Unit: yuanItems
Balance as at 1 January
2023
Additions in this period
Reductions in this
period
Balance as at 30 June
2023
III. TerminationI. Salaries, bonus,
allowances and
| subsidies |
794,299,383.08 794,299,383.08
| II. Staff welfare | 93,936,208.17 | 93,936,208.17 | ||
| III. Social insurances | 95,670,156.88 | 95,670,156.88 | ||
| Including: Medical insurance |
73,981,150.79 73,981,150.79
21,678,022.69 21,678,022.69
| Work-related injury insurance |
| Maternity insurance |
10,983.40 10,983.40
| IV. Housing Fund | 6,622,309.00 | 95,210,946.00 | 95,210,946.00 | 6,622,309.00 |
| V. Labor union fees, |
staff and workers’
3,424,054.27 21,955,279.63 19,049,178.93 6,330,154.97Total10,046,363.27 1,101,071,973.76 1,098,165,873.06 12,952,463.97
(3) Defined contribution plans presentation
Unit: yuanItems
Balance as at 1 January
2023
Additions in this period
Reductions in this
period
Balance as at 30 June
2023
134,565,282.08 134,565,282.08
| I. Basic pension |
| II. Unemployment |
insurance
4,239,008.62 4,239,008.62Total 138,804,290.70 138,804,290.70
22. Taxes and Surcharges Payable
Unit: yuanItems Balance as at 30 June 2023 Balance as at 1 January 2023
66,496,383.29 5,168,511.13
| VAT |
| Corporate income tax |
12,274,395.43 11,469,020.92
783,980.67 2,546,699.73
| Individual income tax |
| City maintenance and construction tax |
1,660,244.53 175,567.61
6,901,254.66 3,785,986.96
| Property tax |
| Educational surcharge |
1,220,343.26 125,405.40
1,049,336.05 1,051,651.99
| Land use tax |
| Others |
16,057,391.23 20,070,077.04
106,443,329.12 44,392,920.78
23. Other Payables
Unit: yuanItems Balance as at 30 June 2023 Balance as at 1 January 2023
TotalOther payables
| Other payables | 1,639,486,201.24 | 1,247,722,165.47 |
| Total | 1,639,486,201.24 | 1,247,722,165.47 |
(1) Other payables
1) Other payables by nature
Unit: yuanItems Balance as at 30 June 2023 Balance as at 1 January 2023
| Deposit | 869,292.00 | 2,303,050.00 |
| Margin | 317,146,084.62 | 290,353,044.56 |
| Accounts | 1,108,631,647.65 | 941,440,196.32 |
| Others | 212,839,176.97 | 13,625,874.59 |
| Total | 1,639,486,201.24 | 1,247,722,165.47 |
24. Non-current Liabilities Maturing within One Year
Unit: yuanItems Balance as at 30 June 2023 Balance as at 1 January 2023
1,572,461,117.60 2,501,169,854.72
| Long-term borrowings maturing within one year | ||
| Bonds payable maturing within one year | 44,762,324.73 | |
| Lease liability maturing within one year | 40,740,341.21 | 40,318,706.98 |
| Total | 1,613,201,458.81 | 2,586,250,886.43 |
25. Other Current Liabilities
Unit: yuanItems Balance as at 30 June 2023 Balance as at 1 January 2023
| Output tax to be transferred | 485,575,516.40 | 493,235,027.03 |
| Total | 485,575,516.40 | 493,235,027.03 |
26. Long-term Borrowings
(1) Long-term loans presented by category
Unit: yuanItems Balance as at 30 June 2023 Balance as at 1 January 2023
| Guaranteed loans | 360,780,612.70 | |
| Credit loans | 959,713,911.60 | 1,366,157,689.60 |
| Total | 959,713,911.60 | 1,726,938,302.30 |
27. Bonds Payable
(1) Details of bonds payable
Unit: yuanItems Balance as at 30 June 2023 Balance as at 1 January 2023
| Convertible bonds | 5,382,304,119.20 | 5,276,502,232.78 |
| Total | 5,382,304,119.20 | 5,276,502,232.78 |
(2) Changes in bonds payable (Excluding other financial instruments such as preferred stocks and perpetual bonds classified as financial liabilities)
Unit: yuanName ofbond
Face value Issue date
Term tomaturity
Issuance amount
Balance as at 31December 2022
Currentissue
Interestaccrued atface value
Premium anddiscountamortization
Repaymentthis period
to stock
thisperiod
Balance as at 30June 2023
| Convert | ||
| Bengang |
ConvertibleBonds(Code ofbond:
127018)
6,800,000,000.00 2020/6/29 6 years 6,800,000,000.00 5,276,502,232.78 42,232,875.75 148,044,762.17 10,000.00 5,382,304,119.20
6,800,000,000.00 5,276,502,232.78 42,232,875.75 148,044,762.17 10,000.00 5,382,304,119.20
(3) Description of the conditions and time for conversion of convertible bonds
Approved by Shenzhen Stock Exchange "Shen Zheng Shang [2020] No. 656", the Company’s RMB 6.80billion convertible corporate bonds were listed on the Shenzhen Stock Exchange on August 4, 2020, and theabbreviation 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 theconvertible corporate bonds (July 3, 2020) to the maturity date of the convertible corporate bonds, that is, fromJanuary 4, 2021 to June 28, 2026. The initial conversion price of the convertible bonds is RMB 5.03 per share.During the period from January 1, 2021 to December 31, 2021, the Company's A-share convertible bonds ofRMB 1,168,855,400.00 were converted into the Company's A-share ordinary shares, and the number ofconverted shares was 232,819,847 shares. Of which:
In the first quarter of 2022, Bengang's convertible bonds decreased by RMB 67,000.00 (670 bonds) due to shareconversion, the number of shares converted was 14,698 shares, and the conversion price was RMB 4.55 pershare;In the second quarter of 2022, Bengang's convertible bonds decreased by RMB 13,200.00 (132 bonds) due toshare conversion, the number of shares converted was 3,029.00 shares, and the conversion price was RMB 3.95per share;In the third quarter of 2022, Bengang's convertible bonds decreased by RMB 9,300.00 (93 bonds) due to shareconversion, the number of shares converted was 2,352 shares, and the conversion price was RMB 3.95 per share;In the fourth quarter of 2022, Bengang's convertible bonds decreased by RMB 3,000.00 (30 bonds) due to shareconversion, the number of shares converted was 759 shares, and the conversion price was RMB 3.95 per share;In the first quarter of 2023, Bengang's convertible bonds decreased by RMB 4,000.00 (40 bonds) due to shareconversion, the number of shares converted was 1,012 shares, and the conversion price was RMB 3.95 per share;In the second quarter of 2023, Bengang's convertible bonds decreased by RMB 6,000.00 (60 bonds) due toshare conversion, the number of shares converted was 1,518 shares, and the conversion price was RMB 3.95 pershare;As at June 30, 2023, the Company's remaining balance of convertible bonds was RMB 5,631,042,100.00(56,310,421 bonds).
(4) Notes to other financial instruments classified as financial liabilities
Basic information on preferred shares, perpetual bonds and other financial instruments issued at the end of theperiodNone.
28. Lease Liabilities
Unit: yuanItems Balance as at 30 June 2023 Balance as at 1 January 2023
| Lease payments | 2,186,301,130.48 | 2,191,946,735.27 |
| Unrecognized financing charges | -781,227,266.14 | -767,279,566.11 |
| Reclassified to non-current liabilities due |
within one year
-40,740,341.21 -40,318,706.98
| Total | 1,364,333,523.13 | 1,384,348,462.18 |
29. Deferred Income
Unit: yuanItems
Balance as at 1January 2023
Additions in this
period
Reductions in this
period
Balance as at 30
June 2023
Reasons
| Government grant | 42,377,015.51 | 850,000.00 | 1,839,198.73 | 41,387,816.78 | Government grant |
| Total | 42,377,015.51 | 850,000.00 | 1,839,198.73 | 41,387,816.78 |
Projects related to government grants:
Unit: yuanLiabilities items
Balance as at 1January 2023
New subsidyamount in thisperiod
in non-operatingincome in thecurrent period
Amount includedin other income inthe current period
| Amount included | Amount of |
offsetting costsand expenses inthe current period
Otherchanges
Balance as at 30
June 2023
Asset-related/Revenue-related
generation high-strength steel forautomobiles
1,160,000.00 290,000.00 870,000.00
Asset-related
| Research and development of the third- |
| Carbon fiber wastewater advanced |
treatment project in Dongfeng plant areaof sheet metal coking plant
5,700,000.00 950,000.00 4,750,000.00
Asset-related
of coal-fired boiler in high-voltageworkshop of Benxi Iron and Steel PowerPlant
2,400,000.00 300,000.00 2,100,000.00
Asset-related
| Desulfurization and denitrification project |
| Air Pollution Prevention and Control Fund |
- Second Sintering Cleaning and DustRemoval Ultra-low EmissionTransformation Project
1,230,000.00 205,000.00 1,025,000.00
Asset-related
Manufacturing and Strengthening theProvince
8,100,000.00 8,100,000.00
Asset-related
| 2021 Special Fund Project for Intellectual |
| 2021 Benxi City Expert Talent and |
Enterprise Docking Project
5,000.00 5,000.00
Asset-related
Energy Conservation and CarbonReduction Special Project (Converter GasRecovery and Efficiency ImprovementTransformation Project)
1,500,000.00 44,117.65 1,455,882.35
Asset-related
Fees
77,297.51 81.08 77,216.43
Asset-related
| 2021 Municipal Skillmaster Workstation |
| 2018 Liaoning Provincial "Hundred |
Thousands of Talents Project" FundingProject
220,000.00 220,000.00
Asset-related
Fees
58,766.34 58,766.34
Asset-related
| 2018 Municipal Skillmaster Workstation |
| 2019 Municipal Skillmaster Workstation |
Fees
69,500.19 69,500.19
Asset-related
construction project (special steel electricfurnace upgrade project)
20,000,000.00 20,000,000.00
Asset-related
| 2020 special ecological civilization |
| Liaoning Artisan Subsidy |
2.97 2.97
| Asset-related | ||
| Effect mechanism and control of rare earth |
oxysulfide on the plasticity of automobilesteel
334,448.50 334,448.50
Asset-related
slag system and research on its physicaland chemical properties
340,000.00 340,000.00
Revenue-related
| Design of rare earth steel metallurgical |
| Provincial Science and Technology |
Department National Natural ScienceFoundation of China-Liaoning ProvincialGovernment Joint Fund Project
334,000.00 334,000.00
Revenue-
related
Fees
200,000.00 200,000.00
| 2019 Provincial Skill Master Workstation | Revenue- |
related
Fees
100,000.00 100,000.00
| 2020 Provincial Skillmaster Workstation | Revenue- |
related
composite iron coke low-carbonironmaking charge
168,000.00 168,000.00
Revenue-
related
of Liaoning Provincial CentralGovernment Guidance for Local Scienceand Technology Development Funds
300,000.00 300,000.00
Revenue-
related
| 2021 the second batch of planned projects |
| 2020 Liaoning Provincial "Hundred |
Thousands of Talents Project" FundingProject
50,000.00 50,000.00
Revenue-
related
Department 2022 Liaoning ProvincialNatural Science Foundation Project Fund
30,000.00 30,000.00
Revenue-
related
| Provincial Science and Technology |
| 2022 Liaoning will become a strong |
province with digital intelligence
300,000.00 300,000.00
related
| Revenue- | ||
| Municipal enterprise operation patent |
navigation project funding subsidy
200,000.00 200,000.00
related
| Revenue- | ||
| Xingliao Talents Program government |
subsidy
350,000.00 350,000.00
related
30. Share Capital
Unit: yuanItems
Balance as at 1January 2023
Balance as at 30
June 2023Issuance ofnew shares
Bonusshares
| Changes in the current period increase (+) decrease (-) | ||
| Provident fund | ||
converted into
Others Subtoal
| share | ||
| Total shares |
4,108,212,217.00 2,530.00 2,530.00 4,108,214,747.00
Other notes:
The increase in this period is due to the conversion of A-share convertible bonds issued by the Company into2,530.00 A-share ordinary shares. Please refer to Note VII. (27) Bonds Payable for details.
31. Other Equity Instruments
(1) Basic information on other financial instruments such as gold preferred shares and perpetual bonds issued outside at the end of the period
Other equity instruments at the end of the period are the equity part of convertible corporate bonds. For the basic information of convertible corporate bonds, pleaserefer to Note VII. (27) Bonds Payable.
(2) Changes in financial instruments such as preferred stocks and perpetual bonds issued at the end of the period
Unit: yuanFinancial instruments issued outside
1 January 2023 Additions in this period Reductions in this period30 June 2023
| Number | Book value | Number | Book value | Number | Book value | Number | Book value | |
| Convertible bonds | 56,310,521.00 | 947,863,834.02 | 100.00 | 2,035.66 | 56,310,421.00 | 947,861,798.36 |
Total 56,310,521.00 947,863,834.02 100.00 2,035.66 56,310,421.00 947,861,798.36
The increase and decrease of other equity instruments in the current period, the reasons for the changes, and the basis for relevant accounting treatment:
A total of RMB 10,000.00 (100 bonds) of A-share convertible bonds issued by the Company were converted into ordinary A-shares of the Company during theperiod. As of June 30, 2023, the Company's remaining convertible bond balance is RMB 5,631,042,100.00 (56,310,421 bonds). For details, please refer to Note VII.
(27) Bonds Payable.
32. Capital Reserves
Unit: yuanItems
Balance as at 1 January
2023
Additions in this period
Reductions in this
period
Balance as at 30 June
2023
(Equity premium)
13,156,287,691.39 7,397.04 13,156,295,088.43
| Capital premium | ||||
| Other capital reserves | 115,917,468.82 | 115,917,468.82 | ||
| Total | 13,272,205,160.21 | 7,397.04 | 13,272,212,557.25 |
Other notes, including the increase and decrease in the current period, and explanations for the reasons for thechanges:
The increase in capital premium is due to the conversion of convertible bonds into the Company’s A-shareordinary shares.
33. Other Comprehensive Income
Unit: yuan
Items
Balance as at 1January 2023
Current period
Balance as at 30June 2023Amount beforeincome tax in the
current period
Less: included in
othercomprehensiveincome in theprevious periodand transferred to
profit or loss inthe current period
othercomprehensiveincome in theprevious periodand transferred toretained earnings
in the current
| period |
Less: income tax
expense
Attributable to the
parent company
after tax
Attributable to
minorityshareholders after
tax
comprehensiveincome that willnot be reclassifiedinto profits and
| losses |
-15,904,760.02 -15,904,760.02
value of otherequity instrument
| investments |
-15,904,760.02 -15,904,760.02
comprehensive
| income |
-15,904,760.02 -15,904,760.02
34. Special Reserves
Unit: yuanItems
Balance as at 1 January
2023
Additions in this period
period
Balance as at 30 June
2023
| Reductions in this | ||||
| Safety production fee | 2,217,913.77 | 34,099,757.81 | 7,307,318.69 | 29,010,352.89 |
| Total | 2,217,913.77 | 34,099,757.81 | 7,307,318.69 | 29,010,352.89 |
35. Surplus Reserves
Unit: yuanItems
Balance as at 1 January
2023
Additions in this period
period
Balance as at 30 June
2023
| Reductions in this | ||
| Statutory surplus reserves |
1,195,116,522.37 1,195,116,522.37
1,195,116,522.37
| Total |
1,195,116,522.37
36. Undistributed Profits
Unit: yuanItemsCurrent period Previous period
Undistributed profit at the end of theprevious year before adjustment
-720,559,670.73 2,977,306,297.64
| Undistributed profit at the end of the previous year before adjustment |
| Adjust the total undistributed profit at the |
beginning of the year (increase +,
| decrease -) |
| Adjusted undistributed profit at the beginning of the year |
-720,559,670.73 2,977,306,297.64
-1,004,945,623.68 -1,232,976,557.37
| Add: Net profit attributable to owners of the parent company in the current period |
| Less: Provision of statutory surplus reserve |
25,416.40
2,464,914,827.40
| Dividends payable on common stock |
| Undistributed profit at the end of the period |
-1,725,505,294.41 -720,559,670.73
Adjustment of undistributed profit details at the beginning of the period: due to the retrospective adjustment ofthe “Accounting Standards for Business Enterprises” and related new regulations, the undistributed profit at thebeginning of the period was affected by RMB 10,592,129.13.
37. Operating Income and Operating Costs
Unit: yuanItems
Current period Previous period
| Revenue | Costs | Revenue | Costs | |
| Principal business |
30,178,980,302.2130,346,840,599.3333,109,977,666.90 31,509,788,033.31
388,428,902.82367,800,364.581,905,199,638.08 1,867,689,507.32
| Other business |
| Total |
30,567,409,205.0330,714,640,963.9135,015,177,304.98 33,377,477,540.63
Details of operating income:
Unit: yuan
| Contract classification | Principal business income | Other business income | Total |
| Classified by business area |
30,178,980,302.21 388,428,902.82 30,567,409,205.03
| Including: |
| Domestic |
26,612,052,408.77 388,428,902.82 27,000,481,311.59
3,566,927,893.44 3,566,927,893.44
| Abroad |
| Total |
30,178,980,302.21 388,428,902.82 30,567,409,205.03
commodity transfer
Including:
| Classified by the time of | |||||
| Recognized at a certain point |
in time
30,178,980,302.21 387,065,834.86 30,566,046,137.07
period of time
1,363,067.96 1,363,067.96Total30,178,980,302.21 388,428,902.82 30,567,409,205.03
Information related to performance obligations:
NoneInformation related to the transaction price allocated to the remaining performance obligations:
At the end of the reporting period, the amount of income corresponding to the performance obligations thathave been signed but not yet fulfilled or not fully fulfilled is 0.00 yuan.
38. Tax and surcharges
Unit: yuanItems Current period Previous period
Recognized over a certainCity maintenance and construction tax
| City maintenance and construction tax | 6,576,796.79 | 4,726,087.15 |
| Educational surcharge | 4,800,732.70 | 3,554,726.34 |
| Housing property tax | 40,884,994.48 | 40,822,272.51 |
| Land use right tax | 6,075,969.40 | 6,847,915.75 |
Stamp duty30,849,463.63 32,496,146.38
| Environmental tax | 9,527,874.78 | 11,411,384.22 |
| Others | 324,845.97 | 26,912.88 |
Total 99,040,677.75 99,885,445.23
39. Selling Expenses
Unit: yuanItems Current period Previous period
| Import and export agency fee | 21,131,652.66 | 36,702,096.00 |
| Salary and benefits | 37,771,652.79 | 18,244,427.10 |
| Package fee | 4,973,464.77 | |
| Others | 9,615,841.56 | 7,510,887.30 |
| Sales service fee | 1,382,736.23 | |
| Total | 69,901,883.24 | 67,430,875.17 |
40. Administrative Expenses
Unit: yuanItems Current period Previous period
| Employee's salaries | 206,440,312.89 | 149,216,492.01 |
| Repair expenses | 298,281.38 | 105,587,548.07 |
| Heating costs | 34,042,689.20 | 19,965,273.48 |
| Depreciation | 19,462,599.70 | 22,309,498.45 |
| land use fees | 1,322,782.02 | 19,696,001.68 |
| Environmental protection fees | 4,442,540.02 | 1,099,369.60 |
| Water resources fees | 16,331,031.46 | 3,176,610.83 |
| Others | 57,228,784.82 | 31,253,889.98 |
| Total | 339,569,021.49 | 352,304,684.10 |
41. Research and Development Expenses
Unit: yuanItems Current period Previous period
| Depreciation, materials and wages, etc. | 32,990,679.09 | 22,368,496.87 |
Total 32,990,679.09 22,368,496.87
42. Finance Costs
Unit: yuanItems Current period Previous period
| Interest expenses | 234,419,462.35 | 342,674,208.42 |
| Interest income | -27,351,519.21 | -61,019,147.27 |
| Exchange gains and losses | -49,493,753.99 | 5,012,400.26 |
| Other expenses | 3,983,576.72 | 6,425,946.41 |
Total 161,557,765.87 293,093,407.82
43. Other income
Unit: yuanSources of other income Current period Previous period
| Government grant | 2,379,198.73 | 30,272,965.00 |
| Withholding personal income tax handling fee |
913,893.41
| Others | 225,000.00 | 382,577.92 |
44. Investment Income
Unit: yuanItems Current period Previous period
-439,659.58 85,455.22
| Long-term equity investment income measured by equity method |
| Investment income from disposal of long-term equity investment |
-294,462.57
-2,502,067.50
| Investment income from disposal of financial assets held-for-trading |
| Investment income from debt restructuring |
694,683.35
| Others | 30,387.62 | |
| Total | -2,541,506.30 | 115,842.84 |
45. Credit Impairment Losses
Unit: yuanItems Current period Previous period
| Bad debt loss of accounts receivable | -35,877,008.41 | 2,051,653.20 |
| Bad debt loss of other receivables | 18,426,234.94 | -2,845,559.93 |
| Total | -17,450,773.47 | -793,906.73 |
46. Asset Impairment Losses
Unit: yuanItems Current period Previous period
impairment loss on contract performance
| costs |
-84,458,260.66 -72,880,991.53
| Total | -84,458,260.66 | -72,880,991.53 |
47. Gains on Disposal of Assets
Unit: yuanSources of gains on disposal of assets Current period Previous period
3,648,546.62
48. Non-operating Income
Unit: yuanItems Current period Previous period
current non-recurring gains
| and losses | ||
| Gains from damage and |
scrapping of non-current
17,095,345.19 711,708.55 17,095,345.19
| assets |
| Compensation for breach of contract |
980,399.63 980,399.63
2,447,931.60
| Unpayable accounts payable | 27,948,070.49 |
2,447,931.60
| Others |
31,060,871.61
| 1,912,502.31 |
31,060,871.61
| Total |
51,584,548.03
| 30,572,281.35 |
51,584,548.03
49. Non-operating Expenses
Unit: yuanItems Current period Previous period
Amount included in the
current non-recurring gains
| and losses | ||
| Non-current asset damage and scrapping loss |
48,484,833.89 10,765,339.79 48,484,833.89
breach of contract,
| compensation payments |
2,072,844.13 2,072,844.13
| Others | 27,649.11 | 27,649.11 | |
| Total | 50,585,327.13 | 10,765,339.79 | 50,585,327.13 |
50. Income Tax Expenses
(1) Income tax expense table
Unit: yuanItems Current period Previous period
| Current income tax expenses | 46,665,568.90 | 197,785,904.70 |
| Deferred tax expenses | -13,473,858.06 | 2,719,416.45 |
| Total | 33,191,710.84 | 200,505,321.15 |
(2) Accounting profit and income tax expense adjustment process
Unit: yuanItems Current period
| Total profit | -950,225,013.71 |
| Income tax expense calculate according to the official or applicable tax rate |
-242,556,253.43
| Effect of adjusting prior period income taxes | 22,945,743.75 |
| Effect of non-taxable income | -109,914.90 |
| Effect of non-deductible costs, expenses or losses | 100,437.96 |
| Effect of use of deductible losses of unrecognized deferred tax asset of prior period |
-543,713.22
losses of deferred income tax assets not recognized in the
| current period |
255,856,087.61
| Others | -2,500,676.93 |
| Income tax expenses | 33,191,710.84 |
51. Other Comprehensive Income
Please refer to Note VII. 33.
52. Notes of Statement of Cash Flows
(1) Cash received from other operating activities
Unit: yuanItems Current period Previous period
36,965,273.21 97,205,274.52
| Recover current payment and advance payment | ||
| Interest income | 27,351,519.21 | 61,019,147.27 |
| Special subsidies and grants | 850,000.00 | 9,690,000.00 |
| Others | 980,399.63 | 804,702.43 |
| Total | 66,147,192.05 | 168,719,124.22 |
(2) Cash paid for other operating activities
Unit: yuanItems Current period Previous period
| Current payment with different entities | 28,422,075.16 | 22,514,446.73 |
| Administrative expenses | 112,917,219.14 | 168,184,142.54 |
| Selling expenses | 32,130,230.45 | 50,910,874.42 |
| Handling fee | 3,983,576.72 | 6,425,946.41 |
| Others | 1,023,567.21 | |
| Total | 177,453,101.47 | 249,058,977.31 |
(3) Cash received from other financing activities
Unit: yuanItems Current period Previous period
299,914,718.38 2,548,792,921.60
| Margin for bill, letter of guarantee and letter of credit | ||
| Total | 299,914,718.38 | 2,548,792,921.60 |
(4) Cash paid for other financing activities
Unit: yuanItems Current period Previous period
letter of credit
695,121,631.51 71,693,646.43Total 695,121,631.51 71,693,646.43
53. Supplementary Information to Cash Flow Statement
(1) Supplementary information to cash flow statement
Unit: yuan
Margin for bill, letter of guarantee and
Supplementary information
| Supplementary information | Current period | Previous period |
| 1. Reconciliation of net profit to cash flows |
from operating activities
-983,416,724.55
| Net profit |
579,963,876.24
| Add: Impairment of assets |
101,909,034.13 72,880,991.53Depreciation of fixed assets,depreciation of oil and gas assets, depreciationof productive biological assets
823,089,855.07 1,105,263,552.94
30,187,267.26 30,187,267.22
| Depreciation of right-of-use assets |
| Amortization of intangible assets |
3,039,005.87 3,690,085.26
expenses
| Amortization of long-term deferred |
| Losses on disposal of fixed assets, |
intangible assets and other long-term assets("-" for net income)
-3,648,546.62
net income)
31,389,488.70 10,053,631.24
| Losses on retirement of fixed assets("-" for |
| Losses from changes in fair value("-" for |
net income)
184,925,708.36 342,674,208.42
| Finance expenses("-" for net income) |
| Investment loss("-" for net income) |
2,541,506.30 -115,842.84
increase)
-11,622,984.29 5,419,049.90
| Decrease in deferred tax assets("-" for |
| Increase in deferred tax liabilities("-" for |
decrease)
784,701,660.05 1,435,572,851.38
increase)
-816,626,771.10 2,160,572,533.72
| Decrease in operating receivables("-" for |
| Increase in operating payables("-" for |
decrease)
4,512,520,236.01 -5,468,912,532.78
-46,149,283.40
| Others |
| Net cash flow from operating activities |
4,662,637,281.81 227,451,842.21
activities that do not involve cash receipts andpayments:
| 2. Significant investment and financing |
| Conversion of debt into capital |
year
| Convertible corporate bonds due within one |
| Leasing of fixed assets through financing |
| 3. Net changes in cash and cash equivalents: |
| Closing balance of cash |
3,135,535,935.14 4,750,473,298.51
1,296,662,683.20 6,299,099,063.48
| Less: Opening balance of cash |
| Add: Closing balance of cash equivalents |
| Less: Opening balance of cash |
| Net increase in cash and cash equivalents |
1,838,873,251.94 -1,548,625,764.97
(2) Composition of cash and cash equivalents
Unit: yuanItems Balance as at 30 June 2023 Balance as at 1 January 2023I. Cash3,135,535,935.14 1,296,662,683.20Bank deposits available for paymentat any time
3,135,535,935.14 1,296,662,683.20II. Balance of cash and cash equivalentsat the end of the period
3,135,535,935.14 1,296,662,683.20
54. Assets whose Ownership or Use Rights Are Restricted
Unit: yuanItems
| Balance as at 30 June 2023 | Reason for restriction | |
| Monetary funds |
521,023,596.93
| Deposit for notes and letter of credit | ||
| Notes receivable |
255,189,626.40
| Pledge for banker's acceptance bill | ||
| Total |
776,213,223.33
55. Foreign Currency Monetary Items
(1) Foreign currency monetary items
Unit: yuanItems
Translation rate
| Closing balance of foreign currency | Closing balance converted into RMB | ||
| Monetary funds | 562,525,888.30 | ||
| Including: U.S. Dollar | 77,083,100.68 | 7.2258 | 556,987,068.89 |
| Euro | 2,840.49 | 7.8771 | 22,374.82 |
| Hong Kong Dollar | 5,983,128.62 | 0.9220 | 5,516,444.59 |
| Long-term borrowings | |||
| Including: U.S. Dollar | |||
| Euro | |||
| Hong Kong Dollar | |||
| Japanese yen | 104,292,000.00 | 0.0501 | 5,225,029.20 |
(2) Instructions for overseas operating entities, including for important overseas operating entities, their
main overseas business location, functional currency for bookkeeping and the basis for selection shouldbe disclosed, and the reasons for changes in the functional currency for bookkeeping should also bedisclosed.
□Applicable ?Not applicable
56. Government Grants
(1) Government grants related to assets
Unit: yuanTypes Amount
statement of financial position
Amount included in current
profit and loss
| Items presented in the | ||
| Research and development of |
the third-generation high-strength steel for automobiles
2,900,000.00
Deferred income
290,000.00
advanced treatment project inDongfeng plant area of sheetmetal coking plant
9,500,000.00
Deferred income
950,000.00
| Carbon fiber wastewater |
| Desulfurization and |
denitrification project of coal-fired boiler in high-voltageworkshop of Benxi Iron andSteel Power Plant
6,000,000.00
Deferred income
300,000.00
Control Fund - SecondSintering Cleaning and DustRemoval Ultra-low EmissionTransformation Project
2,050,000.00
Deferred income
205,000.00
| Air Pollution Prevention and |
| 2021 Special Fund Project for |
Intellectual Manufacturingand Strengthening theProvince
8,100,000.00
Deferred income
Control and EnergyConservation and CarbonReduction Special Project(Converter Gas Recovery andEfficiency ImprovementTransformation Project)
1,500,000.00
Deferred income
44,117.65
| 2021 Benxi City Pollution |
| 2021 Municipal Skillmaster |
Workstation Fees
80,000.00
Deferred income
81.08
"Hundred Thousands ofTalents Project" FundingProject
250,000.00
Deferred income
| The 2018 Liaoning Provincial |
| 2018 Municipal Skillmaster |
Workstation Fees
240,000.00
Deferred income
Workstation Fees
180,000.00
Deferred income
| 2019 Municipal Skillmaster |
| 2020 special ecological |
civilization constructionproject (special steel electricfurnace upgrade project)
20,000,000.00
Deferred income
180,000.00
| Liaoning Artisan Subsidy | Deferred income |
project of seven 130-toncombustion boilers in a powerplant
24,000,000.00
Deferred income
| Flue gas desulfurization |
| Fund for cogeneration |
renovation project of the thirdelectric workshop of thepower plant
10,000,000.00
Deferred income
steel transformation project
250,000,000.00
Deferred income
(2) Return of government grants
□Applicable ?Not applicable
(3) Government grants related to income
Types Amount
Cold-rolled high-strengthAmount included in the current
profit and loss or offsettingrelated costs and expenses
Items included in current profit orloss or written off related costs
and expenses
| Amount included in the current | |
| Current | |
period
period
PreviousEffect mechanism and control of rare earth
oxysulfide on the plasticity of automobilesteel
547,040.00 122,965.00
Other income
| Effect mechanism and control of rare earth |
| 2021 Benxi City Expert Talent and |
Enterprise Docking Project10,000.00 5,000.00
Other income
system and research on its physical andchemical properties
340,000.00
Other income
| Design of rare earth steel metallurgical slag |
| Provincial Science and Technology |
Department National Natural ScienceFoundation of China-Liaoning ProvincialGovernment Joint Fund Project
334,000.00
Other income
Fees200,000.00
Other income
Fees100,000.00
Other income
| 2020 Provincial Skillmaster Workstation |
| Basic research on the new technology of |
composite iron coke low-carbonironmaking charge
168,000.00
Other income
projects of Liaoning Provincial CentralGovernment Guidance for Local Scienceand Technology Development Funds
300,000.00
Other income
| In 2021, the second batch of planned |
| The 2020 Liaoning Provincial "Hundred |
Thousands of Talents Project" FundingProject
50,000.00 50,000.00
Other income
Department 2022 Liaoning ProvincialNatural Science Foundation Project Fund
30,000.00
Other income
| Provincial Science and Technology |
| In 2022, Liaoning will become a strong |
province with digital intelligence300,000.00
Other income
navigation project funding subsidy200,000.00
Other income
| Municipal enterprise operation patent |
| "Xingliao Talents Program" government |
subsidy350,000.00
Other income
57. Others
As lessee
Items Current period Previous periodInterest expense on the lease liabilities
| 27,047,108.38 | 27,576,079.44 | |
| Simplified short-term lease expenses included in relevant asset costs or current profit and loss | ||
| Simplified rental expenses of low-value assets included in |
relevant asset costs or current profit and loss (except for short-
| term rental expenses of low-value assets) |
| Variable lease payments not included in the measurement of |
lease liabilities that are included in the cost of related assets or
| current profit and loss | ||
| Including: the part generated by the sale and leaseback transaction |
Income from sub-leasing of right-of-use assets
Total cash outflows related to leases
| 46,640,413.20 | 46,846,358.31 | |
| Related gains and losses arising from sale and leaseback transactions |
Cash inflow from sale and leaseback transactions
Cash outflow from sale and leaseback transactions
VIII. Changes in the Scope of Consolidation
1. Others
There is no change in the scope of consolidation in this period.IX. Interests in Other Entities
1. Interests in Subsidiaries
(1) Composition of the corporate group
Name of the subsidiaries
Principal placeof business
Registeredaddress
Nature ofbusiness
ratioAcquiring method
| Shareholding | |||
| Direct | Indirect | ||
| Guangzhou Bensteel Trading | |||
Co., Ltd.
Guangzhou Guangzhou Sale 100
Set up
Metallurgical Technology Co.,Ltd.
Shanghai Shanghai Sale 100
Set up
| Shanghai Bensteel |
| Dalian Benruitong Automotive |
Material Technology Co., Ltd.
Dalian Dalian Production 65
Set up
Steel Sheet Co., Ltd.
Benxi Benxi Production 75
| Bengang Puxiang Cool Rolling | Business combination |
under common control
Ltd.
Changchun Changchun Sale 100
| Changchun Bensteel Sales Co., | Business combination |
under common control
Sales Co., Ltd.
Yantai Yantai Sale 100
| Yantai Bengang Iron and Steel | Business combination |
under common control
Trading Co., Ltd.
Tianjin Tianjin Sale 100
| Tianjin Bengang Iron and Steel | Business combination |
under common control
| Benxi Bensteel Sales Co., Ltd. | Benxi | Benxi | Sale | 100 |
| Set up | ||
| Shenyang Bensteel |
Metallurgical Technology Co.,Ltd.
Shenyang Shenyang Sale 100
Set up
Explanation on the difference between the shareholding ratio in the subsidiary and the voting right ratio:
There is no such matter in the Company.Basis for holding half or less of the voting rights but still controlling the invested entity, and holding more thanhalf of the voting rights but not controlling the invested entity:
There is no such matter in the Company.For important structured entities included in the scope of consolidation, the basis for control:
There is no such matter in the Company.
(2) Significant but not wholly-owned subsidiaries
Unit: yuanName of thesubsidiaries
Proportion of non-controlling interests (%)
| Profits and losses |
attributing to non-controllingshareholders
distribute to non-controllingshareholders
Closingbalance of non-controlling interestsBengang Puxiang CoolRolling Steel Sheet
| Dividend declared to | ||
| Co., Ltd. |
25.00% 17,461,806.81 595,620,461.21
Explanation for the shareholding ratio of minority shareholders of subsidiaries different from the ratio of votingrights:
There is no such matter in the Company.
(3) Main financial information of important non-wholly owned subsidiaries
Unit: yuan
Name of the subsidiaries
Balance as at 30 June 2023 Balance as at 1 January 2023Current assets
assets
Total assets
| Non-current | Current |
liabilities
liabilities
Total liabilities Current assets
| Non-current | Non-current |
assets
Total assets
liabilities
| Current | Non-current |
liabilities
Total liabilities
Rolling Steel Sheet Co.,Ltd.
3,611,025,289.22 984,679,076.32 4,595,704,365.54 2,213,222,520.70 2,213,222,520.70 2,642,318,664.91 1,031,753,449.22 3,674,072,114.13 1,370,714,059.80 1,370,714,059.80
Unit: yuanName of thesubsidiaries
Current period Previous periodOperating income Net profit
Bengang Puxiang CoolTotal
comprehensiveincome
| Total | Net cash flows |
from operatingactivities
Operating income Net profit
comprehensive
income
| Total | Net cash flows |
from operatingactivities
Cool Rolling Steel
| Sheet Co., Ltd. |
4,253,071,574.21 69,847,227.23 69,847,227.23 171,658,194.18 5,229,533,000.35 91,532,242.77 91,532,242.77 306,038,909.09
2. Interests in Joint Arrangements or Associates
(1) Important joint ventures or associates
Explanation for the shareholding ratio in joint ventures or associates that is different from the voting rights ratio:
The Company has no significant joint ventures or associates.
X. Risks Associated with Financial InstrumentsThe Company faces various financial risks in the course of operation: credit risk, liquidity risk and market risk(including exchange rate risk, interest rate risk and other price risks). The above financial risks and the riskmanagement policies adopted by the Company to reduce these risks are as follows:
The Board of Directors is responsible for planning and establishing the Company's risk management structure,formulating the Company's risk management policies and relevant guidelines, and supervising theimplementation of risk management measures. The Company has formulated risk management policies toidentify and analyze the risks faced by the Company. These risk management policies clearly stipulate specificrisks, covering many aspects such as market risk, credit risk and liquidity risk management. The Companyregularly evaluates changes in the market environment and the Company’s business activities to determinewhether to update risk management policies and systems. The Company’s risk management is carried out by theRisk Management Committee in accordance with the policies approved by the Board of Directors. The RiskManagement Committee identifies, evaluates and avoids relevant risks through close cooperation with otherbusiness departments of the company. The company’s internal audit department conducts regular audits on riskmanagement controls and procedures, and reports the audit results to the company's audit committee.The overall goal of the Company’s risk management is to formulate risk management policies that reduce risksas much as possible without excessively affecting the Company’s competitiveness and resilience.
1. Credit risk
Credit risk refers to the risk that the counterparty fails to perform its contractual obligations and cause financiallosses to the Company.The Company mainly faces customer credit risk caused by credit sales. Before entering into a new contract, theCompany conducts an assessment of the credit risk of the new client, including an external credit rating and, insome cases, bank references (when this information is available). The Company sets a credit sales limit for eachcustomer, 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 range through regularmonitoring of existing customer credit ratings and regular review of accounts receivable aging analysis. Whenmonitoring the credit risk of customers, group them according to their credit characteristics. Customers rated as“high risk” will be placed on a restricted customer list, and only with additional approval, the Company can sellto them on credit in the future, otherwise they must be required to pay the corresponding amount in advance.
2. Liquidity risk
Liquidity risk refers to the risk of a shortage of funds when an enterprise fulfills its obligations for settlement bydelivery of cash or other financial assets.It is the Company's policy to ensure that it has sufficient cash to meet debt obligations as they fall due. Liquidityrisk is centrally controlled by the Company's financial department. The financial department ensures that thecompany has sufficient funds to repay debts under all reasonable forecasts by monitoring cash balances,marketable securities that can be realized at any time, and rolling forecasts of cash flows for the next 12 months.At the same time, continue to monitor whether the company complies with the provisions of the loan agreement,and obtain commitments from major financial institutions to provide sufficient backup funds to meet short-termand long-term funding needs.The Company's various financial liabilities are listed as follows in terms of undiscounted contractual cash flowby maturity date:
Amount unit: RMB ten thousand
Items
Balance as at 30 June 2023Repayment ondemand
Within 1 year 1-2 years 2-5 years Over 5 years Total
| Repayment on demand | ||||||
| Trade and other payables | 920,298.97 | 920,298.97 | ||||
| Borrowing and interest | 252,786.75 | 40,752.91 | 83,945.86 | 377,485.52 |
Total
| 1,173,085.72 | 40,752.91 | 83,945.86 | 1,297,784.49 |
Items
Balance as at 1 January 2023Repayment on
demand
Within 1 year 1-2 years 2-5 years Over 5 years Total
| Repayment on demand | ||||||
| Trade and other payables | 693,670.74 | 693,670.74 | ||||
| Borrowing and interest | 494,568.82 | 255,904.22 | 678,612.89 | 695.49 | 1,429,781.42 |
Total
| 1,188,239.56 | 255,904.22 | 678,612.89 | 695.49 | 2,123,452.16 |
3. Market risk
The market risk of financial instruments refers to the risk of fluctuations in the fair value or future cash flow offinancial instruments due to changes in market prices, including exchange rate risk, interest rate risk and otherprice risks.
(1) Interest rate risk
Interest rate risk refers to the risk of fluctuations in the fair value of financial instruments or future cash flowsdue to changes in market interest rates.The interest rate risk faced by the Company mainly comes from floating-rate bank deposits and floating-rateloans to bear the cash flow interest rate risk. The Company has not formulated a policy to manage its interestrate risk, but the management will carefully choose financing methods, combining fixed and floating interestrates, short-term debt and long-term debt. Utilize effective interest rate risk management methods, closelymonitor interest rate risk, and use interest rate swaps when necessary to achieve the expected interest ratestructure.
(2) Exchange rate risk
Exchange rate risk refers to the risk of fluctuations in the fair value of financial instruments or future cash flowsdue to changes in foreign exchange rates.The Company continuously monitors the scale of foreign currency transactions and foreign currency assets andliabilities to minimize the foreign exchange risk it faces. In addition, the Company may also sign forwardforeign exchange contracts or currency swap contracts to achieve the purpose of avoiding exchange rate risks.During the reporting period, the Company did not sign any forward foreign exchange contracts or currencyswap contracts.The exchange rate risk faced by the Company mainly comes from the financial assets and financial liabilitiesdenominated in US dollars. The amount of foreign currency financial assets and foreign currency financialliabilities converted into RMB is listed as follows:
Amount unit: RMB ten thousand
Items
| Balance as at 30 June 2023 | Balance as at 1 January 2023 |
US dollar
currency
Total US dollar
| Other foreign | Other foreign |
currency
TotalAssets
| 55,698.71 | 553.88 | 56,252.59 | 4,428.43 | 495.12 | 4,923.55 |
Liabilities
| 522.50 | 522.50 | 4,979.69 | 21,521.13 | 26,500.82 |
Total
| 55,698.71 | 1,076.38 | 56,775.09 | 9,408.12 | 22,016.25 | 31,424.37 |
On June 30, 2023, with all other variables held constant, if the exchange rates of the U.S. dollar, the euro, andthe Japanese yen against the renminbi appreciate or depreciate by 5%, then the Company will increase ordecrease the net profit by RMB 27.865 million (31 December 2022: RMB 10.7886 million). The managementbelieves that 5% reasonably reflects the reasonable range of possible changes of the US dollar, Euro andJapanese yen against RMB in the next year.
XI. Disclosure of Fair Value
1. Closing Fair Value of Assets and Liabilities Measured at Fair Value
Unit: yuanItems
Closing fair value
value measurement
| The first level of fair | The second level of fair |
value measurement
value measurement
TotalI. Continuous fair valuemeasurement
-- -- -- --◆Accounts receivable
The third level of fairfinancing
953,938,535.80 953,938,535.80
| financing |
| ◆Other equity instruments |
1,020,418,482.31 1,020,418,482.31Total assetscontinuously measuredat fair value
1,974,357,018.11 1,974,357,018.11II. Non-continuous fairvalue measurement
-- -- -- --
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, using valuation
techniques and qualitative and quantitative information on important parametersThe Company has no second level fair value measurement items.
4. Continuous and non-continuous third-level fair value measurement items, using valuation
techniques and qualitative and quantitative information on important parametersOther equity instrument investments that continue to be measured at the third level of fair value are unlistedequity investments held by the Company.The receivable financing of continuous third-level fair value measurement is the banker’s acceptance bill heldby the Company, and its fair value is confirmed with reference to the face value.The Company uses valuation techniques for fair value measurement, mainly using the valuation techniques ofthe non-listed company comparison method.
5. Others
The input values used in fair value measurement are divided into three levels:
The first-level input value is the unadjusted quoted price in an active market for the same asset or liability thatcan be obtained on the measurement date.The second-level input value is the directly or indirectly observable input value of the relevant asset or liabilityother than the first-level input value.The third-level input value is the unobservable input value of related assets or liabilities.The level to which the fair value measurement results belong is determined by the lowest level to which theinput values that are important to the fair value measurement as a whole belong.
XII. Related Party and Related Party Transactions
1. Information about the Parent of the Company
Name of parent Registration place Business nature
Registered capital(100 million yuan)
company'sshareholdingpercentage in the
| Company(%) |
Proportion ofvoting rights of theparent company tothe Company(%)Benxi Steel andIron (Group) Co.,
Benxi, Liaoning Manufacturing
74.01 58.65% 58.65%Explanation of the parent company of the CompanyThe ultimate controlling party of the Company is Ansteel Group Co., Ltd.
2. Subsidiaries of the Company
For the details of the Company's subsidiaries, please refer to "IX. Interests in Other Entities" in this note.
3. The Company's Joint Ventures and Associates
For details of the important joint ventures or associates of the Company, please refer to "IX. Interests in otherentities" in this note.
4. Situation of Other Related Parties
| Name of other related parties | Relationship between other related parties and the Company |
| Bengang Group Co., Ltd. | Controlling shareholder of the parent company |
| Ansteel Electric Co., Ltd. | Both belong to Ansteel Group |
| Ansteel Scrap Resources (Anshan) Co., Ltd. | Both belong to Ansteel Group |
| Ansteel Scrap Resources (Anshan) Co., Ltd. Chaoyang Branch | Both belong to Ansteel Group |
| Ansteel Processing and Distribution (Dalian) Co., Ltd. | Both belong to Ansteel Group |
| Ansteel Processing and Distribution (Changchun) Co., Ltd. | Both belong to Ansteel Group |
| Ansteel Processing and Distribution (Zhengzhou) Co., Ltd. | Both belong to Ansteel Group |
| Ansteel Distribution (Hefei) Co., Ltd. | Both belong to Ansteel Group |
| Ansteel Distribution (Wuhan) Co., Ltd. | Both belong to Ansteel Group |
| Ansteel Rope Co., Ltd. | Both belong to Ansteel Group |
| Ansteel Co., Ltd. | Both belong to Ansteel Group |
| Ansteel Chemical Technology Co., Ltd. | Both belong to Ansteel Group |
| Ansteel Group (Anshan) Railway Transportation Equipment Manufacturing Co., Ltd. |
Both belong to Ansteel Group
| Ansteel Group Finance Co., Ltd. | Both belong to Ansteel Group |
| Ansteel Group Engineering Technology Development Co., Ltd. | Both belong to Ansteel Group |
| Ansteel Group Engineering Technology Co., Ltd. | Associate of Ansteel Group |
| Ansteel Group International Economic and Trade Co., Ltd. | Both belong to Ansteel Group |
| Ansteel Group Mining Gongchangling Co., Ltd. | Both belong to Ansteel Group |
| Ansteel Group Mining Co., Ltd. | Both belong to Ansteel Group |
| Ansteel Group Co., Ltd. | Both belong to Ansteel Group |
| Ansteel Group Automation Co., Ltd. | Both belong to Ansteel Group |
| Ansteel Construction Group Co., Ltd. | Both belong to Ansteel Group |
| Ansteel Metal Structure Co., Ltd. | Both belong to Ansteel Group |
| Ansteel Technology Development Co., Ltd. | Both belong to Ansteel Group |
| Ansteel Mining Machinery Manufacturing Co., Ltd. | Both belong to Ansteel Group |
| Ansteel Green Resources Technology Co., Ltd. | Both belong to Ansteel Group |
| Ansteel Energy Technology Co., Ltd. | Both belong to Ansteel Group |
| Ansteel Industrial Group (Anshan) Equipment Operation and Maintenance Co., Ltd. |
Both belong to Ansteel Group
| Ansteel Industrial Group Metallurgical Machinery Co., Ltd. | Both belong to Ansteel Group |
| Ansteel Shuangsheng (Anshan) Fan Co., Ltd. | Both belong to Ansteel Group |
| Ansteel Modern City Service (Anshan) Co., Ltd. | Both belong to Ansteel Group |
| Ansteel Roll Co., Ltd. | Both belong to Ansteel Group |
| Ansteel Heavy Machinery Design and Research Institute Co., Ltd. |
Both belong to Ansteel Group
| Ansteel Heavy Machinery Co., Ltd. | Both belong to Ansteel Group |
| Ansteel Cast Steel Co., Ltd. | Both belong to Ansteel Group |
| North Hengda Logistics Co., Ltd. | Both belong to Bengang Group |
| Bengang Stainless Steel Cold Rolling Dandong Co., Ltd. | Same parent company |
| Bengang Electric Co., Ltd. | Associate of parent company |
| Bengang Group Finance Co., Ltd. | Both belong to Bengang Group |
| Bengang Group International Economic and Trade Co., Ltd. | Both belong to Bengang Group |
| Bengang Tendering Co., Ltd. | Both belong to Bengang Group |
| Benxi Beitai Casting Pipe Co., Ltd. | Both belong to Bengang Group |
| Benxi Beiying Iron and Steel (Group) Co., Ltd. | Both belong to Bengang Group |
Benxi Iron and Steel (Group) Real Estate Development Co.,
Same parent company
| Ltd. | |
| Benxi Iron and Steel (Group) Engineering Construction Supervision Co., Ltd. | Same parent company |
| Benxi Iron and Steel (Group) Machinery Manufacturing Co., Ltd. | Same parent company |
| Benxi Iron and Steel (Group) Construction Co., Ltd. | Same parent company |
| Benxi Iron and Steel (Group) Mining Co., Ltd. | Same parent company |
Benxi Iron and Steel (Group) Thermal Power Development
Same parent company
| Co., Ltd. | |
| Benxi Iron and Steel (Group) Equipment Engineering Co., Ltd. | Same parent company |
| Benxi Iron and Steel (Group) Design and Research Institute | Same parent company |
| Benxi Iron and Steel (Group) Industrial Development Co., Ltd. | Same parent company |
| Benxi Iron and Steel (Group) Information Automation Co., Ltd. | Same parent company |
| Benxi Iron and Steel (Group) Construction Co., Ltd. | Same parent company |
| Benxi Iron and Steel (Group) Metallurgical Slag Co., Ltd. | Same parent company |
| Benxi Steel and Iron (Group) Co., Ltd. | Parent company |
Benxi Iron and Steel (Group) Chint Building Materials Co.,
Same parent company
| Ltd. | |
| Benxi High-tech Drilling Tools Manufacturing Co., Ltd. | Both belong to Bengang Group |
| Benxi New Business Development Co., Ltd. | Same parent company |
| Chengdu Pangang Hotel Co., Ltd. | Both belong to Ansteel Group |
| Dalian Borolle Steel Pipe Co., Ltd. | Same parent company |
| Delin Industrial Products Co., Ltd. | Both belong to Ansteel Group |
| Delin Lugang Supply Chain Service Co., Ltd. | Both belong to Ansteel Group |
| Guangzhou Angang Steel Processing Co., Ltd. | Both belong to Ansteel Group |
| Guangzhou Free Trade Zone Benxi Steel Sales Co., Ltd. | Same parent company |
| Liaoning Hengtai Heavy Machinery Co., Ltd. | Same parent company |
| Liaoning Hengyi Steel Trading Co., Ltd. | Both belong to Bengang Group |
| Liaoning Metallurgical Technician College | Same parent company |
| Liaoning Vocational and Technical College of Metallurgy | Same parent company |
| Pangang Group Xichang Steel and Vanadium Co., Ltd. | Both belong to Ansteel Group |
| Panzhong Yihong Metal Products (Chongqing) Co., Ltd. | Both belong to Ansteel Group |
| Suzhou Longben Metal Materials Co., Ltd. | Hold an equity interest in the company |
| Tianjin Angang Steel Processing and Distribution Co., Ltd. | Both belong to Ansteel Group |
| Tianjin Ansteel International North Trading Co., Ltd. | Both belong to Ansteel Group |
| Wuhan Yuanhong Trading Co., Ltd. | Hold an equity interest in the company |
Changchun FAW Angang Steel Processing and Distribution
Both belong to Ansteel Group
| Co., Ltd. | |
| Ansteel Tendering Co., Ltd. | Both belong to Ansteel Group |
5. Situation of Related Party Transactions
(1) Related party transactions of purchasing or selling goods, rendering and receiving services
Table of purchase of goods/receiving of services
Unit: yuanRelated parties
Related transaction
content
Amount in this
period
Approvedtransaction amount
(if applicable)
transaction limit isexceeded (if
| applicable) |
Amount inprevious period
Repair service261,249.99 Yes
| Ansteel Electric Co., Ltd. |
| Ansteel Scrap |
Resources
Raw materials370,082,138.82 1,300,000,000.00 No 96,065,566.10
Processing andDistribution
| (Dalian) Co., Ltd. |
Service feeNo 11,353.84
Spare parts169,538.40 10,000,000.00 No
| Ansteel Rope Co., Ltd. | |||||
| Ansteel Co., Ltd. | Raw fuel | No | 75,504,413.81 | ||
| Ansteel Group |
(Anshan) RailwayTransportationEquipmentManufacturing
Spare parts872,000.00 Yes
| Co., Ltd. |
| Ansteel Group Finance Co., Ltd. |
Financial services303,708.86 Yes
EngineeringTechnology Co.,
| Ltd. |
Engineeringdesign
512,000.00 Yes
EngineeringTechnology Co.,
| Ltd. |
Construction andinstallation
117,959,759.13 23,000,000.00 Yes
EngineeringTechnology Co.,
| Ltd. |
Equipment76,337,521.60 Yes
EngineeringTechnology Co.,
| Ltd. |
Repair service260,000.00 Yes
InternationalEconomic and
| Trade Co., Ltd. |
Raw materialsNo 8,328,324.66
MiningGongchangling
| Co., Ltd. |
Raw materials200,408,297.44 500,000,000.00 No 238,405,486.63
Automation Co.,
| Ltd. |
Software47,055,000.00 230,000,000.00 No
Construction
| Group Co., Ltd. |
Project costsNo 21,192,660.55
TechnologyDevelopment Co.,
| Ltd. |
Research anddevelopmentservice
633,962.27 Yes
Group (Anshan)EquipmentOperation andMaintenance Co.,
| Ltd. |
Labor service3,253,333.20 10,000,000.00 No
GroupMetallurgicalMachinery Co.,
| Ltd. |
Repair service5,097,094.81 Yes 563,736.00
Shuangsheng(Anshan) Fan Co.,
| Ltd. |
Spare parts69,000.00 Yes
Machinery Co.,
| Ltd. |
Repair service1,565,966.00 Yes
Processing fee599,384.02 Yes
| North Hengda Logistics Co., Ltd. |
| North Hengda Logistics Co., Ltd. |
Raw material942,680.16 Yes
| North Hengda Logistics Co., Ltd. | Transportation and storage Fees |
66,562,921.54 30,000,000.00 Yes 14,102,106.06
Spare parts53,735,396.26 200,000,000.00 No
| Bengang Electric Co., Ltd. |
| Bengang Electric Co., Ltd. |
Repair service3,857,674.29 Yes
Raw materialsNo 65,419,935.95
| Bengang Electric Co., Ltd. |
| Bensteel Group |
InternationalEconomic and
Agency service32,464,379.89 200,000,000.00 No 133,605,645.86
| Trade Co., Ltd. |
| Bensteel Group Co., Ltd. |
Rental fees4,972,711.56 100,000,000.00 No 1,947,299.50
and Steel (Group)
| Co., Ltd. |
Inspection fees71,796.00 Yes
and Steel (Group)
| Co., Ltd. |
Energy power329,215,977.30 800,000,000.00 No 354,632,805.17
and Steel (Group)
| Co., Ltd. |
Repair service2,163,383.85 100,000,000.00 No 46,977,784.13
and Steel (Group)
| Co., Ltd. |
Raw materials6,177,881,267.18 15,080,000,000.00 No 6,247,319,985.72
and Steel (Group)
| Co., Ltd. |
Rental fees5,979,849.05 Yes
Steel (Group)EngineeringConstructionSupervision Co.,
| Ltd. |
Supervision fee836,573.63 Yes
Steel (Group)MachineryManufacturing
| Co., Ltd. |
Spare parts29,846,785.48 120,000,000.00 No 23,012,269.46
Steel (Group)MachineryManufacturing
| Co., Ltd. |
Labor service4,456,401.89 80,000,000.00 No 38,577,078.16
Steel (Group)MachineryManufacturing
| Co., Ltd. |
Equipment fees
8,487,520.00 Yes
Steel (Group)MachineryManufacturing
| Co., Ltd. |
Raw materials2,940,750.95 Yes
Steel (Group)MachineryManufacturing
| Co., Ltd. |
Rental fees16,578,454.81 Yes
Steel (Group)Construction Co.,
| Ltd. |
Spare parts4,854,600.01 No 4,646,764.56
Steel (Group)Construction Co.,
| Ltd. |
Construction andinstallation
184,925,593.15 No 90,638,976.00
Steel (Group)Construction Co.,
| Ltd. |
Brokerage agent3,156,976.43 No
Steel (Group)Construction Co.,
| Ltd. |
Labor service9,511,440.90 585,000,000.00 No
Steel (Group)Construction Co.,
| Ltd. |
Equipment fees48,514,680.00 No
Steel (Group)Construction Co.,
| Ltd. |
Raw materials2,783,241.40 No 4,646,764.56
Steel (Group)Construction Co.,
| Ltd. |
Transportationservice
358,232.94 No
Steel (Group)
| Mining Co., Ltd. |
Service feeNo 2,613,517.18
Steel (Group)
| Mining Co., Ltd. |
Raw materials1,981,592,292.78 8,950,000,000.00 No 3,510,974,470.81
Steel (Group)Thermal PowerDevelopment Co.,
| Ltd. |
Heating costs293,698.06 Yes 708,146.88
Steel (Group)Thermal PowerDevelopment Co.,
| Ltd. |
Raw materials142,424.64 Yes 35,759.46
Steel (Group)EquipmentEngineering Co.,
| Ltd. |
Spare parts527,996.85 No
Steel (Group)EquipmentEngineering Co.,
| Ltd. |
Construction andinstallation
52,248,696.53 No
Steel (Group)EquipmentEngineering Co.,
| Ltd. |
Labor service16,676,640.31 No 17,144,271.62
Steel (Group)EquipmentEngineering Co.,
| Ltd. |
Equipment fees78,905,792.00 No
Steel (Group)EquipmentEngineering Co.,
| Ltd. |
Repair service33,669,653.98 100,000,000.00 No 5,748,486.32
Steel (Group)EquipmentEngineering Co.,
| Ltd. |
Raw materials3,413,348.23 No 2,058,346.87
Steel (Group)EquipmentEngineering Co.,
| Ltd. |
Transportationservice
562,115.92 No
Steel (Group)IndustrialDevelopment Co.,
| Ltd. |
Office equipment293,726.74 No
Steel (Group)IndustrialDevelopment Co.,
| Ltd. |
Construction andinstallation
184,024.72 No
Steel (Group)IndustrialDevelopment Co.,
| Ltd. |
Labor service582,738.30 No
Steel (Group)IndustrialDevelopment Co.,
| Ltd. |
Daily necessities1,826,368.18 No
Steel (Group)IndustrialDevelopment Co.,
| Ltd. |
Repair service446,808.00 No 443,449.54
Steel (Group)IndustrialDevelopment Co.,
| Ltd. |
Raw materials9,559,452.37 600,000,000.00 No 52,820,474.67
Steel (Group)IndustrialDevelopment Co.,
| Ltd. |
Transportationservice
3,030,721.77 No
Steel (Group)InformationAutomation Co.,
| Ltd. |
Spare parts16,818,802.44 No 4,990,030.05
Steel (Group)InformationAutomation Co.,
| Ltd. |
Construction andinstallation
897,468.01 No 18,816,098.36
Steel (Group)InformationAutomation Co.,
| Ltd. |
Software58,674,627.61 100,000,000.00 No
Steel (Group)InformationAutomation Co.,
| Ltd. |
Repair service548,300.00 No 910,634.86
Steel (Group)Metallurgical Slag
| Co., Ltd. |
Raw materials123,153,136.39 300,000,000.00 No 139,381,388.64
Iron (Group) Co.,
| Ltd. |
Financial services1,406,819.97 No
Iron (Group) Co.,
| Ltd. |
Energy power208,218.19 No
Iron (Group) Co.,
| Ltd. |
Daily necessities2,602.04 No
Iron (Group) Co.,
| Ltd. |
Equipmentinspection
2,150,000.00 No
Iron (Group) Co.,
| Ltd. |
Repair service85,545,984.60 350,000,000.00 No 122,783,160.52
Iron (Group) Co.,
| Ltd. |
Raw materials221,106.88 No
Iron (Group) Co.,
| Ltd. |
Transportationservice
70,844.04 No
Iron (Group) Co.,
| Ltd. |
Rental fees35,687,852.59 No 30,187,267.22
Drilling ToolsManufacturing
| Co., Ltd. |
Spare partsNo 71,251.70
BusinessDevelopment Co.,
| Ltd. |
Spare parts8,892.94 Yes
BusinessDevelopment Co.,
| Ltd. |
Catering andaccommodation
608,112.36 Yes
BusinessDevelopment Co.,
| Ltd. |
Daily necessities157,261.01 Yes
| Chengdu Pangang Hotel Co., Ltd. | Catering and accommodation |
937.74 Yes
Steel Pipe Co.,
| Ltd. |
Raw materials599,495.23 Yes
Office equipment682,715.44 Yes
| Delin Industrial Products Co., Ltd. |
| Delin Industrial Products Co., Ltd. |
Spare parts14,447,322.53 Yes
Raw materials8,538.92 Yes
Heavy Machinery
| Co., Ltd. |
Construction andinstallation
1,044,084.00 No
Heavy Machinery
| Co., Ltd. |
Equipment12,130,000.00 No
Heavy Machinery
| Co., Ltd. |
Repair service25,586,655.43 50,000,000.00 No 3,363,187.60
Heavy Machinery
| Co., Ltd. |
Raw materials619,327.43 No 1,158,044.41
Heavy Machinery
| Co., Ltd. |
Transportationservice
35,137.61 No
HengtongMetallurgicalEquipmentManufacturing
| Co., Ltd. |
Raw materialsNo 66,215,321.16
MetallurgicalTechnician
| College |
Training feeNo 580,509.17
Table for sale of goods/render of services
Unit: yuan
Related parties Related transaction content Amount in this period Amount in previous period
Distribution (Dalian) Co., Ltd.
Goods
27,577,837.53
| Angang Steel Processing and |
| Angang Steel Processing and |
Distribution (Changchun) Co.,Ltd.
Goods
2,003,478.27
Distribution (Zhengzhou) Co.,Ltd.
Goods
10,433,394.39
| Angang Steel Processing and |
| Angang Steel Distribution (Hefei) |
Co., Ltd.
Goods
9,109,492.59
(Wuhan) Co., Ltd.
Goods
55,103,512.47
| Angang Steel Distribution | |||
| Ansteel Co., Ltd. | Goods | 94,339.62 | 33,602,226.06 |
| Ansteel Chemical Technology |
Co., Ltd.
Goods
46,858,532.33 85,184,242.50
| Ansteel Group Mining Co., Ltd. | Goods |
6,415.09
Ltd.
Energy power
24,962.53
| Ansteel Construction Group Co., |
| Ansteel Green Resources |
Technology Co., Ltd.
Goods
8,928,632.16 14,016,402.04
Technology Co., Ltd.
Raw materials and spare parts
70,586,829.06
| Ansteel Green Resources |
| Ansteel Energy Technology Co., |
Ltd.
Raw materials and spare parts
97,132.19
Ltd.
Energy power
7,772,270.08
| Ansteel Energy Technology Co., | |||
| Ansteel Cast Steel Co., Ltd. | Goods | 87,707.40 |
| North Hengda Logistics Co., Ltd. | Goods | 1,646,632,183.35 | 732,332,869.53 |
| Bengang Electric Co., Ltd. | Energy power |
2,966,904.10
Development Co., Ltd.
Goods
611.32
| Bensteel Gaoyuan Industrial | |||
| Bensteel Group Finance Co., Ltd. | Energy power | 6,024.27 | |
| Bengang Group Co., Ltd. | Energy power | 101,729.51 | 54,228.93 |
| Benxi North Steel Pipe Co., Ltd. | Energy power | 8,456.61 | |
| Benxi Northern Iron Industry Co., |
Ltd.
Goods
11,065,842.59 341,033,255.96
(Group) Co., Ltd.
Goods
3,951,328.22 7,805,748.05
| Benxi Beiying Iron and Steel |
| Benxi Beiying Iron and Steel |
(Group) Co., Ltd.
Raw materials and spare parts
84,897,746.67 404,510,783.18
(Group) Co., Ltd.
Energy power
33,632,066.23 36,045,489.04
| Benxi Beiying Iron and Steel |
| Benxi Dongfeng Lake Steel |
Resources Utilization Co., Ltd.
Goods
14,111,556.08 11,652,917.70
Resources Utilization Co., Ltd.
Energy power
2,482,745.43 3,170,242.42
| Benxi Dongfeng Lake Steel |
| Benxi Iron and Steel (Group) |
Real Estate Development Co.,Ltd.
Energy power
40,312.15
Information Automation Co., Ltd.
Energy power
78,150.86
| Benxi Iron and Steel (Group) |
| Benxi Iron and Steel (Group) |
Real Estate Development Co.,Ltd.
Energy power
60,649.99
Engineering ConstructionSupervision Co., Ltd.
Energy power
1,208.43
| Benxi Iron and Steel (Group) |
| Benxi Iron and Steel (Group) |
Electromechanical InstallationEngineering Co., Ltd.
Energy power
272,525.36
Machinery Manufacturing Co.,Ltd.
Goods
116,745.28 10,523,900.28
| Benxi Iron and Steel (Group) |
| Benxi Iron and Steel (Group) |
Machinery Manufacturing Co.,Ltd.
Energy power
6,405,245.79 10,883,794.65
Construction AdvancedDecoration Co., Ltd.
Energy power
527.01
| Benxi Iron and Steel (Group) |
| Benxi Iron and Steel (Group) |
Construction Co., Ltd.
Energy power
3,330,406.11 7,783,309.92
Mine Construction EngineeringCo., Ltd.
Energy power
425,543.04
| Benxi Iron and Steel (Group) |
| Benxi Iron and Steel (Group) |
Mining Liaoyang Jiajiabao IronMine Co., Ltd.
Goods
4,753.02
Mining Liaoyang Jiajiabao IronMine Co., Ltd.
Energy power
54,895,941.41
| Benxi Iron and Steel (Group) |
| Benxi Iron and Steel (Group) |
Mining Yanjiagou LimestoneMine Co., Ltd.
Energy power
2,017,672.71
Mining Co., Ltd.
Goods
2,357,654.90 1,298,986.47
| Benxi Iron and Steel (Group) |
| Benxi Iron and Steel (Group) |
Mining Co., Ltd.
Raw materials and spare parts
35,299,728.81 67,380,113.36
| Freight income | 391,007.89 | 4,717,137.94 | |
| Benxi Iron and Steel (Group) |
Mining Co., Ltd.
Energy power
373,480,762.43 368,746,319.95
Road and Bridge ConstructionEngineering Co., Ltd.
Goods
4,695.28
| Benxi Iron and Steel (Group) |
| Benxi Iron and Steel (Group) |
Thermal Power DevelopmentCo., Ltd.
Raw materials and spare parts
20,195,062.17 13,425,740.25
Thermal Power DevelopmentCo., Ltd.
Energy power
14,367,856.89 17,198,224.54
| Benxi Iron and Steel (Group) |
| Benxi Iron and Steel (Group) |
Equipment Engineering Co., Ltd.
Energy power
650,778.47
Industrial Development Co., Ltd.
Energy power
1,490,023.36 1,312,651.56
| Benxi Iron and Steel (Group) |
| Benxi Iron and Steel (Group) |
Information Automation Co., Ltd.
Energy power
118,042.75
Construction Co., Ltd.
Energy power
508,442.14
| Benxi Iron and Steel (Group) |
| Benxi Iron and Steel (Group) |
Metallurgical Slag Co., Ltd.
Goods
49,114,278.31 81,209,016.00
Metallurgical Slag Co., Ltd.
Raw materials and spare parts
1,606.35 6,434,506.40
| Benxi Iron and Steel (Group) |
| Benxi Iron and Steel (Group) |
Metallurgical Slag Co., Ltd.
Energy power
3,203,925.07 2,923,049.91
Ltd.
Raw materials and spare parts
479,091.24 2,815,485.28
| Benxi Steel and Iron (Group) Co., |
| Benxi Steel and Iron (Group) Co., |
Ltd.
Energy power
1,769,725.68 1,830,219.24
Manufacturing Co., Ltd.
Energy power
17,115.96 23,434.19
| Benxi Well Surfacing |
| Benxi New Business |
Development Co., Ltd.
Goods
2,330.66
Development Co., Ltd.
Energy power
24,362.71 56,559.67
| Benxi New Business |
| Dalian Borolle Steel Pipe Co., |
Ltd.
Goods
7,978,875.12 10,411,580.55
| Freight income | 3,396.23 | ||
| Delin Lugang Supply Chain | Goods | 162,901,409.17 |
| Service Co., Ltd. |
| Guangzhou Angang Steel |
Processing Co., Ltd.
Goods
10,131,627.29
Machinery Co., Ltd.
Goods
8,451.93
| Liaoning Hengtai Heavy |
| Liaoning Hengtai Heavy |
Machinery Co., Ltd.
Energy power
130.66 59,737.59
Equipment Manufacturing Co.,Ltd.
Goods
16,460,796.56 16,247,225.07
| Liaoning Hengtong Metallurgical |
| Liaoning Hengtong Metallurgical |
Equipment Manufacturing Co.,Ltd.
Raw materials and spare parts
2,432,735.65
| Liaoning Slag Powder Co., Ltd. | Goods | 30,084,672.83 | |
| Liaoning Tianyu Fire Engineering |
Co., Ltd.
Energy power
27,076.31
Wall Special Steel Co., Ltd.
Goods
1,542,012.35
| Pangang Group Jiangyou Great |
| Panzhong Yihong Metal Products |
(Chongqing) Co., Ltd.
Goods
8,131,733.60
Ltd.
Goods
1,706,801.34
| Suzhou Bengang Industrial Co., |
| Tianjin Angang Steel Processing |
and Distribution Co., Ltd.
Goods
539,449.69
North Trading Co., Ltd.
Goods
249,512,844.48
| Tianjin Ansteel International |
| Changchun FAW Angang Steel |
Processing and Distribution Co.,Ltd.
Goods
99,910.50 9,458,338.35
(2) Situation of related party lease
The Company as lessor:
Unit: yuanLessee name Types of leased assets
the current period
| Lease income recognized in | Lease income recognized in |
the previous period
| Bengang Tendering Co., Ltd. | Plant and ancillary equipment |
250,917.43
The Company as lessee:
Unit: yuan
Lessor name
Types ofleased assets
Simplified treatment ofrental expenses for short-term leases and leases of
low-value assets (Ifapplicable)
Variable lease payments notincluded in the measurementof the lease liability (Ifapplicable)
Rent paid
Interest expense on leaseliability assumed
Increased right-of-use assets
Current
period
Previous
period
Currentperiod
Previousperiod
Currentperiod
Previousperiod
Currentperiod
Previousperiod
Currentperiod
Previous
periodBenxi Steeland Iron(Group) Co.,Ltd.
squaremeters ofland userights,42,920.00squaremeters ofland use
| rights |
27,627,809.26 27,625,616.70 19,750,096.20 19,500,054.00
Benxi Steeland Iron(Group) Co.,Ltd.
rolling millproductionline, related
| real estate |
8,049,080.53 8,049,080.53 3,736,932.14 3,870,344.33
Beiying Ironand Steel(Group) Co.,
| Ltd. | 1780 Hot |
rolling millproductionline, related
7,557,730.91 6,198,949.54 2,877,975.14 2,980,721.72BengangGroup Co.,Ltd.
| real estate |
| Land use |
right728,282.30square
4,972,711.54 4,972,711.54 1,315,378.20 1,224,959.39
Description of related party leases:
1) According to the “Land Use Right Leasing Contract” and subsequent supplementary agreements signed between the Company and Bengang Steel (Group)on
April 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 RMB 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 houses
and auxiliary facilities occupied by the 2300 hot rolling mill production line and the 1780 hot rolling mill production line. The lease term of the 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 Group Company, with leased areas of 42,920.00 square meters and 728,282.30 square meters. The lease term is 20years, the rental price is RMB 1.138 yuan per square meter per month.
(3) Other related transactions
1) The main contents of the centralized fund management arrangement that the Company participates in and
implements are as follows:
In April 2021, after negotiation with Benxi Iron and Steel Group Finance Co., Ltd. (hereinafter referred to asBengang Finance Company), the Company signed the “Financial Service Agreement” with Bengang FinanceCompany to agree on the terms of the financial business and the upper limit of the relevant transaction amountbetween the Company and its subsidiaries and Bengang Finance Company. The agreement stipulates that in thenext twelve months, the maximum daily deposit balance of the company and its holding subsidiaries will beRMB 11 billion yuan, the maximum loan and other credit business will be RMB 8 billion yuan, and themaximum credit line will be RMB 8 billion yuan.In December 2021, after negotiating with Ansteel Group Finance Co., Ltd. (hereinafter referred to as AnsteelFinance Company), the “Financial Service Agreement (2022-2024)” was signed, in order to agree on therelevant financial business terms and the upper limit of the relevant transaction amount between the Companyand its subsidiaries and Ansteel Finance Company in 2022, 2023 and 2024. The agreement stipulates that in thenext twelve months, the maximum daily deposit balance of the Company and its holding subsidiaries in AnsteelFinance Company is RMB 4.5 billion yuan, and the maximum credit limit for loans, bills and other forms isRMB 5 billion yuan. Ansteel Finance Company provides the Company with a maximum entrusted loan of RMB2 billion yuan.
2) Funds collected by the Company to the Group
Funds that the Company does not collect into the account of the parent company of the group but directlydeposits into the finance company
Project name
| Balance as at 30 June 2023 | Balance as at 1 January 2023 |
Book balance
provision
Book balance
| Bad debt | Bad debt |
provision
Co., Ltd.)
| Monetary funds (deposited in Ansteel Group Finance | 2,408,325,571.25 | 1,074,918,531.75 |
Total
| 2,408,325,571.25 | 1,074,918,531.75 | |||
| Including: Funds with restricted withdrawals due to |
centralized management of funds
3) Funds borrowed by the company from the parent company or member units of the group
Project name
| Balance as at 30 June 2023 | Balance as at 1 January 2023 |
Other payables
| 12,014,973.55 | 85,617,500.00 |
Total
| 12,014,973.55 | 85,617,500.00 |
The subsidiary Dalian Benruitong Automotive Material Technology Co., Ltd. borrowed RMB 75,000,000.00from Benxi Steel and Iron (Group) Co., Ltd., as of June 30, 2023, the Company has not yet paid interest ofRMB 12,014,973.55.
6. Receivables and Payable from Related Parties
(1) Receivables from related parties
Unit: yuan
Item Related parties
| Balance as at 30 June 2023 | Balance as at 1 January 2023 |
Book balance Bad debt provision Book balance Bad debt provisionNotes receivable
(Group) MachineryManufacturing Co.,Ltd.
294,500.00Notes receivable
| Benxi Iron and Steel |
| Benxi Iron and Steel |
(Group) ConstructionCo., Ltd.
940,100.00Notes receivable
and Steel (Group)Co., Ltd.
3,100,000.00Notes receivable
| Benxi Beiying Iron |
| Benxi Iron and Steel |
(Group) Mining Co.,Ltd.
5,518,976.33Notes receivable
Ltd.
200,000.00Notes receivable
| Ansteel Roll Co., |
| Ansteel Heavy |
Machinery Co., Ltd.
189,621.75Notes receivable
Xichang Steel andVanadium Co., Ltd.
30,000,000.00Notes receivable
| Pangang Group |
| Pangang Group |
Panzhihua SteelVanadium Co., Ltd.
5,000,000.00
financing
| Accounts receivable | North Hengda |
Logistics Co., Ltd.
1,370,000.00
financing
| Accounts receivable | Benxi Beiying Iron |
and Steel (Group)Co., Ltd.
1,170,132.15
financing
| Accounts receivable | Benxi Iron and Steel |
(Group) MachineryManufacturing Co.,Ltd.
2,108,116.44
financing
| Accounts receivable | Benxi Iron and Steel |
(Group) ConstructionCo., Ltd.
330,000.00
financing
| Accounts receivable | Benxi Steel and Iron |
(Group) Co., Ltd.
755,842.13
financing
| Accounts receivable | Dalian Borolle Steel |
Pipe Co., Ltd.
200,000.00
financing
| Accounts receivable | Liaoning Hengtong |
MetallurgicalEquipmentManufacturing Co.,Ltd.
1,200,000.00
financing
| Accounts receivable | Benxi Iron and Steel |
(Group) Mining Co.,Ltd.
500,000.00Accounts receivable
Processing andDistribution (Dalian)Co., Ltd.
19,636,110.01 196,361.10
Accounts receivable
| Angang Steel |
| Angang Steel |
Processing andDistribution(Zhengzhou) Co.,Ltd.
1,759,216.34 17,592.16 4,477,814.06 44,778.14
Accounts receivable
Distribution (Hefei)Co., Ltd.
1,575,359.32 15,753.59 248,775.35 2,487.75Accounts receivable
| Angang Steel |
| Angang Steel |
Distribution (Wuhan)Co., Ltd.
9,609,762.44 96,097.62 8,113,115.19 81,131.15Accounts receivable
30,314,005.82 303,140.06Accounts receivable
| Ansteel Co., Ltd. |
| Ansteel Green |
ResourcesTechnology Co., Ltd.
2,218,608.01 22,186.08 4,667,550.15 46,675.50Accounts receivable
Technology Co., Ltd.
742,072.08 7,420.72Accounts receivable
| Ansteel Energy |
| Bensteel Gaoyuan |
IndustrialDevelopment Co.,Ltd.
648.00
Accounts receivable
InternationalEconomic and TradeCo., Ltd.
640,621,130.96 6,406,211.31 663,311,074.79 6,633,110.75Accounts receivable
| Bengang Group |
| Bengang Group Co., |
Ltd.
17,036.30Accounts receivable
Industry Co., Ltd.
3,655,505.09 36,555.05Accounts receivable
| Benxi Northern Iron |
| Benxi Beiying Iron |
and Steel (Group)Co., Ltd.
1,157,124.62 11,571.25Accounts receivable
(Group) Real EstateDevelopment Co.,Ltd.
808.72 8.09
Accounts receivable
(Group) MineConstructionEngineering Co.,Ltd.
5,099,269.05 50,992.69
Accounts receivable
| Benxi Iron and Steel |
| Benxi Iron and Steel |
(Group) MiningYanjiagou LimestoneMine Co., Ltd.
777,713.41 7,777.13Accounts receivable
(Group) Mining Co.,Ltd.
44,914,278.63 449,142.79
Accounts receivable
| Benxi Iron and Steel |
| Benxi Iron and Steel |
(Group) Road andBridge ConstructionEngineering Co.,Ltd.
1,772,553.54 17,725.54
Accounts receivable
(Group) ThermalPower DevelopmentCo., Ltd.
17,373,796.70 173,737.97 840,398.67 8,403.99
Accounts receivable
| Benxi Iron and Steel |
| Benxi Iron and Steel |
(Group) EquipmentEngineering Co.,Ltd.
1,348,327.24 13,483.27Accounts receivable
(Group) InformationAutomation Co., Ltd.
23,016.93 230.17Accounts receivable
| Benxi Iron and Steel |
| Benxi Iron and Steel |
(Group)Metallurgical SlagCo., Ltd.
7,437,743.49 74,377.43
Accounts receivable
SurfacingManufacturing Co.,Ltd.
188,119.71 1,881.20Accounts receivable
| Benxi Weier |
| Benxi New Business |
Development Co.,Ltd.
50,257.41 502.57
Accounts receivable
MetallurgicalEquipmentManufacturing Co.,Ltd.
1,850,333.39 18,503.33 144,307.22 1,443.07Accounts receivable
| Liaoning Hengtong |
| Bengang Electric |
Co., Ltd.
142,269.51 1,422.70
| Prepayments | Ansteel Co., Ltd. |
489,219.01Prepayments
Logistics Co., Ltd.
121,074.27
| North Hengda | |
| Prepayments | Bengang Group |
259,916,133.28 398,341,075.41
Economic and TradeCo., Ltd.Prepayments
| International |
| Benxi Beiying Iron |
and Steel GroupImport and ExportCo., Ltd.
894,762.41
Prepayments
(Group) MachineryManufacturing Co.,Ltd.
91,744,319.35 49,429,296.57Prepayments
| Benxi Iron and Steel |
| Benxi Steel and Iron |
(Group) Co., Ltd.
46,605,722.67Prepayments
Heavy MachineryCo., Ltd.
13,619,388.23Prepayments
| Liaoning Hengtai |
| Benxi New Business |
Development Co.,Ltd.
2,324,912.22
| Other receivables | Ansteel Co., Ltd. |
45,559.67 45,559.67 421,142.66 421,142.66Other receivables
Logistics Co., Ltd.
5,000.00 50.00 65,563.55Other receivables
| North Hengda |
| Bengang Group |
InternationalEconomic and TradeCo., Ltd.
6,617.52 6,617.52Other receivables
Lake Steel ResourcesUtilization Co., Ltd.
3,367,748.44 33,677.48Other receivables
| Benxi Dongfeng |
| Benxi Iron and Steel |
(Group) MachineryManufacturing Co.,Ltd.
Other receivables
(Group) ConstructionCo., Ltd.
13,028,492.10 433,910.93Other receivables
Benxi Steel and Iron
| Benxi Iron and Steel |
| (Group) Co., Ltd. |
4,532,904.80 45,329.05Other receivables
Development Co.,
| Ltd. |
2,280,942.73 22,809.43Other receivables
(Group) Real EstateDevelopment Co.,
| Ltd. |
1,097,290.88 991,268.28Other receivables
Machinery Designand ResearchInstitute Co., Ltd.
5,176,720.00 51,767.20Other receivables
| Ansteel Heavy |
| Benxi Iron and Steel |
(Group) Mining Co.,Ltd.
1,193,997.66 11,939.98
Other receivables
(Group) EquipmentEngineering Co.,Ltd.
4,760,949.45 47,609.49
Other receivables
| Benxi Iron and Steel |
| Liaoning Hengtong |
MetallurgicalEquipmentManufacturing Co.,Ltd.
4,249,698.29 42,496.98Other receivables
Co., Ltd.
36,455.28 364.55Other receivables
| Bengang Electric |
| Ansteel Group |
EngineeringTechnology Co., Ltd.
73,908.67 739.09Other non-currentassets
EngineeringTechnology Co., Ltd.
83,071,228.82Other non-currentassets
| Ansteel Group |
| Ansteel Construction |
Group Co., Ltd.
16,254,830.53 132,687.84Other non-currentassets
Machinery Designand ResearchInstitute Co., Ltd.
5,176,720.00Other non-currentassets
| Ansteel Heavy |
| Benxi Iron and Steel |
(Group) MachineryManufacturing Co.,Ltd.
4,176.00Other non-currentassets
(Group) ConstructionCo., Ltd.
33,175,372.34Other non-currentassets
| Benxi Iron and Steel |
| Benxi Iron and Steel |
(Group) MineConstructionEngineering Co.,Ltd.
4,193,364.46
Other non-currentassets
(Group) EquipmentEngineering Co.,Ltd.
46,123,888.51Other non-currentassets
| Benxi Iron and Steel |
| Benxi Iron and Steel |
(Group) IndustrialDevelopment Co.,Ltd.
833,139.38Other non-currentassets
(Group) InformationAutomation Co., Ltd.
7,175,371.14Other non-currentassets
| Benxi Iron and Steel |
| Liaoning Hengtai |
Heavy MachineryCo., Ltd.
225,977.40
(2) Payables from related parties
Unit: yuan
| Items | Related parties | Balance as at 30 June 2023 | Balance as at 1 January 2023 |
| Notes payable | Ansteel Electric Co., Ltd. | 494,065.00 | |
| Notes payable | Ansteel Rope Co., Ltd. |
894,924.67
| Notes payable | Ansteel Group (Anshan) Railway |
Transportation EquipmentManufacturing Co., Ltd.
611,999.91
| Notes payable | Ansteel Industrial Group |
Metallurgical Machinery Co.,Ltd.
5,098,946.77 572,213.92
| Notes payable | Angang Shuangsheng (Anshan) |
Fan Co., Ltd.
168,370.00
| Notes payable | Ansteel Heavy Machinery Co., |
Ltd.
4,102,837.35 745,501.68
| Notes payable | Anshan Iron and Steel |
Metallurgical Furnace MaterialsTechnology Co., Ltd.
1,011,012.83
| Notes payable | Bensteel Gaoyuan Industrial |
Development Co., Ltd.
341,547.50
| Notes payable | Benxi Aike Hydraulic Seal Co., |
Ltd.
4,017,931.36
| Notes payable | Benxi Beiying Iron and Steel |
(Group) Co., Ltd.
3,544,400,000.00 659,999,999.00
| Notes payable | Benxi Dongfeng Lake Steel |
Resources Utilization Co., Ltd.
28,021,980.30
| Notes payable | Benxi Iron and Steel (Group) |
International Trade Tengda Co.,Ltd.
201,007,087.52
| Notes payable | Benxi Iron and Steel (Group) |
Electromechanical InstallationEngineering Co., Ltd.
4,034,726.24
| Notes payable | Benxi Iron and Steel (Group) |
Machinery Manufacturing Co.,Ltd.
55,093,250.74 41,781,569.75
| Notes payable | Benxi Iron and Steel (Group) |
Construction Co., Ltd.
352,395.99 3,789,095.21
| Notes payable | Benxi Iron and Steel (Group) |
Mine Construction EngineeringCo., Ltd.
595,773.93
| Notes payable | Benxi Iron and Steel (Group) |
Mining Co., Ltd.
666,877,903.00 151,930,597.68
| Notes payable | Benxi Iron and Steel (Group) |
Equipment Engineering Co., Ltd.
949,553.06 1,611,555.04
| Notes payable | Benxi Iron and Steel (Group) |
Industrial Development Co., Ltd.
24,812,439.34
| Notes payable | Benxi Iron and Steel (Group) |
Industrial Development Co., Ltd.Recycling Branch
1,127,635.91
| Notes payable | Benxi Iron and Steel (Group) |
Information Automation Co., Ltd.
163,107.15 1,150,225.42
| Notes payable | Benxi Iron and Steel (Group) |
Metallurgical Slag Co., Ltd.
19,731,837.68 10,866,603.68
| Notes payable | Benxi Steel and Iron (Group) Co., |
Ltd.
915,300.00 361,277.52
| Notes payable | Benxi Xihu Metallurgical Charge |
Co., Ltd.
100,964,915.60
| Notes payable | Dalian Borolle Steel Pipe Co., |
Ltd.
472,187.26
| Notes payable | Liaoning Hengtai Heavy |
Machinery Co., Ltd.
6,761,265.63 2,877,574.99
| Notes payable | Liaoning Hengtong Metallurgical |
Equipment Manufacturing Co.,Ltd.
80,188,977.92 34,223,234.99
| Notes payable | Liaoning Hengyi Financial |
Leasing Co., Ltd.
9,104.14
| Notes payable | Liaoning Yitong Machinery |
Manufacturing Co., Ltd.
11,496,157.32
| Notes payable | Bengang Group International |
Economic and Trade Co., Ltd.
82,782,219.21
| Notes payable | Benxi Iron and Steel (Group) |
Industrial Development Co., Ltd.
10,191,802.55
| Notes payable | Liaoning Vocational and |
Technical College of Metallurgy
528,854.07
| Notes payable | Bengang Electric Co., Ltd. |
25,016,176.00
| Notes payable | Ansteel Group Mining Co., Ltd. |
79,210,057.06
| Notes payable | Ansteel Technology Development |
Co., Ltd.
39,644.00
| Notes payable | Ansteel Heavy Machinery Design |
and Research Institute Co., Ltd.
6,827,200.00
| Notes payable | North Hengda Logistics Co., Ltd. |
11,350.04
| Notes payable | Liaoning Hengyi Steel Trading |
Co., Ltd.
8,941,086.81
| Accounts payable | Ansteel Electric Co., Ltd. |
324,789.48Accounts payable
(Anshan) Co., Ltd.
95,508,032.52 52,203,765.63Accounts payable
| Ansteel Scrap Resources |
| Angang Steel Processing and |
Distribution (Changchun) Co.,Ltd.
81,119.58
| Accounts payable | Ansteel Rope Co., Ltd. |
191,578.40 894,924.67Accounts payable
Transportation EquipmentManufacturing Co., Ltd.
985,360.00 577,232.81Accounts payable
| Ansteel Group (Anshan) Railway |
| Ansteel Group International |
Economic and Trade Co., Ltd.
16,733,519.12Accounts payable
Gongchangling Co., Ltd.
117,603,581.10
| Ansteel Group Mining | |
| Accounts payable | Ansteel Group Mining Co., Ltd. |
591,193.88 591,193.88
| Accounts payable | Ansteel Construction Group Co., |
8,527.00
Accounts payable
| Ltd. |
| Ansteel Technology Development |
Co., Ltd.
140,000.00Accounts payable
(Anshan) Equipment Operationand Maintenance Co., Ltd.
2,228,028.59Accounts payable
| Ansteel Industrial Group |
| Ansteel Industrial Group |
Metallurgical Machinery Co.,Ltd.
3,197,220.37 2,265,928.00Accounts payable
Fan Co., Ltd.
77,970.00 168,370.00Accounts payable
| Angang Shuangsheng (Anshan) |
| Ansteel Heavy Machinery Co., |
Ltd.
3,398,533.80 2,873,047.05Accounts payable
Metallurgical Furnace MaterialsTechnology Co., Ltd.
1,466,444.82
| Anshan Iron and Steel | |
| Accounts payable | North Hengda Logistics Co., Ltd. |
25,435,334.70Accounts payable
Rolling Dandong Co., Ltd.
102,005.30Accounts payable
| Bengang Stainless Steel Cold |
| Bensteel Gaoyuan Industrial |
Development Co., Ltd.
1,281,746.64Accounts payable
Economic and Trade Co., Ltd.
51,306,166.70
| Bengang Group International | |
| Accounts payable | Bengang Group Co., Ltd. |
4,688,315.28 50,000.00Accounts payable
Ltd.
3,207,003.01Accounts payable
| Benxi Aike Hydraulic Seal Co., |
| Benxi Northern Iron Industry Co., |
Ltd.
149,204,699.40Accounts payable
(Group) Co., Ltd.
315,454,182.86 131,248,293.37Accounts payable
| Benxi Beiying Iron and Steel |
| Benxi Dongfeng Lake Steel |
Resources Utilization Co., Ltd.
18,999,688.27Accounts payable
Real Estate Development Co.,Ltd.
372,520.06 372,520.06Accounts payable
| Benxi Iron and Steel (Group) |
| Benxi Iron and Steel (Group) |
International Trade Tengda Co.,Ltd.
65,147,129.15Accounts payable
Machinery Manufacturing Co.,Ltd.
2,636,292.77 2,874,934.49Accounts payable
| Benxi Iron and Steel (Group) |
| Benxi Iron and Steel (Group) |
Construction AdvancedDecoration Co., Ltd.
397,711.62Accounts payable
Construction Co., Ltd.
407,952.50 240,928,491.19Accounts payable
| Benxi Iron and Steel (Group) |
| Benxi Iron and Steel (Group) |
Mine Construction EngineeringCo., Ltd.
5,704,240.75
| Accounts payable | Benxi Iron and Steel (Group) |
18,102,215.16 45,768,605.27
Accounts payable
| Mining Co., Ltd. |
| Benxi Iron and Steel (Group) |
Road and Bridge ConstructionEngineering Co., Ltd.
791,935.13Accounts payable
Thermal Power DevelopmentCo., Ltd.
100,889.78 413,463.33Accounts payable
| Benxi Iron and Steel (Group) |
| Benxi Iron and Steel (Group) |
Equipment Engineering Co., Ltd.
56,006,170.72 87,111,368.27Accounts payable
Industrial Development Co., Ltd.
9,175,580.25 75,043,780.30Accounts payable
| Benxi Iron and Steel (Group) |
| Benxi Iron and Steel (Group) |
Information Automation Co., Ltd.
13,453,191.94 88,684,293.06Accounts payable
Metallurgical Slag Co., Ltd.
47,009,411.99 47,468,411.05Accounts payable
| Benxi Iron and Steel (Group) |
| Benxi Steel and Iron (Group) Co., |
Ltd.
39,872,070.78Accounts payable
Mining Liaoyang Maling PelletCo., Ltd.
116,207,873.93Accounts payable
| Benxi Iron and Steel (Group) |
| Benxi Meter & Control |
Electronic Instrument IndustryCo., Ltd.
28,802.83Accounts payable
Co., Ltd.
20,313,571.32Accounts payable
| Benxi Xihu Metallurgical Charge |
| Benxi Well Surfacing |
Manufacturing Co., Ltd.
234,112.13
| Accounts payable | Freight income |
57,637.09 18,937.09Accounts payable
Ltd.
450,952.17Accounts payable
| Dalian Borolle Steel Pipe Co., |
| Delin Industrial Products Co., |
Ltd.
34,853,190.84 9,556,739.82Accounts payable
Machinery Co., Ltd.
14,627,776.85Accounts payable
| Liaoning Hengtai Heavy |
| Liaoning Hengtong Metallurgical |
Equipment Manufacturing Co.,Ltd.
15,943,904.64 30,626,084.39Accounts payable
Technician College
10,107,863.07Accounts payable
| Liaoning Metallurgical |
| Liaoning Vocational and |
Technical College of Metallurgy
48,048.00 513,779.95Accounts payable
Manufacturing Co., Ltd.
3,037,287.88Accounts payable
| Liaoning Yitong Machinery |
| Tianjin Bengang Plate Processing |
and Distribution Co., Ltd.
223,096.00
| Accounts payable | Bengang Electric Co., Ltd. |
1,893,516.67Accounts payable
Manufacturing Co., Ltd.
14,400.16Contract liabilities
| Benxi High-tech Drilling Tools |
| Angang Steel Processing and |
Distribution (Dalian) Co., Ltd.
26,248.21 2,468,274.66
Contract liabilities
Distribution (Changchun) Co.,Ltd.
433,765.38 695,012.13Contract liabilities
| Angang Steel Processing and |
| Angang Steel Distribution (Hefei) |
Co., Ltd.
3,122,010.92 4,731,954.99
| Contract liabilities | Ansteel Co., Ltd. |
930,287.84Contract liabilities
Co., Ltd.
4,381,585.23 3,631,726.76Contract liabilities
| Ansteel Chemical Technology |
| Ansteel Energy Technology Co., |
Ltd.
12,048.13
| Contract liabilities | North Hengda Logistics Co., Ltd. |
118,994,396.13 53,109,140.37Contract liabilities
Resources Utilization Co., Ltd.
1,035,901.39Contract liabilities
| Benxi Dongfeng Lake Steel |
| Benxi Iron and Steel (Group) |
Mining Mineral ResourcesDevelopment Co., Ltd.
90,019.77Contract liabilities
Mining Liaoyang Jiajiabao IronMine Co., Ltd.
40,057,730.41Contract liabilities
| Benxi Iron and Steel (Group) |
| Benxi Iron and Steel (Group) |
Industrial Development Co., Ltd.
357,907.98 535,124.96Contract liabilities
Metallurgical Slag Co., Ltd.
1,044,047.73Contract liabilities
| Benxi Iron and Steel (Group) |
| Benxi Iron and Steel (Group) |
Mining Liaoyang Maling PelletCo., Ltd.
2,970,163.60Contract liabilities
Co., Ltd.
20,000.00Contract liabilities
| Benxi Xihu Metallurgical Charge |
| Dalian Borolle Steel Pipe Co., |
Ltd.
1,647,687.00 1,776,832.88Contract liabilities
Service Co., Ltd.
47,447,914.81 14,902,176.11Contract liabilities
| Delin Lugang Supply Chain |
| Guangzhou Angang Steel |
Processing Co., Ltd.
1,598,818.30 644,213.74Contract liabilities
Equipment Manufacturing Co.,Ltd.
40,540.25Contract liabilities
| Liaoning Hengtong Metallurgical |
| Liaoning Vocational and |
Technical College of Metallurgy
0.01Contract liabilities
Wall Special Steel Co., Ltd.
776,933.91Contract liabilities
| Pangang Group Jiangyou Great |
| Tianjin Angang Steel Processing |
and Distribution Co., Ltd.
95,477.46Contract liabilities
North Trading Co., Ltd.
54,050,485.38 32,000,000.00Contract liabilities
| Tianjin Ansteel International |
| Changchun FAW Angang Steel |
Processing and Distribution Co.,Ltd.
132,535.72 69,561.39Contract liabilities
Co., Ltd.
80,484,269.96
Contract liabilities
Ltd.
4,736,783.67Other payables
| Wuhan Yuanhong Trading Co., |
| Ansteel Scrap Resources |
(Anshan) Co., Ltd.
1,000,000.00 1,000,000.00Other payables
Ltd.
29,869,230.00 3,565,330.00Other payables
| Ansteel Group Automation Co., |
| Ansteel Construction Group Co., |
Ltd.
607,805.64 5,389,177.00
| Other payables | Ansteel Metal Structure Co., Ltd. |
10,000.00 10,000.00Other payables
Co., Ltd.
345,269.90Other payables
| Ansteel Technology Development |
| Ansteel Industrial Group |
(Anshan) Equipment Operationand Maintenance Co., Ltd.
4,101,254.08Other payables
Development Co., Ltd.
2,280,175.76Other payables
| Bensteel Gaoyuan Industrial |
| Bengang Group International |
Economic and Trade Co., Ltd.
2,841,874.23 11,894,493.16
| Other payables | Bengang Group Co., Ltd. |
903,375.93 7,716,476.47Other payables
Ltd.
10,000.00Other payables
| Benxi Aike Hydraulic Seal Co., |
| Benxi Beiying Iron and Steel |
(Group) Co., Ltd.
20,777,431.47Other payables
Resources Utilization Co., Ltd.
210,000.00Other payables
| Benxi Dongfeng Lake Steel |
| Benxi Iron and Steel (Group) |
Real Estate Development Co.,Ltd.
510,910.37 510,910.37Other payables
Engineering ConstructionSupervision Co., Ltd.
1,413,282.10 1,523,543.12Other payables
| Benxi Iron and Steel (Group) |
| Benxi Iron and Steel (Group) |
International Trade Tengda Co.,Ltd.
65,212.55Other payables
Machinery Manufacturing Co.,Ltd.
1,681,991.53Other payables
| Benxi Iron and Steel (Group) |
| Benxi Iron and Steel (Group) |
Inspection and Testing Co., Ltd.
190,140.00Other payables
Construction AdvancedDecoration Co., Ltd.
2,386,190.08Other payables
| Benxi Iron and Steel (Group) |
| Benxi Iron and Steel (Group) |
Construction Co., Ltd.
183,898,256.54 53,547,549.48Other payables
Mine Construction EngineeringCo., Ltd.
23,651,293.09Other payables
| Benxi Iron and Steel (Group) |
| Benxi Iron and Steel (Group) |
Road and Bridge ConstructionEngineering Co., Ltd.
10,619,579.34
Other payables
Thermal Power DevelopmentCo., Ltd.
846,078.80 2,129,446.86Other payables
| Benxi Iron and Steel (Group) |
| Benxi Iron and Steel (Group) |
Equipment Engineering Co., Ltd.
155,059,385.61 1,089,595.17Other payables
Industrial Development Co., Ltd.
3,782,747.75 1,259,239.61Other payables
| Benxi Iron and Steel (Group) |
| Benxi Iron and Steel (Group) |
Information Automation Co., Ltd.
82,094,205.42 2,881,047.50Other payables
Ltd.
19,339,486.49 81,104,935.20Other payables
| Benxi Steel and Iron (Group) Co., |
| Benxi Xihu Metallurgical Charge |
Co., Ltd.
100,000.00Other payables
Development Co., Ltd.
23,157,491.13 33,755,860.72Other payables
| Benxi New Business |
| Dalian Borolle Steel Pipe Co., |
Ltd.
20,000.00 20,000.00Other payables
Machinery Co., Ltd.
4,996,287.37 22,000,196.88Other payables
| Liaoning Hengtai Heavy |
| Liaoning Hengtong Metallurgical |
Equipment Manufacturing Co.,Ltd.
10,000.00 3,366,743.50Other payables
Technician College
388,880.00 427,188.00Other payables
| Liaoning Metallurgical |
| Liaoning Vocational and |
Technical College of Metallurgy
353,630.00 6,401,530.88Other payables
Manufacturing Co., Ltd.
15,545.00
| Liaoning Yitong Machinery | |
| Other payables | Bengang Electric Co., Ltd. |
9,353,903.06
| Other payables | Ansteel Electric Co., Ltd. |
523,642.00
| Other payables | North Hengda Logistics Co., Ltd. |
4,384,330.48Other payables
Mining Co., Ltd.
543,412.47Other payables
| Benxi Iron and Steel (Group) |
| Ansteel Group Engineering |
Technology Co., Ltd.
23,401,702.63
XIII. Commitments and Contingencies
1. Important Commitments
Significant commitments at the balance sheet dateImportant leasing contracts that have been signed and are being performed and their financial impact
(1) According to the “Land Use Right Leasing Contract” and subsequent supplementary agreements signed
between the Company and Bengang Group Co., Ltd. on April 7, 1997, December 30, 2005 and later, theCompany leases land from Bengang Group Co., Ltd. at RMB 0.594 per square meter per month. The leasedland area is 7,669,068.17 square meters and the annual rent is RMB 54.6651 million.
(2) On August 14, 2019, the Company signed the “House Lease Agreement” with Benxi Steel (Group) and
Beiying Steel respectively, leasing the houses and auxiliary facilities occupied by 2300 and 1780 hot rollingmill production lines, and the lease term ends on December 31, 2038. The rental fee is based on the depreciationof the original rent value and the national additional tax, plus reasonable profit negotiation. The estimatedannual rent is not more than RMB 20 million yuan and RMB 18 million yuan respectively. The rental fee issettled and paid monthly. This related party transaction has been reviewed and approved at the fourth meetingof the eighth Board of Directors of the Company.
(3) On July 15, 2019, the Company signed "Land Lease Agreement" with Bengang Group and Benxi Steel
(Group) respectively, and leased and used a total of 8 pieces of land of the two companies. The lease areas are42,920.00 square meters and 728,282.30 square meters respectively, with a lease term of 20 years, and a rentalprice of RMB 1.138 yuan per square meter per month. After the agreement comes into effect, considering thenational law and policy adjustments 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 related party transactionhas been reviewed and approved at the third meeting of the eighth Board of Directors of the Company.
XIV. Events after the Balance Sheet Date
1. Description of Other Events after the Balance Sheet Date
Bengang Steel Plates Co., Ltd. intends to exchange assets with Benxi Steel and Iron (Group) Co., Ltd.(hereinafter referred to as "Benxi Steel"), the assets to be acquired by the Company are 100% equity of BenxiIron and Steel (Group) Mining Co., Ltd. The assets to be acquired by the Company are all assets and liabilitiesof the listed company except retained assets and liabilities, the difference between the assets to be purchasedand the assets to be sold out shall be made up by one party to the other in cash (hereinafter referred to as "thetransaction").As of the disclosure date of this announcement, this transaction plan needs further demonstration,communication and negotiation, and the scope of the underlying assets of the transaction, transaction price andother factors have not been finalized. After the relevant matters are determined, the Company will reconvenethe Board of Directors for review and approval.
XV. Other Important Matters
1. Others
As of June 30, 2023, the Company’s controlling shareholder, Benxi Steel and Iron (Group) Co., Ltd. holds2,409,628,094 shares of the company, among them, 360,000,000 shares are pledged, and 108,326,179 shares arerestricted and frozen.
XVI. Notes to the Main Items of the Financial Statements of the Parent company
1. Accounts Receivable
(1) Accounts receivable presented by category
Unit: yuanTypes
| Balance as at 30 June 2023 | Balance as at 1 January 2023 | ||
| Book balance | Bad debt provision | ||
Book value
| Book balance | Bad debt provision |
Book value
| Amount | Percentage | Amount | Percentage | Amount | Percentage | Amount | Percentage |
Bad debtprovisionsmade on anindividualbasis
61,930,883.00 .7.46% 61,930,883.00 100.00% 48,196,244.68 4.41% 48,196,244.68 100.00%Including:
Bad debtprovisionsmade on thecombination
768,793,549.00 92.54% 75,155,930.40 9.78% 693,637,618.60 1,045,652,547.13 95.59% 114,616,750.55 10.96% 931,035,796.58
| Including: |
| Aging |
portfolio
284,497,106.87 34.25% 75,155,930.40 26.42% 209,341,176.47 886,147,539.07 81.01% 114,616,750.55 12.93% 771,530,788.52
of relatedpartieswithin thescope ofconsolidation
484,296,442.13 58.30% 484,296,442.13 159,505,008.06 14.58% 159,505,008.06
Total 830,724,432.00 100.00% 137,086,813.40 16.50% 693,637,618.60 1,093,848,791.81 100.00% 162,812,995.23 14.88% 931,035,796.58
Bad debt provisions made on an individual basis:
Unit: yuanName of debtor
Balance as at 30 June 2023
| Book balance | Bad debt provision | Bad debts ratio (%) | Reason for provision | |
| Benxi Nanfenxinhe |
Metallurgical ChargeCo., Ltd.
48,196,244.68 48,196,244.68 100.00%
Discontinued, no returnexpected
(Group) ThirdConstructionEngineering Co., Ltd.
10,613,567.47 10,613,567.47 100.00%
| Benxi Iron and Steel | Bankruptcy and |
reorganization of theenterprise is expectedto be irrecoverable
(Group) FirstConstructionEngineering Co., Ltd.
3,121,070.85 3,121,070.85 100.00%
| Benxi Iron and Steel | Bankruptcy and |
reorganization of theenterprise is expectedto be irrecoverable
61,930,883.00 61,930,883.00
Bad debt provisions made on the combination:96,669,699.85
Unit: yuanItems
Balance as at 30 June 2023Accounts receivable Bad debt provisionBad debts ratio (%)
TotalWithin 1 year
| Within 1 year | 693,021,659.55 | 924,570,849.45 | 1.00% |
| 1 to 2 years | 865,863.89 | 14,717,227.92 | 10.00% |
| 2 to 3 years | 2,404,917.15 | 1,087,625.52 | 20.00% |
| More than 3 years | 134,431,991.41 | 153,473,088.92 | 100.00% |
| Total | 830,724,432.00 | 1,093,848,791.81 |
Notes for determining what this combination is based on:
If the bad debt provision for accounts receivable is accrued according to the general model of expected credit losses, please refer tothe disclosure method of other receivables to disclose the relevant information of bad debt provision:
□Applicable ?Not applicable
Disclosure by aging
Unit: yuanAging Balance as at 30 June 2023Within 1 year (including 1 year) 693,021,659.55
| 1 to 2 years | 865,863.89 |
| 2 to 3 years | 2,404,917.15 |
| More than 3 years | 134,431,991.41 |
3 to 4 years 134,431,991.41Total830,724,432.00
(2) Classified by bad debt provision method
Provision for bad debts in this period:
Unit: yuanType
Balance as at 1January 2023
Amount changed during the period
Balance as at 1January 2023Accrued
recovered
Written-off Other changes
| Reversed or | ||
| Provision for |
bad debts ofaccountsreceivable
162,812,995.23 2,764,651.30 1,447,761.08 158,600,582.85
162,812,995.23 2,764,651.30 1,447,761.08 158,600,582.85
(3) Actual written-off of accounts receivable in the current period
Unit: yuanItems Amount of written-off
TotalActual written-off of accounts receivable
| Actual written-off of accounts receivable | 1,447,761.08 |
Important write-off of accounts receivable:
Unit: yuanName of debtor
Nature of accounts
receivable
Amount ofwritten-off
Reason of written-
off
Written-offproceduresperformed
payment isgenerated by a
related party
| transaction | ||
| Jining Forging Center |
Sales of products461,229.33Deregistered
No
| General Manager Office Meeting | ||
| Xuzhou |
JinshanqiaoDevelopment ZoneYongan Metal
Sales of products200,265.48Revoked
General Manager
Office Meeting
No
| Material Co., Ltd. |
| Shanghai Benxi |
Iron and SteelIndustry and Trade
Sales of products193,625.29Deregistered
General Manager
Office Meeting
No
| Company |
| China Ordnance |
MaterialsNortheastCompany FushunTechnology and
Sales of products155,616.74Revoked
General Manager
Office Meeting
No
| Trade Center |
| Tonghua Grain and |
Oil Machinery
Sales of products141,139.39Deregistered
General Manager
Office Meeting
No
| Factory |
| Benxi Steel Yantai |
Marketing Co.,
| Ltd. | Sales of products |
138,378.96Deregistered
General Manager
Office Meeting
No
ZhuchengIndustrial Supplyand Marketing
| Corporation | Sales of products |
87,085.43Revoked
General ManagerOffice Meeting
No
Petroleum PipelineMachinery Product
| Distribution Office | Sales of products |
24,608.99
General Manager
Office Meeting
No
| Deregistered | ||
| Shenzhen |
ZhongtiandaMaterials Industryand Trade Co.,
| Ltd. | Sales of products |
20,441.96
General Manager
Office Meeting
No
| Deregistered | ||
| Shunde |
Xinqiangsheng
| Mold Co., Ltd. | Sales of products |
12,635.20Deregistered
General Manager
Office Meeting
No
Material
| Distribution Office | Sales of products |
7,167.87Revoked
General Manager
Office Meeting
No
ZhaoqingTownshipEnterpriseBuilding Materialsand Minerals
| Company |
Sales of products5,566.44Deregistered
General Manager
Office Meeting
No
| Total | 1,447,761.08 |
(4) The top five units with the ending balance of accounts receivable collected by the debtor
Unit: yuanName of debtor Balance as at 30 June 2023
of accounts receivable
| % of the total closing balance | Bad debt provision as at 30 |
June 2023
238,750,179.09
11.39%
| The first |
| The second |
187,716,823.84
8.96%
1,877,168.24
186,041,227.34
8.88%
1,860,412.27
| The third |
| The fourth |
149,938,272.79
7.15%
144,284,531.52
6.88%
1,442,845.32Total906,731,034.58
43.26%
2. Other Receivables
Unit: yuanItems Balance as at 30 June 2023 Balance as at 1 January 2023
The fifthOther receivables
| Other receivables | 166,743,093.49 | 150,724,545.56 |
| Total | 166,743,093.49 | 150,724,545.56 |
(1) Other receivables
1) Classification by nature of payment
Unit: yuan
| Nature | Book balance as at 30 June 2023 | Book balance as at 31 December 2022 |
| Temporary payment | 231,895,133.40 | 205,620,987.47 |
| Others | 33,356,356.95 | 8,506,439.44 |
| Total | 265,251,490.35 | 214,127,426.91 |
2) Situation of bad debt provisions
Unit: yuanBad debt provision
| The first stage | The second stage | The third stage |
TotalExpected credit lossesover the next 12months
over the entire duration(no credit impairment
occurred)
| Expected credit losses | Expected credit loss |
over the entire duration(credit impairment hasoccurred)
December 2022
801,060.44 1,353,672.38 61,248,148.53 63,402,881.35
| Balance as at 31 |
| Balance as at 31 |
December 2022 is inthe current period
second stage
-154,164.80 154,164.80
| -- Transfer to the |
| -- Transfer to the third |
stage
-925,201.28 925,201.28
period
304,421.93 164,005.63 35,445,003.54 35,913,431.10
| Provision for this |
| Derecognition in this |
period
807,915.59 807,915.59
2023
951,317.57 746,641.53 96,810,437.76 98,508,396.86Changes in the book balance of loss provisions with significant changes in the current period
□Applicable ?Not applicable
Disclosure by aging
Unit: yuanAging Balance as at 30 June 2023Within 1 year (including 1 year) 95,131,756.52
Balance as at 30 June1 to 2 years
| 1 to 2 years | 70,536,371.78 |
| 2 to 3 years | 2,772,924.29 |
| More than 3 years | 96,810,437.76 |
3 to 4 years96,810,437.76Total 265,251,490.35
3) The provision for bad debts accrued, reversed or recovered in the current period
Provision for bad debts in this period:
Unit: yuanType
Balance as at 1January 2023
Amount changed during the period
Balance as at30 June 2023Accrued
recovered
| Reversed or | Transferred or |
written-off
Other changes
bad debts ofotherreceivables
63,402,881.35 35,913,431.10 807,915.59 98,508,396.86
| Provision for | ||||||
| Total | 63,402,881.35 | 35,913,431.10 | 807,915.59 | 98,508,396.86 |
4) Other receivables actually written off in the current period
Unit: yuanItems Amount written off
807,915.59
Important write-off of other receivables:
Unit: yuanName of debtor
Nature of otherreceivables
Amount ofwritten-off
Reason of written-
off
Written-offproceduresperformed
Other receivables actually written off
Whether the
payment isgenerated by arelated partytransaction
| Whether the | ||
| Beijing Bensteel |
Material SalesCenter
Sales of products
807,915.59
Revoked
General Manager
Office Meeting
NoTotal
807,915.59
5) The top five units with the ending balance of other receivables collected by the debtor
Unit: yuanName of debtor
Nature of otherreceivables
Balance as at 30June 2023
Aging
closing balance ofother receivables
| % of the total | Provision for bad |
debts as at 30 June2023The first
payment
12,212,650.80
1年以内
4.60% 122,126.51
The second
| Temporary |
| Temporary |
payment
11,348,676.33
1至2年
4.28%
The third
payment
4,010,871.64 1年以内 1.51% 40,108.72The fourth
| Temporary |
| Temporary |
payment
4,609,686.93
1年以内
1.74% 46,096.87
The fifth
payment
3,367,748.44
1年以内
1.27% 33,677.48
| Temporary | |
| Total |
35,549,634.14
13.40% 242,009.58
3. Long-term Equity Investments
Unit: yuanItems
Balance as at 30 June 2023 Balance as at 1 January 2023Book balance
Provision for
impairment
Book value Book balance
| Provision for | Provision for |
impairment
Book value
subsidiaries
2,222,281,590.24 2,222,281,590.24 2,222,281,590.24 2,222,281,590.24
| Investment in |
| Investment in |
associates andjoint ventures
47,556,655.03 47,556,655.03 47,996,314.61 47,996,314.61
2,269,838,245.27 2,269,838,245.27 2,270,277,904.85 2,270,277,904.85
(1) Investment in subsidiaries
Unit: yuanInvestees
Balance as at 1January 2023(Book
value)
Changes in current period
Balance as at 30 June2023(Book value)
Balance of provisionfor impairment as at
30 June 2023
investment
Reduced investment
| Additional | Provision for |
impairment
Others
200,000,000.00 200,000,000.00
| Guangzhou Bensteel Trading Co., Ltd. |
| Shanghai Bensteel |
Metallurgical
229,936,718.57 229,936,718.57
| Technology Co., Ltd. |
| Dalian Benruitong |
Automotive Material
65,000,000.00 65,000,000.00
| Technology Co., Ltd. |
| Bengang Puxiang |
Cool Rolling Steel
1,019,781,571.10 1,019,781,571.10
| Sheet Co., Ltd. |
| Changchun Bensteel Sales Co., Ltd. |
28,144,875.36 28,144,875.36
and Steel Sales Co.,
| Ltd. |
219,100,329.41 219,100,329.41
and Steel Trading
| Co., Ltd. |
230,318,095.80 230,318,095.80
30,000,000.00 30,000,000.00
| Benxi Bensteel Sales Co., Ltd. |
| Shenyang Bensteel |
Metallurgical
200,000,000.00 200,000,000.00
| Technology Co., Ltd. | |||||||
| Total | 2,222,281,590.24 | 2,222,281,590.24 |
(2) Investment in associates and joint ventures
Unit: yuan
Investees
Balance as at 1January2023(Bookvalue)
Changes in current period
Balance as at 30June 2023(Bookvalue)
Balance ofprovision forimpairment as
at 30 June
2023Additionalinvestment
Reducedinvestment
Gains andlossesrecognizedunder theequity method
Othercomprehensive
incomeadjustment
Otherequitychanges
| Investment |
Declarationof cash
profit
Provisionforimpairment
Others
I. Joint venturesII. Associates
dividends orBensteel Baojin
(Shenyang)Automotive NewMaterialTechnology Co.,
| Ltd. |
47,996,314.61 -439,659.58 47,556,655.03
47,996,314.61 -439,659.58 47,556,655.03
| Subtoal |
| Total |
47,996,314.61 47,556,655.03
4. Operating Income and Operating Costs
Unit: yuanItems
Current period Previous period
| Revenue | Costs | Revenue | Costs | |
| Principal business |
29,752,956,987.4830,143,666,528.2133,392,817,816.17 32,060,330,971.40
598,633,897.79582,130,402.922,381,220,254.26 2,344,381,961.67
| Other business | ||||
| Total | 30,351,590,885.27 | 30,725,796,931.13 | 35,774,038,070.43 | 34,404,712,933.07 |
Revenue related information:
Unit: yuan
营业收入
| Contract classification |
| Classified by business area |
30,351,590,885.27
| Including: |
| Domestic |
27,268,083,739.08
3,083,507,146.19
| Abroad |
| Classified by the time of commodity transfer |
30,351,590,885.27
| Including: |
| Recognized at the time of commodity transfer |
30,350,227,817.31
1,363,067.96Total 30,351,590,885.27
Information related to performance obligations:
NoneInformation related to the transaction price allocated to the remaining performance obligations:
At the end of the reporting period, the amount of income corresponding to the performance obligations thathave been signed but not yet fulfilled or not fully fulfilled is 0.00 yuan.
5. Investment Income
Unit: yuanItems Current period Previous period
Recognized over a certain period of timeLong-term equity investment incomemeasured by cost method
53,139,377.16
| Long-term equity investment income measured by cost method |
| Long-term equity investment income measured by equity method |
-439,659.58
6,059,547.35
| Investment income from disposal of long-term equity investment |
| Investment income of financial assets |
held-for-trading during the holding
-2,502,067.50
| period |
| Investment income from debt restructuring |
694,683.35
| Total | -2,247,043.73 | 59,198,924.51 |
XVII. Supplementary Information
1. Details of Non-recurring Profit and Loss
?Applicable □Not applicable
Unit: yuanItems
| Amount | Notes |
Profit or loss from disposal of non-current assets (including the reversal partof the provision for asset impairment)
Government grants attributable to profitand loss of current period (except suchgovernment subsidy closely related to thecompany's normal business operation,meeting the regulation of national policyand enjoyed constantly in certain quotaor quantity according to a certainstandard)
34,571,691.80
Profit and loss from entrusting others toinvest or manage assets
-2,796,530.07Debt restructuring profit and loss 694,683.35Other non-operating revenue andexpenditure other than above items
-30,054,378.76
75,725.75
| Less: Impact of income tax |
| Less: Impact of minority interests (net of |
tax)
6,025.40Total2,333,715.17--Specific circumstances of other profit and loss items that meet the definition of non-recurring profit and loss:
□Applicable ?Not applicable
The Company does not have other specific circumstances of profit and loss items that meet the definition of non-recurring profitand loss.Explanation on defining the non-recurring profit and loss items listed in the “Interpretive Announcement No. 1 on InformationDisclosure of Companies Offering Securities to the Public - Non-recurring Profit and Loss” as recurring profit and loss items
□Applicable ?Not applicable
2. Return on Equity and Earnings Per Share
Profit in the Reporting Period
Equity
Earnings per share
Weighted average Return on
Basic EPS(yuan/share)
| Basic EPS(yuan/share) | Diluted EPS(yuan/share) | ||
| Net profit attributable to |
ordinary shareholders
-5.49% -0.2446 -0.1558
ordinary shareholders afterdeducting non-recurring profitand loss
-5.50% -0.2452 -0.1563