Bengang Steel Plates Co., Ltd. Semi-Annual Report 2017 Bengang Steel Plates Co., Ltd. Semi-Annual Report 2017 August, 2017 1 Bengang Steel Plates Co., Ltd. Semi-Annual Report 2017 I. Important Notice, Table of Contents, and Definitions The Board of Directors, the Supervisory Committee and the Directors, members of the Supervisory Committee and senior management of the Company guarantee that there are no misrepresentations or misleading statements, or material omission in this report, and individually and collectively accept full responsibility for the authenticity, accuracy and integrity of the information contained in this report. Wang Shu, Chairman of the Company, Han Ge, the principal in charge of the accounting, and Wang Shaoyu, Chief of Accounting Affairs, make the pledge for the authenticity, accuracy and integrity of the attached financial statements. All the members of the Board of Directors attended the board meeting on which this report was examined. The prospective statements contained in this semi-annual report do not constitute any substantial commitment to the investors. Investors should pay attention to the risks attached to investment decisions. This report is prepared in both of Chinese and English. The Chinese version shall prevail when there are any controversial statements in the two versions. The Company planed not to distribute cash dividend or bonus shares, and not to convert capital reserve into share capital. 2 Bengang Steel Plates Co., Ltd. Semi-Annual Report 2017 Table of Contents I. Important Notice, Table of Contents, and Definitions ................................................... 2 II. Company Profile and Main Financial Index ...................................................................... 5 III. Summary of Company Business............................................................................................. 8 IV. Management Discussion and Analysis ................................................................................11 V. Important Events ......................................................................................................................... 17 VI. Status of Share Capital Changes and Shareholders....................................................... 42 VII. Status of Preferred Shares ....................................................................................................... 47 VIII. Status of Directors, Supervisors, Senior Executives .................................................... 48 IX. Relevant Information about Corporate Bonds ................................................................ 49 X. Financial Report .......................................................................................................................... 54 XI. Documents available for inspection .................................................................................. 204 3 Bengang Steel Plates Co., Ltd. Semi-Annual Report 2017 Definition Terms to be defined Refers to Definition Bengang Bancai, Bengang Steel, the Company, Refers to Bengang Steel Plates Co., Ltd. the Listed Company Bengang Group Refers to Bengang Group Co., Ltd. Bengang Co. Refers to Benxi Steel & Iron (Group) Co., Ltd. Liaoning Provincial State-asset Administration Refers to Liaoning State-owned Asset Supervisory and Management Committee SSE Refers to Shenzhen Stock Exchange Bengang Puxiang Refers to Bengang Puxiang Cool Rolling Steel Sheet Co., Ltd. 4 Bengang Steel Plates Co., Ltd. Semi-Annual Report 2017 II. Company Profile and Main Financial Index I. Company Information Stock abbreviation Bengang Bancai, Bengangban B Stock Code 000761, 200761 Stock exchange for listing Shenzhen Stock Exchange Company name in Chinese 本钢板材股份有限公司 Abbreviation of Company name in 本钢板材 Chinese Company name in English (If any) BENGANG STEEL PLATES CO.,LTD. Abbreviation of Company name in BSP English (If any) Legal representative Wang Shu II. Contact Information Secretary of the Board Representative of Stock Affairs Name Sun Yanbin Tong Weigang No.16, Renmin Road, Pingshan District, No.16, Renmin Road, Pingshan District, Address Benxi City, Liaoning Province Benxi City, Liaoning Province Tel 024-47828860 024-47827003 Fax 024-47827004 024-47827004 Email bgbcsyb@126.com bgbc761@126.com III. Other Information 1. Contact Information of the Company Whether the Company’s registration address, office address and post code, web Address and email address have changed □ Applicable √ Not applicable The Company’s registration address, office address and post code, web Address and email address have not changed during the reporting period. Please refer to Annual Report 2016 for details. 2. Information Disclosure and Place for Consulting Whether the information disclosure and place for consulting have changed □ Applicable √ Not applicable Name of newspaper selected by the Company for information release, website appointed by CSRC for publishing semi-annual report 5 Bengang Steel Plates Co., Ltd. Semi-Annual Report 2017 and lodging address of semi-annual report of the Company have not changed during the reporting period. Please refer to Annual Report 2016 for details. IV. Main Accounting Data and Financial Index Whether the Company makes retroactive adjustment or restatement of the accounting data of the previous year □ Yes √ No Increase or decrease in this Same period in This reporting period reporting period over the previous year previous year (%) Operating income 20,736,486,903.74 12,629,584,569.35 64.19% Net profit attributable to the shareholders of 523,635,653.57 182,538,176.32 186.86% the listed company Net profit attributable to the shareholders of listed company after deducting non-recurring 508,873,423.83 164,516,206.59 209.32% gain/loss Net cash flows generated by operating -4,047,305,684.72 2,390,777,363.52 -269.29% activities Basic earnings per share 0.167 0.058 187.93% Diluted earnings per share 0.167 0.058 187.93% ROE 4.04% 1.52% 2.52% Increase or decrease at the end of At the end of this At the end of previous this reporting period over the reporting period reporting period previous year (%) Total assets 54,631,496,549.62 54,155,710,718.91 0.88% Net assets attributable to shareholders of the 13,249,274,456.60 12,715,354,551.15 4.20% listed company V. Differences between Domestic and Foreign Accounting Standards 1. Differences of net profit and net assets disclosed in financial reports prepared under IFRS and Chinese accounting standards. √ Applicable □ Not applicable Unit: Yuan Net profit attributable to the shareholders of the Net assets attributable to the shareholders of the listed company listed company This reporting period Previous reporting period Ending balance Beginning balance According to Chinese 523,635,653.57 182,538,176.32 13,249,274,456.60 12,715,354,551.15 accounting standards 6 Bengang Steel Plates Co., Ltd. Semi-Annual Report 2017 Items and amounts adjusted according to IFRS 2. Differences of net profit and net assets disclosed in financial reports prepared under overseas and Chinese accounting standards. □ Applicable √ Not applicable There are no differences of net profit and net assets disclosed in financial reports prepared under overseas and Chinese accounting standards during the reporting period. 3. Accounting data differences between domestic and foreign accounting standards □ Applicable √ Not applicable VI. Items and Amount of Non-Current Gains and Losses √ Applicable □ Not applicable Unit: Yuan Items Amount Notes Profit or loss from disposal of non-current assets (including the -1,578,126.30 write-off part for which assets impairment provision is made) Details of government subsidies recorded into current profits and loss(except such government subsidy closely related to the company’s normal business operation,,meeting the regulation of 15,047,000.00 national policy and enjoyed constantly in certain quota or quantity according to a certain standard) Profit or loss from investment or assets entrusted to others 3,294,593.14 Profit or loss from debt restructuring 822,116.45 Other non-operating revenue and expenditure other than above 2,130,078.13 items Less: Impact of income tax 4,928,915.36 Impact of minority interests (after tax) 24,516.32 Total 14,762,229.74 -- Explanation for defining non-recurring gains and losses items according to the "Public Offering of Securities Information Disclosure Explanatory Notice No. 1 – Non-Recurring Gains and Losses", and reasons for defining non-recurring gains and losses items listed in the document as recurring items. □ Applicable√ Not applicable There exists no situation of defining non-recurring gains and losses items listed in the document as recurring items. 7 Bengang Steel Plates Co., Ltd. Semi-Annual Report 2017 III. Summary of Company Business I. the Company's main business during the reporting period Whether the Company needs to comply with the disclosure requirement for special industry No During the reporting period, the main businesses of the company involves iron and steel smelting, rolling processing, electricity generation, coal chemical industry, special steel profile, railway, import and export trade, research and development, product sales, etc. Major products include hot-rolled plates, cold-rolled plates, zinc steel plates, special steel, silicon steel, etc. that are widely applied in fields including automobile, household appliances, petrochemical engineering, aerospace, machine manufacturing, energy transportation, architectural decoration, metal parts, etc. The Company can stably manufacture productions which represent the highest level of steel and iron industry, including high-end automobile steel sheet, pipe line, and etc. in large volume and the quality of these productions can reach the internationally advanced quality level. During the reporting period, the Company scientifically adjusts the production organization mode of each line, taking the economic operation and reducing the efficiency as the core, promoting the production of all processes to stabilize smoothly, and improving the quality of economic operation steadily. The Company adheres to market-oriented strategy, continuously focused on customer needs, optimizes the structure of the perfect layout, strengthens market development, thus product efficiency has been continuously enhanced. Through the focus on coal blending, strict controls on non-productive expenses, the Company actively carried out tapping the potential by benchmarking and other measures to continuously reduce the cost level. II. Major Changes in Main Assets 1. Major Changes in Main Assets Main assets Major changes As at 30 June 2017, balance of construction materials was RMB 4,558.9 thousand, Construction materials decreased by 41.43% compared with beginning balance, mainly due to an increase in drawing. As at 30 June 2017, balance of notes receivable was RMB 3,486,513.7 thousand, Notes receivable increased by 71.69% compared with beginning balance, mainly due to an increase in debt collection. As at 30 June 2017, balance of prepayments was RMB 658,157.9 thousand, increased by Prepayments 33.27% compared with beginning balance, mainly due to an increase in prepayment business. As at 30 June 2017, balance of interest receivable was RMB 2,663.3 thousand, decreased Interest receivable by 36.72% compared with beginning balance, mainly due to a decrease in fixed time deposits. 8 Bengang Steel Plates Co., Ltd. Semi-Annual Report 2017 As at 30 June 2017, balance of other receivables was RMB 165,294.6 thousand, Other receivables increased by 40.19% compared with beginning balance, mainly due to an increase in current payments. As at 30 June 2017, balance of other current assets was RMB 280,833.2 thousand, Other current assets decreased by 45.30% compared with beginning balance, mainly due to the reduction of short-term banking products in the end of this period. As at 30 June 2017, balance of available-for-sale financial assets was RMB 5,856.5 Available-for-sale financial assets thousand, decreased by 60.58% compared with beginning balance, mainly due to the transfer to long-term equity investment. 2. Main Information of Overseas Assets □ Applicable √ Not applicable III. Analysis on Core Competitiveness Whether the Company needs to comply with the disclosure requirement for special industry No In order to comprehensively upgrade the level of technological innovation and the ability to create efficiency, closely surround the three factors of variety, quality, the Company strengthened the variety adjustment and market development, improved product quality stability and capacity of guarantee, promoted low-cost and green manufacturing technology, and focused on the constraints of enterprise development key technical problems in 2017. The Company actively carried out variety enhancement, product development, production and marketing research, optimized the variety structure, improved profitability. The Company completed new product development of 32 brands in the first half year, including Martensitic dual-phase steels for wheel spokes RS590-M, high-grade corrosion-resistant pipeline steel, cold-rolled low alloy high-strength steel HC500La, hot-rolled pickling plate SP231-440F, SP251-590, ball mill steel ball and grinding rod for foreign trade, etc. Performance testing of all qualified to meet user requirements; some varieties have realized batch supply. The Company actively carried out product certification and factory certification. In the first half year, a total of 21 brands of cold-rolled, galvanized, pickling plate, and special steel products have been certificated. Certifying users include General Motors, GAC, SAIC, Brilliance, Geely, FAW and many other automotive plants. At present, Volkswagen, GM, SAIC and other 45 products certification work is underway. Among certificated products, SP252-540F has passed the Nissan Automotive Global Certification, galvanized product CR420LA has passed the GM Pan-Asia Global Certification. Also, performance of three brands CR590T, 340Y-DP, and CR180B2 has met GM requirements and will pass certification soon. The Company organized and completed the factory certification for Shenlong automobile, FAW Volkswagen automobile, Dongfeng Nissan, SAIC, India BIS, etc. At present, the Company passed the preliminary factory review for Volkswagen DY project, which is a milestone for the automobile products certification work of the Company. The Company focused on national science and technology innovation policy and guide direction, continued to build high-level research and development platform, declared for national, provincial major science and technology projects through multi-channel. The Company organized the declarations for one project of "Local Professional Technology Innovation Platform Central Guide Local Science And Technology Development Special Funds" by the State Ministry of Science and Technology, three projects of national key research and development program, three projects of "NSFC - Liaoning Joint Fund" by Provincial Science And Technology Department. In addition, the Company actively encouraged the doctoral research and development staff to declare the provincial science and technology department doctoral start-up fund projects. 9 Bengang Steel Plates Co., Ltd. Semi-Annual Report 2017 Using the project as the carrier, the Company actively carried out "production, schooling and research" cooperation and technical exchanges with universities and scientific research institutes to enhance the technological innovation level of the Company. Combined with the current status of existing technology and equipment, as well as the latest technology development in the industry, the Company actively organized technical exchange activities with Shenyang Metal Institute of CAs, Northeastern University, Beijing University of Science and Technology, Jilin Universities and American Levy Corporation. In the first half year, a total of 34 patents were authorized, 15 patents were accepted for review by the State Patent Office. The Company has completed the certification as a Liaoning Province Intellectual Property Superiority Enterprise. 10 Bengang Steel Plates Co., Ltd. Semi-Annual Report 2017 IV. Management Discussion and Analysis I. General In the first half year, influence by the state policies to resolve the excess capacity and clean up the production of substandard steel products, the steel market gradually tuned better. The Company adjusted production mode, strengthened economic operation, and thus the benefit improved compared to same period in previous year. During January to June, the Company produced 4.8568 million tons of pig iron, which decreased by 0.83% compared to same period in previous year; produced 4.9149 million tons crude steel, which increased by 2.86% compared to same period in previous year; produced 6.3215 million tons hot-rolled plate, which increased by 15.63% compared to same period in previous year; produced 2.8491 million tons cold-rolled plate, which increased by 53.77% compared to same period in previous year; and produced 402,900 tons special steel, which increased by 11.7% compared to same period in previous year. The main work done in production operation during the first half year is as followings: 1. The Company vigorously promoted new product research and development, experimental research, application, technical services, and constantly improved the ability of scientific and technological innovation. By adjusting the product structure, and carrying out special management to key varieties with high profitability, the Company constantly expanded the market share of high value-added products. 2. The Company actively expanded procurement methods, and actively reduced procurement costs through the benchmarking price comparison, variety substitution, structural adjustment, timing procurement and other measures. 3. The Company focused on coal blending to reduce cost, strengthened economic operation. In accordance with the principle of cost-effective, at the same time of ensuring the stability of production, the Company achieved lower production costs through the development of new products to optimize the coal blending structure. The Company strictly controlled non-productive expense expenditure, and significantly reduced the non-productive expense quota. 4. The Company adhered to the principle of maximizing economic benefits, innovated production organization mode. Taking the domestic and foreign advanced steel enterprises as the benchmark, the Company actively carried out key processes for tapping the mark, and effectively improved own short board, lowered the cost consumption level. 5. The Company strengthened environmental protection responsibility implementation, tightened environmental protection facilities operation management. The Company strengthened the source of pollution control, and focused on day-to-day supervision and inspection of water, gas, sound, slag and others, implemented closed-loop management measures. The Company pushed forward the construction of environmental protection project to ensure pollutant emission reduction targets. II. Main Business Analysis For relevant information please refer to “Management Discussion and Analysis 1. General”. Year-on-year changes in major financial data: Unit: Yuan Increase or decrease in this Same period in This reporting period reporting period over the Reason for change previous year previous year (%) Sales and prices in this Operating Income 20,736,486,903.74 12,629,584,569.35 64.19% period increased over 11 Bengang Steel Plates Co., Ltd. Semi-Annual Report 2017 same period in previous year Sales and raw material prices increased over Operating Cost 18,690,665,966.11 10,914,182,302.04 71.25% same period in previous year Freight expenses Selling and distribution 587,632,707.43 430,061,063.14 36.64% increased over same expenses period in previous year General and 358,951,405.08 351,954,718.48 1.99% administrative expenses Net exchange losses Financial expenses 381,513,404.80 586,667,825.19 -34.97% decreased over same period in previous year Income tax expense 117,105,061.16 140,062,221.29 -16.39% Investment in R&D Research & Expenses increased over 690,127,962.35 489,537,695.09 40.98% Development Expenses same period in previous year Cash paid for goods and Net cash flows generated services increased over -4,047,305,684.72 2,390,777,363.52 -269.29% from operating activities same period in previous year Cash received from Net cash flow generated return on investments from investment -454,763,829.82 -868,753,571.38 47.65% increased over same activities period in previous year Cash received from Net cash flow generated borrowings increased 3,755,056,060.56 855,170,792.73 339.10% from financing activities over same period in previous year Net cash flows generated Net increase in cash and from operating activities -788,599,857.18 2,765,662,683.48 -128.51% cash equivalents decreased over same period in previous year Whether the Company’s profit composition or source of profit during the reporting period changed significantly □ Applicable √ Not applicable The Company’s profit composition or source of profit during the reporting period did not change significantly. The composition of main business: Unit: Yuan 12 Bengang Steel Plates Co., Ltd. Semi-Annual Report 2017 Operating income Operating cost Gross margin change over same change over same change over same Operating Income Operating Cost Gross margin period in previous period in previous period in previous year year year By industries Industry 19,476,278,905.41 17,638,682,335.86 9.44% 63.79% 71.47% -4.05% By products Steel plate 19,219,245,053.74 17,345,350,725.13 9.75% 63.73% 70.74% -3.71% Billet Others 257,033,851.67 293,331,610.73 -14.12% 68.95% 129.14% -29.97% By regions Northeast 4,467,506,012.00 4,062,831,285.75 9.06% 77.02% 81.05% -2.02% North China 2,419,559,512.78 2,201,840,664.41 9.00% 66.64% 71.81% -2.73% East China 5,817,564,509.05 5,278,286,740.22 9.27% 62.13% 72.05% -5.23% Northwest 46,743,069.37 42,255,282.19 9.60% 60.73% 64.79% -2.23% Central south 851,113,388.17 773,958,212.60 9.07% 24.17% 28.39% -2.98% Export 5,873,792,414.05 5,279,510,150.71 10.12% 62.59% 72.26% -5.04% III. Analysis of Non-core Business √ Applicable □ Not applicable Unit: Yuan Proportion in total Amount Explanation of cause Sustainable (yes or no) profit Income on Income from external 3,294,593.14 0.51% Yes investment financial management Gains or losses from the change in 0.00% fair value Impairment of Inventory loss and bad debt -43,390,454.54 -6.71% No assets loss Non-operating 21,014,488.58 3.25% No income Non-operating 4,593,420.30 0.71% No expenses 13 Bengang Steel Plates Co., Ltd. Semi-Annual Report 2017 IV. Assets and Liabilities 1. Significant Change of Assets Components Unit: Yuan At the end of this reporting At the end of the Same period period in previous year Proportion Proportion in Proportion in Notes to significant changes change Amount the total Amount the total assets (%) assets (%) Cash at bank and 12,240,579,15 7,772,079,707. 22.41% 16.13% 6.28% on hand 1.57 93 Accounts 536,054,820.2 0.98% 452,703,991.36 0.94% 0.04% receivable 1 9,834,703,845. 9,504,612,643. Inventories 18.00% 19.72% -1.72% 66 59 19,753,582,76 19,085,082,253 Fixed assets 36.16% 39.60% -3.44% 8.45 .61 Construction in 7,030,049,975. 7,037,486,548. 12.87% 14.60% -1.73% progress 69 61 22,787,674,40 18,182,664,879 Short-term loans 41.71% 37.73% 3.98% 0.00 .48 3,161,338,135. 2,288,189,324. Long-term loans 5.79% 4.75% 1.04% 87 24 2. Assets and Liabilities Measured at Fair Value □ Applicable √ Not applicable 3. Restricted Assets by the End of the Period Book value at the end of this Items Reason of restriction reporting period Monetary assets 755,604,520.08 Deposit for notes and L/C Notes receivable 1,385,808,380.90 Pledged for acceptance bill Total 2,141,412,900.98 14 Bengang Steel Plates Co., Ltd. Semi-Annual Report 2017 V. Investment 1. General □ Applicable √ Not applicable 2. Acquiring Significant Equity Investment in the Reporting Period □ Applicable √ Not applicable 3. Undergoing Significant Non-equity Investment in the Reporting Period □ Applicable √ Not applicable 4. Investment of Financial Assets (1) Investment in Securities □ Applicable √ Not applicable (2) Investment in Derivatives □ Applicable √ Not applicable VI. Significant Assets and Equity Sold in Reporting Period 1. Significant Assets Sold □ Applicable √ Not applicable 2. Substantial Equity Sold □ Applicable √ Not applicable VII. Analysis on Main Subsidiaries and Share Participating Companies √ Applicable □ Not applicable Main subsidiaries and the joint-stock companies influencing over 10% net profit of the Company Unit: Yuan Company Company Main Registered Operating Industry Total assets Net assets Turnover Net Profit Name type business capital profit Bengang Processing Steel rolling 1,920,000,0 4,210,054,9 1,983,584,0 3,953,643,0 37,340,60 28,005,452.6 Puxiang Subsidiary and sales of process 00.00 27.30 63.79 69.30 3.59 8 Cool steel 15 Bengang Steel Plates Co., Ltd. Semi-Annual Report 2017 Rolling Steel Sheet Co., Ltd. Acquirement and disposal of subsidiaries during the reporting period □ Applicable √ Not applicable Illustration of main joint-stock companies VIII. Structured Entities controlled by the Company □ Applicable √ Not applicable IX. Forecast of operating performance for during January to September 2017 Warning and reason for that forecast of the cumulative net profit from the beginning of the year to the end of the next reporting period might be a loss or due to significant change compared to the previous year □ Applicable √ Not applicable X. Risks and countermeasures for the Company 1. Operational risk At present, the domestic steel industry is still in full competition, and the dividend from the structural reform of the supply side remains to be observed. In the first half year, domestic steel prices warmed up but fluctuated; in the future, the supply side reform will continue to deepen, the steel industry reshuffle will continue to disturb the stability of steel prices, and then affect the Company's operating efficiency. At the same time, the main raw fuel for the company is iron ore, coal, etc. The related raw fuel prices will directly affect the Company's production costs and operating efficiency. In the future, the volatility of the raw fuel price will have a certain impact on the Company's profit level. Countermeasures: Strengthen the market trend, scientifically and rationally formulate sales policies and strategies, and strive to form varieties, regions, and users’ market competitive advantages. At the same time, comprehensively improve the level of technological innovation, independent innovation capabilities, increase the development of high value-added products, improve the quality of varieties and physical, and improve product efficiency. Strengthen the bulk raw fuel market judgments, strengthen communication and strategic cooperation with suppliers, and reduce the impact of raw fuel purchase price fluctuation by increasing timing procurement and strengthening inventory management measures. 2. Environmental risk Government supervision and law enforcement is more stringent, and the enterprise environmental protection supervision and standards continue to improve. The enhanced public awareness of environmental protection leads to higher requirements of environmental protection for enterprises. Steel enterprises are facing a huge environmental pressure. Countermeasures: Strengthen the internal environmental protection, accelerate the implementation of key energy saving and emission reduction projects, strengthen the implementation of environmental protection responsibility, enhance the control of source of pollution, strict environmental protection facilities operation management, to ensure that the discharge meets the standards. 16 Bengang Steel Plates Co., Ltd. Semi-Annual Report 2017 V. Important Events I. Annual General Meeting of Shareholders and Temporary General Meeting of Shareholders held during the Reporting Period 1. Annual General Meeting of Shareholders Investor Index of information Sessions Type Meeting Date Date of disclosure participation ratio disclosure Announcement No.:2017-025 2016 Annual General Annual General 78.56% 1 June, 2017 2 June, 2017 Disclosure address Meeting Meeting http://www.cninfo.co m.cn 2. Temporary general meeting Request by preferred stockholders whose voting rights restore □ Applicable √ Not applicable II. Profit Distribution or Capital Reserve Conversion Proposal in the Reporting Period □ Applicable √ Not applicable The Company planed not to distribute cash dividend or bonus shares, and not to convert capital reserve into share capital during the reporting period. III. The Fulfilled Commitments During The Reporting Period and Under-Fulfillment Commitments by the End of the Period Made by Actual Controller, Acquirer, Director, Supervisor, Senior Management Personnel and other Related Parties. □ Applicable √ Not applicable There was no fulfilled commitment during the reporting period or under-fulfillment commitment by the end of the period made by actual controller, acquirer, director, supervisor, senior management personnel and other related parties. IV. Appointment and Dismiss of Certified Accountant’s Firm Whether the semi-annual report has been audited □ Yes √ No The semi-annual report has not been audited 17 Bengang Steel Plates Co., Ltd. Semi-Annual Report 2017 V. Illustrations of the Board of Directors and Supervisory Committee on the Non-standard Audit Report Issued by the CPAs for this Reporting Period □ Applicable √ Not applicable VI. Illustrations of the Board of Directors on the Non-standard Audit Report Issued by the CPAs for Previous Reporting Period □ Applicable √ Not applicable VII. Bankrupt and Reforming Events □ Applicable √ Not applicable There was no bankrupt and reforming event during the reporting period. VIII. Lawsuits and Arbitrations Significant lawsuits and arbitrations □ Applicable √ Not applicable There was no significant lawsuit or arbitrations during the reporting period. Others lawsuits and arbitrations □ Applicable √ Not applicable IX. Punishment and Rectification □ Applicable √ Not applicable There was no punishment or rectification during the reporting period. X. Credit Status of the Company and its Controlling Shareholders and Actual Controllers √ Applicable □ Not applicable There was no effective judgment of a court or large amount of debt maturity that the Company, its controlling shareholders and actual controller failed to perform or pay off during the reporting period. XI. Implementation Situation of Stock Incentive Plan of the Company, Employee Stock Ownership Plan or Other Employee Incentive Measures □ Applicable √ Not applicable There was no stock incentive plan, employee stock ownership plan or other employee incentives that have been implemented. 18 Bengang Steel Plates Co., Ltd. Semi-Annual Report 2017 XII. Major Related Party Transactions 1. Related party transactions relevant to daily operations √ Applicable □ Not applicable The Amount approve Whether Content Content of Whether Whether Type of Price of Proporti d exceed of of related exceed exceed Index related related on of trading the Date of Related Relation related related party the the of party party similar limit of approve disclosu parties ship party party transacti approve approve disclos transacti transacti transacti transacti d re transacti transacti ons d d ure ons ons ons ons limited ons ons RMB limited limited RMB (Y/N) 10,000 10,000 Benxi Purchas Account Execute Steel & Parent e of s On Related accordin Iron 12,781.8 Compan goods payable agreeme agreeme 0.68% 35,000 No g to the No (Group) 7 y and for nt nt price agreeme Co., services repair nt Ltd. Benxi Purchas Execute Steel & Parent e of Land On Related accordin Iron Compan goods leasing agreeme agreeme 2,734.57 0.15% No g to the No (Group) y and fee nt nt price agreeme Co., services nt Ltd. Bengan g Cold-rol Purchas Execute led Same e of On Related accordin Stainles controll goods Products agreeme agreeme 17.5 0.00% 500 No g to the Yes s Steel er and nt nt price agreeme Dandon services nt g Co., Ltd. Benxi Steel & Purchas Execute Iron Same e of On Related accordin Labor (Group) controll goods agreeme agreeme 253.76 0.01% No g to the No cost Mining er and nt nt price agreeme Co., services nt Ltd. 19 Bengang Steel Plates Co., Ltd. Semi-Annual Report 2017 Benxi Raw Steel & Purchas Execute material Iron Same e of On Related accordin and 217,638. (Group) controll goods agreeme agreeme 11.64% 400,000 No g to the Yes supplem 69 Mining er and nt nt price agreeme entary Co., services nt material Ltd. Benxi Steel & Purchas Execute Iron Same e of On Related accordin (Group) controll goods Freight agreeme agreeme 3.18 0.00% No g to the No Mining er and nt nt price agreeme Co., services nt Ltd. Benxi Steel & Raw Iron Purchas Execute material (Group) Same e of On Related accordin and 12,820.0 Metallur controll goods agreeme agreeme 0.69% 20,000 No g to the Yes supplem 8 gy er and nt nt price agreeme entary Residue services nt material s Co., Ltd. Benxi Steel & Iron (Group) Purchas Execute Steel & Same e of On Related accordin Processi Iron controll goods agreeme agreeme 76.12 0.00% 1,000 No g to the No ng fee Process er and nt nt price agreeme and services nt Logistic s Co., Ltd. Benxi Steel & Iron Purchas Execute (Group) Same e of Raw On Related accordin Real-est controll goods material agreeme agreeme 5,006.75 0.27% 12,000 No g to the No ate er and s nt nt price agreeme Develop services nt ment Co., 20 Bengang Steel Plates Co., Ltd. Semi-Annual Report 2017 Ltd. Benxi Steel & Iron Purchas Execute (Group) Same e of On Related accordin Machine Spare controll goods agreeme agreeme 5,522.36 0.30% 30,000 No g to the No ry parts er and nt nt price agreeme Manufa services nt cture Co., Ltd. Benxi Steel & Iron Purchas Execute (Group) Same e of On Related accordin Machine Repair controll goods agreeme agreeme 368.87 0.02% No g to the No ry services er and nt nt price agreeme Manufa services nt cture Co., Ltd. Benxi Steel & Purchas Execute Iron Same e of On Related accordin (Group) Spare controll goods agreeme agreeme 734.34 0.04% 70,000 No g to the No Constru parts er and nt nt price agreeme ction services nt Co., Ltd. Benxi Steel & Purchas Execute Iron Same e of On Related accordin (Group) Project controll goods agreeme agreeme 12,940.6 0.69% No g to the No Constru fee er and nt nt price agreeme ction services nt Co., Ltd. Benxi Purchas Execute Steel & Same e of On Related accordin Iron Repair controll goods agreeme agreeme 3,237.98 0.17% No g to the No (Group) services er and nt nt price agreeme Constru services nt ction 21 Bengang Steel Plates Co., Ltd. Semi-Annual Report 2017 Co., Ltd. Benxi Steel & Raw Purchas Execute Iron material Same e of On Related accordin (Group) and controll goods agreeme agreeme 464.78 0.02% No g to the Yes Constru supplem er and nt nt price agreeme ction entary services nt Co., material Ltd. Benxi Steel & Purchas Execute Iron Same e of On Related accordin (Group) controll goods Freight agreeme agreeme 155.04 0.01% No g to the No Constru er and nt nt price agreeme ction services nt Co., Ltd. Benxi Steel & Iron Purchas Execute (Group) Same e of On Related accordin Industri Spare controll goods agreeme agreeme 8,905.66 0.48% No g to the No al parts er and nt nt price agreeme Develop services nt ment Co., Ltd. Benxi Steel & Iron Raw Purchas Execute (Group) material Same e of On Related accordin Industri and 10,672.6 controll goods agreeme agreeme 0.57% 45,000 No g to the Yes al supplem 6 er and nt nt price agreeme Develop entary services nt ment material Co., Ltd. Benxi Purchas Execute Steel & Same e of On Related accordin Repair Iron controll goods agreeme agreeme 1,117.99 0.06% No g to the No services (Group) er and nt nt price agreeme Industri services nt 22 Bengang Steel Plates Co., Ltd. Semi-Annual Report 2017 al Develop ment Co., Ltd. Benxi Steel & Iron Purchas Execute (Group) Same e of On Related accordin Industri controll goods Freight agreeme agreeme 137.06 0.01% No g to the No al er and nt nt price agreeme Develop services nt ment Co., Ltd. Benxi Steel & Iron Purchas Execute (Group) Same e of On Related accordin Industri Project controll goods agreeme agreeme 139.82 0.01% No g to the No al fee er and nt nt price agreeme Develop services nt ment Co., Ltd. Benxi Raw Steel & material Iron Purchas & Execute (Group) Same e of supplem On Related accordin Constru controll goods entary agreeme agreeme 139.66 0.01% 25,000 No g to the Yes ction er and material nt nt price agreeme and services s & nt Repairin spare g Co., parts Ltd. Benxi Steel & Purchas Execute Iron Same e of On Related accordin (Group) Project controll goods agreeme agreeme 2,870.64 0.15% No g to the No Constru fee er and nt nt price agreeme ction services nt and Repairin 23 Bengang Steel Plates Co., Ltd. Semi-Annual Report 2017 g Co., Ltd. Benxi Steel & Iron Purchas Account Execute (Group) Same e of s On Related accordin Constru controll goods payable agreeme agreeme 2,130.99 0.11% No g to the No ction er and for nt nt price agreeme and services repair nt Repairin g Co., Ltd. Bengan Raw Purchas Execute g material Same e of On Related accordin Electron and controll goods agreeme agreeme 8,426.07 0.45% 21,000 No g to the Yes ics and supplem er and nt nt price agreeme Gas Co., entary services nt Ltd. material Bengan Purchas Execute g Same e of On Related accordin Electron Project controll goods agreeme agreeme 41.94 0.00% No g to the No ics and fee er and nt nt price agreeme Gas Co., services nt Ltd. Bengan Purchas Execute g Same e of On Related accordin Electron Repair controll goods agreeme agreeme 692.18 0.04% No g to the No ics and services er and nt nt price agreeme Gas Co., services nt Ltd. Benxi High-tec h Purchas Execute Drilling Same e of On Related accordin Spare Tools controll goods agreeme agreeme 39.31 0.00% 800 No g to the No parts Manufa er and nt nt price agreeme cture services nt Co., Ltd. Benxi Same Purchas Labor On Related Execute New controll e of protecti agreeme agreeme 29.45 0.00% 2,000 No accordin No Career er goods on fee nt nt price g to the 24 Bengang Steel Plates Co., Ltd. Semi-Annual Report 2017 Develop and agreeme ment services nt Co., Ltd. Liaonin g Purchas Execute Metallur Same e of On Related accordin Spare gy controll goods agreeme agreeme 1,319.31 0.07% 3,000 No g to the No parts Technici er and nt nt price agreeme an services nt College Liaonin g Purchas Execute Metallur Same e of On Related accordin Spare gy controll goods agreeme agreeme 230.33 0.01% 1,500 No g to the No parts Technici er and nt nt price agreeme an services nt College Bengan g Group Internati Purchas Execute onal Same e of On Related accordin Agency Econom controll goods agreeme agreeme 3,685.68 0.20% 36,000 No g to the No fee ic and er and nt nt price agreeme Trading services nt Co., Ltd. Bengan g Group Internati Purchas Execute onal Same e of Port On Related accordin Econom controll goods surcharg agreeme agreeme 7,751.15 0.41% No g to the No ic and er and es nt nt price agreeme Trading services nt Co., Ltd. Benxi Steel & Purchas Execute Iron Same e of On Related accordin Spare (Group) controll goods agreeme agreeme 693.23 0.04% 8,000 No g to the No parts Informat er and nt nt price agreeme ion and services nt Automat 25 Bengang Steel Plates Co., Ltd. Semi-Annual Report 2017 ic Tech Co., Ltd. Benxi Steel & Iron Purchas Execute (Group) Same e of On Related accordin Informat Repair controll goods agreeme agreeme 305.94 0.02% No g to the No ion and services er and nt nt price agreeme Automat services nt ic Tech Co., Ltd. Benxi Steel & Iron Purchas Execute (Group) Same e of On Related accordin Thermal Heating controll goods agreeme agreeme 168.6 0.01% No g to the No Power costs er and nt nt price agreeme Develop services nt ment Co., Ltd. Benxi Steel & Iron Raw Purchas Execute (Group) material Same e of On Related accordin Thermal and controll goods agreeme agreeme 0 0.00% 2,000 No g to the Yes Power supplem er and nt nt price agreeme Develop entary services nt ment material Co., Ltd. Benxi Steel & Purchas Execute Iron Same e of On Related accordin Design (Group) controll goods agreeme agreeme 235.9 0.01% 3,000 No g to the No fees Designi er and nt nt price agreeme ng services nt Institute Benxi Same Purchas Raw On Related Execute 472,729. 1,350,00 Beiying controll e of material agreeme agreeme 25.29% No accordin Yes 42 0 Steel & er goods and nt nt price g to the 26 Bengang Steel Plates Co., Ltd. Semi-Annual Report 2017 Iron and supplem agreeme (Group) services entary nt Co., material Ltd. Benxi Beiying Purchas Execute Steel & Same e of Energy On Related accordin 50,184.0 Iron controll goods & agreeme agreeme 2.68% No g to the No 8 (Group) er and Power nt nt price agreeme Co., services nt Ltd. Benxi Beiying Purchas Execute Steel & Same e of On Related accordin Iron controll goods Freight agreeme agreeme 889.48 0.05% No g to the No (Group) er and nt nt price agreeme Co., services nt Ltd. Benxi Beiying Purchas Execute Steel & Same e of On Related accordin Labor Iron controll goods agreeme agreeme 5,563.01 0.30% No g to the No cost (Group) er and nt nt price agreeme Co., services nt Ltd. Benxi Beiying Purchas Execute Steel & Same e of On Related accordin Spare Iron controll goods agreeme agreeme 1,844.21 0.10% No g to the No parts (Group) er and nt nt price agreeme Co., services nt Ltd. Liaonin g Hengton g Purchas Raw Execute Metallur Same e of material On Related accordin 10,661.5 gical controll goods and agreeme agreeme 0.57% 18,000 No g to the Yes 4 Equipm er and spare nt nt price agreeme ent services parts nt Manufa cture Co., 27 Bengang Steel Plates Co., Ltd. Semi-Annual Report 2017 Ltd. Liaonin g Purchas Raw Execute Hengtai Same e of material On Related accordin Heavy controll goods and agreeme agreeme 3,873.44 0.21% 7,000 No g to the Yes Machine er and spare nt nt price agreeme ry Co., services parts nt Ltd. Liaonin g Purchas Execute Repair Hengtai Same e of On Related accordin and Heavy controll goods agreeme agreeme 636.47 0.03% No g to the No labor Machine er and nt nt price agreeme cost ry Co., services nt Ltd. Purchas Execute Bengan e of Property On Related accordin g Group Controll goods manage agreeme agreeme 31.07 0.00% 800 No g to the No Co., er and ment fee nt nt price agreeme Ltd. services nt Bengan Execute g Sales of Same Energy On Related accordin Electron goods controll & agreeme agreeme 49.63 0.00% 500 No g to the No ics and and er Power nt nt price agreeme Gas Co., services nt Ltd. Raw Benxi material Beiying & Execute Sales of Steel & Same supplem On Related accordin goods 34,778.4 Iron controll entary agreeme agreeme 1.68% 150,000 No g to the Yes and 3 (Group) er material nt nt price agreeme services Co., s& nt Ltd. spare parts Benxi Beiying Execute Sales of Steel & Same On Related accordin goods Iron controll Products agreeme agreeme 497.33 0.02% No g to the Yes and (Group) er nt nt price agreeme services Co., nt Ltd. 28 Bengang Steel Plates Co., Ltd. Semi-Annual Report 2017 Benxi Beiying Execute Sales of Steel & Same Energy On Related accordin goods 14,389.3 Iron controll & agreeme agreeme 0.69% No g to the No and 1 (Group) er Power nt nt price agreeme services Co., nt Ltd. Benxi Steel & Iron Execute (Group) Sales of Same Energy On Related accordin Real-est goods controll & agreeme agreeme 13.76 0.00% 850 No g to the No ate and er Power nt nt price agreeme Develop services nt ment Co., Ltd. Benxi Steel & Iron (Group) Execute Sales of Steel & Same Energy On Related accordin goods Iron controll & agreeme agreeme 50.3 0.00% 10,000 No g to the No and Process er Power nt nt price agreeme services and nt Logistic s Co., Ltd. Benxi Steel & Iron (Group) Execute Sales of Steel & Same On Related accordin goods Iron controll Products agreeme agreeme 0 0.00% No g to the Yes and Process er nt nt price agreeme services and nt Logistic s Co., Ltd. Benxi Sales of Execute Same On Related Steel & goods accordin controll Products agreeme agreeme 462.07 0.02% 18,000 No Yes Iron and g to the er nt nt price (Group) services agreeme 29 Bengang Steel Plates Co., Ltd. Semi-Annual Report 2017 Machine nt ry Manufa cture Co., Ltd. Benxi Steel & Iron Execute (Group) Sales of Same Energy On Related accordin Machine goods controll & agreeme agreeme 791.36 0.04% No g to the No ry and er Power nt nt price agreeme Manufa services nt cture Co., Ltd. Benxi Raw Steel & material Iron & Execute (Group) Sales of Same supplem On Related accordin Machine goods controll entary agreeme agreeme 51.41 0.00% No g to the No ry and er material nt nt price agreeme Manufa services s& nt cture spare Co., parts Ltd. Benxi Steel & Execute Iron Sales of Same Energy On Related accordin (Group) goods controll & agreeme agreeme 214.45 0.01% 30,000 No g to the No Constru and er Power nt nt price agreeme ction services nt Co., Ltd. Raw Benxi material Steel & & Execute Iron Sales of Same supplem On Related accordin (Group) goods controll entary agreeme agreeme 138.41 0.01% No g to the Yes Constru and er material nt nt price agreeme ction services s& nt Co., spare Ltd. parts 30 Bengang Steel Plates Co., Ltd. Semi-Annual Report 2017 Benxi Steel & Execute Sales of Iron Same Energy On Related accordin goods 45,858.2 (Group) controll & agreeme agreeme 2.21% 100,000 No g to the No and 1 Mining er Power nt nt price agreeme services Co., nt Ltd. Raw Benxi material Steel & & Execute Sales of Iron Same supplem On Related accordin goods (Group) controll entary agreeme agreeme 646.77 0.03% No g to the No and Mining er material nt nt price agreeme services Co., s& nt Ltd. spare parts Benxi Steel & Execute Sales of Iron Same On Related accordin goods Freight (Group) controll agreeme agreeme 407.23 0.02% No g to the No and revenue Mining er nt nt price agreeme services Co., nt Ltd. Benxi Steel & Iron Execute (Group) Sales of Same Energy On Related accordin Thermal goods controll & agreeme agreeme 1,452.38 0.07% 15,000 No g to the No Power and er Power nt nt price agreeme Develop services nt ment Co., Ltd. Benxi Raw Steel & material Iron & Execute (Group) Sales of Same supplem On Related accordin Thermal goods controll entary agreeme agreeme 68.57 0.00% No g to the No Power and er material nt nt price agreeme Develop services s& nt ment spare Co., parts Ltd. 31 Bengang Steel Plates Co., Ltd. Semi-Annual Report 2017 Benxi Steel & Iron Execute (Group) Sales of Same On Related accordin Thermal goods Freight controll agreeme agreeme 9.67 0.00% No g to the No Power and revenue er nt nt price agreeme Develop services nt ment Co., Ltd. Benxi Steel & Iron Execute (Group) Sales of Same Energy On Related accordin Industri goods controll & agreeme agreeme 405.31 0.02% 25,000 No g to the No al and er Power nt nt price agreeme Develop services nt ment Co., Ltd. Benxi Steel & Iron Execute (Group) Sales of Same On Related accordin Industri goods controll Products agreeme agreeme 12.69 0.00% No g to the Yes al and er nt nt price agreeme Develop services nt ment Co., Ltd. Benxi Raw Steel & material Iron & Execute (Group) Sales of Same supplem On Related accordin Industri goods controll entary agreeme agreeme 2,759.53 0.13% No g to the Yes al and er material nt nt price agreeme Develop services s& nt ment spare Co., parts Ltd. Benxi Same Sales of Energy On Related Execute Steel & controll goods & agreeme agreeme 8.3 0.00% 100 No accordin No Iron er and Power nt nt price g to the 32 Bengang Steel Plates Co., Ltd. Semi-Annual Report 2017 (Group) services agreeme Informat nt ion and Automat ic Tech Co., Ltd. Benxi Steel & Iron Execute (Group) Sales of Same Energy On Related accordin Constru goods controll & agreeme agreeme 77.22 0.00% No g to the No ction and er Power nt nt price agreeme and services nt Repairin g Co., Ltd. Benxi Raw Steel & material Iron & Execute (Group) Sales of Same supplem On Related accordin Constru goods controll entary agreeme agreeme 9.84 0.00% 1,200 No g to the Yes ction and er material nt nt price agreeme and services s& nt Repairin spare g Co., parts Ltd. Benxi Steel & Iron Execute Sales of (Group) Same Energy On Related accordin goods Metallur controll & agreeme agreeme 130.04 0.01% 12,000 No g to the No and gy er Power nt nt price agreeme services Residue nt s Co., Ltd. Benxi Raw Steel & material Execute Sales of Iron Same & On Related accordin goods (Group) controll supplem agreeme agreeme 4,358.02 0.21% No g to the Yes and Metallur er entary nt nt price agreeme services gy material nt Residue s& 33 Bengang Steel Plates Co., Ltd. Semi-Annual Report 2017 s Co., spare Ltd. parts Benxi Steel & Iron Execute Sales of (Group) Same On Related accordin goods Freight Metallur controll agreeme agreeme 0.31 0.00% No g to the No and revenue gy er nt nt price agreeme services Residue nt s Co., Ltd. Benxi Steel & Iron Execute Sales of (Group) Same On Related accordin goods Metallur controll Products agreeme agreeme 712.63 0.03% No g to the No and gy er nt nt price agreeme services Residue nt s Co., Ltd. Benxi Execute Steel & Sales of Parent Energy On Related accordin Iron goods Compan & agreeme agreeme 614.52 0.03% 12,000 No g to the No (Group) and y Power nt nt price agreeme Co., services nt Ltd. Raw material Benxi & Execute Steel & Sales of Parent supplem On Related accordin Iron goods Compan entary agreeme agreeme 321.55 0.02% No g to the No (Group) and y material nt nt price agreeme Co., services s& nt Ltd. spare parts Benxi New Execute Sales of Career Same Energy On Related accordin goods Develop controll & agreeme agreeme 18.6 0.00% 500 No g to the No and ment er Power nt nt price agreeme services Co., nt Ltd. 34 Bengang Steel Plates Co., Ltd. Semi-Annual Report 2017 Dalian Execute Boluole Sales of Same On Related accordin Steel goods controll Products agreeme agreeme 223.79 0.01% 1,000 No g to the Yes Tube and er nt nt price agreeme Co., services nt Ltd. Liaonin g Execute Bengan Sales of Same On Related accordin g Steel goods controll Products agreeme agreeme 46.04 0.00% 5,000 No g to the Yes & Iron and er nt nt price agreeme Trading services nt Co., Ltd. Benxi Execute Steel & Sales of Same Energy On Related accordin Iron goods controll & agreeme agreeme 5.17 0.00% 50 No g to the No (Group) and er Power nt nt price agreeme General services nt Hospital Liaonin g Hengton g Execute Metallur Sales of Same Energy On Related accordin gical goods controll & agreeme agreeme 899.19 0.04% 12,000 No g to the Yes Equipm and er Power nt nt price agreeme ent services nt Manufa cture Co., Ltd. Liaonin g Raw Hengton material g & Execute Sales of Metallur Same supplem On Related accordin goods gical controll entary agreeme agreeme 879.76 0.04% No g to the Yes and Equipm er material nt nt price agreeme services ent s& nt Manufa spare cture parts Co., 35 Bengang Steel Plates Co., Ltd. Semi-Annual Report 2017 Ltd. Liaonin g Hengton g Execute Metallur Sales of Same On Related accordin gical goods controll Products agreeme agreeme 0 0.00% No g to the Yes Equipm and er nt nt price agreeme ent services nt Manufa cture Co., Ltd. Bengan Raw g material Cold-rol & Execute Sales of led Same supplem On Related accordin goods Stainles controll entary agreeme agreeme 0 0.00% 500 No g to the Yes and s Steel er material nt nt price agreeme services Dandon s& nt g Co., spare Ltd. parts Bengan g Cold-rol Execute Sales of led Same On Related accordin goods Stainles controll Products agreeme agreeme 0 0.00% No g to the Yes and s Steel er nt nt price agreeme services Dandon nt g Co., Ltd. Suzhou Execute Bengan Sales of Same On Related accordin g goods controll Products agreeme agreeme 13,623.1 0.66% 36,000 No g to the No Industri and er nt nt price agreeme al Co., services nt Ltd. Bengan Execute Sales of g Group Same Energy On Related accordin goods Finance controll & agreeme agreeme 0.75 0.00% 800 No g to the No and Co., er Power nt nt price agreeme services Ltd. nt 36 Bengang Steel Plates Co., Ltd. Semi-Annual Report 2017 Execute Bengan Sales of Energy On Related accordin g Group Controll goods & agreeme agreeme 7.63 0.00% 500 No g to the No Co., er and Power nt nt price agreeme Ltd. services nt 995,896. 2,522,60 Total -- -- -- -- -- -- -- -- 06 0 Details of any sales return of a large None amount Give the actual situation during the reporting period where a forecast had been made for the total amounts of None routine related-party transactions,by type to occur in the current period(if any) Reason for any significant difference between the transaction price and the None market price for reference (if applicable) 2. Related transactions relevant to asset acquisition or sold □ Applicable √ Not applicable There was no related transaction relevant to asset acquisition or sold during the reporting period. 3. Related transactions relevant to joint investments □ Applicable √ Not applicable There was no related transaction relevant to joint investments during the reporting period. 4. Credits and liabilities with related parties √ Applicable □ Not applicable Whether there are any non-operating related credits and debts □ Yes √ No There were no non-operating related credits and debts during the reporting period. 5. Other significant related transactions □ Applicable √ Not applicable There was no other significant related transaction during the reporting period. 37 Bengang Steel Plates Co., Ltd. Semi-Annual Report 2017 XIII. Illustrations of Non-Operating Occupation of Funds by the Controlling Shareholder and Related Parties □ Applicable √ Not applicable There was no non-operating occupation of funds by the controlling shareholder and related parties XIV. Major Contracts and Their Performance 1. Trusteeship, contracting and leasing (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) Leasing □ Applicable √ Not applicable There was no leasing during the reporting period. 2. Guarantee □ Applicable √ Not applicable There was no guarantee during the reporting period. 4. Other Major Contracts □ Applicable √ Not applicable There was no other major contract during the reporting period. XV. Social Responsibilities 1. Performing corporation social responsibility of targeted poverty alleviation The company has not carried out targeted poverty alleviation work during the reporting period, and has no plan for follow-up targeted poverty alleviation. 38 Bengang Steel Plates Co., Ltd. Semi-Annual Report 2017 2. Major environmental protection situation Whether the listed Company and its subsidiaries are among key pollution companies launched by Environmental Protection Department Yes Emission Name of main Number of Distribution standards Name of the Mode of Emission Total pollutants and sewage of sewage for Total Excess company or sewage concentratio approved characteristic emission emission pollutants emissions emissions subsidiaries emission n emissions pollutants points points implemente d Bengang Dongfeng Continuo Steel Plates COD 1 Plant of 38mg/L 50mg/L 2.11Ton 2.11Ton None us Co., Ltd. coking plant Bengang Dongfeng Ammonia Continuo Steel Plates 1 Plant of 4.75mg/L 8mg/L 0.26Ton 0.26Ton None nitrogen us Co., Ltd. coking plant Bengang Dongfeng Volatile Continuo 0.038mg/m Steel Plates 1 Plant of 0.3mg/L 0.002Ton 0.002Ton None phenol us g/L Co., Ltd. coking plant Continuous Continuous emission: emission: Power Plant Gas 9#1#2#, Stove10mg Continuous 21-26# /m3, coal emission: boiler fired30mg/ boiler chimney, m3;coke 5-10mg/m3; coking plant oven dust coke 4-9# dust removal30 oven13-21 Continuo removal mg/m3;Sint mg/m3;15 Bengang us and (crushing, ering -32mg/m3;I Steel Plates Dust intermitt 39 transporting desulfurizat 42064Ton 42064Ton None ntermittent Co., Ltd. ent and ion:50mg/ emission: emission screening) , m3; coke 5 furnace tail:30mg/ oven12-30 group sieve m3;Iron mg/m3;steel coke dust field making6-19 removal, 25mg/m3;I mg/m3boile sintering ntermittent r185mg/m3 desulfurizati emission: on, tail coke electrical oven50mg/ dust m3;steelma 39 Bengang Steel Plates Co., Ltd. Semi-Annual Report 2017 removal, king20mg/ blast m3;boiler2 furnace out 00mg/m3 of the iron field dust; Intermittent emission: coking plant 6-9#, 4-5 furnace group dust removal (loading coal, pushing coal, and drying out) ; hot metal pretreatmen t and second time dust removal in steelmaking plant; raw material factory boiler Power Plant Gas 9#1#2#, Stove10-20 Gas 21-26# mg/m3;coke Stove100m boiler oven g/m3, coal chimney, loading fired200mg coking plant coal, dry /m3;coke 6-9#, 4-5 quenching oven Bengang Under furnace 28-90mg/m loading Steel Plates SO2 organize 22 group dust 3,pushing coal, dry 8450Ton 8450Ton None Co., Ltd. d removal coal quenching (loading 19-32mg/m 100mg/m3; coal, 3;Sintering sintering pushing dust desulfurizat coal, and removal35- ion:200mg/ drying out) 98mg/m3;b m3;boiler4 sintering oiler375mg/ 00mg/m3 desulfurizati m3 40 Bengang Steel Plates Co., Ltd. Semi-Annual Report 2017 on raw material factory boiler Gas Stove mg/m3, coal Power Plant fired and Gas 9#1#2#, coal Stove100m 21-26# blending g/m3, coal Bengang Under boiler fired fired200mg Steel Plates NOx organize 8 chimney; 60-110mg/ /m3;sinteri 8450Ton 8450Ton None Co., Ltd. d sintering m3;sinterin ng machine g desulfurizat desulfurizati desulfurizati ion on on 300mg/m3 35-98mg/m 3 Construction and operation of pollution prevention facilities In 2017, the Company’s subsidiary unit has constructed a total of 161 sets of environmental protection supporting facilities with the main project, including main exhaust gas and dust removal facilities 148 units and sewage treatment facilities 13 sets. The Company strictly implemented environmental protection three simultaneous systems, and synchronously operated and maintained with the main project, to ensure that environmental protection facilities can achieve stable operation. Synchronous operation rate was 100%. (1) Ecological environment: In the first half year of 2017, the Company carried out 15 greening project construction, including 8 public areas and 7sub-units, planted more than 1000 arbors, more than 4,000 shrubs piers, more than 3,000 square meters pattern flowers, more than 25,000 square meters perennial flowers, more than 2000 square meters lawn, and migrated more than 200 arbors,. (2) Prevention and control of pollution: the Company continued to strengthen the daily management of environmental protection facilities and maintenance to ensure stable function. Through the daily environmental monitoring, implementation of environmental protection self-management, strengthening the monitoring of pollutant emission and strengthening the management measures such as assessment, the Company continuously maintained the pollutant emission stable standard. (3) Fulfillment of environmental responsibility: in accordance with environmental laws and regulations, the Company strengthened daily supervision and inspection and assessment to ensure that environmental protection facility and the main projects work synchronously. Once leaking and exhaust emissions exceeding the standard identified, the Company would issue rectification notice and punishment and require immediate rectification. The Company fulfilled the environmental responsibility well. XVI. Other Major Issues □ Applicable √ Not applicable There was no need for illustrating other major issue. XVII. Major Issues of Subsidiaries □ Applicable √ Not applicable 41 Bengang Steel Plates Co., Ltd. Semi-Annual Report 2017 VI. Status of Share Capital Changes and Shareholders I. Share Capital Changes 1. Share capital changes Unit: Share Before the change Increase/decrease(+,-) After the Change Issuing Capitalization Bonus Quantity Percentage of new of common Others Subtotal Quantity Percentage shares share reserve fund II. Non-restricted 3,136,000,000 100.00% 3,136,000,000 100.00% Shares 1. Common shares 2,736,000,000 87.24% 2,736,000,000 87.24% in RMB 2. Foreign shares in 400,000,000 12.76% 400,000,000 12.76% domestic market III. Total shares 3,136,000,000 100.00% 3,136,000,000 100.00% Causation of share capital changes □ Applicable √ Not applicable Approval of share capital changes □ Applicable √ Not applicable Status of registration process of transferred shares □ Applicable √ Not applicable Influences of share capital changes on financial indices such as basic earnings per share, diluted earnings per share, and net asset per share attributed to common shareholders □ Applicable √ Not applicable Other information the Company deems necessary to be disclosed or required by the authority □ Applicable √ Not applicable 2. Changes of Restricted Shares □ Applicable √ Not applicable II. Securities Issuance and Listing □ Applicable √ Not applicable 42 Bengang Steel Plates Co., Ltd. Semi-Annual Report 2017 III. Total Number of Shareholders and Shareholding Unit: Share The total number of Total number of common preferred shareholders shareholders at the end of the 59,424 voting rights restored at the end 0 reporting period of the reporting period (See Notes 8) Shareholding of shareholders holding more than 5% or top 10 shareholders Number Quantity of pledged or frozen Holding of shares Changes in Restricted Un-restricte shares Name of the Nature of Percentage held at reporting shares d shares shareholder shareholder (%) period-en period held held Status Quantity d Benxi Steel & Pledged 1,251,000,000 State-owned legal 2,442,316 Iron (Group) 77.88% person ,069 Frozen 45,000,000 Co., Ltd. Industrial and Commercial Bank of China Limited-South Others 0.31% 9,718,651 Big Data 100 Index Securities Investment Fund Bank of Communication Limited-Chang xin Quantification Others 0.29% 9,088,658 Pioneer Mixed Securities Investment Fund BBH A/C VANGUARD EMERGING Overseas legal 0.26% 8,157,311 MARKETS person STOCK INDEX FUND Domestic natural Zhou Jie 0.17% 5,200,000 person 43 Bengang Steel Plates Co., Ltd. Semi-Annual Report 2017 VANGUARD TOTAL Overseas legal INTERNATIO 0.15% 4,606,141 person NAL STOCK INDEX FUND Caitong Fund - ICBC - Caitong Others 0.15% 4,499,967 Securities Co., Ltd. Southwest Securities - China Everbright Bank - Southwest Others 0.13% 4,099,964 Securities Shuangxi Xinguang Big 1 Collection Asset Management Plan Haitong International Securities Overseas legal 0.12% 3,785,109 Company person Limited-Accou nt Client Domestic natural Chen Nengyi 0.12% 3,757,336 person Strategy investors or general legal person becomes top 10 shareholders None due to rights issued (if any ) (See Notes 3) Notes to relationship or ‘action in It is unknown to the Company whether there is any related connection or ‘Action in Concert’ concert’ among the top 10 as described by Rules of Information Disclosing Regarding Changing of Shareholding Status shareholders. of Listed Companies existing among the above shareholders. Shareholding of top 10 unrestricted shareholders Category of shares Un-restricted shares held at the end of the reporting Name of the shareholder Category of period Quantity shares Benxi Steel & Iron (Group) Co., 2,442,316,069 Common shares 2,442,316,069 44 Bengang Steel Plates Co., Ltd. Semi-Annual Report 2017 Ltd. in RMB Industrial and Commercial Bank of Common shares China Limited-South Big Data 100 9,718,651 9,718,651 in RMB Index Securities Investment Fund Bank of Communication Limited-Changxin Quantification Common shares 9,088,658 9,088,658 Pioneer Mixed Securities in RMB Investment Fund Foreign shares BBH A/C VANGUARD placed in EMERGING MARKETS STOCK 8,157,311 8,157,311 domestic INDEX FUND exchange Foreign shares placed in Zhou Jie 5,200,000 5,200,000 domestic exchange Foreign shares VANGUARD TOTAL placed in INTERNATIONAL STOCK 4,606,141 4,606,141 domestic INDEX FUND exchange Caitong Fund - ICBC - Caitong Common shares 4,499,967 4,499,967 Securities Co., Ltd. in RMB Southwest Securities - China Everbright Bank - Southwest Common shares 4,099,964 4,099,964 Securities Shuangxi Xinguang Big 1 in RMB Collection Asset Management Plan Foreign shares Haitong International Securities placed in 3,785,109 3,785,109 Company Limited-Account Client domestic exchange Common shares Chen Nengyi 3,757,336 3,757,336 in RMB Benxi Steel & Iron (Group) Co., Ltd., the holding shareholder, has no relationship with any of Notes to relationship or ‘action in the other shareholders among the top 10 shareholders, neither being regarded as concert’ among the top 10 action-in-concert parties by the Information Disclosure Regulations for Change of non-restricted shareholders, and Shareholding in PLC. The Company is not aware of any relationship among the other among the top 10 non-restricted shareholders, neither being regarded as action-in-concert parties by the Information shareholders and top 10 Disclosure Regulations for Change of Shareholding in PLC. The Company is not aware of any shareholders relationship among the top 10 shareholders, neither being regarded as action-in-concert parties by the Information Disclosure Regulations for Change of Shareholding in PLC. Shareholders among the top 10 Chen Nengyi holds 3,757,336 shares of the company through investors' credit securities 45 Bengang Steel Plates Co., Ltd. Semi-Annual Report 2017 participating in securities margin accounts. trading (if any) (see Note 4) Whether top 10 common shareholders and top 10 un-restricted common shareholders have a buy-back agreement dealing in reporting period □ Yes √ No Top 10 common shareholders and top 10 un-restricted common shareholders had no buy-back agreement dealing in reporting period. IV. Changes of Controlling Shareholders and Substantial Controller during the Reporting Period Change of holding shareholder □ Applicable √ Not applicable There was no change of holding shareholder in the report period. Change of substantial controller □ Applicable √ Not applicable There was no change of substantial controller in the report period. 46 Bengang Steel Plates Co., Ltd. Semi-Annual Report 2017 VII. Status of Preferred Shares □ Applicable √ Not applicable There was no Preferred Shares during the reporting period. 47 Bengang Steel Plates Co., Ltd. Semi-Annual Report 2017 VIII. Status of Directors, Supervisors, Senior Executives I. Change in Shares held by Directors, Supervisors and Senior Executives □ Applicable √ Not applicable There was no change in shares held by Directors, Supervisors and Senior Executives. Please refer to Annual Report 2016 for details. II. Change in Directors, Supervisors and Senior Executives □ Applicable √ Not applicable There was no change in Directors, Supervisors and Senior Executives. Please refer to Annual Report 2016 for details. 48 Bengang Steel Plates Co., Ltd. Semi-Annual Report 2017 IX. Relevant Information about Corporate Bonds Whether there exists any un-matured corporate bonds public issued and listed on the Stock Exchange or any matured corporate bonds which the listed company failed to pay in full at the approval date of the semi-annual report Yes I. Basic information of corporate bonds Bond short Bond balance Bond name Bond code Issuance date Maturity date Interest rate Servicing way name RMB 10,000 Interest is paid Corporate 15 Benxi Steel 9 February 9 February annually, and Bond 2015 112236 150,000 5.17% 01 2015 2018 principal is (Phase I) paid when due. Corporate bonds listed or Shenzhen Stock Exchange trading places Investors appropriate The above bond transactions have been implemented by investors appropriate management management The interests of Bengang Steel Plates Co., Ltd. Corporate Bonds 2015 (Phase I) of the period from 5 February 2016 to 4 February 2017 were paid on 6 February 2017, as each bond would gain Interest payment status of the RMB 5.17 (tax inclusive). The date of record of interest payment was 3 February 2017, thus any Company Bond during the investor who bought and held the bonds before or on the date of 3 February 2017 enjoyed the right reporting period to receive the interest payments. The investors who sold out the bonds on the date of 3 February 2017 should not enjoy the interests. If the corporate bonds are attached to special clauses such as option clause and exchangeable clause to the Not applicable issuer or investors, please specify the implementation status of the corresponding clauses. (If applicable) II. Bond Trustee and the Credit Rating Agency Bond trustee: ESSENCE 12 F, Guo Tou Contact Name Office address Contact Tian Zhu 010-83321197 Securities Financial Building, 2 number 49 Bengang Steel Plates Co., Ltd. Semi-Annual Report 2017 Fu Cheng Men North Street, Xi Cheng District, Beijing The credit rating agencies which follow and rate the corporate bond during the reporting period: 12/F, PICC Building, No.2 Jian Guo Men Office Name United Ratings Co., Ltd. Wai Street, Chaoyang District, Beijing. address If during the reporting period, the bond trustee, credit rating agency employed by the company have changed, reasons for the Not applicable change, performing procedures, relevant influence on investors, etc. (If applicable) III. The Usage of Raised Funds from Corporate Bonds After deducting issuance costs, all raised funds are used for debt restructuring The usage of raised funds from Corporate and repayment. The amount of repayment of bank loans was RMB 1.5 billion. bonds and procedures of performance As of December 31, 2016, all the raised funds have been used up. Balance (RMB 10,000) 0 Operation of raised funds special account Normal Whether the usage of the raised funds corresponded to the purposes of promise, Yes use plans, or other agreements IV. Corporate Bond Rating (1) On 26 May 2017, United Rating Agency exercised rating towards the Corporate Bond 2015 (Phase I) and maintained the long-term rating of the main body of Bengang Steel Plates Co. Ltd at “AA+” and adjusted rating prospect as “stable”, while adjusting the debt credit rating of the Corporate Bond 2015 (Phase I) at “AAA+” . Bengang Steel Plates Co. Ltd conducted the disclosure about tracking rating report on http://www.cninfo.com/cn/ on 1 June 2017. (2) During the reporting period, United Rating Agency did not exercise irregular tracking rating about the Company’s bonds. (3) During the reporting period, the Company did not launch any other bonds or securities financing tools and there was no difference of the assessment results between different rating agencies. V. Corporate Bond Credit Increasing Mechanism, Debt Repayment Plans and Other Debt Repayment Security Measures 1. Debt repayment plans According to ‘Prospectus of Public Issuance of Corporate Bond 2015 (Phase I)’ launched on February 3, 2015, debt repayment plans are as followings: (1) The value date of the bond is February 5, 2015. In the duration of the bond, the interest will be paid once a year, and the interest payment date is February 5 in three consecutive years, ranging from 2016 to 2018 (subject to postponement in case of statutory 50 Bengang Steel Plates Co., Ltd. Semi-Annual Report 2017 public holiday and weekend, similarly hereinafter) . (2) The maturity date is February 5, 2018. The principal and the interest thereof will be paid at the maturity date. (3) Interest will be paid through registration agency and related agencies. The details will strictly follow related regulations and will be disclosed on the designated public media by the issuer. (4) According to national tax legislation and regulation, the relevant taxes emerged in investment on the bond should be paid by investors. 2. Debt repayment security measures According to ‘Prospectus of Public Issuance of Corporate Bond 2015 (Phase I)’ launched on February 3, 2015, debt repayment security measures are as following: In order to fully and effectively preserve bondholders’ benefit, the Company made a series plan towards repaying the debt in time and in full amount, including set up a special project group, formulated ‘Meeting Rules for bondholders’, formulated and strictly executed fund management plan, fully played the bond trustee’s roles and strictly carried out the disclosure responsibility. (1) Set up a special project group; (2) Formulate ‘Meeting Rules for Bondholders’; (3) Bengang Group Co., Ltd. acted as the company's bond guarantor; (4) Formulate and strictly execute fund management plan; (5) Protect bondholders’ benefits; (6) Strictly carry out the disclosure responsibility; (7) Issuer’s Board of Director’s commitment. During the reporting period, the Company follows the debt repayment plan and security mechanism disclosed in ‘Prospectus of Public Issuance of Corporate Bond 2015 (Phase I) ’. The Company set up a special project group, formulated ‘Meeting Rules for Bondholders’, applied ESSENCE Securities as trustee, and Bengang Group Co., Ltd. as the company's bond guarantor, formulated and strictly executed fund management plan that reasonably distribute fund to ensure the interest was paid in time. On 24 January 2017, the Company disclosed ‘Interest Repayment Notice’ and completed the interest repayment on 6 February 2017. During the reporting period, the Company had no significant changes that would influence the in time repayment of bond and there is no differences situation with relevant commission. During the reporting period, there was no change to Corporate Bond Credit Increasing Mechanism, Debt Repayment Plans and Other Debt Repayment Security Measures. Bengang Group Co., Ltd. was the guarantor for the Company’s bond. As of 30 June 2017, Bengang Group Co., Ltd.’s net assets is RMB 35.874 billion, asset-liability ratio is 74.99%, ROE is 0.08%, liquidity ratio is 0.43, quick ratio is 0.25 (above financial data is not audited) . Bengang Group Co., Ltd. is rated AAA by China Cheng Xin International Credit Rating Co. Ltd. VI. Bondholders’ Meeting in the Reporting Period During the reporting period, the Company did not hold bondholders’ meeting. VII. Duty fulfillment of Bond Trustee in the Reporting Period During the reporting period, the bond trustee performs its responsibilities in accordance with the regulations in Corporate Bond Issuance and Transaction Management Method and commitment in Bond Trustee Agreement: (1) Constantly pay attention to the credit status, execution of credit enhancement measurements and credit repayment safeguard measures of the guarantor and company; 51 Bengang Steel Plates Co., Ltd. Semi-Annual Report 2017 (2) Supervise the utilization of raised funds in the company in the duration of bond; (3) Exercise a well-rounded investigation into and pay constant attention to the company’s debt repayment ability and credit enhancement measures, and provide at least one trustee affair report for the market each year; (4) Constantly supervise the company’s performance of information disclosure obligation in the duration of the bond. The trustee hasn’t been confronted with conflict of interest in performing its responsibilities. The trustee has announced the trustee affair report 2016 on 2 June 2017. VIII. Major Accounting Data and Financial Indicators at the end of this and Previous Reporting Period (or this Reporting Period and Same period in previous year ) Unit: Yuan 10,000 Increase or decrease at the end At the end of this reporting At the end of previous reporting Items of this reporting period over period period the previous year Liquidity ratio 76.00% 74.56% 1.44% Asset-liability ratio 74.78% 75.51% -0.73% Quick ratio 48.52% 47.04% 1.48% Increase or decrease in this This reporting period Same period in previous year reporting period over the previous year EBITDA interest coverage ratio 3.24 3.51 -7.69% Loan payment rate 100.00% 100.00% 0.00% Rate of Interest payment 100.00% 100.00% 0.00% The main reasons that the accounting data and financial indicators change more than 30% □ Applicable √ Not applicable IX. Overdue Outstanding Debts of the Company □ Applicable √ Not applicable There was no Overdue Outstanding Debts of the Company. X. Interest Payment for Other Bonds and Debt Financing Tool in the Reporting Period During the reporting period, the Company did not launch any other bonds or securities financing tools or pay interest for other bonds and securities financing tools. XI. Usage of Bank Credit Obtained and Repayment of Bank Loans in the Reporting Period During the reporting period, the total bank line of credit of the Company was RMB 35.07 billion, and RMB 32.28 billion was used, leaving unused line of credit of RMB 2.79 billion. The total loan amount at the beginning was RMB 22.649 billion, and had increased RMB 13.553 billion in this period. The loan repaid in this period was RMB 91.42 billion, leaving a balance of RMB 27.06 52 Bengang Steel Plates Co., Ltd. Semi-Annual Report 2017 billion. XII. Performance of Agreements or Commitments Related to Corporate Bond Prospectus in the Reporting Period The Company strictly observed the Bond Trustee Agreement and regulations as described in different bond terms and conditions. The Company fulfilled its responsibilities according to Prospectus. There was no situation that the Company harmed investors’ benefits. XIII. Major Events Occurred in the Reporting Period On 26 May 2017, United Rating Agency exercised rating towards the Corporate Bond 2015 (Phase I) and maintained the long-term rating of the main body of Bengang Steel Plates Co. Ltd at “AA+” and adjusted rating prospect as “stable”, while adjusting the debt credit rating of the Corporate Bond 2015 (Phase I) at “AAA+” . Bengang Steel Plates Co. Ltd conducted the disclosure about tracking rating report on http://www.cninfo.com/cn/ on 1 June 2017. XIV. Whether There Exist Any Guarantors of the Corporate Bond √ Yes □ No Whether the guarantor of the corporate bond is a legal person or other organizations √ Yes □ No Whether the Company disclosed the guarantor’s financial statements including statement of financial position, statement of comprehensive income, statement of changes in equity, statement of cash flows, and notes to the financial statements in 2 months since the end of the first half of each fiscal year. √ Yes □ No 53 Bengang Steel Plates Co., Ltd. Semi-Annual Report 2017 X. Financial Report I. Audit report Whether the semi-annual report is audited □ Yes √ No The semi-annual report is not audited. II. Financial Statements Statement in Notes are carried in RMB Yuan 1. CONSOLIDATED STATEMENT OF FINANCIAL POSITION Prepared by: Bengang Steel Plates Co., Ltd. Unit: Yuan Items Ending balance Beginning balance Current assets: Cash at bank and on hand 12,240,579,151.57 12,931,912,017.84 Settlement provisions Capital lent Financial assets at fair value through profit or loss Derivative financial assets Notes receivable 3,486,513,747.73 2,030,681,138.03 Accounts receivable 536,054,820.21 623,865,427.25 Prepayments 658,157,852.16 493,839,659.44 Premium receivable Reinsurance accounts receivable Receivable deposit for reinsurance contract Interests receivable 2,663,285.16 4,208,818.85 Dividends receivable Other receivables 165,294,616.70 117,909,972.49 Redemptory financial assets for sale 54 Bengang Steel Plates Co., Ltd. Semi-Annual Report 2017 Inventories 9,834,703,845.66 9,782,173,936.74 Assets classified as held for sale Non-current assets due within one year Other current assets 280,833,153.36 513,398,815.83 Total current assets 27,204,800,472.55 26,497,989,786.47 Non-current assets: Loan and advances issued Available-for-sale financial assets 5,856,585.63 14,856,585.63 Held-to-maturity investment Long-term receivables Long-term equity investments Investment properties Fixed assets 19,753,582,768.45 20,688,468,637.44 Construction in progress 7,030,049,975.69 6,210,673,674.11 Construction materials 4,558,925.80 7,783,370.29 Disposal of fixed assets Productive biological assets Oil and gas assets Intangible assets 256,855,104.56 259,837,410.93 Development expenditure Goodwill Long-term deferred expenses Deferred tax assets 375,792,716.94 476,101,254.04 Other non-current assets Total non-current assets 27,426,696,077.07 27,657,720,932.44 Total assets 54,631,496,549.62 54,155,710,718.91 Current Liabilities: Short-term loans 22,787,674,400.00 18,762,472,779.48 Loan from central bank Absorbed deposit and interbank deposit Loan from other financial institutions Financial liabilities at fair value 55 Bengang Steel Plates Co., Ltd. Semi-Annual Report 2017 through profit or loss Advance from customers Notes payable 2,654,713,650.65 6,372,173,897.13 Accounts payable 5,379,872,618.65 5,680,244,661.52 Advance from customers 3,290,002,245.71 3,679,477,129.80 Financial assets sold for repurchase Handling charges and commission payable Employee benefits payable 41,263,867.18 24,063,493.70 Current tax liabilities 19,670,459.30 45,771,585.46 Interests payable 43,877,149.04 75,115,265.66 Dividends payable Other payables 469,499,960.08 460,009,213.78 Reinsurance accounts payable Provision for insurance contract Receipt from vicariously traded securities Receipt from vicariously underwriting securities Liabilities held for sale Non-current liabilities due within 1,110,787,748.00 437,669,535.66 one year Other current liabilities Total current liabilities 35,797,362,098.61 35,536,997,562.19 Non-current liabilities: Long-term loans 3,161,338,135.87 3,448,931,721.62 Bonds payable 1,496,550,521.55 1,494,825,782.32 Including: Preferred stock Perpetual bond Long-term payables Long-term employee benefits payable Special accounts payable Estimated liabilities Deferred income 396,052,000.00 410,399,000.00 56 Bengang Steel Plates Co., Ltd. Semi-Annual Report 2017 Deferred tax liabilities Other non-current liabilities Total non-current liabilities 5,053,940,657.42 5,354,156,503.94 Total liabilities 40,851,302,756.03 40,891,154,066.13 Shareholders’ equity: Share capital 3,136,000,000.00 3,136,000,000.00 Other equity instruments Including: Preferred stock Perpetual bond Capital reserves 9,114,845,542.05 9,114,845,542.05 Less: treasury shares Other comprehensive income Special reserves 10,656,973.74 372,721.86 Surplus reserves 961,105,529.85 961,105,529.85 General risk reserve Undistributed profits 26,666,410.96 -496,969,242.61 Total equity attributable to equity 13,249,274,456.60 12,715,354,551.15 holders of the parent company Non-controlling interests 530,919,336.99 549,202,101.63 Total shareholder’s equity 13,780,193,793.59 13,264,556,652.78 Total liabilities and shareholder’s equity 54,631,496,549.62 54,155,710,718.91 Legal Representative: Wang Shu Person in charge of accounting: Han Ge Accounting Dept. Leader: Wang Shaoyu 2. BALANCE SHEET OF THE PARENT COMPANY Unit: Yuan Items Ending balance Beginning balance Current assets: Cash at bank and on hand 12,007,831,826.87 12,402,995,087.03 Financial assets at fair value through profit or loss Derivative financial assets Notes receivable 3,364,985,137.62 1,870,384,367.64 Accounts receivable 491,938,145.44 455,070,302.00 Prepayments 657,548,793.61 487,869,713.72 Interests receivable 2,663,285.16 4,208,818.85 57 Bengang Steel Plates Co., Ltd. Semi-Annual Report 2017 Dividends receivable Other receivables 176,028,682.36 210,089,804.88 Inventories 7,999,016,015.18 8,308,291,029.07 Assets classified as held for sale Non-current assets due within one year Other current assets 207,402,337.05 431,675,085.33 Total current assets 24,907,414,223.29 24,170,584,208.52 Non-current assets: Available-for-sale financial assets 3,888,980.00 12,888,980.00 Held-to-maturity investment Long-term receivables Long-term equity investments 1,751,981,902.16 1,700,981,902.16 Investment properties Fixed assets 17,358,400,004.89 18,125,714,092.15 Construction in progress 7,010,468,962.64 6,196,524,880.06 Construction materials 4,134,139.48 4,134,139.52 Disposal of fixed assets Productive biological assets Oil and gas assets Intangible assets 153,735,383.89 155,388,452.53 Development expenditure Goodwill Long-term deferred expenses Deferred tax assets 278,388,067.92 378,696,605.02 Other non-current assets Total non-current assets 26,560,997,440.98 26,574,329,051.44 Total assets 51,468,411,664.27 50,744,913,259.96 Current Liabilities: Short-term loans 21,016,634,400.00 17,376,963,500.00 Financial liabilities at fair value through profit or loss Advance from customers Notes payable 2,652,021,225.65 5,768,523,196.16 Accounts payable 5,603,674,065.16 5,939,417,729.46 58 Bengang Steel Plates Co., Ltd. Semi-Annual Report 2017 Advance from customers 3,281,133,671.61 3,671,944,099.35 Employee benefits payable 40,881,869.18 22,386,057.59 Current tax liabilities 7,746,972.51 28,902,954.65 Interests payable 31,334,821.13 70,109,821.13 Dividends payable Other payables 275,216,874.86 289,522,026.53 Liabilities held for sale Non-current liabilities due within 1,110,787,748.00 437,669,535.66 one year Other current liabilities Total current liabilities 34,019,431,648.10 33,605,438,920.53 Non-current liabilities: Long-term loans 3,161,338,135.87 3,448,931,721.62 Bonds payable 1,496,550,521.55 1,494,825,782.32 Including: Preferred stock Perpetual bond Long-term payables Long-term employee benefits payable Special accounts payable Estimated liabilities Deferred income 396,052,000.00 410,399,000.00 Deferred tax liabilities Other non-current liabilities Total non-current liabilities 5,053,940,657.42 5,354,156,503.94 Total liabilities 39,073,372,305.52 38,959,595,424.47 Shareholders’ equity: Share capital 3,136,000,000.00 3,136,000,000.00 Other equity instruments Including: Preferred stock Perpetual bond Capital reserves 8,694,693,859.93 8,694,693,859.93 Less: treasury shares Other comprehensive income Special reserves 8,125,511.20 230,735.89 59 Bengang Steel Plates Co., Ltd. Semi-Annual Report 2017 Surplus reserves 961,105,529.85 961,105,529.85 Undistributed profits -404,885,542.23 -1,006,712,290.18 Total shareholder’s equity 12,395,039,358.75 11,785,317,835.49 Total liabilities and shareholder’s equity 51,468,411,664.27 50,744,913,259.96 Legal Representative: Wang Shu Person in charge of accounting: Han Ge Accounting Dept. Leader: Wang Shaoyu 3. CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME Unit: Yuan Items January to June 2017 January to June 2016 1. Total operating income 20,736,486,903.74 12,629,584,569.35 Including: Operating income 20,736,486,903.74 12,629,584,569.35 Interest income Premium earned Income from handling charges and commission 2. Total operating cost 20,109,129,759.95 12,307,317,804.75 Including: Operating cost 18,690,665,966.11 10,914,182,302.04 Interest cost Expenditure for handling charges and commission Surrender value Net expenditure for compensation Net provision for insurance contract appropriated Bonus payment for policy Reinsurance premium Taxes and surcharges 133,756,731.07 26,332,894.76 Selling and distribution 587,632,707.43 430,061,063.14 expenses General and administrative 358,951,405.08 351,954,718.48 expenses Financial expenses 381,513,404.80 586,667,825.19 Asset impairment loss -43,390,454.54 -1,880,998.86 Add: Gains from the change in fair value ("-" for loss) 60 Bengang Steel Plates Co., Ltd. Semi-Annual Report 2017 Income on investment ("-" for 3,294,593.14 loss) Including: Income from associates and joint ventures Exchange Income ("-" for loss) Other Income 3. Operating profit ("-" for loss) 630,651,736.93 322,266,764.60 Add: Non-operating income 21,014,488.58 24,196,669.55 Including: Gain on disposal of 3,015,294.00 2,120,458.89 non-current assets Less: Non-operating expenses 4,593,420.30 105,474.99 Including: Loss on disposal of 4,593,420.30 105,474.99 non-current assets 4. Total profit ("-" for loss) 647,072,805.21 346,357,959.16 Less: Income tax expenses 117,105,061.16 140,062,221.29 5. Net Profit ("-" for loss) 529,967,744.05 206,295,737.87 Attributable to: Owners of parent 523,635,653.57 182,538,176.32 company Non-controlling shareholders 6,332,090.48 23,757,561.55 6. Other comprehensive income after tax Other comprehensive income attributable to owners of parent company after tax 1) Other comprehensive income unable to be reclassified into profit and loss afterwards (1) .Change of net liabilities or net assets through re-measuring defined benefit plan (2) .Share of other comprehensive income of investee not to be classified into profit or loss afterwards under equity method 2) Other comprehensive income to be reclassified into profit and loss afterwards (1) .Share of other comprehensive income of investee to be 61 Bengang Steel Plates Co., Ltd. Semi-Annual Report 2017 classified into profit or loss afterwards under equity method (2). Gains and losses on re-measuring available-for-sale financial assets (3) .Gains and losses resulting from reclassification of held-to maturity investment to financial assets held-for sale (4) .Effective portion of gains or losses from cash flow hedging (5) .Gains and losses resultin g from translating the foreign currency financial statements (6) .Others Other comprehensive income attributable to non-controlling shareholders after tax 7. Total comprehensive income 529,967,744.05 206,295,737.87 Total comprehensive income 523,635,653.57 182,538,176.32 attributable to owners of parent company Total comprehensive income attributable to non-controlling 6,332,090.48 23,757,561.55 shareholders 8. Earnings per share: 1) Basic earnings per share 0.167 0.058 2) Diluted earnings per share 0.167 0.058 The current business combination under common control, the net profits of the combined party before achieved: Yuan, net profit of previous period of the combined party realized: Yuan. Legal Representative: Wang Shu Person in charge of accounting: Han Ge Accounting Dept. Leader: Wang Shaoyu 4. INCOME STATEMENT OF THE PARENT COMPANY Unit: Yuan Items January to June 2017 January to June 2016 1. Turnover 21,197,516,779.20 13,185,388,447.19 Less: Operating cost 19,482,976,074.32 11,729,886,784.21 Taxes and surcharges 116,783,416.00 14,639,973.93 Selling and distribution 373,519,186.39 352,259,509.33 62 Bengang Steel Plates Co., Ltd. Semi-Annual Report 2017 expenses General and administrative 336,370,276.02 321,474,092.99 expenses Financial expenses 350,175,885.42 555,023,839.47 Asset impairment loss -43,390,454.54 -1,880,998.86 Add: Gains from the change in fair value ("-" for loss) Income on investment ("-" for 105,369,227.90 13,713,328.45 loss) Including: Income from associates and joint ventures Other Income 2. Operating profit ("-" for loss) 686,451,623.49 227,698,574.57 Add: Non-operating income 20,277,081.86 23,562,540.98 Including: Gain on disposal of 3,015,294.00 2,050,505.76 non-current assets Less: Non-operating expenses 4,593,420.30 105,474.99 Including: Loss on disposal of 4,593,420.30 105,474.99 non-current assets 3. Total profit ("-" for loss) 702,135,285.05 251,155,640.56 Less: Income tax expenses 100,308,537.10 138,090,659.07 4. Net Profit ("-" for loss) 601,826,747.95 113,064,981.49 5. Other comprehensive income after tax 1) Other comprehensive income unable to be reclassified into profit and loss afterwards (1) .Change of net liabilities or net assets through re-measuring defined benefit plan (2) .Share of other comprehensive income of investee not to be classified into profit or loss afterwards under equity method 2) Other comprehensive income to be reclassified into profit and loss afterwards (1) .Share of other 63 Bengang Steel Plates Co., Ltd. Semi-Annual Report 2017 comprehensive income of investee to be classified into profit or loss afterwards under equity method (2) Gains and losses on re-measuring available-for-sale financial assets (3) .Gains and losses resulting from reclassification of held-to maturity investment to financial assets held-for sale (4) .Effective portion of gains or losses from cash flow hedging (5) .Gains and losses resulti ng from translating the foreign currency financial statements (6) .Others 6. Total comprehensive income 601,826,747.95 113,064,981.49 7. Earnings per share: 1) Basic earnings per share 2) Diluted earnings per share Legal Representative: Wang Shu Person in charge of accounting: Han Ge Accounting Dept. Leader: Wang Shaoyu 5. CONSOLIDATED STATEMENT OF CASH FLOWS Unit: Yuan Items January to June 2017 January to June 2016 1. Cash flow from operating activities: Cash received from sale of goods 14,489,666,407.59 10,026,046,529.17 or rendering of services Net increase of customers’ deposit and interbank deposit Net increase of loan from central bank Net increase of loans from other financial institutions Cash received for premium of original insurance contract Net cash received for reinsurance business 64 Bengang Steel Plates Co., Ltd. Semi-Annual Report 2017 Net increase of deposit and investment of the insured Net increase of Financial assets at fair value through profit or loss Cash from receiving interest, handling charge and commission Net increase of loans from other financial institutions Net increase of fund for buy-back business Tax rebate received 71,132,309.30 303,389,091.42 Other cash received relating to 87,817,078.61 84,327,996.29 operating activities Subtotal of cash inflow received from 14,648,615,795.50 10,413,763,616.88 operation activities Cash paid for goods and services 17,237,734,129.30 6,825,224,385.05 Net increase of customer’s loan and advances Net increase of deposit in central bank and interbank deposit Cash for payment of compensation for original insurance contract Cash for payment of interest, handling charge and commission Cash for payment of policy bonus Cash paid to and on behalf of 719,101,828.61 643,200,672.87 employees Cash paid for all types of taxes 390,701,219.38 154,701,105.71 Other cash paid relating to 348,384,302.93 399,860,089.73 operating activities Subtotal of cash outflow received from 18,695,921,480.22 8,022,986,253.36 operation activities Net cash flows generated from -4,047,305,684.72 2,390,777,363.52 operating activities 2. Cash flows from investing activities: Cash received from return on 424,000,000.00 investments Cash received from distribution of 3,294,593.14 65 Bengang Steel Plates Co., Ltd. Semi-Annual Report 2017 dividends or profit Net cash received from disposal of fixed assets, intangible assets and other 2,405,531.00 long-term assets Net cash received from disposal of subsidiary and other operating units Other cash paid relating to investing activities Subtotal of cash inflow received from 427,294,593.14 2,405,531.00 investing activities Cash paid for acquisition of fixed assets, intangible assets and other 702,058,422.96 758,159,102.38 long-term assets Cash paid for acquisition of 180,000,000.00 113,000,000.00 investments Net increase of mortgage loan Net cash received from subsidiary and other operating unit Other cash paid relating to investing activities Subtotal of cash outflows from 882,058,422.96 871,159,102.38 investing activities The net cash flow generated by -454,763,829.82 -868,753,571.38 investment activities 3. Cash flows from financing activities: Proceeds from investment Including: Proceeds from investment of non-controlling shareholders of subsidiary Proceeds from borrowings 10,419,164,500.00 7,222,865,800.00 Cash received from bond issuance Other proceeds relating to 210,000,000.00 financing activities Subtotal cash inflow received from 10,419,164,500.00 7,432,865,800.00 financing activities Cash repayments of borrowings 6,099,082,442.74 6,003,720,086.94 Cash payments for distribution of 565,025,996.70 573,974,920.33 dividends, profit or interest expenses 66 Bengang Steel Plates Co., Ltd. Semi-Annual Report 2017 Including: Cash paid to non-controlling shareholders as dividend and profit by subsidiaries Other cash payments relating to financing activities Subtotal of cash outflows from 6,664,108,439.44 6,577,695,007.27 financing activities The net cash flow generated by 3,755,056,060.56 855,170,792.73 financing activities 4. Effect of foreign exchange rate -41,586,403.20 388,468,098.61 changes on cash and cash equivalents 5. Net increase in cash and cash -788,599,857.18 2,765,662,683.48 equivalents Add: Cash and cash equivalents at 12,273,574,488.67 4,612,782,772.98 the beginning of the period 6. Cash and cash equivalents at the 11,484,974,631.49 7,378,445,456.46 ending of the period Legal Representative: Wang Shu Person in charge of accounting: Han Ge Accounting Dept. Leader: Wang Shaoyu 6. CASH FLOW STATEMENT OF THE PARENT COMPANY Unit: Yuan Items January to June 2017 January to June 2016 1.Cash flow from operating activities: Cash received from sale of goods 14,377,855,065.89 9,828,128,086.69 or rendering of services Tax rebate received 21,102,552.86 299,232,274.50 Other cash received relating to 80,547,620.06 71,902,496.61 operating activities Subtotal of cash inflow received from 14,479,505,238.81 10,199,262,857.80 operation activities Cash paid for goods and services 17,094,207,253.57 6,988,799,423.39 Cash paid to and on behalf of 672,852,272.11 598,176,442.20 employees Cash paid for all types of taxes 330,314,831.68 51,750,618.52 Other cash paid relating to 244,216,504.53 277,308,179.29 operating activities Subtotal of cash outflow received from 18,341,590,861.89 7,916,034,663.40 operation activities 67 Bengang Steel Plates Co., Ltd. Semi-Annual Report 2017 Net cash flows generated from -3,862,085,623.08 2,283,228,194.40 operating activities 2. Cash flows from investing activities: Cash received from return on 424,000,000.00 investments Cash received from distribution of 105,353,447.08 dividends or profit Net cash received from disposal of fixed assets, intangible assets and other 2,368,625.00 long-term assets Net cash received from disposal of subsidiary and other operating units Other cash paid relating to investing activities Subtotal of cash inflow received from 529,353,447.08 2,368,625.00 investing activities Cash paid for acquisition of fixed assets, intangible assets and other 687,313,444.96 746,341,472.97 long-term assets Cash paid for acquisition of 180,000,000.00 113,000,000.00 investments Net cash received from subsidiary and other operating unit Other cash paid relating to investing activities Subtotal of cash outflows from 867,313,444.96 859,341,472.97 investing activities The net cash flow generated by -337,959,997.88 -856,972,847.97 investment activities 3. Cash flows from financing activities: Proceeds from investment Proceeds from borrowings 9,396,164,500.00 6,782,865,800.00 Cash received from bond issuance Other proceeds relating to 210,000,000.00 financing activities Subtotal cash inflow received from 9,396,164,500.00 6,992,865,800.00 financing activities Cash repayments of borrowings 5,345,526,396.17 5,551,474,882.41 68 Bengang Steel Plates Co., Ltd. Semi-Annual Report 2017 Cash payments for distribution of 399,928,132.12 541,489,070.30 dividends, profit or interest expenses Other cash payments relating to financing activities Subtotal of cash outflows from 5,745,454,528.29 6,092,963,952.71 financing activities The net cash flow generated by 3,650,709,971.71 899,901,847.29 financing activities 4. Effect of foreign exchange rate -41,635,090.04 388,459,851.48 changes on cash and cash equivalents 5. Net increase in cash and cash -590,970,739.29 2,714,617,045.20 equivalents Add: Cash and cash equivalents at 11,876,536,613.66 4,489,630,951.08 the beginning of the period 6. Cash and cash equivalents at the 11,285,565,874.37 7,204,247,996.28 ending of the period Legal Representative: Wang Shu Person in charge of accounting: Han Ge Accounting Dept. Leader: Wang Shaoyu 7. CONSOLIDATED STATEMENT OF CHANGES IN EQUITY Unit: Yuan January to June 2017 Owner’s equity attributable to parent company Other equity Non-co Total Items Other instruments Less: General Undistri ntrollin shareho Share Capital compre Special Surplus treasury risk buted g lder’s Prefer Perpet capital Other reserves hensive reserves reserves ence ual shares reserve profits interests equity s income shares bond 1. Ending 3,136, 9,114,8 -496,96 13,264, 372,721 961,105 549,202 balance of 000,00 45,542. 9,242.6 556,652 .86 ,529.85 ,101.63 last year 0.00 05 1 .78 Add: Change of accounting policies Correction of errors for previous period Business consolidation 69 Bengang Steel Plates Co., Ltd. Semi-Annual Report 2017 under common control Others 2. Beginning 3,136, 9,114,8 -496,96 13,264, 372,721 961,105 549,202 balance of 000,00 45,542. 9,242.6 556,652 .86 ,529.85 ,101.63 current year 0.00 05 1 .78 3. Changes in current year 10,284, 523,635 -18,282, 515,637 (“-” for 251.88 ,653.57 764.64 ,140.81 decrease ) 1) Total 523,635 6,332,0 529,967 comprehensive ,653.57 90.48 ,744.05 income 2) Capital increase 9,003,8 9,003,8 and decrease by 15.84 15.84 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 3) Profit -34,024, -34,024, distribution 878.25 878.25 (1) Appropriation to surplus reserves (2) Appropriation to general risk reserve (3) Profit -34,024, -34,024, distribution to 878.25 878.25 shareholders (4) Others 4) Transfers within 70 Bengang Steel Plates Co., Ltd. Semi-Annual Report 2017 shareholders’ equity (1) Capital reserves transferred into paid-in capital (or stock) (2) Surplus reserves transferred into paid-in capital (or stock) (3) Surplus reserves to recover loss (4) Others 10,284, 406,207 10,690, 5) Special reserves 251.88 .29 459.17 (1) Provision of 19,733, 406,207 20,139, special reserves 398.02 .29 605.31 (2) Use of special 9,449,1 9,449,1 reserves 46.14 46.14 6) Others 3,136, 9,114,8 13,780, 4. Ending balance 10,656, 961,105 26,666, 530,919 000,00 45,542. 193,793 of current year 973.74 ,529.85 410.96 ,336.99 0.00 05 .59 Unit: Yuan January to June 2016 Owner’s equity attributable to parent company Non-co Other equity Total Other ntrollin Items instruments shareho Less: General Undistri Share Capital compre Special Surplus g Prefer Perpet treasury risk buted lder’s capital Other reserves hensive reserves reserves interest ence ual shares reserve profits equity s income s shares bond 1. Ending 3,136, 9,114,8 -1,278,2 12,439, 393,372 961,105 504,993 balance of 000,00 45,542. 44,071. 093,421 .05 ,529.85 ,049.45 last year 0.00 05 93 .47 Add: Change of accounting 71 Bengang Steel Plates Co., Ltd. Semi-Annual Report 2017 policies Correction of errors for previous period Business consolidation under common control Others 2. Beginning 3,136, 9,114,8 -1,278,2 12,439, 393,372 961,105 504,993 balance of 000,00 45,542. 44,071. 093,421 .05 ,529.85 ,049.45 current year 0.00 05 93 .47 3. Changes in current year -20,650. 781,274 44,209, 825,463 (“-” for 19 ,829.32 052.18 ,231.31 decrease ) 1) Total 781,274 44,204, 825,479 comprehensive ,829.32 577.33 ,406.65 income 2) Capital increase and decrease 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 3) Profit distribution (1) Appropriation to surplus reserves (2) Appropriation 72 Bengang Steel Plates Co., Ltd. Semi-Annual Report 2017 to general risk reserve (3) Profit distribution to shareholders (4) Others 4) Transfers within shareholders’ equity (1) Capital reserves transferred into paid-in capital (or stock) (2) Surplus reserves transferred into paid-in capital (or stock) (3) Surplus reserves to recover loss (4) Others -20,650. 4,474.8 -16,175. 5) Special reserves 19 5 34 (1) Provision of 39,766, 4,474.8 39,771, special reserves 855.73 5 330.58 (2) Use of special 39,787, 39,787, reserves 505.92 505.92 6) Others 3,136, 9,114,8 -496,96 13,264, 4. Ending balance 372,721 961,105 549,202 000,00 45,542. 9,242.6 556,652 of current year .86 ,529.85 ,101.63 0.00 05 1 .78 Legal Representative: Wang Shu Person in charge of accounting: Han Ge Accounting Dept. Leader: Wang Shaoyu 8. STATEMENT OF CHANGE IN OWNER’S EQUITY OF THE PARENT COMPANY Unit: Yuan January to June 2017 Items Share Other equity instruments Capital Less: Other Special Surplus Undistri Total 73 Bengang Steel Plates Co., Ltd. Semi-Annual Report 2017 capital Prefere reserves treasury comprehe reserves reserves buted sharehold Perpetu nce Others shares nsive profits er’s al bond shares income equity 1. Ending -1,006,7 3,136,00 8,694,693 230,735.8 961,105,5 11,785,31 balance of 12,290. 0,000.00 ,859.93 9 29.85 7,835.49 last year 18 Add: Change of accounting policies Correction of errors for previous period Others 2. Beginning -1,006,7 3,136,00 8,694,693 230,735.8 961,105,5 11,785,31 balance of 12,290. 0,000.00 ,859.93 9 29.85 7,835.49 current year 18 3. Changes in current year 7,894,775 601,826 609,721,5 (“-” for .31 ,747.95 23.26 decrease ) 1) Total 601,826 601,826,7 comprehensive ,747.95 47.95 income 2) Capital increase and decrease 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 3) Profit 74 Bengang Steel Plates Co., Ltd. Semi-Annual Report 2017 distribution (1) Appropriation to surplus reserves 2.Profit distribution to shareholders 3.Others 4) Transfers within shareholders’ equity (1) Capital reserves transferred into paid-in capital (or stock) (2) Surplus reserves transferred into paid-in capital (or stock) (3) Surplus reserves to recover loss (4) Others 7,894,775 7,894,775 5) Special reserves .31 .31 (1) Provision of 17,253,64 17,253,64 special reserves 4.64 4.64 (2) Use of special 9,358,869 9,358,869 reserves .33 .33 6) Others -404,88 4. Ending balance 3,136,00 8,694,693 8,125,511 961,105,5 12,395,03 5,542.2 of current year 0,000.00 ,859.93 .20 29.85 9,358.75 3 Unit: Yuan January to June 2016 Other equity instruments Less: Other Undistri Total Items Share Capital Special Surplus Prefere Perpetu treasury comprehe buted sharehold capital Others reserves reserves reserves nce al bond shares nsive profits er’s 75 Bengang Steel Plates Co., Ltd. Semi-Annual Report 2017 shares income equity 1. Ending -1,684,4 3,136,00 8,694,693 393,372.0 961,105,5 11,107,73 balance of 56,000. 0,000.00 ,859.93 5 29.85 6,760.94 last year 89 Add: Change of accounting policies Correction of errors for previous period Others 2. Beginning -1,684,4 3,136,00 8,694,693 393,372.0 961,105,5 11,107,73 balance of 56,000. 0,000.00 ,859.93 5 29.85 6,760.94 current year 89 3. Changes in current year -162,636. 677,743 677,581,0 (“-” for 16 ,710.71 74.55 decrease ) 1) Total 677,743 677,743,7 comprehensive ,710.71 10.71 income 2) Capital increase and decrease 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 3) Profit distribution (1) Appropriation 76 Bengang Steel Plates Co., Ltd. Semi-Annual Report 2017 to surplus reserves 2.Profit distribution to shareholders 3.Others 4) Transfers within shareholders’ equity (1) Capital reserves transferred into paid-in capital (or stock) (2) Surplus reserves transferred into paid-in capital (or stock) (3) Surplus reserves to recover loss (4) Others -162,636. -162,636. 5) Special reserves 16 16 (1) Provision of 34,079,63 34,079,63 special reserves 0.37 0.37 (2) Use of special 34,242,26 34,242,26 reserves 6.53 6.53 6) Others -1,006,7 4. Ending balance 3,136,00 8,694,693 230,735.8 961,105,5 11,785,31 12,290. of current year 0,000.00 ,859.93 9 29.85 7,835.49 18 Legal Representative: Wang Shu Person in charge of accounting: Han Ge Accounting Dept. Leader: Wang Shaoyu III. Basic Information of the Company Bengang Steel Plates Co., Ltd. (hereinafter referred to as “the Company”) , as approved in Liao-Zheng (1997) No. 57 by Liaoning People’s Government on 27 March 1997, was incorporated as a joint stock limited company through public share offer of domestic listed foreign currency denominated shares (B shares) in the People’s Republic of China (the “PRC”) on 27 June 1997 by Benxi Steel and Iron (Group) Co., Ltd. 77 Bengang Steel Plates Co., Ltd. Semi-Annual Report 2017 (“Bengang Group”) , through reorganization of operations, assets and liabilities of its plants, namely, Steel Smelting Plant, Primary Rolling Plant and Continuous Hot Rolling Plant. As approved by China Securities Regulatory Commission (hereinafter referred to as “the CSRC”), the Company issued 400,000,000 B-shares at HKD2.38 each in Shenzhen Stock Exchange on 10 June 1997. On 3 November 1997, the Company issued another 120,000,000 A-shares (Renminbi common Shares) at RMB5.40 each, and listed in Shenzhen Stock Exchange since 15 January 1998. The capital shares were totaled to 1,136,000,000 shares including 616,000,000 shares held by the promoter. On 14 March 2006, according to the resolutions of the Shareholders’ Meeting regarding share equity relocation, the Share Equity Relocation Scheme, Response to Bengang Steel Plate Co., Ltd. about Share Equity Relocation issued by Liaoning Provincial Government State-owned Asset Administrative Committee, Bengang Group – the only holder of non-negotiable state-owned legal person shares paid the consideration to the current shareholders to obtain the current option for the 40,800,000 shares of the total 616,000,000 shares it was holding. Shareholding positions have been registered with China Securities Depository & Clearing Corporation Ltd. Shenzhen Office. However, the total amount of capital shares of Bengang Steel Plates Co., Ltd. was not changed through the share equity relocation action. According to the approval document “Zheng-Jian-Gong-Si-Zi [2006] No. 126” by China Securities Regulatory Commission on 30 June 2006, the Company was approved to place 2 billion Renminbi common shares particularly to Bengang Group and the proceeds would be used to purchase the related assets of the Group. On the same day, Bengang Group received circular Zheng-Jian-Gong-Si-Zi [2006] No. 127 issued by China Securities Regulatory Committee, and were exempted for the liability of undertaking the purchase offer. The liability was caused by subscribing of the 2 billion new shares and the total shareholding was thus increased to 2.5752 billion shares (accounting for 82.12% of the total capital shares of the Company). On 28 August 2006, as approved by China Securities Depository & Clearing Corporation Ltd. Shenzhen Office, the registration and conditional placing procedures of the 2 billion new shares were completed. On 28 September 2006, the privately placed shares were approved by Shenzhen Stock Exchange to be placed in the stock market. The new shares were placed in the market with face value of RMB1.00 per share and the placing price was RMB4.6733 per share. The newly placed shares were restricted to be sold in 36 months when they were registered to the account of Bengang Group. Up to 31 December 2016, the capital shares of Bengang Steel Plates Co., Ltd were amounted to 3,136,000,000 shares. The unified social credit code was 91210000242690243E. The registered address is 16th Renmin Road, Pingshan District, Benxi, Liaoning Province. The registered capital is RMB 3,136,000,000. The legal representative is Wang Shu. 78 Bengang Steel Plates Co., Ltd. Semi-Annual Report 2017 The parent company of Bengang Steel Plates Co., Ltd is Benxi Steel and Iron (Group) Co., Ltd. and the actual controller is the State-owned Assets Supervision and Administration Commission of the State Council of Liaoning province. Bengang Steel Plates Co., Ltd. belongs to ferrous metal smelting and rolling processing industry, and is mainly involved in producing and trading of ferrous metal products. The financial statements have been approved for reporting by the board of directors of the Company on 23 August 2017. As at 30 June 2017, subsidiaries included in the Company’s consolidated financial statements are as follows: Name of the subsidiaries Guangzhou Bengang Steel & Iron Trading Co., Ltd. Shanghai Bengang Metallurgy Science and Technology Co., Ltd. Bengang Steel Plate Liaoyang Orel Ball Co., Ltd. Dalian Benruitong Automobile Material Technologies Co., Ltd. Changchun Bengang Steel & Iron Sales Co., Ltd. Harbin Bengang Economic and Trading Co., Ltd. Nanjing Bengang Steel Material Sales Ltd. Wuxi Bengang Steel & Iron Sales Co., Ltd. Xiamen Bengang Steel & Iron Sales Co., Ltd. Yantai Bengang Steel & Iron Sales Co., Ltd. Tianjin Bengang Steel & Iron Trading Co., Ltd. Bengang Puxiang Cool Rolling Steel Sheet Co., Ltd. Benxi Bengang Steel Sales Co., Ltd Shenyang Bengang Metallurgical Science and Technology Co., Ltd. Bengang Baojin (Shenyang) Automobile New Material Technology Co., Ltd. Bengang Baojin (Shenyang) Automobile New Material Technology Co., Ltd. is a new subsidy included in the Company’s consolidated financial statements. IV. Basis of preparation 1. Basis of preparation The financial statements have been prepared on the going concern basis of actual trading and events in accordance with “Accounting Standards for Business Enterprises – Basic Standard” and relevant specific standards, application materials, interpretations (together hereinafter referred to as “Accounting Standards for Business Enterprises”) issued by the Ministry of Finance, and “Information Disclosure Rules for Companies 79 Bengang Steel Plates Co., Ltd. Semi-Annual Report 2017 of securities for public issuance No. 15 – General Regulations for Financial Statements” issued by the China Securities Regulatory Commission. 2. Going concern The Company is operating normally and in a good condition, and thus has the capability to continue to operate in the next twelve months from the end of reporting period V. Significant accounting policies and accounting estimates The following disclosed content covers the detailed accounting policies and accounting estimates that are adopted by the Company according to the actual features of production or operation. 1. Statement of compliance with China Accounting Standards for Business Enterprises The financial statements present truly and completely the financial position, operation results and cash flows of the Company during the reporting period in accordance with China Accounting Standards for Business Enterprises. 2. Accounting year The Accounting year is from 1 January to 31 December. 3. Operating period The operating period is twelve months. 4. Functional currency The Company’s functional currency is RMB. 5. The accounting treatment for Business combination under/now under common control Business consolidation under common control: The assets and liabilities that the Company acquired in a business combination shall be measured on the basis of their carrying amount of aquiree’s assets, liabilities (as well as the goodwill arising from the business combination) in the consolidated financial statement of the ultimate controller on the combining date. As for the balance between the carrying amount of the net assets obtained by the Company and the carrying amount of the consideration paid by it (or the total par value of the shares issued), capital reserve needs to be adjusted. If the capital reserve is not sufficient, any excess shall be adjusted against retained earnings. 80 Bengang Steel Plates Co., Ltd. Semi-Annual Report 2017 Business combination involving entities now under common control: The Company shall, on the acquisition date, measure the assets given and liabilities incurred or assumed by an enterprise for a business combination in light of their fair values, and shall record the balances between them and their carrying amounts into the profits and losses at the current period. The Company shall recognize the positive balance between the combination costs and the fair value of the identifiable net assets it obtains from the acquiree as goodwill. The Company shall treat the negative balance between the combination costs and the fair value of the identifiable net assets it obtains from the acquiree into the profits and losses of the current period. The intermediary costs and relevant management fee for the business combination now under same control paid by the acquirer, including the expenses for audit, assessment and legal services, shall be recorded into the profits and losses at the current period. The transaction expenses for the issuance of equity securities for the business combination shall be recorded into the initial recognition amount of equity securities. 6. Consolidation of Financial Statements 1. Scope of consolidation The scope of consolidation of consolidated financial statements is determined based on control. All the subsidies (including separable sections of the investees controlled by the Company) have been consolidated into the scope of consolidation for this period ended. 2. Procedure of consolidation The consolidated financial statements shall be presented by the parent based on the financial statements of the parent and its subsidiaries, and using other related information. When preparing consolidated financial statements, the parent shall consider the entire group as an accounting entity, adopt uniform accounting policies and apply the requirements of Accounting Standard for Business Enterprises related to recognition, measurement and presentation. The consolidated financial statements shall reflect the overall financial position, operating results and cash flows of the group. The accounting policy and accounting period of the subsidiaries within the consolidation scope shall be in accordance with those of the Company. If not, it is necessary to make the adjustment according to the Company’s accounting policies and accounting period when preparing the consolidated financial statements. For subsidiaries through acquisition that are now under common control, the financial statements are adjusted according to fair value of identifiable net assets on the acquisition date. 81 Bengang Steel Plates Co., Ltd. Semi-Annual Report 2017 For subsidiaries through acquisition that are under common control, the assets, liabilities (as well as the goodwill arising from purchasing the subsidiary by the ultimate controller) are adjusted according to book value of net assets in the financial statements of the ultimate controller. The owners’ interests, profit or loss, and comprehensive income of the subsidiary attributable to the non-controlling shareholders shall be presented separately in the shareholders’ equity of the consolidated balance sheet and under the item of net profit of the consolidated statement of comprehensive income and under the item of total comprehensive income. Where losses assumed by the minority exceed the minority’s interests in the beginning equity of a subsidiary, the excess shall be charged against the minority’s interests. (1) Increase of new subsidiary and business If the Company has a new subsidiary due to business combination under common control during a reporting period, it shall adjust the beginning balance in the consolidated statement of financial position when preparing consolidated statement of financial position. The revenue, expenses and profits of the subsidiaries from the acquisition date to the end of the reporting period are included in the Company’s consolidated statement of comprehensive income. The cash flow of the subsidiaries from the acquisition date to the end of the reporting period is included in the Company’s consolidated statement of cash flows. And meanwhile the Company shall adjust the relevant items of the comparative financial statements as if the reporting entity for the purpose of consolidation has been in existence since the date the ultimate controlling party first obtained control. When the Company becomes capable of exercising control over an investee under common control due to additional investment or other reasons, Adjustment shall be made as if the reporting entity after the combination has been in existence since the date the ultimate controlling party first obtained control. The investment income recognized between date of previously obtaining equity investment and the date the acquiree and acquirer are under common control, which is later, and the combining date, other comprehensive income and other changes of net assets arising from the equity investment previously-held before obtaining the control the acquiree shall be adjusted against the prior retained earnings of the comparative financial statements and the current profit or loss respectively. If it is now under common control, the Company shall not adjust the beginning balance in the consolidated statement of financial position when preparing consolidated statement of financial position. The revenue, expenses and profits of the subsidiaries from the acquisition date to the end of the reporting period are included in the parent company’s consolidated statement of comprehensive income. The cash flow of the subsidiaries from the acquisition date to the end of the reporting period is included in the Company’s consolidated statement of cash flows. When the Company becomes capable of exercising control over an investee now under common control due to additional investment or other reasons, the acquirer shall re-measure its previously held equity interest in 82 Bengang Steel Plates Co., Ltd. Semi-Annual Report 2017 the acquiree to its fair value at the acquisition date. The difference between the fair value and the carrying amount shall be recognized as investment income for the period when the acquisition takes place. When the previously-held equity investment is accounted for under the equity method, any other comprehensive income previously recognized in relation to the acquiree’s equity changes shall be transferred to profit or loss for the current period when the acquisition takes place. Other comprehensive income arising from re-measurement of defined benefit plan is excluded. (2) Disposing subsidiary or business ① General treatment If the Company disposes a subsidiary during a reporting period, the revenue, expenses and profits of the subsidiary from the beginning of the reporting period to disposal date are included in the Company’s consolidated statement of comprehensive income. The cash flow of the subsidiaries from the beginning of the reporting period to disposal date is included in the Company’s consolidated statement of cash flows. When the Company loses control over an investee due to partial disposal or other reasons, the acquirer shall re-measure the remaining equity interests in the acquiree to its fair value at the acquisition date. The difference, between sums of consideration received for disposal equity shares and fair value of the remaining shares, and sums of share of net assets of the subsidiary calculated continuously from the acquisition date or the combination date based on the previous shareholding proportion and goodwill, shall be recognized as investment income for the period when the Company loses control over acquiree. When the previously-held equity investment is accounted for under the equity method, any other comprehensive income previously recognized in relation to the acquiree’s equity changes, and other equity changes rather than changes from net profit, other comprehensive income and profit distribution, shall be transferred to investment income for the current period when the Company loses control over acquiree. Other comprehensive income arising from re-measurement of defined benefit plan is excluded. When the Company loses control over a subsidiary due to the increase of capital from other investors and thus the shareholding ratio of the Company declines, accounting treatment shall be in accordance with the above-mentioned principles ② Disposing the subsidiary by multiple transactions Where the Company loses control of a subsidiary in multiple transactions in which it disposes of its subsidiary in stages, in determining whether to account for the multiple transactions as a single transaction, the Company shall consider all of the terms and conditions of the transactions and their economic effects. One or more of the following may indicate that the Company shall account for the multiple arrangements as a single transaction: Arrangements are entered into at the same time or in contemplation of each other; Arrangements work together to achieve an overall commercial effect; The occurrence of one arrangement is dependent on the occurrence of at least one other arrangement; and 83 Bengang Steel Plates Co., Ltd. Semi-Annual Report 2017 One arrangement considered on its own is not economically justified, but it is economically justified when considered together with other arrangements. If each of the multiple transactions forms part of a bundled transaction which eventually results in loss of control of the subsidiary, these multiple transactions shall be accounted for as a single transaction. In the consolidated financial statements, the difference between the consideration received and the corresponding proportion of the subsidiary’s net assets in each transaction prior to the loss of control shall be recognized in other comprehensive income and transferred to the profit or loss when the Company eventually loses control of the subsidiary. If each of the multiple transactions which eventually results in loss of control of the subsidiary do not form part of a bundled transaction, apply the treatment of disposing partial long-term equity investments in a subsidiary without loss of control prior to the loss of control. After the loss of control, apply the treatment of disposing the subsidiary in common cases. (3) Acquiring the subsidiary’s equity interest held by non-controlling shareholders Where the Company has acquired a subsidiary’s equity interest held by non-controlling shareholders, the difference between the increase in the cost of long-term investments as a result of acquisition of non-controlling interests and the share of net assets of the subsidiary calculated continuously from the acquisition date or the combination date based on the new shareholding proportion shall be adjusted to the capital reserve( capital premium or share premium) in the consolidated financial statements. If the balance of the capital reserve is not sufficient, any excess shall be adjusted against retained earnings. (4) Disposing partial long-term equity investments in a subsidiary without loss of control When the Company disposes of a portion of the long-term equity investments in a subsidiary without loss of control, the difference between the amount of the consideration received and the corresponding portion of the nest assets of the subsidiary calculated continuously from the acquisition date or the combination date related to the disposal of the long-term equity investments shall be adjusted to the capital reserve (capital premium or share premium) in the consolidated financial statements. If the balance of the capital reserve is not sufficient, any excess shall be adjusted against retained earnings. 7. Joint arrangement classification and accounting treatment A joint arrangement is classified as either a joint operation or joint venture. When the Company is joint operator of joint arrangement and has rights to the assets, and obligations for the liabilities, relating to the arrangement, it is classified as joint operation. A joint operator shall recognize the following items in relation to its interest in a joint operation, and account for them in accordance with relevant accounting standards: (1) Its solely-held assets, and its share of any assets held jointly; 84 Bengang Steel Plates Co., Ltd. Semi-Annual Report 2017 (2) Its solely-assumed liabilities, and its share of any liabilities incurred jointly; (3) Its revenue from sales of its share of the output arising from the joint operation; (4) Its share of the revenue from the sale of the output by the joint operation; and (5) Its solely-incurred expenses and its share of any expenses incurred jointly. 8. Recognition of cash and cash equivalents For the purpose of preparing the statement of cash flows, the term “cash” refers to the cash on hand and the unrestricted deposit. And the term “cash equivalents” refers to short-term (maturing within three months from acquisition) and highly liquid investments that are readily convertible to known amounts of cash and which are subject to an insignificant risk of change in value. 9. Foreign currency transaction and translation of foreign currency financial statements 1. Foreign currency transaction Foreign currency transactions are translated into RMB at the current rate at the day of transactions. The foreign currency monetary items shall be translated at the spot exchange rate on the balance sheet date. The balance of exchange arising from the difference between the spot exchange rate on the balance sheet date and the spot exchange rate at the time of initial recognition or prior to the balance sheet date, except those arising from the raising of special foreign debt for the purchase or construction of capitalizable assets thus shall be capitalized according to the borrowing costs capitalization principle, shall be recorded into the profits and losses at the current period. The foreign currency non-monetary items measured at the historical cost shall still be translated at the spot exchange rate on the transaction date, of which the amount of functional currency shall not be changed. The foreign currency non-monetary items measured at the fair value shall still be translated at the spot exchange rate on the date of confirming the fair value and the balance of exchange arising from it shall be recorded into profits and losses at the current period of disposal or capital reserves. 2. Translation of foreign currency financial statements The asset and liability items in the statement of financial position shall be translated at a spot exchange rate on the balance sheet date. Among the owner's equity items, except the ones as "undistributed profits", others shall be translated at the spot exchange rate at the time when they are incurred. The income and expense items in the statement of comprehensive income shall be translated at the spot exchange rate of the transaction date. When disposing an overseas business, the Company shall shift the balance, which is presented under the items of the owner's equities in the statement of financial position and arises from the translation of foreign currency financial statements related to this oversea business, into the disposal profits and losses of the current period. If the overseas business is disposed of partially, the Company shall calculate the balance 85 Bengang Steel Plates Co., Ltd. Semi-Annual Report 2017 arising from the translation of foreign currency statements of the part of disposal based on the disposal rate and shall shift them into the profits and losses of the current period. 10. Financial instruments Financial instruments include financial assets, financial liabilities and equity instruments 1. Classification of financial instruments The classification of financial assets and financial liabilities at initial recognition are as follows: financial assets or financial liabilities designated at fair value through current profit and loss, including: trading financial investment, held-to-maturity investment, loans and receivables, available-for-sale investment and other financial liabilities. 2. Recognition and measurement of financial instruments (1) The financial assets (liabilities) at fair value through profit or loss The financial assets (financial liabilities) at fair value through profit or loss are recognized initially at fair value (minus cash dividends declared but not received or bond interest matured but not drawn yet). The relevant transaction cost is recognized in current profit and loss when occurred. The cash dividends or interest are recognized as investment income when the Company receives such financial assets. At the balance sheet date, the Company recognizes the fair value changes in current profit and loss. The Company recognizes the difference between initial recognition and fair value of the financial assets as investment income when disposing the financial assets and at the same time adjusts the fair value changes in current profit and loss. (2) Held-to-maturity investment The Held-to-maturity investments are recognized initially at fair value (minus bond interest matured but not drawn yet) plus any related transaction cost. The held-to-maturity investments are measured at amortized cost using the effective interest rate. The interest income is recognized as investment income. The effective interest will be determined at the initial recognition and will not be changed in the holding period or within a shorter applicable period. When disposing the held-to-maturity investment, the difference between the investing proceeds and the carrying value is recognized as investment income. (3) Receivables 86 Bengang Steel Plates Co., Ltd. Semi-Annual Report 2017 Receivables from selling products and rendering services or receivable of other company not including the receivables with quoted price in the active market (including: accounts receivable, other receivables, notes receivable, prepayments, long-term receivables) are measured at contract price; if the receivables is of financing nature, it shall be recognized at the present value initially. When disposing the receivables, the difference between the proceeds and the carrying value is recognized in current profit and loss. (4) Available-for-sale financial assets Available-for-sale financial assets are initially recorded at the sum of fair values (deducting cash dividends that have been declared but not distributed and bond interests that have matured but not been drawn) and transaction costs when acquired. The Company recognizes the interest or cash dividends as investment income. At each balance sheet date, available-for-sale financial assets are measured at fair value and the fair value changes are recognized in the capital reserve - other capital reserve. The difference between the proceeds of the disposal and the carrying value shall be recognized as investment income. And the related fair value change in the shareholders’ equity shall be transferred out, and recorded as investment income. (5) Other financial liabilities For other financial liabilities, they are initially recognized at fair value plus any directly attributable transaction costs. After the initial recognition, the other financial liabilities are measured at amortized cost. 3. Determination and measurement of financial assets transfer Where the Company has transferred nearly all of the risks and rewards related to the ownership of the financial asset to the transferee, it shall stop recognizing the financial asset. If it retained nearly all of the risks and rewards related to the ownership of the financial asset, it shall not stop recognizing the financial asset. To judge whether the transfer of a financial asset can satisfy the conditions as prescribed in these Standards for stopping the recognition of a financial asset, the Company shall follow the principle of the substance over form. Transfer of an entire financial asset can be divided into partial financial assets transfer and entire financial asset transfer. If the transfer of an entire financial asset satisfies the conditions for de-recognition, the difference between the amounts of the following 2 items shall be recorded in the profits and losses of the current period: (1) The book value of the transferred financial asset; and 87 Bengang Steel Plates Co., Ltd. Semi-Annual Report 2017 (2) The sum of consideration received from the transfer, and the accumulative amount of the changes of the fair value originally recorded in the owners' equities (in the event that the financial asset involved in the transfer is a financial asset Available-for-sale). If the transfer of partial financial asset satisfies the conditions to derecognize, the entire book value of the transferred financial asset shall, between the portion whose recognition has been stopped and the portion whose recognition has not been stopped (under such circumstance, the service asset retained shall be deemed as a portion of financial asset whose recognition has not been stopped) , be apportioned according to their respective relative fair value, and the difference between the amounts of the following 2 items shall be included into the profits and losses of the current period : (1) The book value of the portion whose recognition has been stopped; and (2) The sum of consideration of the portion whose recognition has been stopped, and the portion of the accumulative amount of the changes in the fair value originally recorded in the owner's equities which is corresponding to the portion whose recognition has been stopped (in the event that the financial asset involved in the transfer is a financial asset Available-for-sale) . If the transfer of financial assets does not satisfy the conditions to stop the recognition, it shall continue to be recognized as financial assets and the consideration received shall be recognized as financial liabilities. 4. Recognition of termination of financial liabilities Only when the prevailing obligations of a financial liability are relieved in all or in part may the recognition of the financial liability be terminated in all or partly. Where the Company (debtor) enters into an agreement with a creditor so as to substitute the existing financial liabilities by way of any new financial liability, and if the contractual stipulations regarding the new financial liability is substantially different from that regarding the existing financial liability, it shall terminate the recognition of the existing financial liability, and shall at the same time recognize the new financial liability. Where the Company makes substantial revisions to some or all of the contractual stipulations of the existing financial liability, it shall terminated the recognition of the existing financial liability or part of it, and at the same time recognize the financial liability after revising the contractual stipulations as a new financial liability. Where the recognition of a financial liability is totally or partially terminated, the enterprise concerned shall include into the profits and losses of the current period the gap between the carrying amount which has been terminated from recognition and the considerations it has paid (including the non-cash assets it has transferred out and the new financial liabilities it has assumed) . 88 Bengang Steel Plates Co., Ltd. Semi-Annual Report 2017 Where the Company buys back part of its financial liabilities, it shall distribute, on the date of repurchase, the carrying amount of the whole financial liabilities in light of the comparatively fair value of the part that continues to be recognized and the part whose recognition has already been terminated. The gap between the carrying amount which is distributed to the part whose recognition has terminated and the considerations it has paid (including the noncash assets it has transferred out and the new financial liabilities it has assumed) shall be recorded into the profits and losses of the current period. 5. Determination of the fair value The fair values of the financial assets or financial liabilities measured at fair value shall be determined by reference to the quoted prices in the active market. 6. Impairment provision of the financial assets (not including accounts receivables) The Company shall carry out impairment review for the financial assets at the balance sheet date except for the financial assets at fair value through profit or loss. Where there is any objective evidence proving that such financial asset has been impaired, an impairment provision shall be made. (1) Impairment of available-for-sale financial assets An impairment provision shall be made where the fair value of the held-to-maturity financial assets drops significantly at the balance sheet date or the trend of decrease is expected not to be temporary after taking various factors into consideration. The accumulative losses arising from the decrease of the fair value of the owners’ equity which was directly included shall be transferred out and recorded as impairment loss. Where any available-for-sale debt instruments is recognized as having suffered from any impairment loss, if there is any objective evidence proving that the value of the said debt instruments has been restored, and it is objectively related to the events that occur after such loss is recognized, the impairment-related losses as originally recognized shall be reversed and be recorded into the profits and losses of the current period. Impairment losses incurred by investment transactions of available-for-sale equity instruments shall not be reversed through profits and losses. The criteria for “serious” level of the decrease of fair value of available-for-sale financial instruments are as follows: the decrease of fair value for the equity investment with the active transaction in a market of good liquidity is normally 50%. The decrease of fair value of the equity investment without good market liquidity is normally 30%; the criteria for “non-temporary” decrease of fair value is continuous decrease over 12 months; the cost of investment is based on the purchase price. (2) Impairment of held-to-maturity investment 89 Bengang Steel Plates Co., Ltd. Semi-Annual Report 2017 The impairment of the held-to-maturity investment can be measured at reference to the measurement of the impairment of accounts receivables. 11. Receivables (1) The recognition and provision for bad debts for the individually significant receivables The recognition standard of bad debts provision for the Individually significant receivables refer to accounts receivable individually significant receivables over RMB10 million or other receivables over RMB 5 million. The impairment test should be assessed individually for each individually significant receivable. If the there is evidence indicating the receivables have been impaired, the difference The provision for bad debts for the individually significant between the present value of the future cash flows and the book receivables value of receivables shall be recognized as bad debt provision and shall be recorded into the profits and losses at the current period. (2) The recognition and provision for bad debts for the receivables in portfolio Portfolio Recognition and provision for bad debts for portfolio Insignificant amount of receivables and unadjusted individual Aging analysis method receivables Aging analysis method for bad debts provision: √ Applicable □ Not applicable Bad debts ratio for Bad debts ratio for Aging accounts receivable other receivables 1-2 years 5.00% 5.00% 2-3 years 20.00% 20.00% Over 3 years 100.00% 100.00% Percentage of balance method for bad debts provisions: □ Applicable √ Not applicable Other methods for bad debts provision: □ Applicable √ Not applicable (3) Insignificant individual amounts of accounts receivable that recognize bad debts individually Accounts receivable amount is proved to be unrecoverable with Reasons for individual recognition and provision of bad debts conclusive evidence. If conclusive evidence shows the possibility of recovering the Method of bad debts recognition and provision amount is small, recognize bad debts individually as if the 90 Bengang Steel Plates Co., Ltd. Semi-Annual Report 2017 amount is unrecoverable. 12. Inventories Whether the Company needs to obey the disclosure requirement of specific industry No 1. Inventory classification Inventories include material in transit, raw material, low-valued consumables, work in process, finished goods, materials for consigned processing, etc. 2. Valuation method for inventory dispatched The weighted average method is used to confirm the actual cost of the inventories dispatched. 3. The basis for confirming the net realizable value of inventories and the methods to make provision for the inventories impairment loss The net realizable value of inventories (finished products, stock commodity, material, etc.) held for direct selling in the daily business activity shall be calculated by deducting the estimated sale expense and relevant taxes from the estimated sale price of inventories. The net realizable value of inventories for further processing in the daily business activity shall be calculated by deducting the estimated cost of completion, estimated sale expense and relevant taxes from the estimated sale price of inventories. The net realizable value of inventories held for the execution of sales contracts or labor contracts shall be calculated on the ground of the contract price. If an enterprise holds more inventories than the quantities subscribed in the sales contract, the net realizable value of the excessive part of the inventories shall be calculated on the ground of the general sales price. The Company shall make provision for loss on decline in value of inventories on the ground of each item of inventories at the year end. For inventories with large quantity and relatively low unit prices, the provision for loss on decline in value of inventories shall be made on the ground of the categories of inventories. For the inventories related to the series of products manufactured and sold in the same area, and of which the final use or purpose is identical or similar thereto, and if it is difficult to measure them by separating them from other items, the provision for loss on decline in value of inventories shall be made on a combination basis. Unless clear evidence shows that the market price is exceptionally fluctuating, the net realizable value of inventory is based on the market price at the balance sheet date. The net realizable value of inventory at the year-end is based on the market price at the balance sheet date. 91 Bengang Steel Plates Co., Ltd. Semi-Annual Report 2017 4. Inventory system The Company uses perpetual inventory system. 5. Amortization of low-valued consumables and packing materials (1) Low-valued consumables shall be amortized in full amount on issuance. (2) Packing materials shall be amortized in full amount on issuance 13. Assets classified as held for sale The Company shall recognize components or non-current assets as held for sale when the following conditions are satisfied simultaneously: (1) This component can be sold immediately based only on usual terms of selling such components in current situation. (2) The Company has adopted a resolution on disposal of the component or non-current asset, and has been approved by the general meeting of shareholders or the corresponding authority if required to be approved by the shareholders by the regulation. (3) The Company has signed an irrevocable transfer agreement with the transferee. (4) The transfer will be completed within one year. 14. Long-term equity investments 1. Criteria of join control and significant influence Joint control is the contractually agreed sharing of control of an arrangement, which exists only when decisions about the relevant activities require the unanimous consent of the parties sharing control. Significant influence is the power to participate in the financial and operating policy decisions of the investee but not control or join control of those policies. If the Company could exert significant influence over the investee, the investee is the associate of the Company. 2. The initial cost of long-term equity investment from business acquisition (1) Long-term equity investment from business acquisition For a business combination involving enterprises under common control, if the consideration of the combination is satisfied by paying cash, transfer of non-cash assets or assumption of liabilities and issue of equity securities, the initial investment cost of the long-term equity investment shall be the absorbing party’s share of the carrying amount of the owner’s equity of the party being absorbed in the consolidated financial statements of the ultimate controlling party at combination date. 92 Bengang Steel Plates Co., Ltd. Semi-Annual Report 2017 When an investor becomes capable of exercising control over an investee under common control due to additional investment or other reasons, the initial investment cost shall be the absorbing party’s share of the carrying amount of the owner’s equity of the party being absorbed in the consolidated financial statements of the ultimate controlling party at combination date. The difference between the initial investment cost and the carrying amount of the previously-held equity investment, together with the additional investment cost for new shares at combination date, shall be adjusted to the capital reserve. If the balance of capital reserve is not sufficient, any excess shall be adjusted to retained earnings. When an investor becomes capable of exercising control over an investee now under common control due to additional investment or other reasons, the investor shall change to the cost method and use the carrying amount of the cost method and use the carrying amount of the previously-held equity investment, together with the additional investment cost, as the initial investment cost under the cost method. (2) The initial cost of the long-term equity investment other than from business acquisition The initial cost of a long-term equity investment obtained by making payment in cash shall be the purchase cost which is actually paid. The initial cost of a long-term equity investment obtained on the basis of issuing equity securities shall be the fair value of the equity securities issued. The initial cost of a long-term equity investment of an investor shall be the value stipulated in the investment contract or agreement (minus cash dividend or profit declared but not paid) except the unfair value stipulated in the contract or agreement. If the exchange of non-monetary assets is commercial in nature and the fair values of both the assets received and surrendered can be reliably measured, the fair value of the assets surrendered shall be used as the basis for determining the cost of the assets received, unless there is any exact evidence showing that the fair value of the assets received is more reliable. Where any non-monetary assets transaction does not meet the conditions as prescribed above, the carrying value and relevant payable taxes of the assets surrendered shall be the initial cost of the assets received. The initial cost of a long-term equity investment obtained by debt restructuring shall be ascertained on the basis of fair values. 3. Subsequent measurement and profit or loss recognition (1) Cost method 93 Bengang Steel Plates Co., Ltd. Semi-Annual Report 2017 The Company adopts cost method for the long term investment in subsidiary company. Under the cost method, an investing enterprise shall, in accordance with the attributable share of the net profits or losses of the invested entity, recognize the investment profits or losses except the dividend declared but unpaid, which is included in the payment when acquiring the investment. (2) Equity method A long-term equity investment in an associate or a joint venture shall be accounted for using the equity method. Where the initial investment cost of a long-term equity investment exceeds tan investor’s interest in the fair values of an investee’s identifiable net assets at the acquisition date, no adjustment shall be made to the initial investment cost. Where the initial cost is less than the investor’s interest in the fair values of the investee’s identifiable net assets at the acquisition date, the difference shall be credited to profit or loss for the current period, and the cost of the long-term equity investment shall be adjusted accordingly. The Company shall recognize its share of the investee’s net profits or losses, as well as its share of the investee’s other comprehensive income, as investment income or losses and other comprehensive income, and adjust the carrying amount of the investment accordingly. The carrying amount of the investment shall be reduced by the portion of any profit distributions or cash dividends declared by the investee that is attributable to the investor. The investor’s share of the investee’s owners’ equity changes, other than those arising from the investee’s net profit or loss, other comprehensive income or profit distribution, and the carrying amount of the long-term equity investment shall be adjusted accordingly. The investor shall recognize its share of the investee’s net profits or losses after making appropriate adjustments based on the fair values of the investee’s identifiable net assets at the acquisition date. The unrealized profits or losses resulting from transactions between the investor and its associate or joint venture shall be eliminated in proportion to the investor’s equity interest in the investee, based on which investment income or losses shall be recognized. Any losses resulting from transactions between the investor and investee which are attributable to asset impairment shall be recognized in full. If the transaction of investment or sale of assets among the Company and associate and joint venture and the assets is a business, it shall apply the treatment mentioned in Note 2 (5) “The accounting treatment for Business combination under/now under common control” and Note 2 (6) “Consolidation of Financial Statements”. When the Company recognizes the losses of invested enterprise, it shall follow the following sequence: First of all, offset the book value of long term equity investment. If the book value of long term equity is insufficient to dilute, the investing enterprise shall recognize the net losses of the invested enterprise until the book value of the long-term equity investment and other long-term rights and interests which substantially 94 Bengang Steel Plates Co., Ltd. Semi-Annual Report 2017 form the net investment made to the invested entity are reduced to zero. If the company still has the obligation to undertake extra losses per contract, and then estimated liabilities shall be recognized into current profit and loss accordingly to the estimated obligation. (3) Disposal of long-term equity investment On disposal of a long-term equity investment, the difference between the proceeds actually received and the carrying amount shall be recognized in profit or loss for the current period. When the previously-held equity investment is accounted for under the equity method, any other comprehensive income previously recognized shall be accounted for on the same basis as would have been required if the investee had directly disposed of the related assets or liabilities. Those owner's equity recognized other than the change of net profits or loss, other comprehensive income, profit distribution of the invested entity shall be transferred proportionally into profit or loss of current period, other comprehensive income arising from the re-measurement of defined benefit plan is excluded. When an investor can no longer exercise joint control of or significant influence over an investee due to partial disposal of equity investment or other reasons, the remaining equity investment shall be accounted for in accordance with “Accounting Standard for Business Enterprises No. 22-Financial instruments: recognition and measurement”. The difference between the fair value and the carrying amount at the date of the loss of join control or significant influence shall be charged to profit or loss for the current period. When the previously-held equity investment is accounted for under the equity method, any other comprehensive income previously recognized shall be accounted for on the same basis as would have been required if the investee had directly disposed of the related assets or liabilities for the current period upon discontinuation of the equity method. Those owner's equity recognized other than the change of net profits or loss, other comprehensive income, profit distribution of the invested entity shall be transferred into profit or loss of current period in full when the Company cease to adopt the equity method. When the Company can no longer exercise control over an investee due to partial disposal of equity investment or other reasons, and with the retained interest, still has joint control of, or significant influence over, the investee, when preparing the individual financial statements, the investor shall change to the equity method and adjust the remaining equity investment as if the equity method had been applied from the date of the first acquisition. If the investor cannot exercise joint control of or significant influence over the investee after partial disposal of equity investment, the remaining equity investment shall be accounted for in accordance with “Accounting Standard for Business Enterprises No.22-Financial instruments: Recognition 95 Bengang Steel Plates Co., Ltd. Semi-Annual Report 2017 and Measurement”, and the difference between the fair value and carrying amount at the date of the loss of control shall be charged to profit or loss for the current period. When the equity investment disposed is acquired through business combination due to additional investment or other reasons, in stand-alone financial statement, the remaining equity investment shall adopt cost method or equity method, any other comprehensive income and other owner’s interests previously recognized of the previously-held equity investment under the equity method shall be transferred proportionally. For those remaining equity investment accounted for in accordance with “Accounting Standard for Business Enterprises No.22-Financial instruments: Recognition and Measurement” after disposal, other comprehensive income and other owner’s interests previously recognized shall be transferred to profit or loss in full. 15. Investment properties Investment properties measurement method: Cost Method Depreciation and amortization method The term "investment properties" refers to the real estate held for generating rent and/or capital appreciation. The investment properties include: (1) The land use right which has already been rented; (2) The land use right which is held and prepared for transfer after appreciation; and (3) The building which has already been rented (including buildings self-constructed or developed for rent after completion or buildings being built or developed for future rent) . The investment properties shall be measured at the cost model. For the investment properties measured at cost model and building for rent, the same depreciation policy shall be adopted as that of fixed assets; for land use right, the same amortization policy shall be adopted as that of intangible assets. 16. Fixed assets (1) Recognition of Fixed assets The term "fixed assets" refers to the tangible assets that simultaneously possess the features as follows: (1) They are held for the sake of producing commodities, rendering labor service, renting or business management; and (2) Their useful life is in excess of one fiscal year. No fixed asset may be recognized unless it simultaneously meets the conditions as follows: (1) The economic benefits related to the fixed asset are likely to flow into the enterprise; and 96 Bengang Steel Plates Co., Ltd. Semi-Annual Report 2017 (2) The cost of the fixed asset can be measured reliably. (2) Fixed assets depreciation Category Fixed assets depreciation Depreciation Period Residual Value Rate Depreciation Rate Plants and Buildings Straight line method 8-40 years 0% 2.50%-12.50% Machinery Straight line method 4-18 years 3% 5.39%-24.25% Transportation and other Straight line method 5-18 years 3% 5.39%-19.40% equipment (3) Recognition criteria for fixed asset leased in by financial leasing and its valuation Where a lease satisfies one or more of the following criteria, it shall be recognized as a financial leasing: (1) The ownership of the leased asset is transferred to the lessee when the term of lease expires; (2) The lessee has the option to buy the leased asset at a price which is expected to be far lower than the fair value of the leased asset at the date when the option becomes exercisable; (3) The lease term covers the major part of the use life of the leased asset; and (4) The present value of the minimum lease payments on the lease beginning date amounts to substantially all of the fair value of the leased asset on the lease beginning date. On the lease beginning date, the Company shall record the lower one of the fair value of the leased asset and the present value of the minimum lease payments on the lease beginning date as the initial book value, recognize the amount of the minimum lease payments as the initial book value of long-term account payable, and treat the difference between the recorded amount of the leased asset and the long-term account payable as unrecognized financing charges. 17. Construction in progress The cost of fixed assets transferred from a construction in progress includes all the necessary expenses incurred for bringing the asset to the expected conditions for use. Construction in progress is transferred to fixed asset when it has reached its working condition for its intended use. In case the final project accounts have not been completed or approved, the asset shall be transferred to fixed assets at an estimated value by considering project budget, cost or actual cost of the project and etc., and the deprecation of the said fixed assets shall be provided in accordance with the Company’s accounting policy since it has reached its working condition for its intended use. After the project accounts have been approved, the estimated values shall be adjusted based on the actual cost, but those provided deprecation shall not be adjusted. 18. Borrowing costs 1. Principle of the recognition of capitalized borrowing costs 97 Bengang Steel Plates Co., Ltd. Semi-Annual Report 2017 The borrowing costs shall include interest on borrowings, amortization of discounts or premiums on borrowings, ancillary expenses, and exchange balance on foreign currency borrowings. Where the borrowing costs incurred to an enterprise can be directly attributable to the acquisition and construction or production of assets eligible for capitalization, it shall be capitalized and recorded into the costs of relevant assets. Other borrowing costs shall be recognized as expenses on the basis of the actual amount incurred, and shall be recorded into the current profits and losses. The term "assets eligible for capitalization" shall refer to the fixed assets, investment real estate, inventories and other assets, of which the acquisition and construction or production may take quite a long time to get ready for its intended use or for sale. The borrowing costs shall not be capitalized unless they simultaneously meet the following requirements: (1) The asset disbursements have already incurred, which shall include cash, transferred non-cash assets or interest bearing debts paid for the acquisition and construction or production activities for preparing assets eligible for capitalization; (2) The borrowing costs has already incurred; and (3) The acquisition and construction or production activities which are necessary to prepare the asset for its intended use or sale have already started. 2. The capitalization period of borrowing costs The capitalization period shall refer to the period from the commencement to the cessation of capitalization of the borrowing costs, excluding the period of suspension of capitalization of the borrowing costs. When the qualified asset under acquisition and construction or production is ready for the intended use or sale, the capitalization of the borrowing costs shall be ceased. Where each part of a qualified asset under acquisition and construction or production is completed separately and is ready for use, the capitalization of the borrowing costs in relation to this part of asset shall be ceased. Where each part of an asset under acquisition and construction or production is completed separately and is ready for use or sale during the continuing construction of other parts, but it cannot be used or sold until the asset is entirely completed, the capitalization of the borrowing costs shall be ceased when the asset is completed entirely. 3. The suspension of capitalization of borrowing costs Where the acquisition and construction or production of a qualified asset is interrupted abnormally and the interruption period lasts for more than 3 months, the capitalization of the borrowing costs shall be suspended. 98 Bengang Steel Plates Co., Ltd. Semi-Annual Report 2017 If the interruption is a necessary step for making the qualified asset under acquisition and construction or production ready for the intended use or sale, the capitalization of the borrowing costs shall continue. The borrowing costs incurred during such period shall be recognized as expenses, and shall be recorded into the profits and losses of the current period, till the acquisition and construction or production of the asset restarts. 4. Method of calculating the capitalization rate and capitalized amount of borrowing costs For interest expense (minus the income of interests earned on the unused borrowing loans as a deposit in the bank or investment income earned on the loan as a temporary investment) and the ancillary expense incurred to a specifically borrowed loan, those incurred before a qualified asset under acquisition, construction or production is ready for the intended use or sale shall be capitalized at the incurred amount when they are incurred, and shall be recorded into the costs of the asset eligible for capitalization. The Company shall calculate and determine the to-be-capitalized amount of interests on the general borrowing by multiplying the weighted average asset disbursement of the part of the accumulative asset disbursements minus the general borrowing by the capitalization rate of the general borrowing used. The capitalization rate shall be calculated and determined in light of the weighted average interest rate of the general borrowing. Where there is any discount or premium, the amount of discounts or premiums that shall be amortized during each accounting period shall be determined by the effective interest rate method, and an adjustment shall be made to the amount of interests in each period. 19. Biological Assets 20. Oil and gas assets 21. Intangible assets (1) Measurement, useful life and impairment 1. Measurement of Intangible Assets (1) Initial measurement is based on cost upon acquisition The cost of an intangible asset on acquisition include the purchase price, relevant taxes and other necessary disbursements which may be directly attributable to bringing the intangible asset to the conditions for the expected purpose. If the payment for an intangible asset is delayed beyond the normal credit conditions and it is of the financing nature, the cost of the intangible asset shall be determined on the basis of the present value of the purchase price. 99 Bengang Steel Plates Co., Ltd. Semi-Annual Report 2017 For intangible assets obtained from debt restructuring as settlement of liabilities from debtors, initial recognition is based on its fair value, and the difference between the debt restructured and the fair value of the intangible assets are recognized in the current profit and loss. For intangible assets obtained from non-monetary transactions with commercial substance, and the fair value of the assets obtained or surrendered can be reliably measured, the initial recognition of the asset obtained is based on the fair value of the asset surrendered, unless there is strong evidence that the fair value of the asset obtained is more reliable. For intangible assets obtained through non-monetary transactions which do not meet the above criteria, the initial recognition is based on the book value of the assets surrendered and the relevant taxes payable. No gain or loss will be recognized. (2) Subsequent Measurement The Company shall analyze and judge the beneficial period of intangible assets upon acquisition. Intangible assets with finite beneficial period shall be amortized under the straight-line method during the period when the intangible asset can bring economic benefits to the enterprise. If it is unable to estimate the beneficial period of the intangible asset, it shall be regarded as an intangible asset with uncertain service life and shall not be amortized. 2. Estimated useful lives of intangible assets with limited useful lives: Item Estimated useful life Criteria Land use right 50 years Land use right certificate The Company shall review the useful lives and amortization methods of intangible assets with limited useful lives at each year end. Per review, the useful lives and amortization methods of intangible assets with limited useful lives at each year-end is the same with that of last year. 3. Determination of intangible assets with uncertain useful lives As at the balance sheet date, the Company has no intangible assets with uncertain useful lives. (2) Development expenditure of internal research 1. Classification criteria for internal research phase and development phase The expenditures for its internal research and development projects of an enterprise shall be classified into research expenditures and development expenditures. Research phase refers to the phase of creative and planned investigation to acquire and study to acquire and understand new scientific or technological knowledge. 100 Bengang Steel Plates Co., Ltd. Semi-Annual Report 2017 Development phase refers to the phase during which the result of research phase or other knowledge is applied into certain projects or designs for the manufacturing of new or substantially improved material, device and product. 2. Criteria of capitalization of development expenditure Expenditures during the development phase of internal research and development projects shall be recognized as intangible assets when they meet all the following criteria: (1) It is feasible technically to complete the intangible assets for use or sale; (2) The intention to complete and use or sell the intangible assets is present; (3) The method of which the intangible assets generate economic benefits shall be proved, including being able to prove that there is a potential market for the products manufactured by applying the intangible assets or there is a potential market for the intangible assets itself or the intangible assets will be used internally; (4) It is able to finish the development of the intangible assets, and able to use or sell the intangible assets, with the support of sufficient technologies, financial resources and other resources; and (5) The development expenditures of the intangible assets can be reliably measured. The development expenditures for its internal research and development projects of the Company shall be recorded into the profit or loss for the current period if the above said conditions are not satisfied simultaneously. The research expenditures for its internal research and development projects of an enterprise shall be recorded into the profit or loss for the current period when incurred. 22. Impairment of long-term assets For long-term assets under the cost model such as fixed assets, construction in progress, intangible assets etc., the Company shall perform impairment tests at the period end if there is clear indication of impairment. If the recoverable amounts of long-term assets are less than their carrying amounts, the carrying amounts of the assets shall be written down to their recoverable amounts. The write-downs are recognized as impairment losses and charged to current profit and loss. The recoverable amounts of long-term assets are the higher of their fair values less costs to sell and the present values of the future cash flows expected to be derived from the assets. The Company shall estimate its recoverable amount on an individual basis. Where it is difficult to do so, it shall determine the recoverable amount of the group assets on the basis of the asset group to which the asset belongs. The term "group assets” refers to a minimum combination of assets by which the cash flows could be generated independently The goodwill shall be subject to an impairment test at least at the end of each year. 101 Bengang Steel Plates Co., Ltd. Semi-Annual Report 2017 When the Company makes an impairment test of assets, it shall, as of the purchasing day, apportion the carrying value of the business reputation formed by merger of enterprises to the relevant asset groups by a reasonable method. Where it is difficult to do so, it shall be apportioned to the relevant combinations of asset groups. When apportioning the carrying value of the business reputation to the relevant asset groups or combinations of asset groups, it shall be apportioned on the basis of the proportion of the fair value of each asset group or combination of asset groups to the total fair value of the relevant asset groups or combinations of asset groups. Where it is difficult to measure the fair value reliably, it shall be apportioned on the basis of the proportion of the carrying value of each asset group or combination of asset groups to the total carrying value of the relevant asset groups or combinations of asset groups. When making an impairment test on the relevant asset groups or combination of asset groups containing business reputation, if any evidence shows that the impairment of asset groups or combinations of asset groups is possible, the Company shall first make an impairment test on the asset groups or combinations of asset groups not containing business reputation, calculate the recoverable amount, compare it with the relevant carrying value and recognize the corresponding impairment loss. Then the Company shall make an impairment test of the asset groups or combinations of asset groups containing business reputation, and compare the carrying value of these asset groups or combinations of asset groups (including the carrying value of the business reputation apportioned thereto) with the recoverable amount. Where the recoverable amount of the relevant assets or combinations of the asset groups is lower than the carrying value thereof, it shall recognize the impairment loss of the business reputation. Impairment losses on long-term assets shall not be reversed in subsequent accounting periods once recognized. 23. Long-term deferred expenses The long-term deferred expense refers to the expenses incurred but shall be borne by current and subsequent accounting period, which is more than one year. The long-term deferred expense shall be amortized over its beneficiary period evenly. 24. Employee benefits (1) Accounting treatment for short employee benefit The Company shall recognized , in the accounting period in which an employee provides service, actually occurred short-term employee benefits as a liability, with a corresponding charge to the profit or loss or cost of an asset for the current period. 102 Bengang Steel Plates Co., Ltd. Semi-Annual Report 2017 Payments made by an enterprise of social security contributions for employees, payments of housing funds, and union running costs employee education costs provided in accordance with relevant requirements shall, in the accounting period in which employees provide services, be calculated according to prescribed bases and percentages in determining the amount of employee benefits. The employee benefits which are non-monetary benefits shall be measured at fair value if it could be measured reliably. (2) Accounting treatment of post-employment benefits 1. Defined contribution plan The Company shall recognize, in the accounting period in which an employee provides service, pension fund and unemployment fund for employees as a liability according to the local government regulations. The amount shall be calculated according to local prescribed bases and percentages in determining the amount of employee benefits, with a corresponding charge to the profit or loss or cost of an asset for the current period. 2. Defined benefit plan None. (3) Accounting treatment of termination benefits The Company which provides termination benefits to employees shall recognize an employee benefits liability for termination benefits, with a corresponding charge to the profit or loss for the current period, at the earlier of the following dates: (1) When the Company cannot unilaterally withdraw the offer of termination benefits because of an employment termination plan or a curtailment proposal (2) When the Company recognizes costs or expenses related to a restructuring that involves the payment of termination benefits (4) Accounting treatment of other long-term employee benefits payable None. 25. Estimated liabilities 1. Recognition Criteria of estimated liabilities The obligation related to a Contingency (litigation, guarantees, loss contract, restructuring) shall be recognized as an estimated liabilities when the following conditions are satisfied simultaneously: (1) That obligation is a current obligation of the enterprise; (2) It is likely to cause any economic benefit to flow out of the enterprise as a result of performance of the obligation; and (3) The amount of the obligation can be measured in a reliable way. 103 Bengang Steel Plates Co., Ltd. Semi-Annual Report 2017 2. Measurement of estimated liabilities The estimated debts shall be initially measured in accordance with the best estimate of the necessary expenses for the performance of the current obligation. To determine the best estimate, an enterprise shall take into full consideration of the risks, uncertainty, time value of money, and other factors related to the Contingencies. If the time value of money is of great significance, the best estimate shall be determined after discounting the relevant future outflow of cash. The best estimate shall be conducted in accordance with the following situations, respectively: If there is a continuous range for the necessary expenses and if all the outcomes within this range are equally likely to occur, the best estimate shall be determined in accordance with the average estimate within the range, that is, the average of the upper and lower limit. If there is not a sequent range for the necessary expenses and if the outcomes within this range are not equally likely to occur, the best estimate shall be determined as follows: (1) If the Contingencies concern a single item, it shall be determined in the light of the most likely outcome. (2) If the Contingencies concern two or more items, the best estimate shall be calculated and determined in accordance with all possible outcomes and the relevant probabilities. When all or some of the expenses necessary for the liquidation of an estimated debts of an enterprise is expected to be compensated by a third party, the compensation shall be separately recognized as an asset only when it is virtually certain that the reimbursement will be obtained. The amount recognized for the reimbursement shall not exceed the book value of the estimated debts. 26. Share-Based Payment 27. Preference shares, Perpetual bond and Other Financial instruments 28. Revenue Whether the Company needs to obey disclosure requirement of specific industry No 1. Recognition Criteria for the Revenue from sale of goods (1) The general principle of revenue recognition and measurement The Company has transferred to the buyer the significant risks and rewards of ownership of the goods; and retained neither continuing managerial involvement which usually relates to the ownership nor exerts effective control over the goods sold. The relevant amount of revenue can be measured reliably, the economic 104 Bengang Steel Plates Co., Ltd. Semi-Annual Report 2017 benefits related to the transaction will flow into the enterprise; and the relevant costs incurred or to be incurred can be measured reliably. Revenue from the sale of goods may be recognized. (2) The specific criteria of revenue recognition and measurement The amount of sale of goods is recognized according to the contract or agreement terms. The Company mainly sells steel and other products. Domestic sales revenue is recognized when the following conditions are met: The Company has delivered the products to buyer under the contract, amount of product sales revenue is determinable, received or the certificate of the right to receive the amount has been obtained and the relevant economic benefits are likely to flow into the entity, and related costs can be measured reliably. Export sales revenue is recognized when the following conditions are met: the Company has undertaken the Customs declaration and delivery has occurred under the contract, bill of lading has been obtained, amount of product sales revenue is determinable, received or the certificate of the right to receive the amount has been obtained and the relevant economic benefits are likely to flow into the entity, and related costs can be measured reliably. 2. Recognition Criteria for the Revenue from alienating of Assets Use Rights (1) The general principle When it is probable that economic benefits in relation to the transaction will flow into the enterprise; and the amount of revenues can be measured reliably. The Company shall ascertain the amount of revenues from the transfer of Assets Use Right based on the following circumstances respectively: (1) Interest income shall be calculated based on the duration of which the Company's cash is used by others and the actual interest rate; or (2) Royalty revenue shall be calculated based on the period and method of charging as stipulated in the relevant contract or agreement. (2) The evidence of recognition of Revenue from alienating of Assets Use Rights (1) The agreement alienating of Assets Use Rights of has been signed and provided to users; and (2) The timing for collecting the fee is due. 3. Recognition Criteria for the Revenue from Providing Labor Services and Construction Contracts under Percentage of Completion Method Revenue from providing labor services are recognized under the percentage of completion method if the outcome of the labor service provision transaction can be reliably measured. Percentage completed is determined by measurement of work completed. Total revenue from providing of labor services is determined based on the received or receivable amount stipulated in the contract or agreement, unless the received or receivable amount as stipulated in the contract 105 Bengang Steel Plates Co., Ltd. Semi-Annual Report 2017 or agreement is unfair. The Company shall, on the date of the balance sheet, ascertain the current revenue from providing labor services by multiplying the total amount of revenues from providing labor services with the percentage completion, less cumulative revenues recognized in the previous accounting periods. At the same time, the enterprise shall recognize current cost of labor services by multiplying the total estimated cost of providing of labor services with percentage completion less cumulative costs recognized in the previous accounting periods. If the result of a transaction concerning the providing of labor services cannot be reliably measured at the balance sheet date, it shall be measured as follows: (1) If the cost of labor services incurred is expected to be compensated, the revenue from the providing of labor services shall be recognized to the extent of the cost of labor services incurred, and the cost of labor services shall be recognized; or (2) If the cost of labor services incurred is not expected to compensate, the cost incurred shall be recognized in the current profit and loss, and no revenue from the providing of labor services shall be recognized. 29. Government Subsidies (1) The judgment basis and accounting treatment of government subsidies related to assets Government subsidies related to assets are government subsidies whose primary condition is that an entity qualifying for them should purchase, construct or otherwise acquire long-term assets. The specific condition of government subsidies related to assets to the Company is that, government subsidies qualifying for us should purchase, construct or otherwise acquire long-term assets, including fiscal appropriation for fixed assets and intangible assets acquired, finance discount of specific borrowing related to fixed assets acquired. Government subsidies related to assets shall be recognized by deducting the subsidies at the carrying amount of the assets or recognized as deferred income. Subsidies that recognized as deferred income shall be recognized in profit or loss on a systematic basis over the periods during the useful lives of the relevant assets (Subsidies related to daily activities should be figured into Other Income. Subsidies that unrelated to daily activities should be figured into Non-operating Income). (2) The judgment basis and accounting treatment of government subsidies related to incomes Government subsidies related to incomes refer to the government subsidies beside government subsidies related to assets. The specific condition of government subsidies related to assets to the Company is that, subsidies are acquired by us and not government subsidies related to assets. The government subsidies related to incomes to compensate future expenses, shall be recognized as deferred income and transferred to current profit or loss (Subsidies related to daily activities should be figured into Other Income. Subsidies that unrelated to daily activities should be figured into Non-operating Income) in the period during which the expenses compensation is recognized, or deduct relevant cost or loss. 106 Bengang Steel Plates Co., Ltd. Semi-Annual Report 2017 30. Deferred tax assets and deferred tax liabilities An enterprise shall recognize the deferred income tax liabilities arising from a deductible temporary difference to the extent of the amount of the taxable income which it is most likely to obtain and which can be deducted from the deductible temporary difference. As for any deductible loss or tax deduction that can be carried forward to the next year, the corresponding deferred income tax assets shall be determined to the extent that the amount of future taxable income to be offset by the deductible loss or tax deduction to be likely obtained. All taxable temporary differences shall be recognized as deferred tax liabilities with certain limited exceptions. Exceptions when deferred tax assets and deferred tax liabilities are not recognized include: initial recognition of goodwill; initial recognition of an asset or liability in a transaction or event that is not a business combination and at the time of the transaction, affects neither accounting profit nor taxable profit (tax loss) An entity shall offset deferred tax assets and deferred tax liabilities if, and only if: (a) the entity has a legally enforceable right to set off current tax assets against current tax liabilities; and (b) the deferred tax assets and the deferred tax liabilities relate to income taxes levied by the same taxation authority on either:(i) the same taxable entity; or (ii) different taxable entities which intend either to settle current tax liabilities and assets on a net basis, or to realize the assets and settle the liabilities simultaneously, in each future period in which significant amounts of deferred tax liabilities or assets are expected to be settled or recovered. 31. Leases (1) Accounting treatment of operating lease (1) The rents paid for operating leases shall be recorded in the profits and losses of the current period by using the straight-line method over each period of the lease term. The initial direct costs paid by the Company shall be recorded into the profits and losses of the current period If the lessor has shouldered any expense related to the lease which shall have been borne by the Company, the Company shall deduct these expenses from the total rental expense and the remaining rental expense shall be allocated to each period during the lease term (2) The rents collected from operating leases shall be recorded in the profits and losses of the current period by using the straight-line method over each period of the whole lease term in which free lease period is included. The initial direct costs paid by the Company shall be recorded into the profits and losses of the 107 Bengang Steel Plates Co., Ltd. Semi-Annual Report 2017 current period. The initial direct costs shall be capitalized if it is material, and be allocated to each period as per the basis for rental revenue recognition. If the Company has shouldered any expense related to the lease which shall have been borne by the lessee, the company shall deduct these expenses from the total rental revenue and the remaining rental revenue shall be allocated to each period during the lease term. (2) Accounting treatment of financial leasing (1) Leased in asset On the lease beginning date, a lessee shall record the lower one of the fair value of the leased asset and the present value of the minimum lease payments on the lease beginning date as the initial book value, recognize the amount of the minimum lease payments as the initial book value of long-term account payable, and treat the balance between the recorded amount of the leased asset and the long-term account payable as unrecognized financing charges. The lessee shall adopt the effective interest rate method to calculate and recognize the financing charge in the current period. The unrecognized financing charge shall be amortized to each period during the lease term. Initial direct costs incurred by the Company shall be recorded in the value of the leased asset. (2) Leased out asset On the lease beginning date, a lessee shall record the balance between the sum of finance lease receivables plus unguaranteed residual value and the present value of the sum as unrealized financing income, and record rental as revenue when received for each period in the future Initial direct costs incurred by the Company related to the leased asset shall be recorded in the initial measurement of the finance lease receivables, and reduce the amount of revenue recognized during the lease term. 32. Discontinuing operation Discontinuing operation is a component that has been disposed or classified as held for sale by the Company, and can be distinguished separately in operating and preparing financial statements when one of the following conditions is met: (1) The component stands for an independent main business or a major business area; (2) The component is a part of disposal plan of an independent main business or a major business area; (3) The component is a subsidiary which is acquired only for sale again. 33. Significant accounting policies and change of accounting estimate (1) Significant changes in accounting policies. 108 Bengang Steel Plates Co., Ltd. Semi-Annual Report 2017 □ Applicable √ Not applicable (2) Significant changes in accounting estimates □ Applicable √ Not applicable 34. Others VI. Taxes 1. Major type of taxes and corresponding tax rates 税种 Taxation Method Tax Rate The balance of output VAT calculated based on product sales and taxable services Value-added Tax(VAT) revenue in accordance with the tax laws 17%, 11%, 6% after subtracting the deductible input VAT of the period Based on VAT and business tax actually City maintenance and construction tax 7%, 5% paid Based on VAT and business tax actually Educational surcharges 3%, 2% paid Enterprise income tax Based on taxable profit 25% Notes to whether there is different income tax rate Tax payer Income tax rate 2. Tax Preference None 3. Others VII. Notes to the consolidated financial statements 1. Cash at bank and on hand Unit: Yuan Items Ending balance Beginning balance Cash on hand 64,107.73 47,743.38 Cash at bank 11,190,437,502.33 12,238,841,745.29 Other monetary funds 1,050,077,541.51 693,022,529.17 109 Bengang Steel Plates Co., Ltd. Semi-Annual Report 2017 Total 12,240,579,151.57 12,931,912,017.84 Notes: The details of restricted monetary funds resulted from guarantee or pledge or freeze accounts are as follows: Items Ending balance Beginning balance Margin for bank acceptance bill 709.022.567.58 483,737,529.17 Guarantee for Yield Enhancement 46,581,952.50 Products Deposits for purchase of foreign currency Total 755,604,520.08 658,337,529.17 2. Financial assets at fair value through profit or loss Unit: Yuan Items Ending balance Beginning balance Notes: 3. Derivative financial assets □ Applicable √ Not applicable 4. Notes receivable (1) Notes receivable disclosed by category Unit: Yuan Items Ending balance Beginning balance Bank acceptance bill 3,486,513,747.73 2,003,701,859.70 Commercial acceptance bill 26,979,278.33 Total 3,486,513,747.73 2,030,681,138.03 (2) The pledged acceptance bill at the year-end Unit: Yuan Items The pledged acceptance bill at the year-end Commercial acceptance bill 1,385,808,380.90 Total 1,385,808,380.90 (3) The amount of Notes receivable endorsed over but not yet matured at the year-end. Unit: Yuan 110 Bengang Steel Plates Co., Ltd. Semi-Annual Report 2017 Items Derecognized ending balance Un-derecognized ending balance Bank acceptance bill 6,333,611,744.92 Total 6,333,611,744.92 (4) No Notes receivable has been transferred into accounts receivable due to inability of drawer to meet acceptance bill at the year-end. Unit: Yuan Items Amount transferred to receivable accounts at year end Notes 5. Accounts receivables (1) Accounts receivables disclosed by category Unit: Yuan Ending balance Beginning balance Provision for bad Total net Carrying amount Carrying amount Provision for bad debts Total net debts book Category book value Bad value of Percenta Percenta Bad debts of Fixed Amount Amount debts Fixed Amount Amount ge ge ratio assets ratio assets Accounts receivable 736,368, 200,313, 536,054,8 829,837 205,972,5 623,865,42 tested for impairment 100.00% 27.20% 100.00% 24.82% 346.43 526.22 20.21 ,954.48 27.23 7.25 by portfolio 736,368, 200,313, 536,054,8 829,837 205,972,5 623,865,42 Total 100.00% 27.20% 100.00% 24.82% 346.43 526.22 20.21 ,954.48 27.23 7.25 Accounts receivables with large amount individually and bad debt provisions were provided: □ Applicable √ Not applicable Accounts receivables tested for impairment by portfolio using the method of Aging analysis: √ Applicable □ Not applicable Unit: Yuan Ending balance Aging Accounts receivables Provision for bad debts Bad debts ratio Within 1 year (inclusive) 354,317,340.47 Subtotal of within 1 year 354,317,340.47 1-2 years 161,343,387.24 8,067,169.36 5.00% 2-3 years 35,576,577.31 7,115,315.46 20.00% 111 Bengang Steel Plates Co., Ltd. Semi-Annual Report 2017 Over 3 years 185,131,041.40 185,131,041.40 100.00% Total 736,368,346.43 200,313,526.22 27.20% Notes: 1. The recognition and provision for bad debts for the individually significant receivables: The recognition standard of bad debts provision for the individually significant receivables: Individually significant receivables refer to accounts receivable over RMB10 million or other receivables over RMB 5 million. The provision for bad debts for the individually significant receivables: The impairment test shall be assessed individually for each individually significant receivable. If the there is evidence indicating the receivables have been impaired, the difference between the present value of the future cash flows and the book value of receivables shall be recognized as bad debts provision and shall be recorded into the profits and losses at the current period. 2. The recognition and provision for bad debts for the receivables in portfolio: Criteria for Recognition of Portfolio Portfolio: Insignificant amount of receivables and unadjusted individual receivables Recognition and provision for bad debts for portfolio Portfolio: Aging analysis method Aging analysis method for bad debts provision: Aging Bad debts ratio for accounts Bad debts ratio for other receivable (%) receivables (%) Within 1 year (inclusive) 1-2 years (inclusive) 5 5 2-3 years (inclusive) 20 20 Over 3 years 100 100 3. Insignificant individual amounts of accounts receivable that recognize bad debts individually: (1) Reasons for individual recognition and provision of bad debts. Accounts receivable amount is proved to be unrecoverable with conclusive evidence. (2) Method of bad debts recognition and provision If conclusive evidence shows the possibility of recovering the amount is small, recognize bad debts individually as if the amount is unrecoverable. Receivable accounts on which bad debt provisions are provided on percentage analyze basis in a portfolio: □ Applicable √ Not applicable Receivable accounts on which bad debt provisions are provided by other ways in the portfolio: None (2) Information of provision, reversal or recovery of bad debts of current period The provision of bad debts of current period is RMB 0.00;Bad debt provision written back was RMB 5,659,001.01 in the period. Significant items of retrieving or writing back of bad debt provisions: Unit: Yuan 112 Bengang Steel Plates Co., Ltd. Semi-Annual Report 2017 Company Amount retrieved or written back way of retrieving (3) Receivable accounts actually written off in the report period Unit: Yuan Items Amount written off Significant amount written off: Unit: Yuan Property of the Reason of writing Written off Created by related Company Amount written off receivable account off procedures transaction or not Statement on writing off of receivable accounts: (4) Top five debtors at the year-end Ending balance Company Percentage of total Provision for Amount Accounts receivable (%) bad debts Huachen Auto Group Holding Co., Ltd. 119,239,063.73 16.19 Benxi Nanfen Xinhe Metallurgical Co., Ltd. 87,396,378.47 11.87 4,368,958.76 Benxi Steel & Iron (Group) Machinery Manufacture Co., 52,584,877.55 7.14 6,252,766.59 Ltd. Hua You Steel Pipe Co., Ltd. 29,732,876.07 4.04 29,616,623.65 Ningbo CIMC Logistics Equipment Co., Ltd. 21,855,329.22 2.97 Total 310,808,525.04 42.21 40,238,349.00 (5) Recognition of receivable accounts terminated (6) The amount of the assets and liabilities formed by the transfer and the continues involvement of accounts receivable Notes: 6, Prepayments (1) Prepayments disclosed by aging Unit: Yuan Ending balance Beginning balance Aging Amount Percentage Amount Percentage Within 1 year 598,454,617.50 90.93% 452,700,499.16 91.67% 113 Bengang Steel Plates Co., Ltd. Semi-Annual Report 2017 1-2 years 47,879,302.45 7.27% 31,080,628.03 6.29% 2-3 years 10,018,315.85 1.52% 8,279,599.88 1.68% Over 3 years 1,805,616.36 0.27% 1,778,932.37 0.36% Total 658,157,852.16 -- 493,839,659.44 -- Notes: Significant prepayment with aging over 1 year is paid for commodity in advance ,and the settlement terms agreed in the contract are not due. (2) Top five prepaid companies at the year-end Name of the company Amount Percentage (%) Benxi Beiying Steel & Iron (Group) Co., Ltd. 336,897,265.03 51.19 Shanxi Xishan Coal and Elect-ricity Power Co., Ltd. 93,542,918.52 14.21 MCC-SFRE Heavy Industry Equipment Co., Ltd. 21,274,964.40 3.23 Shenhua Sales Group Northeast Energy and Trade Co., Ltd 21,000,000.00 3.19 Huaibei Coal Co., Ltd. Coal Transport and Sales Branch 18,000,000.00 2.73 Total 490,715,147.95 74.56 Notes: 7. Interests receivable (1) Interest receivable disclosed by category Unit: Yuan Items Ending balance Beginning balance Fixed deposit 2,663,285.16 4,208,818.85 Total 2,663,285.16 4,208,818.85 (2) Significant Overdue Interest Impairment and the Loans Unit Ending balance Overdue period Reason criterion Notes: 8. Dividends receivable (1) Dividends receivable Unit: Yuan 114 Bengang Steel Plates Co., Ltd. Semi-Annual Report 2017 Items(Company invested in) Ending balance Beginning balance (2) Significant dividends receivable over 1 year Unit: Yuan Items(Company invested Impairment and the Ending balance Aging Reason in) criterion Notes: 9. Other receivables (1) Other receivables disclosed by category Unit: Yuan Ending balance Beginning balance Provision for bad Total net Carrying amount Carrying amount Provision for bad debts Total net debts book Category book value Bad value of Percenta Percenta Bad debts of Fixed Amount Amount debts Fixed Amount Amount ge ge ratio assets ratio assets Accounts receivable 229,832, 66,278,2 163,554,6 183,443 67,273,14 116,169,97 tested for impairment 99.25% 28.84% 99.06% 36.67% 912.39 95.69 16.70 ,116.06 3.57 2.49 by portfolio Other insignificant items but tested for 1,740,00 1,740,000 1,740,0 1,740,000.0 0.75% 0.94% impairment 0.00 .00 00.00 0 individually 231,572, 66,278,2 165,294,6 185,183 67,273,14 117,909,97 Total 100.00% 28.62% 100.00% 36.33% 912.39 95.69 16.70 ,116.06 3.57 2.49 Other receivable accounts with large amount and were provided bad debt provisions individually at end of period. □ Applicable √ Not applicable Other receivables tested for impairment by portfolio using the method of Aging analysis: √ Applicable □ Not applicable Unit: Yuan Ending balance Aging Other receivables Provision for bad debts Bad debts ratio Within 1 year (inclusive) 150,578,901.00 Subtotal of within 1 year 150,578,901.00 115 Bengang Steel Plates Co., Ltd. Semi-Annual Report 2017 1-2 years 9,896,312.40 494,815.62 5.00% 2-3 years 4,467,773.65 893,554.73 20.00% Over 3 years 64,889,925.34 64,889,925.34 100.00% Total 229,832,912.39 66,278,295.69 28.84% Notes: 1. The recognition and provision for bad debts for the individually significant receivables: The recognition standard of bad debts provision for the individually significant receivables: Individually significant receivables refer to accounts receivable over RMB10 million or other receivables over RMB 5 million. The provision for bad debts for the individually significant receivables: The impairment test shall be assessed individually for each individually significant receivable. If the there is evidence indicating the receivables have been impaired, the difference between the present value of the future cash flows and the book value of receivables shall be recognized as bad debts provision and shall be recorded into the profits and losses at the current period. 2. The recognition and provision for bad debts for the receivables in portfolio: Criteria for Recognition of Portfolio Portfolio: Insignificant amount of receivables and unadjusted individual receivables Recognition and provision for bad debts for portfolio Portfolio: Aging analysis method Aging analysis method for bad debts provision: Aging Bad debts ratio for accounts Bad debts ratio for other receivable (%) receivables (%) Within 1 year (inclusive) 1-2 years (inclusive) 5 5 2-3 years (inclusive) 20 20 Over 3 years 100 100 3. Insignificant individual amounts of accounts receivable that recognize bad debts individually: (1) Reasons for individual recognition and provision of bad debts. Accounts receivable amount is proved to be unrecoverable with conclusive evidence. (2) Method of bad debts recognition and provision If conclusive evidence shows the possibility of recovering the amount is small, recognize bad debts individually as if the amount is unrecoverable. Receivable accounts on which bad debt provisions are provided on percentage analyze basis in a portfolio: □ Applicable √ Not applicable Receivable accounts on which bad debt provisions are provided by other ways in the portfolio: None (2) Information of provision, reversal or recovery of bad debts of current period The provision of bad debts of current period is RMB 0.00;Bad debt provision written back was RMB 994,847.88 in the period. Significant items of retrieving or writing back of bad debt provisions: Unit: Yuan 116 Bengang Steel Plates Co., Ltd. Semi-Annual Report 2017 Company Amount retrieved or written back way of retrieving (3) Receivable accounts written back or retrieved in the report period Unit: Yuan Items Amount written off Significant other Receivables have been written off this year: Unit: Yuan Reason of writing Written off Created by related Company Property of account Amount written off off procedures transaction or not Notes: (4) Other receivables disclosed by nature Unit: Yuan Nature Ending balance Beginning balance Accounts 211,298,263.27 165,494,806.44 Export tax rebate 0.00 4,990,848.26 Margin and deposit 4,075,331.26 3,329,519.00 Others 16,199,317.86 11,367,942.36 Total 231,572,912.39 185,183,116.06 (5) Top five debtors at the year-end Unit: Yuan Percentage of total Provision for bad debts Company Nature or content Ending balance Aging other receivables Ending balance Bengang Group International Within 1 year, Accounts 15,997,051.61 6.91% 2,000.00 Economic and Over 3 years Trading Co., Ltd. Benxi Steel and Iron(Group) Mechanical Accounts 4,610,543.21 Within 1 year 1.99% Manufacturing Co., Ltd. Huozhou Coal and Electricity Group Accounts 4,341,257.18 Over 3 years 1.87% 4,341,257.18 Co., Ltd. 117 Bengang Steel Plates Co., Ltd. Semi-Annual Report 2017 State Grid Liaoning Power Supply Co., Accounts 3,530,637.67 Within 1 year 1.52% Ltd. Benxi Branch Benxi Steel & Iron (Group) Real-estate Accounts 2,511,984.11 Within 3 years 1.08% 173,991.52 Development Co., Ltd. Total -- 30,991,473.78 -- 13.38% 4,517,248.70 (6) Receivable accounts involving the government Unit: Yuan Government Subsidies Predicted time and Company Ending balance Age at end of period Items amount of receiving (7) Other receivables de-recognition due to transfer of financial asset (8) Assets and liabilities formed due to the transfer and continuous involvement of other receivables Notes: 10. Inventories Whether the Company needs to obey the disclosure requirement of real estate industry No (1) Inventories disclosed by category Unit: Yuan Ending balance Beginning balance Total net book Total net book Items Carrying amount Impairment value of Fixed Carrying amount Impairment value of Fixed assets assets Raw materials 5,942,137,530.69 4,894,918.76 5,937,242,611.93 5,524,143,499.59 4,894,918.76 5,519,248,580.83 Work in process 1,809,499,061.74 19,429,824.09 1,790,069,237.65 1,565,629,213.06 52,905,684.06 1,512,723,529.00 Products 2,109,456,655.73 2,064,659.65 2,107,391,996.08 2,755,527,232.24 5,325,405.33 2,750,201,826.91 Total 9,861,093,248.16 26,389,402.50 9,834,703,845.66 9,845,299,944.89 63,126,008.15 9,782,173,936.74 Whether the Company needs to follow the disclosure requirement of “Shenzhen Stock Exchange Industry Information Disclosure IndexNo.4 – Listed Company engaged in Seed and Plant Industry” 118 Bengang Steel Plates Co., Ltd. Semi-Annual Report 2017 (2) Impairment of inventory Unit: Yuan Increase in current period Decrease in current period Beginning Items Write-back or Ending balance balance Provision Others Others write-off Raw materials 4,894,918.76 4,894,918.76 Work in process 52,905,684.06 33,475,859.97 19,429,824.09 Products 5,325,405.33 3,260,745.68 2,064,659.65 Total 63,126,008.15 36,736,605.65 26,389,402.50 (3) Statement on part of the inventory balance which was the capitalized borrowing expenses (4) Completed unbalanced assets at the end of the period Unit: Yuan Items Amount Notes: 11. Assets classified as held for sale Unit: Yuan Estimated Disposal Items Ending book value Fair value Estimated Disposal Time Expenses Notes: 12. Non-current assets due within one year Unit: Yuan Items Ending balance Beginning balance Notes: 13. Other current assets Unit: Yuan Items Ending balance Beginning balance Prepaid enterprise income tax 182,372,542.02 183,264,161.99 Input tax to be deducted 98,460,611.34 86,134,653.84 Bank Short-Term Financial Products 244,000,000.00 119 Bengang Steel Plates Co., Ltd. Semi-Annual Report 2017 Total 280,833,153.36 513,398,815.83 Notes: 14. Available-for-sale financial assets (1) Details of available-for-sale financial assets Unit: Yuan Ending balance Beginning balance Items Carrying Total Carrying Book value Total impairment Book value amount impairment amount Available-for-sale equity 20,271,278.63 14,414,693.00 5,856,585.63 29,271,278.63 14,414,693.00 14,856,585.63 instruments : Measured at cost 20,271,278.63 14,414,693.00 5,856,585.63 29,271,278.63 14,414,693.00 14,856,585.63 Total 20,271,278.63 14,414,693.00 5,856,585.63 29,271,278.63 14,414,693.00 14,856,585.63 (2) Available-for-sale financial assets on fair value at the end of period Unit: Yuan Categories of Available-for-sale equity Available-for-sale debt Available-for-sale Total instruments instruments financial assets (3) Available-for-sale financial assets measured at cost Unit: Yuan Carrying amount Total impairment Cash At At Percentage dividend Company beginning At end of beginning At end of of share in of the invested in Increase Decrease Increase Decrease of the the period of the the period the firm % current period period period Zhejiang Bengang Jingrui 1,967,605. 1,967,605. 20.00% Steel 63 63 Processing Co., Ltd. Suzhou Bengang 3,888,980. 3,888,980. 20.10% Industrial 00 00 Co., Ltd. 120 Bengang Steel Plates Co., Ltd. Semi-Annual Report 2017 China Steel Shanghai 14,414,693 14,414,693 14,414,693 14,414,693 15.00% Steel .00 .00 .00 .00 Processing Co., Ltd. Bengang Baojin (Shenyang ) 9,000,000. 9,000,000. 15.00% Automobil 00 00 e New Material Co., Ltd 29,271,278 9,000,000. 20,271,278 14,414,693 14,414,693 Total -- .63 00 .63 .00 .00 (4) Change of impairment of available-for-sale financial assets in the report period Unit: Yuan Categories of Available-for-sale equity Available-for-sale debt Available-for-sale Total instruments instruments financial assets (5) Notes to the fair value of the available-for-sale equity instruments drops significantly or not contemporarily but do not prepare the impairment loss Unit: Yuan Available-for-sale Continuous Accrual of Reason for do not Fall of fair value equity Investment Cost Closing fair value falling provision for make provision compared to cost instruments Items period(month) impairment for impairment Notes 15. Held-to-maturity investment (1) Held-to-maturity investment Unit: Yuan Ending balance Beginning balance Items Carrying amount Total impairment Carrying value Carrying amount Total impairment Carrying value 121 Bengang Steel Plates Co., Ltd. Semi-Annual Report 2017 (2) Significant Held-to-maturity investment at end of the period Unit: Yuan Bond Par value Face interest rate Actual interest rate Maturity date (3) Reclassification to held-to-maturity investment Notes 16. Long-term receivables (1) Long-term receivables Unit: Yuan Ending balance Beginning balance Discount rate Items Carrying Provision for Carrying Provision for Carrying value Carrying value interval amount bad debts amount bad debts (2) De-recognition long-term receivables due to transfer of financial assets (3) Assets and liabilities formed by transferring and continuous involvement of long-term receivables Notes 17. Long-term equity investments Unit: Yuan Increase or decrease Ending Investme Adjustme balance Company nt income nt of Declarati Provision of Beginnin Add Reduce Other Ending invested or loss other on of cash for provision g balance investmen investmen equity Others balance in under comprehe dividends impairme for t t changes equity nsive or profit nt impairme method income nt 1. Joint venture 2. Associated enterprise Notes 122 Bengang Steel Plates Co., Ltd. Semi-Annual Report 2017 18. Investment properties (1) Investment properties under cost method □ Applicable √ Not applicable (2) Investment properties under fair value method □ Applicable √ Not applicable (3) Investment properties without property rights certificate Unit: Yuan Items Carrying value Reason Notes 19. Fixed assets (1) Details of fixed assets Unit: Yuan Transportation Items Plants and Buildings Machinery Total equipment 1. Total original value: 1.Beginning balance 11,782,464,504.30 38,138,073,694.83 832,584,624.54 50,753,122,823.67 2.Increase in current 5,636,318.96 5,636,318.96 period (1) Purchase 155,476.52 155,476.52 (2) Transferred from 5,480,842.44 5,480,842.44 construction in progress (3) Merging 3.Decrease in current 59,712,493.86 59,712,493.86 period (1) Disposal 59,712,493.86 59,712,493.86 4.Ending balance 11,782,464,504.30 38,083,997,519.93 832,584,624.54 50,699,046,648.77 2. Total accumulated depreciation 1.Beginning balance 5,001,998,265.97 24,497,112,858.57 544,382,199.18 30,043,493,323.72 123 Bengang Steel Plates Co., Ltd. Semi-Annual Report 2017 2.Increase in current 173,725,458.08 759,332,914.48 2,066,651.70 935,125,024.26 period (1) Provision 173,725,458.08 759,332,914.48 2,066,651.70 935,125,024.26 3.Decrease in current 54,315,330.17 54,315,330.17 period (1) Disposal 54,315,330.17 54,315,330.17 4.Ending balance 5,175,723,724.05 25,202,130,442.88 546,448,850.88 30,924,303,017.81 3. Total impairment 1.Beginning balance 8,208,087.85 12,952,774.66 21,160,862.51 2.Increase in current period (1) Provision 3.Decrease in current period (1) Disposal 4.Ending balance 8,208,087.85 12,952,774.66 21,160,862.51 4. Total net book value of Fixed assets 1.Ending book value 6,598,532,692.40 12,868,914,302.39 286,135,773.66 19,753,582,768.45 2.Beginning book 6,772,258,150.48 13,628,008,061.60 288,202,425.36 20,688,468,637.44 value (2) Fixed assets temporarily in idle status Unit: Yuan Total accumulated Total net book Items Total original value Total impairment Nature depreciation value of Fixed assets (3) Fixed asset by financial leasing Unit: Yuan Total accumulated Total net book value of Items Total original value Total impairment depreciation Fixed assets 124 Bengang Steel Plates Co., Ltd. Semi-Annual Report 2017 (4) Fixed assets leased out on finance Unit: Yuan Items Ending book value Plants and Buildings 23,686,878.11 Machinery 3,674,508.08 Total 27,361,386.19 (5) Fixed assets without property rights certificates at the year-end Unit: Yuan Items Total net book value of Fixed assets Reason Plants and Buildings 996,678,256.84 To be handled in batches Notes 20. Construction in progress (1) Details of construction in progress Unit: Yuan Ending balance Beginning balance Items Carrying amount Total impairment Book value Carrying amount Total impairment Book value High Strength Cold Rolling 5,368,077,954.30 5,368,077,954.30 4,947,002,125.33 4,947,002,125.33 Steel Renovation Project The Third Cold Rolling Work Hot-Dip 456,515,887.84 456,515,887.84 398,719,600.41 398,719,600.41 Galvanizing Production Line Project Energy Saving And Environmental Protection Reconstruction 196,050,260.88 196,050,260.88 160,819,316.39 160,819,316.39 Of The Converter System And 180 Ton Dephophorization 125 Bengang Steel Plates Co., Ltd. Semi-Annual Report 2017 Converter Project The 360 Square Meter Sintering 9,533,810.01 9,533,810.01 Machine Manufacturing Department 6,063,367.91 6,063,367.91 4,656,735.30 4,656,735.30 Energy Control Center Information System 29,967,791.00 29,967,791.00 27,813,512.90 27,813,512.90 Engineering Power Plant the Third Plant 447,174,799.98 447,174,799.98 427,626,724.92 427,626,724.92 Renovation Project Other Projects 516,666,103.77 516,666,103.77 244,035,658.86 244,035,658.86 Total 7,030,049,975.69 7,030,049,975.69 6,210,673,674.11 6,210,673,674.11 (2) The change of major construction in progress Unit: Yuan Includin Accumul g: ated Increase capitaliz Beginnin Input of amount in Transfer Other Ending ed Capitaliz Source Items Budget g Budget Progress of current to FA decrease balance interest ation rate of fund balance (%) capitaliz period of ed current interest period High Strength Cold Rolling 6,134,98 4,947,00 421,075, 5,368,07 721,446, 168,535, 80.00% 82% 4.10% Others Steel 0,000.00 2,125.33 828.97 7,954.30 966.74 430.93 Renovati on Project The Third 869,180, 398,719, 57,796,2 456,515, 53.00% 80% 0.00 Others Cold 000.00 600.41 87.43 887.84 Rolling 126 Bengang Steel Plates Co., Ltd. Semi-Annual Report 2017 Work Hot-Dip Galvaniz ing Producti on Line Project Energy Saving And Environ mental Protectio n Reconstr uction 1,778,64 160,819, 35,230,9 196,050, 138,731, 10,884,3 85.00% 90% 4.10% Others Of The 4,000.00 316.39 44.49 260.88 941.83 74.52 Converte r System And 180 Ton Dephoph orization Converte r Project The 360 Square 1,284,03 9,533,81 9,533,81 68,627,4 Meter 88.00% 96% 4.10% Others 2,000.00 0.01 0.01 33.26 Sintering Machine Manufac turing Departm 294,500, 4,656,73 3,398,15 1,991,51 6,063,36 45,372,1 ent 91.00% 96% 4.10% Others 000.00 5.30 2.03 9.42 7.91 34.03 Energy Control Center Informat ion 427,250, 27,813,5 2,154,27 29,967,7 34,557,5 379,550. System 92.00% 96% 000.00 12.90 8.10 91.00 23.62 99 Engineer ing Power 610,720, 427,626, 19,548,0 447,174, 73.00% 83% 27,140,0 9,768,77 4.10% Others 127 Bengang Steel Plates Co., Ltd. Semi-Annual Report 2017 Plant the 000.00 724.92 75.06 799.98 56.82 8.16 Third Plant Renovati on Project Other 244,035, 276,119, 3,489,32 516,666, 0.00 Others Projects 658.86 767.93 3.02 103.77 11,399,3 6,210,67 824,857, 5,480,84 7,030,04 1,035,87 189,568, Total 06,000.0 -- -- -- 3,674.11 144.02 2.44 9,975.69 6,056.30 134.60 0 (3) Impairment provision provided on construction in process Unit: Yuan Provision for impairment of the current Items Reason period Notes 21. Construction materials Unit: Yuan Items Ending balance Beginning balance Special equipment 4,558,925.80 7,783,370.29 Total 4,558,925.80 7,783,370.29 Notes: 22. Disposal of fixed assets Unit: Yuan Items Ending balance Beginning balance Notes: 23. Productive biological assets (1) Productive biological assets under cost method □ Applicable √ Not applicable (2) Productive biological assets under fair value method □ Applicable √ Not applicable 128 Bengang Steel Plates Co., Ltd. Semi-Annual Report 2017 24. Oil and gas assets □ Applicable √ Not applicable 25. Intangible assets (1) Details of intangible assets Unit: Yuan Non-patent Items Land use right Patent Software Total technologies 1. Total original value 1.Beginning 296,245,314.76 397,064.99 296,642,379.75 balance 2.Increase in current period (1) Purchase (2) Internal R&D (3) Merging 3.Decrease in current period (1) Disposal 4.Ending 296,245,314.76 397,064.99 296,642,379.75 balance 2. Accumulative amortizing 1.Beginning 36,763,695.35 41,273.47 36,804,968.82 balance 2.Increase in 2,962,453.13 19,853.24 2,982,306.37 current period (1) Provision 2,962,453.13 19,853.24 2,982,306.37 3.Decrease in current period (1) Disposal 129 Bengang Steel Plates Co., Ltd. Semi-Annual Report 2017 4.Ending 39,726,148.48 61,126.71 39,787,275.19 balance 3. Total impairment 1.Beginning balance 2.Increase in current period (1) Provision 3.Decrease in current period (1) Disposal 4.Ending balance 4. Total net book value of Fixed assets 1.Ending book 256,519,166.28 335,938.28 256,855,104.56 value 2.Beginning 259,481,619.41 355,791.52 259,837,410.93 book value There isn’t any intangible asset constituted by internal R&D in the period. (2) Property certificate not granted yet Unit: Yuan Items Total net book value of Fixed assets Reason Notes: 26. Development expenditure Unit: Yuan Beginning Ending Items Increase in current period Decrease in current period balance balance Notes 130 Bengang Steel Plates Co., Ltd. Semi-Annual Report 2017 27. Goodwill (1) Original book value Unit: Yuan Beginning Items Increase Decrease Ending balance balance (2) Provision for impairment Unit: Yuan Beginning Items Increase Decrease Ending balance balance Notes to process of impairment test and parameter and method of recognition of impairment loss: Notes 28. Long-term deferred expenses Unit: Yuan Increase in current Amortized amount Items Beginning balance Other decrease Ending balance period in current period Notes 29. Deferred tax assets/Deferred tax liabilities (1) Un-deducted deferred tax asset Unit: Yuan Ending balance Beginning balance Items Deductible temporary Deductible temporary Deferred tax assets Deferred tax assets differences differences Asset impairment 325,245,151.01 81,311,287.75 368,635,605.55 92,158,901.41 provision Internal trade profit not 78,749,247.78 19,687,311.95 52,499,498.52 13,124,874.63 realized Deductible losses 728,330,824.55 182,082,706.14 1,136,092,189.97 284,023,047.49 Differences of depreciation and 333,978,859.03 83,494,714.76 333,978,859.03 83,494,714.76 amortization Welfare for early 4,686,056.91 1,171,514.23 5,859,027.00 1,464,756.75 retirement 131 Bengang Steel Plates Co., Ltd. Semi-Annual Report 2017 Unpaid employee salary 32,180,728.46 8,045,182.12 7,339,835.99 1,834,959.00 Total 1,503,170,867.74 375,792,716.95 1,904,405,016.06 476,101,254.04 (2) Deferred income tax liabilities not deducted Unit: Yuan Ending balance Beginning balance Items Taxable provisional Taxable provisional Deferred tax liabilities Deferred tax liabilities difference difference (3) Deferred income tax asset or liability at net amount after deduction Unit: Yuan Amount neutralized Closing balance of Amount neutralized Opening balance of between deferred income deferred income tax asset between deferred income deferred income tax asset Items tax asset and liability at or liability after tax asset and liabilities at or liability after end of period deduction opening of period deduction Deferred tax assets 375,792,716.94 476,101,254.04 (4) Unrecognized deferred tax assets Unit: Yuan Items Ending balance Beginning balance Deductible temporary differences 3,311,628.91 3,311,628.91 Deductible losses 2,339,030,279.85 3,041,165,564.90 Total 2,342,341,908.76 3,044,477,193.81 (5) The deductible loss of unrecognized deferred tax assets due in the following period Unit: Yuan Year At end of the period At beginning of the period Nature 2017 44,146,053.02 2018 61,226,455.38 2019 179,596,211.65 2020 2,328,797,491.85 2,745,964,056.85 2021 10,232,788.00 10,232,788.00 Total 2,339,030,279.85 3,041,165,564.90 -- Notes: 132 Bengang Steel Plates Co., Ltd. Semi-Annual Report 2017 30. Other non-current assets Unit: Yuan Items Ending balance Beginning balance Notes: 31. Short-term loans (1) Short-term loans disclosed by category Unit: Yuan Items Ending balance Beginning balance Pledge loans 645,311,200.00 Guaranteed loans 14,508,963,200.00 10,633,173,500.00 Credit loans 8,278,711,200.00 7,483,988,079.48 Total 22,787,674,400.00 18,762,472,779.48 Notes: (2) Outstanding overdue short-term loans Outstanding overdue short-term loans at the end of period is RMB 0.00, significant outstanding overdue short-term loans are as following: Unit: Yuan Unit Ending balance Interest rate Overdue time Overdue interest rate Notes: 32. Financial liabilities at fair value through profit or loss Unit: Yuan Items Ending balance Beginning balance Notes: 33. Advance from customers □ Applicable √ Not applicable 34. Notes payable Unit: Yuan Categories Ending balance Beginning balance 133 Bengang Steel Plates Co., Ltd. Semi-Annual Report 2017 Bank acceptance bill 2,654,713,650.65 6,372,173,897.13 Total 2,654,713,650.65 6,372,173,897.13 Notes payable mature as of end of period was RMB0.00. 35. Accounts payable (1) Accounts payable disclosed by category Unit: Yuan Items Ending balance Beginning balance Accounts payable for goods 4,109,974,739.18 4,399,863,760.66 Accounts payable for labor 72,532,213.01 78,583,112.68 Accounts payable for project and 719,619,305.25 818,679,528.16 equipment Accounts payable for repair 476,312,718.96 382,273,450.21 Others 1,433,642.25 844,809.81 Total 5,379,872,618.65 5,680,244,661.52 (2) Material payable aged over 1 year Unit: Yuan Items Ending balance Reason Benxi Steel & Iron (Group) Mining Co., 911,756,652.03 Not yet settled Ltd. Bengang Group International Economic 790,278,853.89 Not yet settled and Trading Co., Ltd. Liaoning Shenjiao International Trade Co., 82,865,953.79 Not yet settled Ltd. Jixi Huasheng Fengyuan Coal Preparation 46,005,916.07 Not yet settled Co., Ltd. Benxi Nanfen Xinhe Metallurgical Co., 39,634,041.29 Not yet settled Ltd. Total 1,870,541,417.07 -- Notes: 134 Bengang Steel Plates Co., Ltd. Semi-Annual Report 2017 36. Advance from customers (1) Advance from customers disclosed by category Unit: Yuan Items Ending balance Beginning balance Advance for goods 3,290,002,245.71 3,679,477,129.80 Total 3,290,002,245.71 3,679,477,129.80 (2) Material advances received for over 1 year Unit: Yuan Items Ending balance Reason (3) Unfinished project has already paid at the end of period Unit: Yuan Items Amount Notes: 37. Employee benefits payable (1) Employee benefits payable Unit: Yuan Items Beginning balance Increase Decrease Ending balance 1. Short-term 18,146,736.28 791,828,227.17 773,455,834.34 36,519,129.11 employee benefits 2. Post-employment benefits - defined 57,730.42 124,856,230.57 124,853,279.83 60,681.16 contribution plans 3. Termination benefits 5,859,027.00 1,174,970.09 4,684,056.91 Total 24,063,493.70 916,684,457.74 899,484,084.26 41,263,867.18 (2) Short-term employee benefits Unit: Yuan Items Beginning balance Increase Decrease Ending balance 1. Salary, bonus, 8,895,580.36 638,787,236.89 621,067,078.06 26,615,739.19 allowance and 135 Bengang Steel Plates Co., Ltd. Semi-Annual Report 2017 subsidy 2. Employee welfare 0.00 26,039,726.71 26,039,726.71 3.Social security expense 655,574.20 58,424,922.00 58,424,922.00 655,574.20 Including: Medical 0.00 43,281,121.35 43,281,121.35 insurance Work injury 655,574.20 15,133,590.27 15,133,590.27 655,574.20 insurance Maternity 0.00 10,210.38 10,210.38 insurance 4. Housing fund 6,850,713.00 55,104,166.20 55,102,166.20 6,852,713.00 5. Union funds and 1,744,868.72 13,472,175.37 12,821,941.37 2,395,102.72 staff education fee Total 18,146,736.28 791,828,227.17 773,455,834.34 36,519,129.11 (3) Defined contribution plans Unit: Yuan Items Beginning balance Increase Decrease Ending balance 1. Basic pension fund 56,104.40 119,965,183.93 119,961,538.23 59,750.10 2. Unemployment 1,626.02 4,891,046.64 4,891,741.60 931.06 insurance Total 57,730.42 124,856,230.57 124,853,279.83 60,681.16 Notes: 38. Current tax liabilities Unit: Yuan Items Ending balance Beginning balance Value-added Tax(VAT) 1,490,500.36 2,173,913.92 Enterprise income tax 9,038,660.74 13,019,967.76 City maintenance and construction tax 2,179,408.04 14,026,666.46 Housing property tax 3,178,293.23 2,970,971.37 Educational surcharges 1,570,190.02 10,029,654.63 Others 2,213,406.91 3,550,411.32 Total 19,670,459.30 45,771,585.46 Notes: 136 Bengang Steel Plates Co., Ltd. Semi-Annual Report 2017 39. Interests payable Unit: Yuan Items Ending balance Beginning balance Corporate bond interest 31,334,821.13 70,109,821.13 Short-term loan interest payable 12,542,327.91 5,005,444.53 Total 43,877,149.04 75,115,265.66 Notes: Unit: Yuan Unit Overdue amount Reason Notes: 40. Dividends payable Unit: Yuan Items Ending balance Beginning balance Notes, the reason of significant dividends payable aging over 1 year: 41. Other payables (1) Other payables disclosed by nature Unit: Yuan Items Ending balance Beginning balance Deposit 2,360,628.87 2,719,618.51 Margin 148,174,624.13 130,550,329.63 Accounts 300,236,728.97 304,191,214.76 Others 18,727,978.11 22,548,050.88 Total 469,499,960.08 460,009,213.78 (2) Significant other payables ageing over one year Unit: Yuan Items Ending balance Reason Benxi Steel & Iron (Group) Co., Ltd. 200,504,584.76 Not yet settled Bengang Group International Economic 27,984,077.05 Not yet settled and Trading Co., Ltd. Total 228,488,661.81 -- Notes 137 Bengang Steel Plates Co., Ltd. Semi-Annual Report 2017 42. Liabilities held for sale Unit: Yuan Items Ending balance Beginning balance Notes: 43. Non-current liabilities due within one year Unit: Yuan Items Ending balance Beginning balance Long-term loans due within one year 1,110,787,748.00 227,669,535.66 Long-term payables due within one year 210,000,000.00 Total 1,110,787,748.00 437,669,535.66 Notes: 44. Other current liabilities Unit: Yuan Items Ending balance Beginning balance Changes in short-term bonds payable: Unit: Yuan Amortizat Interest Repayme Issuance ion of the Bond Date of Bond Issue Beginnin calculated nt in Ending Par value in current Premiums name issue maturity value g balance by par current balance period and value period Discounts Notes: 45. Long-term loans (1) Long-term loans disclosed by category Unit: Yuan Items Ending balance Beginning balance Guaranteed loans 3,139,041,691.87 3,440,691,721.62 Credit loans 22,296,444.00 8,240,000.00 Total 3,161,338,135.87 3,448,931,721.62 Long-term loans disclosed by category: Notes,including interest rate interval: 138 Bengang Steel Plates Co., Ltd. Semi-Annual Report 2017 46. Bonds payable (1) Bonds payable Unit: Yuan Items Ending balance Beginning balance Corporate bond 1,496,550,521.55 1,494,825,782.32 Total 1,496,550,521.55 1,494,825,782.32 (2) Changes in bonds payable (exclude other financial instruments such as preference shares or perpetual liabilities) Unit: Yuan Amortizat Interest Repayme Issuance ion of the Bond Date of Bond Issue Issue calculated nt in Ending Par value in current Premiums name issue maturity value value by par current balance period and value period Discounts Bengang Steel Plate Co., Ltd. 1,500,000 February 1,500,000 1,494,825 38,775,00 -1,724,73 1,496,550 th 3yaers Corporate ,000.00 5 , 2015 ,000.00 ,782.32 0.00 9.23 ,521.55 Bond of 2015 (Phase I) (3) Statement on conditions and date of corporation bond converting to shares (4) Statement on other financial instruments categorized as financial liabilities Particulars about other financial instruments issued externally such as preference shares or perpetual bonds. Change of financial instruments issued externally such as preference shares or perpetual bonds Unit: Yuan Financial At beginning of the period Increase Decrease At end of the period instruments issued Quantity Book value Quantity Book value Quantity Book value Quantity Book value externally Statements on basis of categorizing of other financial instruments as financial liabilities Notes 139 Bengang Steel Plates Co., Ltd. Semi-Annual Report 2017 47. Long-term payables (1) Long-term payables disclosed by nature Unit: Yuan Items Ending balance Beginning balance Notes: 48. Long-term employee benefits payable (1) Long-term employee benefits payable Unit: Yuan Items Ending balance Beginning balance (2) Changes of defined benefit plan Defined benefit plan obligation present value: Unit: Yuan Items January to June 2017 January to June 2016 Planned assets: Unit: Yuan Items January to June 2017 January to June 2016 Defined benefit plan 净 liabilities(Net assets) Unit: Yuan Items January to June 2017 January to June 2016 Content of defined benefit plan and the related risks, and the related influences to the Company’s future cash flow, time and uncertainty: Results of significant actuarial assumption and sensitivity analysis of defined benefit plan: Notes: 49. Special accounts payable Unit: Yuan Items Beginning balance Increase Decrease Ending balance Reason Notes: 50. Estimated liabilities Unit: Yuan 140 Bengang Steel Plates Co., Ltd. Semi-Annual Report 2017 Items Ending balance Beginning balance Reason Notes, including significant assumption and estimate of estimated liabilities: 51. Deferred income Unit: Yuan Items Beginning balance Increase Decrease Ending balance Reason Government 410,399,000.00 700,000.00 15,047,000.00 396,052,000.00 Subsidies Total 410,399,000.00 700,000.00 15,047,000.00 396,052,000.00 -- Projects of government subsidies: Unit: Yuan Transfer to Beginning Related to assets Items Increase non-operating Other changes Ending balance balance or income income MES PROJECT 5,160,000.00 860,000.00 4,300,000.00 Related to assets SPECIAL FUND Second Batch of National Cleaned Manufacturing 800,000.00 400,000.00 400,000.00 Related to assets Demonstration Project Fund Industrial Enterprise Energy Management Center 11,600,000.00 11,600,000.00 Related to assets Construction Demonstration Project Environment Pollution 12,474,000.00 2,617,000.00 9,857,000.00 Related to assets Renovation Project Environment Renovation Project and 1,180,000.00 250,000.00 930,000.00 Related to assets Regional Basin Environment Protection Project Energy-saving 2,954,000.00 1,477,000.00 1,477,000.00 Related to assets Technological 141 Bengang Steel Plates Co., Ltd. Semi-Annual Report 2017 Reform Fiscal Reward Project High Strength Cold Rolling 250,000,000.00 250,000,000.00 Related to assets Steel Renovation Project Automobile High-class Electrolytic Zinc 32,832,000.00 4,104,000.00 28,728,000.00 Related to assets Steel Plate Production Line Project Sintering Machine Residue Heat Usage and 12,612,000.00 2,102,000.00 10,510,000.00 Related to assets Desulfurization Project Wastewater Treatment Plant 1,500,000.00 750,000.00 750,000.00 Related to assets Renovation Project Overseas R&D Team 4,000,000.00 4,000,000.00 Income Introduction Special Fund 7 130t Boilers Flue Gas Desulfurization 24,000,000.00 24,000,000.00 Related to assets Renovation Project of Power Plant Treatment and Salt Extraction Project of 200,000.00 50,000.00 150,000.00 Related to assets Desulfurization Waste Liquid of Coke Plant Overseas Advanced Technology 12,652,000.00 442,000.00 12,210,000.00 Related to assets Introduction Special Fund 142 Bengang Steel Plates Co., Ltd. Semi-Annual Report 2017 Automobile Steel Sheet Engineering 1,000,000.00 1,000,000.00 Related to assets Laboratory Project Third-generation High Strength Steels for 2,900,000.00 2,900,000.00 Related to assets Automobile R&D Project The 360 Cubic Meter Sintering Machine Flue Gas 600,000.00 100,000.00 500,000.00 Related to assets Desulfurization Renovation Project of Blast Furnace Plant Environment Protection Project 3,480,000.00 580,000.00 2,900,000.00 Related to assets Special Fund Advance Treatment of Carbon Fiber Waste Water 9,500,000.00 9,500,000.00 Related to assets Project of Plates Coke Plant Dongfeng Workshop Coal-fired Boiler Desulfuration and Denitration Project of 6,000,000.00 6,000,000.00 Related to assets Bengang Power Plant High Pressure Workshop Cogeneration Transformation Project of Power 10,000,000.00 10,000,000.00 Related to assets Plant the Third Workshop 143 Bengang Steel Plates Co., Ltd. Semi-Annual Report 2017 Sintering Machine Energy Conservation and Environment 4,640,000.00 580,000.00 4,060,000.00 Related to assets Protection Project of Iron Making Plant Air Quality Automatic 315,000.00 35,000.00 280,000.00 Related to assets Monitoring System Compensation from Resource 700,000.00 700,000.00 Income Management Committee Total 410,399,000.00 700,000.00 15,047,000.00 396,052,000.00 -- Notes: 52. Other non-current liabilities Unit: Yuan Items Ending balance Beginning balance Notes: 53. Share capital Unit: Yuan Changes(+, -) Beginning Capitalization Issuing of new Ending balance balance Bonus shares of common Others Subtotal share reserve fund Total of capital 3,136,000,000. 3,136,000,000. shares 00 00 Notes: 144 Bengang Steel Plates Co., Ltd. Semi-Annual Report 2017 54. Other equity instruments (1) Particulars about other financial instruments issued externally such as preference shares or perpetual bonds. (2) Change of financial instruments issued externally such as preference shares or perpetual bonds Unit: Yuan Financial At beginning of the period Increase Decrease At end of the period instruments issued Quantity Book value Quantity Book value Quantity Book value Quantity Book value externally Changes of other equity instruments during the current period, reason and the basis of accounting treatment Notes: 55. Capital reserves Unit: Yuan Items Beginning balance Increase Decrease Ending balance Capital premium over par 8,998,928,073.23 8,998,928,073.23 value Other capital reserves 115,917,468.82 115,917,468.82 Total 9,114,845,542.05 9,114,845,542.05 Notes: 56. Treasury stock Unit: Yuan Items Beginning balance Increase Decrease Ending balance Notes: 57. Other comprehensive income Unit: Yuan 2016 Less: Amount Amount transferred After-tax After-tax Beginning Less: Ending Items incurred into profit and attribute to attribute to balance Income tax balance before loss in the the parent minority expenses income tax current period company shareholder current period 145 Bengang Steel Plates Co., Ltd. Semi-Annual Report 2017 that recognized into other comprehensive income in prior period Notes,including the adjustment to origin amount of effective portion of gains or losses from cash flow hedging reserve to arbitraged items: 58. Special reserves Unit: Yuan Items Beginning balance Increase Decrease Ending balance Safety production cost 372,721.86 19,733,398.02 9,449,146.14 10,656,973.74 Total 372,721.86 19,733,398.02 9,449,146.14 10,656,973.74 Notes: 59. Surplus reserves Unit: Yuan Items Beginning balance Increase Decrease Ending balance Statutory surplus 961,105,529.85 961,105,529.85 reserves Total 961,105,529.85 961,105,529.85 Notes: 60. Undistributed profits Unit: Yuan Items Amount Distribution rate Before adjustments: undistributed profits at last -496,969,242.61 -1,278,244,071.93 year-end Beginning balance of retained profits after -496,969,242.61 -1,278,244,071.93 adjustments Add: undistributed profit belonging to parent 523,635,653.57 781,274,829.32 company Ending balance of undistributed profits 26,666,410.96 -496,969,242.61 List of adjustment of opening retained profits: 1) Influence to beginning undistributed profits was RMB 0.00 caused by retroactive adjustment due to “Accounting Standard for Business Enterprises” and related new regulations. 146 Bengang Steel Plates Co., Ltd. Semi-Annual Report 2017 2) Influence to beginning undistributed profits was RMB 0.00 due to changes in accounting policies. 3) Influence to begging undistributed profits was RMB 0.00 due to corrections of major accounting mistake. 4) Influence to begging undistributed profits was RMB 0.00 due to the changes of consolidation scope caused by common control. 5) Influence to begging undistributed profits was RMB 0.00 due to other adjustments. 61. Operating income and operating cost Unit: Yuan January to June 2017 January to June 2016 Items Revenue Cost Revenue Cost Principal business 19,476,278,905.41 17,638,682,335.86 11,890,962,256.28 10,286,817,465.00 Other business 1,260,207,998.33 1,051,983,630.25 738,622,313.07 627,364,837.04 Total 20,736,486,903.74 18,690,665,966.11 12,629,584,569.35 10,914,182,302.04 62. Taxes and Surcharges Unit: Yuan Items January to June 2017 January to June 2016 City maintenance and construction tax 46,713,364.91 15,218,000.34 Educational surcharges 33,504,830.35 11,090,597.39 Housing property tax 37,046,142.33 Land use tax 3,155,810.05 Vehicle and vessel use tax 15,152.73 Stamp tax 13,321,430.70 24,297.03 Total 133,756,731.07 26,332,894.76 Notes: The business activities of the occurrence of property tax, land use tax, vehicle and vessel use tax, stamp tax from May 1, 2016 is reclassified from “General and administrative expenses” to “Tax and surcharges”. The tax occurred before May 1, 2016 shall not be adjusted. Comparative data stays unadjusted. 63. Selling and distribution expenses Unit: Yuan Items January to June 2017 January to June 2016 Freight 428,678,322.48 282,160,883.00 Port surcharges 86,681,806.22 90,759,527.08 Agency fee 38,969,368.55 28,513,161.47 Package fee 3,109,039.80 2,761,636.55 147 Bengang Steel Plates Co., Ltd. Semi-Annual Report 2017 Salary and benefits 10,794,773.70 10,503,082.85 Others 19,399,396.68 15,362,772.19 Total 587,632,707.43 430,061,063.14 Notes: Selling and distribution expenses of the current period was RMB 587,632,707.43, increased RMB 157,571,644.29 compared to previous period which was RMB 430,061,063.14, at the rate of 36.64%. The reason of the increase is the increase of external freight expenses. 64. General and administrative expenses Unit: Yuan Items January to June 2017 January to June 2016 Salary and benefits 94,209,841.05 76,395,221.96 Accounts payable for repair 80,215,426.18 92,167,672.38 Taxes 44,353,333.71 Land use right fee 27,345,714.30 28,257,238.10 Depreciation 25,945,531.46 13,236,195.97 Social security expense 21,716,785.13 20,539,733.05 Pollution discharge fee 25,709,122.00 5,866,430.00 Water resources fee 5,596,700.00 Housing fund 4,614,199.60 5,022,412.40 Heating fee 11,677,556.25 4,103,468.74 Entertainment expense 1,535,128.96 1,333,401.18 Amortization of intangible assets 2,982,306.37 2,969,528.58 Freight 277,851.35 290,256.00 Lease expense 572,987.24 693,067.82 Others 56,552,255.19 56,726,758.59 Total 358,951,405.08 351,954,718.48 Notes: 65. Financial expenses Unit: Yuan Items January to June 2017 January to June 2016 Interest cost 434,308,806.10 396,101,669.29 Less: Interest income 36,772,069.07 12,694,596.80 Exchange loss -23,234,309.69 175,055,105.02 148 Bengang Steel Plates Co., Ltd. Semi-Annual Report 2017 Others 7,210,977.46 28,205,647.68 Total 381,513,404.80 586,667,825.19 Notes: Financial expenses of the current period was RMB 381,513,404.80, decreased RMB 205,154,420.39 compared to the previous period which was RMB 586,667,825.19, at the rate of 34.97%. The reason of the decrease is because of the decrease of exchange loss. 66, Asset impairment loss Unit: Yuan Items January to June 2017 January to June 2016 Loss for bad debts -6,653,848.89 -1,880,998.86 Impairment of inventories -36,736,605.65 Total -43,390,454.54 -1,880,998.86 Notes: Asset impairment loss of the current period was RMB-43,390,450.54, decreased RMB 41,509,455.68 compared to previous period which was RMB -1,880,998.86, at the rate of 2,206.78%. The reason of the decrease is because of the reverse of inventory impairment. 67. Variable profit and loss of fair value Unit: Yuan Sources January to June 2017 January to June 2016 Notes: 68. Income on investment Unit: Yuan Items January to June 2017 January to June 2016 Income from bank short-term financial 3,294,593.14 products Total 3,294,593.14 Notes: 69. Other Incomes Unit: Yuan Sources January to June 2017 January to June 2016 149 Bengang Steel Plates Co., Ltd. Semi-Annual Report 2017 70. Non-operating income Unit: Yuan The amount recognized in Items January to June 2017 January to June 2016 non-operating profit Non-current assets disposal 3,015,294.00 2,120,458.89 3,015,294.00 income Including: Fixed assets disposal 3,015,294.00 2,120,458.89 3,015,294.00 income Debt restructuring gain 822,116.45 4,527,416.04 822,116.45 Government Subsidies 15,047,000.00 16,622,000.00 15,047,000.00 Others 2,130,078.13 926,794.62 2,130,078.13 Total 21,014,488.58 24,196,669.55 21,014,488.58 Details of government subsidies recorded into current profits and loss: Unit: Yuan Whether Whether influence the Amount of Related to Distribution Distribution Special Current Items Nature type profits or the previous assets or entity reason subsidy or amount losses of the period income not year or not Subsidies granted by the state to encourage and support Transfer from City Bureau certain 14,347,000.0 16,622,000.0 Related to deferred Subsidy Yes No of Finance industries and 0 0 assets income industries (according to the national policy regulations) Subsidies Benxi Xihu granted by Compensatio District the state to n from Benxi National encourage Lake Treasury Subsidy and support Yes No 700,000.00 Income Resource Payment and certain Management Delivery industries and Committee Center industries (according to 150 Bengang Steel Plates Co., Ltd. Semi-Annual Report 2017 the national policy regulations) 15,047,000.0 16,622,000.0 Total -- -- -- -- -- -- 0 0 Notes: 71. Non-operating expenses Unit: Yuan The amount recognized in Items January to June 2017 January to June 2016 non-operating profit Non-current assets disposal loss 4,593,420.30 105,474.99 4,593,420.30 Including: Fixed assets disposal 4,593,420.30 105,474.99 4,593,420.30 loss Total 4,593,420.30 105,474.99 4,593,420.30 Notes: 72. Income tax expense (1) Income tax expense Unit: Yuan Items January to June 2017 January to June 2016 Income tax payable for the current year 16,796,524.06 3,949,704.94 Deferred income tax expense 100,308,537.10 136,112,516.35 Total 117,105,061.16 140,062,221.29 (2) Accounting profit and income tax expense adjustment process Unit: Yuan Items January to June 2017 Total profit 647,072,805.21 Income tax expense calculate according to the official or 161,768,201.30 applicable tax rate Effect of use of deductible losses of unrecognized deferred tax -44,663,140.14 asset of prior period Income tax expense 117,105,061.16 Notes 151 Bengang Steel Plates Co., Ltd. Semi-Annual Report 2017 73. Other comprehensive income Please refer to notes. 74. Notes of statement of cash flows (1) Cash received related to other operating activities Unit: Yuan Items January to June 2017 January to June 2016 Withdraw of current accounts, advance for 49,988,918.77 70,468,435.19 another Interest income 36,772,069.07 12,694,596.80 Special subsidy income 700,000.00 Non-operating income 350,490.77 926,794.62 Others 5,600.00 238,169.68 Total 87,817,078.61 84,327,996.29 Notes: (2) Cash paid related to other operating activities Unit: Yuan Items January to June 2017 January to June 2016 Current accounts, advance for another 317,981,786.61 322,978,268.19 General and administrative expenses 18,370,234.96 40,919,405.31 Selling and distribution expenses 4,534,010.56 5,628,363.93 Bank charges 7,210,977.46 28,205,647.68 Others 287,293.34 2,128,404.62 Total 348,384,302.93 399,860,089.73 Notes: (3) Other cash received relevant to investment activity Unit: Yuan Items January to June 2017 January to June 2016 Notes: (4) Other cash paid relevant to investment activity Unit: Yuan 152 Bengang Steel Plates Co., Ltd. Semi-Annual Report 2017 Items January to June 2017 January to June 2016 Notes: (5) Cash received related to other financing activities Unit: Yuan Items January to June 2017 January to June 2016 Financing service charges and handling fees Financial leasing 210,000,000.00 Total 210,000,000.00 Notes: (6) Cash paid related to other financing activities Unit: Yuan Items January to June 2017 January to June 2016 Notes: 75. Supplementary details of statement of cash flows (1) Supplementary details of statement of cash flows Unit: Yuan Supplementary information Amount in this period Amount in last year 1. A reconciliation of net profit to cash -- -- flows from operating activities: Net Profit 529,967,744.05 206,295,737.87 Add: Asset impairment losses -43,390,454.54 -1,880,998.86 Depreciation of fixed assets, of oil-gas 935,125,024.26 1,015,556,593.59 assets, of productive biological assets Amortization of intangible assets 2,982,306.37 2,969,528.58 Losses proceeds from disposal of PPE, intangible assets and other long-term 1,578,126.30 -2,014,983.90 assets(Earnings marked“-”) Financial expenses(Earnings marked“-”) 381,513,404.80 586,667,825.19 Investment loss(Earnings marked“-”) -3,294,593.14 Deferred tax assets reduction(Addition 100,308,537.11 136,112,516.35 marked“-”) 153 Bengang Steel Plates Co., Ltd. Semi-Annual Report 2017 Inventories reduction(Addition marked“-”) -52,529,908.92 -902,878,201.17 Operating receivable items 40,403,360.62 32,967,723.56 reduction(Addition marked“-”) Operating payable items increase (Less -5,939,969,231.63 1,316,981,622.31 marked"-") Net cash flows generated from operating -4,047,305,684.72 2,390,777,363.52 activities 2.Payments of investing and financing -- -- activities not involving cash: 3.The net increase in cash and cash -- -- equivalents: Ending balance of the monetary funds 11,484,974,631.49 7,378,445,456.46 Less: Beginning balance of the monetary 12,273,574,488.67 4,612,782,772.98 funds The net increase in cash and cash equivalents -788,599,857.18 2,765,662,683.48 (2) Net Cash paid of obtaining the subsidiary Unit: Yuan Amount Including: -- Including: -- Including: -- Notes: (3) Net Cash receive of disposal of the subsidiary Unit: Yuan Amount Including: -- Including: -- Including: -- Notes: (4) The structure of cash and cash equivalents Unit: Yuan Items Ending balance Beginning balance 1. Cash 11,484,974,631.49 12,273,574,488.67 154 Bengang Steel Plates Co., Ltd. Semi-Annual Report 2017 Including: Cash on hand 64,107.73 47,743.38 Bank deposits available on demand 11,190,437,502.33 12,238,841,745.29 Other monetary funds available on 294,473,021.43 34,685,000.00 demand 2. The final cash and balance of cash 11,484,974,631.49 12,273,574,488.67 equivalents Notes: 76. Notes to changes in equity Notes to the other adjustment to closing balance of the previous period and the adjustment amount: 77. The assets with the ownership or use right restricted Unit: Yuan Items Ending book value Reason Cash at bank and on hand 755,604,520.08 Deposit for notes and L/C Notes receivable 1,385,808,380.90 Pledged for acceptance bill Total 2,141,412,900.98 -- Notes: 78. Foreign currency monetary items (1) Foreign currency monetary items Unit: Yuan Ending balance in foreign Ending balance translated to Items Exchange rate at the year-end currency RMB Including: USD 477,924,242.86 6.7744 3,237,649,990.83 EUR 87,829,623.74 7.7496 680,644,452.14 HKD 1,009,079.01 0.8679 875,779.67 Short-term loans Including: USD 965,500,000.00 6.7744 6,540,683,200.00 Non-current liabilities due within one year Including: USD 149,000,000.00 6.7744 1,009,385,600.00 JPY 23,176,000.00 0.0605 1,402,148.00 Including: USD 181,000,000.00 6.7744 1,226,166,400.00 155 Bengang Steel Plates Co., Ltd. Semi-Annual Report 2017 EUR 105,775,601.20 7.7496 819,718,599.06 Japanese Yen 220,172,000.00 0.0605 13,320,406.00 Notes: (2) Note to overseas entities including: for significant oversea entities, shall disclose main operating place, recording currency and selection basis, if there are changes into recording currency, shall also disclose the reason. □ Applicable √ Not applicable 79. Hedging Hedging items disclosed by category and related hedging instruments and the qualitative and quantitative information of risks: None 80. Others None VIII. Change of the consolidation scope 1. Business combination involving entities now under common control (1) Business merger not under same control in reporting period Unit: Yuan Income of Net profits of Time and Cost of Way to gain Recognition acquiree acquiree Name of place of Proportion of gaining the the stock Purchase date basis of during the during the acquiree gaining the stock rights stock rights rights purchase date purchase date purchase date stock rights to period-end to period-end Notes: (2) Combined cost and goodwill Unit: Yuan Combination cost Note to determination method, consideration and changes of fair value of combined cost: The main formation reason for the large goodwill: Notes: 156 Bengang Steel Plates Co., Ltd. Semi-Annual Report 2017 (3) The identifiable assets and liabilities of acquiree at purchase date Unit: Yuan Fair value on purchase date Book value on purchase date The recognition method of the fair value of identifiable assets and liabilities: Contingent liability of acquiree undertaken by business merger: Notes: (4) The profit or loss from equity held by the date before acquisition in accordance with the fair value measured again Whether there is a transaction that through multiple transaction step by step to realize enterprises merger and gaining the control during the reporting period □ Yes √ No (5) Note to merger could not be determined reasonable consideration or Identifiable assets, Fair value of liabilities of the acquiree at acquisition date or closing period of the merge None (6) Notes None 2. Business consolidation under common control (1) Business combination under the same control during the reporting period Unit: Yuan Income from Net profits the from the Recognition Income Net profits period-begin reporting Combined Proportion of Combination basis of during the during the Basis to the period to the party the profits date combination period of period of combination combination date comparison comparison date of the date of the combination combination Notes: (2) Combination cost Unit: Yuan 157 Bengang Steel Plates Co., Ltd. Semi-Annual Report 2017 Combination cost Note to contingent consideration or other changes: Notes: (3) The book value of the assets and liabilities of the combined party at combining date Unit: Yuan Combination date Distribution rate at end of the period Contingent liabilities of the combined party undertaken in combination: Notes: 3. Counter purchase Basic information of trading, the basis of transactions constitute counter purchase, the retain assets, liabilities of the listed companies whether constituted a business and its basis, the determination of the combination costs, the amount and calculation of adjusted rights and interests in accordance with the equity transaction process.: 4. The disposal of subsidiary Whether there is a single disposal of the investment to subsidiary and lost control □ Yes √ No Whether there are multiple transactions step by step dispose the investment to subsidiary and lost control in reporting period □ Yes √ No 5. Other reasons for the changes in combination scope Notes to reasons for the changes in combination scope (Newly established subsidiary and subsidiary of liquidation) and relevant information: None 5. Others None IX. Equity in other entities 1. Equity in subsidiaries (1) Constitution of enterprise group Name of the Principal place of Registered Nature of Proportion of shares held (%) Acquiring 158 Bengang Steel Plates Co., Ltd. Semi-Annual Report 2017 subsidiaries business address business Direct Indirect method Business Xiamen Bengang consolidation Steel & Iron Sales Xiamen Xiamen Sales 100.00% under common Co., Ltd. control Business Wuxi Bengang consolidation Steel & Iron Sales Wuxi Wuxi Sales 100.00% under common Co., Ltd. control Business Tianjin Bengang consolidation Steel & Iron Tianjin Tianjin Sales 100.00% under common Trading Co., Ltd. control Business Nanjing Bengang consolidation Steel Material Nanjing Nanjing Sales 100.00% under common Sales Ltd. control Business Yantai Bengang consolidation Steel & Iron Sales Yantai Yantai Sales 100.00% under common Co., Ltd. control Business Harbin Bengang consolidation Economic and Harbin Harbin Sales 100.00% under common Trading Co., Ltd. control Changchun Business Bengang Steel & consolidation Changchun Changchun Sales 100.00% Iron Sales Co., under common Ltd. control Guangzhou Bengang Steel & Guangzhou Guangzhou Sales 100.00% Establishment Iron Trading Co., Ltd. Shanghai Bengang Metallurgy Shanghai Shanghai Sales 100.00% Establishment Science and Technology Co., Ltd. Bengang Steel Liaoyang Liaoyang Manufacturing 100.00% Establishment Plate Liaoyang 159 Bengang Steel Plates Co., Ltd. Semi-Annual Report 2017 Orel Ball Co., Ltd. Dalian Benruitong Automobile Dalian Dalian Manufacturing 65.00% Establishment Material Technologies Co., Ltd. Bengang Puxiang Business Cool Rolling consolidation Benxi Benxi Manufacturing 75.00% Steel Sheet Co., under common Ltd. control Benxi Bengang Steel Sales Co., Benxi Benxi Sales 100.00% Establishment Ltd Shenyang Bengang Metallurgical Shenyang Shenyang Sales 100.00% Establishment Science and Technology Co., Ltd. Bengang Baojin (Shenyang) Shenyang Shenyang Sales 85.00% Establishment Automobile New Material Co., Ltd Notes: None Basis of determine the Company control the investee while holding half or less voting rights and basis of determine the Company does not control while holding more than half voting rights: None Basis of control to structured entity included in the consolidation scope: None Basis of determine whether the Company is the agent or the principal: None Notes: None (2) Significant not wholly-owned subsidiaries Unit: Yuan Name of the subsidiaries Proportion of Profits and losses Dividend declared to Ending balance of 160 Bengang Steel Plates Co., Ltd. Semi-Annual Report 2017 non-controlling interests attributing to distribute to non-controlling interests (%) non-controlling non-controlling shareholders shareholders Bengang Puxiang Cool Rolling Steel Sheet Co., 25.00% 7,001,363.17 34,024,878.25 495,896,015.95 Ltd. Dalian Benruitong Automobile Material 35.00% -677,807.69 26,010,970.18 Technologies Co., Ltd. Holding proportion of minority shareholder in subsidiary different from voting proportion: None Notes: None (3) The main financial information of significant not wholly owned subsidiary Unit: Yuan Name of Ending balance Beginning balance the Non-curr Current Non-curr Non-curr Current Non-curr Current Total Total Current Total Total subsidiar ent Liabilitie ent ent Liabilitie ent assets assets liabilities assets assets liabilities ies assets s liabilities assets s liabilities Bengang Puxiang Cool 2,050,71 2,159,34 4,210,05 2,226,47 2,226,47 2,110,62 2,306,99 4,417,62 2,327,57 2,327,57 Rolling 1,701.48 3,225.82 4,927.30 0,863.51 0,863.51 9,548.42 6,743.92 6,292.34 2,997.38 2,997.38 Steel Sheet Co., Ltd. Dalian Benruito ng Automo 119,006, 157,858, 276,865, 202,548, 202,548, 188,167, 161,544, 349,712, 273,458, 273,458, bile 557.85 619.47 177.32 119.65 119.65 707.25 880.30 587.55 936.47 936.47 Material Technolo gies Co., Ltd. Unit: Yuan January to June 2017 January to June 2016 Name of the Total Net cash Total Net cash subsidiaries Turnover Net Profit Turnover Net Profit comprehensi flows from comprehensi flows from 161 Bengang Steel Plates Co., Ltd. Semi-Annual Report 2017 ve income operating ve income operating activities activities Bengang Puxiang Cool 3,953,643,06 28,005,452.6 28,005,452.6 -44,864,088.8 2,592,071,40 99,409,153.7 99,409,153.7 58,017,011.9 Rolling Steel 9.30 8 8 1 0.46 7 7 7 Sheet Co., Ltd. Dalian Benruitong Automobile 84,612,504.0 16,421,759.6 137,623,373. -12,791,423.7 -1,936,593.41 -1,936,593.41 -3,127,791.12 -3,127,791.12 Material 6 5 15 9 Technologies Co., Ltd. Notes: None (4) Significant restrictions of using enterprise group assets and pay off enterprise group debt None (5) Provide financial support or other support for structure entities incorporate into the scope of consolidated financial statements None Notes: None 2. The transaction of the Company with its owner’s equity share changed but still controlling the subsidiary (1) Note to owner’s equity share changed in subsidiary (2) The transaction’s influence to equity of minority shareholders and attributable to the owner’s equity of the parent company Unit: Yuan Notes 162 Bengang Steel Plates Co., Ltd. Semi-Annual Report 2017 3. Equity in joint venture arrangement or associated enterprise (1) Significant joint venture arrangement or associated enterprise Proportion of shares held (%) Accounting treatment of the Principal place of Registered Nature of investment of Name business address business Direct Indirect joint venture or associated enterprise Notes to holding proportion of joint venture or associated enterprise different from voting proportion: Basis of holding less than 20% of the voting rights but has a significant impact or holding 20% or more voting rights but does not have a significant impact: (2) Main financial information of significant joint venture Unit: Yuan Ending balance/January to June 2017 Beginning balance/January to June 2016 Notes (3) Major financial information of significant joint venture Unit: Yuan Ending balance/current period Beginning balance/previous period Notes (4) Main financial information of significant associated enterprise Unit: Yuan Ending balance/current period Beginning balance/previous period Joint venture: -- -- The total of following items according to the -- -- shareholding proportions Associated enterprise: -- -- The total of following items according to the -- -- shareholding proportions Notes 163 Bengang Steel Plates Co., Ltd. Semi-Annual Report 2017 (5) Note to the significant restrictions of the ability of joint venture or associated enterprise transfer funds to the Company (6) The excess loss of joint venture or associated enterprise Unit: Yuan The cumulative recognized The derecognized losses or the The noncumulative Name losses in previous share of net profit in reporting unrecognized losses in reporting accumulatively derecognized period period Notes (7) The unrecognized commitment related to joint venture investment (8) Contingent liabilities related to joint venture or associated enterprise investment 4. Significant common operation Principal place of Proportion /share portion Name Registered address Nature of business business Direct Indirect Notes to holding proportion or share portion in common operation different from voting proportion: Basis of common operation as a single entity, classify as common operation: Notes 5. Equity of structure entity not including in the scope of consolidated financial statements Related notes to structure entity not including in the scope of consolidated financial statements: 6. Others X. Risks associated with financial instruments 1. Credit risk Credit risk refers to a financial loss to a party due to failure to discharge an obligation by the counterparties. The Company is exposed to credit risk arising from customers’ failure to discharge an obligation in sales on credit. In order to minimize the credit risk, the management of the Company is responsible for determination of credit limits, credit approvals and other monitoring procedures to ensure that follow-up actions are taken to recover overdue debts. In addition, the Company strictly approves the line of credit, and only sells on credit to important customers for newly-developed products. In the monitoring of credit risk of customers, the Company sorts customers into groups by their credit characteristics. Those customers which are rated as “high risk” will be put in the 164 Bengang Steel Plates Co., Ltd. Semi-Annual Report 2017 restricted client list. The Company can only sell to these customers on credit with additional approval; otherwise the Company must ask for a corresponding deposit in advance. 2. Market risk Market risk of financial instruments refers to fluctuations of fair value or future cash flows due to market price changes, including currency risk, interest rate risk, and other price risk. 1. Interest rate risk Interest rate risk refers to fluctuations of fair value or future cash flows due to market rate changes. The Company’s exposure to currency risk is primarily arising from variable-rate bank balances and variable-rate borrowings. Currently, the Company does not have a specific policy to manage its interest rate risk. The management will carefully choose financing methods, and combine fixed interest rate with variable interest rate, short-term obligations with long-term obligations. By using effective interest rate risk management methods, the Company closely monitors interest rate risk and will consider interest-rate swaps to acquire an expected structure of interest rates shall the need arise. Although these measures may not ensures that the Company completely avoids the risk of paying at a risk higher than market risk, or that the cash flow risk relevant to interest income fluctuations is completely eliminated, in the opinion of the management, these measures could achieve a reasonable balance among these risks. 2. Currency risk Currency risk refers to fluctuations of fair value or future cash flows due to exchange rate changes. The Company has been constantly working on the adjustment of the organizational framework of risk management and optimization of debt structures to lower the currency risk. The currency risk facing the Company originates from the assets and liabilities measured by US dollars, Euro, Hong Kong dollars and Japanese Yen. The ending balance of the assets and liabilities after converted in RMB is shown as below: Unit: RMB 10,000 Ending balance Items USD Euro HKD Japanese Yen Total Assets 323,765.00 68,064.45 87.58 391,917.02 Liabilities 877,623.52 81,971.86 1,472.26 961,067.64 The table below shows the sensitivity analysis of RMB vs. other currencies when RMB deprecated or appreciated by 5% over other currencies under the assumption that other variables remain the same. 5% is the sensitivity rate used by the management for internal report of currency risk and it represents the estimation of the management over the possible change of foreign currency. Sensitivity analysis only includes the monetary 165 Bengang Steel Plates Co., Ltd. Semi-Annual Report 2017 items measured by foreign currency unpaid and will be adjusted at the year-end by 5%. The positive figures reflect the increase of profit by 5% and the negative figures indicate the reduction of profit. Unit: RMB 10,000 Ending balance Items Impact on Impact on Impact on USD Impact on Euro Total HKD Japanese Yen Appreciation by 5% -12,141.19 2,552.42 3.28 -55.21 -9,640.70 Depreciation by 5% 12,141.19 -2,552.42 -3.28 55.21 9,640.70 3. Liquidity risk Liquidity risk refers to the risk of shortage of funds which occurs in fulfilling the obligation of settlement in a manner of delivering cash or other financial assets. The Company’s policy is to maintain sufficient cash to meet maturing obligations. Liquidity risk is centralized controlled by the Company’s finance department. Through the monitoring of unrestricted cash and cash equivalents, bank acceptance bills due in short time and the continues forecasting of cash flow in the next 12 months, the finance department ensures that the Company has sufficient cash to meet obligations in all predicted reasonable circumstances. The following table details the Company’s mature date of residual contract value of un-derivative financial liabilities to repay according to the contract terms. The table has been drawn up based on the undiscounted cash flows of financial liabilities based on the earliest date on which the Company can be required to pay. The table includes both interest and principal cash flows. Unit: RMB 10,000 Ending balance Items Within 1 year 1-2 years 2-5 years Over 5 years Total Trade and other payables 630,502.58 120,022.87 80,242.31 30,122.01 860,889.77 Loans and interests 2,389,846.21 99,468.00 133,086.83 83,578.98 2,705,980.03 Bonds payable 157,755.00 157,755.00 Total 3,178,103.79 219,490.87 213,329.14 113,701.00 3,724,624.80 XI. The disclosure of the fair value 1. Ending fair value of assets and liabilities calculated by fair value Unit: Yuan Closing fair value Items Fair value measurement Fair value measurement Fair value measurement Total items at level 1 items at level 2 items at level 3 1. Consistent fair value -- -- -- -- 166 Bengang Steel Plates Co., Ltd. Semi-Annual Report 2017 measurement 2. Inconsistent fair value -- -- -- -- measurement 2. Market price recognition basis for consistent and inconsistent fair value measurement items at level 1 3. Valuation technique adopted and nature and amount determination of important parameters for consistent and inconsistent fair value measurement items at level 2 4. Valuation technique adopted and nature and amount determination of important parameters for consistent and inconsistent fair value measurement items at level 2 5. Sensitiveness analysis on unobservable parameters and adjustment information between opening and closing book value of consistent fair value measurement items at level 3 6. Explain the reason for conversion and the policy governing when the conversion happens if conversion happens among consistent fair value measurement items at different levels 7. Changes in the valuation technique in the current period and the reason for change 8. Fair value of financial assets and liabilities not measured at fair value 9. Others XII. Related party transactions 1. Details of parent company (In 100 Million Yuan) Name of parent Registered address Nature of business Registered capital Share proportion (%) Voting rights (%) company Benxi Steel & Iron Benxi Manufacturing 53.69 77.88% 77.88% (Group) Co., Ltd. Bengang Group Co., Benxi Manufacturing 180 77.88% 77.88% Ltd. Note: The parent company of Benxi Steel (Group) Co., Ltd. is Bengang Group Co., Ltd. The ultimate controlling party of the Company is the State-owned Assets Supervision and Administration Commission of Liaoning Province. 2. Details of the subsidiaries For details of subsidiaries of the Company please refer to Note “Equity in other entities”. 167 Bengang Steel Plates Co., Ltd. Semi-Annual Report 2017 3. Information on the joint ventures and associated enterprises of the Company See details to Notes. Information on other joint venture and associated enterprise of occurring related party transactions with the Company in reporting period, or form balance due to related party transactions in previous period: Name Relationship Notes 4. Details of other related parties Name of Other related parties Relationship Bengang Group International Economic and Trading Co., Ltd. Both belong to Bengang Group Co., Ltd. Bengang Cold-rolled Stainless Steel Dandong Co., Ltd. Same parent company Benxi Beiying Steel & Iron (Group) Co., Ltd. Both belong to Bengang Group Co., Ltd. Bengang Electronics and Gas Co., Ltd. Both belong to Benxi Steel and Iron (Group) Co., Ltd. Benxi Steel & Iron (Group) Real-estate Development Co., Ltd. Same parent company Benxi Steel & Iron (Group) Steel & Iron Process and Logistics Same parent company Co., Ltd. Benxi Steel & Iron (Group) Machinery Manufacture Co., Ltd. Same parent company Benxi Steel & Iron (Group) Construction Co., Ltd. Same parent company Benxi Steel & Iron (Group) Mining Co., Ltd. Same parent company Benxi Steel & Iron (Group) Thermal Power Development Co., Same parent company Ltd. Benxi Steel & Iron (Group) Designing Institute Same parent company Benxi Steel & Iron (Group) Industrial Development Co., Ltd. Same parent company Benxi Steel & Iron (Group) Information and Automatic Tech Co., Same parent company Ltd. Benxi Steel & Iron (Group) Construction and Repairing Co., Ltd. Same parent company Benxi Steel & Iron (Group) Metallurgy Residues Co., Ltd. Same parent company Benxi Steel & Iron (Group) Plant Construction Supervisor Co., Same parent company Ltd. Benxi Steel & Iron (Group) Zhengtai Construction Materials Co., Same parent company Ltd. Benxi High-tech Drilling Tools Manufacture Co., Ltd. Both belong to Bengang Group Co., Ltd. Benxi New Career Development Co., Ltd. Same parent company Dalian Boluole Steel Tube Co., Ltd. Both belong to Benxi Steel and Iron (Group) Co., Ltd. Guangzhou Free Trade Zone Bengang Sales Co., Ltd. Both belong to Benxi Steel and Iron (Group) Co., Ltd. 168 Bengang Steel Plates Co., Ltd. Semi-Annual Report 2017 Liaoning Bengang Steel & Iron Trading Co., Ltd. Same parent company Liaoning Hengtai Heavy Machinery Co., Ltd. Same parent company Liaoning Hengtong Metallurgical Equipment Manufacture Co., Same parent company Ltd. Liaoning Metallurgy Technician College Same parent company Liaoning Metallurgy Technician College Same parent company Suzhou Bengang Industrial Co., Ltd. Shareholding company Shanghai Bengang Steel & Iron Trade Co., Ltd. Both belong to Benxi Steel and Iron (Group) Co., Ltd. Benxi Steel & Iron(Group) Medical Department Both belong to Benxi Steel and Iron (Group) Co., Ltd. Bengang Group Finance Co., Ltd. Both belong to Bengang Group Co., Ltd. Liaoning Hengyi Financial Leasing Co., Ltd. Both belong to Bengang Group Co., Ltd. Notes 5. Related Party Transactions (1) Related party transactions of purchasing goods and services Company as the purchaser Unit: Yuan The content of January to June The approved trade Whether exceed trade Name related party January to June 2016 2017 credit credit or not transactions Benxi Steel & Iron Accounts payable 127,818,662.00 350,000,000.00 No 142,914,791.40 (Group) Co., Ltd. for repair Benxi Steel & Iron Land leasing fee 27,345,714.30 No 28,257,238.10 (Group) Co., Ltd. Bengang Cold-rolled Products 174,967.51 5,000,000.00 No 197,900.00 Stainless Steel Dandong Co., Ltd. Benxi Steel & Iron (Group) Mining Labor cost 2,537,625.86 No 8,012,301.00 Co., Ltd. Benxi Steel & Iron Raw material and (Group) Mining supplementary 2,176,386,929.60 4,000,000,000.00 No 1,930,519,957.48 Co., Ltd. material Benxi Steel & Iron (Group) Mining Freight 31,783.77 No 1,442,630.61 Co., Ltd. 169 Bengang Steel Plates Co., Ltd. Semi-Annual Report 2017 Benxi Steel & Iron Raw material and (Group) Metallurgy supplementary 128,200,766.66 200,000,000.00 No 57,261,826.00 Residues Co., Ltd. material Benxi Steel & Iron (Group) Steel & Processing fee 761,185.36 10,000,000.00 No 867,249.53 Iron Process and Logistics Co., Ltd. Benxi Steel & Iron (Group) Real-estate Raw materials 50,067,484.09 120,000,000.00 No 36,885,463.89 Development Co., Ltd. Benxi Steel & Iron (Group) Machinery Spare parts 55,223,576.67 300,000,000.00 No 54,201,883.14 Manufacture Co., Ltd. Benxi Steel & Iron (Group) Machinery Repair services 3,688,668.68 No 5,302,423.00 Manufacture Co., Ltd. Benxi Steel & Iron (Group) Spare parts 7,343,354.50 700,000,000.00 No 7,635,945.10 Construction Co., Ltd. Benxi Steel & Iron (Group) Project fee 129,406,022.95 No 122,809,324.62 Construction Co., Ltd. Benxi Steel & Iron (Group) Repair services 32,379,820.88 No 41,930,655.47 Construction Co., Ltd. Benxi Steel & Iron Raw material and (Group) supplementary 4,647,769.44 No 3,726,235.00 Construction Co., material Ltd. Benxi Steel & Iron (Group) Freight 1,550,379.98 No 1,392,792.26 Construction Co., Ltd. Benxi Steel & Iron Spare parts 89,056,575.46 No 12,098,061.54 (Group) Industrial 170 Bengang Steel Plates Co., Ltd. Semi-Annual Report 2017 Development Co., Ltd. Benxi Steel & Iron Raw material and (Group) Industrial supplementary 106,726,625.72 450,000,000.00 No 118,140,441.19 Development Co., material Ltd. Benxi Steel & Iron (Group) Industrial Repair services 11,179,880.95 No 7,004,363.38 Development Co., Ltd. Benxi Steel & Iron (Group) Industrial Freight 1,370,590.70 No 2,870,362.41 Development Co., Ltd. Benxi Steel & Iron (Group) Industrial Project fee 1,398,249.24 No 630,100.00 Development Co., Ltd. Benxi Steel & Iron Raw material & (Group) supplementary 1,396,647.57 250,000,000.00 No 4,131,446.44 Construction and materials & spare Repairing Co., Ltd. parts Benxi Steel & Iron (Group) Project fee 28,706,439.35 No 28,166,151.94 Construction and Repairing Co., Ltd. Benxi Steel & Iron (Group) Accounts payable 21,309,880.35 No 20,660,206.00 Construction and for repair Repairing Co., Ltd. Bengang Raw material and Electronics and Gas supplementary 84,260,711.25 210,000,000.00 No 53,938,969.16 Co., Ltd. material Bengang Electronics and Gas Project fee 419,352.41 No 1,429,583.24 Co., Ltd. Bengang Electronics and Gas Repair services 6,921,824.58 No 4,427,487.00 Co., Ltd. Benxi High-tech Spare parts 393,070.06 8,000,000.00 No 263,037.74 Drilling Tools 171 Bengang Steel Plates Co., Ltd. Semi-Annual Report 2017 Manufacture Co., Ltd. Benxi New Career Labor protection Development Co., 294,457.32 20,000,000.00 No 1,183,634.68 fee Ltd. Liaoning Metallurgy Spare parts 13,193,086.82 30,000,000.00 No 7,065,509.18 Technician College Liaoning Metallurgy Spare parts 2,303,327.48 15,000,000.00 No Technician College Bengang Group International Agency fee 36,856,843.30 360,000,000.00 No 28,513,161.47 Economic and Trading Co., Ltd. Bengang Group International Port surcharges 77,511,480.65 No 103,016,500.03 Economic and Trading Co., Ltd. Benxi Steel & Iron (Group) Information and Spare parts 6,932,300.00 80,000,000.00 No 14,300,186.79 Automatic Tech Co., Ltd. Benxi Steel & Iron (Group) Information and Repair services 3,059,417.05 No 11,808,973.00 Automatic Tech Co., Ltd. Benxi Steel & Iron (Group) Thermal Heating costs 1,686,000.00 No 6,273,973.39 Power Development Co., Ltd. Benxi Steel & Iron Raw material and (Group) Thermal supplementary 20,000,000.00 No 33,835.74 Power Development material Co., Ltd. Benxi Steel & Iron (Group) Designing Design fees 2,359,000.00 30,000,000.00 No 4,463,442.91 Institute Benxi Beiying Steel Raw material and 4,727,294,158.47 13,500,000,000.00 No 2,775,256,599.12 172 Bengang Steel Plates Co., Ltd. Semi-Annual Report 2017 & Iron (Group) Co., supplementary Ltd. material Benxi Beiying Steel & Iron (Group) Co., Energy & Power 501,840,790.72 No 186,873,654.59 Ltd. Benxi Beiying Steel & Iron (Group) Co., Freight 8,894,757.14 No 3,910,293.80 Ltd. Benxi Beiying Steel & Iron (Group) Co., Labor cost 55,630,095.04 No 26,988,500.01 Ltd. Benxi Beiying Steel & Iron (Group) Co., Spare parts 18,442,067.23 No 5,546,327.45 Ltd. Liaoning Hengtong Metallurgical Raw material and Equipment 106,615,430.32 180,000,000.00 No 40,450,852.53 spare parts Manufacture Co., Ltd. Liaoning Hengtai Raw material and Heavy Machinery 38,734,351.70 70,000,000.00 No 3,347,989.41 spare parts Co., Ltd. Liaoning Hengtai Repair and labor Heavy Machinery 6,364,702.64 No 7,594,926.00 cost Co., Ltd. Bengang Group Property 310,698.12 8,000,000.00 No 422,750.00 Co., Ltd. management fee Total 8,709,027,523.89 20,916,000,000.00 No 5,924,169,936.73 Company as the seller Unit: Yuan The content of related party Name January to June 2017 January to June 2016 transactions Bengang Electronics and Gas Energy & Power 496,261.60 506,435.79 Co., Ltd. Raw material & Benxi Beiying Steel & Iron supplementary materials & 347,784,283.81 48,003,943.30 (Group) Co., Ltd. spare parts Benxi Beiying Steel & Iron Products 4,973,269.68 2,200,079.70 (Group) Co., Ltd. Benxi Beiying Steel & Iron Energy & Power 143,893,069.82 49,331,879.14 173 Bengang Steel Plates Co., Ltd. Semi-Annual Report 2017 (Group) Co., Ltd. Benxi Steel & Iron (Group) Real-estate Development Co., Energy & Power 137,583.72 477,081.15 Ltd. Benxi Steel & Iron (Group) Steel & Iron Process and Energy & Power 503,015.61 288,813.78 Logistics Co., Ltd. Benxi Steel & Iron (Group) Steel & Iron Process and Products 42,000,927.99 Logistics Co., Ltd. Benxi Steel & Iron (Group) Machinery Manufacture Co., Products 4,620,747.58 6,053,249.23 Ltd. Benxi Steel & Iron (Group) Machinery Manufacture Co., Energy & Power 7,913,565.57 9,179,055.96 Ltd. Benxi Steel & Iron (Group) Raw material & Machinery Manufacture Co., supplementary materials & 514,127.97 1,514,608.74 Ltd. spare parts Benxi Steel & Iron (Group) Energy & Power 2,144,512.75 2,455,519.74 Construction Co., Ltd. Raw material & Benxi Steel & Iron (Group) supplementary materials & 1,384,111.28 40,563,514.42 Construction Co., Ltd. spare parts Benxi Steel & Iron (Group) Energy & Power 458,582,060.66 361,479,232.83 Mining Co., Ltd. Raw material & Benxi Steel & Iron (Group) supplementary materials & 6,467,665.26 41,615,621.07 Mining Co., Ltd. spare parts Benxi Steel & Iron (Group) Freight revenue 4,072,326.92 4,362,538.55 Mining Co., Ltd. Benxi Steel & Iron (Group) Thermal Power Development Energy & Power 14,523,775.89 19,598,496.83 Co., Ltd. Benxi Steel & Iron (Group) Raw material & Thermal Power Development supplementary materials & 685,704.00 5,333,835.74 Co., Ltd. spare parts Benxi Steel & Iron (Group) Thermal Power Development Freight revenue 96,738.16 82,818.57 Co., Ltd. 174 Bengang Steel Plates Co., Ltd. Semi-Annual Report 2017 Benxi Steel & Iron (Group) Industrial Development Co., Energy & Power 4,053,089.03 3,316,373.17 Ltd. Benxi Steel & Iron (Group) Industrial Development Co., Products 126,887.14 126,431.04 Ltd. Benxi Steel & Iron (Group) Raw material & Industrial Development Co., supplementary materials & 27,595,285.96 28,143,989.05 Ltd. spare parts Benxi Steel & Iron (Group) Information and Automatic Energy & Power 83,013.82 100,709.65 Tech Co., Ltd. Benxi Steel & Iron (Group) Construction and Repairing Co., Energy & Power 772,159.41 477,947.47 Ltd. Benxi Steel & Iron (Group) Raw material & Construction and Repairing Co., supplementary materials & 98,352.61 1,141,388.99 Ltd. spare parts Benxi Steel & Iron (Group) Energy & Power 1,300,384.81 1,056,102.39 Metallurgy Residues Co., Ltd. Raw material & Benxi Steel & Iron (Group) supplementary materials & 43,580,212.34 10,221,213.07 Metallurgy Residues Co., Ltd. spare parts Benxi Steel & Iron (Group) Freight revenue 3,143.36 4,319.92 Metallurgy Residues Co., Ltd. Benxi Steel & Iron (Group) Products 7,126,315.80 1,553,826.03 Metallurgy Residues Co., Ltd. Benxi Steel & Iron (Group) Co., Energy & Power 6,145,233.63 35,259,836.35 Ltd. Raw material & Benxi Steel & Iron (Group) Co., supplementary materials & 3,215,453.07 3,371,111.95 Ltd. spare parts Benxi New Career Energy & Power 186,027.31 165,240.02 Development Co., Ltd. Dalian Boluole Steel Tube Co., Products 2,237,856.57 1,532,438.22 Ltd. Liaoning Bengang Steel & Iron Products 460,444.50 92,983,672.54 Trading Co., Ltd. Benxi Steel & Iron (Group) Energy & Power 51,687.01 48,288.52 General Hospital 175 Bengang Steel Plates Co., Ltd. Semi-Annual Report 2017 Liaoning Hengtong Metallurgical Equipment Energy & Power 8,991,868.63 8,449,073.80 Manufacture Co., Ltd. Liaoning Hengtong Raw material & Metallurgical Equipment supplementary materials & 8,797,596.07 6,514,862.48 Manufacture Co., Ltd. spare parts Liaoning Hengtong Metallurgical Equipment Products 8,109,275.13 Manufacture Co., Ltd. Raw material & Bengang Cold-rolled Stainless supplementary materials & Steel Dandong Co., Ltd. spare parts Bengang Cold-rolled Stainless Products Steel Dandong Co., Ltd. Suzhou Bengang Industrial Co., Products 136,230,997.93 96,985,025.50 Ltd. Bengang Group Finance Co., Energy & Power 7,485.42 8,150.41 Ltd. Bengang Group Co., Ltd. Energy & Power 76,301.79 28,820.54 Total 1,249,932,616.48 934,645,748.77 Related party transactions of purchasing goods and services Notes None (2) Related trusteeship/contract Lists of related trusteeship/contract: Unit: Yuan Income Name of the Name of the Type Initial date Due date Pricing basis recognized in the entruster/contractee entrustee/contractor reporting period Notes None Lists of entrust/contractee: Unit: Yuan Change Name of the Name of the Type Initial date Due date Pricing basis recognized in the entruster/contractee entrustee/contractor reporting period Notes None 176 Bengang Steel Plates Co., Ltd. Semi-Annual Report 2017 (3) Lease information of related parties Company as the lessor: Unit: Yuan The lease income confirmed in The lease income confirmed in Lessee Lease capital category this year last year Benxi Steel & Iron (Group) Steel & Iron Process and Warehouse and machinery 250,000.00 158,500.00 Logistics Co., Ltd. Benxi Steel & Iron (Group) Machinery Manufacture Co., Plants and machinery 244,805.87 Ltd. Company as the lessee: Unit: Yuan Lessor Lease capital category Lease charges of 2016 Lease charges of 2015 Benxi Steel & Iron (Group) Co., 2300 Hot rolling product line 120,000,000.00 120,000,000.00 Ltd. Benxi Steel & Iron (Group) Co., Land use right 27,345,714.30 28,257,238.10 Ltd. Benxi Beiying Steel & Iron 1780 Hot rolling product line 77,816,940.06 65,950,200.00 (Group) Co., Ltd. Notes: 1. The Company leases 2300 hot rolling product line from the Group. Lease period lasts from 1 January 2015 to 31 December 2017. Lease charges are negotiated between the lessor and the lessee based on the original cost, depreciation, and national taxation of the product line, with consideration of conditions of production and equipment performance. 2. The Company leases land use right from the Group. Lease period lasts from 15 April 2009. The leasing fee is determined by the area of the land which is 7,669,068.17 square meters. Average price is RMB 0.624 per Square meter per month; hence annual rent is RMB 57,426,000.00. 3. The Company leases 1780 hot rolling product line from Benxi Beiying Steel & Iron (Group) Co., Ltd. The lease term lasts from 1 January 2017 to 31 December 2019. Lease charges are negotiated between the lessor and the lessee based on the original cost, depreciation, and national taxation of the product line, with consideration of conditions of production and equipment performance. (4) Information of Guarantee among related parties Company as the warrantor Unit: Yuan Starting date of Has the guarantee been Secured party Guarantee amount Ending date of Guarantee Guarantee fulfilled Company as the warrantee 177 Bengang Steel Plates Co., Ltd. Semi-Annual Report 2017 Unit: Yuan Starting date of Has the guarantee been Warrantor Guarantee amount Ending date of Guarantee Guarantee fulfilled Bengang Group Co., Ltd. and Benxi Steel & Iron 200,000,000.00 2016/11/10 2017/9/13 No (Group) Co., Ltd. Bengang Group Co., Ltd. and Benxi Steel & Iron 100,000,000.00 2016/11/9 2017/8/23 No (Group) Co., Ltd. Bengang Group Co., Ltd. and Benxi Steel & Iron 200,000,000.00 2016/11/9 2017/8/17 No (Group) Co., Ltd. Bengang Group Co., Ltd. and Benxi Steel & Iron 150,000,000.00 2016/11/11 2017/10/19 No (Group) Co., Ltd. Bengang Group Co., Ltd. and Benxi Steel & Iron 200,000,000.00 2016/11/11 2017/10/12 No (Group) Co., Ltd. Bengang Group Co., Ltd. and Benxi Steel & Iron 200,000,000.00 2016/11/15 2017/11/8 No (Group) Co., Ltd. Bengang Group Co., Ltd. and Benxi Steel & Iron 200,000,000.00 2016/11/16 2017/11/15 No (Group) Co., Ltd. Bengang Group Co., Ltd. and Benxi Steel & Iron 200,000,000.00 2016/12/8 2017/12/7 No (Group) Co., Ltd. Bengang Group Co., Ltd. and Benxi Steel & Iron 80,000,000.00 2016/12/6 2017/12/5 No (Group) Co., Ltd. Bengang Group Co., Ltd. and Benxi Steel & Iron 200,000,000.00 2016/12/13 2017/12/12 No (Group) Co., Ltd. Bengang Group Co., Ltd. 150,000,000.00 2016/7/22 2017/7/22 No Bengang Group Co., Ltd. 150,000,000.00 2016/7/21 2017/7/21 No Bengang Group Co., Ltd. 230,000,000.00 2016/8/12 2017/8/12 No Bengang Group Co., Ltd. 490,000,000.00 2016/8/19 2017/8/18 No Bengang Group Co., Ltd. 180,000,000.00 2016/8/5 2017/8/5 No Bengang Group Co., Ltd. 200,000,000.00 2016/8/12 2017/8/12 No 178 Bengang Steel Plates Co., Ltd. Semi-Annual Report 2017 Bengang Group Co., Ltd. 170,000,000.00 2016/8/5 2017/8/5 No Bengang Group Co., Ltd. 220,000,000.00 2016/8/5 2017/8/5 No Bengang Group Co., Ltd. 250,000,000.00 2016/10/20 2017/10/20 No Bengang Group Co., Ltd. 250,000,000.00 2016/10/20 2017/10/20 No Bengang Group Co., Ltd. 100,000,000.00 2016/9/29 2017/8/1 No Bengang Group Co., Ltd. 140,000,000.00 2017/5/19 2018/5/19 No Bengang Group Co., Ltd. 200,000,000.00 2017/5/19 2018/5/19 No Bengang Group Co., Ltd. 200,000,000.00 2017/5/19 2018/5/19 No Bengang Group Co., Ltd. 160,000,000.00 2017/5/19 2018/5/19 No Bengang Group Co., Ltd. 150,000,000.00 2017/1/13 2018/1/13 No Bengang Group Co., Ltd. 110,000,000.00 2017/1/13 2018/1/13 No Bengang Group Co., Ltd. 200,000,000.00 2017/3/24 2018/3/24 No Bengang Group Co., Ltd. 168,000,000.00 2017/6/9 2018/6/9 No Bengang Group Co., Ltd. 300,000,000.00 2017/5/17 2018/5/16 No Bengang Group Co., Ltd. 200,000,000.00 2017/5/17 2018/5/16 No Bengang Group Co., Ltd. 135,000,000.00 2017/1/20 2018/1/19 No Bengang Group Co., Ltd. 500,000,000.00 2017/6/23 2018/6/23 No Benxi Steel & Iron 74,000,000.00 2016/9/28 2017/9/27 No (Group) Co., Ltd. Benxi Steel & Iron 150,000,000.00 2017/5/16 2018/5/15 No (Group) Co., Ltd. Benxi Steel & Iron 74,000,000.00 2017/5/24 2018/5/23 No (Group) Co., Ltd. Benxi Steel & Iron 270,000,000.00 2017/1/17 2018/1/16 No (Group) Co., Ltd. Benxi Steel & Iron 400,000,000.00 2017/2/16 2018/2/15 No (Group) Co., Ltd. Benxi Steel & Iron 200,000,000.00 2017/1/12 2018/1/11 No (Group) Co., Ltd. Benxi Steel & Iron 400,000,000.00 2017/4/25 2017/7/24 No (Group) Co., Ltd. Benxi Steel & Iron 500,000,000.00 2017/4/28 2017/7/27 No (Group) Co., Ltd. Benxi Steel & Iron 460,000,000.00 2017/4/28 2017/11/27 No (Group) Co., Ltd. Benxi Steel & Iron 170,000,000.00 2017/5/27 2018/1/26 No 179 Bengang Steel Plates Co., Ltd. Semi-Annual Report 2017 (Group) Co., Ltd. Benxi Steel & Iron 700,000,000.00 2017/2/27 2025/2/20 No (Group) Co., Ltd. Bengang Group Co., Ltd. 677,440,000.00 2016/8/19 2017/8/14 No Benxi Steel & Iron 697,763,200.00 2016/9/30 2017/9/29 No (Group) Co., Ltd. Benxi Steel & Iron 1,016,160,000.00 2016/9/28 2017/9/27 No (Group) Co., Ltd. Benxi Steel & Iron 152,424,000.00 2016/12/23 2017/12/22 No (Group) Co., Ltd. Benxi Steel & Iron 609,696,000.00 2017/5/19 2018/5/18 No (Group) Co., Ltd. Benxi Steel & Iron 697,763,200.00 2017/5/19 2018/5/15 No (Group) Co., Ltd. Benxi Steel & Iron 1,016,160,000.00 2017/5/19 2018/5/8 No (Group) Co., Ltd. Benxi Steel & Iron 677,440,000.00 2017/2/24 2018/2/23 No (Group) Co., Ltd. Bengang Group Co., Ltd. 207,635,360.00 2016/12/27 2020/6/21 No Bengang Group Co., Ltd. 677,440,000.00 2016/8/3 2018/8/28 No Bengang Group Co., Ltd. 325,171,200.00 2016/7/14 2018/7/12 No Bengang Group Co., Ltd. 338,720,000.00 2016/6/21 2018/6/20 No Bengang Group Co., Ltd. 541,952,000.00 2016/5/30 2018/5/18 No Bengang Group Co., Ltd. 128,713,600.00 2016/4/28 2018/4/18 No Bengang Group Co., Ltd. 2,065,483.30 2015/6/25 2025/9/30 No Bengang Group Co., Ltd. 70,566,803.65 2015/8/20 2025/9/30 No Bengang Group Co., Ltd. 9,255,928.50 2015/8/20 2019/9/30 No Bengang Group Co., Ltd. 47,756.76 2015/6/25 2026/4/30 No Bengang Group Co., Ltd. 4,902,478.41 2015/6/25 2026/4/30 No Bengang Group Co., Ltd. 31,533.97 2015/12/28 2026/4/30 No Bengang Group Co., Ltd. 59,717,848.78 2015/12/28 2026/4/30 No Bengang Group Co., Ltd. 25,161,064.71 2015/6/25 2020/4/30 No Bengang Group Co., Ltd. 8,998,273.67 2015/12/28 2020/4/30 No Bengang Group Co., Ltd. 4,326,100.67 2015/6/25 2025/6/30 No Bengang Group Co., Ltd. 123,705,935.08 2015/6/25 2025/6/30 No Bengang Group Co., Ltd. 3,797,480.46 2015/12/28 2025/6/30 No 180 Bengang Steel Plates Co., Ltd. Semi-Annual Report 2017 Bengang Group Co., Ltd. 22,333,519.70 2015/6/25 2019/6/30 No Bengang Group Co., Ltd. 15,984,345.19 2015/12/28 2019/6/30 No Bengang Group Co., Ltd. 5,572,548.89 2015/6/25 2025/10/31 No Bengang Group Co., Ltd. 88,488,280.86 2015/6/25 2025/10/31 No Bengang Group Co., Ltd. 40,562,264.44 2015/12/28 2025/10/31 No Bengang Group Co., Ltd. 35,828,162.52 2015/6/25 2019/10/31 No Bengang Group Co., Ltd. 687,486.16 2015/12/28 2019/10/31 No Bengang Group Co., Ltd. 4,721,803.46 2015/6/25 2025/8/31 No Bengang Group Co., Ltd. 106,871,392.51 2015/6/25 2025/8/31 No Bengang Group Co., Ltd. 2,241,804.29 2015/12/28 2025/8/31 No Bengang Group Co., Ltd. 28,100,818.36 2015/6/25 2019/8/31 No Bengang Group Co., Ltd. 3,706,999.93 2015/12/28 2019/8/31 No Bengang Group Co., Ltd. 9,951,765.08 2015/12/28 2019/7/30 No Bengang Group Co., Ltd. 5,304,591.51 2016/6/27 2020/4/30 No Bengang Group Co., Ltd. 32,734,871.86 2016/6/27 2020/4/30 No Bengang Group Co., Ltd. 24,883,510.54 2016/12/14 2026/4/30 No Bengang Group Co., Ltd. 472,947.08 2016/12/14 2020/4/30 No Benxi Steel & Iron 14,021,480.00 1997/10/10 2027/9/10 No (Group) Co., Ltd. Bengang Group Co., Ltd.;Benxi Steel & Iron 100,000,000.00 2016/3/30 2025/3/20 No (Group) Co., Ltd. Bengang Group Co., Ltd. 100,000,000.00 2016/3/31 2018/3/31 No Bengang Group Co., Ltd. 59,140,000.00 2015/3/26 2019/3/21 No Bengang Group Co., Ltd. 100,000,000.00 2015/6/25 2021/9/21 No Bengang Group Co., Ltd. 24,000,000.00 2015/12/9 2022/3/21 No Bengang Group Co., Ltd. 72,150,000.00 2016/12/27 2020/6/21 No Bengang Group Co., Ltd. 15,919,840.00 2016/12/27 2020/6/21 No Bengang Group Co., Ltd. 258,185.44 2015/6/25 2025/9/30 No Bengang Group Co., Ltd. 8,820,850.46 2015/8/20 2025/9/30 No Bengang Group Co., Ltd. 4,627,964.25 2015/8/20 2019/9/30 No Bengang Group Co., Ltd. 582,380.58 2015/6/25 2026/4/30 No Bengang Group Co., Ltd. 7,029,339.16 2015/12/28 2026/4/30 No Bengang Group Co., Ltd. 10,064,425.90 2015/6/25 2020/4/30 No Bengang Group Co., Ltd. 3,599,309.47 2015/12/28 2020/4/30 No 181 Bengang Steel Plates Co., Ltd. Semi-Annual Report 2017 Bengang Group Co., Ltd. 576,813.42 2015/6/25 2025/6/30 No Bengang Group Co., Ltd. 16,494,124.65 2015/6/25 2025/6/30 No Bengang Group Co., Ltd. 506,330.73 2015/12/28 2025/6/30 No Bengang Group Co., Ltd. 14,889,013.08 2015/6/25 2019/6/30 No Bengang Group Co., Ltd. 10,656,230.07 2015/12/28 2019/6/30 No Bengang Group Co., Ltd. 11,757,603.69 2015/6/25 2025/10/31 No Bengang Group Co., Ltd. 5,070,283.05 2015/12/28 2025/10/31 No Bengang Group Co., Ltd. 17,914,081.22 2015/6/25 2019/10/31 No Bengang Group Co., Ltd. 343,743.20 2015/12/28 2019/10/31 No Bengang Group Co., Ltd. 13,949,149.50 2015/6/25 2025/8/31 No Bengang Group Co., Ltd. 280,225.54 2015/12/28 2025/8/31 No Bengang Group Co., Ltd. 14,050,409.18 2015/6/25 2019/8/31 No Bengang Group Co., Ltd. 1,853,499.96 2015/12/28 2019/8/31 No Bengang Group Co., Ltd. 4,975,882.54 2015/12/28 2019/7/30 No Bengang Group Co., Ltd. 2,121,836.61 2016/6/27 2020/4/30 No Bengang Group Co., Ltd. 3,851,161.40 2016/6/27 2020/4/30 No Bengang Group Co., Ltd. 2,927,471.85 2016/12/14 2026/4/30 No Bengang Group Co., Ltd. 189,178.74 2016/12/14 2020/4/30 No Benxi Steel & Iron 1,402,148.00 1997/10/10 2027/9/10 No (Group) Co., Ltd. Bengang Group Co., Ltd. 27,860,000.00 2015/3/26 2019/3/21 No Bengang Group Co., Ltd. 17,850,000.00 2016/12/27 2020/6/21 No Bengang Group Co., Ltd. 340,000,000.00 2016/8/25 2017/8/24 No Bengang Group Co., Ltd. 220,000,000.00 2016/10/20 2017/10/20 No Bengang Group Co., Ltd., Benxi Steel & Iron 200,000,000.00 2016/7/29 2017/7/26 No (Group) Co., Ltd. Bengang Group Co., Ltd., Benxi Steel & Iron 100,000,000.00 2016/10/25 2017/10/23 No (Group) Co., Ltd. Bengang Group Co., Ltd. 500,000,000.00 2016/11/10 2017/8/1 Information of Guarantee among related parties The warrantors provide guarantee for the Company’s outstanding bank loans. (5) Inter-bank lending of capital of related parties Unit: Yuan 182 Bengang Steel Plates Co., Ltd. Semi-Annual Report 2017 Amount borrowed and Name Date of value Maturity date Notes loaned Borrowed Benxi Steel & Iron 14,220,000.00 2017/1/17 2018/1/16 (Group) Co., Ltd. Benxi Steel & Iron 19,000,000.00 2017/6/14 2018/6/13 (Group) Co., Ltd. Benxi Steel & Iron 11,369,400.00 2017/6/22 2018/6/21 (Group) Co., Ltd. Benxi Steel & Iron 32,700,000.00 2016/10/24 2017/10/23 (Group) Co., Ltd. Benxi Steel & Iron 22,120,000.00 2016/11/11 2017/11/10 (Group) Co., Ltd. Loaned 99,409,400.00 (6) Related party asset transfer and debt restructuring Unit: Yuan The content of related party Name January to June 2017 January to June 2016 transactions (7) Remuneration of key management personnel Unit: Yuan Items January to June 2017 January to June 2016 (8) Other related party transactions (1) Loan from and deposits in Bengang Group Finance Co., Ltd. Unit: RMB 10,000 Items Beginning balance Increase Decrease Ending balance Nature Deposits 366,863.85 4,656,434.34 4,439,792.54 583,505.65 6. Receivables and payables of the related parties (1) Receivables of the Company Unit: Yuan Ending balance Beginning balance Items Name Name Carrying amount Provision for bad Carrying amount Provision for bad 183 Bengang Steel Plates Co., Ltd. Semi-Annual Report 2017 debts debts Benxi Beiying Steel Accounts receivable & Iron (Group) Co., 17,732,985.04 18,392,217.28 Ltd. Bengang Electronics Accounts receivable 2,518,970.91 191,192.77 2,544,096.41 191,192.77 and Gas Co., Ltd. Benxi Steel & Iron (Group) Machinery Accounts receivable 52,584,877.55 6,252,766.59 58,688,479.41 6,978,534.14 Manufacture Co., Ltd. Benxi Steel & Iron (Group) Accounts receivable 20,465,486.44 16,953,842.92 27,591,781.37 16,953,842.92 Construction Co., Ltd. Benxi Steel & Iron (Group) Industrial Accounts receivable 20,767,168.35 2,160,167.07 43,138,986.20 2,160,167.07 Development Co., Ltd. Benxi New Career Accounts receivable Development Co., 5,101,491.42 4,493,529.85 6,021,519.36 4,493,529.85 Ltd. Benxi Steel & Iron (Group) Thermal Accounts receivable 1,707,735.13 7,065,515.62 Power Development Co., Ltd. Benxi Steel & Iron (Group) Steel & Iron Accounts receivable 411,752.60 499,596.68 Process and Logistics Co., Ltd. Bengang Cold-rolled Accounts receivable Stainless Steel 167,403.11 10,273.91 205,478.22 10,273.91 Dandong Co., Ltd. Liaoning Hengtong Metallurgical Accounts receivable Equipment 9,987,621.61 9,777,694.51 Manufacture Co., Ltd. Bengang Group International Accounts receivable 16,116,883.06 19,014,727.54 Economic and Trading Co., Ltd. 184 Bengang Steel Plates Co., Ltd. Semi-Annual Report 2017 Subtotal: 147,562,375.22 30,061,773.11 192,940,092.60 30,787,540.66 Benxi Beiying Steel Prepayments & Iron (Group) Co., 336,897,265.03 209,639,029.05 Ltd. Benxi Steel & Iron (Group) Machinery Prepayments 12,986,662.13 9,675,956.28 Manufacture Co., Ltd. Bengang Cold-rolled Prepayments Stainless Steel 22,451.35 47,265.99 Dandong Co., Ltd. Subtotal: 349,906,378.50 219,362,251.32 Benxi Steel & Iron (Group) Real-estate Other receivables 2,511,984.11 173,991.52 2,797,309.70 173,991.52 Development Co., Ltd. Liaoning Metallurgy Other receivables 132,501.57 156,265.86 156,265.86 156,265.86 Technician College Benxi Steel & Iron (Group) Machinery Other receivables 4,610,543.21 55.08 658,020.63 55.08 Manufacture Co., Ltd. Benxi Steel & Iron (Group) Other receivables 1,041,994.41 885,014.32 1,218,997.41 885,014.32 Construction Co., Ltd. Bengang Group International Other receivables 15,997,051.61 2,000.00 12,953,078.23 2,000.00 Economic and Trading Co., Ltd. Benxi Steel & Iron (Group) Industrial Other receivables 598,678.69 326,757.79 482,278.78 326,757.79 Development Co., Ltd. Benxi Steel & Iron (Group) Zhengtai Other receivables 191,491.57 140,059.31 198,482.11 140,059.31 Construction Materials Co., Ltd. Benxi Steel & Iron Other receivables 773,464.11 611,332.98 904,953.91 611,332.98 (Group) Medical 185 Bengang Steel Plates Co., Ltd. Semi-Annual Report 2017 Department Subtotal: 25,857,709.29 2,295,476.86 19,369,386.63 2,295,476.86 (2) Payables of the Company Unit: Yuan Items Name Name Ending balance Beginning balance Benxi Steel & Iron (Group) Notes payable Industrial Development Co., 20,404,409.86 28,192,278.69 Ltd. Benxi Steel & Iron (Group) Notes payable Machinery Manufacture Co., 49,168,681.00 31,824,694.29 Ltd. Bengang Electronics and Gas Notes payable 2,303,662.21 307,463.98 Co., Ltd. Benxi Steel & Iron (Group) Notes payable Construction and Repairing Co., 2,041,572.16 Ltd. Liaoning Metallurgy Technician Notes payable 6,204,029.01 College Benxi Steel & Iron (Group) Notes payable 568,740,355.56 Mining Co., Ltd. Benxi Steel & Iron (Group) Notes payable 2,779,709.03 1,963,555.75 Construction Co., Ltd. Benxi Steel & Iron (Group) Notes payable Information and Automatic 2,980,712.19 646,271.77 Tech Co., Ltd. Benxi Beiying Steel & Iron Notes payable 320,987,663.93 (Group) Co., Ltd. Liaoning Hengtong Notes payable Metallurgical Equipment 57,117,975.37 Manufacture Co., Ltd. Liaoning Metallurgy Technician Notes payable 410,420.63 College Liaoning Hengtai Heavy Notes payable 664,260.60 Machinery Co., Ltd. Benxi Steel & Iron (Group) Notes payable 1,461,822.77 Metallurgy Residues Co., Ltd. Subtotal 398,624,838.22 699,574,700.58 186 Bengang Steel Plates Co., Ltd. Semi-Annual Report 2017 Bengang Electronics and Gas Accounts payable 14,136,459.51 14,363,839.08 Co., Ltd. Benxi Steel & Iron (Group) Accounts payable Real-estate Development Co., 887,095.04 3,481,794.33 Ltd. Bengang Group International Accounts payable 790,278,853.89 1,332,351,145.92 Economic and Trading Co., Ltd. Benxi Steel & Iron (Group) Accounts payable Machinery Manufacture Co., 131,292,835.12 153,595,680.56 Ltd. Benxi Steel & Iron (Group) Accounts payable 159,279,391.32 122,639,049.77 Construction Co., Ltd. Benxi Steel & Iron (Group) Accounts payable 911,756,652.03 875,832,744.08 Mining Co., Ltd. Benxi Steel & Iron (Group) Accounts payable Industrial Development Co., 88,584,398.24 89,661,554.50 Ltd. Benxi New Career Accounts payable 6,531,844.53 10,111,480.54 Development Co., Ltd. Benxi Steel & Iron (Group) Accounts payable Construction and Repairing Co., 127,539,632.47 112,970,904.61 Ltd. Benxi Steel & Iron (Group) Accounts payable 5,505,610.62 4,428,544.35 Designing Institute Benxi Steel & Iron (Group) Accounts payable 57,947,618.34 67,838,466.80 Metallurgy Residues Co., Ltd. Benxi Steel & Iron (Group) Accounts payable 20,877.51 20,440.35 Medical Department Benxi Steel & Iron (Group) Accounts payable Information and Automatic 46,163,591.79 40,858,004.25 Tech Co., Ltd. Benxi High-tech Drilling Tools Accounts payable 652,188.35 545,111.09 Manufacture Co., Ltd. Liaoning Metallurgy Technician Accounts payable 11,679,069.18 13,042,942.26 College Liaoning Bengang Steel & Iron Accounts payable Trading Co., Ltd. Benxi Steel & Iron (Group) Accounts payable 115,322.99 108,353.68 Thermal Power Development 187 Bengang Steel Plates Co., Ltd. Semi-Annual Report 2017 Co., Ltd. Benxi Steel & Iron (Group) Accounts payable Zhengtai Construction 239,187.21 351,984.00 Materials Co., Ltd. Liaoning Hengtong Accounts payable Metallurgical Equipment 27,381,156.15 28,345,263.60 Manufacture Co., Ltd. Liaoning Metallurgy Technician Accounts payable 3,400,575.41 3,064,133.55 College Bengang Cold-rolled Stainless Accounts payable 544,494.82 607,335.86 Steel Dandong Co., Ltd. Liaoning Hengtai Heavy Accounts payable 14,429,696.43 16,153,790.49 Machinery Co., Ltd. Benxi Steel & Iron (Group) Accounts payable Plant Construction Supervisor 47,207.48 49,955.00 Co., Ltd. Accounts payable Bengang Group Co., Ltd. 5,626.56 4,717.26 Subtotal 2,398,419,385.00 2,890,427,235.93 Benxi Steel & Iron (Group) Advance from customers Machinery Manufacture Co., 758,322.02 683,249.32 Ltd. Benxi Steel & Iron (Group) Advance from customers Industrial Development Co., 2,280,187.93 2,054,478.78 Ltd. Benxi Steel & Iron (Group) Advance from customers 1,896,198.24 1,567,300.28 Metallurgy Residues Co., Ltd. Benxi Steel & Iron (Group) Advance from customers Steel & Iron Process and 5,921,216.77 7,418,119.01 Logistics Co., Ltd. Dalian Boluole Steel Tube Co., Advance from customers 882,512.73 1,377,911.64 Ltd. Liaoning Bengang Steel & Iron Advance from customers 66,237,222.08 87,655,913.68 Trading Co., Ltd. Liaoning Hengtong Advance from customers Metallurgical Equipment 186,387.64 640,854.91 Manufacture Co., Ltd. Liaoning Hengtai Heavy Advance from customers Machinery Co., Ltd. Advance from customers Benxi Steel & Iron (Group) 188 Bengang Steel Plates Co., Ltd. Semi-Annual Report 2017 Thermal Power Development Co., Ltd. Bengang Group International Advance from customers 69,021.17 69,021.17 Economic and Trading Co., Ltd. Suzhou Bengang Industrial Co., Advance from customers 31,129,090.40 18,849,730.95 Ltd. Subtotal 109,360,158.99 120,316,579.74 Benxi Steel & Iron (Group) Other payables Real-estate Development Co., 2,032,488.21 2,311,747.28 Ltd. Bengang Group International Other payables 27,984,077.05 22,209,584.96 Economic and Trading Co., Ltd. Benxi Steel & Iron (Group) Other payables Machinery Manufacture Co., 70,037.80 72,796.80 Ltd. Benxi Steel & Iron (Group) Other payables 5,171,112.35 5,279,716.11 Construction Co., Ltd. Benxi Steel & Iron (Group) Other payables Industrial Development Co., 2,013,845.68 1,796,857.20 Ltd. Benxi New Career Other payables 522,702.70 1,062,187.97 Development Co., Ltd. Benxi Steel & Iron (Group) Other payables 350,000.00 350,000.00 Metallurgy Residues Co., Ltd. Benxi Steel & Iron (Group) Other payables Medical Department Benxi Steel & Iron (Group) Other payables Information and Automatic 95,572.40 107,000.00 Tech Co., Ltd. Benxi Steel & Iron (Group) Other payables Steel & Iron Process and 1,069,085.08 1,349,684.48 Logistics Co., Ltd. Benxi Steel & Iron (Group) Co., Other payables 200,504,584.76 153,946,251.96 Ltd. Benxi Steel & Iron (Group) Other payables Thermal Power Development 939,138.72 1,127,701.72 Co., Ltd. Guangzhou Free Trade Zone Other payables 2,674,436.85 2,674,436.85 Bengang Sales Co., Ltd. 189 Bengang Steel Plates Co., Ltd. Semi-Annual Report 2017 Benxi Steel & Iron (Group) Other payables Plant Construction Supervisor 359,989.37 453,844.39 Co., Ltd. Liaoning Hengyi Financial Other payables 539,891.03 539,891.03 Leasing Co., Ltd. Liaoning Metallurgy Technician Other payables 3,000.00 3,000.00 College Subtotal 244,329,961.99 193,284,700.75 7. Related parties commitment None 8. Others None XIII. Commitments and Contingencies 1. Commitments Commitments at balance sheet date 1. Lease contracts in progress or to be performed and their financial impacts (1) For the land leased from the Company to the Group, price is RMB 0.624 per Square meter per month, and the area of the land is 7,669,068.17 square meters; hence annual rent is RMB 57.426 million. (2) For the 2300 hot rolling product line leased from the Group to the Company, lease period lasts from 1 January 2015 to 31 December 2017. Lease charges are negotiated between the lessor and the lessee based on the original cost, depreciation, and national taxation of the product line, with consideration of conditions of production and equipment performance. (3) For the 1780 hot rolling product line leased from Benxi Beiying Steel & Iron (Group) Co., Ltd. to the Company, the lease period lasts from 1 January 2017 to 31 December 2019. Lease charges are negotiated between the lessor and the lessee based on the original cost, depreciation, and national taxation of the product line, with consideration of conditions of production and equipment performance. For details of above leasing conditions please refer to Note 9 (4) 2. 2. Contingencies (1) Significant contingency at balance sheet date At the balance sheet date, no significant contingencies need to be disclosed. 190 Bengang Steel Plates Co., Ltd. Semi-Annual Report 2017 (2) The Company have no significant contingency to disclose, also should be stated At the balance sheet date, no significant contingencies need to be disclosed. 2. Others XIV. Subsequent events 1. Significant events had not adjusted Unit: Yuan Influence number to the Reason of unable to estimate Items Content financial position and operating influence number results 2. Profit distribution after the reporting period 3. Sales return 4. Other significant events (1) Segment information Since the Company’s main product is steel with other products accounting for only a small proportion, and the main production base is located in Liaoning area, segmented reporting is not applicable. (2) Financial lease For prioritizing the capital structure and exploring financing channel, on 20 April 2015, the Company signed the “Financial lease cooperation framework” with Liaoning Hengyi Financial Leasing Co., Ltd. with the amount of financial lease not exceeding RMB 5,000 million. The Company obtains the fund through sales and lease back financial lease with interest rate not above the benchmark interest rate of loan over the same period published by the People’s bank of China and the interest rate will be adjusted with the changes of benchmark interest rate of loan published by the People’s bank of China over the lease term. The term of financial lease shall not exceed 36 months On 28 December 2016, the Company signed the “Financing lease back after sales contract” (Contract No. 2016HYZL0006-ZL-01). The purchase price of the leased asset is RMB 210,000,000. 00. Lease period is one year starting from 28 March 2016. Lease rate was 4.35% when signing the contract. (3) On 27 December 2016, as the 1st extraordinary Shareholders’ general meeting approves “the proposal of the non-public offering of A shares program of the Company (December 2016 revised edition) ”, the Company considers to undertake the non-public offering shares to particular investors and thus raise capital of RMB 4 billion. The Company raises funds mainly for the purpose of high strength cold rolling steel renovation project, the third cold rolling work hot-dip galvanizing production line project, and repaying bank loans. Legal procedures are being reviewed for approval 191 Bengang Steel Plates Co., Ltd. Semi-Annual Report 2017 (4) As at 30 June 2017, the controlling shareholder Benxi Steel & Iron (Group) Co., Ltd. held a total number of 1,251,000,000 shares pledged, accounting for 39.89% of the total number of shares of the Company. XV. Other significant events 1. The accounting errors correction in previous period (1) Retrospective restatement Unit: Yuan Name of the influenced report Content Processing program Cumulative impact items during comparison period (2) Prospective application Content Processing program Reason of adopting prospective application 2. Debt restructuring 3. Replacement of assets (1) Non-monetary assets exchange (2) Other assets replacement 4. Pension plan 5. Discontinuing operation Unit: Yuan Termination of the business Income tax profits Items Revenue Expenses Total profit Net Profit expense attributable to the parent company owner Notes 192 Bengang Steel Plates Co., Ltd. Semi-Annual Report 2017 6. Segment information (1) Recognition basis and accounting policies of reportable segment (2) Financial information of segment Unit: Yuan Items Offset in segment Total (3) There was no reportable segment, or the total amount of assets and liabilities of each part of reportable segment, shall disclose the reason. (4) Notes 7. Other important transactions and events have an impact on investor’s decision-making 8. Others XVI. Notes to the financial statements of parent company 1. Accounts receivable (1) Accounts receivable disclosed by category Unit: Yuan Ending balance Beginning balance Provision for bad Total net Carrying amount Carrying amount Provision for bad debts Total net debts book Category book value Bad value of Percenta Percenta Bad debts of Fixed Amount Amount debts Fixed Amount Amount ge ge ratio assets ratio assets Accounts receivable 689,888, 197,950, 491,938,1 658,679 203,609,5 455,070,30 tested for impairment 100.00% 28.69% 100.00% 30.91% 707.86 562.42 45.44 ,865.43 63.43 2.00 by portfolio 689,888, 197,950, 491,938,1 658,679 203,609,5 455,070,30 Total 100.00% 28.69% 100.00% 30.91% 707.86 562.42 45.44 ,865.43 63.43 2.00 Receivable accounts with large amount individually and bad debt provisions were provided: □ Applicable √ Not applicable Accounts receivables tested for impairment by portfolio using the method of Aging analysis: √ Applicable □ Not applicable Unit: Yuan 193 Bengang Steel Plates Co., Ltd. Semi-Annual Report 2017 Ending balance Aging Accounts receivable Provision for bad debts Bad debts ratio Within 1 year (inclusive) 337,110,882.55 Subtotal of within 1 year 337,110,882.55 1-2 years 138,635,838.56 6,931,791.93 5.00% 2-3 years 28,904,020.32 5,780,804.06 20.00% Over 3 years 185,237,966.42 185,237,966.42 100.00% Total 689,888,707.86 197,950,562.42 28.69% Notes: 1. The recognition and provision for bad debts for the individually significant receivables: The recognition standard of bad debts provision for the individually significant receivables: Individually significant receivables refer to accounts receivable over RMB10 million or other receivables over RMB 5 million. The provision for bad debts for the individually significant receivables: The impairment test shall be assessed individually for each individually significant receivable. If the there is evidence indicating the receivables have been impaired, the difference between the present value of the future cash flows and the book value of receivables shall be recognized as bad debts provision and shall be recorded into the profits and losses at the current period. 2. The recognition and provision for bad debts for the receivables in portfolio: Criteria for Recognition of Portfolio Portfolio: Insignificant amount of receivables and unadjusted individual receivables Recognition and provision for bad debts for portfolio Portfolio: Aging analysis method Aging analysis method for bad debts provision: Aging Bad debts ratio for accounts Bad debts ratio for other receivable (%) receivables (%) Within 1 year (inclusive) 1-2 years (inclusive) 5 5 2-3 years (inclusive) 20 20 Over 3 years 100 100 3. Insignificant individual amounts of accounts receivable that recognize bad debts individually: (1) Reasons for individual recognition and provision of bad debts. Accounts receivable amount is proved to be unrecoverable with conclusive evidence. (2) Method of bad debts recognition and provision If conclusive evidence shows the possibility of recovering the amount is small, recognize bad debts individually as if the amount is unrecoverable. Receivable accounts on which bad debt provisions are provided on percentage analyze basis in a portfolio: □ Applicable √ Not applicable Receivable accounts on which bad debt provisions are provided by other ways in the portfolio: 194 Bengang Steel Plates Co., Ltd. Semi-Annual Report 2017 (2) Information of provision, reversal or recovery of bad debts of current period The provision of bad debts of current period is RMB0.00;Bad debt provision written back was RMB 5,659,001.01 in the period. Significant items of retrieving or writing back of bad debt provisions: Unit: Yuan Company Amount retrieved or written back way of retrieving (3) Receivable accounts actually written off in the report period Unit: Yuan Items Amount written off Significant amount written off: Unit: Yuan Property of the Reason of writing Written off Created by related Company Amount written off receivable account off procedures transaction or not Statement on writing off of receivable accounts: (4) Top five debtors at the year-end Ending balance Company Percentage of total Provision for Amount Accounts receivable (%) bad debts Benxi Nanfen Xinhe Metallurgical Co., Ltd. 87,396,378.47 12.67 4,368,958.76 Benxi Steel & Iron (Group) Machinery Manufacture Co., 52,584,877.55 7.62 6,252,766.59 Ltd. Hua You Steel Pipe Co., Ltd. 29,732,876.07 4.31 29,616,623.65 Ningbo CIMC Logistics Equipment Co., Ltd. 21,855,329.22 3.17 Benxi Steel & Iron (Group) Industrial Development Co., 19,023,387.89 2.76 Ltd. Total 210,592,849.20 30.53 42,290,507.72 (5) Recognition of receivable accounts terminated (6) The amount of the assets and liabilities formed by the transfer and the continues involvement of accounts receivable Notes: 195 Bengang Steel Plates Co., Ltd. Semi-Annual Report 2017 2. Other receivables (1) Other receivables disclosed by category Unit: Yuan Ending balance Beginning balance Provision for bad Carrying amount Carrying amount Provision for bad debts debts Net Category Net Book Bad Book Percenta Percenta Bad debts Value Amount Amount debts Value Amount Amount ge ge ratio ratio Accounts receivable 236,478, 62,189,3 174,288,6 271,534 63,184,24 208,349,80 tested for impairment 99.27% 23.27% 99.36% 23.27% 074.50 92.14 82.36 ,044.90 0.02 4.88 by portfolio Other insignificant items but tested for 1,740,00 1,740,000 1,740,0 1,740,000.0 0.73% 0.64% impairment 0.00 .00 00.00 0 individually 238,218, 62,189,3 176,028,6 273,274 63,184,24 210,089,80 Total 100.00% 26.11% 100.00% 23.12% 074.50 92.14 82.36 ,044.90 0.02 4.88 Other receivable accounts with large amount and were provided bad debt provisions individually at end of period. □ Applicable √ Not applicable Other receivables tested for impairment by portfolio using the method of Aging analysis: √ Applicable □ Not applicable Unit: Yuan Ending balance Aging Other receivables Provision for bad debts Bad debts ratio Within 1 year (inclusive) 164,487,738.98 Subtotal of within 1 year 164,487,738.98 1-2 years 6,663,168.20 333,158.41 5.00% 2-3 years 4,338,666.99 867,733.40 20.00% Over 3 years 60,988,500.33 60,988,500.33 100.00% Total 236,478,074.50 62,189,392.14 26.30% Notes: 1. The recognition and provision for bad debts for the individually significant receivables: The recognition standard of bad debts provision for the individually significant receivables: Individually significant receivables refer to accounts receivable over RMB10 million or other receivables over RMB 5 million. 196 Bengang Steel Plates Co., Ltd. Semi-Annual Report 2017 The provision for bad debts for the individually significant receivables: The impairment test shall be assessed individually for each individually significant receivable. If the there is evidence indicating the receivables have been impaired, the difference between the present value of the future cash flows and the book value of receivables shall be recognized as bad debts provision and shall be recorded into the profits and losses at the current period. 2. The recognition and provision for bad debts for the receivables in portfolio: Criteria for Recognition of Portfolio Portfolio: Insignificant amount of receivables and unadjusted individual receivables Recognition and provision for bad debts for portfolio Portfolio: Aging analysis method Aging analysis method for bad debts provision: Aging Bad debts ratio for accounts Bad debts ratio for other receivable (%) receivables (%) Within 1 year (inclusive) 1-2 years (inclusive) 5 5 2-3 years (inclusive) 20 20 Over 3 years 100 100 3. Insignificant individual amounts of accounts receivable that recognize bad debts individually: (1) Reasons for individual recognition and provision of bad debts. Accounts receivable amount is proved to be unrecoverable with conclusive evidence. (2) Method of bad debts recognition and provision If conclusive evidence shows the possibility of recovering the amount is small, recognize bad debts individually as if the amount is unrecoverable. Provision of bad debts under the percentage of balance method: □ Applicable √ Not applicable Provision of bad debts under other methods: □ Applicable √ Not applicable (2) Information of provision, reversal or recovery of bad debts of current period The provision of bad debts of current period is RMB0.00;Bad debt provision written back was RMB 994,847.88 in the period. There into, the significant bad debt provision written back or retrieved during the current period: Unit: Yuan Company Amount of written back or retrieving way of retrieving (3) Receivable accounts written back or retrieved in the report period Unit: Yuan Items Amount written off Significant other receivables: Unit: Yuan 197 Bengang Steel Plates Co., Ltd. Semi-Annual Report 2017 Reason of writing Written off Created by related Company Property of account Amount written off off procedures transaction or not Notes: (4) Other receivables disclosed by nature Unit: Yuan Nature Ending balance Beginning balance Accounts 227,525,677.56 259,660,295.88 Export tax rebate 0.00 4,990,848.26 Others 10,692,396.94 8,622,900.76 Total 238,218,074.50 273,274,044.90 (5) Top five debtors at the year-end Unit: Yuan Percentage of total Provision for bad Company Nature or content Ending balance Aging other receivables debts Ending balance Benxi Steel &Iron (Group) Machinery Accounts 4,610,543.21 Within 1 year 1.94% Manufacturing Co., Ltd. Huozhou Coal and Electricity Group Co., Accounts 4,341,257.18 Over 3 years 1.82% 4,341,257.18 Ltd. State Grid Liaoning Power Supply Co., Accounts 3,530,637.67 Within 1 year 1.48% Ltd. Benxi Branch Benxi Steel & Iron (Group) Real-estate Accounts 2,511,984.11 3 年以内 1.05% 173,991.52 Development Co., Ltd. Liaoning Huawei Coal Preparation Co., Accounts 2,261,360.00 Over 3 years 0.95% 2,261,360.00 Ltd. Total -- 17,255,782.17 -- 7.24% 6,776,608.70 (6) Receivable accounts involving the government Unit: Yuan 198 Bengang Steel Plates Co., Ltd. Semi-Annual Report 2017 Government Subsidies Predicted time and Company Ending balance Age at end of period Items Name amount of receiving (7) De-recognition other receivables due to financial assets transfer (8) Assets and liabilities formed by transferring and continuous involvement of other receivables Notes: 3. Long-term equity investments Unit: Yuan Ending balance Beginning balance Items Carrying amount Total impairment Book value Carrying amount Total impairment Book value Investment to 1,751,981,902.16 1,751,981,902.16 1,700,981,902.16 1,700,981,902.16 subsidiaries Total 1,751,981,902.16 1,751,981,902.16 1,700,981,902.16 1,700,981,902.16 (1) Investment to subsidiaries Unit: Yuan Ending balance of Company invested Beginning Provision for Increase Decrease Ending balance provision for in balance impairment impairment Guangzhou Bengang Steel & 1,000,000.00 1,000,000.00 Iron Trading Co., Ltd. Shanghai Bengang Metallurgy Science and 19,200,000.00 19,200,000.00 Technology Co., Ltd. Bengang Steel Plate Liaoyang 529,899,801.38 529,899,801.38 Orel Ball Co., Ltd. Dalian Benruitong Automobile Material 65,000,000.00 65,000,000.00 Technologies Co., Ltd. 199 Bengang Steel Plates Co., Ltd. Semi-Annual Report 2017 Bengang Puxiang Cool Rolling Steel 1,019,781,571.10 1,019,781,571.10 Sheet Co., Ltd. Changchun Bengang Steel & -1,355,124.64 -1,355,124.64 Iron Sales Co., Ltd. Harbin Bengang Economic and 423,398.23 423,398.23 Trading Co., Ltd. Nanjing Bengang Steel Material 2,081,400.65 2,081,400.65 Sales Ltd. Wuxi Bengang Steel & Iron Sales 936,718.57 936,718.57 Co., Ltd. Xiamen Bengang Steel & Iron Sales 1,095,711.66 1,095,711.66 Co., Ltd. Yantai Bengang Steel & Iron Sales 19,600,329.41 19,600,329.41 Co., Ltd. Tianjin Bengang Steel & Iron 33,318,095.80 33,318,095.80 Trading Co., Ltd. Benxi Bengang Steel Sales Co., 5,000,000.00 5,000,000.00 Ltd Shenyang Bengang Metallurgical 5,000,000.00 5,000,000.00 Science and Technology Co., Ltd. Bengang Baojin(Shenyang) 51,000,000.00 51,000,000.00 Automobile New Material Co, Ltd. Total 1,700,981,902.16 51,000,000.00 1,751,981,902.16 200 Bengang Steel Plates Co., Ltd. Semi-Annual Report 2017 (2) Investment to joint venture and associated enterprise Unit: Yuan Changes Ending Adjustme balance Investme nt of Declarati of Beginnin Add Reduce nt income Other Provision Ending Name other on of cash provision g balance investmen investmen under equity impairme Others balance comprehe dividends for t t equity changes nt nsive or profit impairme method income nt 1. Joint venture 2. Associated enterprise (3) Notes 4. Operating income and operating cost Unit: Yuan January to June 2017 January to June 2016 Items Revenue Cost Revenue Cost Principal business 19,350,686,493.45 17,842,348,026.16 12,051,859,180.54 10,706,509,048.28 Other business 1,846,830,285.75 1,640,628,048.16 1,133,529,266.65 1,023,377,735.93 Total 21,197,516,779.20 19,482,976,074.32 13,185,388,447.19 11,729,886,784.21 Notes: 5. Income on investment Unit: Yuan Items January to June 2017 January to June 2016 Income from long-term equity investment 102,074,634.76 13,713,328.45 (cost method) Income from bank short-term financial 3,294,593.14 products Total 105,369,227.90 13,713,328.45 201 Bengang Steel Plates Co., Ltd. Semi-Annual Report 2017 6. Others XVII. Supplementary information 1. Details of non-recurring profit and loss √ Applicable □ Not applicable Unit: Yuan Items January to June 2017 Notes Profit or loss from disposal of non-current -1,578,126.30 assets Details of government subsidies recorded into current profits and loss(except such government subsidy closely related to the company’s normal business operation,, 15,047,000.00 meeting the regulation of national policy and enjoyed constantly in certain quota or quantity according to a certain standard) Profit or loss from investment or assets 3,294,593.14 entrusted to others Profit or loss from debt restructuring 822,116.45 Other non-operating revenue and 2,130,078.13 expenditure other than above items Less: Impact of income tax 4,928,915.36 Impact of minority interests 24,516.32 Total 14,762,229.74 -- For the Company’s non-recurring profit and loss items as defined in “the Explanatory Announcement No.1 on information disclosure for Companies Offering their Securities to the Public-Non-recurring Profits and Losses” and its non-recurring profit and loss items as illustrated in “the Explanatory Announcement No.1 on information disclosure for Companies Offering their Securities to the Public-Non-recurring Profits and Losses” which have been defined as recurring profits and losses, it is necessary to explain the reason. □ Applicable √ Not applicable 2. Net asset yield and earnings per share Earnings per share Diluted gains per Profit in the Reporting Period Weighted average net assets yield (%) Basic earnings per share(RMB/Share) share(RMB/Share) (RMB/Share) Net profit attributable to ordinary 4.04% 0.167 0.167 202 Bengang Steel Plates Co., Ltd. Semi-Annual Report 2017 shareholders Net profit attributable to ordinary shareholders after deducting 3.92% 0.162 0.162 non-recurring profit and loss 3. The differences between domestic and international accounting standards (1) Simultaneously pursuant to both Chinese accounting standards and international accounting standards disclosed in the financial reports of differences in net income and net assets. √ Applicable □ Not applicable Unit: Yuan Net Profit Net assets 2016 2015 Ending balance Beginning balance According to CAS 523,635,653.57 182,538,176.32 13,249,274,456.60 12,715,354,551.15 Items and amount adjusted according to IAS: (2) Differences of net profit and net assets disclosed in financial reports prepared under overseas and Chinese accounting standards. □ Applicable √ Not applicable (3) Accounting data differences between domestic and foreign accounting standards,if the differences has already been adjusted by the foreign audit agency shall indicate the name of the agency. 4. Others 203 Bengang Steel Plates Co., Ltd. Semi-Annual Report 2017 XI. Documents available for inspection 1. Financial Statements signed and stamped by the legal representative, CFO, and accounting manager; 2. All of the original copies of documents and announcements that have been published on China Securities Journal, Securities Times, and Hong Kong Commercial Daily. 204