Bengang Steel Plates Co., Ltd.
FINANCIAL STATEMENTS
(From January to June 2020)
(Unaudited)
24 August 2020
INDEX PAGES
FINANCIAL STATEMENTS
CONSOLIDATED STATEMENT OF FINANCIAL
POSITION AND STATEMENT OF FINANCIAL 1-4
POSITION
CONSOLIDATED STATEMENT OF
COMPREHENSIVE INCOME AND STATEMENT 5-6
OF COMPREHENSIVE INCOME
CONSOLIDATED STATEMENT OF CASH FLOWS
AND STATEMENT OF CASH FLOWS 7-8
CONSOLIDATED STATEMENT OF CHANGES IN
EQUITY AND STATEMENT OF CHANGES IN
9-12
EQUITY
NOTES TO THE FINANCIAL STATEMENTS 1-131
BENGANG STEEL PLATES CO., LTD.
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
As at 30 June 2020
(Expressed in Renminbi unless otherwise indicated)
Assets Notes 5 30 June 2020 31 December 2019
Current assets
Cash at bank and on hand (1) 16,788,479,305.93 18,415,844,397.77
Settlement provisions
Capital lent
Financial assets held for trading
Financial assets at fair value through profit or loss
Derivative financial assets
Notes receivable
Accounts receivable (2) 234,795,887.35 235,696,265.66
Accounts receivable financing (3) 4,382,121,949.97 2,429,542,461.88
Prepayments (4) 1,283,589,312.47 1,291,047,458.11
Premium receivable
Reinsurance accounts receivable
Receivable deposit for reinsurance contract
Other receivables (5) 158,407,131.71 172,807,036.77
Redemptory financial assets for sale
Inventories (6) 9,586,039,375.52 7,700,397,685.61
Contract assets
Assets held for sale
Non-current assets due within one year
Other current assets (7) 284,207,048.62 312,904,824.09
Total current assets 32,717,640,011.57 30,558,240,129.89
Non-current assets
Loan and advances issued
Debt Investments
Available-for-sale financial assets
Other debt investments
Held-to-maturity investment
Long-term receivables
Long-term equity investments (8) 2,672,302.70 2,642,998.70
Other equity instrument investments (9) 1,042,024,829.00 1,041,824,829.00
Other non-current financial assets
Investment property
Fixed assets (10) 24,952,427,383.86 26,123,375,492.40
Construction in progress (11) 2,569,308,708.27 1,833,853,572.58
Productive biological assets
Oil and gas assets
Intangible assets (12) 268,216,337.94 271,500,023.34
Development expenditure
Goodwill
Long-term deferred expenses
Deferred tax assets (13) 194,873,971.63 191,485,595.49
Other non-current assets (14) 963,239,365.67 708,502,552.50
Total non-current assets 29,992,762,899.07 30,173,185,064.01
Total assets 62,710,402,910.64 60,731,425,193.90
The notes to the financial statements attached form part of these financial statements.
Legal Representative: Chief Financial Officer: Chief Accountant:
Financial Statements Page 1
BENGANG STEEL PLATES CO., LTD.
CONSOLIDATED STATEMENT OF FINANCIAL POSITION (Continued)
As at 30 June 2020
(Expressed in Renminbi unless otherwise indicated)
Liabilities and equities Notes 5 30 June 2020 31 December 2019
Current Liabilities
Short-term loans (15) 12,506,705,000.00 13,151,478,000.00
Loan from central bank
Loan from other banks
Financial liability held for trading
Financial liabilities at fair value through profit or loss
Derivative financial liabilities
Notes payable (16) 14,234,728,488.05 11,828,514,676.95
Accounts payable (17) 4,076,415,267.57 4,527,513,030.27
Advance from customers (18) 4,429,821,526.79
Contract liabilities (19) 4,658,022,515.99
Financial assets sold for repurchase
Deposits from customers and interbank
Receipt from vicariously traded securities
Receipt from vicariously underwriting securities
Employee benefits payable (20) 41,172,677.24 23,698,174.56
Current tax liabilities (21) 21,947,711.98 284,825,814.80
Other payables (22) 644,059,870.61 662,701,744.97
Handling charges and commission payable
Reinsurance accounts payable
Liabilities held for sale
Non-current liabilities due within one year (23) 1,201,524,980.80 234,474,657.99
Other current liabilities
Total current liabilities 37,384,576,512.24 35,143,027,626.33
Non-current liabilities
Provision for insurance contract
Long-term loans (24) 3,810,463,934.18 4,849,675,910.73
Bonds payable
Including: Preferred stock
Perpetual bond
Long-term payables (25) 1,050,748,776.34 516,939,408.14
Long-term employee benefits payable
Estimated liabilities
Deferred income (26) 172,691,452.54 208,955,407.30
Deferred tax liabilities
Other non-current liabilities
Total non-current liabilities 5,033,904,163.06 5,575,570,726.17
Total liabilities 42,418,480,675.30 40,718,598,352.50
Shareholders' equity:
Share capital (27) 3,875,371,532.00 3,875,371,532.00
Other equity instruments
Including: Preferred stock
Perpetual bond
Capital reserves (28) 12,343,209,847.29 12,343,209,847.29
Less: treasury shares
Other comprehensive income
Special reserves (29) 22,480,185.44 212,687.41
Surplus reserves (30) 961,105,529.85 961,105,529.85
General risk reserve
Undistributed profits (31) 2,562,409,868.95 2,307,765,664.62
Total equity attributable to equity holders of the parent company 19,764,576,963.53 19,487,665,261.17
Non-controlling interests 527,345,271.81 525,161,580.23
Total shareholder's equity 20,291,922,235.34 20,012,826,841.40
Total of liabilities and owners’ equity 62,710,402,910.64 60,731,425,193.90
The notes to the financial statements attached form part of these financial statements.
Legal Representative： Chief Financial Officer: Chief Accountant:
Financial Statements Page 2
BENGANG STEEL PLATES CO., LTD.
STATEMENT OF FINANCIAL POSITION
As at 30 June 2020
(Expressed in Renminbi unless otherwise indicated)
Assets Notes 15 30 June 2020 31 December 2019
Current assets
Cash at bank and on hand 15,366,186,440.19 16,982,227,928.89
Financial assets held for trading
Financial assets at fair value through profit or loss
Derivative financial assets
Notes receivable
Accounts receivable (1) 373,473,831.10 388,997,108.46
Accounts receivable financing (2) 3,997,787,483.35 2,193,319,842.60
Prepayments 1,180,298,578.04 1,184,632,345.13
Other receivables (3) 257,932,409.77 266,663,235.81
Inventories 8,140,296,769.10 6,114,582,832.33
Contract assets
Assets held for sale
Non-current assets due within one year
Other current assets 233,073,377.39 191,249,460.42
Total current assets 29,549,048,888.94 27,321,672,753.64
Non-current assets
Debt investments
Available-for-sale financial assets
Other debt investments
Held-to-maturity investment
Long-term receivables
Long-term equity investments (4) 2,016,281,902.16 2,016,281,902.16
Other equity instrument investments 1,041,624,829.00 1,041,624,829.00
Other non-current financial assets
Investment property
Fixed assets 23,390,496,921.43 24,447,763,305.12
Construction in progress 2,540,492,204.43 1,813,889,136.42
Productive biological assets
Oil and gas assets
Intangible assets 143,816,972.04 145,470,040.68
Development expenditure
Goodwill
Long-term deferred expenses
Deferred tax assets 96,728,691.51 93,555,276.54
Other non-current assets 962,009,985.58 696,351,867.38
Total non-current assets 30,191,451,506.15 30,254,936,357.30
Total assets 59,740,500,395.09 57,576,609,110.94
The notes to the financial statements attached form part of these financial statements.
Legal Representative: Chief Financial Officer: Chief Accountant:
Financial Statements Page 3
BENGANG STEEL PLATES CO., LTD.
STATEMENT OF FINANCIAL POSITION (Continued)
As at 30 June 2020
(Expressed in Renminbi unless otherwise indicated)
Liabilities and shareholders' equities Notes 15 30 June 2020 31 December 2019
Current liabilities
Short-term loans 11,606,705,000.00 11,851,478,000.00
Financial liability held for trading
Financial liabilities at fair value through profit or loss
Derivative financial liabilities
Notes payable 12,332,093,817.33 10,225,969,445.22
Accounts payable 4,685,781,414.11 4,909,389,629.86
Advance from customers 5,597,707,687.22
Contract liabilities 5,736,618,018.47
Employee benefits payable 39,903,242.02 21,872,906.71
Current tax liabilities 4,507,444.81 274,181,048.14
Other payables 360,650,090.66 384,125,032.59
Liabilities held for sale
Non-current liabilities due within one year 1,201,524,980.80 234,474,657.99
Other current liabilities
Total current liabilities 35,967,784,008.20 33,499,198,407.73
Non-current liabilities
Long term loans 3,810,463,934.18 4,849,675,910.73
Bonds payable
Including: Preferred stock
Perpetual bond
Long-term payables 1,050,748,776.34 516,939,408.14
Long-term employee benefits payable
Estimated liabilities
Deferred income 172,691,452.54 208,955,407.30
Deferred tax liabilities
Other non-current liabilities
Total non-current liabilities 5,033,904,163.06 5,575,570,726.17
Total liabilities 41,001,688,171.26 39,074,769,133.90
Shareholder’s equity:
Share capital 3,875,371,532.00 3,875,371,532.00
Other equity instruments
Including: Preferred stock
Perpetual bond
Capital reserves 11,923,058,165.17 11,923,058,165.17
Less: Treasury shares
Other comprehensive income
Special reserves 19,768,253.55 53,330.99
Surplus reserves 961,105,529.85 961,105,529.85
Undistributed Profits 1,959,508,743.26 1,742,251,419.03
Total shareholder's equity 18,738,812,223.83 18,501,839,977.04
Total liabilities and shareholder’s equity 59,740,500,395.09 57,576,609,110.94
The notes to the financial statements attached form part of these financial statements.
Legal Representative: Chief Financial Officer: Chief Accountant:
Financial Statements Page 4
BENGANG STEEL PLATES CO., LTD.
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
For the year ended 30 June 2020
(Expressed in Renminbi unless otherwise indicated)
Items Notes 5 Jan – Jun 2020 Jan – Jun 2019
1. Total operating income 22,184,537,260.05 24,102,595,167.14
Including: Operating income (32) 22,184,537,260.05 24,102,595,167.14
Interest income
Premium earned
Income from handling charges and commission
2. Total operating cost 21,927,105,960.14 23,621,825,282.23
Including: Operating cost (32) 20,440,246,362.67 22,067,612,729.65
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 (33) 88,398,436.68 114,125,362.97
Selling and distribution expenses (34) 642,393,218.78 574,445,199.14
General and administrative expenses (35) 380,828,316.41 446,767,811.77
Research and development expenses (36) 20,202,985.20 15,408,472.28
Financial expenses (37) 355,036,640.40 403,465,706.42
Including: Interest expense 439,861,353.93 586,490,262.69
Interest income 154,882,284.33 127,083,779.58
Add: Other income (38) 38,587,332.40 41,695,000.00
Income on investment（“-” for loss） (39) 29,304.00 25,907.49
Including: Income from associates and joint ventures 29,304.00 25,907.49
Income from derecognition of financial assets measured at amortized cost
Exchange gains（“-” for loss）
Net exposure hedge income（“-” for loss）
Gains from change of fair value （“-” for loss）
Credit impairment loss （“-” for loss） (40) 3,487,783.42 3,751,513.83
Asset impairment loss （“-” for loss） (41) -15,321,598.62 -
Assets disposal gains（“-” for loss） (42) 325,651.61 2,418,704.34
3. Operational profit（“-” for loss） 284,539,772.72 528,661,010.57
Add: Non-operating income (43) 1,140,364.12 8,210,182.24
Less: Non-operating expenses (44) 20,035,471.42 57,974,322.05
4. Total profit (“-” for loss) 265,644,665.42 478,896,870.76
Less: Income tax expenses (45) 9,237,815.08 25,962,181.73
5. Net profit（“-” for loss） 256,406,850.34 452,934,689.03
1.Classification by continuing operating
1.Net profit from continuing operation（“-” for loss）
2.Net profit from discontinued operation（“-” for loss）
2.Classification by ownership
1. Net profit attributable to the owners of parent company （“-” for loss） 254,644,204.33 453,209,615.76
2. Net profit attributable to non-controlling shareholders （“-” for loss） 1,762,646.01 -274,926.73
6.Other comprehensive income
Other comprehensive income attributable to owners of the parent company after tax
1.Other comprehensive income items that will not be reclassified into gains/losses
1）Re-measurement of defined benefit plans of changes in net debt or net assets
2）Other comprehensive income under the equity method cannot be reclassified into profit
or loss
3）Changes in fair value of investments in other equity instruments
4）Changes in fair value of company's credit risk
2.Other comprehensive income that will be reclassified into profit or loss.
1）Other comprehensive income under the equity method investee can be reclassified into
profit or loss
2）Changes in fair value of other debt investments
3）Gains and losses from changes in fair value available for sale financial assets
4）Amount of financial assets reclassified into other comprehensive income
5）Held-to-maturity investments reclassified to gains and losses of available for sale
financial assets
6）Credit impairment provision of other debt investments
7）The effective portion of cash flow hedges and losses
8) Translation differences in foreign currency financial statements
9）Other
Other comprehensive income attributable to non-controlling shareholders’ equity after tax
Financial Statements Page 5
Items Notes 5 Jan – Jun 2020 Jan – Jun 2019
7. Total comprehensive income 256,406,850.34 452,934,689.03
Total comprehensive income attributable to the owner of the parent company 254,644,204.33 453,209,615.76
Total comprehensive income attributable to non-controlling shareholders 1,762,646.01 -274,926.73
8. Earnings per share
1）Basic earnings per share (Yuan/share) (46) 0.07 0.12
2）Diluted earnings per share (Yuan/share) (46) 0.07 0.12
The notes to the financial statements attached form part of these financial statements.
Legal Representative: Chief Financial Officer: Chief Accountant:
Financial Statements Page 6
BENGANG STEEL PLATES CO., LTD.
STATEMENT OF COMPREHENSIVE INCOME
For the year ended 30 June 2020
(Expressed in Renminbi unless otherwise indicated)
Items Notes 15 Jan – Jun 2020 Jan – Jun 2019
1. Total operating income (5) 21,759,781,682.12 23,447,215,857.93
Less: Operating cost (5) 20,379,148,281.27 21,757,289,997.18
Tax and surcharges 74,240,782.35 84,467,404.41
Selling and distribution expenses 386,932,932.93 335,094,548.06
General and administrative expenses 354,627,152.28 419,337,998.35
Research and development expenses 20,202,985.20 15,408,472.28
Financial expenses 337,504,255.84 388,071,914.59
Including: Interest expense 410,264,451.89 558,095,343.66
Interest income 141,297,649.84 114,189,626.94
Add: Other income 38,002,345.53 41,695,000.00
Income on investment（“-” for loss）
Including: Income from associates and joint ventures
Income from derecognition of financial assets
measured at amortized cost
Net exposure hedge income（“-” for loss）
Gains from change of fair value （“-” for loss）
Credit impairment loss（“-” for loss） 2,627,938.73 3,751,513.83
Assets impairment loss（“-” for loss） -15,321,598.62 -
Assets disposal gains（“-” for loss） 325,651.61 2,465,706.59
2. Operational profit（“-” for loss） 232,759,629.50 495,457,743.48
Add: Non-operating income 811,659.87 8,138,040.75
Less: Non-operating expenses 19,487,380.11 57,935,182.17
3. Total profit (“-” for loss) 214,083,909.26 445,660,602.06
Less: Income tax expenses -3,173,414.97 15,309,062.75
4. Net profit（“-” for loss） 217,257,324.23 430,351,539.31
1.Net profit from continuing operation (“-” for loss)
2.Net profit from discontinued operation (“-” for loss)
5.Other comprehensive income
1.Other comprehensive income items that will not be reclassified into
gains/losses
1）Re-measurement of defined benefit plans of changes
2）Other comprehensive income under the equity method cannot be
reclassified into profit or loss
3）Changes in fair value of investments in other equity instruments
4）Changes in fair value of company's credit risk
2.Other comprehensive income that will be reclassified into profit or
loss.
1）Other comprehensive income under the equity method investee
can be reclassified into profit or loss
2）Changes in fair value of other debt investments
3）Gains and losses from changes in fair value available for sale
financial assets
4）Amount of financial assets reclassified into other comprehensive income
5）Held-to-maturity investments reclassified to gains and losses of
available for sale financial assets
6）Credit impairment provision of other debt investments
7）The effective portion of cash flow hedges and losses
8) Translation differences in foreign currency financial statements
9）Other
6. Total comprehensive income 217,257,324.23 430,351,539.31
7. Earnings per share
1）Basic earnings per share (Yuan/share)
2）Diluted earnings per share (Yuan/share)
The notes to the financial statements attached form part of these financial statements.
Legal Representative: Chief Financial Officer: Chief Accountant:
Financial Statements Page 7
BENGANG STEEL PLATES CO., LTD.
CONSOLIDATED STATEMENT OF CASH FLOWS
For the year ended 30 June 2020
(Expressed in Renminbi unless otherwise indicated)
Items Notes 5 Jan – Jun 2020 Jan – Jun 2019
1.Cash flow from operating activities
Cash received from sale of goods or rendering of services 15,423,965,198.05 16,357,053,782.81
Net increase of customers' deposit and interbank deposit
Net increase of loan from central bank
Net increase of loans from other financial institutions
Cash received for premium of original insurance contract
Net cash received for reinsurance business
Net increase of deposit and investment of the insured
Cash from receiving interest, handling charge and commission
Net increase of loans from borrowing funds
Net increase of fund for repurchase business
Net cash received from traded securities
Tax rebate received 310,509,228.43 247,667,635.74
Other cash received relating to operating activities (47) 174,016,797.00 144,904,624.34
Subtotal of cash inflows from operating activities 15,908,491,223.48 16,749,626,042.89
Cash paid for goods and services 14,428,717,102.76 13,876,838,386.74
Net increase of customer's loan and advances
Net increase of deposit in central bank and interbank deposit
Cash for payment of compensation for original insurance contract
Net increase in capital lent
Cash for payment of interest, handling charge and commission
Cash for payment of policy bonus
Cash paid to and on behalf of employees 884,844,841.18 987,603,117.25
Cash paid for all types of taxes 520,116,275.37 653,208,180.03
Other cash paid relating to operating activities (47) 226,288,711.25 247,189,353.20
Subtotal of cash outflows from operating activities 16,059,966,930.56 15,764,839,037.22
Net cash flows from operating activities -151,475,707.08 984,787,005.67
2. Cash flows from investing activities
Cash received from disposal of investments
Cash received from return on investments
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
Cash paid for acquisition of fixed assets, intangible assets and other long-term assets 706,681,059.07 545,199,197.41
Cash paid for acquisition of investments
Net increase of mortgage loan
Net cash received from subsidiary and other operating unit
Other cash paid relating to investing activities
Subtotal of cash outflows from investing activities 706,681,059.07 545,199,197.41
Net cash flows from investing activities -706,681,059.07 -545,199,197.41
3. Cash flows from financing activities
Proceeds from investment
Including: Proceeds from investment of non-controlling shareholders of subsidiary
Proceeds from borrowings 4,987,194,000.00 5,828,037,190.72
Other proceeds relating to financing activities
Subtotal of cash inflows from financing activities 4,987,194,000.00 5,828,037,190.72
Cash repayments of borrowings 5,671,544,896.99 5,653,303,509.62
Cash payments for distribution of dividends, profit or interest expenses 480,183,996.49 626,178,049.57
Including: Cash paid to non-controlling shareholders as dividend and profit by
subsidiaries
Other cash payments relating to financing activities
Subtotal of cash outflows from financing activities 6,151,728,893.48 6,279,481,559.19
Net cash flows from financing activities -1,164,534,893.48 -451,444,368.47
4. Effect of foreign exchange rate changes on cash and cash equivalents -1,130,665.43 48,230,507.75
5. Net increase in cash and cash equivalents -2,023,822,325.06 36,373,947.54
Add: Cash and cash equivalents at the beginning of the period 13,441,414,988.58 11,752,548,621.97
6. Cash and cash equivalents at the ending of the period 11,417,592,663.52 11,788,922,569.51
The notes to the financial statements attached form part of these financial statements.
Legal Representative: Chief Financial Officer: Chief Accountant:
Financial Statements Page 8
BENGANG STEEL PLATES CO., LTD.
STATEMENT OF CASH FLOWS
For the year ended 30 June 2020
(Expressed in Renminbi unless otherwise indicated)
Items Notes 15 Jan – Jun 2020 Jan – Jun 2019
1. Cash flow from operating activities
Cash received from sale of goods or rendering of services 15,003,373,098.45 15,970,406,775.11
Tax rebate received 260,246,235.34 219,614,786.86
Other cash received relating to operating activities 163,299,247.34 140,536,583.70
Subtotal of cash inflows from operating activities 15,426,918,581.13 16,330,558,145.67
Cash paid for goods and services 14,323,769,183.95 13,842,821,616.84
Cash paid to and on behalf of employees 840,886,166.89 928,568,022.64
Cash paid for all types of taxes 465,606,411.99 576,260,568.31
Other cash paid relating to operating activities 159,126,577.28 165,446,890.35
Subtotal of cash outflows from operating activities 15,789,388,340.11 15,513,097,098.14
Net cash flows from operating activities -362,469,758.98 817,461,047.53
2. Cash flows from investing activities
Cash received from disposal of investments
Cash received from return on investments
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
Cash paid for acquisition of fixed assets, intangible assets and
696,005,001.44 539,451,276.57
other long-term assets
Cash paid for acquisition of investments
Net cash paid for acquisition of subsidiary and other operating
unit
Other cash paid relating to investing activities
Subtotal of cash outflows paid for investing activities 696,005,001.44 539,451,276.57
Net cash flows from investing activities -696,005,001.44 -539,451,276.57
3. Cash flows from financing activities
Proceeds from investment
Cash received from borrowings 4,747,194,000.00 4,902,327,190.72
Other cash received relating to financing activities
Subtotal of cash inflows from financing activities 4,747,194,000.00 4,902,327,190.72
Cash repayments of borrowings 5,051,544,896.99 4,713,373,509.62
Cash payments for distribution of dividends, profit or interest 433,692,125.89 589,497,122.29
Other cash payments relating to financing activities
Subtotal of cash outflows from financing activities 5,485,237,022.88 5,302,870,631.91
Net cash flows from financing activities -738,043,022.88 -400,543,441.19
4. Effect of foreign exchange rate changes on cash and cash
-1,134,392.87 48,222,621.42
equivalents
5. Net increase in cash and cash equivalents -1,797,652,176.17 -74,311,048.81
Add: Cash and cash equivalents at the beginning of the period 13,029,616,298.47 10,807,824,843.20
6. Ending balance of cash and cash equivalents 11,231,964,122.30 10,733,513,794.39
The notes to the financial statements attached form part of these financial statements.
Legal Representative: Chief Financial Officer: Chief Accountant:
Financial Statements Page 9
BENGANG STEEL PLATES CO., LTD.
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
For the year ended 30 June 2020
(Expressed in Renminbi unless otherwise indicated)
Jan – Jun 2020
Owner's equity attributable to parent company
Items Other equity instruments Less: Other General Non-controlling Total of owner's
Special Undistributed
Share capital Preferenc Perpetual Capital reserves Treasury comprehensive Surplus reserves risk Subtotal interest equity
Others reserves profit
e shares bond shares income reserve
1. Ending balance of last year 3,875,371,532.00 12,343,209,847.29 212,687.41 961,105,529.85 2,307,765,664.62 19,487,665,261.17 525,161,580.23 20,012,826,841.40
Add: Change of accounting policies
Correction of errors for last period
Business consolidation under common control
Others
2. Beginning balance of current year 3,875,371,532.00 12,343,209,847.29 212,687.41 961,105,529.85 2,307,765,664.62 19,487,665,261.17 525,161,580.23 20,012,826,841.40
3. Changes in current year (“-” for decrease) 22,267,498.03 254,644,204.33 276,911,702.36 2,183,691.58 279,095,393.94
1) Total comprehensive income 254,644,204.33 254,644,204.33 1,762,646.01 256,406,850.34
2) Capital increase and decrease by
shareholders
(1) Common share invested by shareholders
(2) Capital input by the holder of other equity
instruments
(3) Share-based payment attributable to
owners' equity
(4) Others
3) Profit distribution
(1) Appropriation to surplus reserves
(2) Appropriation to general risk reserve
(3) Profit distribution to shareholders
(4) Others
4) Transfers within shareholders' equity
(1) Capital reserves transferred into paid-in
capital (or stock)
(2) Surplus reserves transferred into paid-in
capital (or stock)
(3) Surplus reserves to recover loss
(4) Net changes of defined contribution plans
transferred into Retained Earnings
(5) Other comprehensive income transferred
into Retained Earnings
(6) Others
5) Special reserves 22,267,498.03 22,267,498.03 421,045.57 22,688,543.60
(1) Provision of special reserves 26,575,861.58 26,575,861.58 421,045.57 26,996,907.15
(2) Use of special reserves 4,308,363.55 4,308,363.55 4,308,363.55
6) Others
4. Ending balance of current year 3,875,371,532.00 12,343,209,847.29 22,480,185.44 961,105,529.85 2,562,409,868.95 19,764,576,963.53 527,345,271.81 20,291,922,235.34
The notes to the financial statements attached form part of these financial statements
Legal Representative: Chief Financial Officer: Chief Accountant:
Financial Statements Page 10
BENGANG STEEL PLATES CO., LTD.
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY (Continued)
For the year ended 30 June 2020
(Expressed in Renminbi unless otherwise indicated)
Jan – Jun 2019
Owner's equity attributable to parent company
Items Other equity instruments Less: Other General Non-controlling Total of owner's
Special
Share capital Preferenc Perpetual Capital reserves Treasury comprehensi Surplus reserves risk Undistributed profit Subtotal interest equity
Others reserves
e shares bond shares ve income reserve
1. Ending balance of last year 3,875,371,532.00 12,343,209,847.29 683,937.71 961,105,529.85 1,945,887,269.82 19,126,258,116.67 533,146,339.49 19,659,404,456.16
Add: Change of accounting policies
Correction of errors for last period
Business consolidation under common control
Others
2. Beginning balance of current year 3,875,371,532.00 12,343,209,847.29 683,937.71 961,105,529.85 1,945,887,269.82 19,126,258,116.67 533,146,339.49 19,659,404,456.16
3. Changes in current year (“-” for decrease) -471,250.30 361,878,394.80 361,407,144.50 -7,984,759.26 353,422,385.24
1) Total comprehensive income 555,646,971.40 555,646,971.40 1,213,517.58 556,860,488.98
2) Capital increase and decrease by shareholders
(1) Common share invested by shareholders
(2) Capital input by the holder of other equity instruments
(3) Share-based payment attributable to owners' equity
(4) Others
3) Profit distribution -193,768,576.60 -193,768,576.60 -9,198,305.14 -202,966,881.74
(1) Appropriation to surplus reserves
(2) Appropriation to general risk reserve
(3) Profit distribution to shareholders -193,768,576.60 -193,768,576.60 -9,198,305.14 -202,966,881.74
(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 -471,250.30 -471,250.30 28.30 -471,222.00
(1) Provision of special reserves 47,843,133.40 47,843,133.40 28.30 47,843,161.70
(2) Use of special reserves 48,314,383.70 48,314,383.70 48,314,383.70
6) Others
4. Ending balance of current year 3,875,371,532.00 12,343,209,847.29 212,687.41 961,105,529.85 2,307,765,664.62 19,487,665,261.17 525,161,580.23 20,012,826,841.40
The notes to the financial statements attached form part of these financial statements
Legal Representative: Chief Financial Officer: Chief Accountant:
Financial Statements Page 11
BENGANG STEEL PLATES CO., LTD.
STATEMENT OF CHANGES IN EQUITY
For the year ended 30 June 2020
(Expressed in Renminbi unless otherwise indicated)
Jan – Jun 2020
Other equity instruments Less: Other
Items Special Undistributed Total shareholder’s
Share capital Preferenc Perpetual Capital reserves Treasury comprehens Surplus reserves
Others reserves profits equity
e shares bond shares ive income
1. Ending balance of last year 3,875,371,532.00 11,923,058,165.17 53,330.99 961,105,529.85 1,742,251,419.03 18,501,839,977.04
Add: Change of accounting policies
Correction of errors for last period
Others
2. Beginning balance of current year 3,875,371,532.00 11,923,058,165.17 53,330.99 961,105,529.85 1,742,251,419.03 18,501,839,977.04
3. Changes in current year (“-” for decrease) 19,714,922.56 217,257,324.23 236,972,246.79
1) Total comprehensive income 217,257,324.23 217,257,324.23
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) Other comprehensive income transferred into retained
earnings
(6) Others
5) Special reserves 19,714,922.56 19,714,922.56
(1) Provision of special reserves 23,963,236.11 23,963,236.11
(2) Use of special reserves 4,248,313.55 4,248,313.55
6) Others
4. Ending balance of current year 3,875,371,532.00 11,923,058,165.17 19,768,253.55 961,105,529.85 1,959,508,743.26 18,738,812,223.83
The notes to the financial statements attached form part of these financial statements
Legal Representative: Chief Financial Officer: Chief Accountant:
Financial Statements Page 12
BENGANG STEEL PLATES CO., LTD.
STATEMENT OF CHANGES IN EQUITY (Continued)
For the year ended 30 June 2020
(Expressed in Renminbi unless otherwise indicated)
Jan – Jun 2019
Other equity instruments Less: Other
Items Special Undistributed Total shareholder’s
Share capital Preference Perpetual Capital reserves Treasury comprehens Surplus reserves
Others reserves profits equity
shares bond shares ive income
1. Ending balance of last 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
Add: Change of accounting policies
Correction of errors for last period
Others
2. Beginning balance of current year 3,875,371,532.00 11,923,058,165.17 525,218.48 961,105,529.85 1,401,183,955.66 18,161,244,401.16
3. Changes in current year (“-” for decrease) -471,887.49 341,067,463.37 340,595,575.88
1) Total comprehensive income 534,836,039.97 534,836,039.97
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 -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 -471,887.49 -471,887.49
(1) Provision of special reserves 45,445,975.41 45,445,975.41
(2) Use of special reserves 45,917,862.90 45,917,862.90
6) Others
4. Ending balance of current year 3,875,371,532.00 11,923,058,165.17 53,330.99 961,105,529.85 1,742,251,419.03 18,501,839,977.04
The notes to the financial statements attached form part of these financial statements
Legal Representative: Chief Financial Officer: Chief Accountant:
Financial Statements Page 13
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2020
Notes to the financial statements
Bengang Steel Plates Co., Ltd.
Notes to the financial statements
For the period from Jan. to Jun. 2020
(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 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.
Notes to the financial statements Page 1
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2020
Notes to the financial statements
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 30 June 2020, 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. Consolidation scope
The financial statements have been approved for reporting by the board of directors of the Company on 24 August
2020.
(2) Consolidation scope
As at 30 June 2020, subsidiaries included in the Company’s consolidated financial statements are as follows:
Name of the subsidiaries
Guangzhou Bengang Steel & Iron Trading Co., Ltd.
Shanghai Bengang Metallurgy Science and Technology Co., Ltd.
Bengang Steel 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
Notes to the financial statements Page 2
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2020
Notes to the financial statements
Name of the subsidiaries
Shenyang Bengang Metallurgical Science and Technology Co., Ltd.
Chongqing Liaoben Steel & Iron Trading Co., Ltd.
Bengang Baojin (Shenyang) Automobile New Material Technology Co., Ltd.
The scope of the consolidated financial statements in this period has not changed compared with the previous
period.
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
Notes for specific accounting policies and accounting estimates:
The following disclosed content covers the specific accounting policies and accounting estimates that are adopted by
the Company based on the actual production and operation characteristics. Please see Note (10) Financial instruments,
(11) Inventory, (16) Fixed assets, (19) Intangible assets, (25) Revenue under “3. Significant accounting policies and
accounting estimates” for details.
(1) Statement of compliance with China Accounting Standards for Business Enterprises
The financial statements present truly and completely the financial position, operation results and cash flows of the
Company during the reporting period in accordance with China Accounting Standards for Business Enterprises.
(2) Accounting year
The Accounting year is from 1 January to 31 December.
(3) Operating period
The operating period is twelve months.
(4) Functional currency
Notes to the financial statements Page 3
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2020
Notes to the financial statements
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 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
Notes to the financial statements Page 4
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2020
Notes to the financial statements
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 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.
Notes to the financial statements Page 5
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2020
Notes to the financial statements
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, 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.
Notes to the financial statements Page 6
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2020
Notes to the financial statements
If each of the multiple transactions forms part of a bundled transaction which eventually results in loss of control of
the subsidiary, these multiple transactions shall be accounted for as a single transaction. In the consolidated financial
statements, the difference between the consideration received and the corresponding proportion of the subsidiary’s
net assets in each transaction prior to the loss of control shall be recognized in other comprehensive income and
transferred to the profit or loss when the Company eventually loses control of the subsidiary.
If each of the multiple transactions which eventually results in loss of control of the subsidiary do not form part of a
bundled transaction, apply the treatment of disposing partial long-term equity investments in a subsidiary without
loss of control prior to the loss of control. After the loss of control, apply the treatment of disposing the subsidiary in
common cases.
(3) Acquiring the 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 losing 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) Classification of joint venture arrangements and accounting treatment
Joint venture arrangements are divided into joint operations and joint ventures.
When the Company is a joint venture party of a joint venture arrangement and have the assets related to the
arrangement and assumes the liabilities related to the arrangement, it is a joint operation.
The Company confirms the following items related to the share of interest in the joint operation and performs
accounting treatment in accordance with the relevant enterprise accounting standards:
a. Confirm the assets held by the company separately, and confirm the assets held jointly by the Company's share;
Notes to the financial statements Page 7
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2020
Notes to the financial statements
b. Recognize the liabilities assumed by the Company separately and the liabilities jointly assumed by the company's
share;
c. Recognize the income generated by the sale of the Company’s share of common operating output;
d. Recognize the revenue generated from the sale of joint operations based on the Company's share;
e. Confirm the expenses incurred separately and the expenses incurred in the joint operation according to the
Company's share.
For the accounting policy of the Company's investment in joint ventures, please refer to Note (13) Long-term Equity
Investment under “3. Significant accounting policies and accounting estimates”
(8) Recognition of cash and cash equivalents
For the purpose of preparing the statement of cash flows, the term “cash” refers to the cash on hand and the
unrestricted deposit. And the term “cash equivalents” refers to short-term (maturing within three months from
acquisition) and highly liquid investments that are readily convertible to known amounts of cash and which are subject
to an insignificant risk of change in value.
(9) Foreign currency transaction and translation of foreign currency financial statements
1. Foreign currency transaction
Foreign currency transactions are translated into RMB at the current rate at the day of transactions.
The foreign currency monetary items shall be translated at the spot exchange rate on the balance sheet date. The
balance of exchange arising from the difference between the spot exchange rate on the balance sheet date and the spot
exchange rate at the time of initial recognition or prior to the balance sheet date, except those arising from the raising
of special foreign debt for the purchase or construction of capitalizable assets thus shall be capitalized according to the
borrowing costs capitalization principle, shall be recorded into the profits and losses at the current period.
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
Notes to the financial statements Page 8
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2020
Notes to the financial statements
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.
(10) Financial instruments
Financial instruments include financial assets, financial liabilities and equity instruments
1. Classification of financial instruments
The Company shall classify financial assets on the basis of both the entity’s business model for managing the financial
assets and the contractual cash flow characteristics of the financial asset as: financial assets measured at amortised cost,
financial assets measured at fair value through other comprehensive income (debt instrument) and financial assets
measured at fair value through profit or loss at initial measurement.
A financial asset shall be measured at amortised cost if both of the following conditions are met. The financial asset is
held within a business model whose objective is to hold financial assets in order to collect contractual cash flows and
the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of
principal and interest on the principal amount outstanding.
A financial asset shall be measured at fair value through other comprehensive income if both of the following
conditions are met. The financial asset is held within a business model whose objective is achieved by both collecting
contractual cash flows and selling financial assets and the contractual terms of the financial asset give rise on specified
dates to cash flows that are solely payments of principal and interest on the principal amount outstanding. Other
financial assets other than these are classified as financial assets measured at fair value through profit or loss.
The Company may make an election at initial recognition for non-trading equity instrument investments whether it is
designated as a financial asset (equity instrument) that is measured at fair value through other comprehensive income.
At the initial recognition, in order to eliminate or significantly reduce accounting mismatches, financial assets can be
designated as financial assets measured at fair value through profit or loss. According to the above conditions, the
company does not have such designated financial assets.
The Company shall classify financial liabilities as financial liabilities measured at amortised cost and financial
liabilities measured at fair value through profit or loss at initial measurement.
The Company may, at initial recognition, designate a financial liability as measured at fair value through profit or loss
because either:
Notes to the financial statements Page 9
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2020
Notes to the financial statements
(a) it eliminates or significantly reduces an accounting mismatch;
(b) a group of financial liabilities or financial assets and financial liabilities is managed and its performance is
evaluated on a fair value basis, in accordance with a documented risk management or investment strategy, and
information about the group is provided internally on that basis to the entity’s key management personnel;
(c) the financial liability contains embedded derivatives that need to be separated.
According to the above conditions, the Company does not have such designated financial assets.
2. Recognition and measurement of financial instruments
(1) Financial assets measured at amortised cost
Financial assets measured at amortized cost include notes receivables, accounts receivables, other receivables,
long-term receivables, debt investments, etc. At initial recognition, the Company shall measure a financial asset at its
fair value plus or minus transaction costs that are directly attributable to the acquisition or issue of the financial asset.
The Company shall measure account receivables at their transaction price if the account receivables do not contain a
significant financing component and accounts receivables that the company has decided not to consider for a financing
component of no more than one year.
Interests calculated by using the effective interest method during the holding period shall be. recognized in profit or
loss.
When recovering or disposing the receivables, the difference between the price obtained and. the carrying value shall
be recognized in current profit or loss.
(2) Financial assets measured at fair value through other comprehensive income (debt instruments)
Financial assets measured at fair value through other comprehensive income (debt instruments) include receivables
financing, other debt investments, etc. At initial recognition, the Company shall measure a financial asset at its fair
value plus transaction costs that are directly attributable to the acquisition or issuance of the financial asset. The
financial assets are subsequently measured at fair value. Changes in fair value are included in other comprehensive
income except for interest calculated using the effective interest method, impairment losses or gains and exchange
gains and losses. When the financial assets are derecognized, the accumulated gain or loss previously recognized in
other comprehensive income is transferred from other comprehensive income and recognized in profit or loss.
(3) Financial assets at fair value through other comprehensive income (equity instruments)
Notes to the financial statements Page 10
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2020
Notes to the financial statements
Financial assets at fair value through other comprehensive income (equity instruments). include other equity
instrument investments, etc. At initial recognition, the Company shall measure a financial asset at its fair value plus
transaction costs that are directly attributable to the acquisition or issue of the financial asset. The financial assets are
subsequently measured at fair value. Changes in fair value are included in other comprehensive income. The dividends
obtained are recognised in profit and loss.
When the financial assets are derecognized, the accumulated gain or loss previously. recognised in other
comprehensive income is transferred from other comprehensive income and recognised in retained earnings.
(4) Financial assets at fair value through profit or loss
Financial assets at fair value through profit or loss include transactional financial assets, derivative financial assets,
other non-current financial assets, etc.
The Company shall measure the financial assets at fair value at initial recognition. Transaction costs are recognised in
profit or loss. Changes in fair value are included in profit or loss.
When the financial assets are derecognized, the difference between the fair value and the. initially recorded amount is
recognized as investment income, and the gains and losses from changes in fair value are adjusted.
(5) Financial liabilities at fair value through profit or loss
Financial liabilities at fair value through profit or loss include current financial liabilities, derivative financial liabilities,
etc.
The Company shall measure the financial assets at fair value at initial recognition. Transaction costs are recognised in
profit or loss. Changes in fair value are included in profit or loss.
When the financial liabilities are derecognized, the difference between the fair value and the. initially recorded amount
is recognized as investment income, and the gains and losses from changes in fair value are adjusted.
(6) Financial liabilities measured at amortised cost
Financial liabilities measured at amortised cost include short-term borrowings, notes. payables, accounts payables,
other payables, long-term borrowings, bonds payables, long-term payables.
Notes to the financial statements Page 11
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2020
Notes to the financial statements
At initial recognition, the Company shall measure a financial liability at its fair value plus. transaction costs that are
directly attributable to the acquisition or issue of the financial asset.
Interests calculated by using the effective interest method during the holding period shall be. recognized in profit or
loss.
When the financial liabilities are derecognized, the difference between the price obtained and. the carrying value shall
be recognised in profit and loss.
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 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).
Notes to the financial statements Page 12
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2020
Notes to the financial statements
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 (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
Notes to the financial statements Page 13
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2020
Notes to the financial statements
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
The Company considers all reasonable and relevant information, including forward-looking information, to recognize
the expected credit loss on financial assets measured at amortized cost, and financial assets measured at fair value
through other comprehensive income (debt instruments) on the individual or portfolio basis. The measurement of
expected credit loss depends on whether there is a significant increase in credit risk of financial assets since the initial
recognition.
If the credit risk of the financial instrument has increased significantly since the initial confirmation, the Company
shall measure the loss allowance for a financial instrument at an amount equal to the lifetime expected credit losses. If
the credit risk on a financial instrument has not increased significantly since initial recognition, the Company shall
measure the loss allowance for that financial instrument at an amount equal to 12-month expected credit losses. The
increase or reversal amount of loss allowance thus formed shall be included in the current profits and losses as
impairment losses or gains.
Generally, the Company believes that the credit risk of the financial instrument has significantly increased over 30 days
after the due date, unless there is solid evidence that the credit risk of the financial instrument has not increased
significantly since initial recognition.
If the credit risk of a financial instrument at the reporting date is relatively low, the Company considers that the credit
risk of the financial instrument has not increased significantly since the initial recognition.
If there is objective evidence indicating that a certain financial asset has been impaired, the Company shall recognise
provision for impairment of the financial asset individually.
For account receivables, whether a significant financing component is contained or not, the Company shall always
measure the loss allowance at an amount equal to lifetime expected credit losses.
For those accounts receivable, lease receivables, long-term receivables formed by the company through the sale of
goods or rendering of services, notes receivable, accounts receivable financing, and other receivables which contains
significant financing component, the Company chooses to use the general financial asset impairment method, that is,
according to whether the credit risk has increased significantly or not since the initial recognition to measure the
expected credit loss at an amount equal to 12-month expected credit losses (stage one) or at an amount equal to the
lifetime expected credit losses (stage two and stage three).
Notes to the financial statements Page 14
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2020
Notes to the financial statements
(11) Inventory
1. Inventory classification
Inventories include material in transit, raw material, turnover materials, finished goods, work in process, issue
commodity, 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
inventory 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.
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. Specifically,
if the inventory held for the execution of the sales contract or labor contract, and the sales contract order quantity is
equal to the quantity of inventory held by the enterprise, the contract price of the finished product or commodity is
used as the basis for calculating the net realizable value; The quantity of inventory is more than the quantity ordered by
the sales contract, and the net realizable value of the excess inventory is based on the general sales price of the finished
product or commodity; if the quantity of inventory held by the enterprise is less than the quantity ordered by the sales
contract, the actual Contract-related inventory uses the price specified in the sales contract as the basis for calculating
the net realizable value.
Notes to the financial statements Page 15
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2020
Notes to the financial statements
4. Inventory system
The Company uses perpetual inventory system.
5. Amortization of low-valued consumables and packing materials
(1) Low-valued consumables shall be amortized in full amount on issuance.
(2) Packing materials shall be amortized in full amount on issuance.
(12) Contract asset
1. Recognition methods and criteria of contract assets
When either party to a contract has performed, the Company shall present the contract in the statement of financial
position as a contract asset or a contract liability, depending on the relationship between the Company’s performance
and the customer’s payment. If the Company have the rights to receive consideration (the right is conditioned on
factors other than the passage of time) by transferring goods or services to a customer, the entity shall present the
contract as a contract asset. Contract assets and contract liabilities under the same contract are disclosed in net
amount. An entity shall present any unconditional rights to consideration (only the passage of time is required)
separately as a receivable.
2. Expected credit loss of contract assets
For the accounting policy of the expected credit loss of contract assets, please refer to Note (10) 6. Impairment
provision of the financial assets under “3. Significant accounting policies and accounting estimates”
(13) 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.
(14) 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
Notes to the financial statements Page 16
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2020
Notes to the financial statements
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
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.
Notes to the financial statements Page 17
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2020
Notes to the financial statements
The initial cost of a long-term equity investment obtained by debt restructuring shall be ascertained on the basis of fair
values.
3. Subsequent measurement and profit or loss recognition
(1) Cost method
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 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”.
Notes to the financial statements Page 18
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2020
Notes to the 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 financial instruments recognition and measurement standard. The difference between the fair value and the
carrying amount at the date of the loss of join control or significant influence shall be charged to profit or loss for the
current period. When the previously-held equity investment is accounted for under the equity method, any other
comprehensive income previously recognized shall be accounted for on the same basis as would have been required if
the investee had directly disposed of the related assets or liabilities for the current period upon discontinuation of the
equity method. Those owner's equity recognized other than the change of net profits or loss, other comprehensive
income, profit distribution of the invested entity shall be transferred into profit or loss of current period in full when the
Company cease to adopt the equity method.
When the Company can no longer exercise control over an investee due to partial disposal of equity investment or 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 financial instruments recognition and measurement standards, and the difference
Notes to the financial statements Page 19
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2020
Notes to the financial statements
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 investments
accounted for in accordance with financial instruments recognition and measurement standard after disposal, other
comprehensive income and other owner’s interests previously recognized shall be transferred to profit or loss in full.
(15) 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.
(16) 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.
Notes to the financial statements Page 20
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2020
Notes to the financial statements
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 Residual Value Rate Depreciation Rate
Category Depreciation method
Period (%) (%)
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 other
straight line method 5-18 years 3.00 5.39-19.40
equipment
3. Recognition criteria for fixed asset leased in by financial leasing and its valuation
Where a lease satisfies one or more of the following criteria, it shall be recognized as a financial leasing:
(1) The ownership of the leased asset is transferred to the lessee when the term of lease expires;
(2) The lessee has the option to buy the leased asset at a price which is expected to be far lower than the fair value of
the leased asset at the date when the option becomes exercisable;
(3) The lease term covers the major part of the use life of the leased asset; and
(4) The present value of the minimum lease payments on the lease beginning date amounts to substantially all of the
fair value of the leased asset on the lease beginning date.
On the lease beginning date, the Company shall record the lower one of the fair value of the leased asset and the
present value of the minimum lease payments on the lease beginning date as the initial book value, recognize the
amount of the minimum lease payments as the initial book value of long-term account payable, and treat the difference
between the recorded amount of the leased asset and the long-term account payable as unrecognized financing charges.
(17) Construction in progress
The cost of fixed assets transferred from a construction in progress includes all the necessary expenses incurred for
bringing the asset to the expected conditions for use. Construction in progress is transferred to fixed asset when it has
reached its working condition for its intended use. In case the final project accounts have not been completed or
approved, the asset shall be transferred to fixed assets at an estimated value by considering project budget, cost or
actual cost of the project and etc., and the deprecation of the said fixed assets shall be provided in accordance with the
Company’s accounting policy since it has reached its working condition for its intended use. After the project accounts
have been approved, the estimated values shall be adjusted based on the actual cost, but those provided deprecation
shall not be adjusted.
Notes to the financial statements Page 21
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2020
Notes to the financial statements
(18) 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.
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.
Notes to the financial statements Page 22
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2020
Notes to the financial statements
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
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.
(19) 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
Notes to the financial statements Page 23
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2020
Notes to the financial statements
value of the asset surrendered, unless there is strong evidence that the fair value of the asset obtained is more reliable.
For intangible assets obtained through non-monetary transactions which do not meet the above criteria, the initial
recognition is based on the book value of the assets surrendered and the relevant taxes payable. No gain or loss will be
recognized.
(2) Subsequent Measurement
The Company shall analyze and judge the beneficial period of intangible assets upon acquisition.
Intangible assets with finite beneficial period shall be amortized under the straight-line method during the period when
the intangible asset can bring economic benefits to the enterprise. If it is unable to estimate the beneficial period of the
intangible asset, it shall be regarded as an intangible asset with uncertain service life and shall not be amortized.
2. Estimated useful lives of intangible assets with limited useful lives
Item Estimated useful life Criteria
Land use right 50 years Land use right certificate
The Company shall review the useful lives and amortization methods of intangible assets with limited useful lives at
each year end.
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 before
commercial manufacturing and use.
(20) Impairment of long-term assets
Notes to the financial statements Page 24
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2020
Notes to the financial statements
For long-term assets such as long-term equity investments, Investment property under the cost model, fixed assets,
construction in progress, intangible assets with limited useful lives etc., the Company shall perform impairment tests at
the period end if there is clear indication 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 assets on the basis of the asset group to
which the asset belongs. The term "assets group” refers to a minimum combination of assets by which the cash flows
could be generated independently
The goodwill, intangible assets with uncertain useful life and intangible assets not meeting the expected condition for
use the 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.
Notes to the financial statements Page 25
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2020
Notes to the financial statements
(21) 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.
(22) Contract liability
When either party to a contract has performed, the Company shall present the contract in the statement of financial
position as a contract asset or a contract liability, depending on the relationship between the Company’s performance
and the customer’s payment. If a customer pays consideration, or the Company has a right to an amount of
consideration before the Company transfers a good or service to the customer, the Company shall present the contract
as a contract liability. Contract assets and contract liabilities under the same contract are disclosed in net amount.
(23) Employee benefits
1. Accounting treatment for short employee benefit
The Company shall recognise, 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.
2. 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.
Notes to the financial statements Page 26
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2020
Notes to the financial statements
In addition to basic pension fund, the company has also established an enterprise annuity payment system
(supplementary pension fund) / enterprise annuity plan in accordance with the relevant policies of the national
enterprise annuity system. The company pays a local social insurance institution's contribution / annuity plan according
to a certain percentage of the total wages of employees, and the corresponding expenditure is included in the current
profit and loss or related asset costs.
3. 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.
(24) 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.
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.
Notes to the financial statements Page 27
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2020
Notes to the financial statements
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.
(25) Revenue
The company shall recognise revenue when (or as) the company satisfies a performance obligation when (or as) the
customer obtains control of a promised good or service. Control of a promised good or service refers to the ability to
direct the use of, and obtain substantially all of the remaining benefits from it.
If the contract contains two or more performance obligations, the company shall allocate the transaction price to each
individual performance obligation based on the relative proportion of the stand-alone selling price of the goods or
services promised by each individual performance obligation on the date of the contract. The company measures
revenue based on the transaction price allocated to each individual performance obligation.
The transaction price is the amount of consideration to which the company expects to be entitled in exchange for
transferring promised goods or services to a customer, excluding amounts collected on behalf of third parties or
amounts expected to be returned to customers. The company shall consider the terms of the contract and its customary
business practices to determine the transaction price. When determining the transaction price, the company shall
consider the effects of all of the following: variable consideration, the existence of a significant financing component
in the contract, non-cash consideration, and consideration payable to a customer. The company determines the
transaction price that includes variable consideration at an amount that does not exceed the amount of accumulated
recognized revenue that is unlikely to be materially reversed when the relevant uncertainty is eliminated. If there is a
significant financing component in the contract, the company shall recognise revenue at an amount that reflects the
price that a customer would have paid for the promised goods or services if the customer had paid cash for those goods
or services when (or as) they transfer to the customer, and use the effective interest method to amortize the difference
between the transaction price and the contract consideration during the contract period. If the interval between the
Notes to the financial statements Page 28
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2020
Notes to the financial statements
transfer of control and the payment by the customer does not exceed one year, the financing component will not be
considered.
The company transfers control of a good or service over time and, therefore, satisfies a performance obligation and
recognises revenue over time, if one of the following criteria is met. Otherwise, the company satisfies the performance
obligation at a point in time.
(a) the customer simultaneously receives and consumes the benefits provided by the company’s performance as the
company performs;
(b) the company’s performance creates or enhances an asset that the customer controls as the asset is created or
enhanced; or
(c) the company’s performance does not create an asset with an alternative use to the company and the company has an
enforceable right to payment for performance completed to date.
The company shall recognise revenue over time by measuring the progress towards complete satisfaction of that
performance obligation, except where the performance progress cannot be reasonably determined. The company
considers the nature of the goods or services and adopts the output method or the input method to determine the
progress of performance. Where the performance progress cannot be reasonable determined, but the company expects
to recover the costs incurred in satisfying the performance obligation, the company shall recognise revenue only to the
extent of the costs incurred until such time that it can reasonably measure the outcome of the performance obligation.
For performance obligations satisfied at a certain point in time, the company shall recognises revenue at the point when
the customer obtains control of the relevant goods or services. To determine the point in time at which a customer
obtains control of a promised goods or services, the company shall consider requirements as follows:
(a) The company has a present right to payment for the promised goods or services and the customer is presently
obliged to pay for that;
(b) The company has transferred the legal title of the goods to the customer, that is, the customer has the legal title to
the goods;
(c) The company has transferred physical possession of the goods to the customer, that is, the customer has taken
possession of the goods;
(d) The company has transferred the significant risks and rewards of ownership of the goods to the customer, that is,
the customer has the significant risks and rewards of ownership of the goods;
(e) The customer has accepted the promised goods or services.
(26) Contract costs
Contract costs include costs to fulfill a contract and incremental costs of obtaining a contract.
Notes to the financial statements Page 29
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2020
Notes to the financial statements
If the costs incurred in fulfilling a contract with a customer are not within the scope of another Standard, for example,
Inventories, Property, Plant and Equipment or Intangible Assets, the company shall recognise an asset from the costs
incurred to fulfil a contract only if those costs meet all of the following criteria:
(a) the costs relate directly to a contract or to an expected contract;
(b) the costs generate or enhance resources of the Company that will be used in satisfying performance obligations in
the future; and
(c) the costs are expected to be recovered.
The company shall recognise as an asset the incremental costs of obtaining a contract with a customer if the company
expects to recover those costs.
An asset recognised in accordance with contract costs shall be amortised in consistent with the transfer to the customer
of the goods or services to which the asset relates. The company may recognise the incremental costs of obtaining a
contract as an expense when incurred if the amortisation period of the asset is one year or less.
The company shall recognise an impairment loss in profit or loss to the extent that the carrying amount of an asset
related to contract assets exceeds:
(a) the remaining amount of consideration that the company expects to receive in exchange for the goods or services to
which the asset relates; less
(b) the costs that relate directly to providing those goods or services and that have not been recognised as expenses.
The company shall recognise in profit or loss a reversal of some or all of an impairment loss previously recognised
when the impairment conditions no longer exist or have improved. The increased carrying amount of the asset shall not
exceed the carrying amount that if no impairment loss had been recognised previously.
(27) Government Subsidies
1. Types
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.
Government subsidies related to assets are government subsidies whose primary condition is that an entity qualifying
for them should purchase, construct or otherwise acquire long-term assets. The government subsidies related to
incomes refers to government subsidies other than those related to assets.
Notes to the financial statements Page 30
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2020
Notes to the financial statements
The standard of the Company recognizing the government subsidies related to assets is: an entity qualifying for them
should purchase, construct or otherwise acquire long-term assets.
The standard of the Company recognizing the government subsidies related to income is: In addition to government
subsidies related to assets, government subsidies that have been clearly targeted for subsidies.
2. 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.
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.
3. 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 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.
The policy discount loans obtained by the company are divided into the following two situations and are separately
accounted for:
Notes to the financial statements Page 31
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2020
Notes to the financial statements
(a) The government allocates discounted funds to the loan bank, and the loan bank provides loans to the company at a
policy preferential interest rate. The preferential interest rate is used to calculate the relevant borrowing costs.
(b) If the government directly allocates the discounted funds to the company, the company will offset the relevant
borrowing costs with the corresponding discounts, directly accounted for the current profit or loss or recognized as
deferred income.
(28) 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 be obtained and which can be deducted from the
deductible temporary difference. As for any deductible loss or tax deduction that can be carried forward to the next
year, the corresponding deferred income tax assets shall be determined to the extent that the amount of future taxable
income to be offset by the deductible loss or tax deduction to be likely obtained.
All taxable temporary differences shall be recognized as deferred tax liabilities with certain limited exceptions.
Exceptions when deferred tax assets and deferred tax liabilities are not recognized include: initial recognition of
goodwill; initial recognition of an asset or liability in a transaction or event that is not a business combination and at
the time of the transaction, affects neither accounting profit nor taxable profit (tax loss).
An entity shall offset deferred tax assets and deferred tax liabilities if, and only if: (a) the entity has a legally
enforceable right to set off current tax assets against current tax liabilities; and (b) the deferred tax assets and the
deferred tax liabilities relate to income taxes levied by the same taxation authority on either:(i) the same taxable entity;
or (ii) different taxable entities which intend either to settle current tax liabilities and assets on a net basis, or to realize
the assets and settle the liabilities simultaneously, in each future period in which significant amounts of deferred tax
liabilities or assets are expected to be settled or recovered.
(29) 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
Notes to the financial statements Page 32
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2020
Notes to the financial statements
If the lessor has shouldered any expense related to the lease which shall have been borne by the Company, the
Company shall deduct these expenses from the total rental expense and the remaining rental expense shall be allocated
to each period during the lease term
(2) The rents collected from operating leases shall be recorded in the profits and losses of the current period by using
the straight-line method over each period of the whole lease term in which free lease period is included. The initial
direct costs paid by the Company shall be recorded into the profits and losses of the 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.
(30) 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:
The component stands for an independent main business or a major business area;
Notes to the financial statements Page 33
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2020
Notes to the financial statements
The component is a part of disposal plan of an independent main business or a major business area;
The component is a subsidiary which is acquired only for sale again.
(31) Major accounting estimates and judgments
When preparing financial statements, the Company's management needs to use estimates and assumptions, which will
affect the application of accounting policies and the amount of assets, liabilities, income and expenses. Actual
conditions may differ from these estimates. The management of the company continuously evaluates the judgment of
key assumptions and uncertainties involved in the estimation, and the impact of changes in accounting estimates will
be recognized in the current and future periods.
The main uncertainties in the estimated amount are as follows:
(1) Measurement of expected credit losses
The company calculates the expected credit loss through the default risk exposure and the expected credit loss rate, and
determines the expected credit loss rate based on the default probability and the default loss rate. When determining the
expected credit loss rate, the company uses internal historical credit loss experience and other data, and adjusts the
historical data in combination with current conditions and forward-looking information. When considering
forward-looking information, the indicators used by the Company include the risk of economic downturn, the expected
increase in unemployment rate, changes in the external market environment, technological environment and customer
conditions. The Company regularly monitors and reviews assumptions related to the calculation of expected credit
losses.
(2) Inventory Impairment
As mentioned in note (11) Inventory under “3 Significant accounting policies and accounting estimates”, the Company
regularly estimates the net realizable value of the inventory, and recognizes the difference in inventory cost higher than
the net realizable value. When estimating the net realizable value of inventory, the Company considers the purpose of
holding the inventory and uses the available information as the basis for estimation, including the market price of the
inventory and the Company's past operating costs. The actual selling price, completion cost, sales expenses and taxes
of the inventory may change according to changes in market sales conditions, production technology, or the actual use
of the inventory. Therefore, the amount of inventory depreciation reserve may change according to the above reasons.
Adjustments to the inventory impairment will affect the current profit and loss.
(3) Impairment of other assets except inventory and financial assets
Notes to the financial statements Page 34
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2020
Notes to the financial statements
As mentioned in note (20) Long-term Asset Impairment under “3 Significant accounting policies and accounting
estimates”, the company performs an impairment assessment on assets other than inventory and financial assets on the
balance sheet date to determine whether the recoverable amount of the asset has fallen to a lower level than its book
value. If the situation shows that the book value of the long-term assets may not be fully recovered, the relevant assets
will be deemed to be impaired and the impairment loss will be recognized accordingly.
The recoverable amount is the higher of the net value of the fair value of the asset (or asset group) minus the disposal
expenses and the present value of the asset (or asset group) 's expected future cash flow. Because the Company can not
reliably obtain the public market price of assets (or asset groups), and can not reliably and accurately estimate the fair
value of assets. Therefore, the Company regards the present value of the expected future cash flow as the recoverable
amount. When estimating the present value of future cash flows, it is necessary to make a significant judgment on the
output, selling price, related operating costs of the products produced by the asset (or asset group), and the discount
rate used in calculating the present value. The Company will use all available relevant information when estimating the
recoverable amount, including the prediction of output, selling price and related operating costs based on reasonable
and supportable assumptions.
(4) Depreciation and amortization of assets such as fixed assets and intangible assets
As described in note (16) Fixed Assets and note (19) Intangible Assets under “3 Significant accounting policies and
accounting estimates”, the company shall accrue depreciation for the fixed assets and amortization for intangible assets
within the useful life after considering their residual value. The company regularly reviews the useful life of related
assets to determine the amount of depreciation and amortization expenses to be included in each reporting period. The
useful life of assets is determined by the company based on past experience with similar assets and in combination
with anticipated technological changes. If the previous estimates change significantly, the depreciation and
amortization expenses will be adjusted in the future.
(5) Deferred tax assets
When it is estimated that sufficient taxable income can be obtained in the future to use the unrecovered tax losses and
deductible temporary differences, the relevant deferred tax assets are calculated and confirmed on the basis of the
applicable income tax rate during the period when the asset is expected to be recovered and the amount of taxable
income is limited to deductible tax losses and deductible temporary differences likely to be obtained by the Company.
The Company needs to use judgment to estimate the time and amount of future taxable income, and make reasonable
estimates and judgments on the future applicable income tax rate according to the current tax policy and other related
policies to determine the deferred tax assets that should be recognized. If the time and amount of profits actually
Notes to the financial statements Page 35
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2020
Notes to the financial statements
generated in the future period or the actual applicable income tax rate are different from the management's estimate, the
difference will have an impact on the amount of deferred tax assets.
(32) Change of significant accounting policy and accounting estimate
1. Change of major accounting policy during the current reporting period
Implementation of the "Accounting Standards for Business Enterprises No. 14 - Revenue" (revised in 2017)
(hereinafter referred to as the "New Revenue Standards")
The Ministry of Finance revised the "Accounting Standards for Business Enterprises No. 14 - Revenue" in 2017.
The revised standard stipulates that the initial implementation of the standard should adjust the amount of retained
earnings and other related items in the financial statements at the beginning of the year based on the cumulative
impact, and no adjustments should be made to comparable period information.
The company implements the new revenue standard from January 1, 2020. According to the standard, the company
only adjusts the retained earnings at the beginning of 2020 and the amount of other related items in the financial
statements for the cumulative impact of contracts that have not been completed on the date of first implementation,
and the comparative financial statements do not adjust. The major impact of the implementation of the regulation are
as follows:
January 1, 2020
Change of accounting policy content
Affected items Consolidated Financial Parent company financial
and reason
statement statement
Reclassify advance from customers to Advance from customers -4,429,821,526.79 -5,597,707,687.22
contract liabilities. Contract liabilities 4,429,821,526.79 5,597,707,687.22
Compared with the previous revenue standards, the impact of the implementation of the new revenue standards on
the relevant items for the period from January to June in 2020 is as follows:
June 30, 2020
Affected items
Consolidated Financial statement Parent company financial statement
Contract liabilities 4,658,022,515.99 5,736,618,018.47
Advance from customers -4,658,022,515.99 -5,736,618,018.47
There is no impact to the items in the comprehensive income statement.
2. Change of accounting estimation
(1) The company’s principle for determining the applicable point of time for changes in accounting estimates:
According to Article 19 of the "Accounting Standards for Business Enterprises No. 4 - Fixed Assets", the enterprise
Notes to the financial statements Page 36
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2020
Notes to the financial statements
should review the useful life, estimated net residual value and depreciation method of fixed assets at least at the end
of each year. If the estimated useful life is different from the original estimate, the useful life of the fixed asset shall
be adjusted.
(2) Major change of accounting estimate during the current reporting period
Change of accounting estimation Date of
Approval procedure Affected items and amount
content and reason application
Content: The company adjusted the
useful life of some of the fixed assets
since January 1, 2020.
Reason: At the end of 2019, the
company evaluated the actual
condition and depreciation period of
fixed assets, and believed that the On January 31, 2020, the eighth
company’s production equipment meeting of the company's
Accumulative depreciation: RMB
had a relatively high level of eighth board of directors
-206,452,050.12;
equipment and technical content, and reviewed and approved the January 1, 2020
Operating cost : RMB
maintained good conditions. The "Proposal on Adjusting the
-206,452,050.12.
company’s cumulative investment in Useful Life of Certain Fixed
equipment maintenance costs from Assets"
2010 to 2019 was RMB 11.959
billion. To make the depreciation
period of fixed assets closer to the
actual service life, it is necessary to
adjust the useful life of some fixed
assets.
3. Adjustments of the beginning balance due to the first implementation of new revenue standards:
Consolidated statement of financial position:
Adjustment
Ending balance of Beginning balance
Items
the previous year of the current year Reclassification Remeasurement Total
Notes to the financial statements Page 37
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2020
Notes to the financial statements
Adjustment
Ending balance of Beginning balance
Items
the previous year of the current year Reclassification Remeasurement Total
Advance from
4,429,821,526.79 -4,429,821,526.79 -4,429,821,526.79
customers
Contract
4,429,821,526.79 4,429,821,526.79 4,429,821,526.79
liabilities
Statement of financial position of the parent company
Ending balance of Beginning balance Adjustment
Items
the previous year of the current year Reclassification Remeasurement Total
Advance from
5,597,707,687.22 -5,597,707,687.22 -5,597,707,687.22
customers
Contract
5,597,707,687.22 5,597,707,687.22 5,597,707,687.22
liabilities
4. Taxes
(1) Major type of taxes and corresponding tax rates
Tax Taxation Method Tax Rate (%)
The balance of output VAT calculated based on
product sales and taxable services revenue in
Value-added Tax (VAT) 6, 9, 13
accordance with the tax laws after subtracting the
deductible input VAT of the period
City maintenance and construction tax Based on VAT and business tax actually paid 7, 5
Educational surcharges Based on VAT and business tax actually paid 3, 2
Enterprise income tax Based on taxable profit 25
5. Notes to the consolidated financial statements
(1) Cash at bank and on hand
Items 30 June 2020 31 December 2019
Cash on hand 7,110.40 5,588.98
Cash at bank 11,417,585,553.12 13,441,409,399.60
Notes to the financial statements Page 38
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2020
Notes to the financial statements
Items 30 June 2020 31 December 2019
Other monetary funds 5,370,886,642.41 4,974,429,409.19
Total 16,788,479,305.93 18,415,844,397.77
Total amount deposited abroad
The details of restricted monetary funds resulted from guarantee or pledge or freeze accounts are as follows:
Items 30 June 2020 31 December 2019
Margin for bank acceptance bill 4,947,574,509.41 4,803,950,250.12
Margin for letter of credit 419,360,000.00 166,527,026.07
Loan margin 3,330,000.00 3,330,000.00
Others 622,133.00 622,133.00
Total 5,370,886,642.41 4,974,429,409.19
(2) Accounts receivable
1. Accounts receivable disclosed by aging
Items 30 June 2020 31 December 2019
Within 1 year (inclusive) 186,365,796.17 187,728,755.63
1-2 years (inclusive) 32,428,477.61 31,659,160.02
2-3 years (inclusive) 24,358,369.27 24,710,744.49
Over 3 years 174,707,324.46 177,928,572.30
Total 417,859,967.51 422,027,232.44
Less: Provision for bad debts 183,064,080.16 186,330,966.78
Total 234,795,887.35 235,696,265.66
2. Accounts receivable disclosed by category
30 June 2020
Gross carrying amount Provision for bad debts
Items
Percentage Bad debts Book value
Amount Amount
(%) ratio (%)
Tested for impairment
47,762,337.18 11.43 47,762,337.18 100.00
individually
Tested for impairment by
370,097,630.33 88.57 135,301,742.98 36.56 234,795,887.35
portfolio
Notes to the financial statements Page 39
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2020
Notes to the financial statements
30 June 2020
Gross carrying amount Provision for bad debts
Items
Percentage Bad debts Book value
Amount Amount
(%) ratio (%)
Include:
Portfolio 1: Aging portfolio 370,097,630.33 88.57 135,301,742.98 36.56 234,795,887.35
Total 417,859,967.51 100.00 183,064,080.16 234,795,887.35
31 December 2019
Gross carrying amount Provision for bad debts
Items
Percentage Bad debts Book value
Amount Amount
(%) ratio (%)
Individually significant and
tested for impairment 47,762,337.18 11.32 47,762,337.18 100.00
individually
Accounts receivable tested
374,264,895.26 88.68 138,568,629.60 37.01 235,696,265.66
for impairment by portfolio
Other insignificant items but
tested for impairment
individually
Total 422,027,232.44 100.00 186,330,966.78 235,696,265.66
Accounts receivables tested for impairment individually
30 June 2020
Company Gross carrying Provision for bad Bad debts ratio
Reason
amount debts (%)
Benxi Nanfen Xinhe
Metallurgical Furnace Material 47,762,337.18 47,762,337.18 100.00 Halt operation
Co., Ltd
Total 47,762,337.18 47,762,337.18
Accounts receivable tested for impairment by aging portfolio:
Items 30 June 2020
Notes to the financial statements Page 40
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2020
Notes to the financial statements
Gross carrying amount Provision for bad debts Bad debts ratio (%)
Within 1 year (inclusive) 186,365,796.17 1,863,657.96 1.00
1-2 years (inclusive) 32,428,477.61 1,621,423.88 5.00
2-3 years (inclusive) 24,358,369.27 4,871,673.85 20.00
Over 3 years 126,944,987.28 126,944,987.28 100.00
Total 370,097,630.33 135,301,742.98
3. Information of provision, reversal or recovery of bad debts of current period.
The reversal of bad debts of current period is RMB 3,266,886.60.
4. No accounts receivable has been written off during the current period.
5. Top five debtors at the end of period
30 June 2020
Company Percentage of total Accounts Provision for
Gross carrying amount
receivable (%) bad debts
The first 51,186,799.05 12.25 589,234.48
The second 47,762,337.18 11.43 47,762,337.18
The third 14,246,791.47 3.41
The fourth 13,192,766.29 3.16
The fifth 11,524,466.74 2.76 130,131.74
Total 137,913,160.74 33.01 48,481,703.40
6. Accounts receivable derecognized due to the transfer of financial assets
None
7. The amount of assets and liabilities formed by transferring accounts receivable and continuing to be
involved
None
(3) Accounts receivable financing
1. Accounts receivable financing by category
Item 30 June 2020 31 December 2019
Notes Receivable 4,072,660,868.85 2,117,763,147.67
Including: Bank acceptance bill 4,059,350,868.85 2,108,970,139.40
Notes to the financial statements Page 41
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2020
Notes to the financial statements
Item 30 June 2020 31 December 2019
Commercial acceptance bill 13,310,000.00 8,793,008.27
Accounts receivable 309,461,081.12 311,779,314.21
Total 4,382,121,949.97 2,429,542,461.88
Note: Accounts receivable financing reflects notes receivable and accounts receivable that are measured at fair
value through other comprehensive income.
2. Provision for impairment of accounts receivable financing
None
3. The pledged acceptance bill at the end of the period
Items 30 June 2020
Bank acceptance bill 759,753,834.45
Commercial acceptance bill
Total 759,753,834.45
4. The amount of notes receivable endorsed over but not yet matured at the end of the period
Items Derecognized ending balance Unrecognized ending balance
Bank acceptance bill 4,879,438,530.74
Commercial acceptance bill
Total 4,879,438,530.74
5. No notes receivable has been transferred into accounts receivable due to inability of drawer to meet
acceptance bill at the end of the period
(4) Prepayments
1. Prepayments disclosed by aging
30 June 2020 31 December 2019
Aging
Amount Percentage (%) Amount Percentage (%)
Within 1 year (inclusive) 1,277,487,430.52 99.52 1,284,678,069.97 99.51
1-2 years (inclusive) 6,011,981.75 0.48 6,279,487.94 0.49
2-3 years (inclusive) 53,900.20 53,900.20
Over 3 years 36,000.00 36,000.00
Notes to the financial statements Page 42
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2020
Notes to the financial statements
30 June 2020 31 December 2019
Aging
Amount Percentage (%) Amount Percentage (%)
Total 1,283,589,312.47 100.00 1,291,047,458.11 100.00
Notes: As of June 30, 2020, there were no outstanding prepayments over 1 year.
2. Top five prepaid companies at the end of the period
Name of the company Amount Percentage (%)
The First 813,856,225.94 63.40
The Second 75,732,564.05 5.90
The Third 35,489,495.22 2.76
The Fourth 27,512,085.89 2.14
The Fifth 22,368,060.00 1.74
Total 974,958,431.09 75.96
(5) Other receivables
Items 30 June 2020 31 December 2019
Interest receivables 32,395,784.72 20,504,422.47
Dividend receivables
Other receivables 126,011,346.99 152,302,614.30
Total 158,407,131.71 172,807,036.77
1．Interest receivable
(1) Interest receivable disclosed by category
Items 30 June 2020 31 December 2019
Deposit interest 32,395,784.72 20,504,422.47
Subtotal 32,395,784.72 20,504,422.47
Less: provision for bad debts
Total 32,395,784.72 20,504,422.47
(2) The company has no significant overdue interest and provision for bad debts.
2．Other receivables
(1) Other receivables disclosed by aging
Notes to the financial statements Page 43
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2020
Notes to the financial statements
Items 30 June 2020 31 December 2019
Within 1 year (inclusive) 108,817,588.26 135,162,016.85
1-2 years (inclusive) 15,087,613.32 15,306,496.22
2-3 years (inclusive) 3,530,561.08 3,479,413.70
Over 3 years 65,222,052.19 65,222,052.19
Total 192,657,814.85 219,169,978.96
Less: Provision for bad debts 66,646,467.86 66,867,364.66
Total 126,011,346.99 152,302,614.30
(2) Information of provision for bad debts
Stage one Stage two Stage three
lifetime expected credit lifetime expected credit
Provision for bad 12-month
losses losses Total
debts expected credit
(credit impairment has not (credit impairment has
losses
occurred) already occurred)
Beginning balance 9,494,109.69 57,373,254.97 66,867,364.66
Provision, transfer
in, transfer back,
-220,896.80 -220,896.80
transfer out during
the current period
Write-back during
the current period
Write-off during the
current period
Other changes
Ending balance 9,273,212.89 57,373,254.97 66,646,467.86
Changes in the gross carrying amount of other receivables are as follows:
Stage one Stage two Stage three
lifetime expected lifetime expected credit
Provision for bad
12-month expected credit losses losses Total
debts
credit losses (credit impairment has (credit impairment has
not occurred) already occurred)
Beginning balance 137,511,976.11 24,284,747.88 57,373,254.97 219,169,978.96
Notes to the financial statements Page 44
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2020
Notes to the financial statements
Stage one Stage two Stage three
lifetime expected lifetime expected credit
Provision for bad
12-month expected credit losses losses Total
debts
credit losses (credit impairment has (credit impairment has
not occurred) already occurred)
Increase
Decrease 26,291,267.31 220,896.80 26,512,164.11
Other changes
Ending balance 111,220,708.80 24,063,851.08 57,373,254.97 192,657,814.85
(3) Other receivables disclosed by nature
Nature 30 June 2020 31 December 2019
Accounts 183,332,767.17 209,700,618.22
Others 9,325,047.68 9,469,360.74
Total 192,657,814.85 219,169,978.96
(4) Top five debtors at the end of the period
Percentage of total other Provision for bad
Company Nature or content Amount Aging
receivables (%) debts
The First Accounts 9,648,111.00 within 1 year 5.01
The Second Accounts 9,505,576.53 within 1 year 4.93
The Third Accounts 6,804,946.27 2-3 years 3.53
The Fourth Accounts 3,756,448.28 1-2 years 1.95 2,000.00
within 1 year to
The Fifth Accounts 2,661,194.04 1.38 2,465,166.01
over 3 years
Total 32,376,276.12 16.81 2,467,166.01
(5) There is no other receivables relates to government subsidies at the end of the reporting period.
(6) There is no other receivables derecognized due to the transfer of financial assets at the end of the reporting period.
(7) There is no transfer of other receivables and continued involvement in the amount of assets and liabilities formed at
the end of the reporting period.
(6) Inventories
Notes to the financial statements Page 45
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2020
Notes to the financial statements
1. Inventories disclosed by category
30 June 2020 31 December 2019
Items Gross carrying Gross carrying
Impairment Book value Impairment Book value
amount amount
Raw material
and main 3,486,744,568.70 26,986,533.69 3,459,758,035.01 3,737,655,945.87 26,986,533.69 3,710,669,412.18
material
Work in
process and
self-made 1,455,369,031.61 32,278,622.48 1,423,090,409.13 1,302,249,713.48 25,995,508.16 1,276,254,205.32
semi-finished
product
Finished
4,729,490,890.24 26,299,958.86 4,703,190,931.38 2,730,735,542.67 17,261,474.56 2,713,474,068.11
products
Total 9,671,604,490.55 85,565,115.03 9,586,039,375.52 7,770,641,202.02 70,243,516.41 7,700,397,685.61
2. Impairment of inventory
Increase Decrease
Category 31 December 2019 Write-back or 30 June 2020
Provision Others Others
write-off
Raw material and main
26,986,533.69 26,986,533.69
material
Work in process and
self-made semi-finished 25,995,508.16 32,278,622.48 25,995,508.16 32,278,622.48
product
Finished products 17,261,474.56 26,299,958.86 17,261,474.56 26,299,958.86
Total 70,243,516.41 58,578,581.34 43,256,982.72 85,565,115.03
(7) Other current assets
Items 30 June 2020 31 December 2019
Prepaid enterprise income tax 182,484,352.23 182,484,616.27
VAT input tax 101,722,696.39 130,420,207.82
Total 284,207,048.62 312,904,824.09
Notes to the financial statements Page 46
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2020
Notes to the financial statements
(8) Long-term equity investment
Increase/decrease
31 Income or loss on Other Declaration of
Other 30 June Total
Investees December Add Reduce investment Comprehensive Cash
Equity Others 2020 Impairment
2019 Investment Investment recognized under Income Dividends or Provision
Changes
the equity method Adjustment Profit
1．Joint Venture
Subtotal
2．Associated Enterprise
Zhejiang Bengang Jingrui
2,642,998.70 29,304.00 2,672,302.70
Steel Processing Co., Ltd..
Subtotal 2,642,998.70 29,304.00 2,672,302.70
Total 2,642,998.70 29,304.00 2,672,302.70
Notes to the financial statements Page 47
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2020
Notes to the financial statements
(9) Other equity instrument investment
Items 30 June 2020 31 December 2019
Suzhou Bengang Industrial Co., Ltd. 3,888,980.00 3,888,980.00
Sinosteel Shanghai Steel Processing Co., Ltd.
Northeast Special Steel Group Co., Ltd. 1,037,735,849.00 1,037,735,849.00
Guangzhou Benpu Auto Board Sales Co., Ltd. 200,000.00 200,000.00
Wuhan Bengang Yuanhong Trading Co., Ltd 200,000.00
Total 1,042,024,829.00 1,041,824,829.00
Notes:
The item "Other equity instrument investment" reflects the ending book value of the non-trading equity instrument
investment designated by the company as measured at fair value at fair value through other comprehensive income
on the balance sheet date.
The company holds 15% equity in Sinosteel Shanghai Steel Processing Co., Ltd.
The 10% equity of Northeast Special Steel Group Co., Ltd. held by the company has been pledged to Bank of
Dalian Co., Ltd., Shenyang branch.
(10) Fixed assets
1. Fixed assets and Disposal of fixed assets
Items 30 June 2020 31 December 2019
Fixed assets 24,952,427,383.86 26,123,375,492.40
Disposal of fixed assets
Total 24,952,427,383.86 26,123,375,492.40
2. Details of fixed assets
Transportation
Items Buildings Machinery equipment and Total
others
1．Gross carrying amount
(1) 31 December 2019 12,321,783,218.79 47,625,624,131.28 908,284,781.31 60,855,692,131.38
(2) Increase in current period 8,162,112.36 22,887,140.10 19,679,682.35 50,728,934.81
Including: Purchase
Transferred
8,162,112.36 22,887,140.10 19,679,682.35 50,728,934.81
from construction in progress
Notes to the financial statements Page 48
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2020
Notes to the financial statements
Transportation
Items Buildings Machinery equipment and Total
others
Merging
Others
(3) Decrease in current period 6,057,064.23 70,745,410.85 10,856,244.37 87,658,719.45
Including: Disposal 6,057,064.23 70,745,410.85 10,856,244.37 87,658,719.45
Others
(4) 30 June 2020 12,323,888,266.92 47,577,765,860.53 917,108,219.29 60,818,762,346.74
2．Total accumulated
depreciation
(1) 31 December 2019 5,843,160,062.67 28,243,587,548.42 604,346,279.82 34,691,093,890.91
(2) Increase in current period 148,749,130.68 959,941,877.91 92,572,359.88 1,201,263,368.47
Including: Provision 148,749,130.68 959,941,877.91 92,572,359.88 1,201,263,368.47
Others
(3) Decrease in current period 2,826,190.62 51,865,091.34 12,553,762.61 67,245,044.57
Including: Disposal 2,826,190.62 51,865,091.34 12,553,762.61 67,245,044.57
Others
(4) 30 June 2020 5,989,083,002.73 29,151,664,334.99 684,364,877.09 35,825,112,214.81
3．Total impairment
(1) 31 December 2019 38,596,028.99 2,626,719.08 41,222,748.07
(2) Increase in current period
Including: Provision
Others
(3) Decrease in current period
Including: Disposal
Others
(4) 30 June 2020 38,596,028.99 2,626,719.08 41,222,748.07
4．Total net book value of
Fixed assets
(1) 30 June 2020 6,296,209,235.20 18,423,474,806.46 232,743,342.20 24,952,427,383.86
(2) 31 December 2019 6,440,027,127.13 19,379,409,863.78 303,938,501.49 26,123,375,492.40
3. Fixed assets idled temporarily
Notes to the financial statements Page 49
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2020
Notes to the financial statements
Items Gross carrying amount Accumulated depreciation Impairment Book value
Buildings 93,833,538.80 58,818,849.47 35,014,689.33
Machinery 1,224,688.89 1,149,022.46 75,666.43
Transportation
1,042,125.89 1,042,125.89
equipment and others
Total 96,100,353.58 61,009,997.82 35,090,355.76
4. Fixed assets leased in through financial leasing
As of the end of the current reporting period, the original value of the fixed assets leased in through financial
leasing was RMB 1,050,748,776.34, all of which were leased from the related party Liaoning Hengyi Financial
Leasing Co., Ltd. For details, please refer to note (5) 2. Lease under note 10.
5. Fixed assets leased out by operating lease
Items Book value
Buildings 8,479,821.37
Machinery
Total 8,479,821.37
6. Fixed assets without property rights certificates at the end of the period
Items Book value Reason
Buildings 1,070,014,263.61 To be handled
(11) Construction in progress
1. Construction in progress and Construction materials
Items 30 June 2020 31 December 2019
Construction in progress 2,560,710,384.30 1,820,264,689.19
Project materials 8,598,323.97 13,588,883.39
Total 2,569,308,708.27 1,833,853,572.58
Notes to the financial statements Page 50
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2020
Notes to the financial statements
2. Details of construction in progress
30 June 2020 31 December 2019
Items
Gross carrying amount Total impairment Book value Gross carrying amount Total impairment Book value
Energy-saving renovation project of No. 5 blast furnace in
756,972,673.01 756,972,673.01 491,069,345.30 491,069,345.30
ironworks
Special steel mill renovation project 135,994,865.49 135,994,865.49 126,479,522.35 126,479,522.35
1# converter energy saving and environmental protection
132,515,955.85 132,515,955.85 148,803,402.52 148,803,402.52
transformation
Steelmaking Plant No. 8 Casting Machine Project 193,625,008.01 193,625,008.01 100,460,943.24 100,460,943.24
Reconstruction project of three power plant workshop 3,861,154.59 3,861,154.59
Transformation of No. 2 Casting Machine in Steelmaking
82,682,564.04 82,682,564.04 81,419,913.88 81,419,913.88
Plant
CCPP power generation project 115,133,501.01 115,133,501.01 85,320,752.59 85,320,752.59
Environmental protection renovation project of No. 4-6
95,177,941.15 95,177,941.15 69,541,903.74 69,541,903.74
converter
Special Steel Electric Furnace Upgrade Project 88,959,809.91 88,959,809.91 62,311,284.01 62,311,284.01
360 square meter sintering machine 73,248,631.59 73,248,631.59 60,930,506.79 60,930,506.79
360 square meter sintering machine waste heat utilization 56,547,049.50 56,547,049.50 55,089,094.50 55,089,094.50
No. 7 blast furnace dry dust removal and energy-saving
70,288,456.71 70,288,456.71 40,993,916.95 40,993,916.95
transformation of TRT power generation
1700 Hot Rolling Improvement 88,288,386.41 88,288,386.41 39,806,201.09 39,806,201.09
Coking plant gas deamination and sulfur ammonia
48,543.69 48,543.69
maintenance project
5#-7# Oxygen Generator Nitrogen Increasing and Energy
38,600,796.92 38,600,796.92 34,339,392.96 34,339,392.96
Saving Renovation
6#Blast furnace environmental protection overhaul project 65,177,829.19 65,177,829.19 30,937,257.41 30,937,257.41
Two sets of dust collectors for the second sintered finished
1,255,783.76 1,255,783.76 29,954,354.78 29,954,354.78
product in ironworks
Power plant 4-5# coke oven dry quenching waste heat steam
27,358.49 27,358.49
utilization project
Plate transfer to Liaoning Coal Chemical Coke Oven Gas
21,840,791.70 21,840,791.70 21,840,791.70 21,840,791.70
Project
Overall improvement of Benxi Steel's manufacturing
22,104,039.00 22,104,039.00 20,685,421.72 20,685,421.72
management
8#9# Coke oven wastewater advanced treatment 20,335,268.74 20,335,268.74 20,335,268.74 20,335,268.74
Others 498,023,975.54 498,023,975.54 299,945,414.92 299,945,414.92
Total 2,560,710,384.30 2,560,710,384.30 1,820,264,689.19 1,820,264,689.19
Notes to the financial statements Page 51
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2020
Notes to the financial statements
3. Changes in important construction projects in the current period
Project
Transferred Other cumulative Including： Interest
Accumulated
to fixed asset decrease investment Interest capitalizatio
Increase during Project amount of Sources
Items Budget 31 December 2019 during during 30 June 2020 accounted for capitalization n rate in
current period progress interest of
current current the proportion amount in current
(%) capitalization funds
period period of the budget current period period (%)
(%)
Energy-saving
renovation Self-rais
project of No. 5 1,500,000,000.00 491,069,345.30 265,985,896.52 82,568.81 756,972,673.01 50% 50% 22,681,832.49 4,299,372.31 4.35 ed&
blast furnace in Other
ironworks
Special steel Self-rais
mill renovation 596,070,000.00 126,479,522.35 9,515,343.14 135,994,865.49 24% 25% 2,780,476.54 798,549.83 4.35 ed&
project Other
1# converter
energy saving
Self-rais
and
218,000,000.00 148,803,402.52 -16,287,446.67 132,515,955.85 61% 70% 1,244,218.10 295,400.00 4.35 ed&
environmental Other
protection
transformation
Steelmaking
Self-rais
Plant No. 8
643,410,000.00 100,460,943.24 93,164,064.77 193,625,008.01 30% 40% ed&
Casting Other
Machine Project
Cold rolled
high-strength Self-rais
6,134,980,000.00 34,614,140.91 2,037,588.85 32,576,552.06 96% 100% 857,867,059.71 ed&
steel renovation Other
project
Reconstruction
Self-rais
project of three
593,990,000.00 3,861,154.59 3,861,154.59 99% 98% 34,827,795.34 ed&
power plant Other
workshop
Transformation
Self-rais
of No. 2 Casting
100,900,000.00 81,419,913.88 1,262,650.16 82,682,564.04 82% 85% 129,125.71 ed&
Machine in Other
Steelmaking
Notes to the financial statements Page 52
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2020
Notes to the financial statements
Project
Transferred Other cumulative Including： Interest
Accumulated
to fixed asset decrease investment Interest capitalizatio
Increase during Project amount of Sources
Items Budget 31 December 2019 during during 30 June 2020 accounted for capitalization n rate in
current period progress interest of
current current the proportion amount in current
(%) capitalization funds
period period of the budget current period period (%)
(%)
Plant
CCPP power Self-rais
generation 1,060,000,000.00 85,320,752.59 29,812,748.42 115,133,501.01 11% 10% 2,587,646.72 60,479.95 4.35 ed&
project Other
Environmental
protection Self-rais
renovation 270,000,000.00 69,541,903.74 25,636,037.41 95,177,941.15 35% 40% 1,800,233.51 548,620.48 4.35 ed&
project of No. Other
4-6 converter
Special Steel Self-rais
Electric Furnace 1,617,610,000.00 62,311,284.01 26,648,525.90 88,959,809.91 5% 10% ed&
Upgrade Project Other
360 square Self-rais
meter sintering 1,284,032,000.00 60,930,506.79 12,318,124.80 73,248,631.59 98% 90% ed&
machine Other
Total 14,018,992,000.00 1,226,337,574.42 486,531,239.95 2,120,157.66 1,710,748,656.71 923,918,388.12 6,002,422.57
Notes to the financial statements Page 53
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2020
Notes to the financial statements
4. There is no impairment of construction in progress during the current period.
5. Construction materials
30 June 2020 31 December 2019
Items Gross carrying Gross carrying
Impairment Book value Impairment Book value
amount amount
Construction
8,598,323.97 8,598,323.97 13,588,883.39 13,588,883.39
materials
Total 8,598,323.97 8,598,323.97 13,588,883.39 13,588,883.39
(12) Intangible assets
1. Details of intangible assets
Items Land use right Software Total
1．Total of original value
(1) 31 December 2019 327,028,797.84 310,401.55 327,339,199.39
(2) Increase
Including: Purchase
Internal R&D
Increase in Mergers
Others
(3) Decrease
Including: Disposal
Others
(4) 30 June 2020 327,028,797.84 310,401.55 327,339,199.39
2．Total of Accumulated Amortization
(1) 31 December 2019 55,717,267.98 121,908.07 55,839,176.05
(2) Increase 3,270,287.94 13,397.46 3,283,685.40
Including: Provision 3,270,287.94 13,397.46 3,283,685.40
Others
(3) Decrease
Including: Disposal
Others
(4) 30 June 2020 58,987,555.92 135,305.53 59,122,861.45
3．Total of Impairment
Notes to the financial statements Page 54
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2020
Notes to the financial statements
Items Land use right Software Total
(1) 31 December 2019
(2) Increase
Including: Provision
Others
(3) Decrease
Including: Disposal
Others
(4) 30 June 2020
4. Total of Net value
(1) 31 December 2019 268,041,241.92 175,096.02 268,216,337.94
(2) 30 June 2020 271,311,529.86 188,493.48 271,500,023.34
2. Land use right without Certificate of Land use right at the end of the period.
None.
(13) Deferred tax asset and deferred tax liability
1. Deferred tax assets before taking into consideration of the balance offsetting
30 June 2020 31 December 2019
Items Deductible temporary Deferred tax Deductible temporary Deferred tax
differences asset differences asset
Impairment 390,913,104.12 97,728,276.03 378,651,125.80 94,662,781.44
Internal unrealized profit 54,603,923.36 13,650,980.84 53,312,397.14 13,328,099.29
Differences of depreciation
333,978,859.03 83,494,714.76 333,978,859.03 83,494,714.76
and amortization
Total 779,495,886.51 194,873,971.63 765,942,381.97 191,485,595.49
2. There is no deferred tax liabilities before taking into consideration the offsetting of balances at the end of
the period.
3. At the end of the reporting period, there are no deferred tax assets or liabilities listed as net value after
offsetting.
4. Unrecognized deferred tax assets
Items 30 June 2020 31 December 2019
Notes to the financial statements Page 55
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2020
Notes to the financial statements
Items 30 June 2020 31 December 2019
Deductible losses 388,187,521.59 653,832,187.01
Impairment of assets 410,479.98 428,163.12
Total 388,598,001.57 654,260,350.13
5. The deductible loss of unrecognized deferred tax assets due in the following period
Items 30 June 2020 31 December 2019 Notes
Year 2020 341,870,529.25 607,515,194.67
Year 2021 10,981,383.41 10,981,383.41
Year 2022 1,000,766.72 1,000,766.72
Year 2023 16,327,268.19 16,327,268.19
Year 2024 18,007,574.02 18,007,574.02
Total 388,187,521.59 653,832,187.01
(14) Other non-current assets
30 June 2020 31 December 2019
Items Gross carrying Impair Gross carrying Impair
Book value Book value
amount ment amount ment
Prepayment
for long-term 963,239,365.67 963,239,365.67 708,502,552.50 708,502,552.50
assets
Total 963,239,365.67 963,239,365.67 708,502,552.50 708,502,552.50
Notes: The prepayment for long-term assets at the end of the period are prepaid for equipment and construction
funds, of which RMB 841,113,071.18 was the financial lease deposit paid to Liaoning Hengyi Financial
Leasing Co., Ltd.
(15) Short-term loans
1. Classification of short-term loans
Items 30 June 2020 31 December 2019
Pledge loans
Mortgage loans
Guaranteed loans 12,086,705,000.00 12,731,478,000.00
Notes to the financial statements Page 56
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2020
Notes to the financial statements
Items 30 June 2020 31 December 2019
Credit loans 420,000,000.00 420,000,000.00
Total 12,506,705,000.00 13,151,478,000.00
2. There is no short-term loans that were overdue at the end of the reporting period
(16) Notes payables
Items 30 June 2020 31 December 2019
Bank acceptance bill 752,290,000.00 8,897,442,732.91
Domestic letter of credit 10,603,620,199.39 1,174,963,839.77
Domestic letter of credit 2,878,818,288.66 1,756,108,104.27
Total 14,234,728,488.05 11,828,514,676.95
Notes: There are no outstanding notes payable at the end of this period.
(17) Accounts payable
1. Accounts payable disclosed by category
Items 30 June 2020 31 December 2019
Accounts payable for goods 3,122,246,744.39 3,481,176,373.75
Accounts payable for labor 49,716,139.71 56,959,052.87
Accounts payable for project and equipment 457,345,653.91 581,909,120.17
Repair expense 349,444,971.43 407,468,483.48
Total 3,978,753,509.44 4,527,513,030.27
2. Significant accounts payable aging over one year
Items Ending balance Amount aging over one year
Company 1 50,416,440.77 45,906,440.77
Company 2 93,653,173.71 27,685,592.96
Company 3 14,200,763.99 14,200,763.99
Company 4 14,200,000.00 14,200,000.00
Company 5 32,153,162.29 11,977,425.94
Company 6 15,810,625.07 12,040,944.48
Total 220,434,165.83 126,011,168.14
Notes: The above significant accounts payable aged over one year have not yet reached the settlement conditions.
Notes to the financial statements Page 57
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2020
Notes to the financial statements
(18) Advance from customers
Items 30 June 2020 31 December 2019
Advance for goods 4,429,821,526.79
Total 4,429,821,526.79
(19) Contract liabilities
Items 30 June 2020 31 December 2019
Advance for goods 4,658,022,515.99
Total 4,658,022,515.99
(20) Employee benefits payable
1. Employee benefits payable
Items 31 December 2019 Increase Decrease 30 June 2020
(1) Short-term employee
22,208,442.94 947,883,058.17 929,828,911.45 40,262,589.66
benefits
(2) Post-employment
benefits - defined 62,312.32 79,852,867.66 79,517,956.70 397,223.28
contribution plans
(3) Termination benefits 1,427,419.30 914,555.00 512,864.30
(4) Other benefits due within
one year
Total 23,698,174.56 1,027,735,925.83 1,010,261,423.15 41,172,677.24
2. Short-term employee benefits
Items 31 December 2019 Increase Decrease 30 June 2020
(1) Salary, bonus,
12,974,335.94 682,125,744.78 667,433,631.49 27,666,449.23
allowance and subsidy
(2) Employee welfare 42,088,821.33 42,088,821.33
(3) Social Insurance 756,616.34 151,522,095.49 148,532,398.75 3,746,313.08
Including: Medical
106,650.30 54,080,133.64 54,133,936.64 52,847.30
insurance
Work injury
649,966.04 15,341,554.21 12,632,965.43 3,358,554.82
insurance
Maternity
Notes to the financial statements Page 58
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2020
Notes to the financial statements
Items 31 December 2019 Increase Decrease 30 June 2020
insurance
(4) Housing 6,855,601.00 56,644,301.00 56,644,301.00 6,855,601.00
(5) Union funds and staff
1,621,889.66 15,502,095.57 15,129,758.88 1,994,226.35
education fee
(6) Short-term
compensated absences
(7) Short-term profit -
sharing scheme
Total 22,208,442.94 947,883,058.17 929,828,911.45 40,262,589.66
3. Defined contribution plans
Items 31 December 2019 Increase Decrease 30 June 2020
Basic pension fund 60,423.10 77,455,966.53 77,127,366.80 389,022.83
Unemployment insurance 1,889.22 2,396,901.13 2,390,589.90 8,200.45
Total 62,312.32 79,852,867.66 79,517,956.70 397,223.28
(21) Current tax liabilities
Items 30 June 2020 31 December 2019
Value-added tax 6,341,821.09 246,921,117.21
Corporate income tax 5,326,863.20 6,250,204.39
City maintenance and construction tax 523,353.68 11,416,274.65
House property tax 3,676,391.46 3,445,290.84
Educational surcharges 421,669.65 8,146,826.78
Land use right tax 1,128,142.41 1,128,141.09
Environmental tax 251,080.35 5,264,008.42
Others 4,278,390.14 2,253,951.42
Total 21,947,711.98 284,825,814.80
(22) Other payables
Items 30 June 2020 31 December 2019
Interest payables 20,582,111.30 10,818,986.30
Dividends payables
Other payables 623,477,759.31 651,882,758.67
Notes to the financial statements Page 59
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2020
Notes to the financial statements
Items 30 June 2020 31 December 2019
Total 644,059,870.61 662,701,744.97
1. Interest Payable
Items 30 June 2020 31 December 2019
Loan interests 20,582,111.30 10,818,986.30
Total 20,582,111.30 10,818,986.30
At the end of the reporting period, there is no significant overdue interest
2. Other payables
(1) Other payables disclosed by nature
Items 30 June 2020 31 December 2019
Deposit 1,975,288.77 1,933,435.69
Margin 84,938,221.01 86,166,961.89
Accounts 431,828,769.92 454,536,559.31
Others 104,735,479.61 109,245,801.78
Total 623,477,759.31 651,882,758.67
(2) There is no significant other payables aged over one year at the end of the reporting period.
(23) Non-current liabilities due within one year
Items 30 June 2020 31 December 2019
Long-term loans due within one year 1,201,524,980.80 234,474,657.99
Bond payables due within one year
Long-term payables due within one year
Total 1,201,524,980.80 234,474,657.99
Notes: Among the long-term loans due within one year, RMB 1,200,000,000.00 is credit loan and RMB 1,524,980.80 is
guaranteed loan.
(24) Long-term loans
Items 30 June 2020 31 December 2019
Pledged loans 622,600,000.00 622,600,000.00
Mortgage loan
Notes to the financial statements Page 60
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2020
Notes to the financial statements
Items 30 June 2020 31 December 2019
Guaranteed loans 1,313,560,767.82 1,106,159,800.73
Credit loans 1,874,303,166.36 3,120,916,110.00
Total 3,810,463,934.18 4,849,675,910.73
(25) Long-term payables
Items 30 June 2020 31 December 2019
Long-term payables 1,050,748,776.34 516,939,408.14
Special payables
Total 1,050,748,776.34 516,939,408.14
Long-term payables
Items 30 June 2020 31 December 2019
Financing lease payments 1,050,748,776.34 516,939,408.14
Total 1,050,748,776.34 516,939,408.14
Notes: At the end of the reporting period, the amount of unrealized financing expenses payable for financing leases
was RMB 824,818,755.27.
The company needs to pay interest on time, the principal is a one-time payment after the lease contract
expires, and expiry date of each lease contract that has not been completely executed is more than 3 years.
(26) Deferred income
Items 31 December 2019 Increase Decrease 30 June 2020 Reason
Government
208,955,407.30 1,626,919.00 37,890,873.76 172,691,452.54
subsidy
Total 208,955,407.30 1,626,919.00 37,890,873.76 172,691,452.54
Notes to the financial statements Page 61
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2020
Notes to the financial statements
Projects of government subsidies:
Transfer to
Other
Items 31 December 2019 Increase non-operating 30 June 2020 Related to assets or income
decrease
income
project national support funds
Municipal Skills Master Workstation Expenses in 2018 (Special
187,039.34 120,423.00 66,616.34 Related to income
Steel, Steelmaking, and Energy General Plant 80,000 each)
Carbon Fiber Wastewater Advanced Treatment Project in
9,500,000.00 9,500,000.00 Related to assets
Dongfeng Plant Area of Plate Coking Plant
Coal-fired boiler desulfurization and denitrification project in
4,200,000.00 300,000.00 3,900,000.00 Related to assets
high-pressure workshop of Bengang Power Plant
Bengang Group Co., Ltd. Automotive Sheet Engineering
1,000,000.00 1,000,000.00 Related to assets
Laboratory Engineering Construction Fund
Benxi Iron and Steel Automotive Sheet Engineering Laboratory
1,000,000.00 160,206.60 839,793.40 Related to assets
Project
Research and development of the third-generation high-strength
2,900,000.00 2,900,000.00 Related to assets
steel for automobiles
Flue gas desulfurization project of 7 130-ton combustion boilers
14,400,000.00 2,400,000.00 12,000,000.00 Related to assets
in power plant
Project fund for cogeneration transformation project of power
6,000,000.00 1,000,000.00 5,000,000.00 Related to assets
plant's three-electric workshop
Demonstration project of construction of energy management
4,640,000.00 1,160,000.00 3,480,000.00 Related to assets
center for industrial enterprises
Research and development of anti-oxidation hot forming steel
250,000.00 0.10 249,999.90 Related to income
PHS1500A
Air quality automatic monitoring system 105,000.00 35,000.00 70,000.00 Related to assets
Cold rolled high-strength steel renovation project 150,000,000.00 25,000,000.00 125,000,000.00 Related to assets
Notes to the financial statements Page 62
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2020
Notes to the financial statements
Transfer to
Other
Items 31 December 2019 Increase non-operating 30 June 2020 Related to assets or income
decrease
income
Energy saving and environmental protection project of sintering
1,160,000.00 580,000.00 580,000.00 Related to assets
machine in ironworks
Liaoning craftsman subsidy 100,002.97 14,002.80 86,000.17 Related to income
Construction of a new platform for professional technology in
1,000,000.00 300,000.00 700,000.00 Related to assets
the automotive steel industry
Study on the Effect Mechanism and Control of Rare Earth
184,364.99 -3,252.74 187,617.73 Related to income
Oxysulfide on Plasticity of Automobile Steel
Introduce special funds for overseas advanced applicable
technologies (progress in production technology of high-end 4,000,000.00 1,000,000.00 3,000,000.00 Related to assets
electro-galvanized sheet)
High-grade electro-galvanized sheet production line project for
8,208,000.00 4,104,000.00 4,104,000.00 Related to assets
automobiles
Compensation for closing city construction service center 1,626,919.00 1,626,919.00 Related to income
Total 208,955,407.30 1,626,919.00 37,890,873.76 172,691,452.54
Notes to the financial statements Page 63
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2020
Notes to the financial statements
(27) Share capital
Increase/decrease (+ , - )
31 December Issuing Transferred
Items Bonus 30 June 2020
2019 of new from Others Subtotal
shares
share reserves
Capital
3,875,371,532.00 3,875,371,532.00
shares
(28) Capital reserves
Items 31 December 2019 Increase Decrease 30 June 2020
Capital premium over par
12,227,292,378.47 12,227,292,378.47
value
Other capital reserves 115,917,468.82 115,917,468.82
Total 12,343,209,847.29 12,343,209,847.29
(29) Special Reserves
Items 31 December 2019 Increase Decrease 30 June 2020
Safety production
212,687.41 26,575,861.58 4,308,363.55 22,480,185.44
cost
Total 212,687.41 26,575,861.58 4,308,363.55 22,480,185.44
(30) Surplus Reserves
Items 31 December 2019 Increase Decrease 30 June 2020
Statutory surplus
961,105,529.85 961,105,529.85
reserves
Total 961,105,529.85 961,105,529.85
(31) Undistributed Profits
Items Current period Previous period
Before adjustments: undistributed profits at last
2,307,765,664.62 1,945,887,269.82
year-end
Adjustments of the beginning distributed profits
(increase + / decease -)
After adjustments: undistributed profit at this 2,307,765,664.62 1,945,887,269.82
Notes to the financial statements Page 64
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2020
Notes to the financial statements
Items Current period Previous period
year-beginning
Add: undistributed profit belonging to parent
254,644,204.33 555,646,971.40
company
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
Ending balance of undistributed profits 2,562,409,868.95 2,307,765,664.62
(32) Operating income and operating cost
Current period Previous period
Items
Revenue Cost Revenue Cost
Principal business 20,470,526,587.62 18,886,384,469.92 22,581,458,005.55 20,807,089,888.18
Other business 1,714,010,672.43 1,553,861,892.75 1,521,137,161.59 1,260,522,841.47
Total 22,184,537,260.05 20,440,246,362.67 24,102,595,167.14 22,067,612,729.65
Details for operating income:
Items Current period Previous period
Principal business 20,470,526,587.62 22,581,458,005.55
Including：Domestic 17,852,661,337.91 18,514,105,145.87
Abroad 2,617,865,249.71 4,067,352,859.68
Other business 1,714,010,672.43 1,521,137,161.59
Including：Domestic 1,714,010,672.43 1,521,137,161.59
Abroad
Total 22,184,537,260.05 24,102,595,167.14
(33) Tax and surcharges
Items Current period Previous period
City maintenance and construction tax 13,467,815.13 27,561,420.89
Educational surcharge 9,674,693.55 19,877,089.62
Notes to the financial statements Page 65
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2020
Notes to the financial statements
Items Current period Previous period
Housing property tax 40,089,186.70 38,778,891.04
Land use right tax 6,457,679.78 6,538,299.88
Stamp duty and others 5,619,563.86 6,387,222.58
Environmental tax 12,962,357.84 14,961,858.43
others 127,139.82 20,580.53
Total 88,398,436.68 114,125,362.97
(34) Selling and distribution expenses
Items Current period Previous period
Freight 532,184,917.51 456,217,341.94
Port surcharges 53,812,369.10 52,405,847.32
Import and export agency fee 30,678,165.54 34,174,633.61
Salary and benefits 12,735,597.76 13,553,533.82
Others 9,404,066.26 13,751,821.86
Package fee 3,578,102.61 4,342,020.59
Total 642,393,218.78 574,445,199.14
(35) General and administrative expenses
Items Current period Previous period
Salary and benefits 110,662,138.91 122,383,642.39
Repair expense 102,044,859.99 142,464,599.50
Land use right fee 32,611,483.62 27,345,714.30
Others 58,119,763.89 62,667,766.52
Depreciation 18,573,834.52 24,216,703.47
Social insurance fee 18,957,667.84 23,532,872.66
Heating fee 18,050,334.83 22,391,441.18
Water resources fee 12,470,097.22 11,993,951.74
Housing fund 5,056,476.00 4,737,351.00
Amortization 2,975,850.60 2,970,897.50
Entertainment fee 369,545.17 1,070,316.75
Rental fee 661,452.72 643,214.78
Shipping fee 274,811.10 349,339.98
Notes to the financial statements Page 66
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2020
Notes to the financial statements
Items Current period Previous period
Total 380,828,316.41 446,767,811.77
(36) Research and development expenses
Items Current period Previous period
Depreciation, materials and compensation, etc. 20,202,985.20 15,408,472.28
Total 20,202,985.20 15,408,472.28
(37) Financial expenses
Items Current period Previous period
Interest expenditure 439,861,353.93 586,490,262.69
Less: Interest income 154,882,284.33 127,083,779.58
Exchange loss 45,932,418.60 -71,095,752.13
Others 24,125,152.20 15,154,975.44
Total 355,036,640.40 403,465,706.42
(38) Other income
Items Current period Previous period
Government subsidy 37,894,126.40 41,695,000.00
Others 693,206.00
Total 38,587,332.40 41,695,000.00
Notes to the financial statements Page 67
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2020
Notes to the financial statements
Government subsidies included in other income:
Items Current period Previous period Related to assets or income
Steel for high-strength pipelines under low-temperature and high-pressure service
93,575.00 52,000.00 income
conditions>Project State Support Fund
2018 municipal skill master workstation costs 120,423.00 income
Coal-fired boiler desulfurization and denitrification project in high-pressure workshop of
300,000.00 300,000.00 assets
Bengang Power Plant
Benxi Iron and Steel Automotive Sheet Engineering Laboratory Project 160,206.60 assets
Flue gas desulfurization project of 7 130-ton combustion boilers in power plant 2,400,000.00 2,400,000.00 assets
Project fund for cogeneration transformation project of power plant's three-electric workshop 1,000,000.00 1,000,000.00 assets
Demonstration project for the construction of energy management center for industrial
1,160,000.00 1,160,000.00 assets
enterprises
Air quality automatic monitoring system 35,000.00 35,000.00 assets
Cold rolled high-strength steel renovation project 25,000,000.00 25,000,000.00 assets
Energy saving and environmental protection project of sintering machine in ironworks 580,000.00 580,000.00 assets
Liaoning craftsman subsidy 14,002.80 income
Construction of a new platform for professional technology in the automotive steel industry 300,000.00 income
Special funds for introducing overseas advanced and applicable technologies 1,000,000.00 1,442,000.00 assets
High-grade electro-galvanized sheet production line project for automobiles 4,104,000.00 4,104,000.00 assets
Notes to the financial statements Page 68
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2020
Notes to the financial statements
Items Current period Previous period Related to assets or income
Compensation for closing city construction service center 1,626,919.00 income
MES project special funds 860,000.00 assets
Environmental pollution control project 1,810,000.00 assets
Environmental governance project and regional watershed environmental protection
170,000.00 assets
comprehensive prevention and control project
Sintering machine waste heat utilization project and desulfurization renovation project 2,102,000.00 assets
Ironworks 360 Sintering Machine Flue Gas Desulfurization Project 100,000.00 assets
Environmental protection special fund 580,000.00 assets
Others 693,206.00 income
Total 38,587,332.40 41,695,000.00
Notes to the financial statements Page 69
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2020
Notes to the financial statements
(39) Income on investment
Items Current period Previous period
Income on disposal of long-term equity investment by equity
29,304.00 25,907.49
method
Income on bank short-term financial products
Others
Total 29,304.00 25,907.49
(40) Credit impairment loss
Items Current period Previous period
Loss from bad debts of note receivable
Loss from bad debts of account receivable 3,266,886.62 3,389,912.79
Loss from bad debts of receivable financing
Loss from bad debts of other receivables 220,896.80 361,601.04
Loss from bad debts of debt investment
Loss from bad debts of other debt investment
Loss from bad debts of long-term receivables
Total 3,487,783.42 3,751,513.83
(41) Asset impairment loss
Items Current period Previous period
Bad debt loss
Inventory impairment loss -15,321,598.62
Impairment of fixed assets
Total -15,321,598.62
(42) Assets disposal gains
The amount recognized in
Items Current period Previous period
non-recurring profit
Disposal gains or losses
arising from disposal of fixed 325,651.61 2,418,704.34 325,651.61
assets not classified for sale
Total 325,651.61 2,418,704.34 325,651.61
(43) Non-operating income
Notes to the financial statements Page 70
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2020
Notes to the financial statements
The amount
recognized in
Items Current period Previous period
non-recurring
profit
Non-current assets scrapped
302,362.80 7,955,444.40 302,362.80
gains
Others 805,201.30 204,097.84 805,201.30
Debt restructuring gain 32,800.02 50,640.00 32,800.02
Total 1,140,364.12 8,210,182.24 1,140,364.12
(44) Non-operating expense
The amount
recognized in
Items Current period Previous period
non-recurring
profit
Non-current assets scrapped
20,035,471.42 57,974,322.05 20,035,471.42
loss
Total 20,035,471.42 57,974,322.05 20,035,471.42
(45) Income tax expense
1. Income tax expense
Items Current period Previous period
Income tax payable for the current year 12,626,191.22 9,415,176.70
Adjustment of deferred income tax -3,388,376.14 16,547,005.03
Total 9,237,815.08 25,962,181.73
2. Accounting profit and income tax expense adjustment process
Items Current period
Total profit 265,644,665.42
Income tax expense calculate according to the official or applicable tax rate 66,411,166.35
Effect of different tax rates applied by subsidiaries
Effect of adjustment of the income tax expense of prior period
Effect of non-taxable income
Effect of undeductible costs, expenses or losses
Notes to the financial statements Page 71
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2020
Notes to the financial statements
Items Current period
Effect of use of deductible losses of unrecognized deferred tax asset of prior
-54,648,936.33
period
Effect of deductible temporary differences or deductible losses of
unrecognized deferred tax asset of current period
Changes in the balance of deferred income tax assets and liabilities at the
beginning of the period due to additional deductible expenses and tax rate
adjustments required by the tax law
Income tax expenses 9,237,815.08
(46) Earning per share
1. Basic earnings per share
The basic earnings per share is calculated by dividing the consolidated net profit
attributable to the common stock shareholders of the parent company by the weighted
average number of common stocks issued by the company:
Items Current period Previous period
Consolidated net profit attributable to ordinary
254,644,204.33 453,209,615.76
shareholders of parent company
The weighted average number of common shares
3,875,371,532.00 3,813,757,237.67
issued by the company
Basic earnings per share 0.07 0.12
Including: basic earnings per share for continuing
0.07 0.12
operations
Basic earnings per share for discontinued
operations
2. Diluted earnings per share
Diluted earnings per share is calculated by dividing the consolidated net profit attributable
to the common shareholders of the parent company (diluted) by the weighted average
number of ordinary shares issued by the company (diluted):
Items Current period Previous period
Consolidated net profit attributable to ordinary
254,644,204.33 453,209,615.76
shareholders of parent company (diluted)
Notes to the financial statements Page 72
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2020
Notes to the financial statements
Items Current period Previous period
The weighted average number of common shares
3,875,371,532.00 3,813,757,237.67
issued by the company (diluted)
Basic earnings per share 0.07 0.12
Including: basic earnings per share for continuing
0.07 0.12
operations
Basic earnings per share discontinued
(47) Notes of statement of cash flows
1. Cash received related to other operating activities
Items Current period Previous period
Withdraw of current accounts, advance for another 16,851,204.08 17,151,876.47
Interest income 154,882,284.33 127,083,779.58
Special subsidy income 1,626,919.00 428,000.00
Non-operating income 503,009.25 117,870.10
Others 153,380.34 123,098.19
Total 174,016,797.00 144,904,624.34
2. Cash paid related to other operating activities
Items Current period Previous period
Current accounts, advance for another 199,605,380.27 221,234,925.29
Sales expenses 4,545,479.59 4,449,939.39
Administrative expenses 18,446,185.30 17,883,394.86
Bank charges 3,331,343.25 3,255,172.22
Others 360,322.84 365,921.44
Total 226,288,711.25 247,189,353.20
(48) Supplementary details of statement of cash flows
1. Supplementary details for statement of cash flows
Items Current period Previous period
1. A reconciliation of net profit to cash flows from
operating activities:
Net profit 256,406,850.34 452,934,689.03
Add: Credit impairment loss 3,487,783.42 3,751,513.83
Notes to the financial statements Page 73
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2020
Notes to the financial statements
Items Current period Previous period
Asset impairment loss -15,321,598.62
Depreciation of fixed assets and so on 1,201,263,368.47 1,199,864,248.72
Amortization of intangible assets 3,283,685.40 3,278,732.29
Long-term deferred expenses
Losses proceeds from disposal of PPE, intangible
assets and other long-term assets (Earnings 19,733,108.62 57,974,322.05
marked“－”)
Scrapped losses from fixed assets (Earnings
marked“－”)
Change in fair value loss (Earnings marked“－”)
Financial expenses (Earnings marked“－”) 355,036,640.40 403,465,706.42
Investment losses (Earnings marked“－”)
Deferred tax assets reduction (Addition marked“－”) -3,388,376.14 15,928,033.89
Deferred tax liabilities increased (Reduction
marked“－”)
Reduction of inventory (Addition marked“－”) -1,885,641,689.91 -1,289,831,911.07
Operating receivable items reduction (Addition
-1,938,821,059.08 -908,736,317.08
marked“－”)
Operating payable items increase (Less marked"－") 1,852,485,580.02 1,046,157,987.59
Other
Net cash flows generated from operating activities -151,475,707.08 984,787,005.67
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 11,417,592,663.52 11,788,922,569.51
Less: Beginning balance of cash 13,441,414,988.58 11,752,548,621.97
Add: Ending balance of cash equivalents
Less: Opening balance of cash equivalents
The net increase in cash and cash equivalents -2,023,822,325.06 36,373,947.54
Notes to the financial statements Page 74
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2020
Notes to the financial statements
2. The structure of cash and cash equivalents
Items 30 June 2020 31 December 2019
1. Cash 11,417,592,663.52 13,441,414,988.58
Including: Cash on hand 7,110.40 5,588.98
Bank deposits available on demand 11,417,585,553.12 13,441,409,399.60
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 11,417,592,663.52 13,441,414,988.58
Including: Cash and cash equivalents limited to use by
the parent company of other subsidiary in the
group
(49) Assets of which ownership or right to use are restricted
Items 30 June 2020 Reason
Cash at bank and on hand 5,370,886,642.41 Deposit for notes and letter of credit
Accounts receivable Pledged for acceptance bill and short term
759,753,834.45
financing loan
Other equity instrument
1,037,735,849.00 Pledged for loans
investments
Total 7,168,376,325.86
(50) Foreign currency monetary items
1. Foreign currency monetary items
Ending balance in Exchange rate at the Ending balance
Items
foreign currency end of the period translated to RMB
Cash at bank and on hand 62,843,510.18
Including: USD 8,723,365.02 7.0795 61,757,062.66
EUR 105,097.02 7.9610 836,677.38
HKD 273,451.00 0.9134 249,770.14
Notes to the financial statements Page 75
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2020
Notes to the financial statements
Ending balance in Exchange rate at the Ending balance
Items
foreign currency end of the period translated to RMB
Short-term loans 1,345,105,000.00
Including: USD 190,000,000.00 7.0795 1,345,105,000.00
Non-current liabilities due
1,524,980.80
within one year
Including: JPY 23,176,000.00 0.0658 1,524,980.80
Long-term loans 556,295,833.99
Including: USD 18,900,000.00 7.0795 133,802,550.00
EUR 51,825,261.75 7.9610 412,580,908.79
JPY 150,644,000.00 0.0658 9,912,375.20
2. The Company has no overseas operating entities.
Notes to the financial statements Page 76
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2020
Notes to the financial statements
(51) Government subsidy
1. Related to assets
The amount included in the current profit and loss or offset the loss of
Balance sheet
Items Amount related costs
presentation items
Current period Previous period Items
Coal-fired boiler desulfurization and
denitrification project in high-pressure 3,900,000.00 Deferred income 300,000.00 300,000.00 Other income
workshop of Bengang Power Plant
Benxi Iron and Steel Automotive Sheet
1,000,000.00 Deferred income 160,206.60 Other income
Engineering Laboratory Project
Flue gas desulfurization project of 7
12,000,000.00 Deferred income 2,400,000.00 2,400,000.00 Other income
130-ton combustion boilers in power plant
Project fund for cogeneration
transformation project of power plant's 5,000,000.00 Deferred income 1,000,000.00 1,000,000.00 Other income
three-electric workshop
Demonstration project of construction of
energy management center for industrial 3,480,000.00 Deferred income 1,160,000.00 1,160,000.00 Other income
enterprises
Air quality automatic monitoring system 70,000.00 Deferred income 35,000.00 35,000.00 Other income
Cold rolled high-strength steel renovation 125,000,000.00 Deferred income 25,000,000.00 25,000,000.00 Other income
Notes to the financial statements Page 77
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2020
Notes to the financial statements
The amount included in the current profit and loss or offset the loss of
Balance sheet
Items Amount related costs
presentation items
Current period Previous period Items
project
Energy saving and environmental
protection project of sintering machine in 580,000.00 Deferred income 580,000.00 580,000.00 Other income
ironworks
Construction of a new platform for
professional technology in the automotive 700,000.00 Deferred income 300,000.00 Other income
steel industry
Special funds for introducing overseas
3,000,000.00 Deferred income 1,000,000.00 1,442,000.00 Other income
advanced and applicable technologies
High-grade electro-galvanized sheet
4,104,000.00 Deferred income 4,104,000.00 4,104,000.00 Other income
production line project for automobiles
MES project special funds Deferred income 860,000.00 Other income
Environmental pollution control project Deferred income 1,810,000.00 Other income
Environmental governance project and
regional watershed environmental
Deferred income 170,000.00 Other income
protection comprehensive prevention and
control project
Notes to the financial statements Page 78
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2020
Notes to the financial statements
The amount included in the current profit and loss or offset the loss of
Balance sheet
Items Amount related costs
presentation items
Current period Previous period Items
Sintering machine waste heat utilization
project and desulfurization renovation Deferred income 2,102,000.00 Other income
project
Ironworks 360 Sintering Machine Flue
Deferred income 100,000.00 Other income
Gas Desulfurization Project
Environmental protection special fund Deferred income 580,000.00 Other income
Total 158,834,000.00 36,039,206.60 41,643,000.00
2. Related to income
The amount included in the current profit and loss or offset the loss of related costs
Items Amount
Current period Previous period Items
project national support funds
2018 municipal skill master workstation costs 66,616.34 120,423.00 Other income
Liaoning craftsman subsidy 86,000.17 14,002.80 Other income
other 693,206.00 Other income
Notes to the financial statements Page 79
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2020
Notes to the financial statements
The amount included in the current profit and loss or offset the loss of related costs
Items Amount
Current period Previous period Items
Total 180,041.51 921,206.80 52,000.00
3. Return of government subsidies during the reporting period
None
Notes to the financial statements Page 80
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2020
Notes to the financial statements
6. Changes in the scope of consolidation
There is no changes to the scope of consolidation during the current period.
7. Equity in other entities
(1) Equity in subsidiaries
1. Constitution of enterprise group
Principal Shareholding ratio
Registered Notes of
Name of the subsidiaries place of Acquiring method
address business Direct Indirect
business
Xiamen Bengang Steel & Iron Business combination
Xiamen Xiamen Sales 100.00
Sales Co., Ltd. under common control
Wuxi Bengang Steel & Iron Sales Business combination
Wuxi Wuxi Sales 100.00
Co., Ltd. under common control
Tianjin Bengang Steel & Iron Business combination
Tianjin Tianjin Sales 100.00
Trading Co., Ltd. under common control
Nanjing Bengang Materials Sales Business combination
Nanjing Nanjing Sales 100.00
Co., Ltd. under common control
Yantai Bengang Steel & Iron Sales Business combination
Yantai Yantai Sales 100.00
Co., Ltd. under common control
Harbin Bengang Economic and Business combination
Harbin Harbin Sales 100.00
Trading Co., Ltd. under common control
Changchun Bengang Steel & Iron Business combination
Changchun Changchun Sales 100.00
Sales Co., Ltd. under common control
Guangzhou Bengang Steel & Iron
Guangzhou Guangzhou Sales 100.00 Establishment
Trading Co., Ltd.
Shanghai Bengang Metallurgy
Shanghai Shanghai Sales 100.00 Establishment
Science and Technology Co., Ltd.
Bengang Steel Plates Liaoyang Manufactu
Liaoyang Liaoyang 100.00 Establishment
Pellet Co., Ltd. ring
Dalian Benruitong Automobile Manufactu
Dalian Dalian 65.00 Establishment
Material Technology Co., Ltd. ring
Bengang Posco Cold-rolled Sheet Manufactu Business combination
Benxi Benxi 75.00
Co., Ltd. ring under common control
Notes to the financial statements Page 81
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2020
Notes to the financial statements
Principal Shareholding ratio
Registered Notes of
Name of the subsidiaries place of Acquiring method
address business Direct Indirect
business
Benxi Bengang Steel Sales Co.,
Benxi Benxi Sales 100.00 Establishment
Ltd
Shenyang Bengang Metallurgical
Shenyang Shenyang Sales 100.00 Establishment
Science and Technology Co., Ltd.
Chongqing Liaoben Steel & Iron
Chongqing Chongqing Sales 100.00 Establishment
Trading Co., Ltd.
Bengang Baojin (Shenyang) auto Manufactu Business combination
Shenyang Shenyang 85.00
new material technology Co., Ltd. ring under common control
The proportion of shares held in subsidiaries is different from the proportion of voting rights: the
company does not have such matters.
Basis for holding half or less of the voting rights but still controlling the investee, and holding
more than half of the voting rights but not controlling the investee: The company does not have
such matters.
For important structured entities included in the scope of consolidation, the basis for control: The
company does not have such matters.
2. Significant but not wholly-owned subsidiaries
Dividend
Profits and losses Ending
Proportion of declared to
attributing to balance of
Name of the subsidiaries non-controlling distribute to
non-controlling non-controlling
interests (%) non-controlling
shareholders interests
shareholders
Bengang Posco Cold-rolled Sheet
25.00 3,121,127.48 499,174,786.40
Co., Ltd.
Notes to the financial statements Page 82
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2020
Notes to the financial statements
The minority shareholder’s shareholding ratio is different from the voting rights ratio: the
company does not have such matters.
3. Financial information of significant but not wholly-owned subsidiaries
30 June 2020
Name of the Non-curre
Current Non-current Current
subsidiaries Total assets nt Total liabilities
assets assets liabilities
liabilities
Bengang Posco
Cold-rolled Sheet 3,576,435,100.80 1,409,255,518.34 4,985,690,619.14 2,988,991,473.55 2,988,991,473.55
Co., Ltd.
Name of the
31 December 2019
subsidiaries
Name of the Current Non-current Current Non-curren
Total assets Total liabilities
subsidiaries assets assets liabilities t liabilities
Bengang Posco
Cold-rolled Sheet 4,305,831,723.982 1,509,417,518.88 5,815,249,242.86 3,832,718,789.47 3,832,718,789.47
Co., Ltd.
Current period
Total
Name of the subsidiaries Operating Net cash flows from
Net profit comprehensive
income operating activities
income
Bengang Posco Cold-rolled
3,483,712,504.36 12,484,509.92 12,484,509.92 389,115,477.57
Sheet Co., Ltd.
Previous period
Total
Name of the subsidiaries Operating Net cash flows from
Net profit comprehensive
income operating activities
income
Bengang Posco Cold-rolled
3,720,975,482.91 7,704,734.61 7,704,734.61 1,318,506,299.45
Sheet Co., Ltd.
4. Significant restrictions on the use of corporate group assets and the settlement of
corporate group debts
None.
5. Financial support or other support provided to structured entities included in the scope
of consolidated financial statements
None.
Notes to the financial statements Page 83
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2020
Notes to the financial statements
(2) The share of owner's equity in the subsidiary changes and the subsidiary still controls
the transaction
None.
(3) Equity in joint venture or associates
1. Summary of financial information of important joint ventures and associates
The company has no important joint ventures or associates.
2. Summary of financial information of unimportant joint ventures and associates
Items 30 June 2020/Current period 31 December 2019/Previous period
Joint ventures:
Total book value of investment: 2,672,302.70 2,642,998.70
The total amount of the following items
calculated according to the shareholding
ratio
—Net profit 29,304.00 452,582.71
—Other comprehensive income
—Total comprehensive income 29,304.00 452,582.71
3. Explanation of significant restrictions on the ability of joint ventures or associates to
transfer funds to the company
None.
4. Excess losses incurred by joint ventures or associates
None.
5. Unconfirmed commitments related to joint venture investment
None.
6. Contingent liabilities related to investment in joint ventures or associates
None.
(4) Important joint operations
None.
Notes to the financial statements Page 84
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2020
Notes to the financial statements
(5) Equity in structured entities not included in the scope of consolidated financial
statements
None.
8. Risks associated with financial instruments
The company faces various financial risks in its operation: credit risk, market risk and
liquidity risk. The company's board of directors is fully responsible for the determination of
risk management objectives and policies, and assumes ultimate responsibility for the risk
management objectives and policies. However, the board of directors has authorized the
company's planning and development department to design and implement procedures that
ensure the effective implementation of risk management objectives and policies. The board of
directors reviews the effectiveness of the implemented procedures and the rationality of risk
management objectives and policies through reports submitted by the planning and
development department. The company's internal auditors also audit risk management
policies and procedures, and report relevant findings to the audit committee.
The overall goal of the company's risk management is to formulate a risk management policy
that minimizes risks without excessively affecting the company's competitiveness and
resilience.
(1) Credit risk
Credit risk refers to a financial loss to a party due to failure to discharge an obligation by the
counterparties. The Company is exposed to credit risk arising from customers’ failure to
discharge an obligation in sales on credit. Before signing a new contract, the company will
evaluate the credit risk of the new customer, including the external credit rating and in some
cases the bank credit certificate (when this information is available). The company has set a
credit sales limit for each customer, which is the maximum amount without additional
approval.
The Company ensures that the company's overall credit risk is within a controllable range
through regular monitoring of existing customer credit ratings and regular review of accounts
receivable aging analysis. 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
Notes to the financial statements Page 85
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2020
Notes to the financial statements
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.
2. Currency risk
Currency risk refers to fluctuations of fair value or future cash flows due to exchange rate
changes. The Company has been constantly working on the adjustment of the organizational
framework of risk management and optimization of debt structures to lower the currency risk.
The currency risk facing the Company originates from the assets and liabilities measured by
US dollars and Euro. The ending balance of foreign currency financial assets and foreign
currency financial liabilities after converted in RMB is shown as below:
(In 10 Thousand)
30 June 2020
Items
USD Euro HKD Japanese Yen Total
Assets 6,175.71 83.67 24.98 6,284.35
Liabilities 147,890.76 41,258.09 1,143.74 190,292.58
31 December 2019
Items
USD Euro HKD Japanese Yen Total
Assets 8,990.85 1,109.84 22.90 10,123.59
Liabilities 147,372.23 45,006.35 1,188.28 193,566.86
Notes to the financial statements Page 86
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2020
Notes to the financial statements
On June 30, 2020, with all other variables remaining unchanged, if the relevant currency
appreciates or depreciates against the RMB by 5%, the company will increase or decrease its
net profit by RMB 92,041 (on December 31, 2019: RMB 91,721,600). Management believes
that 5% reasonably reflects a reasonable range of possible changes in the relevant currency
against RMB in the next year.
(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.
(In 10 Thousand Yuan)
30 June 2020
Items Over 5
Within 1 year 1-2 years 2-5 years Total
years
Trade and other payables 1,958,097.40 50,904.06 2,009,001.46
Loans and interests 1,186,571.99 281,545.02 144,198.26 19,401.64 1,631,716.89
Total 3,144,669.38 281,545.02 144,198.26 70,305.69 3,640,718.35
(In 10 Thousand Yuan)
31 December 2019
Items Over 5
Within 1 year 1-2 years 2-5 years Total
years
Trade and other payables 1,700,791.05 51,693.94 1,752,484.99
Notes to the financial statements Page 87
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2020
Notes to the financial statements
31 December 2019
Items Over 5
Within 1 year 1-2 years 2-5 years Total
years
Loans and interests 1,339,677.16 328,523.94 133,765.16 22,678.49 1,824,644.75
Total 3,040,468.21 328,523.94 133,765.16 74,372.43 3,577,129.74
9. Disclosure of fair value
The input value used in fair value measurement is divided into three levels:
The input value of the first level is the unadjusted quotation of the same asset or liability that
can be obtained on the measurement date in an active market.
The input value of the second level is the input value of the related assets or liabilities that is
directly or indirectly observable except the input value of the first level.
The third level of input value is the unobservable input value of related assets or liabilities.
The level to which the fair value measurement result belongs is determined by the lowest
level to which the input value that is important to the fair value measurement as a whole
belongs.
(1) Fair value of assets and liabilities measured at fair value
Fair value at the end of the period
Fair value Fair value Fair value
Item
measurement in measurement in the measurement in the Total
the first level second level third level
1. Continuous fair value
measurement
◆Financial assets held for
trading
(1) Financial assets measured
at fair value and whose
changes are included in the
current profit and loss
(a) Investment in debt
Notes to the financial statements Page 88
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2020
Notes to the financial statements
Fair value at the end of the period
Fair value Fair value Fair value
Item
measurement in measurement in the measurement in the Total
the first level second level third level
instruments
(b) Investment in equity
instruments
(c) Derivative financial assets
(d) Others
(2) Designated as a financial
asset measured at fair value
and its changes are included
in the current profit and loss
(1) Investment in debt
instruments
(2) Others
◆ Accounts receivable
4,382,121,949.97 4,382,121,949.97
financing
◆ Other debt investments
◆ Investment in other
1,041,824,829.00 1,041,824,829.00
equity instruments
◆ Other non-current
financial assets
(1) Financial assets measured
at fair value and whose
changes are included in the
current profit and loss
(a) Investment in debt
instruments
(b) Investment in equity
Notes to the financial statements Page 89
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2020
Notes to the financial statements
Fair value at the end of the period
Fair value Fair value Fair value
Item
measurement in measurement in the measurement in the Total
the first level second level third level
instruments
(c) Derivative financial assets
(d) Others
(2) Designated as a financial
asset measured at fair value
and its changes are included
in the current profit and loss
(a) Investment in debt
instruments
(b) Others
Total assets continuously
5,423,946,778.97 5,423,946,778.97
measured at fair value
◆ Financial liabilites held
for trading
Including:
Issued trading bonds
Derivative financial liabilities
Others
◆Designated as a financial
liability measured at fair
value and its changes
included in the current profit
and loss
Total liabilities continuously
Notes to the financial statements Page 90
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2020
Notes to the financial statements
Fair value at the end of the period
Fair value Fair value Fair value
Item
measurement in measurement in the measurement in the Total
the first level second level third level
measured at fair value
2. Non-continuous fair
value measurement
(1) Assets held for sale
Total assets not measured
continuously at fair value
For example: Liabilities
held for sale
Total liabilities not
measured continuously at
fair value
(2) The basis for determining the market value of the continuous and non-continuous
first-level fair value measurement projects
The company has no first level fair value measurement project.
(3) Continuous and non-continuous second-level fair value measurement items, using
valuation techniques and qualitative and quantitative information on important parameters
The company has no second level fair value measurement items.
(4) Continuous and non-continuous third-level fair value measurement items, using
valuation techniques and qualitative and quantitative information on important parameters
The other equity instruments that continue the third level of fair value measurement are mainly
unlisted equity investments held by the company. The company adopted valuation techniques for
fair value measurement, mainly using valuation techniques of listed company comparison method,
Notes to the financial statements Page 91
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2020
Notes to the financial statements
referring to stock prices of similar securities and considering liquidity discounts.
(5) For continuous fair value measurement projects, where conversion between various
levels occurs during the period, the reason for the conversion and the policy for determining
the timing of conversion
During the current period, there was no conversion between various levels
(6) Changes in valuation techniques and reasons for changes during the period
No changes during the period.
(7) Fair value of financial assets and financial liabilities not measured at fair value
No
10. Related party transactions
(1) Details of parent company
(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 62.11 62.11
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 7 “Equity in other entities”.
(3) The company's joint ventures and associates
Name of joint ventures and associates Relationship
Zhejiang Bengang Jingrui Steel Processing Co., Ltd. Associate
(4) Details of other related parties
Name of Other related parties Relationship
Notes to the financial statements Page 92
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2020
Notes to the financial statements
Name of Other related parties Relationship
Bengang Group Co., Ltd. (Hereinafter referred to as
Controlling shareholder of parent company.
"Bengang Group")
Bengang Group International Economic and Trading Co.,
Belongs to Bengang Group Co., Ltd.
Ltd.
Bengang Cold-rolled Stainless Steel Dandong Co., Ltd. Same parent company
Benxi Beiying Steel & Iron (Group) Co., Ltd. (Hereinafter
Belongs to Bengang Group Co., Ltd.
referred to as "Beiying Steel")
Bengang Electronics and Gas Co., Ltd. Associate of parent company
Benxi Steel & Iron (Group) Real-estate Development Co.,
Same parent company
Ltd.
Benxi Steel & Iron (Group) Steel & Iron Process and
Same parent company
Logistics Co., Ltd.
Benxi Steel & Iron (Group) Machinery Manufacture Co., Ltd. Same parent company
Benxi Steel & Iron (Group) Construction Co., Ltd. Same parent company
Benxi Steel & Iron (Group) Mining Co., Ltd. Same parent company
Benxi Steel & Iron (Group) Thermal Power Development
Same parent company
Co., Ltd.
Benxi Steel & Iron (Group) Designing Institute Same parent company
Benxi Steel & Iron (Group) Industrial Development Co., Ltd. Same parent company
Benxi Steel & Iron (Group) Information and Automatic Tech
Same parent company
Co., Ltd.
Benxi Steel & Iron (Group) Construction and Repairing Co.,
Same parent company
Ltd.
Benxi Steel & Iron (Group) Metallurgy Residues Co., Ltd. Same parent company
Benxi Iron and Steel (Group) Engineering Construction
Same parent company
Supervision Co., Ltd.
Benxi Steel & Iron (Group) Zhengtai Construction Materials
Same parent company
Co., Ltd.
Benxi High-tech Drilling Tools Manufacture Co., Ltd. Belongs to Bengang Group Co., Ltd.
Benxi New Career Development Co., Ltd. Same parent company
Dalian Boluole Steel Tube Co., Ltd. Belongs to Benxi Steel and Iron (Group) Co., Ltd.
Guangzhou Free Trade Zone Bengang Sales Co., Ltd. Belongs to Benxi Steel and Iron (Group) Co., Ltd.
Notes to the financial statements Page 93
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2020
Notes to the financial statements
Name of Other related parties Relationship
Benxi Steel & Iron (Group) General Hospital Belongs to Benxi Steel and Iron (Group) Co., Ltd.
Liaoning Bengang Steel & Iron Trading Co., Ltd. Same parent company
Liaoning Hengtai Heavy Machinery Co., Ltd. Same parent company
Liaoning Hengtong Metallurgical Equipment Manufacture
Same parent company
Co., Ltd.
Liaoning Metallurgy Technician College Same parent company
Liaoning Metallurgy Vocational Technical College Same parent company
Suzhou Bengang Industrial Co., Ltd. Shareholding company
Benxi Steel & Iron (Group) Medical Services Department Associate of parent company
Bengang Group Finance Co., Ltd. Belongs to Bengang Group Co., Ltd.
Liaoning Hengyi Financial Leasing Co., Ltd. Belongs to Bengang Group Co., Ltd.
(5) Related Party Transactions
1. Related party transactions of purchasing goods and services
Company as the purchaser
(In 10 Thousand Yuan)
The content of related
Name Current period Previous period
party transactions
Benxi Steel & Iron (Group) Co., Ltd. Repair expense 15,947.21 14,299.69
Benxi Steel & Iron (Group) Co., Ltd. Land lease fee 3,261.15 2,734.57
Bengang Cold-rolled Stainless Steel
Products 7.95 82.25
Dandong Co., Ltd.
Benxi Steel & Iron (Group) Mining Co.,
Labor cost 361.10 391.41
Ltd.
Benxi Steel & Iron (Group) Mining Co., Raw material and
280,270.14 215,655.53
Ltd. supplementary material
Benxi Steel & Iron (Group) Mining Co.,
Freight 87.47 85.36
Ltd.
Benxi Steel & Iron (Group) Metallurgy Raw material and
14,869.84 11,056.03
Residues Co., Ltd. supplementary material
Benxi Steel & Iron (Group) Steel & Iron Processing fee 23.81 84.61
Notes to the financial statements Page 94
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2020
Notes to the financial statements
The content of related
Name Current period Previous period
party transactions
Process and Logistics Co., Ltd.
Benxi Steel & Iron (Group) Real-estate
Raw materials 3,418.04
Development Co., Ltd.
Benxi Steel & Iron (Group) Machinery
Spare parts 2,296.73 3,341.85
Manufacture Co., Ltd.
Benxi Steel & Iron (Group) Machinery
Repair services 330.54 370.37
Manufacture Co., Ltd.
Benxi Steel & Iron (Group) Construction
Spare parts 19.75 424.68
Co., Ltd.
Benxi Steel & Iron (Group) Construction
Project fee 7,490.59 7,123.75
Co., Ltd.
Benxi Steel & Iron (Group) Construction
Repair services 3,660.09 7,085.65
Co., Ltd.
Benxi Steel & Iron (Group) Construction Raw material and
367.31 332.06
Co., Ltd. supplementary material
Benxi Steel & Iron (Group) Construction
Freight 87.94 152.48
Co., Ltd.
Benxi Steel & Iron (Group) Industrial
Spare parts 2,568.90 2,896.02
Development Co., Ltd.
Benxi Steel & Iron (Group) Industrial Raw material and
5,906.02 6,106.81
Development Co., Ltd. supplementary material
Benxi Steel & Iron (Group) Industrial
Repair services 790.53 940.92
Development Co., Ltd.
Benxi Steel & Iron (Group) Industrial
Freight 188.69 349.19
Development Co., Ltd.
Benxi Steel & Iron (Group) Industrial
Project fee 332.00 15.80
Development Co., Ltd.
Notes to the financial statements Page 95
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2020
Notes to the financial statements
The content of related
Name Current period Previous period
party transactions
Raw material &
Benxi Steel & Iron (Group) Construction
supplementary materials 128.19 88.60
and Repairing Co., Ltd.
& spare parts
Benxi Steel & Iron (Group) Construction
Project fee 2,992.87 453.18
and Repairing Co., Ltd.
Benxi Steel & Iron (Group) Construction
Repair expense 2,673.04 5,520.77
and Repairing Co., Ltd.
Raw material and
Bengang Electronics and Gas Co., Ltd. 6,886.40 5,873.36
supplementary material
Bengang Electronics and Gas Co., Ltd. Repair services 1,168.35 252.09
Benxi High-tech Drilling Tools
Spare parts 6.22 4.47
Manufacture Co., Ltd.
Benxi New Career Development Co., Ltd. Labor protection fee 22.45 47.20
Raw material and
Benxi New Career Development Co., Ltd. supplementary material 107.92 48.42
and food
Liaoning Metallurgy Technician College Spare parts 117.57 699.54
Bengang Group International Economic
Agency fee 3,067.82 3,417.46
and Trading Co., Ltd.
Bengang Group International Economic
Port surcharges 5,381.24 5,240.58
and Trading Co., Ltd.
Benxi Steel & Iron (Group) Information
Spare parts 285.13 226.21
and Automatic Tech Co., Ltd.
Benxi Steel & Iron (Group) Information
Project fee 1,368.24 2,191.45
and Automatic Tech Co., Ltd.
Benxi Steel & Iron (Group) Thermal
Heating costs 18.98 27.20
Power Development Co., Ltd.
Notes to the financial statements Page 96
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2020
Notes to the financial statements
The content of related
Name Current period Previous period
party transactions
Benxi Steel & Iron (Group) Thermal Raw material and
55.00 2.84
Power Development Co., Ltd. supplementary material
Benxi Steel & Iron (Group) Designing
Design fees 28.77 29.24
Institute
Benxi Beiying Steel & Iron (Group) Co., Raw material and
466,858.50 591,426.43
Ltd. supplementary material
Benxi Beiying Steel & Iron (Group) Co.,
Energy & Power 21,856.41 31,906.75
Ltd.
Benxi Beiying Steel & Iron (Group) Co.,
Freight 166.79 234.47
Ltd.
Benxi Beiying Steel & Iron (Group) Co.,
Labor cost 2,016.35 4,250.18
Ltd.
Benxi Beiying Steel & Iron (Group) Co.,
Spare parts 897.66 758.28
Ltd.
Liaoning Hengtong Metallurgical Raw material and spare
5,120.05 4,493.46
Equipment Manufacture Co., Ltd. parts
Liaoning Hengtai Heavy Machinery Co., Raw material and spare
43.48 171.84
Ltd. parts
Liaoning Hengtai Heavy Machinery Co.,
Repair and labor cost 509.57 1,133.13
Ltd.
Bengang Group Co., Ltd. House renting fee 37.61 37.61
Company as the seller
(In 10 Thousand Yuan)
The content of related
Name Current period Previous period
party transactions
Bengang Electronics and Gas Co., Ltd. Energy & Power 38.10 50.42
Benxi Beiying Steel & Iron (Group) Co., Raw material & 135,340.23 60,230.78
Notes to the financial statements Page 97
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2020
Notes to the financial statements
The content of related
Name Current period Previous period
party transactions
Ltd. supplementary materials
& spare parts
Benxi Beiying Steel & Iron (Group) Co.,
Products 1,271.42 792.19
Ltd.
Benxi Beiying Steel & Iron (Group) Co.,
Energy & Power 6,882.65 7,565.39
Ltd.
Benxi Steel & Iron (Group) Real-estate
Energy & Power 6.25 6.20
Development Co., Ltd.
Benxi Steel & Iron (Group) Steel & Iron
Energy & Power 20.39 27.47
Process and Logistics Co., Ltd.
Benxi Steel & Iron (Group) Machinery
Products 1,014.55 995.77
Manufacture Co., Ltd.
Benxi Steel & Iron (Group) Machinery
Energy & Power 1,216.43 716.43
Manufacture Co., Ltd.
Raw material &
Benxi Steel & Iron (Group) Machinery
supplementary materials 139.52 605.66
Manufacture Co., Ltd.
& spare parts
Benxi Steel & Iron (Group) Construction
Energy & Power 335.07 19.45
Co., Ltd.
Raw material &
Benxi Steel & Iron (Group) Construction
supplementary materials 15.12 108.13
Co., Ltd.
& spare parts
Benxi Steel & Iron (Group) Mining Co.,
Energy & Power 33,585.45 34,182.02
Ltd.
Raw material &
Benxi Steel & Iron (Group) Mining Co.,
supplementary materials 512.75 3,156.26
Ltd.
& spare parts
Notes to the financial statements Page 98
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2020
Notes to the financial statements
The content of related
Name Current period Previous period
party transactions
Benxi Steel & Iron (Group) Mining Co.,
Freight revenue 497.33 487.08
Ltd.
Benxi Steel & Iron (Group) Thermal
Energy & Power 2,264.65 2,289.99
Power Development Co., Ltd.
Raw material &
Benxi Steel & Iron (Group) Thermal
supplementary materials 682.22 994.94
Power Development Co., Ltd.
& spare parts
Benxi Steel & Iron (Group) Industrial
Energy & Power 409.62 407.66
Development Co., Ltd.
Benxi Steel & Iron (Group) Industrial
Products 912.10 12.46
Development Co., Ltd.
Raw material &
Benxi Steel & Iron (Group) Industrial
supplementary materials 936.70 717.36
Development Co., Ltd.
& spare parts
Benxi Steel & Iron (Group) Information
Energy & Power 11.69 7.68
and Automatic Tech Co., Ltd.
Benxi Steel & Iron (Group) Construction
Energy & Power 66.60 79.48
and Repairing Co., Ltd.
Raw material &
Benxi Steel & Iron (Group) Construction
supplementary materials - 248.68
and Repairing Co., Ltd.
& spare parts
Benxi Steel & Iron (Group) Metallurgy
Energy & Power 105.91 302.41
Residues Co., Ltd.
Raw material &
Benxi Steel & Iron (Group) Metallurgy
supplementary materials 13,364.82 9,363.79
Residues Co., Ltd.
& spare parts
Benxi Steel & Iron (Group) Co., Ltd. Energy & Power 430.55 147.07
Notes to the financial statements Page 99
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2020
Notes to the financial statements
The content of related
Name Current period Previous period
party transactions
Raw material &
Benxi Steel & Iron (Group) Co., Ltd. supplementary materials 308.79 156.10
& spare parts
Benxi New Career Development Co., Ltd. Energy & Power 381.86 15.13
Dalian Boluole Steel Tube Co., Ltd. Products 279.34 188.32
Benxi Steel & Iron (Group) General
Energy & Power 1.06 3.09
Hospital
Benxi Steel & Iron (Group) Zhengtai
Energy & Power 3.20 0.27
Construction Materials Co., Ltd.
Raw material &
Liaoning Hengtong Metallurgical
supplementary materials 493.65 832.61
Equipment Manufacture Co., Ltd.
& spare parts
Raw material &
Bengang Cold-rolled Stainless Steel
supplementary materials 736.33 24.14
Dandong Co., Ltd.
& spare parts
Suzhou Bengang Industrial Co., Ltd. Products 19,082.32 16,362.43
Bengang Group Finance Co., Ltd. Energy & Power 0.65 0.69
Bengang Group Co., Ltd. Energy & Power 8.82 7.79
Notes:
The pricing policy is based on the transaction content and pricing principles specified in the "Raw
Material and Service Supply Agreement" and "Land Use Right Leasing Contract" and
supplementary agreements entered into between the Company and Bengang Group and Benxi
Steel and Iron (Group) Co., Ltd. The main pricing principle is that if there is a market price, the
market price will be used. If there is no market price, then the full cost plus the national additional
tax plus a reasonable profit will be used as the pricing standard.
2. Lease information of related parties
Company as the lessor
Notes to the financial statements Page 100
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2020
Notes to the financial statements
Lease capital Lease income of Lease income of previous
Lessee
category current period period
Benxi Steel & Iron (Group) Steel & Iron Warehouse and
250,000.00 250,000.00
Process and Logistics Co., Ltd. machinery
Benxi Steel & Iron (Group) Machinery Plants and
245,000.00
Manufacture Co., Ltd. machinery
Company as the lessee
Lease charges of Lease charges of
Lessor Lease capital category current period previous period
(Without tax) (Without tax)
Land use right
7,669,068.17 sq.m.
Benxi Steel & Iron (Group) Co., Ltd. 8,049,080.52 123,426,656.64
Land use right
42,920.00 sq.m.
2300 Hot rolling product
Benxi Steel & Iron (Group) Co., Ltd. 27,638,772.06 27,345,714.30
line, related real estate
Benxi Beiying Steel & Iron (Group) Co., 1780 Hot rolling product
5,002,327.68 59,013,278.16
Ltd. line, related real estate
Land use right
Bengang Group Co., Ltd. 4,972,711.56
728,282.30 sq.m.
Notes:
1. According to the "Land Use Right Leasing Contract" and subsequent supplementary agreements
signed between the Company and Bengang Steel and Iron (Group) Co., Ltd. on April 7, 1997,
December 30, 2005, the Company leases land from Bengang Group, with a monthly rent of 0.594
yuan per square meter. The leased land is 7,669,068.17 square meters and the annual rent is
54,665.10 thousand yuan.
2. On August 14, 2019, the company signed the "House Lease Agreement" with Bengang Steel
and Iron (Group) Co., Ltd. and Beiying Iron and Steel Company, and leased the houses and
auxiliary facilities occupied by the 2300 hot rolling mill production line and the 1780 hot rolling
mill production line. The lease term of the houses and ancillary facilities is until December 31,
2038. For details, please refer to note ‘11 – (1) - 1 – (2)’.
3. On July 15, 2019, the company signed "Land Lease Agreement" with Bengang Group and
Notes to the financial statements Page 101
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2020
Notes to the financial statements
Bengang Steel and Iron (Group) Co., Ltd. respectively, leased and used a total of 8 pieces of land
from Bengang Group and Bengang Steel and Iron (Group) Co., Ltd., with leased areas of
42,920.00 square meters, and 728,282.30 square meters, respectively. The lease term is 20 years,
the rental price is 1.138 yuan per square meter per month. For details, please refer to note ‘11 – (1)
- 1 – (3)’.
Financial leasing:
During the reporting period, the company leased machinery and equipment from Liaoning Hengyi
Finance Leasing Co., Ltd. in the form of financial leasing. From January to June 2020, the
purchase amount is RMB 509,841,317.15, and the amount of interest and commission is RMB
8,880,409.61 (The aforementioned amounts are all include tax.)
3. Information of Guarantee among related parties
(1) Company as the warrantee
Guarantee of loans:
Has the
Starting date of Ending date guarantee
Warrantor Amount of guarantee
Guarantee of Guarantee been
fulfilled
Bengang Group Co., Ltd. 183,237.83 2015/6/25 2025/9/30 No
Bengang Group Co., Ltd. 6,162.48 2015/6/25 2026/4/30 No
Bengang Group Co., Ltd. 444,736.12 2015/6/25 2026/4/30 No
Bengang Group Co., Ltd. 372,157.59 2015/6/25 2025/6/30 No
Bengang Group Co., Ltd. 10,641,920.02 2015/6/25 2025/6/30 No
Bengang Group Co., Ltd. 719,075.68 2015/6/25 2025/10/31 No
Bengang Group Co., Ltd. 7,625,460.88 2015/6/25 2025/10/31 No
Bengang Group Co., Ltd. 609,296.41 2015/6/25 2025/8/31 No
Bengang Group Co., Ltd. 9,290,610.97 2015/6/25 2025/8/31 No
Bengang Group Co., Ltd. 6,260,281.50 2015/8/20 2025/9/30 No
Bengang Group Co., Ltd. 198,880.00 2015/12/28 2025/8/31 No
Bengang Group Co., Ltd. 3,598,451.12 2015/12/28 2025/10/31 No
Bengang Group Co., Ltd. 326,681.92 2015/12/28 2025/6/30 No
Bengang Group Co., Ltd. 5,438,280.80 2015/12/28 2026/4/30 No
Bengang Group Co., Ltd. 4,069.11 2015/12/28 2026/4/30 No
Notes to the financial statements Page 102
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2020
Notes to the financial statements
Has the
Starting date of Ending date guarantee
Warrantor Amount of guarantee
Guarantee of Guarantee been
fulfilled
Bengang Group Co., Ltd. 2,981,698.20 2016/6/27 2026/4/30 No
Bengang Group Co., Ltd. 2,266,546.78 2016/12/14 2026/4/30 No
Bengang Group Co., Ltd. 857,708.44 2017/6/30 2025/10/31 No
Bengang Group Co., Ltd. $18,900,000 2016/12/27 2024/6/21 No
Bengang Group Co., Ltd. 75,990,000.00 2015/6/25 2021/9/21 No
Bengang Group Co., Ltd. 129,750,000.00 2016/12/27 2024/6/21 No
Bengang Group Co., Ltd. and
Benxi Steel & Iron (Group) 75,000,000.00 2016/3/30 2025/3/20 No
Co., Ltd.
Bengang Group Co., Ltd. and
Benxi Steel & Iron (Group) 475,000,000.00 2017/2/27 2025/2/20 No
Co., Ltd.
Benxi Steel & Iron (Group)
340,000,000.00 2019/12/17 2020/12/17 No
Co., Ltd.
Benxi Steel & Iron (Group)
31,000,000.00 2020/3/20 2021/3/20 No
Co., Ltd.
Benxi Steel & Iron (Group)
500,000,000.00 2019/11/19 2020/11/19 No
Co., Ltd.
Benxi Steel & Iron (Group)
480,000,000.00 2019/12/13 2020/12/13 No
Co., Ltd.
Benxi Steel & Iron (Group)
300,000,000.00 2019/12/13 2020/12/13 No
Co., Ltd.
Benxi Steel & Iron (Group)
147,000,000.00 2019/12/16 2020/12/16 No
Co., Ltd.
Benxi Steel & Iron (Group)
$90,000,000.00 2020/3/17 2021/3/17 No
Co., Ltd.
Benxi Steel & Iron (Group)
$100,000,000.00 2019/12/18 2020/12/18 No
Co., Ltd.
Bengang Group Co., Ltd. and 200,000,000.00 2019/9/9 2020/9/8 No
Notes to the financial statements Page 103
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2020
Notes to the financial statements
Has the
Starting date of Ending date guarantee
Warrantor Amount of guarantee
Guarantee of Guarantee been
fulfilled
Benxi Steel & Iron (Group)
Co., Ltd.
Bengang Group Co., Ltd. and
Benxi Steel & Iron (Group) 150,000,000.00 2019/10/10 2020/10/8 No
Co., Ltd.
Bengang Group Co., Ltd. and
Benxi Steel & Iron (Group) 200,000,000.00 2019/10/11 2020/10/9 No
Co., Ltd.
Bengang Group Co., Ltd. and
Benxi Steel & Iron (Group) 200,000,000.00 2019/9/19 2020/9/17 No
Co., Ltd.
Bengang Group Co., Ltd. and
Benxi Steel & Iron (Group) 200,000,000.00 2019/9/24 2020/9/23 No
Co., Ltd.
Bengang Group Co., Ltd. and
Benxi Steel & Iron (Group) 178,000,000.00 2019/12/12 2020/12/12 No
Co., Ltd.
Bengang Group Co., Ltd. and
Benxi Steel & Iron (Group) 100,000,000.00 2019/7/8 2020/7/7 No
Co., Ltd.
Bengang Group Co., Ltd. 1,200,000,000.00 2020/4/30 2020/12/8 No
Bengang Group Co., Ltd. 490,000,000.00 2019/9/5 2020/9/5 No
Bengang Group Co., Ltd. 480,000,000.00 2020/1/20 2020/10/19 No
Bengang Group Co., Ltd. 800,000,000.00 2020/3/4 2020/9/3 No
Bengang Group Co., Ltd. 500,000,000.00 2020/6/19 2021/6/18 No
Bengang Group Co., Ltd. 310,000,000.00 2020/5/27 2021/5/25 No
Bengang Group Co., Ltd. 670,000,000.00 2020/5/27 2021/5/25 No
Bengang Group Co., Ltd.;
480,000,000.00 2019/12/12 2020/11/3 No
Benxi Beiying Steel & Iron
Notes to the financial statements Page 104
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2020
Notes to the financial statements
Has the
Starting date of Ending date guarantee
Warrantor Amount of guarantee
Guarantee of Guarantee been
fulfilled
(Group) Co., Ltd.
Bengang Group Co., Ltd.;
Benxi Beiying Steel & Iron 490,000,000.00 2019/12/12 2020/11/10 No
(Group) Co., Ltd.
Bengang Group Co., Ltd.;
Benxi Beiying Steel & Iron 320,000,000.00 2019/12/13 2020/12/3 No
(Group) Co., Ltd.
Bengang Group Co., Ltd.;
Benxi Beiying Steel & Iron 710,000,000.00 2019/12/16 2020/12/10 No
(Group) Co., Ltd.
Bengang Group Co., Ltd. 350,000,000.00 2019/10/11 2020/9/10 No
Bengang Group Co., Ltd. 15,600,000.00 2020/1/16 2020/7/16 No
Benxi Steel & Iron (Group)
JPY 173,820,000 1997/10/10 2027/9/10 No
Co., Ltd.
Bengang Group Co., Ltd. and
Benxi Steel & Iron (Group) 100,000,000.00 2020/1/9 2020/10/9 No
Co., Ltd.
Bengang Group Co., Ltd. and
Benxi Steel & Iron (Group) 100,000,000.00 2019/10/11 2020/10/9 No
Co., Ltd.
Bengang Group Co., Ltd. 220,000,000.00 2019/9/25 2020/9/25 No
Bengang Group Co., Ltd. 340,000,000.00 2019/9/6 2020/9/6 No
Bengang Group Co., Ltd. 140,000,000.00 2020/1/17 2021/1/17 No
4. 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 1,364,312.51 9,638,807.40 9,774,864.22 1,228,255.69
Notes to the financial statements Page 105
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2020
Notes to the financial statements
1. The interests of deposits in Bengang Group Finance Co., Ltd. is RMB 148,923
thousand from January to June in 2020. As at 30 June 2020, the interest receivable
from Bengang Group Finance Co., Ltd. is RMB 32,395.8 thousand.
2. As at 30 June 2020, the restricted deposits in Bengang Group Finance Co., Ltd. is
RMB 1,886,440 thousand.
3. From January to June in 2020, 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 4.5 billion from January to June in 2020. As at 30 June 2020, the amount of
acceptance bill opened by Bengang Group Finance Co., Ltd. was RMB 2.71 billion,
and the amount of the acceptance bill that had been opened and unpaid by Bengang
Group Finance Co., Ltd. is RMB 3.099 billion, and the proportion of deposit is
98.61%.
5. From January to June in 2020, the Company did not apply for bill discounting to
the finance company.
(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
Capital lending 7,500.00 7,500.00
Total 7,500.00 7,500.00
Notes: The interest accrued is RMB 1,763,125.00 during the current period, and as at 30 June
2020, the interest that has not been paid is RMB 1,763,125.00.
(6) Receivables and payables of the related parties
1. Receivables of the Company
(in 10 thousand yuan)
30 June 2020 31 December 2019
Gross Provision Provision
Items Name Name Gross carrying
carrying for bad for bad
amount
amount debts debts
Accounts receivable
Bengang Group 5,118.68 58.92 5,892.34 58.92
Notes to the financial statements Page 106
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2020
Notes to the financial statements
30 June 2020 31 December 2019
Gross Provision Provision
Items Name Name Gross carrying
carrying for bad for bad
amount
amount debts debts
International Economic
and Trading Co., Ltd.
Benxi Steel & Iron
(Group) Thermal Power 1,152.45 13.01 1,301.32 13.01
Development Co., Ltd.
Bengang Cold-rolled
Stainless Steel Dandong 185.97 1.89 188.8 1.89
Co., Ltd.
Benxi Steel & Iron
(Group) Machinery 6.68 0.08 7.7 0.08
Manufacture Co., Ltd.
Benxi Steel & Iron
(Group) Metallurgy 0.14 0.14
Residues Co., Ltd.
Prepayments
Benxi Beiying Steel &
81,385.62 93,762.24
Iron (Group) Co., Ltd.
Benxi Steel & Iron
(Group) Machinery 3,548.95 3,559.63
Manufacture Co., Ltd.
Other receivables
Bengang Group
International Economic 375.64 0.2 432.77 0.2
and Trading Co., Ltd.
Benxi Steel & Iron
(Group) Real-estate 266.12 246.52 270.17 246.52
Development Co., Ltd.
Benxi Steel & Iron
(Group) Medical 94.46 85.27 94.75 85.27
Services Department;
Notes to the financial statements Page 107
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2020
Notes to the financial statements
30 June 2020 31 December 2019
Gross Provision Provision
Items Name Name Gross carrying
carrying for bad for bad
amount
amount debts debts
Benxi Steel & Iron
(Group) Zhengtai
18.26 12.3 24.6 12.3
Construction Materials
Co., Ltd.
Liaoning Metallurgy
14.15 4.58 14.2 4.58
Technician College
Benxi Steel & Iron
(Group) Industrial 0.01 0.02
Development Co., Ltd.
Other non-current
assets
Liaoning Hengyi
Financial Leasing Co., 84,111.31 58,419.72
Ltd.
Notes receivable
Benxi Beiying Steel &
39,958.98 41,739.59
Iron (Group) Co., Ltd.
Benxi Steel (Group) Co.,
402.17
Ltd.
Zhejiang Bengang
Jingrui Steel Processing 400
Co., Ltd.
2. Payables of the Company
(in 10 thousand yuan)
Items Name 30 June 2020 31 December 2019
Accounts payables
Bengang Group International Economic and
78,932.33 70,193.27
Trading Co., Ltd.
Benxi Steel & Iron (Group) Industrial 10,768.78 11,311.75
Notes to the financial statements Page 108
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2020
Notes to the financial statements
Items Name 30 June 2020 31 December 2019
Development Co., Ltd.
Benxi Steel & Iron (Group) Construction
12,253.65 10,331.91
Co., Ltd.
Benxi Steel & Iron (Group) Mining Co., Ltd. 9,365.32 8,524.77
Benxi Steel & Iron (Group) Information and
7,302.57 6,567.06
Automatic Tech Co., Ltd.
Benxi Steel & Iron (Group) Construction
4,430.36 4,443.69
and Repairing Co., Ltd.
Liaoning Hengtai Heavy Machinery Co.,
3,213.82 3,246.28
Ltd.
Bengang Group Co., Ltd. 3,139.46 3,148.91
Liaoning Hengtong Metallurgical Equipment
1,432.13 1,487.15
Manufacture Co., Ltd.
Bengang Electronics and Gas Co., Ltd. 998.36 1,149.26
Benxi Steel & Iron (Group) Machinery
1,012.81 1,143.65
Manufacture Co., Ltd.
Benxi Steel & Iron (Group) Metallurgy
1,197.39 1,033.48
Residues Co., Ltd.
Liaoning Metallurgy Technician College 629.17 724.86
Liaoning Metallurgy Vocational Technical
650.43 671.93
College
Bengang Cold-rolled Stainless Steel
520.07 521.64
Dandong Co., Ltd.
Benxi New Career Development Co., Ltd. 217.15 292.66
Benxi Steel & Iron (Group) Thermal Power
171.46 144.24
Development Co., Ltd.
Benxi Steel & Iron (Group) Real-estate
54.38 62.65
Development Co., Ltd.
Benxi High-tech Drilling Tools Manufacture
32.15 33.77
Co., Ltd.
Benxi Iron and Steel (Group) Engineering
15.68 16.28
Construction Supervision Co., Ltd.
Notes to the financial statements Page 109
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2020
Notes to the financial statements
Items Name 30 June 2020 31 December 2019
Benxi Steel & Iron (Group) Medical
1.78 2.04
Services Department;
Benxi Steel & Iron (Group) Zhengtai
0.21 0.24
Construction Materials Co., Ltd.
Advance from
customers
Suzhou Bengang Industrial Co., Ltd. 5,387.92 1,635.62
Benxi Steel & Iron (Group) Steel & Iron
741.11 1,582.14
Process and Logistics Co., Ltd.
Benxi Steel & Iron (Group) Metallurgy
126.57
Residues Co., Ltd.
Dalian Boluole Steel Tube Co., Ltd. 99.58 85.93
Liaoning Hengtong Metallurgical Equipment
82.00
Manufacture Co., Ltd.
Benxi Steel & Iron (Group) Industrial
23.36 35.79
Development Co., Ltd.
Other payables
Benxi Steel (Group) Co., Ltd. 16,187.24 18,278.27
Bengang Group International Economic and
1,411.25 1,432.74
Trading Co., Ltd.
Benxi Steel & Iron (Group) Construction
456.69 526.14
Co., Ltd.
Benxi Steel & Iron (Group) Thermal Power
423.69 437.69
Development Co., Ltd.
Guangzhou Free Trade Zone Bengang Sales
266.64 267.44
Co., Ltd.
Benxi New Career Development Co., Ltd. 166.09 223.84
Benxi Steel & Iron (Group) Real-estate
127.36 143.59
Development Co., Ltd.
Benxi Steel & Iron (Group) Industrial
26.40 30.42
Development Co., Ltd.
Benxi Beiying Steel & Iron (Group) Co., 4.45 6.00
Notes to the financial statements Page 110
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2020
Notes to the financial statements
Items Name 30 June 2020 31 December 2019
Ltd.
Liaoning Metallurgy Technician College 1.19 1.34
Benxi Steel & Iron (Group) Machinery
0.97 1.01
Manufacture Co., Ltd.
Bengang Group Finance Co., Ltd. 0.52 0.60
Liaoning Hengyi Financial Leasing Co., Ltd. 0.35 0.39
Long-term payables
Liaoning Hengyi Financial Leasing Co., Ltd. 105,074.88 51,693.94
Notes payables
Benxi Beiying Steel & Iron (Group) Co.,
625,805.90 508,775.58
Ltd.
Benxi Steel & Iron (Group) Mining Co., Ltd. 53,545.40 69,292.59
Benxi Steel & Iron (Group) Industrial
691.00 3,203.52
Development Co., Ltd.
Bengang Electronics and Gas Co., Ltd. 6,116.16 2,285.78
Liaoning Hengyi Financial Leasing Co., Ltd. 6,126.45 1,758.01
Benxi Steel & Iron (Group) Real-estate
684.81
Development Co., Ltd.
Liaoning Metallurgy Technician College 195.91
Benxi Steel & Iron (Group) Information and
189.02 189.02
Automatic Tech Co., Ltd.
Benxi Steel & Iron (Group) Machinery
254.75 186.51
Manufacture Co., Ltd.
Bengang Cold-rolled Stainless Steel
71.84 71.84
Dandong Co., Ltd.
Liaoning Metallurgy Vocational Technical
43.55
College
Benxi Steel & Iron (Group) Construction
22.04 14.82
and Repairing Co., Ltd.
Benxi Steel & Iron (Group) Construction
13.05
Co., Ltd.
Benxi High-tech Drilling Tools Manufacture 5.71 5.71
Notes to the financial statements Page 111
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2020
Notes to the financial statements
Items Name 30 June 2020 31 December 2019
Co., Ltd.
11. Commitments and Contingencies
(1) Commitments
1. Lease contracts in progress or to be performed and their financial impacts
(1) According to the "Land Use Right Leasing Contract" and subsequent supplementary
agreements signed by the company and Benxi Steel (Group) on April 7, 1997, December
30, 2005, the Company leased land from Benxi Steel (Group). The monthly rent is 0.594
yuan per square meters, the leased land area is 7,669,068.17 square meters, and the
annual rent is 54,665,100 yuan.
(2) On August 14, 2019, the Company signed the "House Lease Agreement" with Benxi
Steel (Group) and Beiying Steel respectively, leasing the houses and auxiliary facilities
occupied by 2300 and 1780 hot rolling mill production lines, and the lease term ends on
December 31, 2038. The rental fee is based on the depreciation of the original rent value
and the national additional tax, plus reasonable profit negotiation. The estimated annual
rent is not more than 20 million yuan and 18 million yuan respectively. The rental fee is
settled and paid monthly. This related party transaction has been reviewed and approved
at the fourth meeting of the eighth board of directors of the Company.
(3) On July 15, 2019, the Company signed "Land Lease Agreement" with Bengang Group
and Benxi Steel (Group) respectively, and leased and used a total of 8 pieces of land of
the two companies. The lease areas are 42,920.00 square meters and 728,282.30 square
meters respectively, with a lease term of 20 years, and a rental price of 1.138 yuan per
square meter per month. After the agreement comes into effect, considering the national
law and policy adjustments every five years, both parties should determine whether the
rent needs to be adjusted according to the pricing basis stipulated in Article 2 of this
agreement. This related party transaction has been reviewed and approved at the third
meeting of the eighth board of directors of the company.
Notes to the financial statements Page 112
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2020
Notes to the financial statements
(4) As of June 30, 2020, the amount of financial lease contracts that the Company and
Liaoning Hengyi Financial Leasing Co., Ltd. had signed but had not yet started to execute
was 2.108 billion yuan.
2. Irrevocable letter of credit
As at June 30, 2020, the amount of irrevocable letter of credit that was not fulfilled is
RMB 2.599 billion.
(2) Contingencies
At the balance sheet date, no significant contingencies need to be disclosed.
12. Subsequent events
(1) Important non-adjustment matters
Impact of the COVID-19
Since the outbreak of the COVID-19, the consumption, investment and exports in our
country have been affected to a certain extent. The Company pays close attention to the
progress of the epidemic. As of the date of this report, the situation of domestic epidemic
prevention and control continues to improve, but the situation of overseas epidemic
prevention and control is still grim. Iron ore imports, direct and indirect exports of
products have been affected to a certain extent. The Company will continually and
actively evaluate the development situation of the epidemic situation, scientifically
respond to the challenges of the epidemic situation, and ensure the stability of production
and operation.
(2) Profit distribution
Not applicable.
(3) Sales Return
Not applicable.
(4) Divided into assets held for sale and disposal portfolio
Not applicable.
Notes to the financial statements Page 113
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2020
Notes to the financial statements
(5) Other subsequent events
Not applicable.
13. Other significant events
(1) Correction of previous accounting errors
None.
(2) Debt restructuring
None.
(3) Asset replacement
None.
(4) Termination of business
None.
(5) Segment information
Since the Company’s main product is steel with other products accounting for only a
small proportion of sales, and the main production base is located in Liaoning area,
segmented reporting is not applicable.
(6) 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 the People’s bank of China over the lease term. The lease security ratio is not
higher than 30% of the lease principal amount.
Notes to the financial statements Page 114
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2020
Notes to the financial statements
2. Shares pledged by the Controlling Shareholders
As at 30 June 2020, the total 2,407,002,394 shares were held by the controlling shareholder
Benxi Steel & Iron (Group) Co., Ltd., of which 712,545,000 shares were pledged and
102,100,000 shares were frozen.
3. The controlling shareholder completes the increase in the company's shares
Benxi Steel (Group) Co., Ltd., the Company's controlling shareholder, plans to increase its
shareholding in the Company within 6 months from February 14, 2020. The total amount of
this shareholding increasing plan is no more than RMB 100 million. As of August 12, 2020,
Benxi Steel (Group)'s shareholding increase plan was completed. Benxi Steel (Group) has
accumulatively increased its holdings of 28,523,000 shares of the Company, accounting for
0.66% of the Company's total share capital, and the total amount of additional holdings was
RMB 99.98 million.
4. Accounting estimates adjustment
On January 31, 2020, the eighth meeting of the eighth session of the company's board of
directors passed a resolution of the "Proposal on Adjusting the Depreciation Period of Certain
Fixed Assets."
Reasons for changes in accounting estimates: According to Article 19 of the "Accounting
Standards for Business Enterprises No. 4 - Fixed Assets", "Enterprises should review the
useful life, estimated net residual value and depreciation method of fixed assets at least at the
end of each year. If there is a difference between the estimated amount and the original
estimated amount, the useful life of the fixed asset shall be adjusted". In order to fairly reflect
the company's financial status and operating results, make the fixed asset depreciation life
closer to its actual useful life, and adapt to the company's business development and fixed
asset management needs, the company assessed the use and useful life of fixed assets. After
the company’s evaluation of the actual status and depreciation period of fixed assets, it is
concluded that the company’s production equipment has a high level of equipment and
technical content, and the maintenance is in good condition. During the period from 2010 to
2019, the company’s cumulative investment in equipment maintenance costs was 11.959
Notes to the financial statements Page 115
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2020
Notes to the financial statements
billion yuan. In order to make the depreciation life of fixed assets closer to the actual service
life, it is necessary to adjust the depreciation life of some fixed assets of the company.
Accounting estimates used before and after the change:
The company decided to adjust the useful life of some fixed assets from January 1, 2020. The
specific adjustment plan is as follows:
Accounting estimates used before and after the change:
Adjusted depreciation period
Fixed asset category Original depreciation period (years)
(years)
1. Mechanical equipment 14 21
2. Power equipment 18 19
3. Conduction equipment 18 28
4. Transportation equipment 6 12
5. Tools and other production
9 14
utensils
6. Non-production equipment and
appliances
(1) Equipment and tools 18 22
(2) Copiers, word processors 5 8
7. Houses and buildings
(1) Houses for production 40 40
(2) Corroded production houses 25 25
(3) Production houses subject to
10 15
strong corrosion
(4) Non-production houses 30 45
(5) Simple houses 8 10
(6) Buildings 25 25
5. Issuance of convertible corporate bonds
The Company plans to publicly issue convertible corporate bonds that can be converted into
company’s A shares. The total amount of convertible bonds issued this time will not exceed
Notes to the financial statements Page 116
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2020
Notes to the financial statements
RMB 6.8 billion (inclusive RMB 6.8 billion). The specific amount of funds raised is to be
confirmed determined within the aforementioned quota by the Company's board of directors
or persons authorized by the board of directors under the authorization of the Company's
general meeting of shareholders.
After deducting the issuance expenses, the proceeds will be fully invested in the following
projects:
Unit: in 10 thousand yuan
No. Projects Total Investment Proposed investment
1 High grade high magnetic induction 114,500.00 105,700.00
non-oriented silicon steel project
2 Steelworks No. 8 Casting Machine Project 39,500.00 33,500.00
3 Energy-saving renovation project of No. 5 150,000.00 96,000.00
blast furnace in ironworks
4 Special Steel Electric Furnace Upgrading 160,000.00 141,600.00
Project
5 CCPP power generation project 98,826.80 83,300.00
6 No. 4-No. 6 converter environmental 27,000.00 19,900.00
protection renovation project
7 Repayment of bank loan 200,000.00 200,000.00
Total 789,826.80 680,000.00
The relevant proposal of the Company's public issuance of A-share convertible corporate
bonds was reviewed and approved by the second meeting of the eighth board of directors of
the Company on May 22 2019, and was resolved by the Company's second extraordinary
general meeting of shareholders on June 10, 2019.
In June 2019, the State-owned Assets Supervision and Administration Commission of the
People ’s Government of Liaoning Province issued the "Response for the Public Issuance of
Convertible Corporate Bonds of Bengang Steel Plates Co., Ltd." (Liao-Guo-Zi-Chan-Quan
Notes to the financial statements Page 117
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2020
Notes to the financial statements
[2019] No. 110), which approved the Company's application for public offering of no more
than RMB 6.8 billion (inclusive) convertible corporate bonds with a term of 6 years.
The "Proposal on the Company's Public Offering of A Share Convertible Corporate Bonds
(Revised Draft) was reviewed and approved by the sixth meeting of the eighth board of
directors on October 8, 2019.
The "Proposal on the Company's Public Offering of A Share Convertible Corporate Bonds
(Second Revision)" was reviewed and approved by the seventh meeting of the eighth board
of directors on October 28, 2019.
The "Proposal on the Company's Public Offering of A Share Convertible Corporate Bonds
(Second Revision)" was passed by the resolution made by the fourth extraordinary general
meeting of shareholders in 2019 on November 14, 2019.
On December 20, 2019, the Issuance Review Committee of the China Securities Regulatory
Commission (hereinafter referred to as the "China Securities Regulatory Commission")
reviewed the company's application for public issuance of A-share convertible corporate
bonds. According to the results of the meeting, the Company's public offering for A-share
convertible corporate bonds was approved. On January 22, 2020, the Company received the
“Response for Approving the Public Issuance of Convertible Corporate Bonds of Bengang
Steel Plate Co., Ltd.” issued by the China Securities Regulatory Commission (Zhongjian
License [2020] No. 46) (hereinafter referred to as “Response”) ,which approved Company’s
publicly issuance of convertible corporate bonds with a total face value of RMB 6.8 billion to
the public for a period of 6 years. This approval is valid for 6 months from the date of
approval of the issuance.
RMB 6.8 billion convertible bonds of the Company, each with a face value of RMB 100,
totaling 68 million in quantity, are issued at face value.
Notes to the financial statements Page 118
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2020
Notes to the financial statements
14. Capital management
The main objectives of the company's capital management are as following:
- to ensure the Company's ability to continue to operate in order to provide returns to
shareholders and other stakeholders continuously;
- to price the products and services accordingly according to the risk level, so as to
provide sufficient returns to shareholders.
The Company has set a capital amount proportional to the risk, and manages and adjusts the
capital structure according to changes in the economic environment and the risk
characteristics of the underlying assets. In order to maintain or adjust the capital structure, the
Company may adjust the amount of dividends paid to shareholders, return capital to
shareholders, issue new shares or sell assets to reduce liabilities.
The company monitors capital based on the adjusted liability / capital ratio.
Liability/capital ratio after adjustment as of the balance sheet date is showed as follows:
Items 30 June 2020 31 December 2019
Shor-term loans 12,506,705,000.00 13,151,478,000.00
Long-term loans due within one
1,201,524,980.80 234,474,657.99
year
Long-term loans 3,810,463,934.18 4,849,675,910.73
Total amount of loans 17,518,693,914.98 18,235,628,568.72
Minus: cash and cash equivalent 11,417,592,663.52 13,441,414,988.58
Net value of liabilities 6,101,101,251.46 4,794,213,580.14
Shareholder’s equity 20,291,922,235.34 20,012,826,841.40
Liability/capital ratio after
30.07% 23.96%
adjustment
15. Notes to the financial statements of parent company
(1) Accounts receivable
1. Accounts receivable disclosed by aging
Notes to the financial statements Page 119
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2020
Notes to the financial statements
Items 30 June 2020 31 December 2019
Within 1 year (inclusive) 326,463,297.85 339,851,051.52
1-2 years (inclusive) 32,410,975.65 31,642,073.27
2-3 years (inclusive) 24,355,924.19 24,708,264.04
Over 3 years 170,785,391.75 175,744,519.91
Sub-total 554,015,589.45 571,945,908.74
Less: Provision for bad
180,541,758.35 182,948,800.28
debts
Total: 373,473,831.10 388,997,108.46
2. Accounts receivable disclosed by category
30 June 2020
Gross carrying amount Provision for bad debts
Items
Percentage Bad debts Book value
Amount Amount
(%) ratio (%)
Individually
significant and
tested for 47,762,337.18 8.62 47,762,337.18 100.00
impairment
individually
Accounts
receivable tested
506,253,252.27 91.38 132,779,421.17 25.79 373,473,831.10
for impairment by
portfolio
Include:
Portfolio 1: Aging 253,577,229.31 45.77 132,779,421.17 52.36
Portfolio 2:
Related party
within 252,676,022.96 45.61
consolidation
scope
Total 554,015,589.45 100.00 180,541,758.35 373,473,831.10
Notes to the financial statements Page 120
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2020
Notes to the financial statements
31 December 2019
Gross carrying amount Provision for bad debts
Items
Percenta Bad debts Book value
Amount Amount
ge (%) ratio (%)
Individually
significant and tested
47,762,337.18 8.35 47,762,337.18 100.00
for impairment
individually
Accounts receivable
tested for impairment 524,183,571.56 91.65 135,186,463.10 25.79 388,997,108.46
by portfolio
Include:
Portfolio 1: Aging 268,981,818.03 47.03 135,186,463.10 50.26 133,795,354.93
Portfolio 2: Related
party within 255,201,753.53 44.62 255,201,753.53
consolidation scope
Total 571,945,908.74 100.00 182,948,800.28 388,997,108.46
Receivables individually insignificant but tested for impairment individually:
30 June 2020
Bad
Items Accounts Provision for debts
Reason
receivable bad debts ratio
（%）
Benxi Nanfen
Benxi Nanfen Xinhe
47,762,337.18 47,762,337.18 100.00 Xinhe has halt
Metallurgical Co., Ltd.
operation.
Total 47,762,337.18 47,762,337.18
Accounts receivable tested for impairment by portfolio
Portfolio tested by aging
30 June 2020
Items
Gross carrying amount Provision for bad debts Bad debts ratio (%)
Notes to the financial statements Page 121
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2020
Notes to the financial statements
30 June 2020
Items
Gross carrying amount Provision for bad debts Bad debts ratio (%)
Within 1 year 326,463,297.86 3,264,632.98 1.00
1-2 years 32,410,975.65 1,620,548.78 5.00
2-3 years 24,355,924.19 4,871,184.84 20.00
Over 3 years 123,023,054.57 123,023,054.57 100.00
Total 506,253,252.27 132,779,421.17
3. Information of provision, reversal or recovery of bad debts of current period.
The reversal of bad debts of current period is RMB 2,407,041.93.
4. No accounts receivable has been written off this year.
5. Top five debtors at the end of the period
30 June 2020
Percentage of total
Company Provision for
Amount accounts receivable
bad debts
(%)
No.1 51,186,799.05 12.25 589,234.48
No.2 47,762,337.18 11.43 47,762,337.18
No.3 14,246,791.47 3.41
No.4 13,192,766.29 3.16
No.5 11,524,466.74 2.76 130,131.74
Total 137,913,160.74 33.00 48,481,703.40
6. There is no account receivables be derecognized due to the transfer of financial
assets at the end of the period.
7. There is no account receivables be transferred and further involved in assets and
liabilities during the current period.
(2) Accounts receivable financing
1. Details of accounts receivable financing
Notes to the financial statements Page 122
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2020
Notes to the financial statements
Items 30 June 2020 31 December 2019
Notes receivable 3,997,787,483.35 2,193,319,842.60
Include: Bank acceptance bill 3,984,477,483.35 2,184,526,834.33
Commercial acceptance bill 13,310,000.00 8,793,008.27
Total 3,997,787,483.35 2,193,319,842.60
Notes: Accounts receivable financing reflects notes receivable and accounts receivable
that are measured at fair value through other comprehensive income.
2. Provision for financing impairment of receivables
None.
3. The pledged acceptance bill at the end of the period
Items Pledged amount
Bank acceptance bill 759,753,834.45
Commercial acceptance bill
Total 759,753,834.45
4.The amount of notes receivable endorsed over or discounted but not yet matured
at the end of the period
Items Derecognized amount Not derecognized amount
Bank acceptance bill 4,879,438,530.74
Commercial acceptance bill
Total 4,879,438,530.74
5. There is no notes receivable has been transferred into accounts receivable due to
inability of drawer to meet acceptance bill at the year-end.
(3) Other receivables
Items 30 June 2020 31 December 2019
Interest receivables 31,655,295.18 19,658,230.77
Dividend receivables
Other receivables 226,277,114.59 247,005,005.04
Total 257,932,409.77 266,663,235.81
1. Interest receivable
Notes to the financial statements Page 123
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2020
Notes to the financial statements
(1) Interest receivable disclosed by category
Items 30 June 2020 31 December 2019
Deposit interest 31,655,295.18 19,658,230.77
Subtotal 31,655,295.18 19,658,230.77
Less: provision for bad debt
Total 31,655,295.18 19,658,230.77
(2) There is no significant provision for overdue interest and bad debt provision.
2. Other receivables
(1) Other receivables disclosed by Aging
Items 30 June 2020 31 December 2019
Within 1 year (inclusive) 96,502,772.71 115,480,359.05
1-2 years (inclusive) 16,100,882.51 15,711,856.93
2-3 years (inclusive) 3,394,063.57 3,479,413.59
Over 3 years 175,449,847.41 177,724,723.88
Sub-total 291,447,566.20 312,396,353.45
Less: Provision for bad
65,170,451.61 65,391,348.41
debts
Total 226,277,114.59 247,005,005.04
(2) Provision for bad debt provision
Stage one Stage two Stage three
Lifetime expected
Provision for bad 12-month Lifetime expected
credit losses (credit Total
debts expected credit losses (no
impairment
credit losses credit impairment)
occurred)
Beginning balance 9,179,698.89 56,211,649.52 65,391,348.41
Current period
provision,
write-back, -220,896.80 -220,896.80
transfer-in.
transfer-out
Current period
Notes to the financial statements Page 124
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2020
Notes to the financial statements
Stage one Stage two Stage three
Lifetime expected
Provision for bad 12-month Lifetime expected
credit losses (credit Total
debts expected credit losses (no
impairment
credit losses credit impairment)
occurred)
reversal
Current period
write-off
Other changes
Ending balance 8,958,802.09 56,211,649.52 65,170,451.61
Changes in the gross carrying amount of other receivables are as follows
Stage one Stage two Stage three
Gross Lifetime expected
Lifetime expected
carrying 12-month expected credit losses (credit Total
credit losses (no
amount credit losses impairment
credit impairment)
occurred)
Beginnin
g 232,528,777.63 23,655,926.30 56,211,649.52 312,396,353.45
balance
Current
-
period
increase
Current
period 20,727,890.45 220,896.80 20,948,787.25
decrease
Other
change
Ending
211,800,887.18 23,435,029.50 56,211,649.52 291,447,566.20
balance
(3) Other receivables disclosed by nature
Notes to the financial statements Page 125
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2020
Notes to the financial statements
Nature 30 June 2020 31 December 2019
Receivable and payable 283,339,342.69 304,483,575.55
Other 8,108,223.51 7,912,777.90
Total 291,447,566.20 312,396,353.45
(4) Top five debtors at the year-end
Percentage of
Nature or total other Provision for
Company Amount Aging
content receivables bad debts
(%)
Receivable Within 1
The First 9,648,111.00 3.31
and payable year
Receivable Within 1
The Second 9,505,576.53 3.26
and payable year
Receivable Within 1
The Third 6,804,946.27 2.33
and payable year
Receivable
The Fourth 3,756,448.28 1-2 years 1.29 2,000.00
and payable
Within 1
Receivable
The Fifth 2,661,194.04 year and 0.91 2,465,166.01
and payable
over 3 years
Total 32,376,276.12 11.11 2,467,166.01
(5) There is no other receivables relates to government subsidies at the end of the
reporting period.
(6) There is no other receivables derecognized due to the transfer of financial assets at
the end of the reporting period.
(7) There is no transfer of other receivables and continued involvement in the amount
of assets and liabilities formed at the end of the reporting period.
(4) Long-term equity investment
Items 30 June 2020 31 December 2019
Notes to the financial statements Page 126
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2020
Notes to the financial statements
Gross carrying Gross carrying
Impairment Book value Impairment Book value
amount amount
Subsidiaries 2,016,281,902.16 2,016,281,902.16 2,016,281,902.16 2,016,281,902.16
Joint ventures
Total 2,016,281,902.16 2,016,281,902.16 2,016,281,902.16 2,016,281,902.16
Details of investment in subsidiaries
Impair
Ending
ment
balance
Ending of
Name of entity Beginning balance Increase Decrease of
balance curren
impair
t
ment
period
Guangzhou Bengang Steel & Iron
30,000,000.00 30,000,000.00
Trading Co., Ltd.
Shanghai Bengang Metallurgy
30,000,000.00 30,000,000.00
Science and Technology Co., Ltd.
Bengang Steel Plates Liaoyang
529,899,801.38 529,899,801.38
Pellet Co., Ltd.
Dalian Benruitong Automobile
65,000,000.00 65,000,000.00
Material Technology Co., Ltd.
Bengang Posco Cold-rolled Sheet
1,019,781,571.10 1,019,781,571.10
Co., Ltd.
Changchun Bengang Steel & Iron
28,144,875.36 28,144,875.36
Sales Co., Ltd.
Harbin Bengang Economic and
29,923,398.23 29,923,398.23
Trading Co., Ltd.
Nanjing Bengang Materials Sales
2,081,400.65 2,081,400.65
Co., Ltd.
Wuxi Bengang Steel & Iron Sales
29,936,718.57 29,936,718.57
Co., Ltd.
Xiamen Bengang Steel & Iron
1,095,711.66 1,095,711.66
Sales Co., Ltd.
Yantai Bengang Steel & Iron Sales
49,100,329.41 49,100,329.41
Co., Ltd.
Tianjin Bengang Steel & Iron
60,318,095.80 60,318,095.80
Trading Co., Ltd.
Benxi Bengang Steel Sales Co.,
5,000,000.00 5,000,000.00
Ltd
Shenyang Bengang Metallurgical
30,000,000.00 30,000,000.00
Science and Technology Co., Ltd.
Chongqing Liaoben Steel & Iron 30,000,000.00 30,000,000.00
Notes to the financial statements Page 127
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2020
Notes to the financial statements
Trade Co., Ltd.
Bengang Baojin (Shenyang)
Automobile New Materials 76,000,000.00 76,000,000.00
Technology Co., Ltd.
Total 2,016,281,902.16 2,016,281,902.16
(5) Operating income and operating cost
Current period Previous period
Items
Revenue Cost Revenue Cost
Principal business 19,591,244,860.47 18,369,564,255.82 21,327,519,597.49 19,894,713,843.28
Other business 2,168,536,821.65 2,009,584,025.45 2,119,696,260.44 1,862,576,153.90
Total 21,759,781,682.12 20,379,148,281.27 23,447,215,857.93 21,757,289,997.18
Details of operating income:
Items Current period Previous period
Principal business 19,591,244,860.47 21,327,519,597.49
Including: Domestic 17,433,565,833.49 18,051,675,852.17
Overseas 2,157,679,026.98 3,275,843,745.32
Other business 2,168,536,821.65 2,119,696,260.44
Including: Domestic 2,168,536,821.65 2,119,696,260.44
Overseas
Total 21,759,781,682.12 23,447,215,857.93
16. Supplementary information
(1) Details of non-recurring profit and loss
Items Amount Notes
Profit or loss from disposal of non-current assets -19,733,108.62
Tax refund, reduction or exemption of unauthorized approval or no formal
approval document
Government subsidy attributable to profit and loss of current period (except
such government subsidy closely related to the company's normal business 38,587,332.40
operation, meeting the regulation of national policy and enjoyed constantly
Notes to the financial statements Page 128
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2020
Notes to the financial statements
Items Amount Notes
in certain quota or quantity according to a certain standard)
Fund occupation fee charged to non-financial enterprises included in current
profit and loss
The investment cost of an enterprise acquiring subsidiaries, associates and
joint ventures is less than the income from the fair value of the identifiable
net assets of the investee when obtaining the investment
Non-monetary asset exchange gains and losses
Profit or loss from investment or assets entrusted to others
Provision for asset impairment due to unavoidable factors such as natural
disasters
Profit or loss from debt restructuring
Restructuring costs, such as the cost of relocating employees, integration
costs, etc.
Profits and losses in excess of fair value from unfair transaction
Subsidiary companies arising from business combinations under the same
control
Profits and losses from contingencies are not related to the company's
normal business operations
Profits excluded effective hedging business related to the company's normal
business operations, from holding transactional financial assets, derivative
financial assets, transactional financial liabilities, fair value changes in
derivative financial liabilities, and disposal of transactional financial assets
and derivative financial Investment income from assets, trading financial
liabilities, derivative financial liabilities and other debt investments
Reversal of impairment provision for individually tested impairment of
receivables
Profits and losses from external entrusted loans
Profits and losses from changes in fair value of investment real estate that
use the fair value model for subsequent measurement
Profit and loss affected due to the adjustments of requirements of taxation,
accounting and other laws and regulations
Trustee income from trust operations
Notes to the financial statements Page 129
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2020
Notes to the financial statements
Items Amount Notes
Other non-operating revenue and expenditure other than above items 838,001.32
Other non-recurring profit and loss
Subtotal 19,692,225.10
Impact of income tax 4,923,056.28
Impact of minority interests 10,437.03
Total 14,758,731.79
(2) Net asset yield and earnings per share
Weighted average net Earnings per share (Yuan)
Profit in the Reporting Period
assets yield (%) Basic EPS Diluted EPS
Net profit attributable to ordinary shareholders 1.30 0.07 0.12
Net profit attributable to ordinary shareholders
1.22 0.06 0.12
after deducting non-recurring profit and loss
(3) Differences between Domestic and Foreign Accounting Standards
Not applicable.
Bengang Steel Plates Co., Ltd.
（Seal）
24 August 2020
Notes to the financial statements Page 130
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2020
Notes to the financial statements
Notes to the financial statements Page 131
