Bengang Steel Plates Co., Ltd. Annual Report 2018
Bengang Steel Plates Co., Ltd.
Annual Report 2018
April, 2019
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Bengang Steel Plates Co., Ltd. Annual Report 2018
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.
Gao Lie, chairman of the Company, Shen Qiang, Chief financial officer, and Zhao
Zhonghua, the person in charge of the accounting department (the person in charge of
the accounting), 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 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 takes existing share capital 3,875,371,532.00 shares as the base,
distributing cash dividends 0.5 Yuan per 10 shares (including tax), and distributing
bonus dividends 0 to shareholders. The Company will not converse capital reserve to
share capital.
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Bengang Steel Plates Co., Ltd. Annual Report 2018
Table of Contents
I. Important Notice, Table of Contents, and Definitions ...................................................................... 2
II. Company Profile and Main Financial Index ................................................................................... 5
III. Company Business Summary ........................................................................................................ 9
IV. Management Discussion and Analysis ......................................................................................... 12
V. Important Events ............................................................................................................................ 24
VI. Status of Share Capital Changes and Shareholders ..................................................................... 49
VII. Status of Preferred Shares .......................................................................................................... 55
VIII. Status of Directors, Supervisors, Senior Executives and Employees ....................................... 56
IX. Corporate Governance ................................................................................................................. 64
X. Relevant Information about Corporate Bonds .............................................................................. 70
XI. Financial Report ........................................................................................................................... 71
XII. Documents available for inspection ......................................................................................... 186
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Bengang Steel Plates Co., Ltd. Annual Report 2018
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.
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Bengang Steel Plates Co., Ltd. Annual Report 2018
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 Gao Lie
Registration Address No.16, Renmin Road, Pingshan District, Benxi City, Liaoning Province
Post Code of registration Address 117000
Office address No.16, Renmin Road, Pingshan District, Benxi City, Liaoning Province
Post Code of office address 117000
Web Address None
Email bgbcdm@163.com
II. Contact Information
Secretary of Board of Directors Representative of Securities Affairs
Name Gao Desheng
No.16, Renmin Road, Pingshan District,
Address
Benxi City, Liaoning Province
Tel 024-47827003
Fax 024-47827004
Email bgbcdm@163.com
III. Information Disclosure and Place for Consulting
Press media for information disclosure China Securities Journal, Securities Times, Hong Kong Commercial Daily
Web address for the annual report as assigned by
http://www.cninfo.com.cn
CSRC
Place for inquiry of the annual report Secretary Office of the Board, Bengang Steel Plate Co., Ltd.
IV. Change of Business Registration
Organization Code 91210000242690243E
Changes of principal business activities since listing (if any) No change
Changes of the controlling shareholder in the past (is any) No change
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Bengang Steel Plates Co., Ltd. Annual Report 2018
V. Other Information
Accountants’ firm engaged by the Company:
Name of the accountants’ firm BDO China Shu Lun Pan Certified Public Accountants LLP
Address of the accountants’ firm Address: 4/F 61 Nanjing Rd. East, Huangpu, Shanghai
Signing name of accountants Wu Xue, Li Guiying
Sponsor engaged by the Company to conduct sustained supervision during the reporting period
√ Applicable □ Not applicable
Address of the sponsor Name of the sponsor
Name of the sponsor institution Sustained supervision period
institution representative
Shenwan Hongyuan Securities
No. 19, Taiping Bridge Street, March 5th, 2018 to December
Underwriting Sponsoring Co., Zhang Wei, Liu Guoku
Xicheng District, Beijing 31th, 2019
Ltd.
Financial consultancy institution engaged by the Company to conduct sustained supervision during the reporting period
□ Applicable √ Not applicable
VI. Main Accounting Data and Financial Index
Whether the Company makes retroactive adjustment or restatement of the accounting data of the last years due to change of the
accounting policy and correction of accounting errors
□ Yes √ No
Changed over last
2018 2017 2016
year
Operating income（RMB） 50,181,869,721.54 40,507,855,843.72 23.88% 29,526,012,651.08
Net profit attributable to the shareholders
1,036,493,236.07 1,600,110,229.77 -35.22% 781,296,452.51
of the listed company（RMB）
Net profit after deducting of non-recurring
gain/loss attributable to the shareholders 1,093,065,140.59 1,607,675,869.15 -32.01% 747,690,316.58
of listed company（RMB）
Net Cash flow generated by business
3,619,937,841.93 2,744,243,492.51 31.91% 9,557,419,076.92
operation（RMB）
Basic earnings per share (RMB/Share) 0.272 0.510 -46.67% 0.249
Diluted gains per share (RMB/Share) 0.272 0.510 -46.67% 0.249
Weighted average net assets yield 5.64% 11.84% -6.20% 6.34%
Changed over last
End of 2018 End of 2017 End of 2016
year
Gross assets（RMB） 59,632,504,915.83 62,998,143,513.02 -5.34% 54,197,775,889.31
Net assets attributable to shareholders of
19,126,258,116.67 14,315,588,729.00 33.60% 12,757,376,174.34
the listed company（RMB）
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Bengang Steel Plates Co., Ltd. Annual Report 2018
VII. 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
2018 2017 Ending balance Beginning balance
According to Chinese
1,036,493,236.07 1,600,110,229.77 19,126,258,116.67 14,315,588,729.00
accounting standards
Items and amounts adjusted according to IFRS: No difference
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. Reasons of differences between domestic and foreign accounting standards
□ Applicable √ Not applicable
VIII. Main Financial Index by Quarters
Unit: Yuan
First quarter Second quarter Third quarter Fourth quarter
Operation income 11,641,518,226.15 11,799,729,150.99 13,313,390,671.44 13,427,231,672.96
Net profit attributable to the
350,629,492.24 406,322,495.35 68,230,224.01 211,311,024.47
shareholders of the listed company
Net profit after deducting
non-recurring gain/loss attributable
347,300,210.06 377,622,745.92 51,745,834.18 316,396,350.43
to the shareholders of listed
company
Net cash flows generated by
-8,871,507,868.81 730,519,741.47 6,933,467,399.98 3,619,937,841.93
operating activities
Whether significant variances exist between the above financial index or the index with its sum and the financial index of the
quarterly report as well as semi-annual report index disclosed by the Company
□ Yes √ No
IX. Items and Amount of Non-recurring Profits and Losses
√ Applicable □ Not applicable
Unit: Yuan
Item 2018 2017 2016 Notes
Gains and losses on disposal of non-current
assets (including the write off part of the -148,409,630.35 -65,886,612.10 -1,854,918.03
provision for impairment)
Government subsidy attributable to profit and
loss of current period (except such 86,085,297.03 39,086,900.00 36,089,000.00
government subsidy closely related to the
company's normal business operation,
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Bengang Steel Plates Co., Ltd. Annual Report 2018
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
5,041,397.26 1,715,742.47
assets entrusted to others
Gains and losses of debt restructuring 4,725,936.17 8,631,844.34
Net profit of loss of the current period from
beginning of the period to the combination
24,668.65
date of subsidiaries generated from business
combination under common control
Other non-operating income and expenses
771,191.90 14,538,002.49 663,844.36
other than above
Less: impact of income tax 22,141.38 162,375.42 11,311,378.29
impact of minority equity (after tax) 38,018.98 -107,840.83 327,998.92
Total -56,571,904.52 -7,565,639.38 33,606,135.93 --
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.
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Bengang Steel Plates Co., Ltd. Annual Report 2018
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
(1) During the reporting period, the company's main business activities include steel smelting, rolling processing, power generation,
coal chemical industry, special steel profiles, railways, import and export trade, scientific research, and product sales. The
introduction of world advanced equipment technology has enabled the implementation of equipment upgrades for the steel industry.
The Company has built a fine steel base, formed more than 60 varieties, more than 7500 series of product specifications, high
value-added and high-tech product ratio reached more than 80%, automotive surface panels, household appliances, oil pipeline steel,
container board Shipboard and other leading products are widely used in automobiles, home appliances, petrochemicals, aerospace,
machinery manufacturing, energy transportation, construction and decoration, and metal products, and are exported to more than 60
countries and regions.
During the reporting period, the Company further strengthened technical research, continuously discovered potentials and
dramatically increased efficiency, and promoted a substantial increase in production efficiency. The output of some varieties and the
record of daily output and class output were continuously refreshed. A series of indicators all reached the best level in history, and the
quality of the Company’s development was significantly improved. At the same time, the Company adapts to the new requirements
of the national environmental protection policy, identifies the responsibility for environmental protection work, and achieves
controllable pollution discharge through the strengthening of environmental protection facilities, the implementation of pollutant
discharge standards, and the improvement of automatic online monitoring facilities. The deployment was completed to meet the
central environmental protection inspectors to inspect the work. In addition, 56 new auto market certification grades have added. The
Company has passed the Mercedes-Benz and BMW auto market certifications, and successfully entered the world's top auto brands
such as Ford, Fiat and Renault, marking the company's qualifications and capabilities to supply world-class auto companies. This is a
milestone for the Company.
During the reporting period, the main performance drivers were: strongly promoted the second phase of the “four determinants” work,
orderly promoted all employees to compete for posts and ‘last out’ system, and the work efficiency was improved significantly.
Basically established a “de-administrative” broadband salary system, which simplifies the salary structure, broadens the promotion
path, and improves the performance management system for all employees and the evaluation method for employee performance. At
the same time, around the process improvement, product structure adjustment and energy conservation and emission reduction, the
construction of key project renovation projects was accelerated. The No. 5 blast furnace of the Company was successfully opened in
one time after 77 days of overhaul. The new No. 1 blast furnace of the Company completed the maintenance task 7 days ahead of
schedule, creating a number of historical records of the same type of blast furnace renovation construction in China. The special steel
factory of the Company researched and implemented the project construction and improvement of the initial rolling zone based on
the requirements of high-quality development, and promoted the transformation and upgrading of the Company. In addition, the
Company’s non-public offering raised 4 billion yuan, which is the first time in the past 20 years to refinance in the capital market.
No significant change occurred during the reporting period.
(2) During the reporting period, China's macro-economy sustained its steady growth. Under the strong promotion of the state's
continuous supply-side structural reform, the prohibition of new production capacity and the prevention of the resurgence of
‘substandard steel products’, China's steel industry has achieved steady progress. Although it is affected to some extent by China-US
trade frictions, steel prices are generally stable and remain within a reasonable range. In particular, Present Xi made an important
speech during the inspection tour in Liaoning and in the in-depth promotion of the Northeast Revitalization Symposium. The speech
directed the orientation of the revitalization of the Northeast in the new era and led the navigation. It also created a rare historical
opportunity for the Company's development. The Company adheres to the supply-side structural reform as the main line, persists in
the general keynote of steady progress, firmly establishes and practices new concepts of development. It implements high-quality
development requirements, achieves stable growth of major economic indicators, and continuously improves comprehensive
competitive strengths. The Company’s status in the industry is standing.
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Bengang Steel Plates Co., Ltd. Annual Report 2018
II. Major Changes in Main Assets
1. Major Changes in Main Assets
Main assets Notes to major changes
The balance at 31 December 2018 is RMB 836,594.50 thousand and it has decreased by
Construction in progress 65.09%, which is mainly caused by the part of Construction in progress transferred to
fixes assets.
The balance at 31 December 2018 is RMB 11,608.70 thousand and it has decreased by
Interest receivables 37.08% compared with beginning balance, which is mainly caused by the decreased of
interest receivables.
The balance at 31 December 2018 is RMB 292,119.80 thousand and it has decreased by
Other current assets 63.91% compared with beginning balance, which is mainly caused by the decreased of
bank financial products.
The balance at the 31 December 2018 is RMB 1,041,824.80 thousand and it has
increased by 26689.15%, which is mainly caused by the reason that the Company has
Available-for-sale financial assets
10% shareholding of a new joint stock company-Dongbei Special Steel Group Co., Ltd.
in current period.
The balance at the 31 December 2018 is RMB 76,342.00 thousand and it has decreased
Other non-current assets by 92.85%, which is because that the investment to East North Special Steel Co., Ltd is
adjusted to available-for-sale financial assets.
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 2018, in response to the national industrial revitalization and development policy, and the supply-side structural reform, the
Company carefully planned a new round of technological transformation. The Company implemented technical transformation
projects construction in terms of variety aspects such as structure adjustment, new material research and development, green and
intelligent manufacturing, and capacity replacement. The construction will promote the development of high quality, green and
intelligent enterprise. The Company successfully joined the China Automotive Engineering Society and the Corrosion-resistant Steel
Industry Technology Innovation Strategic Alliance, and actively integrated into the national technology innovation system;
coordinated provincial and municipal departments to promote Hengtong's national high-tech enterprise identification work, and
encourage the Company to enjoy the national tax reduction and exemption policy. The Company completed the annual assessment of
the national technical center and six provincial enterprises technology centers, and the ranking was greatly improved. Strengthen
foreign technical communication and cooperation, apply for major national and provincial science and technology projects through
multiple ways. The Company declared a total of 36 government projects, including 6 national-level projects, 27 provincial-level
projects and 3 other organization projects. 15 projects were approved. A total of 1.25 million government funding was obtained.
In order to comprehensively improve the level of technological innovation and profitability, strengthen product variety adjustment
and market development, improve product quality stability and assurance capabilities, promote low-cost and green manufacturing
technologies, the Company carried out 58 company-level functions around the three major factors of variety, quality and cost. Some
projects have achieved phased results.
In 2018, a total of 39 new products were developed, including 17 new automotive applications, 6 home appliances, 10 new products
for engineering structures, and 6 special steel products. Some varieties achieved batch supply. A total of 56 grades of products such as
cold rolling and galvanizing have been completed. Users include Mercedes-Benz, BMW, GM, Nissan, Ford, Fiat, Renault and other
global famous brands, which indicates that the Company has the qualification to supply world-class auto companies. ability. A total
of 131 patents were accepted by the State Intellectual Property Office throughout the year; a total of 26 patents were authorized by
the State Intellectual Property Office, including 15 inventions and 11 utility new models. There were 4 new registration software
products. Two invention patents were awarded to participate in the "China International Patent Exhibition".
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Bengang Steel Plates Co., Ltd. Annual Report 2018
The Company continued to promote industry-university-research and school-enterprise cooperation, signed a comprehensive
strategic cooperation agreement with Northeastern University, and organized the Company-Northeastern University to participate in
the School-Enterprise Cooperation Technical Matchmaking Meeting. Inviting nearly 80 teachers from Northeastern University, the
Company organized 8 sub-meeting venues for technical communication, and collect 69 projects. 28 cooperation projects were
initially identified. It has carried out comprehensive cooperation and matchmaking work with Liaoning University of Science and
Technology. The cooperation covers technical development, talents cultivation and platform construction. In addition, the Company
cooperated and communicated with Beijing University of Science and Technology, China Iron and Steel Research Institute, Institute
of Metals of Chinese Academy of Sciences, Shanghai University, etc. through multi-levels, multi-channels and multi-forms. The
cooperation and communication have accelerated the transformation of scientific and technological achievements into real
productivity.
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Bengang Steel Plates Co., Ltd. Annual Report 2018
IV. Management Discussion and Analysis
I. General
During the reporting period, the company adhered to Xi Jinping's new era of socialism with Chinese characteristics as
the guide, in-depth study and implementation of the spirit of the 19th Party Congress, adhere to the general tone of
steady progress, firmly establish and practice new development concepts, and implement high-quality development. At
the same time, under the strong support of the supply-side structural reform and the well-developed steel market, the
company entered a good momentum of sustained and stable development. The Company produced 8.4874 million tons
of pig iron in the whole year, which decreased by 2.21%, 8.9603 million tons of crude steel which increased by 0.89%,
11.4894 million tons of hot-rolled plate which decreased by 3.45%, 5.6053 million tons of cold-rolled sheet which
increased by 3%, and 0.6801 million tons of special steel which decreased by 6.06% compared to last period. The
company did not have any major personal accidents, major fire accidents or major equipment accidents throughout the
year. Looking back at the past year's production and operation process, we mainly completed the following work:
First, the Company went all out to improve quality and efficiency. The quality of enterprise development has been
significantly improved. The production record has been continuously refreshed. The project has been promoted
efficiently. The product development has been fruitful, and the brand influence has been continuously expanded.
Second, the Company solidly promoted the improvement of efficiency. The overall operation level of the enterprise is
comprehensively improved, effectively reduced the procurement cost, optimized the procurement management mode,
strengthened the dynamic management of suppliers, and strictly controlled the acceptance of materials. The Company
improved product profitability and vigorously promoted e-commerce sales. Strengthen the operation of fund and capital,
strengthen fund management, coordinate the use of funds, improve the efficiency of use, and optimize the capital
layout.
Third, the Company unswervingly deepened reforms, further enhanced the vitality of enterprise development,
vigorously promoted the work of “Four Sets”, promoted the recruitment and elimination of all employees in an orderly
manner, established a “de-administrative” broadband compensation system, and improved the performance
management system for all employees and staff performance evaluation method. The Company resolutely rectified the
work style, solidly carried out the work style assessment of the department, carried out work discipline inspection and
supervision work, set up a two-level "service staff hotline", and broadened the channels for optimizing public opinion
appeals. The Company promoted the handling of historical issues and accelerated the transfer of management rights and
asset transfers for the “three for one industry” assets.
Fourth, the Company constantly consolidated the management foundation, continuously optimized the company's
management and control processes, strengthened the management of rules and regulations, improved the corporate
governance system, strengthened the management system certification, and independently developed ERP upgrades.
The scientific research system has been continuously improved, the IATF16949 system revision audit has been
completed, the “production, study and research” R&D platform has been established. The Company joined into the
China Automotive Engineering Society and the Corrosion-Resistant Steel Industry Technology Innovation Strategic
Alliance. The Company continuously promoted school-enterprise cooperation. The safety management was effectively
strengthened, and the safety production responsibility system at all levels was comprehensively improved and
implemented, and the basic management of safety was strengthened. Continue to consolidate environmental
management, strengthen the stable operation of environmental protection facilities, implement pollutant discharge
standards, improve automatic online monitoring facilities, and conduct a second survey of pollution sources, steel
industry emission permit application, carbon emission verification, and environmental impact assessment of
construction projects. The talent management has been promoted in depth, and the channels have been widely recruited
to recruit talents who meet the needs of enterprise development, promote open competition and strengthen cadre
training.
II. Main Business Analysis
1. General
For relevant information please refer to “Management Discussion and Analysis 1. General”.
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Bengang Steel Plates Co., Ltd. Annual Report 2018
2. Income and Cost
(1) Components of Operating Income
Unit: Yuan
2018 2017 Change over last
Amount Proportion Amount Proportion year
Total operating income 50,181,869,721.54 100% 40,507,855,843.72 100% 23.88%
By industries
Industry 50,181,869,721.54 100.00% 40,507,855,843.72 100.00% 23.88%
By products
Steel plate 46,228,334,211.43 92.12% 37,488,231,200.04 92.55% 23.31%
Others 3,953,535,510.11 7.88% 3,019,624,643.68 7.45% 30.93%
By regions
Northeast 15,200,555,630.64 30.29% 12,039,186,774.85 29.72% 26.26%
North China 5,695,230,806.71 11.35% 5,345,627,433.43 13.20% 6.54%
East China 17,511,020,155.51 34.90% 11,602,151,558.67 28.64% 50.93%
Northwest 68,730,984.27 0.14% 65,574,747.86 0.16% 4.81%
Southwest 179,439,784.55 0.36% 121,903,398.49 0.30% 47.20%
Central south 29,348,279.57 0.06% 25,741,875.56 0.06% 14.01%
Export 11,497,544,080.29 22.90% 11,307,670,054.86 27.91% 1.68%
(2) Industry, Product and Regions Occupying the Company’s Operating Income or Profit over 10%
√ Applicable □ Not applicable
Whether the Company needs to comply with the disclosure requirement for special industry
No
Unit: Yuan
Operating income Operating profit Gross margin
Operating Income Operating profit Gross margin change over last change over last change over last
year year year
By industries
Industry 50,181,869,721.54 45,243,735,204.31 9.84% 23.88% 26.81% -2.08%
By products
Steel plate 46,228,334,211.43 41,947,082,227.94 9.26% 23.31% 27.33% -2.86%
Others 3,953,535,510.11 3,296,652,976.37 16.62% 30.93% 20.59% 7.15%
By regions
Northeast 15,200,555,630.64 13,838,195,282.28 8.96% 26.26% 29.47% -2.26%
North China 5,695,230,806.71 5,156,755,673.96 9.45% 6.54% 9.60% -2.54%
East China 17,511,020,155.51 15,752,152,615.84 10.04% 50.93% 54.18% -1.90%
Northwest 68,730,984.27 63,477,268.44 7.64% 4.81% 8.84% -3.42%
Southwest 179,439,784.55 162,256,076.23 9.58% 47.20% 51.12% -2.34%
Central south 29,348,279.57 26,546,325.81 9.55% 14.01% 16.58% -1.99%
Export 11,497,544,080.29 10,244,351,961.75 10.90% 1.68% 3.69% -1.73%
Operating data of recent one year according to adjusted statistics caliber at the year-end in the case that the Company's main business
statistics caliber has changed during the reporting period
□ Applicable √Not applicable
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Bengang Steel Plates Co., Ltd. Annual Report 2018
(3) Whether the Company’s Physical Sales Income Exceeded Service Income
√ Yes □ No
Change over last
Industry classification Item Unit 2018 2017
year
Sales ton 11,921,203.14 11,270,079.91 5.78%
Steel rolling processing
Production ton 11,778,658 11,336,966 3.90%
industry
Inventory ton 644,714.08 787,259.58 -18.11%
The main reasons that the relevant data changed more than 30%
□ Applicable √ Not applicable
(4) Performance of Significant Sales Contract Signed-up in this Reporting Period
□ Applicable √ Not applicable
(5) Components of Operating Cost
Industry classification
Unit: Yuan
Industry 2018 2017 Change over last
Item
classification Amount Proportion Amount Proportion year
Steel rolling
Raw material 21,947,301,201.20 48.51% 16,760,973,503.97 46.98% 1.53%
processing industry
Steel rolling Supplementary
2,042,667,624.99 4.51% 1,702,911,706.70 4.77% -0.26%
processing industry materials
Steel rolling Spare parts and
736,234,636.78 1.63% 510,752,659.98 1.43% 0.20%
processing industry tools
Steel rolling
Fuel 12,532,214,109.19 27.70% 9,604,880,159.74 26.92% 0.78%
processing industry
Steel rolling
Energy 2,851,020,001.46 6.30% 2,459,372,335.20 6.89% -0.59%
processing industry
Steel rolling Salary and
1,995,005,132.35 4.41% 1,892,325,541.52 5.30% -0.89%
processing industry benefits
Steel rolling
Depreciation 2,346,173,478.53 5.19% 2,020,739,760.10 5.66% -0.48%
processing industry
Steel rolling
Others 793,119,019.81 1.75% 726,024,503.52 2.03% -0.28%
processing industry
Steel rolling
Total 45,243,735,204.31 100.00% 35,677,980,170.73 100.00% 0.00%
processing industry
(6) Whether Changes Occurred in Consolidation Scope in the Reporting Period
□ Yes √No
(7) Relevant Information of Significant Changes or Adjustment of the Business, Product or Service in the
Reporting Period
□ Applicable √ Not applicable
(8) Information of Main Customers and Main Suppliers
Information of the Company’s main customers
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Bengang Steel Plates Co., Ltd. Annual Report 2018
Total sales amount of the top five customers (Yuan) 7,925,406,309.46
Total sales amount of the top five customers accounted for the
15.79%
proportion of total annual sales
The proportion of the total sales of the related parties in the
4.44%
top five customers
Information of the top 5 customers
No Name Amount (Yuan) Proportion
1 Benxi Beiying Steel & Iron (Group) Co., Ltd. 2,227,702,873.21 4.44%
2 Xiamen Jianfa Metals Co., Ltd. 1,682,768,907.78 3.35%
Shanghai Minxingda International Trading Co.,
3 1,572,092,746.56 3.13%
Ltd.
4 Ningbo AUX Trading Co., Ltd. 1,446,750,945.73 2.88%
5 Zhejiang Hang Lian Steel Co., Ltd. 996,090,836.18 1.98%
Total -- 7,925,406,309.46 15.79%
Other information of principal customers
□ Applicable √ Not applicable
Information of the Company’s main suppliers
Total purchase amount of the top five suppliers (Yuan) 26,235,194,747.64
Total purchase amount of the top five suppliers accounted for
57.99%
the proportion of total purchase
The proportion of the total purchase of the related parties in
44.25%
the top five suppliers
Information of the top 5 suppliers
No. Name Amount (Yuan) Proportion
1 Benxi Beiying Steel & Iron (Group) Co., Ltd. 15,980,734,063.34 35.32%
2 Benxi Steel & Iron (Group) Mining Co., Ltd. 4,039,099,444.66 8.93%
3 Heilongjiang Dragon Coal Group Co., Ltd. 2,686,319,470.24 5.94%
Liaoning Electric Power Co., Ltd. Benxi Electric
4 2,382,933,857.63 5.27%
Power Supply Company
5 Shenyang Coking Coal Co., Ltd. Sales Branch 1,146,107,911.77 2.53%
Total -- 26,235,194,747.64 57.99%
Other information of principal suppliers
□ Applicable √ Not applicable
3. Expenses
Unit: Yuan
Notes to significant
2018 2017 Change over last year
change
Selling and distribution expenses 1,135,004,470.47 1,184,294,573.92 -4.16%
General and administrative expenses 916,341,137.85 844,651,916.95 8.49%
Increase of exchange
Financial expenses 1,376,355,160.46 535,642,520.07 156.95% losses in the current
period
Research and development expenses 6,399,884.30 8,208,922.25
-22.04%
4. Research and Development Input
√ Applicable □ Not applicable
15
Bengang Steel Plates Co., Ltd. Annual Report 2018
56 key science and technology projects of the company level were issued, and the project was organized in an orderly manner.
Currently, 20 projects have been completed, 21 have been transferred, 8 have been postponed, 8 have been suspended or terminated,
and the completed projects have been accepted, evaluated and identified. The considerable economic benefits have improved the
grades and physical quality of the varieties, greatly improved the ability of varieties to increase profits, and made the "sales research
and production" more closely integrated, achieving integrated research and development and seamless docking.
A total of 36 government projects were declared, of which 6 were national-level projects; 27 were provincial-level projects; 3 were
organized by other associations, and 15 were approved. A total of 1.25 million government funding was obtained.
Information of research and development input by the company
2018 2017 Change over last year
Number of Research and
1,712 1,669 2.58%
Development personnel
Proportion of number of
Research and Development 9.51% 8.59% 0.92%
personnel
Amount of Research and
Development Investment (In 1,495,775,000.00 1,390,403,000.00 7.58%
RMB)
Proportion of Research and
Development investment to 2.98% 3.43% -0.45%
operating income
Amount of capitalized Research
0.00 0.00 0.00%
and Development investment
Proportion of capitalized
Research and Development
investment accounted to total 0.00% 0.00% 0.00%
Research and Development
investment
Illustrations of the prominent change in proportion of research and development input occupying the operating income over same
period last year
□ Applicable √ Not applicable
Illustrations of significant change in the research and development input’s capitalization rate and its reasonableness
□ Applicable √ Not applicable
5. Cash Flow
Unit: Yuan
Item 2018 2017 Change over last year
Subtotal of cash inflows from
42,888,958,869.76 39,077,319,940.56 9.75%
operating activities
Subtotal of cash outflows from
39,269,021,027.83 36,333,076,448.05 8.08%
operating activities
Net cash flows from operating
3,619,937,841.93 2,744,243,492.51 31.91%
activities
Subtotal of cash inflows from
684,483,213.49 427,294,593.14 60.19%
investing activities
Subtotal of cash outflows paid
761,988,848.56 2,343,736,950.05 -67.49%
for investing activities
Net cash flows from investing
-77,505,635.07 -1,916,442,356.91 95.96%
activities
Subtotal of cash inflows from
35,061,062,441.77 29,075,698,099.54 20.59%
financing activities
Subtotal of cash outflows from
39,211,589,467.82 29,785,971,645.05 31.64%
financing activities
Net cash flows from financing
-4,150,527,026.05 -710,273,545.51 -484.36%
activities
Net increase in cash and cash -565,028,156.96 -7,062,880.14 -7,899.97%
16
Bengang Steel Plates Co., Ltd. Annual Report 2018
equivalents
Illustrations of key factors of significant changes over same period last year
√ Applicable □Not applicable
Notes:
(1) Net cash flows from operating activities increased by 31.91% compared with the previous period, which
mainly due to the increase in cash received from sale of goods is more than the increase in cash paid for goods
and services.
(2) Subtotal of cash inflows from investing activities increased by 60.19% compared with the previous period,
which was mainly due to the increase in cash received from the purchase of finance products during the
period.
(3) Subtotal of cash outflows from investing activities decreased by 67.49% compared with the previous period,
mainly due to the decrease in cash paid for investment in the current period.
(4) Net cash flows from investing activities increased by 95.96% compared to the previous period, which mainly
due to the decrease in cash paid for investment in the current period.
(5) Subtotal of cash outflows from financing activities increased by 31.64% compared to the previous period,
mainly due to the increase in cash repayments of borrowings.
(6) Net cash flows from financing activities decreased by 484.36% compared to the previous period, mainly due
to the increase in cash repayments of borrowings.
Illustrations of significant difference between cash flow from operating activities and net profit during the reporting period
□ Applicable √Not applicable
III. Analysis of Non-core Business
√Applicable □ Not applicable
Unit: Yuan
Amount Proportion in total profit Explanation of cause Whether sustainable
Due to interest income from
Investment income 5,212,886.01 0.49% No
finance products
Due to provision of impairment of
Impairment of assets 37,147,168.61 3.52% No
finished products
Due to income raised from
Non-operating income 8,384,120.14 0.80% No
scrapping of non-current assets
Due to overhaul of the blast
Non-operating expenses 156,235,959.72 14.82% furnace and scrap of non-current No
assets
IV. Assets and Liabilities
Significant Change of Assets Components
Unit: Yuan
End of 2018 End of 2017
Notes to
Proportion in Proportion in Proportion
significant
Amount the total assets Amount the total assets change
change
(%) (%)
Cash at bank and on
16,567,471,755.77 27.78% 17,037,713,410.49 27.04% 0.74%
hand
Accounts receivable 639,482,481.45 1.07% 728,597,926.39 1.16% -0.09%
Inventories 10,677,747,112.40 17.91% 11,209,898,096.16 17.79% 0.12%
Long-term equity
2,455,681.55 0.00% 2,726,009.03 0.00% 0.00%
investment
Fixed assets 23,924,504,539.97 40.12% 23,852,067,166.10 37.86% 2.26%
17
Bengang Steel Plates Co., Ltd. Annual Report 2018
Construction in
836,594,457.82 1.40% 2,396,143,330.06 3.80% -2.40%
process
Short-term loans 11,938,490,375.85 20.02% 21,999,103,900.00 34.92% -14.90%
Long-term loans 7,083,640,094.16 11.88% 2,444,185,630.28 3.88% 8.00%
2. Assets and Liabilities Measured at Fair Value
□ Applicable √ Not applicable
3. Restricted Assets by the End of the Period
Items Ending balance Reason
Cash at bank and on hand 4,814,923,133.80 Deposit for notes and L/C
Pledged for acceptance bill and
Notes receivable 124,096,196.40
short-term loan
Total 4,939,019,330.20
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
There was no investment in securities during the reporting period.
(2) Investment in Derivatives
□Applicable √ Not applicable
There was no investment in derivatives during the reporting period.
5. Use of Raised Funds
√ Applicable □ Not applicable
(1) Use of Raised Funds
√Applicable □ Not applicable
Unit: 10 thousand yuan
18
Bengang Steel Plates Co., Ltd. Annual Report 2018
The
total
amount
of funds The
Accumulat Total
Used raised amount of
ed amount amount of Purpose of
amount Accumulat for funds
Source of of funds funds fund raised
Year Total amount during the ively used changin Proportion raised for
funding raised for raised have not
current amount g more than
changing have not been used
period purpose two years
purposes been used
s during of idle
the
reportin
g period
Private
2018 placement
3,965,799,988.19 3,170,677,243.45 3,170,677,243.45 0 0 0.00% 267,523,003.62 Deposit 0
Total -- 3,965,799,988.19 3,170,677,243.45 3,170,677,243.45 0 0 0.00% 267,523,003.62 -- 0
Description of the overall use of raised funds
1. Changes in the implementation location, implementation body, and implementation of the fundraising investment project: There
is no change in the company's investment projects in 2018.
2. Initial investment and replacement of fund raising projects: The 14th meeting of the 7th Board of Directors and the 10th meeting
of the 7th Board of Supervisors reviewed and approved the proposal on self-raised funds for the use of raised funds to replace
pre-investment funds. Before the funds raised received, in order to ensure the smooth implementation of the fundraising project, the
company built the project with self-raised funds. As of February 28, 2018, the amount of pre-investment of self-raised funds with
raised funds was 1,822,749,211.07 yuan, including 1,484,133,089.39 yuan for cold-rolled high-strength steel renovation project and
338,616,121.68 yuan for hot-dip galvanizing production line of three cold rolling mills. Details are as follows:
(1) The replacement amount of the cold-rolled high-strength steel reconstruction engineering company with self-raised funds to
raise funds for the initial investment is RMB 1,484,133,089.39, mainly for equipment purchase and construction, etc.
(2) The replacement amount of the project funded for the Third Cold Rolling Mills Hot-Dip Galvanizing Production Line with
self-raised funds was RMB 338,616,121.68, mainly for equipment purchase and construction. The company replaced the funds
used in the construction of the fundraising project with the self-raised funds to replace the funds raised. The initial investment and
replacement of the above-mentioned fundraising projects has been verified by BDO China Shu Lun Pan Certified Public
Accountants LLP. Please refer to PCPAR [2018] No. ZB10101 “Verification report on the self-raised fund invested in the raised
funds investment project of Bengang Steel Plates Co., Ltd”.
(3) Temporary replenishment of circulating funds with idle raised funds: During the reporting period, according to the progress of
the company's fund-raising investment project construction and the fund-raising plan, part of the funds raised in this issuance is
temporarily idle. According to the provisions of the "Procedures for the Management of Funds Raised by Listed Companies of the
Shenzhen Stock Exchange", in accordance with the principle of maximizing the interests of shareholders, under the premise of
ensuring the fund demand for investment projects and the investment projects for raising funds. The efficiency of fundraising will
further reduce the company's financial costs, reduce financial expenses, and protect the interests of investors. The company uses
530,000,000.00 yuan (250,000,000.00 yuan for cold-rolled high-strength steel renovation project, 280,000,000.00 yuan for hot-dip
galvanizing production line of three cold rolling mills). The raised funds will temporarily supplement the working capital, and the
term of use will not exceed 12 months from the date of approval by the board of directors (March 13, 2018). The company's use of
idle raised funds to temporarily supplement liquidity has been reviewed and approved at the 14th meeting of the 7th Board of
Directors and the 10th meeting of the 7th Board of Supervisors held on March 13, 2018. The company's independent directors have
issued a clear statement. The consent opinion has fulfilled the necessary decision-making procedures. The use of idle raised funds
to temporarily supplement the liquidity matters will change the use of raised funds or affect the normal operation of the raised
funds investment plan. There is no damage to the interests of shareholder. Single replenishment of working capital is no more than
12 months. The company has promised not to use idle raised funds for high-risk investment, in line with the provisions of the
relevant laws, regulations and regulatory documents, including the “Regulatory Guidelines No. 2 of Listed Companies –
Regulatory Requirements for the Management and Use of Raised Funds of Listed Companies”, “Stock Exchange Listing Rules of
Shenzhen Stock Exchange” and “Shenzhen Stock Exchange the Standard Operating Guidelines for Main Board Listed Companies”.
The use of idle raised funds to temporarily replenish working capital does not involve the use of funds in disguised form or affect
the normal operation of the raised funds investment plan. The sponsor institution agreed to use the idle raised funds to temporarily
supplement the working capital and issued the “Verification Opinions of Shenwan Hongyuan Securities Underwriting and
Sponsoring Co., Ltd. on the temporary replenishment of working capital by Bengang Steel Plate Co., Ltd. using idle raised funds”.
4. Usage of surplus funds raised: During the reporting period, the company did not have any use of surplus funds raised.
5. Use and destination of raised funds that have not been used: As of December 31, 2018, the company's remaining raised funds
temporarily saved in special account for fund raising.
19
Bengang Steel Plates Co., Ltd. Annual Report 2018
(2) Fundraising commitments
√Applicable □ Not applicable
Unit: 10 thousand yuan
Accumul Investme
Whether Date of Whether
Total ated
the Raised Amount nt the Benefits Whether the
amount investme progress
project funds invested project achieved the project
Committed investment of nt
has been promised during as of the reaches during expected feasibility
projects and investme amount
changed total the end of the the the benefits has
over-raised funds nt after as of the
(includin investme reporting period expected reporting are changed
adjustme end of the
g partial nt period (3)＝ usable period achieved significan
nt (1) period
changes) (2)/(1) status tly
(2)
Committed invested projects
High Strength Cold
2,265,799,988. 2,265,799,988. 1,767,751,121. 1,767,751,121.
Rolling Steel No 19 19 77 77
78.02% 91,742,364.48 No No
Renovation Project
The Third Cold Rolling
Work Hot-Dip
402,926,121.6 402,926,121.6
Galvanizing No 700,000,000 700,000,000
8 8
57.56% No No
Production Line
Project
Repayment of bank
No 1,000,000,000 1,000,000,000 1,000,000,000 1,000,000,000 100.00% No No
loans
3,965,799,988. 3,965,799,988. 3,170,677,243. 3,170,677,243.
Subtotal -- 19 19 45 45
-- -- 91,742,364.48 -- --
Over-raised funds
Not applicable
3,965,799,988. 3,965,799,988. 3,170,677,243. 3,170,677,243.
Total -- 19 19 45 45
-- -- 91,742,364.48 -- --
Situation and cause of
failure to meet planned
High Strength Cold Rolling Steel: The project has not yet been fully constructed, and the part that has
progress or projected
already been put into use has not yet reached the design output at the beginning of the operation.
earnings (disclosed by
project)
Description of major
changes in project None.
feasibility
Amount, use and Not applicable
progress of usage of
over-raised funds
Change in the Not applicable
implementation
location of the raised
funds investment
project
Adjustment of Not applicable
implementation
methods of
fund-raising
investment projects
The initial investment Applicable
and replacement of the
fundraising investment Refer to the Contents in Special Report III 4
project
Temporary Applicable
replenishment of
working capital with Refer to the Contents in Special Report III 5
idle raised funds
20
Bengang Steel Plates Co., Ltd. Annual Report 2018
The amount and reason Not applicable
for the rest of raised
fund in the project
implementation
Use and destination of
raised funds that have Refer to the Contents in Special Report III 8
not been used
Problems or other
situations in the use There are no problems or other situations. The use of funds raised by the company is reasonable and
and disclosure of raised standardized, and the use of raised funds is disclosed in a timely, truthful, accurate and complete manner.
funds
(3) The situation for raised funds change project
□ Applicable √ Not applicable
During the reporting period, the company did not have any changes in the fundraising project.
VI. Significant Assets and Equity Sold in Reporting Period
1. Significant Assets Sold
□ Applicable √ Not applicable
There was no significant asset sold during the reporting period.
2. Substantial Equity Sold
□ Applicable √ Not applicable
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 Main Registered Operating Operating
Company Name Total assets Net assets Net Profit
type business capital income profit
Bengang
Processing
Puxiang Cool
Subsidiaries and sales 1,920,000,000.00 4,678,899,388.23 1,999,945,307.67 8,063,719,253.01 10,700,557.20 8,838,074.77
Rolling Steel
of steel
Sheet Co., Ltd.
Acquirement and disposal of subsidiaries during the reporting period
□ Applicable √ Not applicable
Illustration of main joint-stock companies
VIII. Structure Entities controlled by the Company
□ Applicable √ Not applicable
IX. Prospect for Future Development of the Company
1. The development trend of the industry and the market competition
In 2019, the uncertainty of the domestic steel market increased, although the country will continue to increase
supply-side structural reforms and infrastructure construction, but the continuous release of steel production capacity
and reasonable adjustment of upstream and downstream profits, as well as the formation of Sino-US trade friction. The
return of the market will also have a certain impact on steel prices. However, from the perspective of national
21
Bengang Steel Plates Co., Ltd. Annual Report 2018
authoritative opinions and industry analysis, domestic steel production capacity has basically become reasonable, and
will maintain a basic balance between supply and demand for a long time, and the steel industry will continue to
maintain a stable and good development trend. General Secretary Xi Jinping made an important speech during the
inspection tour in Liaoning and in the in-depth promotion of the Northeast Revitalization Symposium. He directed the
orientation of the revitalization of the Northeast in the new era and led the navigation. It further strengthened our
confidence and determination to accelerate the revitalization and development and pointed out the progress for
Liaoning's revitalization and development. The direction and the provision of scientific methods will surely open up a
new era of Liaoning's revitalization and development in a new era.
2. The Company’s development strategy
The overall work idea of 2019: comprehensively implement the spirit of the important speech of General Secretary Xi
Jinping during the inspection tour in Liaoning and in-depth promotion of the Northeast Revitalization Symposium,
adhere to the supply-side structural reform as the main line, implement the high-quality development requirements, and
consistently implement the new development concept. With "four efforts" and "three advances", the Company will
unswervingly deepen reforms, seize opportunities and innovate breakthroughs, and strive to build a world-class
enterprise group with world competitiveness.
3. Business plan
The overall goal of production and operation in 2019: strive to complete 10 million tons of pig iron, 10.14 million tons
of crude steel, 14.34 million tons of hot rolled sheet, 5.95 million tons of cold rolled sheet, 700,000 tons of special steel,
and achieve "three zeros" for safe production.
In order to achieve the above objectives, we will focus on the following aspects:
(1) Taking the reform of institutional mechanism as a breakthrough to further stimulate the vitality of enterprises.
(2) Continuously optimize resource allocation and create new impetus for innovation and development.
(3) In-depth implement benchmarking potential and comprehensively improve comprehensive competitive strength.
(4) Continue to promote process optimization and build a scientific and rational management and control system.
(5) Strengthen party building and ideological work, and create a new situation for enterprise development.
4. Maintaining current business and completing the required capital arrangements of invested projects under
construction.
The company will use its own funds and bank loans to meet the funds needed for production operations and
technological transformation.
5. Potential risks
（1）Operational risks:
At present, although the pressure on production capacity of the steel industry is reduced, the demand for domestic steel
has not increased significantly. The demand for steel for machinery, automobiles, home appliances and other related
industries will slow down, and the contradiction between supply and demand is still outstanding.
Countermeasures: Optimize product structure, improve product quality, improve cost, and continue to implement
refined management; organize production in a scientific manner around core products, improve production flexibility;
strengthen dynamic management of market information, and timely make market forecast and corresponding business
strategy adjustment
（2）Environmental protection risks:
China's environmental protection policies and standards are becoming more and more perfect and strict, and the
environmental protection supervision of enterprises is maintaining a strict trend. Liaoning Province's "Three-Year
Action Plan for Blue Sky Defence Warfare" requires the implementation of ultra-low emission transformation of the
steel industry. Wastewater, waste gas and waste residue generated in the production process of enterprises will become
the key targets for environmental protection. In order to achieve full compliance emission, the company will invest
more manpower, material resources and financial resources, which will cause the company to face greater pressure on
production costs. Further tightening of environmental protection standards will further increase the related compliance
risks.
Countermeasures: increase internal environmental protection efforts, increase investment in environmental protection
renovation projects, and continuously tap the potential for emission reduction; strengthen pollution source control,
control emissions of various pollutants in accordance with national emission limit standards, and on the basis of
achieving emission standards, Ultra-low emission standards are marching forward; in-depth implementation of
environmental management responsibility, strengthening internal supervision and inspection of various types of
pollution sources of the company, and strengthening environmental awareness of all employees.
（3）Raw fuel price risk:
22
Bengang Steel Plates Co., Ltd. Annual Report 2018
Although the company has certain advantages in its own mines, the self-sufficiency rate of iron ore is not high. If the
price of raw fuel such as coal, coke, ore continues to run at a high level, it will lead to high raw material procurement
costs for steel companies. As the national environmental protection policy becomes more and more strict, it may bring
great difficulty to the supply of mineral resources products, and the fluctuation of the original fuel price may be further
increased. If the market trend forecast is inaccurate, it may cause shortage or backlog of inventory, which may result in
production obstruction or waste of resources.
Countermeasures: Accurately grasp the procurement market information, scientifically formulate procurement plans,
adjust the purchase quantity by machine, and rationally control the inventory to achieve cost reduction and efficiency
increase. Establish strategic cooperation with customers in the procurement and sales markets to reduce the adverse
effects caused by price fluctuations and ensure the normal production and operation of enterprises
X. Researches, visits and interviews received in this reporting period
1. Registration form of researches, visits and interviews received in this reporting period
□ Applicable √ Not applicable
During the reporting period, the Company did not receive any research, communication, interviews and other activities.
23
Bengang Steel Plates Co., Ltd. Annual Report 2018
V. Important Events
I. Profit Distribution or Capital Reserve Conversion
Formulation, implementation and adjustment of profit distribution policy of common shares especially cash dividend
policy during the reporting period
□ Applicable √ Not applicable
The profit distribution plan or proposal and the plan or proposal of conversion of the capital reserve into share capital in
recent three years (including the reporting period)
1. Profit distribution proposal of 2018
As audited by BDO China Shu Lun Pan Certified Public Accountants LLP., the net profit attributable to the parent
company of the year 2018 was RMB 1,036,493,236.07. After adding the retained profit of RMB 1,103,162,610.35 at the
beginning of the year, and deducting the actual dividend of RMB 193,768,576.6 from the previous year, the balance of
undistributed profit was RMB 1,945,887,269.82.
Profits distribution plan of 2018: The company will take existing share capital 3,875,371,532 shares as the base,
distributing cash dividends RMB 0.5 per 10 shares (including tax) to shareholders. The company plans to distribute
RMB193,768,576.60 dividends of ordinary shares, and the remaining RMB 1,752,118,693.22 will be carried over to
next year’s undistributed profits. This proposal will be subject to approval of the Shareholders’ Annual Meeting of 2018.
2. Profit distribution proposal of 2017
As audited by BDO China Shu Lun Pan Certified Public Accountants LLP., the net profit attributable to the parent company of the
year 2017 was RMB 1,600,110,229.77. After adding the retained profit of RMB -496,947,619.42 at the beginning of the year, the
balance of undistributed profit was RMB 1,103,162,610.35.
Profits distribution plan of 2017: The company will take existing share capital 3,875,371,532 shares as the base, distributing cash
dividends RMB 0.5 per 10 shares (including tax) to shareholders. The company plans to distribute RMB193,768,576.60 dividends of
ordinary shares, and the remaining RMB 909,394,033.75 will be carried over to next year’s undistributed profits. This proposal will
be subject to approval of the Shareholders’ Annual Meeting of 2017.
3. Profit distribution plan of 2016
As audited by BDO China Shu Lun Pan Certified Public Accountants LLP., the net profit attributable to the parent company of the
year 2016 was RMB 781,274,829.32. After adding the retained profit of RMB -1,278,244,071.93 at the beginning of the year, the
balance of undistributed profit was RMB -496,969,242.61.
Profits distribution plan of 2016: due to a loss in 2016, according to the relevant Chinese regulations and laws and the Company's
Articles of Association, the company would not withdraw surplus reserves. The company planed not to distribute cash dividend or
bonus shares, and not to convert capital reserve into share capital.
Cash dividend distribution in recent three years
Unit: Yuan
Net profit attributable to the Ratio in net profit attributable
Amount of Proportion of
Cash dividend parent company in the to the parent company in the
Year cash dividends cash dividends
(Including Tax) consolidated financial consolidated financial
in other ways in other ways
statements statements
2018 193,768,576.60 1,036,493,236.07 18.69% 0.00 0.00%
2017 193,768,576.60 1,600,110,229.77 12.11% 0.00 0.00%
2016 0.00 781,296,452.51 0.00% 0.00 0.00%
Both the Company’s profit and the parent company’s retained earnings are positive however no proposal of cash dividend distribution
was proposed during the reporting period
□ Applicable √ Not applicable
24
Bengang Steel Plates Co., Ltd. Annual Report 2018
II. Profit Distribution or Capital Reserve Conversion Proposal in the Reporting Period
√ Applicable □ Not applicable
Dividend distributed per 10 shares (share) 0
Cash dividend per 10 shares (RMB)（including tax） 0.50
The number of capital reserve conversion per 10
0
shares (share)
Share capital base of the distribution plan (share) 3,875,371,532
Total amount of cash dividends (RMB) (including
193,768,576.60
tax)
Cash dividend amount (RMB) in other ways (such
0.00
as repurchasing shares)
Total amount of cash dividends (RMB) (including
193,768,576.60
other method)
Distributable profits 1,945,887,269.82
The proportion of cash dividends to total profit
18.69%
distribution
The distribution of cash dividends
Others
Detailed description profit distribution or capital reserve conversion proposal
1. Profit distribution proposal of 2018
As audited by BDO China Shu Lun Pan Certified Public Accountants LLP., the net profit attributable to the parent
company of the year 2018 was RMB 1,036,493,236.07. After adding the retained profit of RMB 1,103,162,610.35 at
the beginning of the year, and deducting the actual dividend of RMB 193,768,576.6 from the previous year, the
balance of undistributed profit was RMB 1,945,887,269.82.
Profits distribution plan of 2018: The company will take existing share capital 3,875,371,532 shares as the base,
distributing cash dividends RMB 0.5 per 10 shares (including tax) to shareholders. The company plans to distribute
RMB193,768,576.60 dividends of ordinary shares, and the remaining RMB 1,752,118,693.22 will be carried over to
next year’s undistributed profits. This proposal will be subject to approval of the Shareholders’ Annual Meeting of
2018.
2. Profit distribution proposal of 2017
As audited by BDO China Shu Lun Pan Certified Public Accountants LLP., the net profit attributable to the parent company of the
year 2017 was RMB 1,600,110,229.77. After adding the retained profit of RMB -496,947,619.42 at the beginning of the year, the
balance of undistributed profit was RMB 1,103,162,610.35.
Profits distribution plan of 2017: The company will take existing share capital 3,875,371,532 shares as the base, distributing cash
dividends RMB 0.5 per 10 shares (including tax) to shareholders. The company plans to distribute RMB193,768,576.60 dividends of
ordinary shares, and the remaining RMB 909,394,033.75 will be carried over to next year’s undistributed profits. This proposal will
be subject to approval of the Shareholders’ Annual Meeting of 2017.
3. Profit distribution plan of 2016
As audited by BDO China Shu Lun Pan Certified Public Accountants LLP., the net profit attributable to the parent company of the
year 2016 was RMB 781,274,829.32. After adding the retained profit of RMB -1,278,244,071.93 at the beginning of the year, the
balance of undistributed profit was RMB -496,969,242.61.
Profits distribution plan of 2016: due to a loss in 2016, according to the relevant Chinese regulations and laws and the Company's
Articles of Association, the company would not withdraw surplus reserves. The company planed not to distribute cash dividend or
bonus shares, and not to convert capital reserve into share capital.
25
Bengang Steel Plates Co., Ltd. Annual Report 2018
III. Performance of Committed Issues
1. 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
Commitment Type of Commitment Commitment
Commitments Contents Performance
party commitment time period
Commitment of shares
reform
Commitment made in the
acquisition report or the
equity change report
Commitment made during
asset restructuring
According to the
relevant provisions of
the China Securities
Regulatory
Commission, the
following commitments
can be made to the
company’s efforts to fill
the rewards: During the
tenure, faithfully and
diligently perform duties
and safeguards the
legitimate rights and
interests of the company
and all shareholders,
including but not limited
to: 1. Commitment not
to transfer benefits to
other units or
individuals without
compensation or unfair
Company conditions, and not to
Commitment made during damage the company’s
directors, Other th th Under normal
initial public offering or
senior commitment interests in other ways; Jan 26 2016 Dec 9 2019 fulfillment
refinancing 2. Commitment to
management
constrain the behavior of
job consumption; 3.
Commitment to not use
company assets to
engage in investment
and consumption
activities unrelated to
the performance of their
duties; 4. Commitment
to the compensation
system established by
the board of directors or
the Remuneration and
Appraisal Committee is
linked to the
implementation of the
company's measures to
cover the return; 5. If
the company launches
an equity incentive plan
in the future, the terms
of the exercise of the
26
Bengang Steel Plates Co., Ltd. Annual Report 2018
equity incentive plan are
linked to the
implementation of the
company's measures to
fill the rewards.
The allocated shares will
Liaoning be locked for 12 months 12 months
Provincial from the date of the from the date
Transportation Share sales listing of the new of the listing Under normal
Mar 5th 2018
Investment restriction non-public offering of of the new fulfillment
Group Co., shares, and will not be non-public
Ltd. transferred during this offering
period.
The allocated shares will
be locked for 12 months 12 months
CCB Principal from the date of the from the date
Asset Share sales listing of the new of the listing Under normal
Mar 5th 2018
Management restriction non-public offering of of the new fulfillment
Co.,Ltd. shares, and will not be non-public
transferred during this offering
period.
The allocated shares will
be locked for 12 months 12 months
Beixin from the date of the from the date
Ruifeng Fund Share sales listing of the new of the listing Under normal
Mar 5th 2018
Management restriction non-public offering of of the new fulfillment
Co., Ltd. shares, and will not be non-public
transferred during this offering
period.
The allocated shares will
be locked for 12 months 12 months
China Life from the date of the from the date
AMP Asset Share sales listing of the new of the listing Under normal
Mar 5th 2018
Management restriction non-public offering of of the new fulfillment
Co., Ltd. shares, and will not be non-public
transferred during this offering
period.
Stock option incentive
commitment
Other commitments to the
company's minority
shareholders
Whether Commitment
Yes
fulfilled on time or not
2. The Company made illustrations that there are assets or projects which meet the original profit forecast
and the reasons when there are assets or projects profit forecast of the Company and the reporting period
is still in the forecast period
□ Applicable √ Not applicable
IV. 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
27
Bengang Steel Plates Co., Ltd. Annual Report 2018
V. Illustrations of the Supervisory Committee and Independent Directors (If Applicable) on
the Qualified Audit Report Issued by the CPAs
□ Applicable √ Not applicable
VI. Illustrations of Changes in the Accounting Policy, Accounting Estimate and Measurement
Methods as Compared with the Financial Report of Last Year
√ Applicable □ Not applicable
Ministry of Finance issued “Notice of the Ministry of Finance on the revision of the format for the issuance of the
financial statements of the general enterprise for the year 2018” (Cai Kuai 2018 No.15) on 15 June 2018, which revised
the format of financial statement for the general enterprise. The major impact of the implementation of the above three
regulations are as follows:
The contents and reasons
The items affected and the amount
of accounting policy changes
"Notes receivable" and "Accounts receivable" are
combined and shown as "Notes receivable and
(1) In Statement of Financial Position, "Notes
accounts receivable", amount for current year is
receivable" and "Accounts receivable" are combined
4,219,628,324.83, amount for previous year is
and shown as "Notes receivable and accounts
4,575,031,627.26;"Notes payable" and "Accounts
receivable"; "Notes payable" and "Accounts
payable" are combined and shown as "Notes
payable" are combined and shown as "Notes
payable and accounts payable", amount for
payable and accounts payable"; "Interest receivable"
current year is 15,535,234,825.67, amount for
and "Dividends receivable" are incorporated into
previous year is 15,392,258,341.04; “Other
"Other receivables"; "Interest payable" and
receivables” increased 11,608,705.43 in current
"Dividends payable" are incorporated into "Other
year, and the increasing amount for previous year
account payables"; "Disposal of fixed assets" is
is 18,448,520.50; “Other account payables”
incorporated into "fixed assets", "Project materials"
increased 9,658,681.99 in current year, and the
is incorporated into "Construction in progress";
increasing amount for previous year is
"Special accounts payable" is incorporated into
84,139,288.02; “Construction in progress”
"Long-term payables". The comparative data is
increased 4,900,986.11 in current year, and the
adjusted accordingly.
increasing amount for previous year is
4,558,919.60.
(2) A new item "Research and development "General and administrative expenses" is
expenses" is added to the Statement of decreased by 6,399,884.30 in current year and
Comprehensive Income, reclassifying R&D 8,208,922.25 in previous year, which is
expenses originally under "General and reclassified to " Research and development
administrative expenses" into "Research and expenses ";The amount of “interest expenses” for
28
Bengang Steel Plates Co., Ltd. Annual Report 2018
development expenses " which is now disclosed this year is 1,278,508,985.59, amount for
separately. New items "Interest expenses" and previous year is 1,023,936,982.91; “interest
"Interest income" are added to the Statement of incomes” in this year is 200,356,927.95, amount
Comprehensive Income under financial expenses. for previous year is 142,752,764.37.
The comparative data is adjusted accordingly.
Ⅶ. Illustrations of Retrospective Restatement Due to Correction of Significant Accounting
Errors in the Reporting Period
□ Applicable √ Not applicable
There was no retrospective restatement due to correction of significant accounting errors during the reporting period
VIII. Illustrations of Changes of the Consolidation Scope as Compared with the Financial
Report of Last Year
□ Applicable √ Not applicable
There is no change of the consolidation scope during the reporting period.
IX. Appointment and Dismiss of Certified Accountant’s Firm
Accountant’s firm currently appointed
Name of the domestic accountant’s firm BDO China Shu Lun Pan Certified Public Accountants LLP
Payment to the domestic accountant’s firm (RMB 10
280
thousand)
Service life of domestic accountant’s firm providing
11
audit service
Name of CPAs from the domestic accountant’s firm Wu Xue, Li Guiying
Service life of domestic accountants’ providing audit
4
service
Name of the overseas accountant’s firm (if any) None
Payment to overseas accountant’s firm (RMB 10
0
thousand) (if any)
Service life of overseas accountant’s firm providing
None
audit service (if any)
Name of CPAs from the overseas accountant’s firm
None
(if any)
Whether the accountant’s firm was changed during the reporting period
□ Yes √ No
Engagement of accountant’s firms, financial consultants or sponsors for internal control auditing
√ Applicable □ Not applicable
The Company appointed BDO China Shu Lun Pan Certified Public Accountants LLP as the auditor of internal control auditing at
RMB 600 thousand.
During the year, due to the non-public offering of shares, the company hired Shenwan Hongyuan Securities Underwriting and
Sponsoring Co., Ltd. as the sponsor, and paid a total of RMB 10 million during the period.
X. Risk of Suspension or Termination of Listing after the Disclosure of Annual Report
□ Applicable √ Not applicable
29
Bengang Steel Plates Co., Ltd. Annual Report 2018
XI. Bankrupt and Reforming Events
□ Applicable √ Not applicable
There was no bankrupt and reforming event during the reporting period.
XII. Significant Lawsuits and Arbitrations
□ Applicable √ Not applicable
There was no significant lawsuit or arbitrations during the reporting period.
XIII. Punishment and Rectification
□ Applicable √ Not applicable
There was no punishment or rectification during the reporting period.
XIV. Credit Status of the Company and its Controlling Shareholders and Actual Controllers
□ Applicable √ Not applicable
XV. Implementation Situation of Stock Incentive Plan of the Company, Employee Stock
Ownership Plan or Other Employee Incentive Measures
□ Applicable √ Not applicable
There was no implementation situation of stock incentive plan of the Company, employee stock ownership plan or other
employee incentive measures during the reporting period.
XVI. Major Related Party Transactions
1. Related party transactions relevant to daily operations
√ Applicable □ Not applicable
The
Amount
approve Means
Pricing Price of Whethe Availabl
d of
Type of Content of principle of related Proporti r exceed e
trading paymen Index
related related of relate party on of the market Date of
Related Relation limit of t of of
party party related d transacti similar approve price of disclosu
parties ship transacti related disclos
transacti transactio party party ons (in transacti d similar re
ons (in party ure
ons ns transacti transa 10 ons limited transacti
10 transacti
ons ctions thousan (Y/N) ons
thousan ons
d)
d)
Execute
Benxi Purchas Relate
accordi
Steel & Parent e of Accounts On d
30,864. ng to 2018.04
Iron Compan goods payable agreeme agree 0.68% 35,000 No No
85 the .20
(Group) y and for repair nt ment
agreeme
Co., Ltd. services price
nt
Execute
Benxi Purchas Relate
accordi
Steel & Parent e of On d
Land 5,469.1 ng to 2018.04
Iron Compan goods agreeme agree 0.12% No No
lease fee 4 the .20
(Group) y and nt ment
agreeme
Co., Ltd. services price
nt
Bengang Same Purchas On Relate Execute 2018.04
Cold-rolle controll e of Products agreeme d 362.5 0.01% 500 No accordi Yes .20
d er goods nt agree ng to
30
Bengang Steel Plates Co., Ltd. Annual Report 2018
The
Amount
approve Means
Pricing Price of Whethe Availabl
d of
Type of Content of principle of related Proporti r exceed e
trading paymen Index
related related of relate party on of the market Date of
Related Relation limit of t of of
party party related d transacti similar approve price of disclosu
parties ship transacti related disclos
transacti transactio party party ons (in transacti d similar re
ons (in party ure
ons ns transacti transa 10 ons limited transacti
10 transacti
ons ctions thousan (Y/N) ons
thousan ons
d)
d)
Stainless and ment the
Steel services price agreeme
Dandong nt
Co., Ltd.
Benxi Execute
Purchas Relate
Steel & accordi
Same e of On d
Iron 2,200.1 ng to 2018.04
controll goods Labor cost agreeme agree 0.05% 400,000 No No
(Group) 7 the .20
er and nt ment
Mining agreeme
services price
Co., Ltd. nt
Benxi Raw Execute
Purchas Relate
Steel & material accordi
Same e of On d
Iron and 401,542 ng to 2018.04
controll goods agreeme agree 8.88% No Yes
(Group) suppleme .74 the .20
er and nt ment
Mining ntary agreeme
services price
Co., Ltd. material nt
Benxi Execute
Purchas Relate
Steel & accordi
Same e of On d
Iron ng to 2018.04
controll goods Freight agreeme agree 167.04 0.00% No Yes
(Group) the .20
er and nt ment
Mining agreeme
services price
Co., Ltd. nt
Benxi
Steel & Raw Execute
Purchas Relate
Iron material accordi
Same e of On d
(Group) and 25,866. ng to 2018.04
controll goods agreeme agree 0.57% 20,000 No No
Metallurg suppleme 54 the .20
er and nt ment
y ntary agreeme
services price
Residues material nt
Co., Ltd.
Benxi
Steel &
Iron Execute
Purchas Relate
(Group) accordi
Same e of On d
Steel & Processin ng to 2018.04
controll goods agreeme agree 160.26 0.00% 500 No No
Iron g fee the .20
er and nt ment
Process agreeme
services price
and nt
Logistics
Co., Ltd.
Benxi
Steel &
Execute
Iron Purchas Relate
accordi
(Group) Same e of On d
Raw 7,757.9 ng to 2018.04
Real-estat controll goods agreeme agree 0.17% 10,000 No Yes
materials 9 the .20
e er and nt ment
agreeme
Develop services price
nt
ment Co.,
Ltd.
Benxi Same Purchas On Relate Execute
Steel & Spare 14,321. 2018.04
controll e of agreeme d 0.32% 25,000 No accordi Yes
Iron er goods parts nt agree 59 ng to .20
(Group) and ment the
31
Bengang Steel Plates Co., Ltd. Annual Report 2018
The
Amount
approve Means
Pricing Price of Whethe Availabl
d of
Type of Content of principle of related Proporti r exceed e
trading paymen Index
related related of relate party on of the market Date of
Related Relation limit of t of of
party party related d transacti similar approve price of disclosu
parties ship transacti related disclos
transacti transactio party party ons (in transacti d similar re
ons (in party ure
ons ns transacti transa 10 ons limited transacti
10 transacti
ons ctions thousan (Y/N) ons
thousan ons
d)
d)
Machiner services price agreeme
y nt
Manufact
ure Co.,
Ltd.
Benxi
Steel &
Execute
Iron Purchas Relate
accordi
(Group) Same e of On d
Repair ng to 2018.04
Machiner controll goods agreeme agree 4,617.2 0.10% No No
services the .20
y er and nt ment
agreeme
Manufact services price
nt
ure Co.,
Ltd.
Benxi
Execute
Steel & Purchas Relate
accordi
Iron Same e of On d
Spare 1,072.3 ng to 2018.04
(Group) controll goods agreeme agree 0.02% 60,000 No No
parts 3 the .20
Construct er and nt ment
agreeme
ion Co., services price
nt
Ltd.
Benxi
Execute
Steel & Purchas Relate
accordi
Iron Same e of On d
Project 8,375.5 ng to 2018.04
(Group) controll goods agreeme agree 0.19% No No
fee 4 the .20
Construct er and nt ment
agreeme
ion Co., services price
nt
Ltd.
Benxi
Execute
Steel & Purchas Relate
accordi
Iron Same e of On d
Repair 21,285. ng to 2018.04
(Group) controll goods agreeme agree 0.47% No No
services 38 the .20
Construct er and nt ment
agreeme
ion Co., services price
nt
Ltd.
Benxi
Raw Execute
Steel & Purchas Relate
material accordi
Iron Same e of On d
and ng to 2018.04
(Group) controll goods agreeme agree 55.12 0.00% No Yes
suppleme the .20
Construct er and nt ment
ntary agreeme
ion Co., services price
material nt
Ltd.
Benxi
Execute
Steel & Purchas Relate
accordi
Iron Same e of On d
1,469.3 ng to 2018.04
(Group) controll goods Freight agreeme agree 0.03% No No
9 the .20
Construct er and nt ment
agreeme
ion Co., services price
nt
Ltd.
Benxi Same Purchas Raw On Relate Execute
Steel & 19,722. 2018.04
controll e of material agreeme d 0.44% 40,000 No accordi Yes
Iron goods and agree 48 ng to .20
er nt
(Group) and suppleme ment the
32
Bengang Steel Plates Co., Ltd. Annual Report 2018
The
Amount
approve Means
Pricing Price of Whethe Availabl
d of
Type of Content of principle of related Proporti r exceed e
trading paymen Index
related related of relate party on of the market Date of
Related Relation limit of t of of
party party related d transacti similar approve price of disclosu
parties ship transacti related disclos
transacti transactio party party ons (in transacti d similar re
ons (in party ure
ons ns transacti transa 10 ons limited transacti
10 transacti
ons ctions thousan (Y/N) ons
thousan ons
d)
d)
Industrial services ntary price agreeme
Develop material nt
ment Co.,
Ltd.
Benxi
Execute
Steel & Purchas Relate
accordi
Iron Same e of On d
Repair 2,576.9 ng to 2018.04
(Group) controll goods agreeme agree 0.06% No No
services 8 the .20
Construct er and nt ment
agreeme
ion Co., services price
nt
Ltd.
Benxi
Steel & Execute
Purchas Relate
Iron accordi
Same e of On d
(Group) ng to 2018.04
controll goods Freight agreeme agree 581.17 0.01% No No
Industrial the .20
er and nt ment
Develop agreeme
services price
ment Co., nt
Ltd.
Benxi
Steel & Execute
Purchas Relate
Iron accordi
Same e of On d
(Group) Project ng to 2018.04
controll goods agreeme agree 189.45 0.00% No No
Industrial fee the .20
er and nt ment
Develop agreeme
services price
ment Co., nt
Ltd.
Benxi Raw
Steel & material Execute
Purchas Relate
Iron & accordi
Same e of On d
(Group) suppleme ng to 2018.04
controll goods agreeme agree 573.58 0.01% 30,000 No Yes
Construct ntary the .20
er and nt ment
ion and materials agreeme
services price
Repairing & spare nt
Co., Ltd. parts
Benxi
Steel & Execute
Purchas Relate
Iron accordi
Same e of On d
(Group) Project 2,473.2 ng to 2018.04
controll goods agreeme agree 0.05% No No
Construct fee 6 the .20
er and nt ment
ion and agreeme
services price
Repairing nt
Co., Ltd.
Benxi
Steel & Execute
Purchas Relate
Iron accordi
Same e of Accounts On d
(Group) 20,379. ng to 2018.04
controll goods payable agreeme agree 0.45% No No
Construct 63 the .20
er and for repair nt ment
ion and agreeme
services price
Repairing nt
Co., Ltd.
Bengang Same Purchas Raw On Relate 14,695. 0.32% 20,000 No Execute Yes 2018.04
Electronic controll e of material agreeme d 97 accordi .20
33
Bengang Steel Plates Co., Ltd. Annual Report 2018
The
Amount
approve Means
Pricing Price of Whethe Availabl
d of
Type of Content of principle of related Proporti r exceed e
trading paymen Index
related related of relate party on of the market Date of
Related Relation limit of t of of
party party related d transacti similar approve price of disclosu
parties ship transacti related disclos
transacti transactio party party ons (in transacti d similar re
ons (in party ure
ons ns transacti transa 10 ons limited transacti
10 transacti
ons ctions thousan (Y/N) ons
thousan ons
d)
d)
s and Gas er goods and nt agree ng to
Co., Ltd. and suppleme ment the
services ntary price agreeme
material nt
Execute
Purchas Relate
Bengang accordi
Same e of On d
Electronic Repair ng to 2018.04
controll goods agreeme agree 3,085.9 0.07% No No
s and Gas services the .20
er and nt ment
Co., Ltd. agreeme
services price
nt
Benxi
Execute
High-tech Purchas Relate
accordi
Drilling Same e of On d
Spare ng to 2018.04
Tools controll goods agreeme agree 61.16 0.00% 800 No No
parts the .20
Manufact er and nt ment
agreeme
ure Co., services price
nt
Ltd.
Benxi Execute
Purchas Relate
New accordi
Same e of On d
Career Repair ng to 2018.04
controll goods agreeme agree 340.23 0.01% 2,000 No No
Develop services the .20
er and nt ment
ment Co., agreeme
services price
Ltd. nt
Raw
Benxi Execute
Purchas material Relate
New accordi
Same e of and On d
Career ng to 2018.04
controll goods suppleme agreeme agree 630.15 0.01% No No
Develop the .20
er and ntary nt ment
ment Co., agreeme
services material price
Ltd. nt
and food
Execute
Liaoning Purchas Relate
accordi
Metallurg Same e of On d
Spare 1,151.3 ng to 2018.04
y controll goods agreeme agree 0.03% 2,000 No Yes
parts 8 the .20
Technicia er and nt ment
agreeme
n College services price
nt
Liaoning 2018.04
Execute
Metallurg Purchas Relate .20
accordi
ical Same e of On d
Project ng to
Vocationa controll goods agreeme agree 0.00% No No
fee the
l and er and nt ment
agreeme
Technical services price
nt
College
Liaoning 2018.04
Execute
Metallurg Purchas Relate .20
accordi
ical Same e of On d
Repair ng to
Vocationa controll goods agreeme agree 449.86 0.01% 1,000 No No
services the
l and er and nt ment
agreeme
Technical services price
nt
College
Bengang Same Purchas Agency On Relate 7,602.2 Execute 2018.04
Group controll e of agreeme d 0.17% 35,000 No accordi No .20
fee 8
Internatio er goods nt agree ng to
34
Bengang Steel Plates Co., Ltd. Annual Report 2018
The
Amount
approve Means
Pricing Price of Whethe Availabl
d of
Type of Content of principle of related Proporti r exceed e
trading paymen Index
related related of relate party on of the market Date of
Related Relation limit of t of of
party party related d transacti similar approve price of disclosu
parties ship transacti related disclos
transacti transactio party party ons (in transacti d similar re
ons (in party ure
ons ns transacti transa 10 ons limited transacti
10 transacti
ons ctions thousan (Y/N) ons
thousan ons
d)
d)
nal and ment the
Economic services price agreeme
and nt
Trading
Co., Ltd.
Bengang 2018.04
Group Execute .20
Purchas Relate
Internatio accordi
Same e of On d
nal Port 11,692. ng to
controll goods agreeme agree 0.26% No No
Economic surcharges 28 the
er and nt ment
and agreeme
services price
Trading nt
Co., Ltd.
Benxi 2018.04
Steel & .20
Execute
Iron Purchas Relate
accordi
(Group) Same e of On d
Spare 2,551.2 ng to
Informati controll goods agreeme agree 0.06% 7,000 No Yes
parts 1 the
on and er and nt ment
agreeme
Automati services price
nt
c Tech
Co., Ltd.
Benxi 2018.04
Steel & .20
Execute
Iron Purchas Relate
accordi
(Group) Same e of On d
Project 3,283.8 ng to
Informati controll goods agreeme agree 0.07% No Yes
fee 8 the
on and er and nt ment
agreeme
Automati services price
nt
c Tech
Co., Ltd.
Benxi 2018.04
Steel & .20
Execute
Iron Purchas Relate
accordi
(Group) Same e of On d
Repair 1,292.3 ng to
Informati controll goods agreeme agree 0.03% No No
services 6 the
on and er and nt ment
agreeme
Automati services price
nt
c Tech
Co., Ltd.
Benxi 2018.04
Steel & .20
Execute
Iron Purchas Relate
accordi
(Group) Same e of On d
Heating ng to
Thermal controll goods agreeme agree 183.78 0.00% 2,000 No No
costs the
Power er and nt ment
agreeme
Develop services price
nt
ment Co.,
Ltd.
Benxi Purchas Raw Relate Execute 2018.04
Steel & Same e of material On d accordi .20
Iron controll goods and agreeme agree 7.54 0.00% No ng to Yes
(Group) er and suppleme nt ment the
Thermal services ntary price agreeme
35
Bengang Steel Plates Co., Ltd. Annual Report 2018
The
Amount
approve Means
Pricing Price of Whethe Availabl
d of
Type of Content of principle of related Proporti r exceed e
trading paymen Index
related related of relate party on of the market Date of
Related Relation limit of t of of
party party related d transacti similar approve price of disclosu
parties ship transacti related disclos
transacti transactio party party ons (in transacti d similar re
ons (in party ure
ons ns transacti transa 10 ons limited transacti
10 transacti
ons ctions thousan (Y/N) ons
thousan ons
d)
d)
Power material nt
Develop
ment Co.,
Ltd.
Benxi Execute 2018.04
Purchas Relate
Steel & accordi .20
Same e of On d
Iron Design ng to
controll goods agreeme agree 510.96 0.01% 2,000 No No
(Group) fees the
er and nt ment
Designing agreeme
services price
Institute nt
Benxi Raw Execute 2018.04
Purchas Relate
Beiying material accordi .20
Same e of On d
Steel & and 1,507,9 1,700,0 ng to
controll goods agreeme agree 33.33% No Yes
Iron suppleme 72.99 00 the
er and nt ment
(Group) ntary agreeme
services price
Co., Ltd. material nt
Benxi Execute 2018.04
Purchas Relate
Beiying accordi .20
Same e of On d
Steel & Energy & 80,758. ng to
controll goods agreeme agree 1.78% No No
Iron Power 32 the
er and nt ment
(Group) agreeme
services price
Co., Ltd. nt
Benxi Execute 2018.04
Purchas Relate
Beiying accordi .20
Same e of On d
Steel & ng to
controll goods Freight agreeme agree 588.11 0.01% No No
Iron the
er and nt ment
(Group) agreeme
services price
Co., Ltd. nt
Benxi Execute 2018.04
Purchas Relate
Beiying accordi .20
Same e of On d
Steel & 8,117.3 ng to
controll goods Labor cost agreeme agree 0.18% No No
Iron 7 the
er and nt ment
(Group) agreeme
services price
Co., Ltd. nt
Benxi Execute 2018.04
Purchas Relate
Beiying accordi .20
Same e of On d
Steel & Spare ng to
controll goods agreeme agree 636.62 0.01% No Yes
Iron parts the
er and nt ment
(Group) agreeme
services price
Co., Ltd. nt
Liaoning 2018.04
Hengtong .20
Execute
Metallurg Purchas Relate
Raw accordi
ical Same e of On d
material 10,000. ng to
Equipmen controll goods agreeme agree 0.22% 15,000 No Yes
and spare 99 the
t er and nt ment
parts agreeme
Manufact services price
nt
ure Co.,
Ltd.
Liaoning Same Purchas Raw Relate Execute 2018.04
On
Hengtai controll e of material d 2,106.6 accordi No .20
agreeme 0.05% 5,000 No
Heavy goods and spare agree 7 ng to
er nt
Machiner and parts ment the
36
Bengang Steel Plates Co., Ltd. Annual Report 2018
The
Amount
approve Means
Pricing Price of Whethe Availabl
d of
Type of Content of principle of related Proporti r exceed e
trading paymen Index
related related of relate party on of the market Date of
Related Relation limit of t of of
party party related d transacti similar approve price of disclosu
parties ship transacti related disclos
transacti transactio party party ons (in transacti d similar re
ons (in party ure
ons ns transacti transa 10 ons limited transacti
10 transacti
ons ctions thousan (Y/N) ons
thousan ons
d)
d)
y Co., services price agreeme
Ltd. nt
Liaoning Execute 2018.04
Purchas Relate
Hengtai accordi .20
Same e of Repair On d
Heavy 2,266.2 ng to
controll goods and labor agreeme agree 0.05% No No
Machiner 5 the
er and cost nt ment
y Co., agreeme
services price
Ltd. nt
Execute 2018.04
Purchas Relate
accordi .20
Bengang e of Property On d
Controll ng to
Group goods managem agreeme agree 0.00% 800 No No
er the
Co., Ltd. and ent fee nt ment
agreeme
services price
nt
Execute 2018.04
Relate
Bengang Sales of accordi .20
Same On d
Electronic goods Energy & ng to
controll agreeme agree 89.86 0.00% 500 No No
s and Gas and Power the
er nt ment
Co., Ltd. services agreeme
price
nt
Raw 2018.04
Benxi material Execute .20
Relate
Beiying Sales of & accordi
Same On d
Steel & goods suppleme 80,882. ng to
controll agreeme agree 1.61% 260,000 No Yes
Iron and ntary 3 the
er nt ment
(Group) services materials agreeme
price
Co., Ltd. & spare nt
parts
Benxi Execute 2018.04
Relate
Beiying Sales of accordi .20
Same On d
Steel & goods 2,143.1 ng to
controll Products agreeme agree 0.04% No Yes
Iron and 4 the
er nt ment
(Group) services agreeme
price
Co., Ltd. nt
Benxi Execute 2018.04
Relate
Beiying Sales of accordi .20
Same On d
Steel & goods Energy & 139,744 ng to
controll agreeme agree 2.78% No No
Iron and Power .84 the
er nt ment
(Group) services agreeme
price
Co., Ltd. nt
Benxi 2018.04
Steel & .20
Execute
Iron Relate
Sales of accordi
(Group) Same On d
goods Energy & ng to
Real-estat controll agreeme agree 12.15 0.00% 800 No No
and Power the
e er nt ment
services agreeme
Develop price
nt
ment Co.,
Ltd.
Benxi Sales of Relate Execute 2018.04
Same On
Steel & goods Energy & d accordi No .20
controll agreeme 51.01 0.00% 1,000 No
Iron and Power agree ng to
er nt
(Group) services ment the
37
Bengang Steel Plates Co., Ltd. Annual Report 2018
The
Amount
approve Means
Pricing Price of Whethe Availabl
d of
Type of Content of principle of related Proporti r exceed e
trading paymen Index
related related of relate party on of the market Date of
Related Relation limit of t of of
party party related d transacti similar approve price of disclosu
parties ship transacti related disclos
transacti transactio party party ons (in transacti d similar re
ons (in party ure
ons ns transacti transa 10 ons limited transacti
10 transacti
ons ctions thousan (Y/N) ons
thousan ons
d)
d)
Steel & price agreeme
Iron nt
Process
and
Logistics
Co., Ltd.
Benxi 2018.04
Steel & .20
Iron Execute
Relate
(Group) Sales of accordi
Same On d
Steel & goods ng to
controll Products agreeme agree 0.00% No Yes
Iron and the
er nt ment
Process services agreeme
price
and nt
Logistics
Co., Ltd.
Benxi 2018.04
Steel & .20
Execute
Iron Relate
Sales of accordi
(Group) Same On d
goods 2,009.0 ng to
Machiner controll Products agreeme agree 0.04% 20,000 No Yes
and 3 the
y er nt ment
services agreeme
Manufact price
nt
ure Co.,
Ltd.
Benxi 2018.04
Steel & .20
Execute
Iron Relate
Sales of accordi
(Group) Same On d
goods Energy & 1,758.6 ng to
Machiner controll agreeme agree 0.04% No No
and Power 9 the
y er nt ment
services agreeme
Manufact price
nt
ure Co.,
Ltd.
Benxi 2018.04
Raw
Steel & .20
material Execute
Iron Relate
Sales of & accordi
(Group) Same On d
goods suppleme ng to
Machiner controll agreeme agree 1,310.9 0.03% No Yes
and ntary the
y er nt ment
services materials agreeme
Manufact price
& spare nt
ure Co.,
parts
Ltd.
Benxi 2018.04
Execute
Steel & Relate .20
Sales of accordi
Iron Same On d
goods Energy & ng to
(Group) controll agreeme agree 467.84 0.01% 20,000 No No
and Power the
Construct er nt ment
services agreeme
ion Co., price
nt
Ltd.
Benxi Sales of Raw Relate Execute 2018.04
Same On
Steel & goods material agreeme d 5,416.3 accordi Yes .20
controll 0.11% No
Iron and & agree 8 ng to
er nt
(Group) services suppleme ment the
38
Bengang Steel Plates Co., Ltd. Annual Report 2018
The
Amount
approve Means
Pricing Price of Whethe Availabl
d of
Type of Content of principle of related Proporti r exceed e
trading paymen Index
related related of relate party on of the market Date of
Related Relation limit of t of of
party party related d transacti similar approve price of disclosu
parties ship transacti related disclos
transacti transactio party party ons (in transacti d similar re
ons (in party ure
ons ns transacti transa 10 ons limited transacti
10 transacti
ons ctions thousan (Y/N) ons
thousan ons
d)
d)
Construct ntary price agreeme
ion Co., materials nt
Ltd. & spare
parts
Benxi Execute 2018.04
Relate
Steel & Sales of accordi .20
Same On d
Iron goods Energy & 68,372. ng to
controll agreeme agree 1.36% 100,000 No No
(Group) and Power 48 the
er nt ment
Mining services agreeme
price
Co., Ltd. nt
Raw 2018.04
Benxi material Execute .20
Relate
Steel & Sales of & accordi
Same On d
Iron goods suppleme 6,421.8 ng to
controll agreeme agree 0.13% No Yes
(Group) and ntary 4 the
er nt ment
Mining services materials agreeme
price
Co., Ltd. & spare nt
parts
Benxi Execute 2018.04
Relate
Steel & Sales of accordi .20
Same On d
Iron goods Freight 1,086.2 ng to
controll agreeme agree 0.02% No No
(Group) and revenue 5 the
er nt ment
Mining services agreeme
price
Co., Ltd. nt
Benxi Execute 2018.04
Relate
Steel & Sales of accordi .20
Same On d
Iron goods ng to
controll Products agreeme agree 935.65 0.02% No Yes
(Group) and the
er nt ment
Mining services agreeme
price
Co., Ltd. nt
Benxi 2018.04
Steel & .20
Execute
Iron Relate
Sales of accordi
(Group) Same On d
goods Energy & 5,825.3 ng to
Thermal controll agreeme agree 0.12% 12,000 No Yes
and Power 1 the
Power er nt ment
services agreeme
Develop price
nt
ment Co.,
Ltd.
Benxi
Raw
Steel &
material Execute
Iron Relate
Sales of & accordi
(Group) Same On d
goods suppleme ng to 2018.04
Thermal controll agreeme agree 0.07 0.00% No Yes
and ntary the .20
Power er nt ment
services materials agreeme
Develop price
& spare nt
ment Co.,
parts
Ltd.
Benxi Relate Execute 2018.04
Sales of
Steel & Same On d accordi .20
goods Freight
Iron controll agreeme agree 0.00% No ng to No
and revenue
(Group) er nt ment the
services
Thermal price agreeme
39
Bengang Steel Plates Co., Ltd. Annual Report 2018
The
Amount
approve Means
Pricing Price of Whethe Availabl
d of
Type of Content of principle of related Proporti r exceed e
trading paymen Index
related related of relate party on of the market Date of
Related Relation limit of t of of
party party related d transacti similar approve price of disclosu
parties ship transacti related disclos
transacti transactio party party ons (in transacti d similar re
ons (in party ure
ons ns transacti transa 10 ons limited transacti
10 transacti
ons ctions thousan (Y/N) ons
thousan ons
d)
d)
Power nt
Develop
ment Co.,
Ltd.
Benxi 2018.04
Steel & Execute .20
Relate
Iron Sales of accordi
Same On d
(Group) goods Energy & ng to
controll agreeme agree 753.92 0.02% 20,000 No No
Industrial and Power the
er nt ment
Develop services agreeme
price
ment Co., nt
Ltd.
Benxi 2018.04
Steel & Execute .20
Relate
Iron Sales of accordi
Same On d
(Group) goods 1,459.1 ng to
controll Products agreeme agree 0.03% No Yes
Industrial and 6 the
er nt ment
Develop services agreeme
price
ment Co., nt
Ltd.
Benxi Raw 2018.04
Steel & material Execute .20
Relate
Iron Sales of & accordi
Same On d
(Group) goods suppleme 1,021.1 ng to
controll agreeme agree 0.02% No No
Industrial and ntary 6 the
er nt ment
Develop services materials agreeme
price
ment Co., & spare nt
Ltd. parts
Benxi 2018.04
Steel & .20
Execute
Iron Relate
Sales of accordi
(Group) Same On d
goods Energy & ng to
Informati controll agreeme agree 25.45 0.00% 100 No No
and Power the
on and er nt ment
services agreeme
Automati price
nt
c Tech
Co., Ltd.
Benxi 2018.04
Steel & Execute .20
Relate
Iron Sales of accordi
Same On d
(Group) goods Energy & ng to
controll agreeme agree 132.2 0.00% 1,200 No No
Construct and Power the
er nt ment
ion and services agreeme
price
Repairing nt
Co., Ltd.
Benxi Raw 2018.04
Steel & material Execute .20
Relate
Iron Sales of & accordi
Same On d
(Group) goods suppleme 5,008.9 ng to
controll agreeme agree 0.10% No Yes
Construct and ntary 5 the
er nt ment
ion and services materials agreeme
price
Repairing & spare nt
Co., Ltd. parts
40
Bengang Steel Plates Co., Ltd. Annual Report 2018
The
Amount
approve Means
Pricing Price of Whethe Availabl
d of
Type of Content of principle of related Proporti r exceed e
trading paymen Index
related related of relate party on of the market Date of
Related Relation limit of t of of
party party related d transacti similar approve price of disclosu
parties ship transacti related disclos
transacti transactio party party ons (in transacti d similar re
ons (in party ure
ons ns transacti transa 10 ons limited transacti
10 transacti
ons ctions thousan (Y/N) ons
thousan ons
d)
d)
Benxi 2018.04
Steel & Execute .20
Relate
Iron Sales of accordi
Same On d
(Group) goods Energy & ng to
controll agreeme agree 555.29 0.01% 15,000 No No
Metallurg and Power the
er nt ment
y services agreeme
price
Residues nt
Co., Ltd.
Benxi Raw 2018.04
Steel & material Execute .20
Relate
Iron Sales of & accordi
Same On d
(Group) goods suppleme 23,215. ng to
controll agreeme agree 0.46% No Yes
Metallurg and ntary 49 the
er nt ment
y services materials agreeme
price
Residues & spare nt
Co., Ltd. parts
Benxi 2018.04
Steel & Execute .20
Relate
Iron Sales of accordi
Same On d
(Group) goods Freight ng to
controll agreeme agree 0.00% No No
Metallurg and revenue the
er nt ment
y services agreeme
price
Residues nt
Co., Ltd.
Benxi 2018.04
Steel & Execute .20
Relate
Iron Sales of accordi
Same On d
(Group) goods 1,732.8 ng to
controll Products agreeme agree 0.03% No Yes
Metallurg and 6 the
er nt ment
y services agreeme
price
Residues nt
Co., Ltd.
Execute 2018.04
Benxi Relate
Sales of accordi .20
Steel & Parent On d
goods Energy & ng to
Iron Compan agreeme agree 132.59 0.00% 12,000 No No
and Power the
(Group) y nt ment
services agreeme
Co., Ltd. price
nt
Raw 2018.04
material Execute .20
Benxi Relate
Sales of & accordi
Steel & Parent On d
goods suppleme ng to
Iron Compan agreeme agree 300.21 0.01% No No
and ntary the
(Group) y nt ment
services materials agreeme
Co., Ltd. price
& spare nt
parts
Benxi Execute 2018.04
Relate
New Sales of accordi .20
Same On d
Career goods Energy & ng to
controll agreeme agree 43.87 0.00% 500 No No
Develop and Power the
er nt ment
ment Co., services agreeme
price
Ltd. nt
Dalian Same Sales of Products On Relate 585.99 0.01% 1,000 No Execute Yes 2018.04
41
Bengang Steel Plates Co., Ltd. Annual Report 2018
The
Amount
approve Means
Pricing Price of Whethe Availabl
d of
Type of Content of principle of related Proporti r exceed e
trading paymen Index
related related of relate party on of the market Date of
Related Relation limit of t of of
party party related d transacti similar approve price of disclosu
parties ship transacti related disclos
transacti transactio party party ons (in transacti d similar re
ons (in party ure
ons ns transacti transa 10 ons limited transacti
10 transacti
ons ctions thousan (Y/N) ons
thousan ons
d)
d)
Boluole controll goods agreeme d accordi .20
Steel er and nt agree ng to
Tube Co., services ment the
Ltd. price agreeme
nt
Liaoning Execute 2018.04
Relate
Bengang Sales of accordi .20
Same On d
Steel & goods ng to
controll Products agreeme agree 0.00% 1,000 No Yes
Iron and the
er nt ment
Trading services agreeme
price
Co., Ltd. nt
Benxi Execute 2018.04
Relate
Steel & Sales of accordi .20
Same On d
Iron goods Energy & ng to
controll agreeme agree 8.11 0.00% 50 No No
(Group) and Power the
er nt ment
General services agreeme
price
Hospital nt
Benxi 2018.04
Steel & .20
Execute
Iron Relate
Sales of accordi
(Group) Same On d
goods Energy & ng to
Zhengtai controll agreeme agree 0.27 0.00% 50 No No
and Power the
Construct er nt ment
services agreeme
ion price
nt
Materials
Co., Ltd.
Liaoning 2018.04
Hengtong .20
Execute
Metallurg Relate
Sales of accordi
ical Same On d
goods Energy & ng to
Equipmen controll agreeme agree 0.00% 10,000 No No
and Power the
t er nt ment
services agreeme
Manufact price
nt
ure Co.,
Ltd.
Liaoning
Raw
Hengtong
material Execute
Metallurg Relate
Sales of & accordi
ical Same On d
goods suppleme 1,955.2 ng to 2018.04
Equipmen controll agreeme agree 0.04% No Yes
and ntary 9 the .20
t er nt ment
services materials agreeme
Manufact price
& spare nt
ure Co.,
parts
Ltd.
Liaoning 2018.04
Hengtong .20
Execute
Metallurg Relate
Sales of accordi
ical Same On d
goods 1,019.9 ng to
Equipmen controll Products agreeme agree 0.02% No Yes
and 1 the
t er nt ment
services agreeme
Manufact price
nt
ure Co.,
Ltd.
42
Bengang Steel Plates Co., Ltd. Annual Report 2018
The
Amount
approve Means
Pricing Price of Whethe Availabl
d of
Type of Content of principle of related Proporti r exceed e
trading paymen Index
related related of relate party on of the market Date of
Related Relation limit of t of of
party party related d transacti similar approve price of disclosu
parties ship transacti related disclos
transacti transactio party party ons (in transacti d similar re
ons (in party ure
ons ns transacti transa 10 ons limited transacti
10 transacti
ons ctions thousan (Y/N) ons
thousan ons
d)
d)
Raw 2018.04
Bengang
material Execute .20
Cold-rolle Relate
Sales of & accordi
d Same On d
goods suppleme ng to
Stainless controll agreeme agree 0.00% 500 No Yes
and ntary the
Steel er nt ment
services materials agreeme
Dandong price
& spare nt
Co., Ltd.
parts
Bengang 2018.04
Execute
Cold-rolle Relate .20
Sales of accordi
d Same On d
goods ng to
Stainless controll Products agreeme agree 0.00% No Yes
and the
Steel er nt ment
services agreeme
Dandong price
nt
Co., Ltd.
Execute 2018.04
Relate
Suzhou Sales of accordi .20
Same On d
Bengang goods 39,596. ng to
controll Products agreeme agree 0.79% 30,000 No Yes
Industrial and 68 the
er nt ment
Co., Ltd. services agreeme
price
nt
Execute 2018.04
Relate
Bengang Sales of accordi .20
Same On d
Group goods Energy & ng to
controll agreeme agree 1.46 0.00% 500 No No
Finance and Power the
er nt ment
Co., Ltd. services agreeme
price
nt
Execute
Relate
Sales of accordi
Bengang On d
Controll goods Energy & ng to 2018.04
Group agreeme agree 3.93 0.00% 500 No No
er and Power the .20
Co., Ltd. nt ment
services agreeme
price
nt
2,626,1 2,920,3
Total -- -- -- -- -- -- -- --
51.12 00
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
43
Bengang Steel Plates Co., Ltd. Annual Report 2018
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.
XVII. Major Contracts and Their Performance
1. Trusteeship, contracting and lease
(1) Trusteeship
□ Applicable √ Not applicable
There was no trusteeship during the reporting period.
(2) Contracting
□ Applicable √ Not applicable
There was no contracting during the reporting period.
(3) Lease
√ Applicable □ Not applicable
Company as the lessor
Lessee Lease capital category Lease income of 2018 Lease income of 2017
Benxi Steel & Iron (Group) Steel & 500,000.00 500,000.00
Warehouse and machinery
Iron Process and Logistics Co., Ltd.
Benxi Steel & Iron (Group) 490,000.00 490,000.00
Plants and machinery
Machinery Manufacture Co., Ltd.
Company as the lessee
Lessor Lease capital category Lease charges of 2018 Lease charges of 2017
Benxi Steel & Iron (Group) 247,959,966.10 243,353,313.24
2300 Hot rolling product line
Co., Ltd
Benxi Steel & Iron (Group) 54,691,428.60 54,691,428.60
Land use right
Co., Ltd
44
Bengang Steel Plates Co., Ltd. Annual Report 2018
Benxi Beiying Steel & Iron 135,959,033.13 134,443,446.44
1780 Hot rolling product line
(Group) Co., Ltd.
Financial lease matters:
During the reporting period, the company leased machinery and equipment from Liaoning Hengyi Finance Leasing Co., Ltd. in
the form of financial leases. As of the end of the reporting period, the long-term accounts payable amounted to RMB
13,686,705.92. The equipment was presented in the construction in progress subject.
Notes to lease from or to related parties:
1. The Company leases land from Bengang Group Co., Ltd., with a monthly rent of 0.594 yuan per square meter. The leased
land is 7,669,068.17 square meters and the annual rent is 54,665.10 thousand yuan.
2. For the 2300mm hot rolling product line leased from the Group to the Company, lease period lasts from 1 January 2018 to 31
December 2020. 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. “Notice on
Bengang Steel Plates Co., Ltd. signing a renewal agreement with Benxi Steel (group) Co., Ltd” were adopted on the sixth
meeting of the seventh board of directors, it stipulated that the company leased the 1780 hot rolling product line from Benxi
Beiying Steel & Iron (Group) Co., Ltd., 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. The annual rent shall not exceed RMB
150,000,000.00.
Projects that bring profits and losses to the company that exceed 10% of the company's total profit during the reporting
period
□ Applicable √ Not applicable
There was no projects that bring profits and losses to the company that exceed 10% of the company's total profit during
the reporting period.
2. Guarantee
□ Applicable √ Not applicable
There was no guarantee during the reporting period.
3. Entrusting Others for Managing Cash Asset
(1) Entrusted Finance
√ Applicable □ Not applicable
Contents of entrusted finance during the reporting period
Unit: in 10 thousand yuan
Overdue amount not
Type Fund resource Amount Unexpired balance
recovered
Temporary working
Bank finance products 17,300 0 0
capital
45
Bengang Steel Plates Co., Ltd. Annual Report 2018
Total 17,300 0 0
The specific situation of high-risk entrusted wealth management with large single amount or low security, poor liquidity and
non-guarantee
□ Applicable √ Not applicable
Entrusted wealth management is expected to be unable to recover the principal or other circumstances that may result in impairment
□ Applicable √ Not applicable
(2) Entrusted Loans
□ Applicable √ Not applicable
There was no entrusted loan during the reporting period.
4. Other Major Contracts
□ Applicable √ Not applicable
There was no other major contract during the reporting period.
XVIII. Social Responsibilities
1. Performing other corporation social responsibilities
During the reporting period, the company actively protected the legitimate rights and interests of creditors and all
employees while pursuing the economic benefits of the company and protecting the interests of shareholders, in
accordance with the spirit of corporate social responsibility, and actively treated suppliers, customers and consumers.
Public welfare undertakings such as environmental protection and community building. In the business activities,
consciously follow the principles of voluntariness, fairness, equal pay, honesty and credit, consciously abide by social
morality, professional ethics, consciously accept the supervision of the government and the public, and actively fulfill
the corporate social responsibility.
2. Performing corporation social responsibility of targeted poverty alleviation
In the annual report of the company, there has been no accurate poverty alleviation work, and there is no follow-up accurate poverty
alleviation plan.
3. Environmental protection-related conditions
Whether the listed company and its subsidiaries belong to the key pollutant discharge units announced by the environmental
protection department.
Yes
Main The
The number Emission The Approved Surpass the
pollutants Discharge distribution Total
Name of discharge concentratio emission total emission
and specific modes of discharge emission
hatch n standard emission standard
pollutants hatch
Energy
integral
Bengang Unapproved
factory Sewage
Steel Plates COD Continuous 1 Sewage 50 279.74 tons by the None
sewage 21.6
Co., Ltd. government
treatment
plant.
Raw Raw Raw None
Bengang Continuous material materials materials 18052.85 Unapproved
Particulate
Steel Plates and 178 dumper, 14-23; 25; by the
Co., Ltd.
Matter
intermittent
tons government
transfer Ironmaking ironmaking
station, 7-35; 25-50;
46
Bengang Steel Plates Co., Ltd. Annual Report 2018
mine pit, Steelmaking steelmaking
pre-mixing; 7-27; 20-50;
ironmaking Special special steel
iron and steel 7-15; 20; power
steel field, Power generation
furnace top, generation 10-30; cold
fuel, 5-10; Cold rolling 20;
solvent, rolling; hot rolling
whole grain, 6-18 hot 20.
ore coke rolling 6-15.
tank,
sintering
head, tail;
steelmaking
water
pretreatmen
t, iron alloy
feeding ,
North-South
inverted
irrigation
stations,
primary
dust
removal,
secondary
dust
removal,
refining and
dust
removal;
special steel
furnace,
refining
furnace,
electro slag
furnace;
desulfurizati
on and
denitrificati
on of power
generation
boilers;
cold-rolled
acid
regeneration
, pickling,
tensioning,
welding,
leveling,
Annealing,
baking; hot
rolling
furnace.
Ironmaking Sintering Unapproved None
sintering machine Sintering by the
head; power head 12-40; head 200; government
generation power power
Bengang Continuous
boiler; cold generation generation 6600.96
Steel Plates SO and 64
rolling 10-70; cold 100-200; tons
Co., Ltd. intermittent
roasting, rolling cold rolling
annealing; 80-100; hot 150; hot
hot rolling rolling rolling 150.
furnace. 118-128.
Bengang Oxides of Continuous 57 Ironmaking Sintering Sintering 13741.86 Unapproved None
Steel Plates nitrogen and sintering head head 300; tons by the
47
Bengang Steel Plates Co., Ltd. Annual Report 2018
Co., Ltd. intermittent head; power 100-230; power government
generation power generation
boiler; cold generation 100-200;
rolling 50-140; cold rolling
roasting, cold rolling 300; hot
annealing; 69-172; hot rolling 300.
hot rolling rolling
furnace. 105-124.
furnace.
Construction and operation of pollution prevention facility:
The company has a total of 178 sets of environmental pollution prevention and control facilities. In addition to the hot rolling mill
2300 production line, the rough-rolling finishing rolling plastic plate dust collector which is designed for the production of stainless
steel, the rest of the facilities are put into use normally.
Environmental Impact Assessment and Other Environmental Protection Administrative Licensing of Construction Projects
Plate special steel rolling mill transformation - the initial rolling mill renovation project completed the environmental
impact assessment, Benxi City Environmental Protection Bureau issued the environmental assessment approval:
Ben-Huan-Jian-Biao-Zi [2018] No. 02, 2018-5-28;
2. The environmental protection of the No. 6 blast furnace dry dedusting and TRT renovation project of the Plate
Energy General Plant was completed by the Benxi Environmental Protection Bureau. The approval of the
environmental protection bureau of this project: Ben-Huan-Jian-Biao-Zi [2018] No. 03, June 29, 2018.
The three-electric cogeneration project of the plate power plant completed the enterprise's independent environmental
protection acceptance in June 2018;
Sheet cold-rolled high-strength steel transformation project, sheet metal three-cold hot-dip galvanizing production line
project, completed the company's independent environmental protection acceptance in October 2018.
Emergency plan for emergency environmental incidents
The company and its subordinate 13 units are revised the emergency plans for emergency environmental incidents, and
carried out related work such as risk assessment and investigation of emergency resources in accordance with the "Law
of the People's Republic of China on Incident Responses", "Notice on Printing and Distributing the Guidelines for Risk
Assessment of Enterprises' Environmental Emergencies (Trial)", and "Emergency Preparedness for Environmental
Incidents of Enterprises and Institutions" Existing laws and regulations such as the Administrative Measures (Trial).
Environmental self-monitoring project.
In 2018, the self-monitoring plan was carried out in accordance with the requirements of the pollutant discharge permit.
The monitoring points of Benxi Steel pollution sources: 172 flue gas, 10 wastewater monitoring points, 5 noise points at
the boundary of the plant, 27 atmospheric dustfall points, and newly added unorganized monitoring. The number of
points is 60. From the plate factory to the mine, the monitoring is divided into weekly, monthly, seasonal, semi-annual
and annual frequency monitoring. The main monitoring items of the automatic air quality monitoring station are PM10,
PM2.5, sulfur dioxide and nitrogen dioxide. , O3, CO, one set of data per hour, a total of 52,560 monitoring data were
obtained throughout the year; 27 steel dust points were distributed in the steel plant area, and 324 monitoring data were
obtained; routine monitoring tasks for flue gas were completed, and monitoring was achieved throughout the year. 1842
data; 5 noise monitoring points at the boundary of the plant, 160 monitoring data; 20 wastewater monitoring points,
3,660 monitoring data; 347 temporary monitoring data, and a total of 6333 monitoring data reported by the monitoring
station. Monthly, quarterly reports and separate monitoring reports for each mine are reported.
Other environmental information that should be disclosed
None
Other environmental protection related information
In 2018, the company completed the application for the pollutant discharge permit of the raw material factory,
iron-making plant, steel-making plant, hot-rolling plant, one cold rolling, two cold rolling, three cold rolling and special
steel plants of the plate company, and completed the discharge permit change work of the plate company power plant
and coking plant.
XIX. Other Major Issues
□ Applicable √ Not applicable
There was no need for illustrating other major issue.
XX. Major Issues of Subsidiaries
□ Applicable √ Not applicable
48
Bengang Steel Plates Co., Ltd. Annual Report 2018
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
Capitaliz
ation of
Percenta Issuing of new Bonus Othe Percenta
Quantity common Subtotal Quantity
ge share shares rs ge
reserve
fund
I. Restricted Shares 739,371,532 739,371,532 739,371,532 19.08%
1.State shareholding
2. State-own Legal-person 184,842,883 184,842,883 184,842,883 4.77%
Shareholding
3. Other domestic 554,528,649 554,528,649 554,528,649 14.31%
shareholdings
Including:
Domestic legal person 554,528,649 554,528,649 554,528,649 14.31%
holding
Domestic natural person
holding
II. Non-restricted Shares 3,136,000,000 100.00% 3,136,000,000 80.92%
1. Common shares in
2,736,000,000 87.24% 2,736,000,000 70.60%
RMB
2. Foreign shares in
400,000,000 12.76% 400,000,000 10.32%
domestic market
III. Total shares 3,136,000,000 100.00% 739,371,532 739,371,532 3,875,371,532 100.00%
Causation of share capital changes
√Applicable □Not applicable
With the approval of the China Securities Regulatory Commission's "Approval of the Private Issuance of Shares of Benxi Steel Plate
Co., Ltd" (Securities Regulatory License [2017] 1476), the company issued the shares to Liaoning Traffic Investment Co., Ltd.,
Jianxin Fund Management Co., Ltd., Beixin Ruifeng Fund Management Co., Ltd., and Guoshou Security Fund Management Co., Ltd.
in private. Bank 739,371,532 common shares (RMB).
Approval of share capital changes
√ Applicable □Not applicable
1. On June 13, 2017, the China Securities Regulatory Commission (CSRC) issued an audit committee to examine and approve the
company's application for non-public issuance of shares.
2. On August 11, 2017, the China Securities Regulatory Commission (CSRC) approved the issue of Private Issuance of Shares of this
Steel Plate Co., Ltd. (CSRC License No. 1476). The company received the approval on August 21, 2017 and made a public
announcement on August 22, 2017.
Status of registration process of transferred shares
√ Applicable □Not applicable
On February 9, 2018, the company submitted relevant registration data to Shenzhen Branch of China Securities Registration and
Settlement Co., Ltd. It has been confirmed that the newly issued shares will be registered at the end of the trading day prior to the
listing date and formally listed in the company's shareholder register.
Progress of Share Repurchase
□ Applicable √ Not applicable
Implementation Progress of Reducing Holdings of Repurchase Shares by Centralized Bidding
□ 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
49
Bengang Steel Plates Co., Ltd. Annual Report 2018
□ Applicable √ Not applicable
2. Changes of Restricted Shares
□ Applicable √ Not applicable
Unit: Share
Number of Increased number
Number of initial Limited Shares of restricted End-of-Term Restriction
Shareholder Release date
restricted shares Released in the shares in the Limited Shares reason
Current Period current period
The number of
Liaoning
restricted shares
Provincial
participating in
Transportation 0 0 184,842,883 184,842,883 Mar 5th 2019
the additional
Investment Group
issue was
Co., Ltd.
184,842,883.
CCB Principal
The number of
Asset Management
restricted shares
– ICBC – CR Trust
participating in
– CR Trust Xing 0 0 184,842,883 184,842,883 Mar 5th 2019
the additional
Sheng No. 5
issue was
Collective Fund
184,842,883.
Trust Plan
Bei Xin Rui Feng
The number of
Fund – China
restricted shares
Merchants Bank –
participating in
Bei Xin Rui Feng 0 0 184,842,883 184,842,883 Mar 5th 2019
the additional
Fund Feng Qing
issue was
No. 229 Asset
184,842,883.
Management Plan
China Life AMP
Fund– ICBC –
The number of
China Life AMP –
restricted shares
Hua Xin Trust
participating in
Targeted 0 0 184,842,883 184,842,883 Mar 5th 2019
the additional
Additional Shares
issue was
Issuance No. 10
184,842,883.
Asset Management
Plan
Total 0 0 739,371,532 739,371,532 -- --
II. Securities Issuance and Listing
1. Status of Security Issuance (Excluding Preferred Shares) in the Reporting Period
√ Applicable □ Not applicable
Names of stocks Quantity of Deal
Issuance price
and their Issue date Issue quantity Date of listing approved listing Termination
(or interest rate)
derivatives transactions Date
Stock
Bengang Steel
Feb 1st 2018 5.41 yuan 739,371,532 Mar 5th 2019 739,371,532
Plates
Convertible corporate bonds, separately traded convertible corporate bonds, corporate bonds
Other Derivative Securities
Notes on the status of security issuance (excluding preferred shares) in the reporting period
On August 21, 2017, the company obtained the certificate No. 1476 issued by China Securities Regulatory Commission on
August 11, 2017, which approved the non-public issuance of no more than 739,371,354 shares of Bengang steel plate. On
February 12, 2018, the company completed the registration of the non-public issuance of shares and the limited sale of
shares. On March 5, 2018, the company listed new shares in its private offering at a price of 5.41 yuan per share.
50
Bengang Steel Plates Co., Ltd. Annual Report 2018
2. Total Share and Shareholder Change and Asset and Liability Structure Change
√ Applicable □ Not applicable
During the reporting period, 739,371,354 shares of the company were issued in private. The total equity of the company increased
from 3,136,000,000 shares at the beginning of the period to 3,875,371,532 shares, including 3,475,371,532 common shares (RMB)
(A shares) and 400,000,000 foreign-funded shares (B shares) listed in China.
Liaoning Provincial Transportation Investment Group Co., Ltd., CCB Principal Asset Management – ICBC – CR Trust – CR
Trust Xing Sheng No. 5 Collective Fund Trust Plan, Bei Xin Rui Feng Fund – China Merchants Bank – Bei Xin Rui Feng Fund
Feng Qing No. 229 Asset Management Plan, China Life AMP Fund– ICBC – China Life AMP – Hua Xin Trust Targeted Additional
Shares Issuance No. 10 Asset Management, which participated in the company's non-public offering, have become the top two to five
shareholders of the company (see the top 10 shareholders in this report for details).
3. Employee Shareholding Status
□ Applicable √ Not applicable
III. Shareholders and Actual Controller
1. Total Number of shareholders and shareholding
In Shares
Total
The total number of Total preferred
shareholders at
Total number of shareholders at the
the end of the preferred shareholders
common shareholders end of the month from
61,271 month from the 59,625 voting rights restored at 0 0
at the end of the the date of disclosing
date of the end of the reporting
reporting period the annual report (if
disclosing the period (See Notes 8) any) (See Notes 8)
annual report
Shareholding of shareholders holding more than 5% or top 10 shareholders
Holding Number of Changes in Number of pledged or
Name of the Nature of Restricted Un-restricted frozen shares
Percentage shares held at reporting
shareholder shareholder shares held shares held
(%) period-end period Status Number
Benxi Steel & Iron State-owned Pledged 1,652,095,133
60.78% 2,355,409,263 70,998,061 2,355,409,263
(Group) Co., Ltd. legal person Frozen 45,000,000
Liaoning Provincial
Transportation State-owned
4.77% 184,842,883 184,842,883 184,842,883
Investment Group legal person
Co., Ltd.
CCB Principal Asset
Management – ICBC
– CR Trust – CR
Others 4.77% 184,842,883 184,842,883 184,842,883
Trust Xing Sheng
No. 5 Collective Fund
Trust Plan
Bei Xin Rui Feng
Fund – China
Merchants Bank – Bei
Xin Rui Feng Fund Others 4.77% 184,842,883 184,842,883 184,842,883
Feng Qing No. 229
Asset Management
Plan
China Life AMP
Fund– ICBC – China
Life AMP – Hua Xin
Trust Targeted Others 4.77% 184,842,883 184,842,883 184,842,883
Additional Shares
Issuance No. 10 Asset
Management Plan
VANGUARD Overseas legal 0.21% 8,157,311 8,157,311
51
Bengang Steel Plates Co., Ltd. Annual Report 2018
EMERGING person
MARKETS STOCK
INDEX FUND
Domestic
Chen Jinhong 0.19% 7,480,675 1,773,175 7,480,675
natural person
Domestic
Lyu Ruijun 0.13% 5,192,800 69,000 5,192,800
natural person
VANGUARD TOTAL
INTERNATIONAL Overseas legal
0.12% 4,606,141 4,606,141
STOCK INDEX person
FUND
Agricultural bank of
China - China
Securities 500 Trading Others 0.10% 4,057,810 4,057,810 4,057,810
Open Index Securities
Investment Fund
Strategy investors or general legal
person becomes top 10 shareholders due None
to rights issued (if any) (See Notes 3)
It is unknown to the Company whether there is any related connection or ‘Action in Concert’ as
Notes to relationship or ‘action in
described by Rules of Information Disclosing Regarding Changing of Shareholding Status of
concert’ among the top 10 shareholders.
Listed Companies existing among the above shareholders.
Shareholding of top 10 unrestricted shareholders
Un-restricted shares held at Category of shares
Name of the shareholder
the end of the reporting period Category of shares Quantity
Benxi Steel & Iron (Group) Co., Ltd. 2,355,409,263 Common shares in RMB 2,355,409,263
VANGUARD EMERGING MARKETS
8,157,311 Foreign shares in domestic exchange 8,157,311
STOCK INDEX FUND
Chen Jinhong 7,480,675 Common shares in RMB 7,480,675
Lyu Ruijun 5,192,800 Foreign shares in domestic exchange 5,192,800
VANGUARD TOTAL INTERNATIONAL
4,606,141 Foreign shares in domestic exchange 4,606,141
STOCK INDEX FUND
Agricultural bank of China - China Securities
500 Trading Open Index Securities Investment 4,057,810 Common shares in RMB 4,057,810
Fund
Yu Xiaofan 4,002,707 Foreign shares in domestic exchange 4,002,707
Xu Hekun 3,738,800 Foreign shares in domestic exchange 3,738,800
Basic Endowment Insurance Fund 1302
3,728,166 Common shares in RMB 3,728,166
Portfolio
Feng Meijuan 3,429,850 Common shares in RMB 3,429,850
Benxi Steel & Iron (Group) Co., Ltd., the holding shareholder, has no relationship with
any of the other shareholders among the top 10 shareholders, neither being regarded as
action-in-concert parties by the Information Disclosure Regulations for Change of
Notes to relationship or ‘action in concert’
Shareholding in PLC. The Company is not aware of any relationship among the other
among the top 10 non-restricted shareholders,
shareholders, neither being regarded as action-in-concert parties by the Information
and among the top 10 non-restricted
Disclosure Regulations for Change of Shareholding in PLC. The Company is not aware
shareholders and top 10 shareholders
of any 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.
Benxi Steel & Iron (Group) Co., Ltd. Holds 2,105,409,263 shares of the Company’s
stock through credit security account and holds 250,000,000 shares of the Company’s
Shareholders among the top 10 participating in
stock, totaling 2,355,409,263 shares. Feng Meijuan holds 14,000 shares of the
securities margin trading (if any) (see Note 4)
Company’s stock through ordinary account, and holds 3,415,850 shares though credit
security account.
Whether top 10 common shareholders and top 10 un-restricted common shareholders have a buy-back agreement
dealing in reporting period
52
Bengang Steel Plates Co., Ltd. Annual Report 2018
□ Yes √ No
Top 10 common shareholders and top 10 un-restricted common shareholders had no buy-back agreement dealing
in reporting period.
2. Controlling Shareholder
Nature of Controlling Shareholders: Local state holding
Type of Controlling Shareholders: Legal person
Name of the
Legal representative Date of Organization
Controlling Principal business activities
/ person in charge incorporation Code
shareholder
Business scope: steel smelt, mine exploitation, panel
rolling, oxygen manufacturing, pipe manufacturing,
power generating, coal industry, special steel material
manufacturing, heating, supply of the water, electricity,
wind and gas, metal processing, electro mechanics builds,
device manufacturing, architecture installation, railway,
highway transportation, import and export trade, traveling
industry, construction material, refractory material,
Benxi Steel &
9121050011972 measuring device instrument, goods and materials supply
Iron (Group) Co., Yang Chengguang July 10,1996
6263U and marketing, development of real estate, scientific
Ltd.
research, design, information service, property
management, telecommunication, processing of waste
iron, property leasing, exchange of steel material, and
recycling of waste oils (to the extent of licensed to the
subsidiary companies) , property management; publishing
of Bengang Daily; designing and making of presswork
and advertisement, releasing, producing of TV
advertisements in the country and abroad.
Equity of other
domestic/foreign
listed company
with share
controlling and None
share participation
by controlling
shareholder in
reporting period
Changes of controlling shareholders during the reporting period
□ Applicable √ Not applicable
3. Actual Controller
Actual controller nature: Local state owned assets management
Actual controller type: Legal person
Legal representative Principal business
Name of the controlling shareholder Date of incorporation Organization Code
/ person in charge activities
Bengang Group Co., Ltd. Chen Jizhuang November 25, 2010 912100005646255759 Asset management
Equity of other domestic/foreign
listed company with share
controlling and share participation None
by controlling shareholder in
reporting period
Change of actual controller during the reporting period
□ Applicable √ Not applicable
There is no change of actual controller during the reporting period.
Block diagram of the ownership and control relations between the Company and the actual controller
53
Bengang Steel Plates Co., Ltd. Annual Report 2018
Liaoning Provincial State-owned Assets
Supervision and Administration Commission
Liaoning Council for social security fund
80% 20%
Bengang Group Finance Co., Ltd. Huatai Securities (Shanghai) Asset Management Co., Ltd.
85.33% 14.67%
Benxi Steel & Iron (Group) Co., Ltd.
60.78%
Bengang Steel Plates Co., Ltd.
Whether the actual controller is controlling the Company through trusteeship or other asset management service
□ Applicable √ Not applicable
4. Shareholders holding More than 10% of the Shares
□ Applicable √ Not applicable
5. Status of Share Reduction Limitation of Controlling Shareholders, Actual Controller, Restructuring
Party and Other Commitment Subjects
□ Applicable √ Not applicable
54
Bengang Steel Plates Co., Ltd. Annual Report 2018
VII. Status of Preferred Shares
□ Applicable √ Not applicable
There was no Preferred Shares during the reporting period.
55
Bengang Steel Plates Co., Ltd. Annual Report 2018
VIII. Status of Directors, Supervisors, Senior Executives and
Employees
I. Change in Shares held by Directors, Supervisors and Senior Executives
Shares Shares Shares
Starting Expiry Other Shares
Offic held at increased decreased
date of date of increase held at
Name Position e Sex Age the during the during the
office office / the
status year-b reporting reporting
term term decrease year-end
egin period period
Leavi
Wang Director, December March 14,
ng Male 48
Shu Chairman 27, 2016 2019
office
Cao Director, Vice In October May 26,
Male 52
Aimin Chairman office 26, 2009 2019
Huang In May 24, May
Director Male 56
Xinghua office 2018 26,2019
Jin Independent In May 17, May
Male 61
Yongli Director office 2013 26,2019
Zhong Independent In Femal May 20, May
62
Tianli Director office e 2014 26,2019
Zhao Independent In May 21, May
Male 59
Xinan Director office 2015 26,2019
Supervisor,
Chairman of In Femal February May
Han Mei 50
Supervisory office e 19, 2014 26,2019
Committee
In Femal February May
Li Lin Supervisor 51
office e 19, 2014 26,2019
Liu In August May
Supervisor Male 49
Yansong office 14, 2018 26,2019
Zhang In January May
Supervisor Male 42
Yanlong office 26, 2014 26,2019
General In August May
Gao Lie Male 52
Manager office 27, 2018 26,2019
Bao Deputy General In December May
Male 56
Mingwei Manager office 28, 2012 26,2019
Wang Deputy General In January May
Male 54
Fengmin Manager office 26, 2014 26,2019
Hu Deputy General In Male 59 January May
56
Bengang Steel Plates Co., Ltd. Annual Report 2018
Guangyu Manager office 26, 2014 26,2019
an
Zhao Director of
In Femal April May
Zhonghu Finance 35
office e 18,2018 26,2019
a
Gao Secretary of the In Septembe May
Male 45
Desheng Board office r 20,2018 26,2019
Director, Leavi
February August
Han Ge General ng Male 50
19,2014 08,2018
Manager office
Tang Leavi
December April
Chaoshen Director ng Male 56
27,2016 18,2018
g office
Supervisor,
Leavi
Dong Chairman of Femal February April
ng 55
Liju Supervisory e 19, 2014 18,2018
office
Committee
Li Leavi
April 1, April
Zhengchu Supervisor ng Male 46
2015 18,2018
n office
Leavi
Wang Deputy General October April
ng Male 55
Shaoyu Manager, CFO 28, 2015 18,2018
office
Leavi
Sun Secretary of the August 3, April
ng Male 37
Yanbin Board 2015 18,2018
office
Total -- -- -- -- -- --
II. Change in Directors, Supervisors and Senior Executives
√Applicable □ Not applicable
Type of
Name Position Date Reason
change
Director, General
Han Ge Leaving office August 08,2018 Voluntary turnover
Manager
Tang
Director Leaving office April 18,2018 Voluntary turnover
Chaosheng
Supervisor,
Chairman of
Dong Liju Leaving office April 18,2018 Voluntary turnover
Supervisory
Committee
Li Zhengchun Supervisor Leaving office April 18,2018 Voluntary turnover
Wang Shaoyu Deputy General Dismissal April 18,2018 Job change
57
Bengang Steel Plates Co., Ltd. Annual Report 2018
Manager, Director of
Finance
Secretary of the
Sun Yanbin Dismissal April 18,2018 Job change
Board
III. Posts holding
Work experience in the past five years of Directors, Supervisors and Senior Executives in current office
Profiles of the members of the Board:
Gao Lei, Male, 52, undergraduate, master of engineering, professor-level senior engineer. Once Chairman of Benxi
Iron and Steel(Group)Mining Co.,Ltd; Manager of Mineral Resources Development Company; Assistant General
Manager of Bengang Group Co., Ltd. and Manager of Mineral Resources Development Company; Deputy General
Manager of Bengang Group Co.,Ltd; He is now Member of the Standing Committee of the company’s party
committee, chairman of Bengang Steel Plate Co.,Ltd.
Cao Aimin, Male, 52, undergraduate, senior accountant. Once Head of Capital Division of Finance Department;
Head of Planning and Finance Division; and Chief Accountant. Director and Chief Accountant of Bengang Group
Co., Ltd. He is now Member of the Standing Committee of the company’s party committee, Vice Chairman of
Bengang Steel Plates Co., Ltd.
Huang Xinghua, Male, 56, College degree, senior accountant. Once Deputy director of the planning and finance
department of Benxi Iron and Steel (Group) Co.,Ltd; Director and Chief accountant of Benxi Iron and Steel(Group)
Co.,Ltd; Director of the finance department of Bengang Group Co., Ltd. He is now the head of the finance
department of Bengang Group Co., Ltd., Benxi Iron and Steel Director of (Group) Co., Ltd., Director of Bengang
Steel Plate Co., Ltd.
Jin Yongli, Male, 61, postgraduate, professor. Once he was the dean of engineering school of Shenyang University.
At present he is the dean of Business School of Shenyang University. He has been Independent Director of the
Company since May 2013.
Zhong Tianli, Female, 63. Once she was Professor of Northeast Universities (Doctorial Tutor). Once she was vice
dean of Business School of Northeast University, dean of Fundamental Study School and Head of Accounting
Institute of Northeast University. At present she is professor of Accounting Dept. of Business School of Northeast
University. She has been Independent Director of the Company since May 2014.
Zhao Xinan, Male, 59, Professor of Northeast Universities (Doctorial Tutor). Once he was vice dean of Business
School of Northeast University, member of the national Education Dept of Management science and Engineering
Teaching steering Committee; He is now Professor of Business School of Northeast University. He has been
independent director of the Company since May 2015.
58
Bengang Steel Plates Co., Ltd. Annual Report 2018
Profiles of the Supervisory Committee:
Hen Mei, Female, 50, undergraduate, senior accountant. Once she was the vice head of financial department of the
Company; vice head of auditing department and head of administration department of the supervisory committee
of Bengang Group; Provincial Government Liaison in Bengang Benxi Steel & Iron (Group) Co., Ltd. Director of
Audit Dept. She now is Head of Audit Department, Chairman of Supervisory Committee of Bengang Steel Plates
Co. Ltd.
Li Lin, Female, 51, postgraduate, engineer. Once she was the administrator of HR department of Bengang Group;
vice chief engineer of Transportation Department of the Company; substitute chairman of the trade union of
Transportation Department of the Company. She now is Secretary of Commission for Discipline Inspection of
Transportation Department and Chairman of the Labour Union of Bengang Steel Plates Co. Ltd. She is now Pary
secretary of Railway company; Supervisor of Bengang Steel Plates Co. Ltd.
Li Xiaowei Male, 44, undergraduate, economist. He was once senior officer of the audit department and Division
chief of the operation audit department of Bengang Group Co., Ltd. he is now the deputy director of the audit
department of Bengang Group Co., Ltd., the supervisor of the finance company, the supervisor of Hengxin
Company, and the supervisor of the board of supervisors of Bengang Steel Plate Co., Ltd.
Liu Yansong Male, 48 years old, postguaduate, senior engineer. He was once Deputy manager and export manager
of Bengang International Trade Co., Ltd.; Acting secretary and Deputy manager of Bengang International Trade
Co., Ltd.; Party secretary of Bengang Steel Cold Rolling Mill. He is now Party secretary of Bengang Steel Hot
Rolling Mill; and Supervisor of Bengang Steel Plate Co., Ltd.
Zhang Yanlong, Male, 42, undergraduate, senior engineer. He once was the workshop manager of steel-making
factory; vice chief of QC department of iron-making factory, Director of Steel-making plant, Manager of
Manufacturing Department of Bengang Steel Plates Co., Ltd.; He is now the assistant of director of production
division of steel-making plant, Supervisor of Bengang Steel Plates Co. Ltd.
Executives other than directors:
Shen Qiang, Male, 51 years old, master's degree, senior engineer. He has served as Secretary of the Board of
Directors and Director of the Board of Directors of Bengang Group Corporation, Director of the Office, Director
of the Secretary of Secretaries, Secretary of the Party Committee of Bengang Group Corporation, Chairman of the
Board of Directors of the Real Estate Company, Secretary of the Party Committee; Director of Benxi Iron and
Steel Company, Deputy Secretary of the Party Committee, Deputy General Manager, Board of Directors Secretary;
Assistant General Manager of Bengang Group Corporation, Minister of Human Resources Department
(Organization Department); current General Manager of Bengang Steel Plate Co., Ltd.
Bao Mingwei, Male, 56 years old, Undergraduate, senior engineer. He has successively served as Secretary of the
Party Committee, Vice Director and Factory Director of the Hot Strip Mill of Benxi Steel Co., Ltd., Vice General
Manager of Benxi Steel Co., Ltd. and Director of the Third Cold Rolling Mill, Vice General Engineer of Benxi
Steel Group Co., Ltd., Minister of Planning and Development Department (Science and Technology Development
Department), Vice General Manager of Benxi Steel Co., Ltd.
59
Bengang Steel Plates Co., Ltd. Annual Report 2018
Wang Fengmin, Male, 54, postgraduate, senior engineer. He has been the deputy director, director and Secretary of
the Party Committee of the ironmaking plant of Benxi Iron and Steel Co., Ltd., deputy general manager and
manufacturing Minister of Benxi Steel Co., Ltd., Deputy Engineer of Benxi Steel Group Co., Ltd., deputy general
manager of Benxi Steel Co., Ltd.
Huo Gang, Male, 46, PHD, senior engineer. He has been the acting general manager of Bengang Puxiang Cold
Rolling Plant, the Secretary and executive vice director of the Party Committee of Bengang No. 3 Cold Rolling
Plant, the Secretary and director of the Party Committee of Bengang No. 3 Cold Rolling Plant, and the current
director of Bengang Cold Rolling Plant, the general manager of Puxiang Cold Rolling Plant and the deputy general
manager of Bengang Steel Stock Co., Ltd.
Zhao Zhonghua, Female, 35, graduate degree, accountant. She has successively been deputy director and director
of the Finance Department of Benxi Steel Plate Co., Ltd., assistant director of the Finance Department of Benxi
Steel Group Co., Ltd., deputy manager of Benxi Steel Group Finance Co., Ltd., and currently the finance minister
of Benxi Steel Plate Co., Ltd.
Gao Desheng, Male, 45, undergraduate, master of management, senior economist. He has been the acting director
of the Business Planning Department of the Operation Improvement Department of Benxi Iron and Steel Group
Co., Ltd., the director of the Ownership Management Department of the Operation Improvement Department of
Benxi Iron and Steel Group Co., Ltd., the director of the Ownership Management Department of the Operation
Improvement Department of Benxi Iron and Steel Group Co., Ltd., the vice-chairman of the First Supervisory
Board, and the director of the office and Secretary of the board.
Posts holding in Shareholders
√ Applicable □ Not applicable
Does he /she
Expiry receive
Names of the
Names of the Starting date of date of remuneration
persons in Titles engaged in the shareholders
shareholders office term office or allowance
office
term from the
shareholder
Bengang Group Co., Vice Secretary of CCP, General December 1,
Wang Shu Yes
Ltd. Manager, Vice Chairman 2013
Bengang Group Co., November 1,
Cao Aimin Director, Chief Accountant Yes
Ltd. 2010
Huang Bengang Group Co.,
Minister of Finance Sep 1, 2017 Yes
Xinghua Ltd.
Director of Audit Department,
Bengang Group Co., February 1,
Han Mei Director of Supervisory Yes
Ltd. 2016
Committee Management
Office taking in
shareholder None
companies
Posts holding in other companies
√Applicable □Not applicable
60
Bengang Steel Plates Co., Ltd. Annual Report 2018
Does he /she
Titles
Names of the receive
engaged in Starting date of Expiry date of
persons in Names of the other companies remuneration or
other office term office term
office allowance from
companies
the shareholder
Benxi Steel Automobile Transportation Co.,
Gao Desheng Director Nov, 1,2013 No
Ltd.
Office taking in
other None
companies
Punishment by the securities regulatory authorities in last three years
□ Applicable √ Not applicable
IV. Remuneration to Directors, Supervisors and Senior Executives
Decision-making procedures, basis of recognition and actual payment of the remuneration to Directors,
Supervisors and Senior Executives
Decision making procedures
1. The Remuneration and Assessment Committee will produce a plan or proposal, which will be implemented
upon approval of the Board or the Shareholders’ Meeting;
2. According to performance assessment criteria and procedures, the Remuneration and Assessment Committee
undertakes assessment on the Directors and Senior Executives;
3. Remuneration amounts and ways of rewards will be proposed according to the assessment and remuneration
policies for Directors, Supervisors and Senior Executives, and adopted by voting;
4. To be implemented upon approval of the Board.
Basis of recognition
Remuneration scheme for a particular position is recognized basing on the range of responsibilities, duties.
Remunerations are distributed based on the assessment results and remuneration policies.
Actual payment of the remuneration
Remuneration is paid on monthly basis according to the remuneration allocation policies.
Remuneration of Directors, Supervisors and Senior Executives during the reporting period
Unit: 10 thousand Yuan
Total Whether receive
remuneration remuneration in
Name Position Sex Age Office status
received from the the Company's
shareholder related parties
Wang Shu Director, Chairman Male 48 In office
Cao Aimin Director, Chairman Male 52 In office
Huang Xinghua Director Male 56 In office
61
Bengang Steel Plates Co., Ltd. Annual Report 2018
Jin Yongli Independent Director Male 61 In office 5
Zhong Tianli Independent Director Female 62 In office 5
Zhao Xinan Independent Director Male 59 In office 5
Supervisor, supervisory
Han Mei Female 50 In office
board chairman
Li Lin Supervisor Female 51 In office 18.1
Liu Yansong Supervisor Male 49 In office 18.51
Zhang Yanlong Supervisor Male 42 In office 13.13
Gao Lie General Manager Male 52 In office 10.94
Bao Mingwei Deputy General Manager Male 56 In office 25.47
Wang Fengmin Deputy General Manager Male 54 In office 28.61
Hu Guangyuan Deputy General Manager Male 59 In office 23.57
Zhao Zhonghua CFO Female 35 In office 17.92
Gao Desheng Secretary of Board Male 45 In office 8.07
Han ge Director, General Manager Male 50 Leaving office 14.19
Tang Chaosheng Director Male 56 Leaving office
Supervisor, supervisory
Dong Liju Female 55 Leaving office
board chairman
Li Zhengchun Supervisor Male 46 Leaving office
Deputy General Manager,
Wang Shaoyu Male 55 Leaving office 1.82
CFO
Sun Yanbin Secretary of the Board Male 37 Leaving office 2.26
Total -- -- -- -- 197.59 --
Incentive equity to Directors, Supervisors and Senior Executives during the reporting period
□ Applicable √ Not applicable
V. Staff Condition
1. Staff Population, Professional Structure and Education Level
Population of in-service staff in parent company 18,436
Population of in-service staff in main subsidiaries 580
Total population of in-service staff 18,436
Total population of staff receiving remuneration in the current
18,436
period
Population of retired staff whose expense was borne by parent
22,695
company and major subsidiary companies
Professional Composition
Type of Professional Composition Population
Production Staff 14,922
Sales Staff 193
Technician 1,466
Financial Staff 143
62
Bengang Steel Plates Co., Ltd. Annual Report 2018
Administrative Staff 1,712
Total 18,436
Educational Degree
Type of Educational Degree Population
PhD. 11
Postgraduate 335
Undergraduate 3,463
Junior college 5,375
Others 9,252
Total 18,436
2. Remuneration Policies
In 2018, the company will further strengthen the management of salary distribution, establish a "de-administrative"
broadband salary system, open up channels for the functional development of business, technology and operational
posts, and improve the salary standards of employees. We should implement total compensation contract, guide all
units to allocate human resources rationally, optimize the distribution mechanism and improve labor productivity,
and give full play to the role of salary incentives and constraints. Simplify the annual salary structure and establish
an annual salary assessment system which is linked to the group's efficiency and employee's income. Promote and
strengthen the management of ERP salary, and realize the direct connection between banks and enterprises and the
closed-loop management of salary.
3. Training Plan
The company plans to complete 96 training projects and train 24,698 people throughout the year. Ensure that the
training rate of the whole staff reaches 70%, and the implementation rate of the annual training plan reaches 85%.
4. Outsourcing
□ Applicable √ Not applicable
63
Bengang Steel Plates Co., Ltd. Annual Report 2018
IX. Corporate Governance
I. Basic Situation of Corporate Governance
Since listed in the stock exchange, the Company has been following the laws, regulations and
documents such as the Company Law, Securities Law, Listed Company Governance Rules,
Shareholders’ Meeting Criteria of Listed Companies, Guide of Lifting the Quality of Listed
Company, and Instructions for Articles of Association of Listed Companies. The Company has
been establishing and improving governance structure to protect the interests of the Company and
the investors. The Shareholders’ Meeting was working with clear responsibilities and
decision-making procedures. Arrangements were made to enable convenient participating of the
public investors. Online voting system was introduced for material decision making processes.
During the reporting period, according to the relevant laws and regulations, and combining with
the actual situation of the Company, ‘Company policy’ and ‘Rules of Shareholders' General
Meeting’ was formulated.
Whether there exists any difference in compliance with corporate governance, PRC Company Law
and relevant provisions of CSRC
□ Yes √ No
There exists no difference in compliance with corporate governance, PRC Company Law and
relevant provisions of CSRC
II. Explanation on Structural Independence of the Company on Business, Personnel, Assets,
Organization and Finance from the Controlling Shareholder
The Company is separated from the controlling shareholder in aspects of business, personnel,
assets, organization and finance, etc. and has its own independent and complete business
operation.
(1) In business operation: The Company has its own production and business planning, financial
affairs check and calculate, labor and personnel, raw material supplies and products selling
business system independently and completely.
(2) In personnel: The Company and controlling shareholder are separate in such aspects as labor,
personnel and salary management. Such senior executives as company's chairman, general
manager, vice general manager, secretary of Board of Directors, etc. get salary from the Company,
and hold the important position other than a director in shareholder department.
(3) In Asset: The Company is separated from the controlling shareholder's clearly in asset. The
Company has its own independent purchase, production, and marketing system.
(4) In organization: The internal operations of the Company are independent; organization
structure and working function are totally independent.
64
Bengang Steel Plates Co., Ltd. Annual Report 2018
(5) In finance: The company has independent financial management department, the accounting
and financial management system where are complete and operated independently, and has bank
account and pay taxes independently.
III. Competition Situations of the Industry
□ Applicable √ Not applicable
IV. Annual General Meeting and Extraordinary Shareholders’ Meetings in the Reporting
Period
1. Annual General Meeting
Investor Index of information
Sessions Type Meeting Date Date of disclosure
participation ratio disclosure
Annual General Annual General Announcement No.:
59.50% May 24 2018 May 25 2018
Meeting of 2017 Meeting 2018-028
2. Request for Extraordinary General Meeting by Preferred Stockholders Whose Voting Rights
Restore
□ Applicable √ Not applicable
V. Duty fulfillment of Independent Directors in Reporting Period
1. The situation of independent directors attending the BOD and shareholders meeting
Attendance of independent directors
Number of
Board Failure to
Number of
meetings Number of personally Number of
Number of meetings
Independent necessary to be attendances Number of attend board general
spot attended by
Directors attended by absence meetings meetings to be
attendances Communicatio
during the representative successively attended
n
reporting twice (Yes/No)
period
Jin Yongli 7 3 4 0 0 No 1
Zhong Tianli 7 3 4 0 0 No 1
Zhao Xinan 7 3 4 0 0 No 1
Illustration to failure to personally attend Board Meetings Twice Successively
2. Objection of Independent Directors on Relevant Issues
Objection of independent directors on some relevant issues
□ Yes √ No
65
Bengang Steel Plates Co., Ltd. Annual Report 2018
Independent directors proposed no objection against the relevant matters during the reporting
period.
3. Other Notes to Duty Fulfillment of Independent Directors
Whether any independent director’s advice to the Company was accepted
√ Yes □ No
Illustration of acceptance of or failure to accept an independent director’s advice to the Company
Independent directors have not made recommendations during the reporting period.
VI. Duty Fulfillment of the Special Committees under the Board during the reporting period
The Remuneration and Assessment Committee is responsible to inspect the assessment process of
the executives in year 2017.
The Development and Strategy Committee is responsible to examine the Board of Directors’ Work
Report 2017 and the Proposal of Investment Structural Planning 2018 in advance and provide
suggestions on the Company’s long-term development basing on its researches.
The Auditing Committee is responsible to inspect the operation of internal auditing system, to
verify the financial information disclosure, to examine the Financial Report 2017, and the Internal
Control Introspective Evaluation Report, etc.
Nomination Committee provided opinions on the adjustment of executive positions.
VII. Duty Fulfillment of the Supervisory Committee
Whether the supervisory board made any objection against the supervision issue during the
reporting period
□ Yes √ No
The Supervisory Board made no objection against the supervision issue during the reporting
period.
VIII. Appraisal and Incentive System for Senior Executives
The Company’s performance assessment scheme for executives implements a combination of
daily accountability and annual comprehensive assessment and evaluation. Senior Executives shall
be punished if they fail to perform their duties properly, make mistakes or neglect their duty. The
annual comprehensive assessment is conducted in the form of positive evaluation, horizontal
66
Bengang Steel Plates Co., Ltd. Annual Report 2018
evaluation and reverse democratic evaluation. The comprehensive evaluation results are an
important basis for selecting and appointing senior management personnel, cultivating education,
management supervision and incentives.
IX. Internal Control
1. Significant defects of the internal control found in the internal control self-assessment report in
the reporting period
√Yes □ No
Significant Defects of The Internal Control Found In The Report Period
No significant defects of the internal control were found during the reporting period
2. Self-Evaluation Report on Internal Control
Disclosing date of internal control auditing
April 19, 2019
report full text
Index of the internal control auditing report
http://www.cninfo.com.cn
full text
Proportion of total assets of subsidiaries
belong to the scope of self-evaluation
98.00%
report in the total assets of the Company’s
consolidated financial statements
Proportion of operation income of
subsidiaries belong to the scope of
self-evaluation report in the operation 77.00%
income of the Company’s consolidated
financial statements
Standards of Defects Evaluation
Category Financial Report Non-financial Report
1. Material deficiencies：The frauds made by 1. Material deficiencies：Major errors
the directors, or supervisors, or senior caused by decision-making procedure;
management personnel that leads to the important business lacks institutional
significant losses and adverse effects to the control or has a systematic failure while
company. 2. Significant deficiencies：Not in lacking effective compensatory control;
accordance with generally accepted serious drain of senior and middle level
Qualitative criteria accounting standards selection and management personnel and senior
application of accounting policies; ； Not technical staff; the results of internal
established anti-fraud procedures and control control evaluation, especially the
measures; Not established the corresponding significant deficiencies have not been
control mechanism or not implemented the corrected; other circumstances that have
corresponding compensatory control on the big negative impact on the company. 2.
accounting treatment of non-conventional or Significant deficiencies：General errors
67
Bengang Steel Plates Co., Ltd. Annual Report 2018
special deals; there are one or more defects caused by decision-making procedure;
in the process control of the final financial there are defects in the important
report and which leads to cannot reasonably business regulations and system serious
guaranteeing the financial report compiled to drain of business personnel in key posts;
achieve the goal of being true and accurate. the results of internal control evaluation,
3. General deficiencies：the internal control especially the important deficiencies
deficiencies except those constitute the have not been corrected; other
material deficiencies and the significant circumstances that have comparably big
deficiencies. negative impact on the company. 3.
General deficiencies：low-efficiency on
the decision-making process; existed
defects in the ordinary business
institution or system; serious drain of
business personnel in general posts;
general deficiencies that have not been
corrected.
1. Material deficiencies：1）misstatement≥5% 1. Material deficiencies：1）
of the total profits; 2）misstatement≥3% of misstatement≥5% of the total profits；2）
the total assets; 3）misstatement≥1% of the misstatement≥3% of the total assets；3）
total operating income; 4）misstatement≥1% misstatement≥1% of the total operating
of the total amount of the owner’s equity. 5) income. 4）misstatement≥1% of the total
3% of the total profits ≤misstatement＜5% amount of the owner’s equity. 5) 3% of
of the total profits；2. Significant the total profits ≤misstatement＜5% of
deficiencies：1）0.5% of the total assets the total profits；2. Significant
≤misstatement＜3% of the total assets；2） deficiencies：1）0.5% of the total assets
0.5% of the total operating income ≤misstatement＜3% of the total assets；
Quantitative criteria
≤misstatement＜1% of the total operating 2）0.5% of the total operating income
income； 3）0.5% of the total amount of the ≤misstatement＜1% of the total
owner’s equity ≤misstatement＜1% of the operating income；3）0.5% of the total
total amount of the owner’s equity。3. amount of the owner’s equity
General deficiencies：1）misstatement＜3% ≤misstatement＜1% of the total amount
of the total profits；2）misstatement＜0.5% of of the owner’s equity。3. General
the total assets；3）misstatement＜0.5% of deficiencies：1）misstatement＜3% of the
the total operating income；4）misstatement total profits；2）misstatement＜0.5% of
＜0.5% of the total amount of the owner’s the total assets；3）misstatement＜0.5%
equity。 of the total operating income；
Number of major defects in financial
0
reporting(a)
Number of major defects in non-financial
0
reporting (a)
Number of important defects in financial
0
reporting(a)
Number of important defects in
0
non-financial reporting(a)
68
Bengang Steel Plates Co., Ltd. Annual Report 2018
X. Internal Control Audit Report
√ Applicable □ Not applicable
Review opinions in the internal control audit report
We acknowledge that internal control of Bengang Bancai is effective in all material respects and is compliance with ‘Fundamental
Rules of Enterprise Internal Control’ up to December 31, 2018.
Internal Control Audit Report
Disclosure
Status
Disclosure date of audit report of
April 19, 2019
internal control (full-text)
Index of audit report of internal
http://www.cninfo.com.cn
control (full-text)
Internal audit report’s opinion Standard unqualified opinion
Whether there is significant defect
No
in non-financial report
Whether the accountants’ firm issued a qualified auditor’s report of internal control
□ Yes √ No
Whether the internal control audit report issued by the accountants’ firm agree with the
self-assessment report of the Board of Directors
√ Yes □ No
69
Bengang Steel Plates Co., Ltd. Annual Report 2018
X. 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 annual report
No
70
Bengang Steel Plates Co., Ltd. Annual Report 2018
XI. Financial Report
Auditors’ Report
PCPAR [2019] No. ZB10611
To All Shareholders of Bengang Steel Plates Co., Ltd.:
Auditor’s Opinion
We have audited the accompanying financial statements of Bengang Steel Plates Co., Ltd.
(hereinafter referred to as “the Company”) which comprise the consolidated statement of
financial position and statement of financial position as at 31 December 2018, the
consolidated statement of comprehensive income and statement of comprehensive income,
the consolidated statement of changes in equity and statement of changes in equity, the
consolidated statement of cash flows and statement of cash flows for the year then ended,
and notes to the financial statements.
In our opinion, the financial statements present fairly, in all material respects, the
consolidated financial position and financial position of the Company as at 31 December
2018, and the consolidated results of operations and results of operations and the
consolidated cash flows and cash flows of the Company for the year then ended in
accordance with the requirements of Accounting standards for Business Enterprises.
Basis for Opinion
We conducted our audit in accordance with Chinese Certified Public Accountants
Auditing Standards. Our responsibilities under those standards are further described in the
Auditor’s Responsibilities for the Audit of the Financial Statements section of our report.
We are independent of the Company in accordance with the China Code of Ethics for
Certified Public Accountants, and we have fulfilled our other ethical responsibilities in
accordance with China Code of Ethics for Certified Public Accountants. We believe that
the audit evidence we have obtained is sufficient and appropriate to provide a basis for
our opinion.
Key Audit Matters
The key audit matters are matters that we consider to be the most important for the audit
of the current financial statements based on professional judgment. The response to these
matters is based on the overall audit of the financial statements and the formation of audit
opinions. We do not express a separate opinion on these matters. We have identified the
following items as key audit matters that need to be disclosed in the audit report.
Key Audit Matters Audit Procedure
1. Provision for Bad Debts
Please refer to the Note (10) Bad debt The audit process implemented for
provision for accounts receivable under recoverability of Accounts receivable
71
Bengang Steel Plates Co., Ltd. Annual Report 2018
“3. Significant accounting policies and includes mainly:
accounting estimates” and Note (2) Notes 1. Understand, evaluate and test
receivable and accounts receivable under management's aging analysis of
“5. Notes to consolidated financial receivables and determine internal control
statements”. related to bad debt provision for accounts
receivable;
As at December 31, 2018, the carrying 2. Review the management's
amount of Accounts receivable is RMB consideration and objective evidence for
821,194,784.32 and the bad debt is RMB the impairment test of accounts receivable
181,712,302.87. and pay close attention to whether the
management has fully identified the items
The management determines the that have been impaired;
estimated recoverable amount of accounts 3. Sample the accounts receivable tested
receivable based on the assessment of the for impairment individually, and review
credit status, financial status and actual on the assumption and reasonableness of
repayment status of relevant customers. future cash flows estimation made by the
management;
The government determines the estimated 4. For accounts receivable tested for
recoverable amount of accounts impairment by portfolio, evaluate the
receivable based on significant accounting reasonableness of the bad debt provision
estimation and judgement. And impact proportion;
amount is significant, we determine that 5. Perform confirmation procedure, and
the recoverability of accounts receivable check the confirmation results with the
is a key audit matter. amount recorded by the management;
6. Check the amount received after the
reporting period and evaluate the
reasonableness of provision for bad debts
made by the management.
2. Impairment of Inventory
Please refer to the Note （11）Inventory The procedures carried out for the
under “3. Significant accounting policies impairment of inventory include:
and accounting estimates” and (5) 1. Test and evaluate the effectiveness of
Inventory under “5. Notes to internal control in relation to the
consolidated financial statements”. impairment of inventory;
2. Supervise stock taking and check the
72
Bengang Steel Plates Co., Ltd. Annual Report 2018
As at December 31,2018, the carrying quantity and status of inventory,
amount of inventory in consolidated especially slow-moving and aged
statement is RMB 10,762,705,553.11, inventory;
impairment of inventory is RMB 3. Obtain the calculation of the
84,958,440.71, the book value of impairment of inventory. Check any
inventory is RMB 10,677,747,112.40. changes of the accrual of inventory
Inventory is measured at the lower of cost impairment in the current period and
and net realizable value. The sufficiency analyse the sufficiency of impairment;
of impairment for inventory will exert a 4. For products with open market selling
great impact on the financial statement. price, we inquired the open market price
independently and compared with the
The net realizable value of finished estimated selling price. For products
products held for direct selling in the daily without open market selling price, we
business activity shall be calculated by compare the estimated price of the
deducting the estimated sale expense and products with the latest actual selling
relevant taxes from the estimated sale price or selling price after the reporting
price of inventories. period.
5.Evaluate the estimated sales expenses
It involves significant judgement when and related taxes and fees made by the
the management determines the estimated management and compare with the
selling price of the finished products historical data of similar products and
based on status. compare with the actual costs occurred
after the balance sheet date.
As at December 31, 2018, the carrying
amount of inventory was significant and
involves the estimation of net realizable
value. Therefore, we identified it as a key
audit matter.
Other information
The management of the Company is responsible for the other information. The other
information comprises information of the Company's annual report for the period of 2018
but excludes the financial statements and our auditor's report.
Our opinion on the financial statements does not cover the other information and we do
not and will not express any form of assurance conclusion thereon.
73
Bengang Steel Plates Co., Ltd. Annual Report 2018
In connection with our audit of the financial statements, our responsibility is to read the
other information identified above and, in doing so, consider whether the other
information is materially inconsistent with the financial statements or our knowledge
obtained in the audit if there appears to be a material misstatement.
Based on the work we have performed, if we determine that there is a material
misstatement of other information, we should report that fact. In this regard, we have
nothing to report.
Responsibilities of Management and Those Charged with Governance for the
Financial Statements
Management is responsible for the preparation and fair presentation of the financial
statements in accordance with requirements of Accounting Standards for Business
Enterprises, and for such internal control as management determines is necessary to
enable the preparation of financial statements that are free from material misstatement,
whether due to fraud or error.
In preparing the financial statements, management of the Company is responsible for
assessing the Company's ability to continue as a going concern, disclosing, as applicable,
matters related to going concern and using the going concern basis of accounting unless
management either intends to liquidate the Company or to cease operations, or has no
realistic alternative but to do so.
Those charged with governance are responsible for supervising the Company's financial
reporting process.
Auditor's Responsibilities for the Audit of the Financial Statements
Our objectives are to obtain reasonable assurance about whether the financial statements
as a whole are free from material misstatement, whether due to fraud or error, and to issue
an auditor’s report that includes our opinion. Reasonable assurance is a high level of
assurance but is not a guarantee that an audit conducted in accordance with Chinese
Certified Public Accountants Auditing Standards will always detect a material
misstatement when it exists. Misstatements can arise from fraud or error and are
considered material if, individually or in the aggregate, they could reasonably be expected
to influence the economic decisions of users taken on the basis of these financial
statements.
As part of an audit in accordance with accordance with Chinese Certified Public
Accountants Auditing Standards, we exercise professional judgment and maintain
professional skepticism throughout the audit. We also:
(1) Identify and assess the risks of material misstatement of the financial statements,
whether due to fraud or error, design and perform audit procedures responsive to those
risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our
opinion. The risk of not detecting a material misstatement resulting from fraud is higher
than for one resulting from error, as fraud may involve collusion, forgery, intentional
omissions, misrepresentations, or the override of internal control.
(2) Obtain an understanding of internal control relevant to the audit in order to design
audit procedures that are appropriate in the circumstances.
(3) Evaluate the appropriateness of accounting policies used and the reasonableness of
accounting estimates and related disclosures made by management.
(4) Conclude on the appropriateness of management’s use of the going concern basis of
74
Bengang Steel Plates Co., Ltd. Annual Report 2018
accounting and, based on the audit evidence obtained, whether a material uncertainty
exists related to events or conditions that may cast significant doubt on Bengang Steel
Plate’s ability to continue as a going concern. If we conclude that a material uncertainty
exists, we are required to draw attention in our auditor’s report to the related disclosures
in the financial statements or, if such disclosures are inadequate, to modify our opinion.
Our conclusions are based on the audit evidence obtained up to the date of our auditor’s
report. However, future events or conditions may cause Bengang Steel Plates to cease to
continue as a going concern.
(5) Evaluate the overall presentation, structure and content of the financial statements,
including the disclosures, and whether the financial statements represent the underlying
transactions and events in a manner that achieves fair presentation.
(6) Obtain sufficient and appropriate audit evidence regarding the financial information of
entities or business activities within Bengang Steel Plates to express an opinion on the
financial statements. We are responsible for guiding, supervising and executing the group
audit and assume full responsibility for the audit opinion.
We communicate with those charged with governance regarding, among other matters, the
planned scope and timing of the audit and significant audit findings, including any
significant deficiencies in internal control that we identify during our audit.
We also provide a statement to those charged with governance on compliance with the
ethical requirements associated with independence and communicate with those charged
with governance all relationships and other matters that may reasonably be considered to
affect our independence, and related precautions (if applicable).
From the matters communicated with those charged with governance, we determine those
matters that were of most significance in the audit of the financial statements of the
current period and are therefore the key audit matters. We describe these matters in our
auditor's report unless law or regulation precludes public disclosure about the matter or
when, in extremely rare circumstances, we determine that a matter should not be
communicated in our report because the adverse consequences of doing so would
reasonably be expected to outweigh the public interest benefits of such communication.
BDO CHINA SHULUN PAN CERTIFIED Certified Public Accountants of China
PUBLIC ACCOUNTANTS LLP (Engagement Partner)
Certified Public Accountants of China
Shanghai, the People’s Republic of China 17 April 2019
This auditor’s report and the accompanying notes to the financial statement are English translation of the
Chinese auditors’ report. In case of doubt as to the presentation of these documents, the Chinese version shall
prevail.
75
Bengang Steel Plates Co., Ltd. Annual Report 2018
BENGANG STEEL PLATES CO., LTD.
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
As at 31 December 2018
(Expressed in Renminbi unless otherwise indicated)
Asset Notes Ending balance Beginning balance
Current assets
Cash at bank and on hand 5 (1) 16,567,471,755.77 17,037,713,410.49
Settlement provisions
Capital lent
Financial assets at fair value through profit or
loss
Derivative financial assets
Notes receivable and Accounts receivable 5 (2) 4,219,628,324.83 4,575,031,627.26
Prepayments 5 (3) 1,321,537,514.78 1,280,689,094.33
Premium receivable
Reinsurance accounts receivable
Receivable deposit for reinsurance contract
Other receivables 5 (4) 202,763,964.98 308,825,505.84
Redemptory financial assets for sale
Inventories 5 (5) 10,677,747,112.40 11,209,898,096.16
Assets held for sale
Non-current assets due within one year
Other current assets 5 (6) 292,119,771.13 809,322,127.79
Total current assets 33,281,268,443.89 35,221,479,861.87
Non-current assets
Loan and advances issued
Available-for-sale financial assets 5 (7) 1,041,824,829.00 3,888,980.00
Held-to-maturity investment
Long-term receivables
Long-term equity investments 5 (8) 2,455,681.55 2,726,009.03
Investment property
Fixed assets 5 (9) 23,924,504,539.97 23,852,067,166.10
Construction in progress 5 (10) 836,594,457.82 2,396,143,330.06
Productive biological assets
Oil and gas assets
Intangible assets 5 (11) 278,062,441.04 253,884,881.48
Development expenditure
Goodwill
Long-term deferred expenses
Deferred tax assets 5 (12) 191,452,547.21 200,618,461.36
Other non-current assets 5 (13) 76,341,975.35 1,067,334,823.12
Total non-current assets 26,351,236,471.94 27,776,663,651.15
Total assets 59,632,504,915.83 62,998,143,513.02
The notes to the financial statements attached form part of these financial statements.
Legal Representative: Chief Financial Officer: Chief Accountant:
76
Bengang Steel Plates Co., Ltd. Annual Report 2018
BENGANG STEEL PLATES CO., LTD.
CONSOLIDATED STATEMENT OF FINANCIAL POSITION (Continued)
As at 31 December 2018
(Expressed in Renminbi unless otherwise indicated)
Liabilities and equities Notes Ending balance Beginning balance
Current Liabilities
Short-term loans 5 (14) 11,938,490,375.85 21,999,103,900.00
Loan from central bank
Absorbed deposit and interbank deposit
Loan from other financial institutions
Financial liabilities at fair value through profit or
loss
Derivative financial liabilities
Notes payable and Accounts payable 5 (15) 15,535,234,825.67 15,392,258,341.04
Advance from customers 5 (16) 3,331,854,098.42 3,308,567,598.05
Financial assets sold for repurchase
Handling charges and commission payable
Employee benefits payable 5 (17) 51,466,231.72 43,722,537.58
Current tax liabilities 5 (18) 515,752,369.68 87,807,128.50
Other payables 5 (19) 862,511,178.96 661,129,220.33
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 one year 5 (20) 350,965,576.32 3,811,540,590.84
Other current liabilities 5 (21) 27,979,093.21
Total current liabilities 32,586,274,656.62 45,332,108,409.55
Non-current liabilities
Long-term loans 5 (22) 7,083,640,094.16 2,444,185,630.28
Bonds payable
Including: Preferred stock
Perpetual bond
Long-term payables 5 (23) 13,686,705.92
Long-term employee benefits payable
Estimated liabilities
Deferred income 5 (24) 289,499,002.97 372,785,000.00
Deferred tax liabilities
Other non-current liabilities
Total non-current liabilities 7,386,825,803.05 2,816,970,630.28
Total liabilities 39,973,100,459.67 48,149,079,039.83
Shareholders' equity:
Share capital 5 (25) 3,875,371,532.00 3,136,000,000.00
Other equity instruments
Including: Preferred stock
Perpetual bond
Capital reserves 5 (26) 12,343,209,847.29 9,114,845,542.05
Less: treasury shares
Other comprehensive income
Special reserves 5 (27) 683,937.71 475,046.75
Surplus reserves 5 (28) 961,105,529.85 961,105,529.85
General risk reserve
Undistributed profits 5 (29) 1,945,887,269.82 1,103,162,610.35
Total equity attributable to equity holders of the
19,126,258,116.67 14,315,588,729.00
parent company
Non-controlling interests 533,146,339.49 533,475,744.19
Total shareholder's equity 19,659,404,456.16 14,849,064,473.19
Total of liabilities and owners’ equity 59,632,504,915.83 62,998,143,513.02
The notes to the financial statements attached form part of these financial statements.
Legal Representative： Chief Financial Officer: Chief Accountant:
77
Bengang Steel Plates Co., Ltd. Annual Report 2018
BENGANG STEEL PLATES CO., LTD.
STATEMENT OF FINANCIAL POSITION
As at 31 December 2018
(Expressed in Renminbi unless otherwise indicated)
Assets Notes Ending balance Beginning balance
Current assets
Cash at bank and on hand 15,536,305,375.00 16,717,913,081.42
Financial assets at fair value through profit or loss
Derivative financial assets
Notes receivable and Accounts receivable 13(1) 3,765,573,658.16 3,997,543,586.41
Prepayments 1,309,194,738.97 1,280,354,579.87
Other receivables 13(2) 235,037,391.46 395,240,485.68
Inventories 8,681,362,081.72 9,228,860,225.75
Assets held for sale
Non-current assets due within one year
Other current assets 193,989,096.20 682,211,823.73
Total current assets 29,721,462,341.51 32,302,123,782.86
Non-current assets
Available-for-sale financial assets 1,041,624,829.00 3,888,980.00
Held-to-maturity investment
Long-term receivables
Long-term equity investment 13(3) 2,016,281,902.16 1,756,981,902.16
Investment property
Fixed assets 22,035,187,328.57 21,621,369,452.27
Construction in progress 825,553,510.15 2,387,667,263.65
Productive biological assets
Oil and gas assets
Intangible assets 148,776,177.96 152,082,315.24
Development expenditure
Goodwill
Long-term deferred expenses
Deferred tax assets 96,220,003.00 100,189,921.33
Other non-current assets 76,341,975.35 1,037,735,849.00
Total non-current assets 26,239,985,726.19 27,059,915,683.65
Total assets 55,961,448,067.70 59,362,039,466.51
The notes to the financial statements attached form part of these financial statements.
Legal Representative: Chief Financial Officer: Chief Accountant:
78
Bengang Steel Plates Co., Ltd. Annual Report 2018
BENGANG STEEL PLATES CO., LTD.
STATEMENT OF FINANCIAL POSITION (Continued)
As at 31 December 2018
(Expressed in Renminbi unless otherwise indicated)
Liabilities and shareholders' equities Notes Ending balance Beginning balance
Current liabilities
Short-term loans 10,624,270,375.85 20,499,694,500.00
Financial liabilities at fair value through profit or loss
Derivative financial liabilities
Notes payable and Accounts payable 15,154,564,853.70 15,051,433,056.31
Advance from customers 3,189,143,565.45 3,217,423,443.14
Employee benefits payable 49,378,095.47 42,380,713.02
Current tax liabilities 507,003,883.57 66,903,531.67
Other payables 538,051,513.13 422,286,065.92
Liabilities held for sale
Non-current liabilities due within one year 350,965,576.32 3,811,540,590.84
Other current liabilities 27,979,093.21
Total current liabilities 30,413,377,863.49 43,139,640,994.11
Non-current liabilities
Long term loans 7,083,640,094.16 2,444,185,630.28
Bonds payable
Including: Preferred stock
Perpetual bond
Long-term payables 13,686,705.92
Long-term employee benefits payable
Estimated liabilities
Deferred income 289,499,002.97 372,785,000.00
Deferred tax liabilities
Other non-current liabilities
Total non-current liabilities 7,386,825,803.05 2,816,970,630.28
Total liabilities 37,800,203,666.54 45,956,611,624.39
Shareholder’s equity:
Share capital 3,875,371,532.00 3,136,000,000.00
Other equity instruments
Including: Preferred stock
Perpetual bond
Capital reserves 11,923,058,165.17 8,694,693,859.93
Less: Treasury shares
Other comprehensive income
Special reserves 525,218.48 276,727.96
Surplus reserves 961,105,529.85 961,105,529.85
Undistributed Profits 1,401,183,955.66 613,351,724.38
Total shareholder's equity 18,161,244,401.16 13,405,427,842.12
Total liabilities and shareholder’s equity 55,961,448,067.70 59,362,039,466.51
The notes to the financial statements attached form part of these financial statements.
Legal Representative: Chief Financial Officer: Chief Accountant:
79
Bengang Steel Plates Co., Ltd. Annual Report 2018
BENGANG STEEL PLATES CO., LTD.
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
For the year ended 31 December 2018
(Expressed in Renminbi unless otherwise indicated)
Items Notes 2018 2017
1. Total operating income 50,181,869,721.54 40,507,855,843.72
Including: Operating income 5 (30) 50,181,869,721.54 40,507,855,843.72
Interest income
Premium earned
Income from handling charges and commission
2. Total operating cost 49,071,401,810.11 38,588,059,963.38
Including: Operating cost 5 (30) 45,243,735,204.31 35,677,980,170.73
Interest expense
Expenditure for handling charges and commission
Surrender value
Net expenditure for compensation
Net provision for insurance contract appropriated
Bonus payment for policy
Reinsurance premium
Tax and surcharges 5 (31) 356,418,784.11 233,743,675.12
Selling and distribution expenses 5 (32) 1,135,004,470.47 1,184,294,573.92
General and administrative expenses 5 (33) 916,341,137.85 844,651,916.95
Research and development expenses 5 (34) 6,399,884.30 8,208,922.25
Financial expenses 5 (35) 1,376,355,160.46 535,642,520.07
Including: Interest expense 1,278,508,985.59 1,023,936,982.91
Interest income 200,356,927.95 142,752,764.37
Asset impairment loss 5 (36) 37,147,168.61 103,538,184.34
Add: Other income 5 (37) 86,085,297.03 39,086,900.00
Income on investment（“-” for loss） 5 (38) 5,212,886.01 4,052,996.54
Including: Income from associates and joint ventures 171,488.75 758,403.40
Gains from change of fair value （“-” for loss）
Assets disposal gains（“-” for loss） 5 (39) 213,401.13 4,280,684.29
Exchange gains
3. Operational profit（“-” for loss） 1,201,979,495.60 1,967,216,461.17
Add: Non-operating income 5 (40) 8,384,120.14 19,335,019.49
Less: Non-operating expenses 5 (41) 156,235,959.72 70,238,377.22
4. Total profit (“-” for loss) 1,054,127,656.02 1,916,313,103.44
Less: Income tax expenses 5 (42) 17,949,597.66 306,922,395.71
5. Net profit（“-” for loss） 1,036,178,058.36 1,609,390,707.73
1.Classification by continuing operating
1.Net profit from continuing operation 1,036,178,058.36 1,609,390,707.73
2.Net profit from discontinued operation
2.Classification by ownership
1. Net profit attributable to the owners of parent company 1,036,493,236.07 1,600,110,229.77
2. Net profit attributable to non-controlling shareholders -315,177.71 9,280,477.96
6.Other comprehensive income
Other comprehensive income attributable to owners of the parent
company after tax
1.Other comprehensive income items that will not be
reclassified into gains/losses
1）Re-measurement of defined benefit plans of changes
in net debt or net assets
2）Other comprehensive income under the equity method
cannot be reclassified into profit or loss
2.Other comprehensive income that will be reclassified into
profit or loss.
1）Other comprehensive income under the equity method
investee can be reclassified into profit or loss
2）Gains and losses from changes in fair value available for
sale financial assets
3）Held-to-maturity investments reclassified to gains and
losses of available for sale financial assets
4）The effective portion of cash flow hedges and losses
5) Translation differences in currency financial statements
6）Other
Other comprehensive income attributable to
non-controlling shareholders’ equity after tax
7. Total comprehensive income 1,036,178,058.36 1,609,390,707.73
Total comprehensive income attributable to the owner of the
1,036,493,236.07 1,600,110,229.77
parent company
Total comprehensive income attributable to non-controlling
-315,177.71 9,280,477.96
shareholders
8. Earnings per share
1）Basic earnings per share 0.272 0.510
2）Diluted earnings per share 0.272 0.510
The notes to the financial statements attached form part of these financial statements.
Legal Representative: Chief Financial Officer: Chief Accountant:
80
Bengang Steel Plates Co., Ltd. Annual Report 2018
BENGANG STEEL PLATES CO., LTD.
STATEMENT OF COMPREHENSIVE INCOME
For the year ended 31 December 2018
(Expressed in Renminbi unless otherwise indicated)
Items Notes 2018 2017
1. Total operating income 13(4) 50,425,079,247.74 41,239,125,343.24
Less: Operating cost 13(4) 46,181,928,781.43 37,080,706,204.98
Tax and surcharges 315,916,612.32 200,820,143.07
Selling and distribution expenses 649,990,454.92 769,196,392.70
General and administrative expenses 865,648,309.29 798,398,143.43
Research and development expenses 6,399,884.30 8,208,922.25
Financial expenses 1,322,508,429.72 476,274,625.93
Including: Interest expense 1,214,448,750.09 959,588,329.92
Interest income 189,652,832.19 137,298,595.07
Asset impairment loss 40,515,739.88 103,897,129.58
Add: Other income 85,795,297.03 39,086,900.00
Income on investment（“-” for loss） 13(5) 5,041,397.26 105,369,227.90
Including: Income from associates and joint
ventures
Gains from change of fair value （“-” for
loss）
Assets disposal gains（“-” for loss） 213,401.13 4,280,684.29
2. Operational profit（“-” for loss） 1,133,221,131.30 1,950,360,593.49
Add: Non-operating income 7,861,687.83 18,377,401.15
Less: Non-operating expenses 155,512,092.92 70,167,296.39
3. Total profit (“-” for loss) 985,570,726.21 1,898,570,698.25
Less: Income tax expenses 3,969,918.33 278,506,683.69
4. Net profit（“-” for loss） 981,600,807.88 1,620,064,014.56
1.Net profit from continuing operation 981,600,807.88 1,620,064,014.56
2.Net profit from discontinued operation
5.Other comprehensive income
1.Other comprehensive income items that will not be
reclassified into gains/losses
1）Re-measurement of defined benefit plans of
changes
2）Other comprehensive income under the equity
method cannot be reclassified into profit or
loss
2.Other comprehensive income that will be
reclassified into profit or loss.
1）Other comprehensive income under the equity
method can be reclassified into profit or loss
2）Gains and losses from changes in fair value
available for sale financial assets
3）Held-to-maturity investments reclassified to
gains and losses of available for sale financial
assets
4）The effective portion of cash flow hedges and
losses
5）Translation differences in currency financial
statements
6）Other
6. Total comprehensive income 981,600,807.88 1,620,064,014.56
7. Earnings per share
1）Basic earnings per share
2）Diluted earnings per share
The notes to the financial statements form part of these financial statements
Legal Representative: Chief Financial Officer: Chief Accountant:
81
Bengang Steel Plates Co., Ltd. Annual Report 2018
BENGANG STEEL PLATES CO., LTD.
CONSOLIDATED STATEMENT OF CASH FLOWS
For the year ended 31 December 2018
(Expressed in Renminbi unless otherwise indicated)
Items Notes 2018 2017
1.Cash flow from operating activities
Cash received from sale of goods or rendering of services 42,328,152,309.09 38,398,560,637.86
Net increase of customers' deposit and interbank deposit
Net increase of loan from central bank
Net increase of loans from other financial institutions
Cash received for premium of original insurance contract
Net cash received for reinsurance business
Net increase of deposit and investment of the insured
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 Borrowing funds
Net increase of fund for buy-back business
Tax rebate received 302,924,880.47 396,593,593.65
Other cash received relating to operating activities 5 (43) 257,881,680.20 282,165,709.05
Subtotal of cash inflows from operating activities 42,888,958,869.76 39,077,319,940.56
Cash paid for goods and services 36,193,580,135.37 33,511,750,779.63
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 employees 1,979,770,272.66 1,818,262,493.84
Cash paid for all types of taxes 736,309,593.47 497,364,981.50
Other cash paid relating to operating activities 5 (43) 359,361,026.33 505,698,193.08
Subtotal of cash outflows from operating activities 39,269,021,027.83 36,333,076,448.05
Net cash flows from operating activities 3,619,937,841.93 2,744,243,492.51
2. Cash flows from investing activities
Cash received from return on investments 679,000,000.00 424,000,000.00
Cash received from distribution of dividends or profit 5,483,213.49 3,294,593.14
Net cash received from disposal of fixed assets, intangible assets and
other long-term assets
Net cash received from disposal of subsidiary and other operating
units
Other cash paid relating to investing activities
Subtotal of cash inflows from investing activities 684,483,213.49 427,294,593.14
Cash paid for acquisition of fixed assets, intangible assets and other
588,988,848.56 577,962,615.41
long-term assets
Cash paid for acquisition of investments 173,000,000.00 1,765,735,849.00
Net increase of mortgage loan
Net cash received from subsidiary and other operating unit
Other cash paid relating to investing activities 38,485.64
Subtotal of cash outflows from investing activities 761,988,848.56 2,343,736,950.05
Net cash flows from investing activities -77,505,635.07 -1,916,442,356.91
3. Cash flows from financing activities
Proceeds from investment 3,965,799,988.19 9,000,000.00
Including: Proceeds from investment of non-controlling shareholders
9,000,000.00
of subsidiary
Proceeds from borrowings 30,454,154,238.01 29,066,698,099.54
Cash received from bond issuance
Other proceeds relating to financing activities 5 (43) 641,108,215.57
Subtotal of cash inflows from financing activities 35,061,062,441.77 29,075,698,099.54
Cash repayments of borrowings 37,598,204,701.96 24,367,516,288.90
Cash payments for distribution of dividends, profit or interest
1,546,758,168.22 1,348,382,179.94
expenses
Including: Cash paid to non-controlling shareholders as dividend and
34,024,878.25
profit by subsidiaries
Other cash payments relating to financing activities 5 (43) 66,626,597.64 4,070,073,176.21
Subtotal of cash outflows from financing activities 39,211,589,467.82 29,785,971,645.05
Net cash flows from financing activities -4,150,527,026.05 -710,273,545.51
4. Effect of foreign exchange rate changes on cash and cash
43,066,662.23 -124,590,470.23
equivalents
5. Net increase in cash and cash equivalents -565,028,156.96 -7,062,880.14
Add: Cash and cash equivalents at the beginning of the period 12,317,576,778.93 12,324,639,659.07
6. Cash and cash equivalents at the ending of the period 11,752,548,621.97 12,317,576,778.93
The notes to the financial statements attached form part of these financial statements
Legal Representative: Chief Financial Officer: Chief Accountant:
82
Bengang Steel Plates Co., Ltd. Annual Report 2018
BENGANG STEEL PLATES CO., LTD.
STATEMENT OF CASH FLOWS
For the year ended 31 December 2018
(Expressed in Renminbi unless otherwise indicated)
Items Notes 2018 2017
1. Cash flow from operating activities
Cash received from sale of goods or rendering of
42,632,583,197.28 38,408,092,773.75
services
Tax rebate received 118,774,962.17 285,379,382.79
Other cash received relating to operating activities 231,198,417.23 256,722,673.91
Subtotal of cash inflows from operating activities 42,982,556,576.68 38,950,194,830.45
Cash paid for goods and services 37,353,692,318.60 33,504,491,064.85
Cash paid to and on behalf of employees 1,859,006,850.63 1,716,037,102.55
Cash paid for all types of taxes 624,727,175.93 391,088,388.18
Other cash paid relating to operating activities 283,003,821.64 480,784,596.96
Subtotal of cash outflows from operating activities 40,120,430,166.80 36,092,401,152.54
Net cash flows from operating activities 2,862,126,409.88 2,857,793,677.91
2. Cash flows from investing activities
Cash received from return on investments 650,000,000.00 424,000,000.00
Cash received from distribution of dividends or profit 5,041,397.26 105,369,227.90
Net cash received from disposal of fixed assets,
intangible assets and other long-term assets
Net cash received from disposal of subsidiary and
other operating units
Other cash received relating to investing activities
Subtotal of cash inflows from investing activities 655,041,397.26 529,369,227.90
Cash paid for acquisition of fixed assets, intangible
583,816,993.15 535,378,428.27
assets and other long-term assets
Cash paid for acquisition of investments 409,300,000.00 1,764,735,849.00
Net cash paid for acquisition of subsidiary and other
operating unit
Other cash paid relating to investing activities 38,485.64
Subtotal of cash outflows paid for investing activities 993,116,993.15 2,300,152,762.91
Net cash flows from investing activities -338,075,595.89 -1,770,783,535.01
3. Cash flows from financing activities
Proceeds from investment 3,965,799,988.19
Cash received from borrowings 28,965,014,238.01 27,099,099,299.54
Cash received from bond issuance
Other cash received relating to financing activities 641,108,215.57
Subtotal of cash inflows from financing activities 33,571,922,441.77 27,099,099,299.54
Cash repayments of borrowings 36,001,575,301.96 22,501,298,853.33
Cash payments for distribution of dividends, profit or
1,479,949,919.63 1,250,068,065.92
interest
Other cash payments relating to financing activities 1,958,720.83 4,034,360,176.07
Subtotal of cash outflows from financing activities 37,483,483,942.42 27,785,727,095.32
Net cash flows from financing activities -3,911,561,500.65 -686,627,795.78
4. Effect of foreign exchange rate changes on cash
43,049,979.65 -124,633,410.57
and cash equivalents
5. Net increase in cash and cash equivalents -1,344,460,707.01 275,748,936.55
Add: Cash and cash equivalents at the beginning of
12,152,285,550.21 11,876,536,613.66
the period
6. Ending balance of cash and cash equivalents 10,807,824,843.20 12,152,285,550.21
The notes to the financial statements form part of these financial statements
Legal Representative: Chief Financial Officer: Chief Accountant:
83
Bengang Steel Plates Co., Ltd. Annual Report 2018
BENGANG STEEL PLATES CO., LTD.
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
For the year ended 31 December 2018
(Expressed in Renminbi unless otherwise indicated)
2018
Owner's equity attributable to parent company
Other equity instruments Other
Items Less: General Non-controlling Total of owner's
compreh Special Undistributed
Share capital Preference Perpetual Capital reserves Treasury Surplus reserves risk interest equity
Others ensive reserves profit
shares bond shares reserve
income
1. Ending balance of last year 3,136,000,000.00 9,114,845,542.05 475,046.75 961,105,529.85 1,103,162,610.35 533,475,744.19 14,849,064,473.19
Add: Change of accounting policies
Correction of errors for last period
Business consolidation under common control
Others
2. Beginning balance of current year 3,136,000,000.00 9,114,845,542.05 475,046.75 961,105,529.85 1,103,162,610.35 533,475,744.19 14,849,064,473.19
3. Changes in current year (“-” for decrease) 739,371,532.00 3,228,364,305.24 208,890.96 842,724,659.47 -329,404.70 4,810,339,982.97
1) Total comprehensive income 1,036,493,236.07 -315,177.71 1,036,178,058.36
2) Capital increase and decrease by shareholders 739,371,532.00 3,228,364,305.24 3,967,735,837.24
(1) Common share invested by shareholders 739,371,532.00 3,228,364,305.24 3,967,735,837.24
(2) Capital input by the holder of other equity
instruments
(3) Share-based payment attributable to owners'
equity
(4) Others
3) Profit distribution -193,768,576.60 -193,768,576.60
(1) Appropriation to surplus reserves
(2) Appropriation to general risk reserve
(3) Profit distribution to shareholders -193,768,576.60 -193,768,576.60
(4) Others
4) Transfers within shareholders' equity
(1) Capital reserves transferred into paid-in capital
(or stock)
(2) Surplus reserves transferred into paid-in
capital (or stock)
(3) Surplus reserves to recover loss
(4) Net changes of defined contribution plans
transferred into Retained Earnings
(5) Others
5) Special reserves 208,890.96 -14,226.99 194,663.97
(1) Provision of special reserves 46,823,964.39 46,823,964.39
(2) Use of special reserves 46,615,073.43 14,226.99 46,629,300.42
6) Others
4. Ending balance of current year 3,875,371,532.00 12,343,209,847.29 683,937.71 961,105,529.85 1,945,887,269.82 533,146,339.49 19,659,404,456.16
The notes to the financial statements attached form part of these financial statements
Legal Representative: Chief Financial Officer: Chief Accountant:
84
Bengang Steel Plates Co., Ltd. Annual Report 2018
BENGANG STEEL PLATES CO., LTD.
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY (Continued)
For the year ended 31 December 2018
(Expressed in Renminbi unless otherwise indicated)
2017
Owner's equity attributable to parent company
Items Other equity instruments Less: Other General Non-controlling Total shareholder's
Special Undistributed
Share capital Preferenc Perpetual Capital reserves Treasury comprehensi Surplus reserves risk interest equity
Others reserves profit
e shares bond shares ve income reserve
1. Ending balance of last year 3,136,000,000.00 9,156,845,542.05 372,721.86 961,105,529.85 -496,947,619.42 549,205,917.49 13,306,582,091.83
Add: Change of accounting policies
Correction of errors for last period
Business consolidation under common
control
Others
2. Beginning balance of current year 3,136,000,000.00 9,156,845,542.05 372,721.86 961,105,529.85 -496,947,619.42 549,205,917.49 13,306,582,091.83
3. Changes in current year (“-” for decrease) -42,000,000.00 102,324.89 1,600,110,229.77 -15,730,173.30 1,542,482,381.36
1) Total comprehensive income 1,600,110,229.77 9,280,477.96 1,609,390,707.73
2) Capital increase and decrease by
9,000,000.00 9,000,000.00
shareholders
(1) Common share invested by
shareholders
(2) Capital input by the holder of other
equity instruments
(3) Share-based payment attributable to
shareholders' equity
(4) Others 9,000,000.00 9,000,000.00
3) Profit distribution -34,024,878.25 -34,024,878.25
(1) Appropriation to surplus reserves
(2) Appropriation to general risk reserves
(3) Profit distribution to shareholders -34,024,878.25 -34,024,878.25
(4) Others
4) Transfers within shareholders' equity
(1) Capital reserves transferred into paid-in
capital (or stock)
(2) Surplus reserves transferred into
paid-in capital (or stock)
(3) Surplus reserves to recover loss
(4) Net changes of defined contribution
plans transferred into Retained Earnings
(5) Others
5) Special reserves 102,324.89 14,226.99 116,551.88
(1) Provision of special reserves 40,325,168.14 14,226.99 40,339,395.13
(2) Use of special reserves 40,222,843.25 40,222,843.25
6) Others -42,000,000.00 -42,000,000.00
4. Ending balance of current year 3,136,000,000.00 9,114,845,542.05 475,046.75 961,105,529.85 1,103,162,610.35 533,475,744.19 14,849,064,473.19
The notes to the financial statements attached form part of these financial statement
Legal Representative: Chief Financial Officer: Chief Accountant:
85
Bengang Steel Plates Co., Ltd. Annual Report 2018
BENGANG STEEL PLATES CO., LTD.
STATEMENT OF CHANGES IN EQUITY
For the year ended 31 December 2018
(Expressed in Renminbi unless otherwise indicated)
2018
Other equity instruments Less: Other
Items Special Undistributed Total shareholder’s
Share capital Preference Capital reserves Treasury comprehensive Surplus reserves
Perpetual bond Others reserves profits equity
shares shares income
1. Ending balance of last year 3,136,000,000.00 8,694,693,859.93 276,727.96 961,105,529.85 613,351,724.38 13,405,427,842.12
Add: Change of accounting policies
Correction of errors for last period
Others
2. Beginning balance of current year 3,136,000,000.00 8,694,693,859.93 276,727.96 961,105,529.85 613,351,724.38 13,405,427,842.12
3. Changes in current year (“-” for decrease) 739,371,532.00 3,228,364,305.24 248,490.52 787,832,231.28 4,755,816,559.04
1) Total comprehensive income 981,600,807.88 981,600,807.88
2) Capital increase and decrease by
739,371,532.00 3,228,364,305.24 3,967,735,837.24
shareholders
(1) Common share invested by
739,371,532.00 3,228,364,305.24 3,967,735,837.24
shareholders
(2) Capital input by the holder of other
equity instruments
(3) Share-based payment attributable to
shareholders' equity
(4) Others
3) Profit distribution -193,768,576.60 -193,768,576.60
(1) Appropriation of surplus reserves
(2) Profit distribution to shareholders -193,768,576.60 -193,768,576.60
(3) Others
4) Transfers within shareholders' equity
(1) Capital reserves transferred into
paid-in capital (or stock)
(2) Surplus reserves transferred into
paid-in capital (or stock)
(3) Surplus reserves to recover loss
(4) Net changes of defined contribution
plans transferred into Retained Earnings
(5) Others
5) Special reserves 248,490.52 248,490.52
(1) Provision of special reserves 40,685,554.06 40,685,554.06
(2) Use of special reserves 40,437,063.54 40,437,063.54
6) Others
4. Ending balance of current year 3,875,371,532.00 11,923,058,165.17 525,218.48 961,105,529.85 1,401,183,955.66 18,161,244,401.16
The notes to the financial statements attached form part of these financial statements
Legal Representative: Chief Financial Officer: Chief Accountant:
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Bengang Steel Plates Co., Ltd. Annual Report 2018
BENGANG STEEL PLATES CO., LTD.
STATEMENT OF CHANGES IN EQUITY (Continued)
For the year ended 31 December 2018
(Expressed in Renminbi unless otherwise indicated)
2017
Other equity instruments Less: Other
Items Special Undistributed Total shareholder’s
Share capital Preference Capital reserves Treasury comprehensive Surplus reserves
Perpetual bond Others reserves profits equity
shares shares income
1. Ending balance of last year 3,136,000,000.00 8,694,693,859.93 230,735.89 961,105,529.85 -1,006,712,290.18 11,785,317,835.49
Add: Change of accounting policies
Correction of errors for last period
Others
2. Beginning balance of current year 3,136,000,000.00 8,694,693,859.93 230,735.89 961,105,529.85 -1,006,712,290.18 11,785,317,835.49
3. Changes in current year (“-” for decrease) 45,992.07 1,620,064,014.56 1,620,110,006.63
1) Total comprehensive income 1,620,064,014.56 1,620,064,014.56
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
shareholders' equity
(4) Others
3) Profit distribution
(1) Appropriation of surplus reserves
(2) Profit distribution to shareholders
(3) Others
4) Transfers within shareholders' equity
(1) Capital reserves transferred into
paid-in capital (or stock)
(2) Surplus reserves transferred into
paid-in capital (or stock)
(3) Surplus reserves to recover loss
(4) Net changes of defined contribution
plans transferred into Retained Earnings
(5) Others
5) Special reserves 45,992.07 45,992.07
(1) Provision of special reserves 34,507,289.29 34,507,289.29
(2) Use of special reserves 34,461,297.22 34,461,297.22
6) Others
4. Ending balance of current year 3,136,000,000.00 8,694,693,859.93 276,727.96 961,105,529.85 613,351,724.38 13,405,427,842.12
The notes to the financial statements attached form part of these financial statements
Legal Representative: Chief Financial Officer: Chief Accountant:
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Bengang Steel Plates Co., Ltd. Annual Report 2018
Bengang Steel Plates Co., Ltd.
Notes to the financial statements
For the year ended 31 December 2018
(Expressed in Renminbi unless otherwise indicated)
1. Basic Information of the Company
(1) Company profile
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. (“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 RMB 5.40 each, and listed in Shenzhen Stock
Exchange since 15 January 1998. The capital shares were totaled to 1,136,000,000 shares.
On 14 March 2006, according to the resolutions of the Shareholders’ Meeting regarding 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
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Bengang Steel Plates Co., Ltd. Annual Report 2018
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 placing price
was RMB4.6733 per share.
Approved by the China Securities Regulatory Commission [2017] No. 1476, Bengang Steel
Plate Co., Ltd. privately placed no more than 739,371,534 RMB ordinary shares (A shares) to
no more than 10 issuers. The non-public offering was completed on 9 February 2018, and
739,371,532 shares were actually issued. The placing price was RMB5.41 per share.
As at 31 December 2018, the capital shares were totaled to 3,875,371,532 shares.
The Company’s uniform social credit code: 91210000242690243E.
The Company’s registered address: 16th Renmin Road, Pingshan District, Benxi, Liaoning
Province.
The Company’s legal representative: Gao Lie.
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 17 April 2019.
(2) Consolidation scope
As at 31 December 2018, subsidiaries included in the Company’s consolidated financial
statements are as follows:
Name of the subsidiaries
Guangzhou Bengang Steel & Iron Trading Co., Ltd.
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Bengang Steel Plates Co., Ltd. Annual Report 2018
Shanghai Bengang Metallurgy Science and Technology Co., Ltd.
Bengang Steel Plates Liaoyang Pellet Co., Ltd.
Dalian Benruitong Automobile Material Technology Co., Ltd.
Changchun Bengang Steel & Iron Sales Co., Ltd.
Harbin Bengang Economic and Trading Co., Ltd.
Nanjing Bengang Materials Sales Co., 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 Posco Cold-rolled Sheet Co., Ltd.
Benxi Bengang Steel Sales Co., Ltd
Shenyang Bengang Metallurgical Science and Technology Co., Ltd.
Chongqing Liaoben Steel & Iron Trading Co., Ltd.
Bengang Baojin (Shenyang) Automobile New Material Technology Co., Ltd.
For details of consolidation scope and change of the consolidation scope for the period, please
refer to Note 6 “Equity in other entities”.
2. 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 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.
3. 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
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Bengang Steel Plates Co., Ltd. Annual Report 2018
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/not under common control
Business combination 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.
Business combination not 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 fees for the business combination 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
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Bengang Steel Plates Co., Ltd. Annual Report 2018
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. 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) Increasing new subsidiaries and businesses
If the Company has a new subsidiary due to business combination under common control
during the reporting period, it shall adjust the beginning balance in the consolidated
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
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Bengang Steel Plates Co., Ltd. Annual Report 2018
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 remeasure
its previously held equity interest in 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 remeasurement of defined benefit plan is excluded.
(2) Disposing subsidiaries or businesses
1. General treatment
If the Company disposes a subsidiary during the reporting period, the revenue, expenses 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,
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Bengang Steel Plates Co., Ltd. Annual Report 2018
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 subsidiaries 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:
(a) Arrangements are entered into at the same time or in contemplation of each other;
(b) Arrangements work together to achieve an overall commercial effect;
(c) The occurrence of one arrangement is dependent on the occurrence of at least one
other arrangement; and
(d) 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.
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Bengang Steel Plates Co., Ltd. Annual Report 2018
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 subsidiaries’ 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 portion of equity investments in subsidiaries without lossing 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) 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.
(8) 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
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Bengang Steel Plates Co., Ltd. Annual Report 2018
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.
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 income statement shall be translated
using an exchange rate that is determined in a systematic and reasonable manner and
approximates the spot exchange rate on 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 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.
(9) 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
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Bengang Steel Plates Co., Ltd. Annual Report 2018
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
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
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Bengang Steel Plates Co., Ltd. Annual Report 2018
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. Recognition 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
(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
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Bengang Steel Plates Co., Ltd. Annual Report 2018
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. Termination of recognition 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 part 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 Company
shall include into the profits and losses of the current period the difference 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).
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
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Bengang Steel Plates Co., Ltd. Annual Report 2018
(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 of the financial assets (liabilities)
If active markets for the financial instruments exist, the fair value shall be measured by
quoted prices in the active markets. If active markets for the financial instruments do not
exist, valuation techniques shall be applied for the measurement. The Company uses
valuation techniques appropriate in the circumstances and for which sufficient data are
available to measure fair value. The Company chooses relevant observable inputs for
identical or similar assets or liabilities. Only when relevant observable inputs are unavailable
or should the Company use unobservable inputs for the asset or liability.
6. Impairment provision of the financial assets (excluding 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 available-for-sale
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.
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The criteria for “significant” decrease of fair value of available-for-sale equity instruments:
the book value the equity investment is lower than 50% of the fair value;
The criteria for “non-temporary” decrease of fair value of available-for-sale equity
instruments: available-for-sale equity instruments have been subject to material un-normal
factors or the book value has been lower than the purchase price for over one year (including
one year).
(2) Impairment of held-to-maturity investment
The impairment of the held-to-maturity investment can be measured at reference to the
measurement of the impairment of accounts receivables.
(10) Receivables
1. The recognition and provision for bad debts for the individually significant receivables
The recognition standard for the individually significant receivables:
Accounts receivable over RMB10 million or other receivables over RMB 5 million.
The provision method for bad debts for the individually significant receivables:
The impairment test shall be assessed individually for each individually significant receivable.
If there is evidence indicating that 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. Receivables that are assessed not to be impaired individually are subsequently
assessed for impairment in portfolios.
2. The provision for bad debts for the receivables in portfolio
The provision method for bad debts for the receivables in portfolio
Criteria for portfolio
Individual insignificant receivables and receivables that are individually assessed
Portfolio
not to be impaired
Provision method for bad debts for portfolio
Portfolio Aging analysis method
Aging analysis method for bad debts provision
Bad debts ratio for Bad debts ratio for
Aging
accounts receivable (%) other receivables (%)
Within 1 year (inclusive)
1-2 years (inclusive) 5.00 5.00
2-3 years (inclusive) 20.00 20.00
Over 3 years 100.00 100.00
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3. Individually insignificant receivables of which bad debts are provisioned individually
(1) Reasons for individual provision of bad debts
Individually insignificant receivables are individually assessed to be impaired.
(2) The provision method for bad debts
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.
(11) Inventory
1. Inventory classification
Inventories include material in transit, raw material, low-valued consumables, finished goods,
work in process, 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 the Company 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.
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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.
4. Inventory system
The Company uses perpetual inventory system.
5. Amortization of low-valued consumables and packing materials
(1) Low-valued consumables shall be amortized in full amount on issuance.
(2) Packing materials shall be amortized in full amount on issuance.
(12) Assets hold for sales
The Company classifies non-current assets or disposal asset groups when the assets meet the
following criterion into holding categories for sale simultaneously:
(1) According to the practice of selling such assets or disposal asset groups in similar
transactions, they can be sold immediately under current conditions;
(2) The sale of assets is highly probable, as the company has already made a resolution on a
sale plan and obtained a certain purchase commitment, and the transaction is expected to be
completed within one year. The relevant regulations that the assets can be sold have been
approved by relevant authorities or regulatory authorities of the Company.
(13) Long-term equity investment
1. Criteria of joint control and significant influence
Joint control is the contractually agreed sharing of control of an arrangement, which exists
only when decisions about the relevant activities require the unanimous consent of the parties
sharing control. If the Company and other joint venture have joint control of the investee and
have rights to the net assets of the investee, the investee is a joint venture of the Company.
Significant influence is the power to participate in the financial and operating policy decisions
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
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For a business combination 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. 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.
For a business combination not under common control, the initial investment cost of the
long-term equity investment shall be the acquisition cost at the acquisition date. When an
investor becomes capable of exercising control over an investee due to additional investment
or other reasons, the initial investment cost under the cost method shall be the carrying
amount of previously-held equity investment together with the additional investment cost.
(2) The initial cost of the long-term equity investment other than from business acquisition
The initial cost of a long-term equity investment obtained by making payment in cash shall 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.
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.
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3. Subsequent measurement and profit or loss recognition
(1) Cost method
The Company adopts cost method for the long term investment in subsidiary company. Under
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.
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 according to the Company’s accounting principles and operating
period based on the fair values of the investee’s identifiable net assets at the acquisition date.
During the holding period, if the investee makes consolidated financial statements, the
Company shall calculate its share based on the investee’s net profit, other comprehensive
income and the amount of other owners' equity attribute to the investee in the consolidated
financial statements.
The unrealized profits or losses resulting from transactions between the investor and 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
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the Company and associate and joint venture and the assets is a business, it shall apply the
treatment mentioned in Note 3 (5) “The accounting treatment for Business combination
under/now under common control” and Note 3 (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 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
When disposing 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.
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When the Company can no longer exercise control over an investee due to partial disposal of
equity investment or due to decrease of shareholding ratio because of additional investment
by other investors, 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 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.
(14) Investment property
Investment property refers to real estate held for the purpose of earning rent or capital appreciation,
or both, including leased land use rights, land use rights held and prepared for transfer after
appreciation, and leased buildings ( Buildings that are leased after completion of self-construction
or development activities and buildings that are being used for rental in the future during
construction or development).
The company uses the cost model to measure the existing investment property. For investment
property measured according to the cost model - the rental building adopts the same depreciation
policy as the fixed assets of the company, and the land use right for rental is amortized according
to the same amortization policy as the intangible assets.
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(15) Fixed assets
1. Recognition of Fixed assets
The term "fixed assets" refers to the tangible assets held for the sake of producing
commodities, rendering labor service, renting or business management and of which useful
life is in excess of one fiscal year. No fixed asset may be recognized unless it simultaneously
meets the conditions as follows:
(1) The economic benefits pertinent to the fixed asset are likely to flow into the enterprise;
and
(2) The cost of the fixed asset can be measured reliably.
2. Fixed assets depreciation
Fixed assets are depreciated under the straight line method. The depreciation rate is
determined according to the category of assets, the useful life and the expected residual rate.
If the components of the fixed assets have different useful lives or provide the economic
benefits in a different way, then different depreciation rate or method shall be applied and the
depreciation of the components shall be calculated separately.
Fixed assets acquired under financial leasing is depreciated over the useful life if it is
reasonably certain that the ownership of the leased assets will be acquired upon expiry of
lease, or over the shorter of lease term and useful life if it is not reasonably certain that the
ownership of the leased assets will be acquired upon expiry of lease.
Details of classification, depreciation period, residual value rate and annual depreciation rate
are as follows:
Depreciation
Depreciation Residual Value
Category Depreciation method Rate
Period Rate (%)
(%)
Plants and Buildings straight line method 8-40 years 0.00 2.50-12.50
Machinery straight line method 4-18 years 3.00 5.39-24.25
Transportation and straight line method
5-18 years 3.00 5.39-19.40
other 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
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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.
(16) 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.
(17) Borrowing costs
1. Principle of the recognition of capitalized borrowing costs
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.
Assets eligible for capitalization 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.
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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. 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
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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.
(18) Intangible Assets
1. Measurement of Intangible Assets
(1) Initial measurement is based on cost upon acquisition
The cost of an intangible asset on acquisition include the purchase price, relevant taxes 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.
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.
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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.
3. Determination of intangible assets with uncertain useful lives
As at the balance sheet date, the Company has no intangible assets with uncertain useful lives.
4. Classification criteria for internal research phase and development phase
The expenditures for its internal research and development projects of an enterprise shall 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.
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.
(19) Impairment of long-term assets
For long-term assets under the cost model such as long-term equity investments, Investment property,
fixed assets, construction in progress, intangible assets with limited useful lives etc., the
Company shall perform impairment tests at the period end if there is clear indication 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
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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.
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.
(20) Long-term deferred expense
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
(21) Employee benefits
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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.
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.
3. Accounting treatment of post-employment benefits
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.
4. Accounting treatment of termination benefits
The Company 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: when the Company cannot unilaterally withdraw the offer of termination benefits
because of an employment termination plan or a curtailment proposal; or when the Company
recognizes costs or expenses related to a restructuring that involves the payment of
termination benefits.
(22) Estimated liabilities
1. Recognition criteria of estimated liabilities
The obligation pertinent to a Contingency (litigation, guarantees, loss contract, restructuring)
shall be recognized as an estimated liability 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.
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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 pertinent 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.
(23) Revenue
(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 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
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Bengang Steel Plates Co., Ltd. Annual Report 2018
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.
(3) Recognition Criteria for the Revenue from alienating of Assets Use Rights
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.
(24) Government Subsidies
A government subsidy means the monetary or non-monetary assets obtained free of charge
by the Company from the government. Government subsidies consist of the government
subsidies pertinent to assets and government subsidies pertinent to income.
The criteria and accounting treatment of government subsidies pertinent 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.
Recognition
Government subsidies related to assets shall be recognized by deducting the subsidies at
the caring amount of the assets or recognized as deferred income. Subsidies that
recognized as deferred income shall be recognized in profit or loss over the periods
during the useful lives of the relevant assets.
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Bengang Steel Plates Co., Ltd. Annual Report 2018
Accounting treatment
Government subsidies related to assets shall be recognized by deducting the subsidies at
the caring 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 recorded in Other Income. Subsidies that unrelated to daily activities
should be recorded in Non-operating Income).
The criteria and accounting treatment of government subsidies pertinent to income.
The government subsidy related to income refers to the government subsidy other than
the government subsidy related to the asset.
Recognition
The government subsidies related to incomes to compensate future expenses, shall be
recognized as deferred income and transferred to current profit or loss. Government
subsidies to compensate expenses or losses already incurred shall be recognized in
current profit and loss.
Accounting treatment
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 recorded in Other Income. Subsidies that unrelated to daily
activities should be recorded in Non-operating Income) in the period during which the
expenses compensation is recognized or deduct relevant cost or loss. Government
subsidies to compensate expenses or losses already incurred shall be recognized in
current profit and loss (Subsidies related to daily activities should be recorded in Other
Income. Subsidies unrelated to daily activities should be recorded in Non-operating
Income) or deduct relevant cost or loss.
(25) Deferred tax assets and deferred tax liabilities
An enterprise shall recognize the deferred income tax assets 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
117
Bengang Steel Plates Co., Ltd. Annual Report 2018
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.
(26) 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
118
Bengang Steel Plates Co., Ltd. Annual Report 2018
recorded into the profits and losses of the 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.
(27) 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;
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Bengang Steel Plates Co., Ltd. Annual Report 2018
(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.
(28) Change of significant accounting policy and accounting estimate
1. Change of major accounting policy during this reporting period
Ministry of Finance issued “Notice of the Ministry of Finance on the revision of the
format for the issuance of the financial statements of the general enterprise for the year
2018” (Cai Kuai 2018 No.15) on 15 June 2018, which revised the format of financial
statement for the general enterprise. The major impact of the implementation of the
above three regulations are as follows:
The contents and reasons
The items affected and the amount
of accounting policy changes
"Notes receivable" and "Accounts receivable" are
combined and shown as "Notes receivable and
(1) In Statement of Financial Position, "Notes
accounts receivable", amount for current year is
receivable" and "Accounts receivable" are combined
4,219,628,324.83, amount for previous year is
and shown as "Notes receivable and accounts
4,575,031,627.26;"Notes payable" and "Accounts
receivable"; "Notes payable" and "Accounts
payable" are combined and shown as "Notes
payable" are combined and shown as "Notes
payable and accounts payable", amount for
payable and accounts payable"; "Interest receivable"
current year is 15,535,234,825.67, amount for
and "Dividends receivable" are incorporated into
previous year is 15,392,258,341.04; “Other
"Other receivables"; "Interest payable" and
receivables” increased 11,608,705.43 in current
"Dividends payable" are incorporated into "Other
year, and the increasing amount for previous year
account payables"; "Disposal of fixed assets" is
is 18,448,520.50; “Other account payables”
incorporated into "fixed assets", "Project materials"
increased 9,658,681.99 in current year, and the
is incorporated into "Construction in progress";
increasing amount for previous year is
"Special accounts payable" is incorporated into
84,139,288.02; “Construction in progress”
"Long-term payables". The comparative data is
increased 4,900,986.11 in current year, and the
adjusted accordingly.
increasing amount for previous year is
4,558,919.60.
(2) A new item "Research and development "General and administrative expenses" is
expenses" is added to the Statement of decreased by 6,399,884.30 in current year and
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Bengang Steel Plates Co., Ltd. Annual Report 2018
Comprehensive Income, reclassifying R&D 8,208,922.25 in previous year, which is
expenses originally under "General and reclassified to " Research and development
administrative expenses" into "Research and expenses ";The amount of “interest expenses” for
development expenses " which is now disclosed this year is 1,278,508,985.59, amount for
separately. New items "Interest expenses" and previous year is 1,023,936,982.91; “interest
"Interest income" are added to the Statement of incomes” in this year is 200,356,927.95, amount
Comprehensive Income under financial expenses. for previous year is 142,752,764.37.
The comparative data is adjusted accordingly.
2. Change of accounting estimate during this reporting period
None.
4. Taxes
(1) Major type of taxes and corresponding tax rates
Tax Taxation Method Tax Rate
The balance of output VAT calculated 6%，10%、16%（May
based on product sales and taxable to December in 2018）
Value-added Tax(VAT) services revenue in accordance with the
11%、17%（Jan to
tax laws after subtracting the deductible
input VAT of the period April in 2018）
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%
5. Notes to the consolidated financial statements
(1) Cash at bank and on hand
Items Ending balance Beginning balance
Cash on hand
4,839.95 20,871.51
Cash at bank
11,752,543,782.02 12,317,555,907.42
Other monetary funds
4,814,923,133.80 4,720,136,631.56
Total 16,567,471,755.77 17,037,713,410.49
Total amount deposited abroad
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
3,794,647,133.80 3,147,582,187.96
Margin for letter of credit 105,000,000.00
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Bengang Steel Plates Co., Ltd. Annual Report 2018
Time deposit or notice deposit
for guarantee 915,276,000.00 1,572,554,443.60
Total 4,814,923,133.80 4,720,136,631.56
(2) Notes receivable and Accounts receivable
Items Ending balance Beginning balance
Notes receivable 3,580,145,843.38 3,846,433,700.87
Accounts receivable 639,482,481.45 728,597,926.39
Total 4,219,628,324.83 4,575,031,627.26
1. Notes receivable
(1) Notes receivable disclosed by category
Items Ending balance Beginning balance
Bank acceptance bill
3,540,317,759.10 3,622,042,309.91
Commercial acceptance bill
39,828,084.28 224,391,390.96
Total
3,580,145,843.38 3,846,433,700.87
(2) The pledged acceptance bill at the year-end
Items The pledged acceptance bill at the year-end
Bank acceptance bill 124,096,196.40
Total 124,096,196.40
(3) The amount of Notes receivable endorsed over but not yet matured at the year-end.
Items Derecognized ending balance Unrecognized ending balance
Bank acceptance bill 10,357,325,978.51
Total 10,357,325,978.51
(4) No Notes receivable has been transferred into accounts receivable due to inability of
drawer to meet acceptance bill at the year-end.
2. Accounts receivable
(1) Accounts receivable disclosed by category
Ending balance
Items Carrying amount Provision for bad debts
Percentage Bad debts
Book value
Amount (%)
Amount ratio (%)
Individually significant 47,762,337.18 5.82 47,762,337.18 100.00
and tested for impairment
individually
Accounts receivable tested 773,432,447.14 94.18 133,949,965.69 17.32 639,482,481.45
for impairment by
122
Bengang Steel Plates Co., Ltd. Annual Report 2018
portfolio
Other insignificant items
but tested for impairment
individually
Total 821,194,784.32 100.00 181,712,302.87 639,482,481.45
Beginning balance
Items Carrying amount Provision for bad debts
Percentage Bad debts
Book value
Amount (%)
Amount ratio (%)
Individually significant and
tested for impairment 47,762,337.18 4.86 47,762,337.18 100.00
individually
Accounts receivable tested
for impairment by portfolio 934,445,274.36 95.14 205,847,347.97 22.03 728,597,926.39
Other insignificant items
but tested for impairment
individually
Total 982,207,611.54 100.00 253,609,685.15 728,597,926.39
Accounts receivables individually significant and tested for impairment individually
Ending balance
Company Provision for bad Bad debts
Carrying amount Reason
debts ratio (%)
Benxi Nanfen Xinhe
Metallurgical Furnace 47,762,337.18 47,762,337.18 100.00 Halt operation
Material Co., Ltd
Total 47,762,337.18 47,762,337.18
Accounts receivables tested for impairment by portfolio using the method of Aging analysis
Ending balance
Items
Carrying amount Provision for bad debts Bad debts ratio (%)
Within 1 year (inclusive) 563,409,367.97
1-2 years (inclusive) 56,752,847.90 2,837,642.39 5.00
2-3 years (inclusive) 27,697,384.96 5,539,476.99 20.00
Over 3 years 125,572,846.31 125,572,846.31 100.00
Total 773,432,447.14 133,949,965.69
(2) Information of provision, reversal or recovery of bad debts of current period.
The provision of bad debts of current period is RMB 71,897,382.28.
(3) No accounts receivable has been written off this year.
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Bengang Steel Plates Co., Ltd. Annual Report 2018
（4）Top five debtors at the year-end
Ending balance
Company Percentage of total Accounts Provision for
Amount
receivable (%) bad debts
The first 317,449,873.52 38.66
The second 129,063,024.28 15.72
The third 91,185,441.03 11.10 6,792,099.51
The fourth 47,762,337.18 5.82 47,762,337.18
The fifth 39,608,495.91 4.82
Total 625,069,171.92 76.12 54,554,436.69
（3）Prepayments
1. Prepayments disclosed by aging
Ending balance Beginning balance
Aging
Amount Percentage (%) Amount Percentage (%)
Within 1 year (inclusive) 1,318,136,339.11 99.74 1,259,327,577.20 98.33
1-2 years (inclusive) 2,494,489.34 0.19 13,457,173.07 1.05
2-3 years (inclusive) 901,900.77 0.07 1,669,541.26 0.13
Over 3 years 4,785.56 0.00 6,234,802.80 0.49
Total 1,321,537,514.78 100.00 1,280,689,094.33 100.00
Notes: As of December 31, 2018, there were no outstanding prepayments of over 1 year.
2. Top five prepaid companies at the year-end
Name of the company Amount Percentage (%)
The First 713,124,266.80 53.96
The Second 119,250,171.60 9.02
The Third 77,376,851.40 5.86
The Fourth 70,879,684.67 5.36
The Fifth 35,679,699.53 2.70
Total 1,016,310,674.00 76.90
（4）Other receivables
Items Ending balance Beginning balance
Interest receivables 11,608,705.43 18,448,520.50
Dividend receivables
Other receivables 191,155,259.55 290,376,985.34
Total 202,763,964.98 308,825,505.84
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Bengang Steel Plates Co., Ltd. Annual Report 2018
1．Interest receivable
（1）Interest receivable disclosed by category
Items Ending balance Beginning balance
Deposit interest 11,608,705.43 18,448,520.50
Total 11,608,705.43 18,448,520.50
2．Other receivables
(1). Other receivables disclosed by category
Ending balance
Items Carrying amount Provision for bad debts
Percentage Bad debts Book value
Amount Amount
(%) ratio (%)
Individually significant and tested
for impairment individually
Accounts receivable tested for
impairment by portfolio 254,359,387.50 99.32 64,944,127.95 25.53 189,415,259.55
Other insignificant items but tested
for impairment individually 1,740,000.00 0.68 1,740,000.00
Total 256,099,387.50 100.00 64,944,127.95 191,155,259.55
Beginning balance
Items Carrying amount Provision for bad debts
Percentage Bad debts
Book value
Amount (%)
Amount ratio (%)
Individually significant and tested
for impairment individually
Accounts receivable tested for
impairment by portfolio 359,690,439.99 99.52 71,053,454.65 19.75 288,636,985.34
Other insignificant items but
tested for impairment individually 1,740,000.00 0.48 1,740,000.00
Total 361,430,439.99 100.00 71,053,454.65 290,376,985.34
Other receivables tested for impairment by portfolio using the method of Aging analysis
Ending balance
Items Carrying
Provision for bad debts Bad debts ratio (%)
amount
Within 1 year (inclusive) 156,340,847.48
1-2 years (inclusive) 4,278,962.95 213,948.15 5.00
2-3 years (inclusive) 36,261,746.59 7,252,349.32 20.00
Over 3 years 57,477,830.48 57,477,830.48 100.00
Total 254,359,387.50 64,944,127.95
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Bengang Steel Plates Co., Ltd. Annual Report 2018
(2). Information of provision, reversal or recovery of bad debts of current period.
The provision of bad debts of current period is RMB 6,109,326.70.
(3). No other receivables have been written off this year.
(4). Other receivables disclosed by nature
Nature Ending balance Beginning balance
Accounts 203,695,979.62 345,146,993.73
Margin and deposit 2,238,972.26 3,045,619.00
Others 50,164,435.62 13,237,827.26
Total 256,099,387.50 361,430,439.99
(5). Top five debtors at the year-end
Percentage of Provision
Nature or
Company Amount Aging total other for bad
content
receivables (%) debts
The First Accounts 7,718,029.34 within 1 year 3.01
The Second Accounts 6,224,516.81 within 1 year 2.43
The Third Accounts 4,491,968.59 within 1 year 1.75
The Fourth Accounts 4,341,257.18 2-3 years 1.70 868,251.44
The Fifth Accounts 3,457,108.78 within 1 year 1.35
Total 26,232,880.70 10.24 868,251.44
(5) Inventories
1. Inventories disclosed by category
Ending balance Beginning balance
Items
Carrying amount Impairment Book value Carrying amount Impairment Book value
Raw material
5,509,216,101.37 26,986,533.69 5,482,229,567.68 5,612,450,076.70 4,894,918.76 5,607,555,157.94
and main material
Work in process and
self-made
1,365,365,191.33 29,012,489.61 1,336,352,701.72 1,689,682,178.82 23,431,222.63 1,666,250,956.19
semi-finished
product
Finished products 3,888,124,260.41 28,959,417.41 3,859,164,843.00 3,964,781,474.74 28,689,492.71 3,936,091,982.03
Total 10,762,705,553.11 84,958,440.71 10,677,747,112.40 11,266,913,730.26 57,015,634.10 11,209,898,096.16
2. Impairment of inventory
Beginning Increase Decrease Ending
Category
balance Provision Others Write-back Others balance
126
Bengang Steel Plates Co., Ltd. Annual Report 2018
or write-off
Raw material 4,894,918.76 22,091,614.93 26,986,533.69
and main material
Work in process and 23,431,222.63 29,012,489.61 23,431,222.63 29,012,489.61
self-made semi-finished
product
Finished products 28,689,492.71 28,959,417.29 28,689,492.59 28,959,417.41
Total 57,015,634.10 80,063,521.83 52,120,715.22 84,958,440.71
(6) Other current assets
Items Ending balance Beginning balance
Prepaid enterprise income tax 189,634,393.98 182,938,934.20
Input tax to be deducted 102,485,377.15 120,383,193.59
Bank Short-Term Financial Products 506,000,000.00
Total 292,119,771.13 809,322,127.79
(7) Available-for-sale financial assets
1. Details of available-for-sale financial assets
Ending balance Beginning balance
Items Carrying
Carrying amount Impairment Book value Impairment Book value
amount
Available-for-sale
debt instruments
Available-for-sale 1,056,239,522.00 14,414,693.00 1,041,824,829.00 18,303,673.00 14,414,693.00 3,888,980.00
equity instruments
Including:
Measured at fair
value
Measured at cost 1,056,239,522.00 14,414,693.00 1,041,824,829.00 18,303,673.00 14,414,693.00 3,888,980.00
Total 1,056,239,522.00 14,414,693.00 1,041,824,829.00 18,303,673.00 14,414,693.00 3,888,980.00
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Bengang Steel Plates Co., Ltd. Annual Report 2018
2. Available-for-sale financial assets measured at cost
Carrying amount Impairment Percenta
ge of Cash dividend
Company invested
Beginning Ending share in of the current
in Beginning Balance Increase Decrease Ending Balance Increase Decrease
Balance Balance the firm period
(%)
Suzhou Bengang 3,888,980.00 3,888,980.00 20.10
Industrial Co., Ltd.
China Steel 14,414,693.00 14,414,693.00 14,414,693.00 14,414,693.00 15.00
Shanghai Steel
Processing Co., Ltd.
Dongbei Special 1,037,735,849.00 1,037,735,849.00 10.00
Steel Group Co.,
Ltd.
Guangzhou Benpu 200,000.00 200,000.00 10.00
Auto Board Sales
Co., Ltd.
Total 18,303,673.00 1,037,935,849.00 1,056,239,522.00 14,414,693.00 14,414,693.00
Other instructions: Dongbei Special Steel Group Co., Ltd. is a new joint stock company during the current period. The company’s shareholding ratio is 10%.
Guangzhou Benpu Auto Board Sales Co., Ltd. is a new joint stock company during the current period. The company’s shareholding ratio is 10%.
(8) Long-term equity investment
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Bengang Steel Plates Co., Ltd. Annual Report 2018
Increase/decrease
Amount Total
Investment Gains
Investees Beginning Add Reduce Adjustment Other Declaration of Ending Provision Impairme
and Losses
Balance Invest Investme Comprehen Equity Cash Dividends Others Balance Total nt Ending
Recognized under
ment nt sive Income Changes or Profit Impairment Balance
the Equity Method
1．Joint Venture
Subtotal
2．Associated Enterprise
Zhejiang Bengang Jingrui
2,726,009.03 171,488.75 -441,816.23 2,455,681.55
Steel Processing Co., Ltd..
Subtotal 2,726,009.03 171,488.75 -441,816.23 2,455,681.55
Total 2,726,009.03 171,488.75 -441,816.23 2,455,681.55
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Bengang Steel Plates Co., Ltd. Annual Report 2018
(9) Fixed assets
1. Fixed assets and Fixed assets liquidation incorporated
Items Ending Balance Beginning Balance
Fixed assets 23,924,504,539.97 23,852,067,166.10
Disposal of fixed assets
Total 23,924,504,539.97 23,852,067,166.10
2. Details of fixed assets
Transportation
Items Buildings Machinery equipment and Total
others
1. Total original value
Beginning balance 12,311,587,761.99 41,626,541,563.48 902,411,923.49 54,840,541,248.96
Increase 31,819,012.72 2,578,087,213.14 1,144,674.00 2,611,050,899.86
in current period
Including: Purchase 17,031,921.96 1,039,027.45 18,070,949.41
Transferred 31,819,012.72 2,561,055,291.18 105,646.55 2,592,979,950.45
from construction in
progress
Merging
Others
Decrease in current 168,915,008.85 652,892,800.35 1,028,820.37 822,836,629.57
period
Including: Disposal 168,915,008.85 652,892,800.35 1,028,820.37 822,836,629.57
Others
Ending balance 12,174,491,765.86 43,551,735,976.27 902,527,777.12 56,628,755,519.25
2.Total accumulated
depreciation
Beginning balance 5,276,168,794.08 25,159,715,530.00 541,830,618.28 30,977,714,942.36
Increase 366,707,201.07 1,959,703,592.18 19,762,685.28 2,346,173,478.53
in current period
Including: Provision 366,707,201.07 1,959,703,592.18 19,762,685.28 2,346,173,478.53
Others
Decrease in current 66,848,981.79 593,365,302.39 997,955.87 661,212,240.05
period
Including: Disposal 66,848,981.79 593,365,302.39 997,955.87 661,212,240.05
Others
Ending balance 5,576,027,013.36 26,526,053,819.79 560,595,347.69 32,662,676,180.84
3. Total impairment
Beginning balance 8,208,087.85 2,551,052.65 10,759,140.50
Increase 35,014,689.33 75,666.43 35,090,355.76
in current period
Including: Provision 35,014,689.33 75,666.43 35,090,355.76
130
Bengang Steel Plates Co., Ltd. Annual Report 2018
Transportation
Items Buildings Machinery equipment and Total
others
Others
Decrease in current 4,274,697.82 4,274,697.82
period
Including: Disposal 4,274,697.82 4,274,697.82
Others
Ending balance 38,948,079.36 2,626,719.08 41,574,798.44
4. Total net book value
of Fixed assets
Ending book value 6,559,516,673.14 17,023,055,437.40 341,932,429.43 23,924,504,539.97
Beginning book value 7,027,210,880.06 16,464,274,980.83 360,581,305.21 23,852,067,166.10
3. Fixed assets idled temporarily
Accumulated
Items Original value Impairment Book value Notes
depreciation
Buildings 201,165,792.22 116,333,985.36 35,014,689.33 49,817,117.53
Machinery 1,224,688.89 1,149,022.46 75,666.43
Total 202,390,481.11 117,483,007.82 35,090,355.76 49,817,117.53
4. Fixed assets leased out by operating lease
Items Book value
Buildings 14,786,772.84
Machinery 142,432.58
`Total 14,929,205.42
5. Fixed assets without property rights certificates at the year-end
Items Book value Reason
Buildings 1,016,286,114.63 To be handled
（10）Construction in progress
1. Construction in progress and Construction materials
131
Bengang Steel Plates Co., Ltd. Annual Report 2018
Items Ending balance Beginning balance
Construction in progress 831,693,471.71 2,391,584,410.46
Project materials 4,900,986.11 4,558,919.60
Total 836,594,457.82 2,396,143,330.06
2. Details of construction in progress
Ending balance Beginning balance
Total net book
Items Total Total Total net book
Carrying amount value of Fixed Carrying amount
impairment impairment value of Fixed assets
assets
High Strength Cold Rolling
1,187,165,940.86 1,187,165,940.86
Steel Renovation Project
The Third Cold Rolling Work
Hot-Dip Galvanizing 611,760,000.00 611,760,000.00
Production Line Project
Energy Saving And
Environmental Protection
Reconstruction Of The
170,359,741.31 170,359,741.31
Converter System And 180
Ton Dephophorization
Converter Project
Ultrathin Pickling Line
32,745,791.58 32,745,791.58
Modification
Information System
32,708,961.76 32,708,961.76
Engineering
Modifying and Upgrading of
System Equipment such as 27,289,578.22 27,289,578.22
Hot Blast Furnace.
The 360 Square Meter
39,870,921.39 39,870,921.39 26,592,065.27 26,592,065.27
Sintering Machine
Automobile Board
Engineering Laboratory 20,289,005.83 20,289,005.83
Phase 2 Project.
132
Bengang Steel Plates Co., Ltd. Annual Report 2018
Ending balance Beginning balance
Total net book
Items Total Total Total net book
Carrying amount value of Fixed Carrying amount
impairment impairment value of Fixed assets
assets
Energy Control Center
16,068,616.55 16,068,616.55 8,617,499.91 8,617,499.91
Project
Renovation Project of Power
67,436,716.24 67,436,716.24
Plant Three - Power Plant.
Energy Saving And
Environmental Protection
81,652,336.52 81,652,336.52
Reconstruction Of No.1
Converter Project
Modifying and Upgrading of
No.2 Casting machine in Hot 67,751,518.71 67,751,518.71
steel plant
New No.2 blast furnace 79,221,161.00 79,221,161.00 5,786,289.03 5,786,289.03
Power plant 4-5# coke oven
dry quenching waste heat 27,607,246.17 27,607,246.17 27,567,246.17 27,567,246.17
steam utilization project
1700 hot rolling perfect
25,521,831.89 25,521,831.89
transformation
CCPP power generation
24,961,721.54 24,961,721.54 1,006,256.89 1,006,256.89
project
Coking plant gas deamination
and sulfur ammonia 34,300,566.05 34,300,566.05 4,626,059.46 4,626,059.46
maintenance project
360 square meter sintering
machine waste heat 44,777,158.00 44,777,158.00 40,641,505.00 40,641,505.00
utilization
5#-7# Oxygen Generator
Nitrogen Increase Energy 21,715,145.18 21,715,145.18 239,658.18 239,658.18
Saving Reconstruction
Dry dedusting of No. 7 blast
22,973,276.80 22,973,276.80 17,669,283.41 17,669,283.41
furnace and energy saving
133
Bengang Steel Plates Co., Ltd. Annual Report 2018
Ending balance Beginning balance
Total net book
Items Total Total Total net book
Carrying amount value of Fixed Carrying amount
impairment impairment value of Fixed assets
assets
reform of TRT power
generation
No. 6 blast furnace
environmental protection 22,895,777.14 22,895,777.14
overhaul project
Other 254,939,478.53 254,939,478.53 176,519,527.58 176,519,527.58
Total 831,693,471.71 831,693,471.71 2,391,584,410.46 2,391,584,410.46
Notes: During the reporting period, the company leased machinery and equipment from
Liaoning Hengyi Finance Leasing Co., Ltd. in the form of financial leasing. At the end of the
reporting period, the long-term accounts payable amounted to RMB 13,686,705.92. The
equipment was presented in the construction in progress.
134
Bengang Steel Plates Co., Ltd. Annual Report 2018
3. The change of major construction in progress
Input
Including:
Budget (In 10 Other of Accumulated
Progress capitalized Capitalizat Source of
Project Thousand Beginning Balance Increase Transfer to FA decre Ending balance Budge amount of
(%) interest of ion rate fund
Yuan) ase t capitalized interest
current period
(%)
Self-raised
High Strength Cold Rolling
613,498.00 1,187,165,940.86 13,721,523.28 1,200,887,464.14 83.32 100.00 855,901,421.79 fund &
Steel Renovation Project
Loan
The Third Cold Rolling Work
Self-raised
Hot-Dip Galvanizing 86,918.00 611,760,000.00 10,152,702.49 621,912,702.49 70.39 100.00
fund
Production Line Project
Energy Saving And
Environmental Protection
Self-raised
Reconstruction Of The
177,864.40 170,359,741.31 19,217,862.76 189,577,604.07 86.84 100.00 127,847,567.31 fund &
Converter System And 180
Loan
Ton Dephophorization
Converter Project
Renovation Project of Power 59,399.00 67,436,716.24 67,436,716.24 79.08 90.00 34,827,795.34 Self-raised
135
Bengang Steel Plates Co., Ltd. Annual Report 2018
Input
Including:
Budget (In 10 Other of Accumulated
Progress capitalized Capitalizat Source of
Project Thousand Beginning Balance Increase Transfer to FA decre Ending balance Budge amount of
(%) interest of ion rate fund
Yuan) ase t capitalized interest
current period
(%)
Plant Three - Power Plant. fund &
Loan
Energy Saving And
Environmental Protection Self-raised
21,800.00 81,652,336.52 81,652,336.52 37.46 45.00
Reconstruction Of No.1 fund
Converter Project
Modifying and Upgrading
Self-raised
of No.2 Casting machine 10,090.00 67,751,518.71 67,751,518.71 67.15 80.00
fund
in Hot steel plant
Self-raised
New No.2 blast furnace 150,000.00 5,786,289.03 75,196,539.52 1,761,667.55 79,221,161.00 5.40 10.00
fund
Total 1,975,071,971.20 335,129,199.52 2,014,139,438.25 296,061,732.47 1,018,576,784.44
136
Bengang Steel Plates Co., Ltd. Annual Report 2018
4. Construction materials
Ending balance Beginning balance
Items Carrying Book Carrying Book
Impairment Impairment
amount Value amount Value
Construction
4,900,986.11 4,900,986.11 4,558,919.60 4,558,919.60
materials
Total 4,900,986.11 4,900,986.11 4,558,919.60 4,558,919.60
(11) Intangible assets
1. Details of intangible assets
Items Land use right Software Total
1.Total of original value
Beginning balance 296,245,314.76 409,458.15 296,654,772.91
Increase 30,783,483.08 30,783,483.08
Including: Purchase 30,783,483.08 30,783,483.08
Decrease 99,056.60 99,056.60
Including: Disposal 99,056.60 99,056.60
Ending balance 327,028,797.84 310,401.55 327,339,199.39
2. Total of Accumulated Amortization
Beginning balance 42,688,601.63 81,289.80 42,769,891.43
Increase 6,488,090.52 18,776.41 6,506,866.92
Including: Provision 6,488,090.52 18,776.41 6,506,866.92
Decrease
Including: Disposal
Ending balance 49,176,692.15 100,066.21 49,276,758.35
3. Total of Impairment
Beginning balance
Increase
Including: Provision
Decrease
Including: Disposal
Ending balance
4. Total of Net value
Ending book value 277,852,105.69 210,335.35 278,062,441.04
Beginning book value 253,556,713.13 328,168.35 253,884,881.48
2. Land use right without Certificate of Land use right at the year-end
None.
137
Bengang Steel Plates Co., Ltd. Annual Report 2018
(12) Deferred tax asset and deferred tax liability
1. Undedicated deferred tax asset
Ending balance Beginning balance
Items Deductible Deductible
temporary Deferred tax asset temporary Deferred tax asset
differences differences
Impairment 384,689,582.05 96,172,395.52 403,885,112.30 100,971,278.09
Internal unrealized
profit 47,141,747.73 11,785,436.93 64,609,874.03 16,152,468.51
Differences of
depreciation and 333,978,859.03 83,494,714.76 333,978,859.03 83,494,714.76
amortization
Total 765,810,188.81 191,452,547.21 802,473,845.36 200,618,461.36
2. Unrecognized deferred tax assets
Items Ending balance Beginning balance
Deductible temporary differences 2,914,780.92 2,967,495.10
Deductible losses 1,112,718,371.26 2,105,332,277.56
Total 1,115,633,152.18 2,108,299,772.66
3. The deductible loss of unrecognized deferred tax assets due in the following period
Items Ending balance Beginning balance Notes
Year 2018
4,904,050.21
Year 2019
Year 2020
1,085,478,921.77 2,086,284,665.11
Year 2021
11,436,302.83 12,562,922.76
Year 2022
1,000,766.72 1,580,639.48
Year 2023
14,802,379.94
Total 1,112,718,371.26 2,105,332,277.56
(13) Other non-current assets
Items Ending balance Beginning balance
Prepaid of long-term assets
76,341,975.35 1,067,334,823.12
Total
76,341,975.35 1,067,334,823.12
Notes: The prepaid long-term assets at the end of the period are prepaid equipment and
construction funds.
（14）Short-term loans
Items Ending balance Beginning balance
138
Bengang Steel Plates Co., Ltd. Annual Report 2018
Pledge loans
48,262,375.85 1,470,000,000.00
Guaranteed loans
10,361,008,000.00 11,529,063,300.00
Credit loans
1,529,220,000.00 9,000,040,600.00
Total
11,938,490,375.85 21,999,103,900.00
（15）Notes payable and Accounts payable
Items Ending balance Beginning balance
Notes payable
10,013,192,014.02 11,494,589,827.27
Accounts payable
5,522,042,811.65 3,897,668,513.77
Total
15,535,234,825.67 15,392,258,341.04
1. Notes payable
Items Ending balance Beginning balance
Bank acceptance bill
8,738,192,014.02 8,782,045,779.95
Commercial acceptance bill
1,812,544,047.32
Domestic letter of credit
1,275,000,000.00 900,000,000.00
Total
10,013,192,014.02 11,494,589,827.27
2. Accounts payable
(1) Accounts payable disclosed by category
Items Ending balance Beginning balance
Accounts payable for goods
4,483,900,163.08 3,116,873,305.58
Accounts payable for labor
30,829,506.69 4,467,697.76
Accounts payable for project and equipment
424,097,390.68 254,691,333.73
Repair expense
579,971,383.23 519,035,208.21
Others
3,244,367.97 2,600,968.49
Total
5,522,042,811.65 3,897,668,513.77
(2) Significant accounts payable aging over one year
Items Ending balance Reason
Liaoning Shenjiao International Trade Co.,Ltd Not yet settled
72,839,065.27
MCC Southern Engineering Technology Co., Ltd. Not yet settled
51,719,440.77
Hangzhou Tianshen Materials Co., Ltd. Not yet settled
20,145,902.65
MCC Jiaoli Engineering Technology Co., Ltd. Not yet settled
19,379,163.99
MCC Jiao Nai (Dalian) Engineering Technology
17,415,300.00 Not yet settled
Co., Ltd.
139
Bengang Steel Plates Co., Ltd. Annual Report 2018
Shenyang Railway Construction Bridge and Tunnel
14,200,000.00 Not yet settled
Engineering Co., Ltd.
Jixi Huasheng Fengyuan Coal Preparation Co., Ltd. Not yet settled
14,005,916.07
Total 209,704,788.75
(16) Advance from customers
1. Advance from customers disclosed by category
Items Ending balance Beginning balance
Advance for goods 3,331,854,098.42 3,308,567,598.05
Total 3,331,854,098.42 3,308,567,598.05
2. Significant advance from customers aging over one year.
No.
(17) Employee benefits payable
1. Employee benefits payable
Beginning Ending
Items Increase Decrease
balance balance
Short-term employee
benefits 39,492,800.76 1,726,008,899.53 1,717,677,231.87 47,824,468.42
Post-employment benefits
- defined contribution
58,897.24 267,437,459.69 267,321,983.50 174,373.43
plans
Termination benefits
4,170,839.58 1,558,773.13 2,262,222.84 3,467,389.87
Other benefits due within
one year
Total
43,722,537.58 1,995,005,132.35 1,987,261,438.21 51,466,231.72
2. Short-term employee benefits
Beginning Ending
Items Increase Decrease
balance balance
(1) Salary, bonus,
allowance and subsidy 29,912,528.80 1,375,294,688.81 1,366,924,495.83 38,282,721.78
(2) Employee welfare
86,798,751.54 86,798,751.54
(3) Social Insurance
663,146.90 128,959,120.81 128,969,867.35 652,400.36
Including: Medical
insurance 94,504,100.98 94,502,502.83 1,598.15
Work injury
insurance 663,146.90 34,430,079.77 34,442,424.46 650,802.21
Maternity
insurance 24,940.06 24,940.06
(4) Housing
6,850,655.00 104,854,984.00 104,850,950.00 6,854,689.00
(5) Union funds and staff
education fee 2,066,470.06 30,101,354.37 30,133,167.15 2,034,657.28
140
Bengang Steel Plates Co., Ltd. Annual Report 2018
Beginning Ending
Items Increase Decrease
balance balance
(6) Short-term
compensated absences
(7) Short-term profit -
sharing scheme
Total
39,492,800.76 1,726,008,899.53 1,717,677,231.87 47,824,468.42
3. Defined contribution plans
Beginning Ending
Items Increase Decrease
balance balance
Basic pension fund 57,445.11 260,888,485.09 260,877,591.38 68,338.82
Unemployment insurance 1,452.13 6,548,974.60 6,444,392.12 106,034.61
Total 58,897.24 267,437,459.69 267,321,983.50 174,373.43
(18) Current tax liabilities
Items Ending balance Beginning balance
Value-added tax 442,980,368.02 44,433,347.78
Corporate income tax 2,769,293.58 12,706,288.46
City maintenance and construction tax 32,813,368.49 13,007,637.50
House property tax 3,004,878.95 2,990,847.04
Educational surcharges 23,450,632.11 9,382,026.01
Environmental tax 7,340,495.80
Others 3,393,332.73 5,286,981.71
Total 515,752,369.68 87,807,128.50
(19) Other payables
Items Ending balance Beginning balance
Interest payables 9,658,681.99 84,139,288.02
Dividends payables
Other payables 852,852,496.97 576,989,932.31
Total 862,511,178.96 661,129,220.33
1. Interests payable
Items Ending balance Beginning Balance
Corporate bond interests
70,109,821.13
Loan interests
9,658,681.99 14,029,466.89
Total
9,658,681.99 84,139,288.02
141
Bengang Steel Plates Co., Ltd. Annual Report 2018
2. Other payables
(1) Other payables disclosed by nature
Items Ending balance Beginning Balance
Deposit 6,876,696.99 2,475,771.82
Margin 129,911,043.84 145,686,888.01
Accounts 568,285,473.68 349,363,687.04
Others 147,779,282.46 79,463,585.44
Total 852,852,496.97 576,989,932.31
(2) Significant other payables ageing over one year
Name Ending balance Reason
Benxi Steel & Iron (Group) Co., Ltd. 218,328,849.90 Not yet settled
(20) Non-current liabilities due within one year
Items Ending balance Beginning balance
Long-term loans due within one year 350,965,576.32 2,311,995,410.89
Bond payables due within one year 1,499,545,179.95
Total 350,965,576.32 3,811,540,590.84
(21) Other current liabilities
Items Ending balance Beginning balance
Pending output value-added tax 27,979,093.21
Total 27,979,093.21
(22) Long-term loans
Long-term loans disclosed by category
Categories Ending balance Beginning balance
Pledged loans
Mortgage loan
Guaranteed loans 3,931,317,094.16 2,267,263,140.28
Credit loans 3,152,323,000.00 176,922,490.00
Total 7,083,640,094.16 2,444,185,630.28
142
Bengang Steel Plates Co., Ltd. Annual Report 2018
(23) Long-term payables
Items Ending balance Beginning balance
Long-term payables 13,686,705.92
Special payables
Total 13,686,705.92
1. Long-term payables
Items Ending balance Beginning balance
Financing lease payments 13,686,705.92
Total 13,686,705.92
(24) Deferred income
Beginning Ending
Items Increase Decrease Reason
balance balance
Government
372,785,000.00 2,799,300.00 86,085,297.03 289,499,002.97
subsidy
Total 372,785,000.00 2,799,300.00 86,085,297.03 289,499,002.97
143
Bengang Steel Plates Co., Ltd. Annual Report 2018
Projects of government subsidies:
Transfer to Related to
Beginning Other
Items Increase non-operating Ending balance assets or
balance decrease
income income
MES Project Special Fund 3,440,000.00 1,720,000.00 1,720,000.00 Assets
Industrial Enterprise Energy Management Center
9,280,000.00 2,320,000.00 6,960,000.00 Assets
Construction Demonstration Project
Environment Pollution Renovation Project 7,240,000.00 3,620,000.00 3,620,000.00 Assets
Environment Renovation Project and Regional Basin
680,000.00 340,000.00 340,000.00 Assets
Environment Protection Project
Cold Rolling Steel High Strength Renovation Project 250,000,000.00 50,000,000.00 200,000,000.00 Assets
Automobile High-class Electrolytic Zinc Steel Plate
24,624,000.00 8,208,000.00 16,416,000.00 Assets
Production Line Project
Sintering Machine Residue Heat Usage and Desulfurization
8,408,000.00 4,204,000.00 4,204,000.00 Assets
Project
7 130t Boilers Flue Gas Desulfurization Renovation Project
24,000,000.00 4,800,000.00 19,200,000.00 Assets
of Power Plant
Treatment and Salt Extraction Project of Desulfurization
100,000.00 100,000.00 Assets
Waste Liquid of Coke Plant
Overseas Advanced Technology Introduction Special Fund 9,768,000.00 2,884,000.00 6,884,000.00 Assets
Automobile Steel Sheet Engineering Laboratory Project 1,000,000.00 1,000,000.00 Assets
Third-generation High Strength Steels for Automobile R&D
2,900,000.00 2,900,000.00 Assets
Project
The 360 Cubic Meter Sintering Machine Flue Gas
400,000.00 200,000.00 200,000.00 Assets
Desulfurization Renovation Project of Blast Furnace Plant
144
Bengang Steel Plates Co., Ltd. Annual Report 2018
Transfer to Related to
Beginning Other
Items Increase non-operating Ending balance assets or
balance decrease
income income
Environment Protection Project Special Fund 2,320,000.00 1,160,000.00 1,160,000.00 Assets
Advanced Treatment of Carbon Fiber Wastewater Project of
9,500,000.00 9,500,000.00 Assets
Coke Plant Dongfeng Area
Desulfurization and Denitration Projects for Coal-fired
5,400,000.00 600,000.00 4,800,000.00 Assets
Boiler of Power Plant High-pressure Workshop
Power Plant No 3 workshop Heat and Power Cogeneration
10,000,000.00 2,000,000.00 8,000,000.00 Assets
Renovation Project
Sintering Machine Energy Saving and Environmental
3,480,000.00 1,160,000.00 2,320,000.00 Assets
Protection Project of Blast Furnace Plant
Air Quality Automatic Monitoring System 245,000.00 70,000.00 175,000.00 Assets
Liaoning artisan subsidies 280,000.00 179,997.03 100,002.97 Income
Xi Yuan Resources supervision Committee Compensation 414,300.00 414,300.00 Income
Coal-fired boiler demolition subsidy 1,815,000.00 1,815,000.00 Income
Investment promotion tax incentive policy of Baoshan 290,000.00 290,000.00
Income
District
Total 372,785,000.00 2,799,300.00 86,085,297.03 289,499,002.97
145
Bengang Steel Plates Co., Ltd. Annual Report 2018
(25) Share capital
Increase/decrease (+ , - )
Beginning Transferred Ending
Items Issuing of new Bonus
balance from Others Subtotal balance
share shares
reserves
Capital shares 3,136,000,000.00 739,371,532.00 739,371,532.00 3,875,371,532.00
Notes:
The company issued 739,371,532 shares of RMB common stock to investors in the current period, raising a total
of RMB 3,999,999,988.12. After deducting various issuance expenses, the net proceeds raised by the company
were RMB 3,967,735,837.24. Among the amount, 739,371,532 RMB is included in the share capital, and
3,228,364,305.24 RMB is included in the capital reserve.
(26) Capital reserves
Items Beginning balance Increase Decrease Ending balance
Capital premium over par
8,998,928,073.23 3,228,364,305.24 12,227,292,378.47
value
Other capital reserves 115,917,468.82 115,917,468.82
Total 9,114,845,542.05 3,228,364,305.24 12,343,209,847.29
(27) Special Reserves
Items Beginning balance Increase Decrease Ending balance
Safety production cost 475,046.75 46,823,964.39 46,615,073.43 683,937.71
Total 475,046.75 46,823,964.39 46,615,073.43 683,937.71
(28) Surplus Reserves
Beginning Ending
Items Increase Decrease
balance balance
Statutory surplus reserves 961,105,529.85 961,105,529.85
Discretionary surplus reserve
Total 961,105,529.85 961,105,529.85
(29) Undistributed Profits
Items 2018 2018
Before adjustments: undistributed profits at last
1,103,162,610.35 -496,947,619.42
year-end
Adjustments of the beginning distributed profits
(increase + / decease -)
After adjustments: undistributed profit at this
1,103,162,610.35 -496,947,619.42
year-beginning
146
Bengang Steel Plates Co., Ltd. Annual Report 2018
Items 2018 2018
Add: undistributed profit belonging to parent company 1,036,493,236.07 1,600,110,229.77
Less: Statutory surplus reserves
Discretionary reserves
General risk reserves
Common shares dividend payable 193,768,576.60
Common shares dividend transferred to paid-in capital
Others
Ending balance of undistributed profits 1,945,887,269.82 1,103,162,610.35
(30) Operating income and operating cost
2018 2017
Items
Revenue Cost Revenue Cost
Principal business 46,228,334,211.43 41,947,082,227.94 37,488,231,200.04 33,295,587,407.25
Other business 3,953,535,510.11 3,296,652,976.37 3,019,624,643.68 2,382,392,763.48
Total 50,181,869,721.54 45,243,735,204.31 40,507,855,843.72 35,677,980,170.73
(31) Tax and surcharges
Items 2018 2017
City maintenance and construction tax 125,302,026.98 72,133,939.73
Educational surcharge 89,864,959.52 51,786,464.96
Housing property tax 73,097,772.24 73,910,361.76
Land use right tax 9,230,553.37 6,304,275.26
Environmental tax 28,286,566.21
Stamp duty and others 30,636,905.79 29,608,633.41
Total 356,418,784.11 233,743,675.12
(32) Selling and distribution expenses
Items 2018 2017
Freight 891,366,784.34 871,160,348.90
Port surcharges 116,922,773.17 183,767,518.94
Import and export agency fee 76,022,775.79 80,110,942.00
Salary and benefits 23,868,787.71 24,212,842.39
Others 19,855,677.18 16,620,229.40
Package fee 6,967,672.28 8,422,692.29
Total 1,135,004,470.47 1,184,294,573.92
(33) General and administrative expenses
147
Bengang Steel Plates Co., Ltd. Annual Report 2018
Items 2018 2017
Salary and benefits 354,229,795.80 346,361,242.30
Repair expense 338,321,930.18 236,344,347.42
Sewage charges 55,538,587.00
Land use right fee 54,691,428.60 54,691,428.60
Depreciation 51,749,401.30 51,486,458.19
Heating fee 30,017,619.41 25,014,536.75
Water resources fee 18,264,847.73 18,329,900.73
Others 69,066,114.83 56,885,415.96
Total 916,341,137.85 844,651,916.95
(34) Research and development expenses
Items 2018 2017
Depreciation, materials and compensation, etc. 6,399,884.30 8,208,922.25
Total 6,399,884.30 8,208,922.25
(35) Financial expenses
Items 2018 2017
Interest expenditure 1,278,508,985.59 1,023,936,982.91
Less: Interest income 200,356,927.95 142,752,764.37
Exchange loss 288,851,132.98 -357,509,334.61
Others 9,351,969.84 11,967,636.14
Total 1,376,355,160.46 535,642,520.07
(36) Assets impairment loss
Items 2018 2017
Loss for bad debts -78,006,708.98 51,417,469.00
Impairment of inventories 80,063,521.83 52,120,715.34
Impairment of Fixed assets 35,090,355.76
Total 37,147,168.61 103,538,184.34
(37) Other income
Related to
Items 2018 2017 assets or
income
MES PROJECT SPECIAL FUND 1,720,000.00 1,720,000.00 Assets
Second Batch of National Cleaned Manufacturing
800,000.00 Assets
Demonstration Project Fund
Industrial Enterprise Energy Management Center
2,320,000.00 2,320,000.00 Assets
Construction Demonstration Project
Environment Pollution Renovation Project 3,620,000.00 5,234,000.00 Assets
148
Bengang Steel Plates Co., Ltd. Annual Report 2018
Related to
Items 2018 2017 assets or
income
Environment Renovation Project and Regional
340,000.00 500,000.00 Assets
Basin Environment Protection Project
Energy-saving Technological Reform Fiscal
2,954,000.00 Assets
Reward Project
Cold Rolling Steel High Strength Renovation
50,000,000.00 Assets
Project
Automobile High-class Electrolytic Zinc Steel
8,208,000.00 8,208,000.00 Assets
Plate Production Line Project
Sintering Machine Residue Heat Usage and
4,204,000.00 4,204,000.00 Assets
Desulfurization Project
Wastewater Treatment Plant Renovation Project 1,500,000.00 Assets
Overseas R&D Team Introduction Special Fund 4,000,000.00 Income
7 130t Boilers Flue Gas Desulfurization
4,800,000.00 Assets
Renovation Project of Power Plant
Treatment and Salt Extraction Project of Assets
100,000.00 100,000.00
Desulfurization Waste Liquid of Coke Plant
Overseas Advanced Technology Introduction Assets
2,884,000.00 2,884,000.00
Special Fund
The 360 Cubic Meter Sintering Machine Flue
Gas Desulfurization Renovation Project of Blast 200,000.00 200,000.00 Assets
Furnace Plant
Environment Protection Project Special Fund 1,160,000.00 1,160,000.00 Assets
Bengang Power plant high pressure workshop
coal burning boiler desulfurization and 600,000.00 600,000.00 Assets
denitrification items
Power Plant No 3 workshop Heat and Power Assets
2,000,000.00
Cogeneration Renovation Project
Fund in Energy saving and environmental Assets
1,160,000.00 1,160,000.00
protection project in blast furnace plant
Air quality automatic monitoring system 70,000.00 70,000.00 Assets
Xiyuan source resource management committee
414,300.00 1,472,900.00 Income
compensation
Liaoning artisan subsidies 179,997.03 Income
Coal-fired boiler demolition subsidy 1,815,000.00 Income
Investment promotion tax incentive policy of Income
290,000.00
Baoshan district
Total 86,085,297.03 39,086,900.00
(38) Income on investment
Items 2018 2017
Income on disposal of long-term equity investment by equity
171,488.75 758,403.40
method
Income on bank short-term financial products 5,041,397.26 3,294,593.14
Total 5,212,886.01 4,052,996.54
(39) Assets disposal gains
The amount
Items 2018 2017 recognized in
non-recurring profit
Disposal gains or losses arising from disposal
213,401.13 4,280,684.29 213,401.13
of fixed assets not classified for sale
Total 213,401.13 4,280,684.29 213,401.13
149
Bengang Steel Plates Co., Ltd. Annual Report 2018
(40) Non-operating income
The amount
2018 2017 recognized in
Items
non-recurring profit
Debt restructuring gain 4,725,936.17
Fines and the penalty income 646,727.69
Non-current assets scrapped gains 5,633,553.43 5,633,553.43
Others 2,750,566.71 13,962,355.63 2,750,566.71
Total 8,384,120.14 19,335,019.49 8,384,120.14
(41) Non-operating expense
The amount
Items 2018 2017 recognized in
non-recurring profit
Non-current assets scrapped loss 154,256,584.91 70,167,296.39 154,256,584.91
Donations 1,419,374.81 1,419,374.81
Others 560,000.00 71,080.83 560,000.00
Total 156,235,959.72 70,238,377.22 156,235,959.72
(42) Income tax expense
1. Income tax expense
Items 2018 2017
Income tax payable for the current year 8,783,683.51 31,439,603.03
Adjustment of deferred income tax 9,165,914.15 275,482,792.68
Total 17,949,597.66 306,922,395.71
2. Accounting profit and income tax expense adjustment process
Items 2018
Total profit 1,054,127,656.02
Income tax expense calculate according to the official or applicable tax rate 263,531,914.00
Effect of different tax rates applied by subsidiaries
Effect of adjustment of the income tax expense of prior period -4,250,274.89
Effect of non-taxable income -42,872.19
Effect of undeductible costs, expenses or losses 386,292.21
Effect of use of deductible losses of unrecognized deferred tax asset of prior
period -245,382,980.62
Effect of deductible temporary differences or deductible losses of unrecognized
deferred tax asset of current period 3,707,519.15
Income tax expenses 17,949,597.66
(43) Notes of statement of cash flows
150
Bengang Steel Plates Co., Ltd. Annual Report 2018
1. Cash received related to other operating activities
Items 2018 2017
Withdraw of current accounts, advance for another 46,433,149.15 144,739,613.06
Interest income 207,196,743.02 124,145,399.94
Special subsidy income 2,509,300.00 1,472,900.00
Non-operating income 452,241.66 9,220,528.61
Others 1,290,246.37 2,587,267.44
Total 257,881,680.20 282,165,709.05
2. Cash paid related to other operating activities
Items 2018 2017
Current accounts, advance for another 94,760,382.17 311,562,827.07
Sales expenses 141,536,246.92 130,350,911.02
Administrative expenses 82,458,953.65 51,406,846.17
Bank charges 9,351,969.84 11,826,845.86
Others 31,253,473.75 550,762.96
Total 359,361,026.33 505,698,193.08
3. Cash received related to other financing activities
Items 2018 2017
Margin for bill, letter of guarantee and letter of credit 641,108,215.57
Total 641,108,215.57
4. Cash paid related to other financing activities
Items 2018 2017
Margin for bill, letter of guarantee and letter of credit 64,667,876.81 4,070,073,176.21
Others 1,958,720.83
Total 66,626,597.64 4,070,073,176.21
(44) Supplementary details of statement of cash flows
1. Supplementary details for statement of cash flows
Items 2018 2017
1. A reconciliation of net profit to cash flows from
operating activities:
Net profit 1,036,178,058.36 1,609,390,707.73
Add: Asset impairment losses 37,147,168.61 103,538,184.34
Depreciation of fixed assets and so on 2,346,173,478.53 2,020,739,760.10
Amortization of intangible assets 6,506,866.92 5,964,922.61
Losses proceeds from disposal of PPE, intangible assets
213,401.13 -4,280,684.29
and other long-term assets (Earnings marked“－”)
151
Bengang Steel Plates Co., Ltd. Annual Report 2018
Items 2018 2017
Scrapped losses from fixed assets (Earnings
148,623,031.48 70,167,296.39
marked“－”)
Financial expenses (Earnings marked“－”) 1,771,705,297.79 666,427,648.30
Investment losses (Earnings marked“－”) -5,212,886.01 -4,052,996.54
Deferred tax assets reduction (Addition marked“－”) 9,165,914.15 275,482,792.68
Deferred tax liabilities increased (Reduction
marked“－”)
Reduction of inventory (Addition marked“－”) 504,208,177.15 -1,421,613,785.37
Operating receivable items reduction (Addition
491,783,316.75 -3,227,142,290.68
marked“－”)
Operating payable items increase (Less marked"－") -2,726,553,982.93 2,649,621,937.24
Net cash flows generated from operating activities 3,619,937,841.93 2,744,243,492.51
2. Payments of investing and financing activities not
involving cash:
Liabilities transferred to capital
Convertible bonds due within one year
Fixed assets financed by leasing
3. The net increase in cash and cash equivalents:
Ending balance of cash 11,752,548,621.97 12,317,576,778.93
Less: Beginning balance of cash 12,317,576,778.93 12,324,639,659.07
Add: Ending balance of cash equivalents
Less: Opening balance of cash equivalents
The net increase in cash and cash equivalents -565,028,156.96 -7,062,880.14
2. The structure of cash and cash equivalents
Items Ending balance Beginning balance
1. Cash 11,752,548,621.97 12,317,576,778.93
Including: Cash on hand 4,839.95 20,871.51
Bank deposits available on demand 11,752,543,782.02 12,317,555,907.42
Other monetary funds available on demand
Central bank deposits available on demand
Balances with other financial institutions
Loans to other financial institutions
2. Cash equivalents
Including: Investment of securities due within 3 months
3. Ending balance of cash and cash equivalents 11,752,548,621.97 12,317,576,778.93
Including: Cash and cash equivalents limited to use by the
parent company of other subsidiary in the group
(45) Assets of which ownership or right to use are restricted
Items Ending balance Reason
Cash at bank and on hand 4,814,923,133.80 Deposit for notes and letter of credit
152
Bengang Steel Plates Co., Ltd. Annual Report 2018
Items Ending balance Reason
Pledged for acceptance bill and short term
Notes receivable 124,096,196.40
loan
Total 4,939,019,330.20
(46) Foreign currency monetary items
Ending balance in Exchange rate at Ending balance
Items
foreign currency the year-end translated to RMB
Cash at bank and on hand 2,216,275,084.71
Including: USD 315,892,718.96 6.8632 2,168,034,908.58
EUR 6,060,666.56 7.8473 47,559,868.87
HKD 776,429.19 0.8762 680,307.26
Short-term loans 1,304,008,000.00
Including: USD 190,000,000.00 6.8632 1,304,008,000.00
EUR
Non-current liabilities due
181,525,576.32
within one year
Including: USD 4,700,000.00 6.8632 32,257,040.00
EUR 18,838,867.28 7.8473 147,834,243.21
JPY 23,176,000.00 0.0619 1,434,293.11
Long-term loans 2,599,540,094.16
Including:USD 311,250,000.00 6.8632 2,136,171,000.00
EUR 57,586,016.75 7.8473 451,894,749.26
JPY 185,408,000.00 0.0619 11,474,344.90
153
Bengang Steel Plates Co., Ltd. Annual Report 2018
6. Equity in other entities
(1) Equity in subsidiaries
1. Constitution of enterprise group
Notes Shareholding ratio
Principal Register
of
Name of the subsidiaries place of ed Indi Acquiring method
busine Direct
business address rect
ss
Business combination
Xiamen Bengang Steel & Iron Sales Co., Ltd. Xiamen Xiamen Sales 100.00
under common control
Business combination
Wuxi Bengang Steel & Iron Sales Co., Ltd. Wuxi Wuxi Sales 100.00
under common control
Business combination
Tianjin Bengang Steel & Iron Trading Co., Ltd. Tianjin Tianjin Sales 100.00
under common control
Business combination
Nanjing Bengang Materials Sales Co., Ltd. Nanjing Nanjing Sales 100.00
under common control
Business combination
Yantai Bengang Steel & Iron Sales Co., Ltd. Yantai Yantai Sales 100.00
under common control
Business combination
Harbin Bengang Economic and Trading Co., Ltd. Harbin Harbin Sales 100.00
under common control
Changc Business combination
Changchun Bengang Steel & Iron Sales Co., Ltd. Changchun Sales 100.00
hun under common control
Guangzhou Bengang Steel & Iron Trading Co., Guangz
Guangzhou Sales 100.00 Establishment
Ltd. hou
Shanghai Bengang Metallurgy Science and Shangh
Shanghai Sales 100.00 Establishment
Technology Co., Ltd. ai
Manuf
Liaoya
Bengang Steel Plates Liaoyang Pellet Co., Ltd. Liaoyang acturin 100.00 Establishment
ng
g
Manuf
Dalian Benruitong Automobile Material
Dalian Dalian acturin 65.00 Establishment
Technology Co., Ltd.
g
Manuf
Business combination
Bengang Posco Cold-rolled Sheet Co., Ltd. Benxi Benxi acturin 75.00
under common control
g
Benxi Bengang Steel Sales Co., Ltd Benxi Benxi Sales 100.00 Establishment
Shenyang Bengang Metallurgical Science and Shenya
Shenyang Sales 100.00 Establishment
Technology Co., Ltd. ng
Chongqing Liaoben Steel & Iron Trading Co., Chong
Chongqing Sales 100.00 Establishment
Ltd. qing
Manuf
Bengang Baojin (Shenyang) auto new material Shenya Business combination
Shenyang acturin 85.00
technology Co., Ltd. ng under common control
g
2. Significant but not wholly-owned subsidiaries
Profits and losses Dividend declared Ending
Proportion of
attributing to to distribute to balance of
Name of the subsidiaries non-controlling
non-controlling non-controlling non-controlling
interests (%)
shareholders shareholders interests
Bengang Posco Cold-rolled Sheet 2,209,518.69 499,986,326.92
25.00
Co., Ltd.
3. Financial information of significant but not wholly-owned subsidiaries
154
Bengang Steel Plates Co., Ltd. Annual Report 2018
Ending balance
Name of the Non-curre
subsidiaries Non-current Current nt
Current assets Total assets Total liabilities
assets liabilities liabilitie
s
Bengang Posco
Cold-rolled Sheet 2,986,224,229.42 1,692,675,158.81 4,678,899,388.23 2,678,954,080.56 2,678,954,080.56
Co., Ltd.
Beginning balance
Non-curre
Name of the Current Non-current Current
Total assets nt Total liabilities
subsidiaries assets assets liabilities
liabilities
Bengang
Posco
Cold-rolled 2,386,618,039.83 2,003,972,503.03 4,390,590,542.86 2,399,426,402.00 2,399,426,402.00
Sheet Co.,
Ltd.
2018
Name of the subsidiaries Total
Operating Net cash flows from
Net profit comprehensive
income operating activities
income
Bengang Posco Cold-rolled 8,063,719,253.01 8,838,074.77 8,838,074.77 1,040,018,505.74
Sheet Co., Ltd.
2017
Name of the subsidiaries Total
Operating Net cash flows from
Net profit comprehensive
income operating activities
income
Bengang Posco Cold-rolled 7,442,109,333.08 37,153,450.95 37,153,450.95 -147,937,610.55
Sheet Co., Ltd.
(2) Equity in joint venture or associates
1. Summary of financial information of unimportant joint ventures and associates
Ending balance/Current period Beginning balance/Last period
Joint ventures:
Total book value of investment: 2,455,681.55 2,726,009.03
The total amount of the following items
calculated according to the shareholding ratio
—Net profit 171,488.75 758,403.40
—Other comprehensive income
—Total comprehensive income 171,488.75 758,403.40
7. Risks associated with financial instruments
(1) Credit risk
155
Bengang Steel Plates Co., Ltd. Annual Report 2018
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 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 ensure 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.
156
Bengang Steel Plates Co., Ltd. Annual Report 2018
The currency risk facing the Company originates from the assets and liabilities measured by
US dollars, Euro, Hongkong dollars and Japanese Yen. The ending balance of the assets and
liabilities after converted in RMB is shown as below:
(In 10 Thousand Yuan)
Ending balance
Items
USD Euro HKD Japanese Yen Total
Assets 216,803.49 4,755.99 68.03 221,627.51
Liabilities 347,243.60 59,972.90 1,290.86 408,507.36
Total 564,047.09 64,728.89 68.03 1,290.86 630,134.87
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 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.
(In 10 Thousand Yuan)
Ending balance
Items Impact on Impact on
Impact on USD Impact on Euro Total
HKD Japanese Yen
Appreciation by 5% -6,523.20 -2,760.85 3.40 -64.56 -9,345.20
Depreciation by 5% 6,523.20 2,760.85 -3.40 64.56 9,345.20
(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
underivative 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.
157
Bengang Steel Plates Co., Ltd. Annual Report 2018
(In 10 Thousand Yuan)
Ending balance
Items Over 5
Within 1 year 1-2 years 2-5 years Total
years
Trade and other payables 1,638,885.92 67.12 130.65 71.79 1,639,155.48
Loans and interests 1,229,911.46 224,083.41 371,055.41 113,225.19 1,938,275.47
Total 2,868,797.38 224,150.53 371,186.06 113,296.98 3,577,430.95
(In 10 Thousand Yuan)
Beginning balance
Items Over 5
Within 1 year 1-2 years 2-5 years Total
years
Trade and other payables 1,618,161.06 73.68 159.73 97.25 1,618,491.72
Loans and interests 2,470,640.43 31,954.06 81,123.04 165,472.33 2,749,189.86
Non-current liabilities due within one year 149,954.52 149,954.52
Total 4,238,756.01 32,027.74 81,282.77 165,569.58 4,517,636.10
8. Related party transactions
(1) Details of parent company
(In 100 Million Yuan)
Place of Notes of Registered Share Voting
Name of parent company
Registry Business capital proportion (%) rights (%)
Benxi Steel (Group) Co., Ltd. Benxi Manufacturing 62.92 60.78 60.78
Note:
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 6 “Equity in other entities”.
（3） Details of other related parties
Name of Other related parties Relationship
Bengang Group International Economic
Both belong to Bengang Group Co., Ltd.
and Trading Co., Ltd.
Bengang Cold-rolled Stainless Steel
Same parent company
Dandong Co., Ltd.
Benxi Beiying Steel & Iron (Group) Co.,
Both belong to Bengang Group Co., Ltd.
Ltd.
Bengang Electronics and Gas Co., Ltd. Both belong to Benxi Steel and Iron (Group) Co., Ltd.
Benxi Steel & Iron (Group) Real-estate Same parent company
158
Bengang Steel Plates Co., Ltd. Annual Report 2018
Name of Other related parties Relationship
Development Co., Ltd.
Benxi Steel & Iron (Group) Steel & Iron
Same parent company
Process and Logistics Co., Ltd.
Benxi Steel & Iron (Group) Machinery
Same parent company
Manufacture Co., Ltd.
Benxi Steel & Iron (Group) Construction
Same parent company
Co., Ltd.
Benxi Steel & Iron (Group) Mining Co.,
Same parent company
Ltd.
Benxi Steel & Iron (Group) Thermal Power
Same parent company
Development Co., Ltd.
Benxi Steel & Iron (Group) Designing
Same parent company
Institute
Benxi Steel & Iron (Group) Industrial
Same parent company
Development Co., Ltd.
Benxi Steel & Iron (Group) Information
Same parent company
and Automatic Tech Co., Ltd.
Benxi Steel & Iron (Group) Construction
Same parent company
and Repairing Co., Ltd.
Benxi Steel & Iron (Group) Metallurgy
Same parent company
Residues Co., Ltd.
Benxi Iron and Steel (Group) Engineering
Same parent company
Construction Supervision Co., Ltd.
Benxi Steel & Iron (Group) Zhengtai
Same parent company
Construction Materials Co., Ltd.
Benxi High-tech Drilling Tools
Both belong to Bengang Group Co., Ltd.
Manufacture 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
Both belong to Benxi Steel and Iron (Group) Co., Ltd.
Sales Co., Ltd.
Benxi Steel & Iron (Group) General
Both belong to Benxi Steel and Iron (Group) Co., Ltd.
Hospital
Liaoning Bengang Steel & Iron Trading
Same parent company
Co., Ltd.
Liaoning Hengtai Heavy Machinery Co.,
Same parent company
Ltd.
Liaoning Hengtong Metallurgical
Same parent company
Equipment Manufacture Co., Ltd.
Liaoning Metallurgy Technician College Same parent company
Liaoning Metallurgy Vocational Technical
Same parent company
College
Suzhou Bengang Industrial Co., Ltd. Shareholding company
159
Bengang Steel Plates Co., Ltd. Annual Report 2018
Name of Other related parties Relationship
Benxi Steel & Iron (Group) Medical
Related party that the parent company has significant influence on it
Services Department;
Bengang Group Finance Co., Ltd. Both belong to Bengang Group Co., Ltd.
Liaoning Hengyi Financial Leasing Co., Both belong to Bengang Group Co., Ltd.
Ltd.
(4) Related Party Transactions
1. Related party transactions of purchasing goods and services
Company as the purchaser
(In 10 Thousand Yuan)
The content of related party
Name 2018 2017
transactions
Benxi Steel & Iron (Group) Co., Ltd. Repair expense 30,864.85 24,248.68
Benxi Steel & Iron (Group) Co., Ltd. Land lease fee 5,469.14 5,469.14
Bengang Cold-rolled Stainless Steel Dandong Co., Ltd. Products 362.50 5.03
Benxi Steel & Iron (Group) Mining Co., Ltd. Labor cost 2,200.17 2,659.17
Raw material and
Benxi Steel & Iron (Group) Mining Co., Ltd. 401,542.74 299,526.85
supplementary material
Benxi Steel & Iron (Group) Mining Co., Ltd. Freight 167.04 174.43
Raw material and
Benxi Steel & Iron (Group) Metallurgy Residues Co., Ltd. 25,866.54 17,396.46
supplementary material
Benxi Steel & Iron (Group) Steel & Iron Process and Logistics
Processing fee 160.26 168.26
Co., Ltd.
Benxi Steel & Iron (Group) Real-estate Development Co., Ltd. Raw materials 7,757.99 8,215.57
Benxi Steel & Iron (Group) Machinery Manufacture Co., Ltd. Spare parts 14,321.59 13,745.15
Benxi Steel & Iron (Group) Machinery Manufacture Co., Ltd. Repair services 4,617.20 2,252.82
Benxi Steel & Iron (Group) Construction Co., Ltd. Spare parts 1,072.33 526.58
Benxi Steel & Iron (Group) Construction Co., Ltd. Project fee 8,375.54 7,854.97
Benxi Steel & Iron (Group) Construction Co., Ltd. Repair services 21,285.38 8,397.27
Raw material and
Benxi Steel & Iron (Group) Construction Co., Ltd. 55.12 83.75
supplementary material
Benxi Steel & Iron (Group) Construction Co., Ltd. Freight 1,469.39 708.03
Benxi Steel & Iron (Group) Industrial Development Co., Ltd. Spare parts 19,722.48 25,210.95
Raw material and
Benxi Steel & Iron (Group) Industrial Development Co., Ltd. 2,576.98 1,608.42
supplementary material
Benxi Steel & Iron (Group) Industrial Development Co., Ltd. Freight 581.17 540.76
Benxi Steel & Iron (Group) Industrial Development Co., Ltd. Project fee 189.45 244.17
Raw material &
Benxi Steel & Iron (Group) Construction and Repairing Co.,
supplementary materials & 573.58 651.23
Ltd.
spare parts
Benxi Steel & Iron (Group) Construction and Repairing Co.,
Project fee 2,473.26 5,058.49
Ltd.
160
Bengang Steel Plates Co., Ltd. Annual Report 2018
The content of related party
Name 2018 2017
transactions
Benxi Steel & Iron (Group) Construction and Repairing Co.,
Repair expense 20,379.63 12,129.28
Ltd.
Raw material and
Bengang Electronics and Gas Co., Ltd. 14,695.97 14,201.43
supplementary material
Bengang Electronics and Gas Co., Ltd. Repair services 3,085.90 1,824.57
Benxi High-tech Drilling Tools Manufacture Co., Ltd. Spare parts 61.16 104.30
Benxi New Career Development Co., Ltd. Labor protection fee 340.23 533.84
Raw material and
Benxi New Career Development Co., Ltd. supplementary material 630.15 692.70
and food
Liaoning Metallurgy Technician College Spare parts 1,151.38 1,504.98
Liaoning Metallurgy Vocational Technical College Project fee - 159.82
Liaoning Metallurgy Vocational Technical College Repair services 449.86 259.04
Bengang Group International Economic and Trading Co., Ltd. Agency fee 7,602.28 7,905.47
Bengang Group International Economic and Trading Co., Ltd. Port surcharges 11,692.28 16,376.02
Benxi Steel & Iron (Group) Information and Automatic Tech
Spare parts 2,551.21 1,521.69
Co., Ltd.
Benxi Steel & Iron (Group) Information and Automatic Tech
Project fee 3,283.88 2,024.87
Co., Ltd.
Benxi Steel & Iron (Group) Information and Automatic Tech
Repair services 1,292.36 968.96
Co., Ltd.
Benxi Steel & Iron (Group) Thermal Power Development Co.,
Heating costs 183.78 176.63
Ltd.
Benxi Steel & Iron (Group) Thermal Power Development Co., Raw material and
7.54 3.67
Ltd. supplementary material
Benxi Steel & Iron (Group) Designing Institute Design fees 510.96 385.79
Raw material and
Benxi Beiying Steel & Iron (Group) Co., Ltd. 1,507,972.99 1,131,947.10
supplementary material
Benxi Beiying Steel & Iron (Group) Co., Ltd. Energy & Power 80,758.32 64,877.65
Benxi Beiying Steel & Iron (Group) Co., Ltd. Freight 588.11 781.29
Benxi Beiying Steel & Iron (Group) Co., Ltd. Labor cost 8,117.37 7,460.80
Benxi Beiying Steel & Iron (Group) Co., Ltd. Spare parts 636.62 955.50
Liaoning Hengtong Metallurgical Equipment Manufacture Co., Raw material and spare
10,000.99 9,117.95
Ltd. parts
Raw material and spare
Liaoning Hengtai Heavy Machinery Co., Ltd. 2,106.67 802.73
parts
Liaoning Hengtai Heavy Machinery Co., Ltd. Repair and labor cost 2,266.25 1,437.18
Bengang Group Co., Ltd. Property management fee - 84.55
Company as the seller
(In 10 Thousand Yuan)
The content of related party
Name 2018 2017
transactions
161
Bengang Steel Plates Co., Ltd. Annual Report 2018
The content of related party
Name 2018 2017
transactions
Bengang Electronics and Gas Co., Ltd. Energy & Power 89.86 88.05
Raw material &
Benxi Beiying Steel & Iron (Group) Co., Ltd. supplementary materials & 80,882.30 107,584.27
spare parts
Benxi Beiying Steel & Iron (Group) Co., Ltd. Products 2,143.14 1,475.15
Benxi Beiying Steel & Iron (Group) Co., Ltd. Energy & Power 139,744.84 33,191.37
Benxi Steel & Iron (Group) Real-estate
Energy & Power 12.15 20.88
Development Co., Ltd.
Benxi Steel & Iron (Group) Steel & Iron Process
Energy & Power 51.01 74.66
and Logistics Co., Ltd.
Benxi Steel & Iron (Group) Steel & Iron Process
Products 29.25
and Logistics Co., Ltd.
Benxi Steel & Iron (Group) Machinery
Products 2,009.03 1,065.99
Manufacture Co., Ltd.
Benxi Steel & Iron (Group) Machinery
Energy & Power 1,758.69 1,606.10
Manufacture Co., Ltd.
Raw material &
Benxi Steel & Iron (Group) Machinery
supplementary materials & 1,310.90 87.96
Manufacture Co., Ltd.
spare parts
Benxi Steel & Iron (Group) Construction Co., Ltd. Energy & Power 467.84 156.41
Raw material &
Benxi Steel & Iron (Group) Construction Co., Ltd. supplementary materials & 5,416.38 1,026.54
spare parts
Benxi Steel & Iron (Group) Mining Co., Ltd. Energy & Power 68,372.48 71,317.95
Raw material &
Benxi Steel & Iron (Group) Mining Co., Ltd. supplementary materials & 6,421.84 9,874.06
spare parts
Benxi Steel & Iron (Group) Mining Co., Ltd. Freight revenue 1,086.25 804.19
Benxi Steel & Iron (Group) Mining Co., Ltd. Products 935.65 1,013.41
Benxi Steel & Iron (Group) Thermal Power
Energy & Power 5,825.31 2,913.18
Development Co., Ltd.
Raw material &
Benxi Steel & Iron (Group) Thermal Power
supplementary materials & 0.07 2,264.70
Development Co., Ltd.
spare parts
Benxi Steel & Iron (Group) Thermal Power
Freight revenue - 28.34
Development Co., Ltd.
Benxi Steel & Iron (Group) Industrial
Energy & Power 753.92 814.35
Development Co., Ltd.
Benxi Steel & Iron (Group) Industrial
Products 1,459.16
Development Co., Ltd.
Raw material &
Benxi Steel & Iron (Group) Industrial
supplementary materials & 1,021.16 6,337.01
Development Co., Ltd.
spare parts
162
Bengang Steel Plates Co., Ltd. Annual Report 2018
The content of related party
Name 2018 2017
transactions
Benxi Steel & Iron (Group) Information and
Energy & Power 25.45 16.89
Automatic Tech Co., Ltd.
Benxi Steel & Iron (Group) Construction and
Energy & Power 132.20 136.39
Repairing Co., Ltd.
Raw material &
Benxi Steel & Iron (Group) Construction and
supplementary materials & 5,008.95
Repairing Co., Ltd.
spare parts
Benxi Steel & Iron (Group) Metallurgy Residues
Energy & Power 555.29 448.98
Co., Ltd.
Raw material &
Benxi Steel & Iron (Group) Metallurgy Residues
supplementary materials & 23,215.49 12,068.73
Co., Ltd.
spare parts
Benxi Steel & Iron (Group) Metallurgy Residues
Freight revenue -
Co., Ltd.
Benxi Steel & Iron (Group) Metallurgy Residues
Products 1,732.86
Co., Ltd.
Benxi Steel & Iron (Group) Co., Ltd. Energy & Power 132.59 314.50
Raw material &
Benxi Steel & Iron (Group) Co., Ltd. supplementary materials & 300.21 736.31
spare parts
Benxi New Career Development Co., Ltd. Energy & Power 43.87 48.09
Dalian Boluole Steel Tube Co., Ltd. Products 585.99 510.74
Liaoning Bengang Steel & Iron Trading Co., Ltd. Products - 38.85
Benxi Steel & Iron (Group) General Hospital Energy & Power 8.11 10.33
Benxi Steel & Iron (Group) Zhengtai Construction
Energy & Power 0.27 0.18
Materials Co., Ltd.
Liaoning Hengtong Metallurgical Equipment
Energy & Power - 1,156.65
Manufacture Co., Ltd.
Raw material &
Liaoning Hengtong Metallurgical Equipment
supplementary materials & 1,955.29 1,799.29
Manufacture Co., Ltd.
spare parts
Liaoning Hengtong Metallurgical Equipment
Products 1,019.91 611.65
Manufacture Co., Ltd.
Raw material &
Bengang Cold-rolled Stainless Steel Dandong Co.,
supplementary materials & - 7.16
Ltd.
spare parts
Suzhou Bengang Industrial Co., Ltd. Products 39,596.68 26,643.27
Bengang Group Finance Co., Ltd. Energy & Power 1.46 1.49
Bengang Group Co., Ltd. Energy & Power 3.93 2.47
2. Lease information of related parties
Company as the lessor
163
Bengang Steel Plates Co., Ltd. Annual Report 2018
Lessee Lease capital category Lease income of 2018 Lease income of 2017
Benxi Steel & Iron (Group)
Steel & Iron Process and Warehouse and machinery 500,000.00 500,000.00
Logistics Co., Ltd.
Benxi Steel & Iron (Group)
Machinery Manufacture Co., Plants and machinery 490,000.00 490,000.00
Ltd.
Company as the lessee
Lessor Lease capital category Lease charges of 2018 Lease charges of 2017
Benxi Steel & Iron 247,959,966.10 243,353,313.24
2300 Hot rolling product line
(Group) Co., Ltd
Benxi Steel & Iron 54,691,428.60 54,691,428.60
Land use right
(Group) Co., Ltd
Benxi Beiying Steel & 135,959,033.13 134,443,446.44
1780 Hot rolling product line
Iron (Group) Co., Ltd.
Financial lease matters:
During the reporting period, the company leased machinery and equipment from Liaoning
Hengyi Finance Leasing Co., Ltd. in the form of financial leases. As of the end of the reporting
period, the long-term accounts payable amounted to RMB 13,686,705.92. The equipment was
presented in the construction in progress subject.
Notes to lease from or to related parties:
1. The Company leases land from Bengang Group Co., Ltd., with a monthly rent of 0.594 yuan
per square meter. The leased land is 7,669,068.17 square meters and the annual rent is
54,665.10 thousand yuan.
2. For the 2300mm hot rolling product line leased from the Group to the Company, lease
period lasts from 1 January 2018 to 31 December 2020. 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. “Notice on Bengang Steel Plates Co., Ltd. signing a renewal agreement
with Benxi Steel (group) Co., Ltd” were adopted on the sixth meeting of the seventh board of
directors, it stipulated that the company leased the 1780 hot rolling product line from Benxi
Beiying Steel & Iron (Group) Co., Ltd., 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. The annual rent shall not exceed RMB
150,000,000.00.
164
Bengang Steel Plates Co., Ltd. Annual Report 2018
3. Information of Guarantee among related parties
(1) Company as the guarantor
No.
(2) Company as the warrantee
Guarantee of loans:
Has the
Ending date
Starting date guarantee
Warrantor Amount of guarantee of
of Guarantee been
Guarantee
fulfilled
Bengang Group Co., Ltd. 480,000,000.00 2018/1/22 2019/1/21 No
Benxi Steel & Iron (Group) Co., Ltd. 270,000,000.00 2018/1/23 2019/1/22 No
Benxi Steel & Iron (Group) Co., Ltd. 60,000,000.00 2018/2/1 2019/1/31 No
Benxi Steel & Iron (Group) Co., Ltd. 340,000,000.00 2018/2/11 2019/2/10 No
Bengang Group Co., Ltd. 180,000,000.00 2018/3/9 2019/3/9 No
Bengang Group Co., Ltd. 310,000,000.00 2018/3/28 2019/3/27 No
Bengang Group Co., Ltd. 720,000,000.00 2018/4/2 2019/4/1 No
Benxi Steel & Iron (Group) Co., Ltd. 150,000,000.00 2018/5/18 2019/5/17 No
Benxi Steel & Iron (Group) Co., Ltd. 74,000,000.00 2018/5/25 2019/5/24 No
Bengang Group Co., Ltd. 160,000,000.00 2018/5/24 2019/5/24 No
Bengang Group Co., Ltd. 150,000,000.00 2018/7/13 2019/7/13 No
Bengang Group Co., Ltd. 150,000,000.00 2018/7/13 2019/7/13 No
Bengang Group Co., Ltd. 100,000,000.00 2018/7/2 2019/7/1 No
Bengang Group Co., Ltd. and Benxi No
200,000,000.00 2018/9/7 2019/9/5
Steel & Iron (Group) Co., Ltd.
Bengang Group Co., Ltd. and Benxi No
150,000,000.00 2018/10/17 2019/10/16
Steel & Iron (Group) Co., Ltd.
Bengang Group Co., Ltd. and Benxi No
200,000,000.00 2018/10/12 2019/10/10
Steel & Iron (Group) Co., Ltd.
Bengang Group Co., Ltd. and Benxi No
200,000,000.00 2018/11/9 2019/11/7
Steel & Iron (Group) Co., Ltd.
Bengang Group Co., Ltd. and Benxi No
200,000,000.00 2018/11/14 2019/11/13
Steel & Iron (Group) Co., Ltd.
Bengang Group Co., Ltd. 300,000,000.00 2018/11/15 2019/11/14 No
Bengang Group Co., Ltd. 800,000,000.00 2018/11/27 2018/11/26 No
Bengang Group Co., Ltd. 900,000,000.00 2018/11/28 2019/11/27 No
Bengang Group Co., Ltd. 390,000,000.00 2018/11/29 2019/11/28 No
165
Bengang Steel Plates Co., Ltd. Annual Report 2018
Has the
Ending date
Starting date guarantee
Warrantor Amount of guarantee of
of Guarantee been
Guarantee
fulfilled
Bengang Group Co., Ltd. and Benxi No
178,000,000.00 2018/12/13 2019/12/12
Steel & Iron (Group) Co., Ltd.
Benxi Steel & Iron (Group) Co., Ltd. 147,000,000.00 2018/12/19 2019/12/19 No
Benxi Steel & Iron (Group) Co., Ltd. 300,000,000.00 2018/12/14 2019/12/14 No
Benxi Steel & Iron (Group) Co., Ltd. 373,000,000.00 2018/12/13 2019/12/13 No
Benxi Steel & Iron (Group) Co., Ltd. 480,000,000.00 2018/12/13 2019/12/13 No
Benxi Steel & Iron (Group) Co., Ltd. 500,000,000.00 2018/12/13 2019/12/13 No
Benxi Steel & Iron (Group) Co., Ltd. US$100,000,000.00 2018/2/24 2019/2/23 No
Benxi Steel & Iron (Group) Co., Ltd. US$90,000,000.00 2018/5/22 2019/5/21 No
Bengang Group Co., Ltd. and Benxi No
90,000,000.00 2016/3/30 2025/3/20
Steel & Iron (Group) Co., Ltd.
Bengang Group Co., Ltd. and Benxi No
610,000,000.00 2017/2/27 2025/2/20
Steel & Iron (Group) Co., Ltd.
Bengang Group Co., Ltd. 16,280,000.00 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. 36,450,000.00 2016/12/27 2020/6/21 No
Bengang Group Co., Ltd. 87,280,000.00 2018/3/26 2024/6/21 No
Bengang Group Co., Ltd. 59,570,000.00 2017/11/15 2021/12/21 No
Bengang Group Co., Ltd. 622,600,000.00 2017/12/15 2024/8/20 No
Bengang Group Co., Ltd. 960,631.08 2015/6/25 2019/6/30 No
Bengang Group Co., Ltd. 1,813,075.20 2015/6/25 2019/8/31 No
Bengang Group Co., Ltd. 2,311,613.67 2015/6/25 2019/10/31 No
Bengang Group Co., Ltd. 1,948,053.95 2015/6/25 2020/4/30 No
Bengang Group Co., Ltd. 483,803.97 2015/6/25 2025/6/30 No
Bengang Group Co., Ltd. 13,834,496.03 2015/6/25 2025/6/30 No
Bengang Group Co., Ltd. 609,296.41 2015/6/25 2025/8/31 No
Bengang Group Co., Ltd. 11,990,585.71 2015/6/25 2025/8/31 No
Bengang Group Co., Ltd. 233,211.78 2015/6/25 2025/9/30 No
Bengang Group Co., Ltd. 719,075.68 2015/6/25 2025/10/31 No
Bengang Group Co., Ltd. 9,901,243.51 2015/6/25 2025/10/31 No
Bengang Group Co., Ltd. 6,162.48 2015/6/25 2026/4/30 No
Bengang Group Co., Ltd. 557,460.75 2015/6/25 2026/4/30 No
Bengang Group Co., Ltd. 597,187.50 2015/8/20 2019/9/30 No
166
Bengang Steel Plates Co., Ltd. Annual Report 2018
Has the
Ending date
Starting date guarantee
Warrantor Amount of guarantee of
of Guarantee been
Guarantee
fulfilled
Bengang Group Co., Ltd. 7,967,631.00 2015/8/20 2025/9/30 No
Bengang Group Co., Ltd. 687,534.21 2015/12/28 2019/6/30 No
Bengang Group Co., Ltd. 642,082.50 2015/12/28 2019/7/30 No
Bengang Group Co., Ltd. 239,173.64 2015/12/28 2019/8/31 No
Bengang Group Co., Ltd. 44,356.22 2015/12/28 2019/10/31 No
Bengang Group Co., Ltd. 696,676.50 2015/12/28 2020/4/30 No
Bengang Group Co., Ltd. 424,686.42 2015/12/28 2025/6/30 No
Bengang Group Co., Ltd. 253,120.00 2015/12/28 2025/8/31 No
Bengang Group Co., Ltd. 4,579,846.88 2015/12/28 2025/10/31 No
Bengang Group Co., Ltd. 4,069.11 2015/12/28 2026/4/30 No
Bengang Group Co., Ltd. 6,798,868.28 2015/12/28 2026/4/30 No
Bengang Group Co., Ltd. 410,699.25 2016/6/27 2020/4/30 No
Bengang Group Co., Ltd. 3,727,122.75 2016/6/27 2020/4/30 No
Bengang Group Co., Ltd. 36,617.16 2016/12/14 2020/4/30 No
Bengang Group Co., Ltd. 2,833,183.48 2016/12/14 2026/4/30 No
Bengang Group Co., Ltd. 21,690.00 2017/6/30 2025/10/31 No
Bengang Group Co., Ltd. 1,091,628.91 2017/6/30 2025/10/31 No
Bengang Group Co., Ltd. and Benxi No
Beiying Steel & Iron (Group) Co., US$20,000,000.00 2018/5/8 2020/5/7
Ltd.
Bengang Group Co., Ltd. and Benxi No
Beiying Steel & Iron (Group) Co., US$80,000,000.00 2018/5/2 2020/5/21
Ltd.
Bengang Group Co., Ltd. and Benxi No
Beiying Steel & Iron (Group) Co., US$45,000,000.00 2018/7/3 2020/7/2
Ltd.
Bengang Group Co., Ltd. and Benxi No
Beiying Steel & Iron (Group) Co., US$45,000,000.00 2018/8/17 2020/8/7
Ltd.
Bengang Group Co., Ltd. and Benxi No
Beiying Steel & Iron (Group) Co., US$100,000,000.00 2018/8/29 2020/8/28
Ltd.
Benxi Steel & Iron (Group) Co., Ltd. JPY 208,584,000.00 1997/10/10 2027/9/10 No
(3) Guarantee of acceptance bill
As of December 31, 2018, the guarantees for notes payable provided by related parties are as
follows:
1. The Company's balance of notes payable at the Agricultural Bank of China Benxi Xinhua
branch is RMB 60 million, and Bengang Group Co., Ltd. and Benxi Steel & Iron (Group) Co.,
167
Bengang Steel Plates Co., Ltd. Annual Report 2018
Ltd. provide guarantee.
2.The Company's balance of notes payable at Ping An Bank Dalian Branch is RMB
1,428,000,000.00, of which RMB 1,000,000,000.00 is guaranteed by Benxi Steel and Iron
(Group) Co., Ltd.; the remaining RMB 428,000,000.00 is issued as a pledge guarantee by a
RMB 428,000,000.00 certificate of deposit at Ping An Bank Dalian Xigang branch.
(3) The Company's balance of notes payable at China Minsheng Bank Dalian Branch was
RMB 2,141,500,000, which was guaranteed by Bengang Group Co., Ltd., and the actual
deposit balance of Bengang Steel Plate Co., Ltd. in Dalian Branch of China Minsheng Bank
Co., Ltd. was pledged. The balance of the margin account as of December 31, 2018 is RMB
7,233,045.30.
(4) The balance of notes payable by the Company at the China Guangfa Bank Benxi Branch
is RMB 666,000,000, which is guaranteed by Bengang Group Co., Ltd.
(5) The Company's balance of notes payable at Bank of Jinzhou Benxi Branch is RMB
471,846,195.67, and Bengang Group Co., Ltd. provides guarantee.
4. Remuneration of key management personnel
(In 10 Thousand Yuan)
Name 2018 2017
Remuneration of key management personnel 197.60 217.32
5. Other related party transactions
(1) Loan from and deposits in Bengang Group Finance Co., Ltd.
(In 10 Thousand Yuan)
Item Beginning balance Increase Decrease Ending balance Notes
Deposits 895,092.14 16,226,529.75 16,146,428.81 975,193.08
1. The interests of deposits in Bengang Group Finance Co., Ltd. is RMB 144,464.2
thousand in 2018. As at 31 December 2018, the interest receivable from Bengang Group
Finance Co., Ltd. is RMB 11,608.7 thousand.
2. As at 31 December 2018, the restricted deposits in Bengang Group Finance Co., Ltd.
is RMB 2,715,569.00 thousand.
3. In 2018, the company and its subsidiaries did not borrow money from financial
companies.
4. Bengang Group Finance Co., Ltd. granted the company an unsecured credit line of
RMB 2.5 billion in 2018. As 31 December 2018，the amount of acceptance bill opened
by Bengang Group Finance Co., Ltd. was RMB 6.007 billion, and the amount of the
168
Bengang Steel Plates Co., Ltd. Annual Report 2018
acceptance bill that had been opened and unpaid by the Japanese company is RMB 2.716
billion which is 100% deposit.
5. In 2018, the Company applied for 2 bill discounting services to the finance company,
amounting to RMB 20,000 and paying discounted interest of RMB 7.08.
(2) The company's loan and interest payment to Benxi steel and iron (Group) Co., Ltd.
(In 10 Thousand yuan).
Item Beginning balance Increase Decrease Ending balance
Entrusted loan through Bengang
Group Finance Co., Ltd. 9,940.94 1,422.00 9,940.94 1,422.00
Capital lending 9,192.00 1,422.00 7,770.00
Total 9,940.94 10,614.00 11,362.94 9,192.00
Details of outstanding loans as at 31 December 2018
Related parties Lease form Lease amount Start date Due date
Benxi Steel and Iron (Group) Co., Ltd. Entrusted loan 14,220,000.00 2018/2/8 2019/2/8
Benxi Steel and Iron (Group) Co., Ltd. Money lending 14,000,000.00 2018/6/13 2019/6/13
Benxi Steel and Iron (Group) Co., Ltd. Money lending 11,000,000.00 2018/7/5 2019/7/5
Benxi Steel and Iron (Group) Co., Ltd. Money lending 32,700,000.00 2018/10/25 2019/10/25
Benxi Steel and Iron (Group) Co., Ltd. Money lending 20,000,000.00 2018/12/4 2019/12/4
Total 91,920,000.00
Notes: In 2018, the interest accrued is RMB 4,541,266.03, and as at 31 December 2018,
the company has no interest that has not been paid.
5. Receivables and payables of the related parties
1、Receivables of the Company
(in 10 thousand yuan)
Ending Balance Beginning Balance
Provision Provision
Items Name Name Carrying Carrying
for bad for bad
amount amount
debts debts
Accounts receivable
Benxi Beiying Steel & Iron
1,206.26 701.26
(Group) Co., Ltd.
169
Bengang Steel Plates Co., Ltd. Annual Report 2018
Ending Balance Beginning Balance
Provision Provision
Items Name Name Carrying Carrying
for bad for bad
amount amount
debts debts
Bengang Electronics and
408.26 112.76 317.53 70.51
Gas Co., Ltd.
Benxi Steel & Iron (Group)
Machinery Manufacture 6,224.21 2,275.49
Co., Ltd.
Benxi Steel & Iron (Group)
Industrial Development 4,108.83 884.08
Co., Ltd.
Benxi New Career
632.98 486.25
Development Co., Ltd.
Benxi Steel & Iron (Group)
Thermal Power 937.22 273.52
Development Co., Ltd.
Bengang Cold-rolled
Stainless Steel Dandong 155.04 19.31 163.42 4.11
Co., Ltd.
Liaoning Hengtong
Metallurgical Equipment 1,022.42
Manufacture Co., Ltd.
Bengang Group
International Economic 12,906.30 4,142.04
and Trading Co., Ltd.
Benxi Steel & Iron
(Group) Metallurgy 113.22
Residues Co., Ltd.
Prepayments
Benxi Beiying Steel & Iron
71,312.43 66,415.14
(Group) Co., Ltd.
Benxi Steel & Iron (Group) 967.60
170
Bengang Steel Plates Co., Ltd. Annual Report 2018
Ending Balance Beginning Balance
Provision Provision
Items Name Name Carrying Carrying
for bad for bad
amount amount
debts debts
Machinery Manufacture
Co., Ltd.
Bengang Cold-rolled
Stainless Steel Dandong 4.73 4.73
Co., Ltd.
Other receivables
Benxi Steel & Iron (Group)
Real-estate Development 261.61 72.45 248.21 95.18
Co., Ltd.
Liaoning Metallurgy
5.80 15.63 15.63
Technician College
Benxi Steel & Iron
(Group) Machinery 259.26 1,489.04 246.22
Manufacture Co., Ltd.
Benxi Steel & Iron (Group)
449.20 84.80 84.80
Construction Co., Ltd.
Bengang Group
International Economic 622.45 2,001.40 0.86
and Trading Co., Ltd.
Benxi Steel & Iron
(Group) Industrial 181.50 52.22 43.58
Development Co., Ltd.
Benxi Steel & Iron
(Group) Zhengtai
20.41 19.32 19.90 19.34
Construction Materials
Co., Ltd.
Benxi Steel & Iron
(Group) Medical Co., 93.95 73.32 91.36 67.48
Ltd.
171
Bengang Steel Plates Co., Ltd. Annual Report 2018
Ending Balance Beginning Balance
Provision Provision
Items Name Name Carrying Carrying
for bad for bad
amount amount
debts debts
Other non-current
assets
Liaoning Hengyi
Financial Leasing Co., 4,631.32
Ltd.
2、 Payables of the Company
(in 10 thousand yuan)
Beginning
Items Name Ending balance
balance
Notes payable
Benxi Steel & Iron (Group) Industrial Development Co., Ltd. 190.51 7,099.55
Benxi Steel & Iron (Group) Machinery Manufacture Co., Ltd. 22.44 4,778.56
Bengang Electronics and Gas Co., Ltd. 904.35
Benxi Steel & Iron (Group) Construction and Repairing Co., Ltd. 274.74
Liaoning Metallurgy Technician College 1,298.88
Benxi Steel & Iron (Group) Mining Co., Ltd. 98,047.94 188,559.94
Benxi Steel & Iron (Group) Construction Co., Ltd. 153.09
Benxi Steel & Iron (Group) Information and Automatic Tech Co.,
189.74
Ltd.
Benxi Beiying Steel & Iron (Group) Co., Ltd. 470,958.00 444,936.18
Liaoning Hengtong Metallurgical Equipment Manufacture Co.,
3,778.76
Ltd.
Liaoning Metallurgy Technician College 86.79
Liaoning Hengtai Heavy Machinery Co., Ltd. 37.13
Benxi Steel & Iron (Group) Metallurgy Residues Co., Ltd. 38.56
Benxi hi-tech drilling tools Co., Ltd. 132.73
Benxi Steel & Iron (Group) Real-estate Development Co., Ltd. 291.70 540.44
Accounts payable
Bengang Electronics and Gas Co., Ltd. 2,038.30 1,308.22
Benxi Steel & Iron (Group) Real-estate Development Co., Ltd. 318.45 295.90
Bengang Group International Economic and Trading Co., Ltd. 151,974.50 26,957.04
Benxi Steel & Iron (Group) Machinery Manufacture Co., Ltd. 3,239.73 15,233.51
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Bengang Steel Plates Co., Ltd. Annual Report 2018
Beginning
Items Name Ending balance
balance
Benxi Steel & Iron (Group) Construction Co., Ltd. 9,288.02 6,143.11
Benxi Steel & Iron (Group) Mining Co., Ltd. 46,435.71 31,618.85
Benxi Steel & Iron (Group) Industrial Development Co., Ltd. 7,543.14 8,885.85
Benxi New Career Development Co., Ltd. 356.98 898.94
Benxi Steel & Iron (Group) Construction and Repairing Co., Ltd. 10,736.73 6,420.88
Benxi Steel & Iron (Group) Metallurgy Residues Co., Ltd. 1,473.85 4,589.73
Benxi Steel & Iron (Group) Medical and Health department 2.04 2.04
Benxi Steel & Iron (Group) Information and Automatic Tech Co.,
4,578.45 4,086.15
Ltd.
Benxi High-tech Drilling Tools Manufacture Co., Ltd. 10.80 11.07
Liaoning Metallurgical Technician College 1,033.31 768.35
Benxi Steel & Iron (Group) Thermal Power Development Co., Ltd. 20.97 15.13
Benxi Steel & Iron (Group) Zhengtai Construction Materials Co.,
0.24 37.44
Ltd.
Liaoning Hengtong Metallurgical Equipment Manufacture Co.,
529.45 1,025.60
Ltd.
Liaoning Metallurgy Vocational Technical College 531.92 232.56
Bengang Cold-rolled Stainless Steel Dandong Co., Ltd. 454.96 105.41
Liaoning Hengtai Heavy Machinery Co., Ltd. 2,991.38 2,670.49
Benxi Iron and Steel (Group) Engineering Construction
123.00
Supervision Co., Ltd.
Advance from customers
Benxi Steel & Iron (Group) Machinery Manufacture Co., Ltd. 232.22
Benxi Steel & Iron (Group) Industrial Development Co., Ltd. 35.80 59.15
Benxi Steel & Iron (Group) Metallurgy Residues Co., Ltd. 285.07
Benxi Steel & Iron (Group) Steel & Iron Process and Logistics
6,069.05 754.21
Co., Ltd.
Dalian Boluole Steel Tube Co., Ltd. 66.42 38.11
Liaoning Bengang Steel & Iron Trading Co., Ltd. 50.02 5,804.14
Liaoning Hengtong Metallurgical Equipment Manufacture Co.,
12.91 160.95
Ltd.
Bengang Group International Economic and Trading Co., Ltd. 786.55
Suzhou Bengang Industrial Co., Ltd. 571.81 2,957.84
Other payables
Benxi Steel & Iron (Group) Real-estate Development Co., Ltd. 143.59 143.59
Bengang Group International Economic and Trading Co., Ltd. 4,948.15 3,925.10
Benxi Steel & Iron (Group) Machinery Manufacture Co., Ltd. 75.09 1.41
Benxi Steel & Iron (Group) Construction Co., Ltd. 590.19 417.15
Benxi Steel & Iron (Group) Industrial Development Co., Ltd. 49.15 98.07
Benxi New Career Development Co., Ltd. 97.07 109.64
Benxi Steel & Iron (Group) Metallurgy Residues Co., Ltd. 50.15 50.00
Benxi Steel & Iron (Group) Information and Automatic Tech Co.,
10.70
Ltd.
Benxi Steel & Iron (Group) Steel & Iron Process and Logistics
331.87
Co., Ltd.
Benxi Steel & Iron (Group) Co., Ltd. 21,832.88 7,107.05
Benxi Steel & Iron (Group) Thermal Power Development Co., Ltd. 307.73 369.53
Guangzhou Free Trade Zone Bengang Sales Co., Ltd. 267.44 267.44
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Bengang Steel Plates Co., Ltd. Annual Report 2018
Beginning
Items Name Ending balance
balance
Benxi Steel & Iron (Group) Engineering Construction Supervision
71.00
Co., Ltd.
Liaoning Hengyi Financial Leasing Co., Ltd. 0.36
Liaoning Metallurgy Vocational Technical College 0.30 0.30
Bengang Group Finance Co., Ltd. 2.12
Liaoning Metallurgical Technician College 36.33
Benxi Beiying Steel & Iron (Group) Co., Ltd. 1,824.27
Long-term payables
Liaoning Hengyi Financial Leasing Co., Ltd. 1,368.67
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Bengang Steel Plates Co., Ltd. Annual Report 2018
9. Government subsidy
(1) Government subsidy related to assets
Amount recognized in the profit and loss or offset related Item recognized in the
Item listed on the costs or expenses
Category Amount profit and loss or offset
balance sheet
Current Period Previous Period related costs or expenses
MES Project Special Fund 8,600,000.00 Deferred Income 1,720,000.00 1,720,000.00 Other Income
Second Batch of National Cleaned
4,000,000.00 Deferred Income 800,000.00 Other Income
Manufacturing Demonstration Project Fund
Industrial Enterprise Energy Management
11,600,000.00 Deferred Income 2,320,000.00 2,320,000.00 Other Income
Center Construction Demonstration Project
Environment Pollution Renovation Project 26,170,000.00 Deferred Income 3,620,000.00 5,234,000.00 Other Income
Environment Renovation Project and Regional
2,400,000.00 Deferred Income 340,000.00 500,000.00 Other Income
Basin Environment Protection Project
Energy-saving Technological Reform Fiscal
14,770,000.00 Deferred Income 2,954,000.00 Other Income
Reward Project
High Strength Cold Rolling Steel Renovation
250,000,000.00 Deferred Income 50,000,000.00 Other Income
Project
Automobile High-class Electrolytic Zinc Steel
41,040,000.00 Deferred Income 8,208,000.00 8,208,000.00 Other Income
Plate Production Line Project
Sintering Machine Residue Heat Usage and
21,020,000.00 Deferred Income 4,204,000.00 4,204,000.00 Other Income
Desulfurization Project
Wastewater Treatment Plant Renovation
7,500,000.00 Deferred Income 1,500,000.00 Other Income
Project
7 130t Boilers Flue Gas Desulfurization
24,000,000.00 Deferred Income 4,800,000.00 Other Income
Renovation Project of Power Plant
Treatment and Salt Extraction Project of
500,000.00 Deferred Income 100,000.00 100,000.00 Other Income
Desulfurization Waste Liquid of Coke Plant
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Bengang Steel Plates Co., Ltd. Annual Report 2018
Item listed on the Amount recognized in the profit and loss or offset related Item recognized in the
Category Amount
balance sheet costs or expenses profit and loss or offset
Overseas Advanced Technology Introduction
14,420,000.00 Deferred Income 2,884,000.00 2,884,000.00 Other Income
Special Fund
Bengang Group Co., Ltd. Automotive Board
Engineering Laboratory Construction Project 1,000,000.00 Deferred Income Other Income
Fund
R&D for the Third Generation of
2,900,000.00 Deferred Income Other Income
High-strength Steel for Automobile
The 360 Cubic Meter Sintering Machine Flue
Gas Desulfurization Renovation Project of 1,000,000.00 Deferred Income 200,000.00 200,000.00 Other Income
Blast Furnace Plant
Environment Protection Project Special Fund 5,800,000.00 Deferred Income 1,160,000.00 1,160,000.00 Other Income
Advanced Treatment of Carbon Fiber
Wastewater Project of Coke Plant Dongfeng 9,500,000.00 Deferred Income Other Income
Area
Desulfurization and Denitration Projects for
Coal-fired Boiler of Power Plant 6,000,000.00 Deferred Income 600,000.00 600,000.00 Other Income
High-pressure Workshop
Power Plant No 3 workshop Heat and Power
10,000,000.00 Deferred Income 2,000,000.00 Other Income
Cogeneration Renovation Project
Sintering Machine Energy Saving and
Environmental Protection Project of Blast 5,800,000.00 Deferred Income 1,160,000.00 1,160,000.00 Other Income
Furnace Plant
Air Quality Automatic Monitoring System 350,000.00 Deferred Income 70,000.00 70,000.00 Other Income
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Bengang Steel Plates Co., Ltd. Annual Report 2018
(2) Government subsidy related to income
Amount recognized in the profit and Item recognized in
loss or offset related costs or expenses the profit and loss
Category Amount
or offset related
Current Period Previous Period costs or expenses
Liaoning Subsidiary for Craftsman 280,000.00 179,997.03 Other Income
Xiyuan Resource Management
414,300.00 414,300.00 1,472,900.00 Other Income
Committee Compensation
Coal-fired boiler demolition
1,815,000.00 1,815,000.00 Other Income
subsidy
Baoshan District Tax Incentive
290,000.00 290,000.00 Other Income
Policy for Investment Promotion
Overseas R&D Team Introduction
4,000,000.00 4,000,000.00 Other Income
Special Fund
10. Commitments and Contingencies
(1) Commitments
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 0.594 per Square
meter per month, and the area of the land is 7,669,068.17 square meters; hence annual rent
is RMB 54,665.10 thousand.
(2) For the 2300mm hot rolling product line leased from the Group to the Company, lease
period lasts from 1 January 2018 to 31 December 2020. 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. “Notice on Bengang Steel Plates Co., Ltd. signing a renewal
agreement with Benxi Steel (group) Co., Ltd” were adopted on the sixth meeting of the
seventh board of directors, it stipulated that the company leased the 1780 hot rolling
product line from Benxi Beiying Steel & Iron (Group) Co., Ltd., 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. The annual
rent shall not exceed RMB 150,000,000.00.
177
Bengang Steel Plates Co., Ltd. Annual Report 2018
2. Irrevocable letter of credit
As at December 31, 2018, the amount of irrevocable letter of credit that was not fulfilled
was 1.275 billion yuan.
(2) Contingencies
At the balance sheet date, no significant contingencies need to be disclosed.
11. Subsequent events
(1) Profit distribution after the reporting period
On April 17, 2019, the resolution of the 24th meeting of
the 7th Board of Directors passed the 2018 dividend
distribution plan. Based on the total share capital of the
company's 2018 annual profit distribution equity
Proposed profit or dividend
registration date, a cash dividend of 0.5 yuan (including
tax) will be distributed to every 10 shares of all
registered shareholders. The estimated cash dividend is
193,768,576.60 yuan.
12. 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) Other material issues that will influence investors’ decisions
1. Financing Lease
For prioritizing the capital structure and exploring financing channel, 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 billion per year. 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
178
Bengang Steel Plates Co., Ltd. Annual Report 2018
the People’s bank of China over the lease term. The lease security ratio is not higher than 30%
of the lease principal amount. The term of financial lease shall not exceed 12 years.
2. Shares pledged by the Controlling Shareholders
As at 31 December 2018, within the total shares held by the controlling shareholder Benxi Steel
& Iron (Group) Co., Ltd., 1,652,095,133 shares are pledged and 45,000,000.00 shares are
frozen.
13. Notes to the financial statements of parent company
(1) Notes receivable and accounts receivable
Item Ending balance Beginning balance
Notes receivable 3,356,020,598.89 3,515,361,992.96
Accounts receivable 409,553,059.27 482,181,593.45
Total 3,765,573,658.16 3,997,543,586.41
1. Notes receivable
(1) Notes receivable disclosed by category
Items Ending balance Beginning balance
Bank acceptance bill 3,316,192,514.61 3,383,242,448.41
Commercial acceptance bill 39,828,084.28 132,119,544.55
Total 3,356,020,598.89 3,515,361,992.96
(2) The pledged acceptance bill at the year-end
Items The pledged acceptance bill at the year-end
Bank acceptance bill 124,096,196.40
Total 124,096,196.40
(3) The amount of Notes receivable endorsed over but not yet matured at the year-end.
Items Derecognized ending balance Underrecognized ending balance
11,768,229,905.96
Bank acceptance bill
Commercial acceptance bill
Total 11,768,229,905.96
(4) No Notes receivable has been transferred into accounts receivable due to inability of
179
Bengang Steel Plates Co., Ltd. Annual Report 2018
drawer to meet acceptance bill at the year-end.
2. Accounts receivable
(1) Accounts receivable disclosed by category
Ending balance
Items Carrying amount Provision for bad debts
Percentage Bad debts
Book value
Amount (%)
Amount ratio (%)
Individually significant
and tested for impairment 47,762,337.18 8.11 47,762,337.18 100.00
individually
Accounts receivable tested
for impairment by 541,151,187.11 91.89 131,598,127.84 24.32 409,553,059.27
portfolio
Other insignificant items
but tested for impairment
individually
Total 588,913,524.29 100.00 179,360,465.02 409,553,059.27
Beginning balance
Items Carrying amount Provision for bad debts
Percenta Bad debts Book value
Amount ge (%)
Amount ratio (%)
Individually significant and
tested for impairment 47,762,337.18 6.51 47,762,337.18 100.00
individually
Accounts receivable tested
for impairment by 685,620,057.01 93.49 203,438,463.56 29.67 482,181,593.45
portfolio
Other insignificant items
but tested for impairment
individually
Total 733,382,394.19 100.00 251,200,800.74 482,181,593.45
Receivables individually insignificant but tested for impairment individually
Ending balance
Items Provision for Bad debts
Accounts receivable Reason
bad debts ratio（%）
Benxi Nanfen
Benxi Nanfen Xinhe Metallurgical
47,762,337.18 47,762,337.18 100.00 Xinhe has halt
Co., Ltd.
operation.
Total 47,762,337.18 47,762,337.18
Accounts receivable tested for impairment by portfolio
Ending balance
Items
Carrying amount Provision for bad debts Bad debts ratio (%)
Within 1 year (inclusive) 333,482,302.22
1-2 years (inclusive) 56,750,367.45 2,837,518.37 5.00
180
Bengang Steel Plates Co., Ltd. Annual Report 2018
Ending balance
Items
Carrying amount Provision for bad debts Bad debts ratio (%)
2-3 years (inclusive) 27,697,384.96 5,539,476.99 20.00
Over 3 years 123,221,132.48 123,221,132.48 100.00
Total 541,151,187.11 131,598,127.84
(2) Information of provision, reversal or recovery of bad debts of current period.
The provision of bad debts of current period is RMB 71,840,335.72.
(3) No accounts receivable has been written off this year.
(4) Top five debtors at the year-end
Ending balance
Company Percentage of total Provision for
Amount
accounts receivable (%) bad debts
No.1 228,538,659.84 38.81
No.2 91,185,441.03 15.48 6,792,099.51
No.3 47,762,337.18 8.11 47,762,337.18
No.4 39,608,495.91 6.73
No.5 19,555,323.27 3.32 1,150,024.13
Total 426,650,257.23 72.45 55,704,460.82
(2) Other receivables
Item Ending Balance Beginning Balance
Interest receivables 9,815,280.04 18,377,036.96
Dividend receivables
Other receivables 225,222,111.42 376,863,448.72
Total 235,037,391.46 395,240,485.68
1. Interest receivables
(1) Interest receivable disclosed by category
Items Ending balance Beginning balance
Deposit interest 9,815,280.04 18,377,036.96
Total 9,815,280.04 18,377,036.96
2. Other receivables
(1) Other receivables disclosed by category
181
Bengang Steel Plates Co., Ltd. Annual Report 2018
Ending balance
Items Carrying amount Provision for bad debts
Percentage Bad debts
Book value
Amount (%)
Amount ratio (%)
Individually significant
and tested for
impairment individually
Accounts receivable
tested for impairment by
288,053,726.26 99.40 64,571,614.84 22.42 223,482,111.42
portfolio
Other insignificant items
but tested for
1,740,000.00 0.60 1,740,000.00
impairment individually
Total
289,793,726.26 100.00 64,571,614.84 225,222,111.42
Beginning balance
Items Carrying amount Provision for bad debts
Percentage Bad debts
Book value
Amount (%)
Amount ratio (%)
Individually significant
and tested for
impairment individually
Accounts receivable
tested for impairment by
442,492,865.67 99.61 67,369,416.95 15.22 375,123,448.72
portfolio
Other insignificant items
but tested for
1,740,000.00 0.39 1,740,000.00
impairment individually
Total
444,232,865.67 100.00 67,369,416.95 376,863,448.72
Other receivables tested for impairment by portfolio using the method of Aging analysis
Ending balance
Items
Carrying amount Provision for bad debts Bad debts ratio (%)
Within 1 year (inclusive) 183,173,264.02
1-2 years (inclusive) 3,202,196.37 160,109.82 5.00
2-3 years (inclusive) 46,583,451.06 9,316,690.21 20.00
Over 3 years 55,094,814.81 55,094,814.81 100.00
Total 288,053,726.26 64,571,614.84
2. Information of provision, reversal or recovery of bad debts of current period.
Reversal of bad debts for other receivable in current period is RMB 2,797,802.11.
3. No other receivables have been written off this year.
4. Other receivables disclosed by Nature
182
Bengang Steel Plates Co., Ltd. Annual Report 2018
Nature Ending balance Beginning balance
Current Accounts 278,547,233.77 435,666,187.53
Export tax rebate
Others 11,246,492.49 8,566,678.14
Total 289,793,726.26 444,232,865.67
5. Top five debtors at the year-end
Percentage of Provision
Company Notes or content Amount Aging total other for
receivables(%) bad debts
No.1 Accounts 74,178,775.96 Within 1 year 25.60
No.2 Accounts 14,664,372.10 2-3 years 5.06 2,932,874.42
No.3 Accounts 7,718,029.34 Within 1 year 2.66
No.4 Accounts 4,341,257.18 2-3 years 1.50 868,251.44
No.5 Accounts 4,333,839.78 Within 1 year 1.50
Total 105,236,274.36 36.32 3,801,125.86
(3) Long-term equity investment
Ending balance Beginning balance
Items Impairm Impai
Carrying amount Book value Carrying amount Book value
ent rment
Subsidiaries 2,016,281,902.16 2,016,281,902.16 1,756,981,902.16 1,756,981,902.16
Total 2,016,281,902.16 2,016,281,902.16 1,756,981,902.16 1,756,981,902.16
Details of investment in subsidiaries
Ending
Impairm
balance
Decre Ending ent of
Name of entity Beginning balance Increase of
ase balance current
impair
period
ment
Guangzhou Bengang Steel & Iron Trading
1,000,000.00 29,000,000.00 30,000,000.00
Co., Ltd.
Shanghai Bengang Metallurgy Science and
Technology Co., Ltd. 19,200,000.00 10,800,000.00 30,000,000.00
Bengang Steel Plates Liaoyang Pellet Co.,
529,899,801.38 529,899,801.38
Ltd.
Dalian Benruitong Automobile Material
65,000,000.00 65,000,000.00
Technology Co., Ltd.
Bengang Posco Cold-rolled Sheet Co., Ltd. 1,019,781,571.10 1,019,781,571.10
Changchun Bengang Steel & Iron Sales Co., -1,355,124.64 29,500,000.00 28,144,875.36
Ltd.
Harbin Bengang Economic and Trading Co.,
423,398.23 29,500,000.00 29,923,398.23
Ltd.
Nanjing Bengang Materials Sales Co., Ltd. 2,081,400.65 2,081,400.65
Wuxi Bengang Steel & Iron Sales Co., Ltd. 936,718.57 29,000,000.00 29,936,718.57
Xiamen Bengang Steel & Iron Sales Co.,
1,095,711.66 1,095,711.66
Ltd.
183
Bengang Steel Plates Co., Ltd. Annual Report 2018
Yantai Bengang Steel & Iron Sales Co., Ltd. 19,600,329.41 29,500,000.00 49,100,329.41
Tianjin Bengang Steel & Iron Trading Co.,
33,318,095.80 27,000,000.00 60,318,095.80
Ltd.
Benxi Bengang Steel Sales Co., Ltd 5,000,000.00 5,000,000.00
Shenyang Bengang Metallurgical Science
5,000,000.00 25,000,000.00 30,000,000.00
and Technology Co., Ltd.
Chongqing Liaoben Steel & Iron Trade Co.,
5,000,000.00 25,000,000.00 30,000,000.00
Ltd.
Bengang Baojin (Shenyang) Automobile
51,000,000.00 25,000,000.00 76,000,000.00
New Materials Technology Co., Ltd.
Total 1,756,981,902.16 259,300,000.00 2,016,281,902.16
(4) Operating income and operating cost
2018 2017
Items
Revenue Cost Revenue Cost
Principal business 45,295,861,844.09 41,702,339,825.46 37,093,245,286.79 33,564,848,835.71
Other business 5,129,217,403.65 4,479,588,955.97 4,145,880,056.45 3,515,857,369.27
Total 50,425,079,247.74 46,181,928,781.43 41,239,125,343.24 37,080,706,204.98
(5) Income on investment
Items 2018 2017
Income from long-term equity investment (cost method) 102,074,634.76
Income from bank short-term financial products 5,041,397.26 3,294,593.14
Total 5,041,397.26 105,369,227.90
15. Supplementary information
(1) Details of non-recurring profit and loss
Items Amount Notes
Profit or loss from disposal of non-current assets -148,409,630.35
Government subsidy attributable to profit and loss of current period
(except such government subsidy closely related to the company's normal
business operation, meeting the regulation of national policy and enjoyed
86,085,297.03
constantly in certain quota or quantity according to a certain standard)
Profit or loss from investment or assets entrusted to others 5,041,397.26
Profit or loss from debt restructuring
Net profit or loss of subsidiary from the beginning to consolidation date
gained from consolidation under same control
Other non-operating revenue and expenditure other than above items 771,191.90
Impact of income tax -22,141.38
Impact of minority interests -38,018.98
Total -56,571,904.52
(2) Net asset yield and earnings per share
184
Bengang Steel Plates Co., Ltd. Annual Report 2018
Weighted average Earnings per share (Yuan)
Profit in the Reporting Period
net assets yield (%) Basic EPS Diluted EPS
Net profit attributable to ordinary shareholders 5.64 0.272 0.272
Net profit attributable to ordinary shareholders
after deducting non-recurring profit and loss
5.94 0.287 0.287
(3) 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
2018 2017 Ending balance Beginning balance
According to Chinese
1,036,493,236.07 1,600,110,229.77 19,126,258,116.67 14,315,588,729.00
accounting standards
Items and amounts adjusted according to IFRS: No difference.
2. Differences of net profit and net assets disclosed in financial reports prepared under overseas and Chinese
accounting standards.
□ Applicable √ Not applicable
3. Illustrations for the differences in accounting data between domestic and foreign accounting standards, and the
names of the overseas institutions should be indicated if the differences in the data audited by overseas audit
institutions have been adjusted
□ Applicable √ Not applicable
(4) Others
185
Bengang Steel Plates Co., Ltd. Annual Report 2018
XII. 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.;
3, Original copy of the Auditors’ Report under the seal of the CPA and signed by and under the seal of certified
accountants。
186
