Bengang Steel Plates Co., Ltd. Semi-Annual Report 2021
Bengang Steel Plates Co., Ltd.
Semi-Annual Report 2021
August, 2021
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Bengang Steel Plates Co., Ltd. Semi-Annual Report 2021
Ⅰ. Important Notice, Table of Contents, and Definitions
The Board of Directors, the Supervisory Committee and the Directors, members of the Supervisory
Committee and senior management of the Company guarantee that there are no misrepresentations
or misleading statements, or material omission in this report, and individually and collectively accept
full responsibility for the authenticity, accuracy and integrity of the information contained in this
report.
Gao Lie, the person in charge of the company, Lin Dong, the person in charge of accounting work,
and Cong Yajuan, the person in charge of the accounting organization (accounting officer), hereby
confirm that the financial report in this semi-annual report is true, accurate and complete.
All directors have attended the board meeting for reviewing this report.
This report involves forward-looking statements such as future plans and does not constitute a
substantial commitment of the company to investors. Investors are advised to pay attention to
investment risks. This report is prepared in Chinese and English respectively. In the event of
discrepancies in the interpretation of Chinese and foreign texts, the Chinese text shall prevail.
The company has described the existing risks and countermeasures in detail in this report, please refer
to the content of Section 3-10 "Risks Faced by the Company and Countermeasures". "China Securities
Journal", "Securities Times", "Hong Kong Commercial Daily" and Juchao Information Network
(www.cninfo.com.cn) are selected as the company's information disclosure media. All information of
the company is subject to the information published in the above-mentioned designated media.
Investors are kindly requested to pay attention to investment risks.
The company’s profit distribution plan approved by the board of directors this time is as follows:
Based on 3,885,060,605, a cash dividend of RMB 5 (tax included) will be distributed to all
shareholders for every 10 shares, and 0 shares of bonus shares (tax included) will be distributed. There
is no conversion of reserves into share capital.
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Bengang Steel Plates Co., Ltd. Semi-Annual Report 2021
Table of Contents
Ⅰ. Important Notice, Table of Contents, and Definitions ..................................................................... 2
Ⅱ. Company Profile and Main Financial Index ................................................................................... 6
III. Management Discussion and Analysis .......................................................................................... 9
IV. Corporate Governance ................................................................................................................. 17
V. Environment and Social Responsibilities...................................................................................... 18
VI. Important Events .......................................................................................................................... 22
VII. Status of Share Capital Changes and Shareholders .................................................................... 54
VIII. Status of Preferred Shares ......................................................................................................... 54
IX. Status of Bonds ............................................................................................................................ 55
X. Financial Report ............................................................................................................................ 58
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Bengang Steel Plates Co., Ltd. Semi-Annual Report 2021
Reference File Directory
1. Financial statements containing the signatures and seals of legal representative, chief
financial officer, and chief accountant;
2. The originals of all company documents and announcements publicly disclosed during the
reporting period;
3. Semi-annual reports published in other securities markets.
Definition
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Bengang Steel Plates Co., Ltd. Semi-Annual Report 2021
Terms to be defined Refers to Content of Definition
Bengang Bancai, Bengang Steel, the
Refers to Bengang Steel Plates Co., Ltd.
Company, the Listed Company
Bengang Group Refers to Bengang Group Co., Ltd.
Bengang Co. Refers to Benxi Steel & Iron (Group) Co., Ltd.
Liaoning Provincial State-asset Liaoning State-owned Asset Supervisory and
Refers to
Administration Management Committee
SSE Refers to Shenzhen Stock Exchange
Bengang Posco Refers to Bengang Posco Cold-rolled Sheet Co., Ltd.
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Bengang Steel Plates Co., Ltd. Semi-Annual Report 2021
Ⅱ. Company Profile and Main Financial Index
I. Company Information
Stock abbreviation Bengang Bancai, Bengangban B Stock Code 000761、200761
Stock exchange for listing Shenzhen Stock Exchange
Company name in Chinese 本钢板材股份有限公司
Abbreviation of Company
name in Chinese 本钢板材
Company name in English
(If any) BENGANG STEEL PLATES CO., LTD.
Abbreviation of Company
name in English (If any) BSP
Legal representative Gao Lie
II. Contact Information
Secretary of the Board Representative of Stock Affairs
Name Gao Desheng Chen Liwen
No.16, Renmin Road, Pingshan
No.16, Renmin Road, Pingshan District,
Address District, Benxi City, Liaoning
Benxi City, Liaoning Province
Province
Tel 024-47827003 024-47828980
Fax 024-47827004 024-47827004
Email bgbcdm@163.com bgbcdm@126.com
III. Other Information
1.Contact Information of the Company
Whether the information disclosure and place for consulting have changed
□ Applicable √ Not applicable
Name of newspaper selected by the Company for information release, website appointed by CSRC for publishing
semi-annual report and lodging address of semi-annual report of the Company have not changed during the reporting
period. Please refer to Annual Report 2020 for details.
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Bengang Steel Plates Co., Ltd. Semi-Annual Report 2021
2. Place for information disclosure
Whether the information disclosure and place for consulting have changed
□ Applicable √ Not applicable
Name of newspaper selected by the Company for information release, website appointed by CSRC for publishing
semi-annual report and lodging address of semi-annual report of the Company have not changed during the reporting
period. Please refer to Annual Report 2020 for details
IV. Summary of Accounting Data and Financial Index
Whether the Company makes retroactive adjustment or restatement of the accounting data of the previous year
□ Yes √ No
Unit: Yuan
Increase or decrease in this
Same period in previous
This reporting period reporting period over the
year
previous year
Operating income 38,588,128,212.14 22,184,537,260.05 73.94%
Net profit attributable to the shareholders
2,208,798,167.91 254,644,204.33 767.41%
of the listed company
Net profit attributable to the shareholders
of listed company after deducting non- 2,199,142,563.30 239,885,472.54 816.75%
recurring gain/loss
Net cash flows generated by operating
1,524,916,220.03 -151,475,707.08 1,106.71%
activities
Basic earnings per share 0.57 0.07 714.29%
Diluted earnings per share 0.57 0.07 714.29%
ROE 9.98% 1.30% 8.68%
Increase or decrease at the
At the end of this reporting At the end of previous
end of this reporting period
period reporting period
over the previous year
Total assets 64,752,065,169.98 65,007,470,749.20 -0.39%
Net assets attributable to shareholders of
23,246,599,850.13 21,018,296,389.10 10.60%
the listed company
V. Differences between Domestic and Foreign Accounting Standards
1. Differences of net profit and net assets disclosed in financial reports prepared under IFRS and Chinese
accounting standards.
□Applicable √ Not applicable
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Bengang Steel Plates Co., Ltd. Semi-Annual Report 2021
2. Differences of net profit and net assets disclosed in financial reports prepared under overseas and Chinese
accounting standards.
□ Applicable √ Not applicable
VI. Items and Amount of Non-recurring Gains and Losses
√ Applicable □ Not applicable
Unit: yuan
Items Amount Notes
Profit or loss from disposal of non-current assets
(including the write-off part for which assets impairment -22,272,050.41
provision is made)
Details of government subsidies recorded into current
profits and loss(except such government subsidy closely
related to the company’s normal business operation,，
32,659,483.34
meeting the regulation of national policy and enjoyed
constantly in certain quota or quantity according to a
certain standard)
Other non-operating revenue and expenditure other than
2,555,535.73
above items
Less: Impact of income tax 3,235,742.17
Impact of non-controlling interests (after tax) 51,621.88
Total 9,655,604.61 --
Explanation for defining non-recurring gains and losses items according to the "Public Offering of Securities Information
Disclosure Explanatory Notice No. 1 – Non-Recurring Gains and Losses", and reasons for defining non-recurring gains
and losses items listed in the document as recurring items.
□ Applicable√ Not applicable
There exists no situation of defining non-recurring gains and losses items listed in the document as recurring items.
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Bengang Steel Plates Co., Ltd. Semi-Annual Report 2021
III. Management Discussion and Analysis
I. The Company's main business during the reporting period
(1) The company's main business during the reporting period
1. Industry development
The company's industry is the steel industry. In the first half of 2021, the domestic economy is recovering steadily,
economic development is showing rapid growth, the steel industry is operating well, the production and sales of
enterprises are booming, efficiency is improved, and new progress has been made in green development, intelligent
manufacturing, and technological innovation. However, the current domestic and international environment is still
complicated, with many uncertain and unstable factors. On the one hand, in accordance with the policy guidance of
“controlling production capacity, suppressing output, and adjusting exports”, the steel industry must improve the dynamic
adaptability of domestic steel product supply and demand. , To avoid large fluctuations in steel prices, and to prevent the
pressure and risks of steel costs caused by the large fluctuations in the prices of bulk raw materials and fuels; on the other
hand, due to many factors such as seasonal cycles, environmental constraints, and resource bottlenecks, the demand for
steel is relatively weakened. China has entered a new development stage of building a modern socialist country in an all-
round way. The iron and steel industry is an important support for building a modern and powerful country and an
important field for achieving green and low-carbon development. The goal of achieving carbon neutrality in the past has
put forward new requirements for the development of the iron and steel industry, and has also stimulated new momentum
for the high-quality development of the iron and steel industry. China's steel industry will face a series of changes in the
domestic steel demand structure, steel product supply structure, steel production process structure, and steel production
resource structure.
2. Main business, main products and their uses
During the reporting period, the company’s main businesses include iron and steel smelting, rolling processing, power
generation, coal chemical industry, special steel profiles, railways, import and export trade, scientific research, product
sales, etc. The introduction of world advanced equipment and technology to implement equipment upgrades for the main
iron and steel industry , Basically built a high-quality steel base, formed more than 60 varieties, more than 7,500
specifications of product series, the proportion of high value-added and high-tech products reached more than 80%,
automotive surface panels, home appliance panels, petroleum pipeline steel, container panels Leading products such as,
shipboard, etc. are widely used in the fields of automobiles, home appliances, petrochemicals, aerospace, machinery
manufacturing, energy and transportation, building decoration and metal products, and are exported to more than 60
countries and regions. During the reporting period, the company's main business did not undergo major changes.
3. Business model
Procurement model: The company's procurement model includes domestic procurement and foreign procurement.
Domestic material procurement is carried out through centralized procurement, unified bidding, price comparison, and
negotiation. The procurement of foreign materials is carried out through long-term cooperative procurement, direct
procurement, open and invited bidding, price inquiry, price competition, negotiation and procurement, and is mainly
represented by Benxi Iron and Steel International Trade Corporation.
Sales model: The company’s sales are divided into domestic sales and foreign sales. Domestic sales mainly adopt the
direct sales model. Large customers are sold directly by the company, and other small and medium customers are sold
through various regional sales subsidiaries. The strong marketing network accumulated in international trade is exported
by its agency company, and the agency fee of Benxi Iron and Steel International Trade Co., Ltd. is paid.
4. Main performance drivers
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Bengang Steel Plates Co., Ltd. Semi-Annual Report 2021
The main performance drivers during the reporting period: During the reporting period, the steel market prices remained
high as a whole, the prices of raw materials such as iron ore and coke rose simultaneously, and the pressure on
environmental protection continued to increase. The "5+1" work pattern and the "1+4" key tasks have steadily promoted
the three system reforms, continued to promote the reform and innovation of the management mechanism, and
implemented the "general factory system" to continuously improve management efficiency and benefits. Build a
technological innovation system, create innovative platforms such as the "Liaoning Bengang Iron and Steel Industry
Industry-University-Research Alliance", and implement the "R&D personnel delisting system for scientific and
technological projects" to achieve precise incentives. Continue to carry out in-depth benchmarking exchanges, adhere to
the direction of market-oriented reforms, and continuously promote the high-quality development of diversified industries.
(2) Analysis of the operating conditions during the reporting period
During the reporting period, the company took "efficiency as the center" as the starting point, and carried out in-depth
work of "refining and strengthening listed companies, and promoting high-quality development". Business process,
undertaking related business work, improving the company's standardized operation level, focusing on epidemic
prevention and control on the one hand, and stabilizing and high output on the other hand, achieving both epidemic
prevention and control and production and operation, and achieving stable economic development. The output of some
varieties and the records of daily and monthly output have been continuously refreshed. A series of indicators have reached
the best level in history, and the quality of enterprise development has been significantly improved. In the first half of
2021, the company’s main operating indicators have achieved steady growth, including: pig iron of 5.1601 million tons,
a year-on-year increase of 49,300 tons, an increase of 0.96%; crude steel 5,565,400 tons, an increase of 433,000 tons, an
increase of 8.44%; hot-rolled plates 7.0511 million Tons, a year-on-year increase of 1,183,200 tons, an increase of 20.16%;
a cold-rolled sheet of 3,134,100 tons, a year-on-year increase of 357,000 tons, an increase of 12.86%; a special steel
389,000 tons, an increase of 33,400 tons, an increase of 9.39%. Reviewing the work in the first half of the year, it is
mainly reflected in the following aspects:
1. Production and operation work. Strictly pay attention to ensuring the supply of materials in the ironmaking process and
the stable operation of the blast furnace, focusing on the timely coordination of the ironmaking plant to rationally adjust
the structure of the blast furnace acidic material according to the changes in pig iron production, and scientifically
matching pellets and lump on the basis of ensuring the blast furnace is running smoothly. The amount of ore will make
every effort to create conditions for the annual repair of the polo ball. Completed the allocation of plates from Beiying
Xinyu pelletizing group, which effectively made up the company's pelletizing gap and ensured high-yield demand.
Coordinate the ironmaking process to do a good job in the homogenization of raw materials into the furnace, strengthen
technical operations to stabilize furnace conditions, and gradually increase the output of pig iron. Focus on organizing the
ironmaking plant to steadily advance the strengthening process of the new 5# blast furnace; do a good job of special
protection for the hearth of the new 1# blast furnace to ensure safe and stable operation.
2. Safety management work. In accordance with national laws and regulations, industry standards, combined with the
actual situation of the company, reorganize and revise the company's relevant safety system. 29 related systems have been
revised and issued. Carry out safety work surveys to learn more about the current safety management status, management
ideas and existing problems of each unit, and better supervise, guide, and serve the safety management work of each
grass-roots unit.
3. Management innovation. Won the title of "Excellent Board of Directors" and "Most Innovative Secretary of the Board"
of the 16th "Golden Round Table Award". The "Golden Round Table Award" is jointly organized by the China Association
of Listed Companies and the "Board of Directors" magazine. It has been successfully held for fifteen times. An important
evaluation benchmark for the governance level of China's listed companies, it is recognized by the industry as the first
award in the field of China's listed company board of directors. Bengang Steel Plates won this award, which has promoted
the brand value of Benxi Steel Plates, established a positive image in the capital market, and boosted investor confidence.
4. Scientific and technological innovation work. During the reporting period, 31 new product developments were
completed. The hot-rolled automotive structural steel represented by "automotive beam" and "box steel" has achieved full
coverage of the strength level serialization. Through the "point-to-point" personalized and precise market development,
the "one material, multiple households" and the "one material, multiple households" have been developed. The
transformation of “multi-materials”; breakthrough in the cold-rolled 1630 production line design capability, and
successfully developed the domestic leading level of 1180 strength duplex steel; the product certification work was carried
out in an orderly manner, and 4 items and 6 grades were certified in the first half of the year.
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Bengang Steel Plates Co., Ltd. Semi-Annual Report 2021
5. Party building and group work. Comprehensively do a good job in party history learning and education, and
coordinate with the third tour steering group to carry out party history learning and education supervision work to 14
units, and form the first stage of guidance summary report. A total of 10 issues of Bengang Steel Plate Party History
Learning and Education Week briefings have been compiled and distributed. Organize the party committee of the
grassroots unit to carry out the recommendation work of celebrating the 100th anniversary of the founding of the party.
Guide the party committee of grassroots units to carry out a series of activities to celebrate the 100th anniversary of the
founding of the party and commendation work within the party.
II. Analysis on Core Competitiveness
The company adheres to the innovation-driven and "quality plus service" development model, with the strategic goal of
building an internationally competitive high-quality plate base, a domestic first-class special steel base and a
comprehensive service provider, and exerts a strategic leading role, focusing on improving quality and efficiency, In terms
of product upgrades, technological innovation, green and intelligent manufacturing, we will innovate management ideas,
enhance the core competitiveness of enterprises, and promote the realization of high-quality, green and intelligent
development of enterprises.
1. Manufacturing capacity. Focus on economic benefits, firmly grasp market opportunities, actively build a "5+1" work
pattern, promote "1plus 4" key tasks, and implement the production and operation thinking of "the upper process is subject
to the next process, and the entire process is subject to the market" ——Re-established the assessment mechanism,
implemented simulated market profit assessment, and all employees moved around the market, and the profit awareness
and corporate profitability continued to improve. Various departments and units interact with each other, focus on the
process of iron and steel, and rationally match the production line and resource production organization principles of the
steel post process, so that the production process and operation are continuously standardized and refined, and the quality,
efficiency and production scale are fully realized. The maximization of production, promotes the entire production chain
towards high-end manufacturing.
2. Equipment transformation and upgrading. In 2021, the company issued a fixed asset investment plan of 3.85 billion
yuan. A new round of major projects represented by special steel electric furnace upgrade and transformation, special
steel rolling mill transformation, CCPP power generation project, 220KVA substation project, Taizi River Bridge
transformation, 1700mm production line improvement department, coke oven flue gas desulfurization and denitrification,
and other key projects have been implemented. Large-scale technological transformation, ultra-low emission
transformation. At present, the 1700mm production line is complete, the CCPP power generation project, and the 220KVA
substation project will be put into production one after another; the special steel electric furnace upgrade project, 70% of
the project construction progress has been completed in 2021.
3. New product development capabilities. 36 new products are planned to be developed throughout the year, 31 of which
have been developed, and 86% of the annual plan has been completed, an increase of 94% year-on-year; the contract
volume of new products is 64,000 tons, an increase of 120% year-on-year; The best level in the same period. The hot-
rolled automotive structural steel represented by "automotive beam" and "box steel" has achieved full coverage of the
strength level serialization. Through the "point-to-point" personalized and precise market development, the "one material,
multiple households" and the "one material, multiple households" have been developed. The transformation of “multi-
materials”; breakthrough in the cold-rolled 1630 production line design capability, and successfully developed the
domestic leading level of 1180 strength duplex steel; the product certification work was carried out in an orderly manner,
and 4 items and 6 grades were certified in the first half of the year.
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Bengang Steel Plates Co., Ltd. Semi-Annual Report 2021
4. Technological innovation ability. In terms of scientific and technological cooperation, with Northeastern University,
China Industrial Internet Research Institute and other units, jointly apply for the "2021 Industrial Technology Basic Public
Service Platform Project" of the Ministry of Industry and Information Technology, with the project name "Green and Low
Carbon Public Service Platform for Key Raw Material Industries"; apply for Liaoning Provincial Department of Science
and Technology "2022 National Natural Science Foundation Regional Innovation and Development Joint Fund
Application Guidelines" 3 projects, the project name "Multi-modal data mining and design of advanced steel material
intelligent manufacturing process", "New generation series of hot-formed steel anti-high temperature Key oxidation
technology and dynamic mechanics mechanism of integrated door knocker", "New technology and theoretical basis for
smelting of ultra-pure and high-homogeneous bearing steel"; applied for the "Special Fund for Central Leading Local
Scientific and Technological Development" project of the Science and Technology Department of Liaoning Province, the
project name is "Liaoning Province" "Advanced high-strength automotive steel professional technology innovation center
capacity building", the project has been approved, and it is expected to receive government funding of 300,000 yuan. In
terms of scientific and technological achievements, it has won 2 metallurgical science and technology awards. In terms
of intellectual property rights, 84 patents were accepted by the National Bureau; 48 patents were authorized by the
National Bureau, including 10 inventions and 38 utility models. Participated in the drafting of 1 national standard, 1
industry standard, and 75 enterprise standards.
5. Green development capability. In accordance with the national and Liaoning Province’s policy requirements for the
steel industry and local ultra-low emissions, the company has the courage to assume social responsibilities, relying on
professional planning and research institutions, has compiled environmental protection improvement plans and annual
implementation plans, and sorted out more than 40 ultra-low emissions projects. All are included in the investment plan.
Construction or preliminary work is underway. Through clean production of water, three wastes treatment, environmental
protection management and other all-round green improvements, the community will realize environmental quality,
promote the integration of industry and city, and strive to achieve ultra-low emissions by the end of 2023. The company
has become an "ecological steel factory" that develops harmoniously with the city. At present, the two dust collectors for
the second sintering product of the iron smelting plant have completed the transformation to meet the emission standards;
the use of surplus gas CCPP power generation project is expected to be completed and put into operation in August.
6. Intelligent manufacturing capabilities. The company vigorously promotes the construction of intelligent manufacturing
related projects such as informatization and intelligence. In 2021, it has issued investment to carry out centralized control
and intelligent manufacturing of iron, burning, coking, special steel process and raw material management, energy
management, etc., and promotes the improvement of the basic information platform , Intelligent transformation in the
fields of manufacturing management, intelligent equipment in cold rolling area, and upgrading and transformation of
railway transportation dispatching and commanding information system. Keep up with the pace of enterprise development
in the era of big data and achieve high-quality development.
III. Analysis on Main Business
Please refer to the relevant content of "I. Main Business Engaged in the Reporting Period".
Year-on-year changes in major financial data.
Unit: Yuan
Current Period Previous Period Change Reason
The increase of sales is
mainly caused by the
operating income 38,588,128,212.14 22,184,537,260.05 73.94%
increase of the selling
prices.
The increase of Cost
of goods sold is
Operating cost 34,592,825,792.72 20,440,246,362.67 69.24% mainly due to the
increase of purchase
price of raw materials
Selling and
59,652,669.72 642,393,218.78 -90.71%
distribution expenses
General and
administrative 388,678,843.23 380,828,316.41 2.06%
expenses
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Bengang Steel Plates Co., Ltd. Semi-Annual Report 2021
Financial expenses 336,355,698.84 355,036,640.40 -5.26%
The profit before tax is
Income tax expenses 746,977,590.45 9,237,815.08 7,986.09%
increased.
Research and
development 869,601,179.00 697,727,326.00 24.63%
investment
Net cash flows from Due to increase of
1,524,916,220.03 -151,475,707.08 -1,106.71%
operating activities profit before tax
Net cash flows from Due to the increase of
-2,747,214,027.23 -706,681,059.07 288.75%
investing activities investment
Net cash flows from Due to increase of
-3,533,315,813.10 -1,164,534,893.48 203.41%
financing activities repayment of loans
Due to the repayment
Net increase in cash of loans and increase
-4,771,963,480.21 -2,023,822,325.06 135.79%
and cash equivalents of investment and
decrease of payables.
Significant changes in the company's profit composition or source of profit during the reporting period
□ Applicable √ Not applicable
There was no major change in the company's profit composition or source of profit during the reporting period.
Operating income composition
Current period Previous period Change over
Amount Proportion Amount Proportion previous period
Total operating
38,588,128,212.14 100% 22,184,537,260.05 100% 73.94%
income
By industries
Industry 38,588,128,212.14 100.00% 22,184,537,260.05 100.00% 73.94%
By products
Steel plate 35,798,649,027.39 92.77% 20,241,192,221.39 92.35% 76.86%
Steel Billet 310,652.98 -100.00%
Others 2,789,479,184.75 7.23% 1,943,034,385.68 7.65% 43.56%
By region
Northeast 13,764,490,687.62 35.67% 7,575,795,193.58 29.57% 81.69%
North China 4,282,969,762.68 11.10% 2,351,380,897.12 11.37% 82.15%
East China 15,059,297,569.71 39.03% 8,731,546,106.40 37.82% 72.47%
Northwest 82,611,121.25 0.21% 50,847,000.22 0.22% 62.47%
Southwest 1,475,476,779.53 3.82% 857,102,813.02 4.15% 72.15%
Central south 3,923,282,291.35 10.17% 2,617,865,249.71 16.88% 49.87%
Industry, Product and Regions Accounting for the Company’s Operating Income or Profit over 10%
√ Applicable □ Not applicable
Unit: Yuan
Operating Operating costs Gross margin
Operating
Operating costs Gross margin income change change over last change over last
income
over last year year year
By industries
38,588,128,212. 34,592,825,792.
Industry 10.35% 73.94% 69.24% 2.49%
14 72
By products
35,798,649,027. 32,161,592,894.
Steel plate 10.16% 76.86% 72.14% 2.46%
39 30
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Bengang Steel Plates Co., Ltd. Semi-Annual Report 2021
Steel Billet
2,789,479,184.7 2,430,950,949.2
Others 12.85% 43.56% 38.39% 3.26%
5 7
By regions
13,764,490,687. 12,304,736,134.
Northeast 10.61% 81.69% 77.44% 2.15%
62 48
4,282,969,762.6 3,816,908,998.1
North China 10.88% 82.15% 77.50% 2.33%
8 8
15,059,297,569. 13,492,931,637.
East China 10.40% 72.47% 67.50% 2.65%
71 18
Northwest 82,611,121.26 77,065,449.11 6.71% 62.47% 62.47% 0.00%
1,475,476,779.5 1,379,133,959.6
Southwest 6.53% 72.15% 72.15% 0.00%
3 1
3,923,282,291.3 3,522,049,614.1
Central south 10.23% 49.87% 43.67% 3.87%
5 6
13,764,490,687. 12,304,736,134.
Export 10.61% 81.69% 77.44% 2.15%
62 48
38,588,128,212. 34,592,825,792.
Total 10.35% 73.94% 69.24% 2.49%
14 72
When the statistical caliber of the company's main business data is adjusted during the reporting period, the company's
main business data adjusted according to the caliber at the end of the reporting period in the most recent period
□ Applicable √ Not applicable
Explanation of the reason why the relevant data has changed by more than 30% year-on-year
□ Applicable √ Not applicable
IV. Analysis of Non-core Business
√ Applicable □ Not applicable
Unit: Yuan
Proportion in total
Amount Explanation of cause Sustainable (yes or no)
profit
Income on Due to investment in
1,835,124.19 0.06% No
investment associate
Assets disposal Due to impairment of
6,629,442.12 0.22% No
gains inventory
Non-operating Due to disposal of non-
3,273,128.46 0.11% No
income current assets
Non-operating
22,989,643.14 0.77% Due to scrap of assets No
expenses
V. Assets and Liabilities
1. Significant Change of Assets Components
Unit: Yuan
At the end of this reporting At the end of the Same period
period in previous year
Proportio Proportio Proportion
Notes to significant changes
n in the n in the change
Amount Amount
total total
assets assets
Cash at bank and
9,510,700,502.67 14.69% 13,126,666,915.26 20.19% -5.50%
on hand
Accounts 225,510,568.92 0.35% 245,217,182.66 0.38% -0.03%
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Bengang Steel Plates Co., Ltd. Semi-Annual Report 2021
receivable
Contract assets 0.00%
Inventories 8,663,345,615.68 13.38% 9,040,065,342.65 13.91% -0.53%
Long-term equity
3,024,013.88 0.00% 2,742,064.73 0.00% 0.00%
investments
Fixed assets 25,137,148,377.89 38.82% 26,284,567,956.44 40.43% -1.61%
Construction in
2,878,339,506.26 4.45% 1,839,933,715.58 2.83% 1.62%
progress
Right-of-use
1,510,538,778.93 2.33% 2.33%
assets
Short-term loans 7,495,419,000.00 11.58% 10,067,731,000.00 15.49% -3.91%
Contract
6,182,094,798.39 9.55% 4,458,671,819.90 6.86% 2.69%
liabilities
Long-term loans 4,309,786,941.97 6.66% 3,502,934,427.65 5.39% 1.27%
Lease liabilities 1,549,600,900.45 2.39% 2.39%
2. Main overseas assets
□ Applicable √ Not applicable
3. Assets and liabilities measured at fair value
□ Applicable √ Not applicable
4. Restricted Assets by the End of the Period
Book value at the end of this
Items Reason of restriction
reporting period
Cash at bank and on hand 5,053,246,387.76 Deposit for notes and L/C
Accounts receivable financing 22,991,847.39 Pledged for acceptance bills
Other equity instrument investment 1,037,735,849.00 Pledged for loans
Fixed assets 94,790,118.09 Mortgaged for loans
Intangible assets 37,116,386.66 Mortgaged for loans
Total 6,245,880,588.90
15
Bengang Steel Plates Co., Ltd. Semi-Annual Report 2021
VI. Analysis of investment status
1. Overall situation
□ Applicable √ Not applicable
2. Major equity investments obtained during the reporting period
□ Applicable √ Not applicable
3. Significant non-equity investment in progress during the reporting period
□ Applicable √ Not applicable
4. Financial asset investment
(1) Securities investment
□ Applicable √ Not applicable
There was no securities investment in the company during the reporting period.
(2) Investment in derivatives
□ Applicable √ Not applicable
There was no derivative investment in the company during the reporting period.
VII. Significant Assets and Equity Sold in Reporting Period
1. Significant Assets Sold
□ Applicable √ Not applicable
2. Substantial Equity Sold
□ Applicable √ Not applicable
VIII. Analysis on Main Subsidiaries and Share Participating Companies
√ Applicable □ Not applicable
Main subsidiaries and the joint-stock companies influencing over 10% net profit of the Company
Unit: Yuan
Company Company Main Registered Operating
Total assets Net assets Turnover Net Profit
Name type business capital profit
Bengang Subsidiary Processing
1,920,000,000 2,866,363,984 2,088,899,151 5,691,380,556 83,685,739. 62,979,247.98
Puxiang and sales of
16
Bengang Steel Plates Co., Ltd. Semi-Annual Report 2021
Cool steel .00 .10 .71 .81 48
Rolling
Steel Sheet
Co., Ltd.
Acquirement and disposal of subsidiaries during the reporting period
□ Applicable √ Not applicable
Illustration of main joint-stock companies
None.
IX. Structured Entities controlled by the Company
□ Applicable √ Not applicable
X. Risks and countermeasures for the Company
1. The risk of raw material price fluctuations
Risk: The company's main raw materials, iron ore, coal, etc., fluctuate greatly. In particular, iron ore prices continued to
rise during the reporting period, which had a greater impact on the company's profitability.
Response measures: In terms of bulk raw material procurement, do a good job in market analysis and judgment, increase
the inventory through low-cost bulk material purchases, and strive to reduce procurement costs; adjust the inventory
structure to improve inventory turnover; solidly carry out cost reduction and efficiency enhancement work, and actively
promote the enterprise Competitiveness: Set research index projects for the weak links and bottlenecks that affect the
index level, clarify the research goals, measures, time nodes, and responsible persons, and solidly advance the index
research.
2. Risks of prevention and control of the new crown pneumonia epidemic
Risk: Since the outbreak of the novel coronavirus pneumonia in early 2020, the prevention and control of the epidemic
has been continuing nationwide. With a series of strong epidemic prevention and control measures adopted by
governments at all levels, domestic epidemic prevention and control has been effectively controlled, and various economic
activities have gradually resumed, but overseas epidemics are still continuing and facing greater uncertainty. The company
will effectively implement the government's requirements for epidemic prevention and control, and strengthen support
for epidemic prevention and control, so as to reduce the impact of the epidemic on the company's normal production and
operation activities.
Response measures: Establish various strict and normalized epidemic prevention and control mechanisms, strengthen the
publicity of all employees' health knowledge related to the epidemic, and highlight the supervision and inspection of
internal epidemic prevention and control.
3. Environmental risks
Risk: The country promotes carbon peaking and carbon neutrality. The steel industry is one of the important areas in my
country to achieve emission reduction and carbon reduction. The industry faces more requirements for carbon emission
restriction mechanisms and low-carbon development, making the company face greater environmental pressure .
Countermeasures: Optimize the production process and further improve the recycling rate of various energy sources. Pay
attention to various national environmental protection policies, improve corporate environmental protection standards,
and make them meet and appropriately exceed national standards. Strengthen the self-supervision and inspection of the
company's various pollution sources and strengthen the environmental protection awareness of all employees. Accelerate
the construction progress of the identified environmental protection projects to ensure that the national environmental
protection requirements are met.
4. Market risk
Risks: The competition in the steel industry is fierce, and the industry concentration is accelerating, driven by national
policies and the market. At the same time, due to the continued overseas epidemic, the export business is facing more
challenges, and the company is facing fierce market competition risks.
Response measures: increase the development of new products, increase investment in technology research and
development, optimize product structure, and increase the market share of core products; comprehensively improve
management, improve management energy efficiency, reduce operating costs, and increase profitability; improve the
marketing service system and continue to optimize The company’s marketing strategy to enhance brand influence.
17
Bengang Steel Plates Co., Ltd. Semi-Annual Report 2021
IV. Corporate Governance
I. Annual General Meeting of Shareholders and Temporary General Meeting of Shareholders
held during the Reporting Period
1. General meeting of shareholders during the reporting period
Investors’
Meeting session Meeting type Date of convening Date of disclosure Disclosure index
participation ratio
The annual general Annual general Announcement No.:
80.56% 27 May 2021 28 May 2021
meeting of 2020 meeting 2021-028
2. Temporary general meeting Request by preferred stockholders whose voting rights restore
□ Applicable √ Not applicable
II. Change of Directors, Supervisors and Senior Executives
√Applicable □ Not applicable
Name Position Type of change Date Reason
Cao Aimin Director, Vice Chairman Departure 2021/5/27 Position adjustment
Shen Qiang Director, General Manager Departure 2021/5/27 Position adjustment
Huang Xinghua Director Departure 2021/5/27 Position adjustment
Zhao Xinan Independent Director Term of office expires 2021/5/27 Term of office expires
Jiag Guangwei Vice Chairman Election 2021/5/27 Position adjustment
Han Mei Vice Chairman Appointment and dismissal 2021/5/27 Position adjustment
Lin Dong Director, General Manager Election 2021/5/27 Position adjustment
Wang Donghui Director Election 2021/5/27 Position adjustment
Zhong Tianli Independent Director Election 2021/5/27 Nomination
Chairman of Supervisory
Cheng Bin Election 2021/5/27 Position adjustment
Committee
Li Lin Supervisor Departure 2021/5/27 Position adjustment
Zhao Zhonghua Supervisor Appointment and dismissal 2021/5/27 Position adjustment
Bao Mingwei Deputy General Manager Dismissal 2021/4/26 Position Change
Wang Fengmin Deputy General Manager Dismissal 2021/4/26 Position Change
Huo Gang Deputy General Manager Dismissal 2021/4/26 Position Change
Chen Xin Deputy General Manager Appointment 2021/4/26 Position adjustment
Yang Xiaofang Deputy General Manager Appointment 2021/4/26 Position adjustment
18
Bengang Steel Plates Co., Ltd. Semi-Annual Report 2021
Cong Yajuan Director of Finance Appointment 2021/4/26 Position adjustment
III. Profit Distribution or Capital Reserve Conversion Proposal in the Reporting Period
√ Applicable □ Not applicable
Number of bonus shares for every 10 shares
0
(shares)
Dividend per 10 shares (yuan) (tax included) 5
The base of the share capital of the distribution
3,885,060,605
plan (shares)
Cash dividend amount (yuan) (tax included) 0.00
Cash dividend amount in other ways (such as share
0.00
repurchase) (yuan)
Total cash dividends (including other methods)
1,942,530,302.5
(yuan)
Distributable profit (yuan) 4,862,062,857.99
The ratio of total cash dividends (including other
39.95%
methods) to total profit distribution
Cash dividend of the current period
If the company's development stage is not easy to distinguish but there is a major capital expenditure arrangement,
when the profit is distributed, the proportion of cash dividends in this profit distribution should be at least 20%.
Notes to the profit distribution or capital reserve transfer plan
On August 26, 2021, the 20th meeting of the 8th Board of Directors of the company passed the 2021 interim dividend
distribution plan. It is planned to use the total share capital of 3,885,060,605 shares at the end of June 2021 as the base,
and distribute cash dividends to all shareholders for every 10 shares. 5 yuan (including tax), a total of 1,942,530,302.5
yuan in cash dividends will be distributed. In this distribution, the capital public reserve will not be converted into share
capital. After the company’s profit distribution plan is announced and before its implementation, if the company’s share
capital changes, adjustments will be made in accordance with the principle that the total amount of the distribution does
not change.
IV. Implementation of the company’s equity incentive plan, employee stock ownership plan or
other employee incentive measures
□ Applicable √ Not applicable
During the reporting period, the company had no equity incentive plan, employee stock ownership plan or other
employee incentive measures and their implementation.
19
Bengang Steel Plates Co., Ltd. Semi-Annual Report 2021
V. Environment and Social Responsibilities
I. Major environmental issues
Whether the listed company and its subsidiaries belong to the key pollutant discharge units announced by the
environmental protection department
√ Yes □ No
Main The
The distribution Emission The Approved Surpass the
pollutants Discharge number of Total
Name of discharge concentra emission total emission
and specific modes discharge emission
hatch tion standard emission standard
pollutants hatch
Raw material
dumper, transfer
station,
receiving ore
tank, pre-batch;
coke oven
adding coal,
pushing coke
dry quenching;
ironmaking
tapping field,
Raw
furnace roof,
materials
fuel, solvent,
14-23; Raw
granulation, ore
Sintering materials
coke tank;
8-40; 25;
sintering head,
Ironmaki Sintering
machine Tail;
ng 7-35; 30-50;
iron and steel
Steelmaki Ironmaking
water
ng 20-50; 25;
pretreatment,
Special Steelmaking The total
ferroalloy 439tons of
steel 7- 20-50; quantity is
Bengang Continuous feeding, north- Smoke and
Particulate 15; Special not
Steel Plates and 183 south infusion dust; None
Matter Coking steel 20; confirmed
Co., Ltd. intermittent station, tundish, 6702tons of
5-50; Coking 10- by the
primary dust dust
Power 50; government
removal,
generatio power
secondary dust
n 3-30; generation
removal,
Cold 5-30;
refining dust
rolling; cold rolling
removal; special
6-18 ; 20-30; hot
steel electric
hot rolling 20-
furnace, refining
rolling 6- 30;
furnace, electric
15.
slag furnace;
power
generation
boiler
desulfurization
and
denitrification;
cold rolling acid
regeneration,
Pickling,
drawing
straightening,
20
Bengang Steel Plates Co., Ltd. Semi-Annual Report 2021
welding
machine,
smoothing,
annealing,
roasting; hot
rolling heating
furnace.
Sintering
head 12-
40;
Sintering
Sintering head; Power
head 200;
Power generatio
Power The total
generation n boiler
generation quantity is
Bengang Continuous boiler; Coke 5-70;
35-200; not
Steel Plates SO and 64 oven chimney; Coke 2570 tons None
Coke oven confirmed
Co., Ltd. intermittent cold rolling oven 30-
30-100; by the
roasting, 100; Cold
Cold rolling government
annealing; hot rolling
100; Hot
rolling furnace. 80-100;
rolling 150.
Hot
rolling
118-128.
Sintering
head 100-
230;
Coke Sintering
Sintering head; oven head 300;
power 150- Coke oven The total
generation 268;Powe chimney quantity is
Bengang Continuous
Oxides of boiler; cold r 150; Power not
Steel Plates and 57 5278 tons None
nitrogen rolling roasting, generatio generation confirmed
Co., Ltd. intermittent
annealing; hot n 30-140; 100-200; by the
rolling furnace. Cold Cold rolling government
furnace. rolling 300; Hot
69-172; rolling 300.
Hot
rolling
105-124.
Construction and operation of pollution prevention facilities
The company has a total of 183 sets of environmental pollution prevention and control facilities, and each process is
equipped with dust removal, desulfurization and denitrification, and online facilities in accordance with pollutant emission
standards. Sintering machine head wet desulfurization, coke oven chimney dry desulfurization and denitrification, power
generation wet desulfurization and SCR denitrification, etc. The dust collector for rough rolling and finishing rolling of
the 2300mm production line of the hot rolling mill is designed to be used in the production of stainless steel, and the
environmental protection facilities are normally put into use.
Environmental impact assessment of construction projects and other environmental protection administrative permits
Completed the environmental impact assessment registration and filing of 7 projects including the coke oven flue gas
desulfurization and denitrification transformation project of the Benxi Iron and Steel General Iron Plant; the company’s
220KV substation project environmental impact assessment report was submitted for approval. The environmental
protection acceptance work of 5 projects including the No. 7 coke oven desulfurization and denitration project and the
No. 5 blast furnace capacity replacement project of the Benxi Iron and Steel General Iron Plant was carried out.
Emergency plan for environmental emergencies
The company and its 13 subsidiaries strictly follow the "Emergency Response Law of the People's Republic of China",
the "Notice on Issuing the "Guidelines for Risk Assessment of Environmental Emergencies for Enterprises (Trial)", and
the "Emergency Plan for Environmental Incidents of Enterprises and Institutions" Management Measures (for Trial
Implementation) and other current laws and regulations to carry out environmental emergency management work. During
the reporting period, a third party was entrusted to revise the emergency response plan for environmental emergencies,
and the risk assessment and emergency resource investigation work should be carried out again. Bureau management
requires evaluation and filing. At the same time, all units of the plate company formulate drill plans in accordance with
the plan and carry out corresponding plan drills.
Environmental self-monitoring program
21
Bengang Steel Plates Co., Ltd. Semi-Annual Report 2021
During the reporting period, pollution source monitoring points: 317 flue gas, 20 wastewater monitoring points, 44 noise
points at the plant boundary, 35 atmospheric dust reduction points, and 94 unorganized monitoring points, which are
divided into weekly and monthly according to the monitoring plan. , Quarterly, half-yearly, and annual frequency
monitoring, 210 monitoring data for atmospheric dust fall; completion of routine monitoring tasks for atmospheric
unorganized and flue gas, 1143 monitoring data for half a year; 688 monitoring data for plant boundary noise monitoring;
wastewater The monitoring obtained 2014 monitoring data; various temporary monitoring data were 1,580, and the
monitoring stations reported a total of 5,637 monitoring data, forming monthly reports, quarterly reports, and separate
monitoring reports for various factories and mines.
Administrative penalties due to environmental issues during the reporting period
Impact on the
Company
Violation production and
Name of company Penalty reasons Penalty results rectification
circumstances operation of listed
measures
companies
None None None None None None
Other environmental information that should be disclosed.
During the reporting period, the environmental information disclosure of the company's 12 units was completed in
accordance with the list of key pollutant emission companies issued by the Municipal Environmental Protection Bureau.
The content of the announcement includes basic information, pollution discharge information, construction and operation
of pollution prevention facilities, environmental impact assessment of construction projects and other environmental
protection administrative permits, emergency plans for environmental emergencies, environmental self-monitoring plans,
and other environmental information that should be disclosed.
Other environmental related information
II. Social responsibility situation
During the reporting period, the company implemented the spirit of the relevant documents in accordance with corporate
social responsibility, while pursuing corporate economic benefits and protecting the interests of shareholders, while
actively protecting the legal rights and interests of creditors and all employees, treating suppliers, customers and
consumers with integrity, and actively engaged in Public welfare undertakings such as environmental protection and
community construction. In business activities, we consciously follow the principles of voluntariness, fairness,
compensation for equal value, honesty and credibility, consciously abide by social ethics and professional ethics,
consciously accept the supervision of the government and the public, and actively perform corporate social responsibilities.
VI. Important Events
I. The Fulfilled Commitments During the Reporting Period and Under-Fulfillment
Commitments by the End of the Period Made by Actual Controller, Acquirer, Director,
Supervisor, Senior Management Personnel and other Related Parties.
√ Applicable □ Not applicable
Commitment Type of Commitment Commitment
Commitments Contents Performance
party commitment time period
Commitment of shares
reform
22
Bengang Steel Plates Co., Ltd. Semi-Annual Report 2021
Commitment made in the
acquisition report or the
equity change report
Commitment made during
asset restructuring
According to the
relevant regulations of
the China Securities
Regulatory Commission,
all directors and senior
management of the
Company have made the
following commitments
to the Company’s
fulfillment of the diluted
immediate return
measures: 1. I promise to
perform my duties
faithfully and diligently,
and safeguard the
legitimate rights and
interests of the Company
and all shareholders . 2. I
promise not to deliver
benefits to other units or
individuals without
compensation or under
unfair conditions, nor to
use other means to
damage the Company's
interests. 3. I promise to
restrict the position-
related consumption
Company behavior of company
Commitment made during directors and senior
directors, Other Under normal
initial public offering or management personnel. May 22, 2019 Long term
senior commitment fulfillment
refinancing 4. I promise not to use
management
the Company’s assets to
do investment and
consumption activities
that are not related to the
performance of my
duties. 5. Within the
scope of my
responsibilities and
authority, I promise to
make every effort to
promote the company's
board of directors or the
remuneration system
established by the
remuneration and
appraisal committee to
be linked to the
implementation of the
company's
compensation measures,
and vote in favor of the
relevant proposals
reviewed by the
company's board of
directors and general
meeting (If I have voting
rights). 6. If the company
intends to implement
equity incentives, I
23
Bengang Steel Plates Co., Ltd. Semi-Annual Report 2021
promise to, within my
own responsibilities and
jurisdiction, make every
effort to promote the
Company’s proposed
equity incentive exercise
conditions to be linked to
the Company’s
implementation of the
return measures, and to
review the Company’s
board of directors and
shareholders’ general
meetings and vote in
favor of the relevant
proposals reviewed by
the company's board of
directors and general
meeting (If I have voting
rights). 7. If the future
issuance of this
commitment and the
implementation of the
Company’s public
issuance of convertible
corporate bonds are
completed, if the China
Securities Regulatory
Commission makes
other new regulatory
provisions on the
measures for filling
returns and their
commitments, and the
above commitments
cannot meet the
requirements of the
China Securities
Regulatory Commission
When other regulations
are stipulated, a
commitment will be
issued in accordance
with the latest
regulations of the China
Securities Regulatory
Commission. The
company's controlling
shareholder, Benxi Iron
and Steel (Group) Co.,
Ltd., promised not to
interfere with the
company's operation and
management activities
beyond its authority and
not to infringe on the
Company's interests.
The sales companies of
Benxi Steel & Bengang International
Iron (Group) Trade Co.,Ltd. and
Co., Ltd. and Other Bengang Steel plates in Under normal
Bengang Commitment the same region July 24,2019 Long term
fulfillment
Group Co., guarantee independent
Ltd. personnel, independent
business, independent
finance, and independent
24
Bengang Steel Plates Co., Ltd. Semi-Annual Report 2021
assets, and are
guaranteed not to be in
the same registration
place or in the same
office; The filing of
foreign economic and
trade operators, taking
into account the need to
gradually improve the
qualification
certification of raw
material suppliers,
customs import and
export qualification
certification, etc. In the
short term, the actual
conditions and
capabilities for
independent import and
export business are still
lacking. In order to
ensure the normal
business development of
Benxi Steel Plate, the
Group agrees that within
the period of not more
than 5 years from the
date of issuance of this
commitment, the main
import and export
business of Benxi Steel
Plate will still be
represented by Bengang
International Trade until
Bengang Steel Plates can
be independently
developed Import and
export business, and
during this period,
Bengang International
Trade will provide the
necessary support for the
establishment and
improvement of
Bengang's import and
export business. In
addition, the sales
company under Bengang
International Trade is
only responsible for
selling the products of
Beiying Iron and Steel
Group, and never sells
third-party steel
products. 3. The three
sales companies under
the Group, Shanghai
Bengang Iron and Steel
Sales Co., Ltd., Shanghai
Bengang Iron and Steel
Materials Co., Ltd., and
Guangzhou Free Trade
Zone Bengang Sales Co.,
Ltd., are currently no
longer actually engaged
in any business
activities, as follows: (1 )
25
Bengang Steel Plates Co., Ltd. Semi-Annual Report 2021
Shanghai Bengang Iron
& Steel Sales Co., Ltd.
filed for bankruptcy in
2014, and the Shanghai
Changning District
People's Court issued an
announcement to
appoint Guohao Lawyer
(Shanghai) Office as the
bankruptcy
administrator. After
communication with the
bankruptcy
administrator, it is
expected that the
bankruptcy and
liquidation of Shanghai
Bengang Iron and Steel
Sales Co., Ltd. will be
completed by the end of
2020. Upon completion
of the aforementioned
bankruptcy liquidation
procedures, the relevant
procedures for
cancellation of Shanghai
Bengang Iron and Steel
Sales Co., Ltd. will be
handled immediately. (2)
Shanghai Bengang Iron
& Steel Materials Co.,
Ltd. is a holding
subsidiary of Shanghai
Bengang Iron & Steel
Sales Co., Ltd., and its
business license has been
revoked. As the
shareholder Shanghai
Bengang Iron & Steel
Sales Co., Ltd. is in the
process of bankruptcy
and liquidation,
Shanghai Bengang Iron
& Steel Materials Co.,
Ltd. was unable to
convene a shareholders'
meeting to cancel the
company and establish a
liquidation group
according to law.
Therefore, the
cancellation has not yet
been completed. After
the aforementioned
bankruptcy and
liquidation procedures of
Shanghai Bengang Iron
& Steel Sales Co., Ltd.
are completed, the
relevant procedures for
cancellation of Shanghai
Bengang Iron & Steel
Materials Co., Ltd. will
be processed
immediately. (3)
Guangzhou Free Trade
Zone Bengang Sales Co.,
26
Bengang Steel Plates Co., Ltd. Semi-Annual Report 2021
Ltd. has a contract
arrears dispute with
Jiedong County Trading
Corporation. According
to the Civil Judgment
((1999) Ben Jing No.
116), Guangzhou Free
Trade Zone Bengang
Sales Co., Ltd. applied to
the court to seal 62
properties under the
name of Jiedong County
Trading Corporation.
However, due to serious
local protection,
property rights and other
factors, the content of the
judgment has not been
enforceable. Later, after
applying again from
Guangzhou Free Trade
Zone Bengang Sales Co.,
Ltd., the Intermediate
People's Court of Benxi
City, Liaoning Province
issued an execution
ruling again, and 62
properties of Jiedong
County Trading
Corporation were re-
sealed. As of February 4,
2022. Except for
participating in the
litigation activities for
the purpose of realizing
creditor's rights,
Guangzhou Free Trade
Zone Bengang Sales Co.,
Ltd has not carried out
other business activities.
After the litigation is
completed, the relevant
procedures for the
cancellation of
Guangzhou Free Trade
Zone Bengang Sales Co.,
Ltd. will be handled
immediately.
The Group's horizontal The company
competition with Benxi has completed
Steel Plates and the the acquisition
measures and of the
commitments to avoid 2300mm hot
inter-industry rolling mill
competition 1. During production
the period when the line, and the
Benxi Steel &
Other Group is the controlling July 24,2019 industry
Iron (Group) Long term
Commitment shareholder of Bengang competition
Co., Ltd.
Steel Plates, in addition problem has
to the matters listed in been
Article 1 of this completely
Commitment Letter, the resolved.
Group and other Other
enterprises controlled by commitments
the Group other than continue to be
Bengang Steel Plates no fulfilled
27
Bengang Steel Plates Co., Ltd. Semi-Annual Report 2021
longer produce or
develop any products
that compete or may
compete with the
products produced by
Bengang Steel Plates and
its subsidiaries at home
and abroad, and do not
directly or indirectly
operate any business that
competes with Bengang
Steel Plates and its
subsidiaries. Businesses
that may constitute
competition, nor are they
involved in investing in
any other enterprise that
competes with or may
compete with products
or businesses produced
by Bengang Steel Plates
and its subsidiaries. 2. If
Bengang Steel Plates and
its subsidiaries further
expand their business
scope, the Group and
other enterprises
controlled by the Group
will not compete with the
expanded business of
Bengang Steel Plates and
its subsidiaries; they may
compete with Bengang
Steel Plates and its
subsidiaries If the
company's expanded
business produces
competition, it will
withdraw from the
competition with
Bengang Steel Plates as
follows: (1) Stop
business that may or may
compete with Bengang
Steel Plates and its
subsidiaries; (2) Will
compete The business is
incorporated into
Bengang Steel Plates and
its subsidiaries in a legal
and compliant manner;
(3) Competitive business
is transferred to
unrelated third parties. 3.
If the Group has any
business opportunities to
engage in or participate
in the competition with
Bengang Steel Plates’
operations, the Group
shall immediately notify
Bengang Steel Plates of
the above commercial
opportunities. Within a
reasonable period
specified in the notice,
Bengang Steel Plates If
28
Bengang Steel Plates Co., Ltd. Semi-Annual Report 2021
an affirmative answer is
made to take advantage
of the business
opportunity, the Group
will endeavor to give the
business opportunity to
Bengang Steel Plates on
terms not less than that
provided to any
independent third party.
4. If the above
commitments are
violated, the Group is
willing to bear all the
responsibilities arising
therefrom, and fully
compensate or
compensate for all direct
or indirect losses caused
to Bengang Steel Plates.
5. This letter of
commitment continues
to be effective during the
period of the Group as
the controlling
shareholder of Bengang
Steel Plates and cannot
be changed or withdrawn
In order to regulate and
reduce the Company ’s
transactions with
controlling shareholders
and other related parties,
and to protect the
interests of the Company
and small and medium
shareholders, Benxi Iron
and Steel (Group) Co.,
Ltd. and Bengang Group
Co., Ltd. have issued the
following commitments:
"Benxi Iron and Steel
(Group) Co., Ltd. and
Bengang Group Co.,
Benxi Steel & Ltd. (hereinafter
Iron (Group) collectively referred to
Co., Ltd. and Other as the "Group"), as a July 24,2019 Under normal
Long term
Bengang Commitment direct controlling fulfillment
Group Co., shareholder and an
Ltd. indirect controlling
shareholder of Bengang
Steel Plates Co., Ltd.
(hereinafter referred to
as "Bengang Steel
Plates"), in order to
protect the interests of
Bengang Steel Plates and
other shareholders of
Bengang Steel Plates,
regulate The Group's
related transaction with
Bengang Steel Plates
hereby promises: 1. The
Group will fully respect
the independent legal
person status of Bengang
29
Bengang Steel Plates Co., Ltd. Semi-Annual Report 2021
Steel Plates, ensure the
independent operation
and independent
decision-making of
Bengang Steel Plates,
ensure the independence
of Bengang Steel Plates’
business, asset integrity
and personnel
Independence and
financial independence
to avoid and reduce
unnecessary related
transactions; the Group
will strictly control
related transactions with
Bengang Steel Plates and
its subsidiaries. 2. The
Group and other
controlled companies
promise not to use loans
or occupy or
misappropriate the funds
of Bengang Steel Plates
and its subsidiaries to
repay debts, substitute
funds or otherwise, nor
We ask Bengang Steel
Plates and its
subsidiaries to provide
illegal guarantees for the
Group and other
companies under its
control. 3. The Group
and other controlled
companies and Bengang
Steel Plates will
minimize related
transactions. It is indeed
necessary and
unavoidable to carry out
in the related party
transactions, strictly
implement the decision-
making authority,
decision-making
procedures, avoidance
system and other
contents stipulated in
Bengang's "Articles of
Association" and related
party transaction
decision-making system,
give full play to the role
of the board of
supervisors and
independent directors,
and earnestly fulfill the
obligation of
information disclosure
To ensure that
transactions are
conducted in accordance
with the open, fair, and
fair principles of market
transactions and normal
commercial terms, the
30
Bengang Steel Plates Co., Ltd. Semi-Annual Report 2021
Group and other
companies under control
will not require or accept
Bengang Steel Sheets to
give preferential
treatment to third parties
in any fair market
transaction Conditions to
protect other
shareholders of Benxi
Steel Plates and the
interests of Benxi Steel
Plates from damage. 4.
The Group guarantees
that the above
commitments are
continuously effective
and irrevocable as long
as Bengang Steel Plates
is listed on the domestic
stock exchange and the
Group acts as its direct
and indirect controlling
shareholder. If any
violation of the above
commitments occurs, the
Group therefore bear all
the losses caused to
Bengang Steel Plates.
Stock option incentive
commitment
Other commitments to the
company's minority
shareholders
Whether Commitment
Yes
fulfilled on time or not
II.. Non-operating capital occupation of listed companies by controlling shareholders and other
related parties
□ Applicable √ Not applicable
During the reporting period, there was no non-operating capital occupation of the listed company by controlling
shareholders and other related parties.
III. Violation of external guarantees
□ Applicable √ Not applicable
During the reporting period, the company had no violations of external guarantees.
IV. Appointment and Dismissal of Certified Accountant’s Firm
Is the semi-annual financial report audited?
□ Yes √ No
The semi-annual report has not been audited.
31
Bengang Steel Plates Co., Ltd. Semi-Annual Report 2021
V. Illustrations of the Board of Directors and Supervisory Committee on the Modified Audit
Report Issued by the CPAs
□ Applicable √ Not applicable
VI. Illustrations of the Board of Directors on the Modified Audit Report Issued by the CPAs
for Previous Reporting Period
□ Applicable √ Not applicable
Ⅶ. Bankrupt and Reforming Events
□ Applicable √ Not applicable
There was no bankrupt and reforming event during the reporting period.
VIII. Lawsuits and Arbitrations
Significant lawsuits and arbitrations
□ Applicable √ Not applicable
There is no Significant lawsuits and arbitrations during the reporting period.
Other Lawsuits and Arbitrations
□ Applicable √ Not applicable
IX. Punishment and Rectification
□ Applicable √ Not applicable
There was no punishment or rectification during the reporting period.
X. Credit Status of the Company and its Controlling Shareholders and Actual Controllers
□ Applicable √ Not applicable
XI. Major Related Party Transactions
1. Related party transactions relevant to daily operations
√ Applicable □ Not applicable
The
Amount
approve Means
Pricing Price of Whethe Availabl
d of
Type of Content of principle of related Proporti r exceed e
trading paymen Index
related related of relate party on of the market Date of
Related Relation limit of t of of
party party related d transacti similar approve price of disclosu
parties ship transacti related disclos
transacti transactio party party ons (in transacti d similar re
ons (in party ure
ons ns transacti transa 10 ons limited transacti
10 transacti
ons ctions thousan (Y/N) ons
thousan ons
d)
d)
Benxi Parent purchas Per Per Execute
Repair 2021/4/
Steel & compan e of related Agree 14,746 0.00% 40,000 No per No
expense 28
Iron y goods party ment agreeme
32
Bengang Steel Plates Co., Ltd. Semi-Annual Report 2021
The
Amount
approve Means
Pricing Price of Whethe Availabl
d of
Type of Content of principle of related Proporti r exceed e
trading paymen Index
related related of relate party on of the market Date of
Related Relation limit of t of of
party party related d transacti similar approve price of disclosu
parties ship transacti related disclos
transacti transactio party party ons (in transacti d similar re
ons (in party ure
ons ns transacti transa 10 ons limited transacti
10 transacti
ons ctions thousan (Y/N) ons
thousan ons
d)
d)
(Group) and agreeme nt
Co., Ltd. services nt price
Benxi purchas Per 0
Execute
Steel & Parent e of Land related Per .
3,261.1 per 2021/4/
Iron compan goods leasing party Agree 0 No Yes
5 agreeme 28
(Group) y and fee agreeme ment 0
nt
Co., Ltd. services nt price %
Bengang
Cold- Under purchas Per
Execute
rolled the e of related Per
per 2021/4/
Stainless same goods Products party Agree 63.05 0.00% 30 No Yes
agreeme 28
Steel controll and agreeme ment
nt
Dandong er services nt price
Co., Ltd.
Benxi
Under purchas Per
Steel & Execute
the e of related Per
Iron per 2021/4/
same goods Labor cost party Agree 388.19 0.00% 900,000 No No
(Group) agreeme 28
controll and agreeme ment
Mining nt
er services nt price
Co., Ltd.
Benxi Raw
Under purchas Per
Steel & material Execute
the e of related Per
Iron and 333,109 per 2021/4/
same goods party Agree 0.10% No Yes
(Group) suppleme .30 agreeme 28
controll and agreeme ment
Mining ntary nt
er services nt price
Co., Ltd. material
Benxi
Under purchas Per
Steel & Execute
the e of related Per
Iron per 2021/4/
same goods Freight party Agree 665.9 0.00% No No
(Group) agreeme 28
controll and agreeme ment
Mining nt
er services nt price
Co., Ltd.
Benxi
Steel & Raw
Under purchas Per
Iron material Execute
the e of related Per
(Group) and 24,576. per 2021/4/
same goods party Agree 0.01% 40,000 No Yes
Metallurg suppleme 01 agreeme 28
controll and agreeme ment
y ntary nt
er services nt price
Residues material
Co., Ltd.
Benxi
Steel &
Iron
Under purchas Per
(Group) Execute
the e of related Per
Steel & Processin per 2021/4/
same goods party Agree 5.08 0.00% 70 No No
Iron g fee agreeme 28
controll and agreeme ment
Process nt
er services nt price
and
Logistics
Co., Ltd.
Benxi Under purchas Spare Per Per Execute
1,491.7 2021/4/
Steel & the e of related Agree 0.00% 10,000 No per Yes
parts 1 28
Iron same goods party ment agreeme
33
Bengang Steel Plates Co., Ltd. Semi-Annual Report 2021
The
Amount
approve Means
Pricing Price of Whethe Availabl
d of
Type of Content of principle of related Proporti r exceed e
trading paymen Index
related related of relate party on of the market Date of
Related Relation limit of t of of
party party related d transacti similar approve price of disclosu
parties ship transacti related disclos
transacti transactio party party ons (in transacti d similar re
ons (in party ure
ons ns transacti transa 10 ons limited transacti
10 transacti
ons ctions thousan (Y/N) ons
thousan ons
d)
d)
(Group) controll and agreeme nt
Machiner er services nt price
y
Manufact
ure Co.,
Ltd.
Benxi
Steel &
Iron Under purchas Per
Execute
(Group) the e of related Per
Repair per 2021/4/
Machiner same goods party Agree 292.32 0.00% No No
services agreeme 28
y controll and agreeme ment
nt
Manufact er services nt price
ure Co.,
Ltd.
Benxi
Steel & Under purchas Per
Execute
Iron the e of related Per
Spare per 2021/4/
(Group) same goods party Agree 198.76 0.00% 50,000 No Yes
parts agreeme 28
Construct controll and agreeme ment
nt
ion Co., er services nt price
Ltd.
Benxi
Steel & Under purchas Per
Execute
Iron the e of related Per
Project 14,057. per 2021/4/
(Group) same goods party Agree 0.00% No No
fee 74 agreeme 28
Construct controll and agreeme ment
nt
ion Co., er services nt price
Ltd.
Benxi
Steel & Under purchas Per
Execute
Iron the e of related Per
Repair 4,168.2 per 2021/4/
(Group) same goods party Agree 0.00% No No
services 6 agreeme 28
Construct controll and agreeme ment
nt
ion Co., er services nt price
Ltd.
Benxi
Raw
Steel & Under purchas Per
material Execute
Iron the e of related Per
and per 2021/4/
(Group) same goods party Agree 375.59 0.00% No Yes
suppleme agreeme 28
Construct controll and agreeme ment
ntary nt
ion Co., er services nt price
material
Ltd.
Benxi
Steel & Under purchas Per
Execute
Iron the e of related Per
per 2021/4/
(Group) same goods Freight party Agree 87.45 0.00% No No
agreeme 28
Construct controll and agreeme ment
nt
ion Co., er services nt price
Ltd.
Benxi Under purchas Spare Per Per Execute
2,693.6 2021/4/
Steel & the e of related Agree 0.00% 30,000 No per Yes
parts 4 28
Iron same goods party ment agreeme
34
Bengang Steel Plates Co., Ltd. Semi-Annual Report 2021
The
Amount
approve Means
Pricing Price of Whethe Availabl
d of
Type of Content of principle of related Proporti r exceed e
trading paymen Index
related related of relate party on of the market Date of
Related Relation limit of t of of
party party related d transacti similar approve price of disclosu
parties ship transacti related disclos
transacti transactio party party ons (in transacti d similar re
ons (in party ure
ons ns transacti transa 10 ons limited transacti
10 transacti
ons ctions thousan (Y/N) ons
thousan ons
d)
d)
(Group) controll and agreeme nt
Industrial er services nt price
Develop
ment Co.,
Ltd.
Benxi
Steel & Raw
Under purchas Per
Iron material Execute
the e of related Per
(Group) and 1,567.1 per 2021/4/
same goods party Agree 0.00% No Yes
Industrial suppleme 3 agreeme 28
controll and agreeme ment
Develop ntary nt
er services nt price
ment Co., material
Ltd.
Benxi
Steel &
Under purchas Per
Iron Execute
the e of related Per
(Group) Repair per 2021/4/
same goods party Agree 18.9 0.00% No No
Industrial services agreeme 28
controll and agreeme ment
Develop nt
er services nt price
ment Co.,
Ltd.
Benxi
Steel &
Under purchas Per
Iron Execute
the e of related Per
(Group) per 2021/4/
same goods Freight party Agree 191.68 0.00% No No
Industrial agreeme 28
controll and agreeme ment
Develop nt
er services nt price
ment Co.,
Ltd.
Benxi
Steel &
Under purchas Per
Iron Execute
the e of related Per
(Group) Project per 2021/4/
same goods party Agree 360.29 0.00% No No
Industrial fee agreeme 28
controll and agreeme ment
Develop nt
er services nt price
ment Co.,
Ltd.
Benxi Raw
Steel & material
Under purchas Per
Iron & Execute
the e of related Per
(Group) suppleme per 2021/4/
same goods party Agree 62.83 0.00% 20,000 No Yes
Construct ntary agreeme 28
controll and agreeme ment
ion and materials nt
er services nt price
Repairing & spare
Co., Ltd. parts
Benxi
Steel &
Under purchas Per
Iron Execute
the e of related Per
(Group) Project per 2021/4/
same goods party Agree 370.74 0.00% No No
Construct fee agreeme 28
controll and agreeme ment
ion and nt
er services nt price
Repairing
Co., Ltd.
35
Bengang Steel Plates Co., Ltd. Semi-Annual Report 2021
The
Amount
approve Means
Pricing Price of Whethe Availabl
d of
Type of Content of principle of related Proporti r exceed e
trading paymen Index
related related of relate party on of the market Date of
Related Relation limit of t of of
party party related d transacti similar approve price of disclosu
parties ship transacti related disclos
transacti transactio party party ons (in transacti d similar re
ons (in party ure
ons ns transacti transa 10 ons limited transacti
10 transacti
ons ctions thousan (Y/N) ons
thousan ons
d)
d)
Benxi
Steel &
Under purchas Per
Iron Execute
the e of related Per
(Group) Repair per 2021/4/
same goods party Agree 255.59 0.00% No No
Construct expense agreeme 28
controll and agreeme ment
ion and nt
er services nt price
Repairing
Co., Ltd.
Raw
Under purchas Per
Bengang material Execute
the e of related Per
Electronic and 7,365.3 per 2021/4/
same goods party Agree 0.00% 20,000 No Yes
s and Gas suppleme 7 agreeme 28
controll and agreeme ment
Co., Ltd. ntary nt
er services nt price
material
Under purchas Per
Bengang Execute
the e of related Per
Electronic Repair per 2021/4/
same goods party Agree 220.68 0.00% No No
s and Gas services agreeme 28
controll and agreeme ment
Co., Ltd. nt
er services nt price
Benxi
High-tech Under purchas Per
Execute
Drilling the e of related Per
Spare per 2021/4/
Tools same goods party Agree 7.96 0.00% 50 No Yes
parts agreeme 28
Manufact controll and agreeme ment
nt
ure Co., er services nt price
Ltd.
Benxi
Under purchas Per
New Execute
the e of related Per
Career per 2021/4/
same goods #N/A party Agree 3.01 0.00% 21,500 No No
Develop agreeme 28
controll and agreeme ment
ment Co., nt
er services nt price
Ltd.
Raw
Benxi
Under purchas material Per
New Execute
the e of and related Per
Career per 2021/4/
same goods suppleme party Agree 113.4 0.00% No Yes
Develop agreeme 28
controll and ntary agreeme ment
ment Co., nt
er services material nt price
Ltd.
and food
Liaoning Under purchas Per
Execute
Metallurg the e of related Per
Spare per 2021/4/
y same goods party Agree 126.16 0.00% 1,000 No Yes
parts agreeme 28
Technicia controll and agreeme ment
nt
n College er services nt price
Bengang
Group Raw
Under purchas Per
Internatio material Execute
the e of related Per
nal and 846,115 1,750,0 per 2021/4/
same goods party Agree 0.24% No Yes
Economic suppleme .86 00 agreeme 28
controll and agreeme ment
and ntary nt
er services nt price
Trading material
Co., Ltd.
36
Bengang Steel Plates Co., Ltd. Semi-Annual Report 2021
The
Amount
approve Means
Pricing Price of Whethe Availabl
d of
Type of Content of principle of related Proporti r exceed e
trading paymen Index
related related of relate party on of the market Date of
Related Relation limit of t of of
party party related d transacti similar approve price of disclosu
parties ship transacti related disclos
transacti transactio party party ons (in transacti d similar re
ons (in party ure
ons ns transacti transa 10 ons limited transacti
10 transacti
ons ctions thousan (Y/N) ons
thousan ons
d)
d)
Bengang
Group
Under purchas Per
Internatio Execute
the e of related Per
nal Agency 3,648.1 per 2021/4/
same goods party Agree 0.00% No No
Economic fee 0 agreeme 28
controll and agreeme ment
and nt
er services nt price
Trading
Co., Ltd.
Bengang
Group
Under purchas Per
Internatio Execute
the e of related Per
nal Port 10,544. per 2021/4/
same goods party Agree 0.00% No Yes
Economic surcharges 71 agreeme 28
controll and agreeme ment
and nt
er services nt price
Trading
Co., Ltd.
Benxi
Steel &
Iron Under purchas Per
Execute
(Group) the e of related Per
Spare per 2021/4/
Informati same goods party Agree 93.14 0.00% 4,000 No Yes
parts agreeme 28
on and controll and agreeme ment
nt
Automati er services nt price
c Tech
Co., Ltd.
Benxi
Steel &
Iron Under purchas Per
Execute
(Group) the e of related Per
Project per 2021/4/
Informati same goods party Agree 236.53 0.00% No No
fee agreeme 28
on and controll and agreeme ment
nt
Automati er services nt price
c Tech
Co., Ltd.
Benxi
Steel &
Iron Under purchas Per
Execute
(Group) the e of related Per
Heating per 2021/4/
Thermal same goods party Agree 9.18 0.00% 200 No Yes
costs agreeme 28
Power controll and agreeme ment
nt
Develop er services nt price
ment Co.,
Ltd.
Benxi
Steel &
Raw
Iron Under purchas Per
material Execute
(Group) the e of related Per
and per 2021/4/
Thermal same goods party Agree 2.02 0.00% No Yes
suppleme agreeme 28
Power controll and agreeme ment
ntary nt
Develop er services nt price
material
ment Co.,
Ltd.
Benxi Under purchas Design Per Per 40.96 0.00% 200 No Execute No 2021/4/
37
Bengang Steel Plates Co., Ltd. Semi-Annual Report 2021
The
Amount
approve Means
Pricing Price of Whethe Availabl
d of
Type of Content of principle of related Proporti r exceed e
trading paymen Index
related related of relate party on of the market Date of
Related Relation limit of t of of
party party related d transacti similar approve price of disclosu
parties ship transacti related disclos
transacti transactio party party ons (in transacti d similar re
ons (in party ure
ons ns transacti transa 10 ons limited transacti
10 transacti
ons ctions thousan (Y/N) ons
thousan ons
d)
d)
Steel & the e of fees related Agree per 28
Iron same goods party ment agreeme
(Group) controll and agreeme nt
Designing er services nt price
Institute
Benxi Raw
Under purchas Per
Beiying material Execute
the e of related Per
Steel & and 140,619 per 2021/4/
same goods party Agree 0.04% 350,000 No Yes
Iron suppleme .89 agreeme 28
controll and agreeme ment
(Group) ntary nt
er services nt price
Co., Ltd. material
Benxi
Under purchas Per
Beiying Execute
the e of related Per
Steel & Energy & 24,890. per 2021/4/
same goods party Agree 0.01% No Yes
Iron Power 63 agreeme 28
controll and agreeme ment
(Group) nt
er services nt price
Co., Ltd.
Benxi
Under purchas Per
Beiying Execute
the e of related Per
Steel & per 2021/4/
same goods Freight party Agree 226.54 0.00% No No
Iron agreeme 28
controll and agreeme ment
(Group) nt
er services nt price
Co., Ltd.
Benxi
Under purchas Per
Beiying Execute
the e of related Per
Steel & 4,041.8 per 2021/4/
same goods Labor cost party Agree 0.00% No No
Iron 5 agreeme 28
controll and agreeme ment
(Group) nt
er services nt price
Co., Ltd.
Benxi
Under purchas Per
Beiying Execute
the e of related Per
Steel & Spare 1,154.8 per 2021/4/
same goods party Agree 0.00% No Yes
Iron parts 3 agreeme 28
controll and agreeme ment
(Group) nt
er services nt price
Co., Ltd.
Liaoning
Hengtong
Metallurg Under purchas Per
Raw Execute
ical the e of related Per
material 3,481.5 per 2021/4/
Equipmen same goods party Agree 0.00% 10,000 No Yes
and spare 3 agreeme 28
t controll and agreeme ment
parts nt
Manufact er services nt price
ure Co.,
Ltd.
Liaoning
Hengtong
Metallurg Under purchas Per
Execute
ical the e of related Per
Repair per 2021/4/
Equipmen same goods party Agree 66.93 0.00% No No
services agreeme 28
t controll and agreeme ment
nt
Manufact er services nt price
ure Co.,
Ltd.
38
Bengang Steel Plates Co., Ltd. Semi-Annual Report 2021
The
Amount
approve Means
Pricing Price of Whethe Availabl
d of
Type of Content of principle of related Proporti r exceed e
trading paymen Index
related related of relate party on of the market Date of
Related Relation limit of t of of
party party related d transacti similar approve price of disclosu
parties ship transacti related disclos
transacti transactio party party ons (in transacti d similar re
ons (in party ure
ons ns transacti transa 10 ons limited transacti
10 transacti
ons ctions thousan (Y/N) ons
thousan ons
d)
d)
Liaoning
Under purchas Per
Hengtai Raw Execute
the e of related Per
Heavy material per 2021/4/
same goods party Agree 70.79 0.00% 1,000 No Yes
Machiner and spare agreeme 28
controll and agreeme ment
y Co., parts nt
er services nt price
Ltd.
Liaoning
Under purchas Per
Hengtai Execute
the e of related Per
Heavy Repair per 2021/4/
same goods party Agree 425.44 0.00% No No
Machiner services agreeme 28
controll and agreeme ment
y Co., nt
er services nt price
Ltd.
purchas Per
Execute
Bengang acutal e of related Per
8,793.3 per 2021/4/
Group controll goods Labor cost party Agree 0.00% 20,000 No No
4 agreeme 28
Co., Ltd. er and agreeme ment
nt
services nt price
purchas Per
Execute
Bengang acutal e of related Per
House per 2021/4/
Group controll goods party Agree 37.61 0.00% No Yes
rental fee agreeme 28
Co., Ltd. er and agreeme ment
nt
services nt price
Sale of
Under Per
Bengang goods Execute
the related Per
Electronic and Energy & per 2021/4/
same party Agree 39.46 0.00% 100 No Yes
s and Gas renderin Power agreeme 28
controll agreeme ment
Co., Ltd. g of nt
er nt price
services
Raw
Benxi Sale of material
Under Per
Beiying goods & Execute
the related Per
Steel & and suppleme 166,327 per 2021/4/
same party Agree 0.04% 240,000 No Yes
Iron renderin ntary .67 agreeme 28
controll agreeme ment
(Group) g of materials nt
er nt price
Co., Ltd. services & spare
parts
Benxi Sale of
Under Per
Beiying goods Execute
the related Per
Steel & and 1,150.4 per 2021/4/
same Products party Agree 0.00% No Yes
Iron renderin 9 agreeme 28
controll agreeme ment
(Group) g of nt
er nt price
Co., Ltd. services
Benxi Sale of
Under Per
Beiying goods Execute
the related Per
Steel & and Energy & 6,461.2 per 2021/4/
same party Agree 0.00% No Yes
Iron renderin Power 3 agreeme 28
controll agreeme ment
(Group) g of nt
er nt price
Co., Ltd. services
Benxi Sale of Execute
Under Per Per
Steel & goods Energy & per 2021/4/
the related Agree 0.94 0.00% No Yes
Iron and Power agreeme 28
same party ment
(Group) renderin nt
controll agreeme
Real- g of
39
Bengang Steel Plates Co., Ltd. Semi-Annual Report 2021
The
Amount
approve Means
Pricing Price of Whethe Availabl
d of
Type of Content of principle of related Proporti r exceed e
trading paymen Index
related related of relate party on of the market Date of
Related Relation limit of t of of
party party related d transacti similar approve price of disclosu
parties ship transacti related disclos
transacti transactio party party ons (in transacti d similar re
ons (in party ure
ons ns transacti transa 10 ons limited transacti
10 transacti
ons ctions thousan (Y/N) ons
thousan ons
d)
d)
estate er services nt price
Develop
ment Co.,
Ltd.
Benxi
Steel &
Iron Sale of
Under Per
(Group) goods Execute
the related Per
Steel & and Energy & per 2021/4/
same party Agree 0.46 0.00% 30 No Yes
Iron renderin Power agreeme 28
controll agreeme ment
Process g of nt
er nt price
and services
Logistics
Co., Ltd.
Benxi
Steel &
Sale of
Iron Under Per
goods Execute
(Group) the related Per
and per 2021/4/
Machiner same Products party Agree 445.96 0.00% 5,000 No Yes
renderin agreeme 28
y controll agreeme ment
g of nt
Manufact er nt price
services
ure Co.,
Ltd.
Benxi
Steel &
Sale of
Iron Under Per
goods Execute
(Group) the related Per
and Energy & 1,086.2 per 2021/4/
Machiner same party Agree 0.00% No Yes
renderin Power 0 agreeme 28
y controll agreeme ment
g of nt
Manufact er nt price
services
ure Co.,
Ltd.
Benxi
Raw
Steel &
Sale of material
Iron Under Per
goods & Execute
(Group) the related Per
and suppleme per 2021/4/
Machiner same party Agree 16.41 0.00% No Yes
renderin ntary agreeme 28
y controll agreeme ment
g of materials nt
Manufact er nt price
services & spare
ure Co.,
parts
Ltd.
Benxi
Sale of
Steel & Under Per
goods Execute
Iron the related Per
and Energy & per 2021/4/
(Group) same party Agree 377.58 0.00% 8,000 No Yes
renderin Power agreeme 28
Construct controll agreeme ment
g of nt
ion Co., er nt price
services
Ltd.
Benxi Under Raw Per
Sale of Execute
Steel & the material related Per
goods per 2021/4/
Iron same & party Agree 171.46 0.00% No Yes
and agreeme 28
(Group) controll suppleme agreeme ment
renderin nt
Construct er ntary nt price
g of
ion Co., materials
40
Bengang Steel Plates Co., Ltd. Semi-Annual Report 2021
The
Amount
approve Means
Pricing Price of Whethe Availabl
d of
Type of Content of principle of related Proporti r exceed e
trading paymen Index
related related of relate party on of the market Date of
Related Relation limit of t of of
party party related d transacti similar approve price of disclosu
parties ship transacti related disclos
transacti transactio party party ons (in transacti d similar re
ons (in party ure
ons ns transacti transa 10 ons limited transacti
10 transacti
ons ctions thousan (Y/N) ons
thousan ons
d)
d)
Ltd. services & spare
parts
Benxi Sale of
Under Per
Steel & goods Execute
the related Per
Iron and Energy & 33,426. per 2021/4/
same party Agree 0.01% 100,000 No Yes
(Group) renderin Power 91 agreeme 28
controll agreeme ment
Mining g of nt
er nt price
Co., Ltd. services
Raw
Benxi Sale of material
Under Per
Steel & goods & Execute
the related Per
Iron and suppleme 5,312.6 per 2021/4/
same party Agree 0.00% No Yes
(Group) renderin ntary 2 agreeme 28
controll agreeme ment
Mining g of materials nt
er nt price
Co., Ltd. services & spare
parts
Benxi Sale of
Under Per
Steel & goods Execute
the related Per
Iron and Freight per 2021/4/
same party Agree 339.29 0.00% No No
(Group) renderin revenue agreeme 28
controll agreeme ment
Mining g of nt
er nt price
Co., Ltd. services
Benxi
Steel &
Sale of
Iron Under Per
goods Execute
(Group) the related Per
and Energy & 3,649.4 per 2021/4/
Thermal same party Agree 0.00% 5,000 No Yes
renderin Power 8 agreeme 28
Power controll agreeme ment
g of nt
Develop er nt price
services
ment Co.,
Ltd.
Benxi
Raw
Steel &
Sale of material
Iron Under Per
goods & Execute
(Group) the related Per
and suppleme per 2021/4/
Thermal same party Agree 893.57 0.00% No Yes
renderin ntary agreeme 28
Power controll agreeme ment
g of materials nt
Develop er nt price
services & spare
ment Co.,
parts
Ltd.
Benxi
Steel & Sale of
Under Per
Iron goods Execute
the related Per
(Group) and Energy & per 2021/4/
same party Agree 413.68 0.00% 3,000 No Yes
Industrial renderin Power agreeme 28
controll agreeme ment
Develop g of nt
er nt price
ment Co., services
Ltd.
Benxi Under Sale of Per
Execute
Steel & the goods related Per
per 2021/4/
Iron same and Products party Agree 501.34 0.00% No Yes
agreeme 28
(Group) controll renderin agreeme ment
nt
Industrial er g of nt price
41
Bengang Steel Plates Co., Ltd. Semi-Annual Report 2021
The
Amount
approve Means
Pricing Price of Whethe Availabl
d of
Type of Content of principle of related Proporti r exceed e
trading paymen Index
related related of relate party on of the market Date of
Related Relation limit of t of of
party party related d transacti similar approve price of disclosu
parties ship transacti related disclos
transacti transactio party party ons (in transacti d similar re
ons (in party ure
ons ns transacti transa 10 ons limited transacti
10 transacti
ons ctions thousan (Y/N) ons
thousan ons
d)
d)
Develop services
ment Co.,
Ltd.
Benxi Raw
Steel & Sale of material
Under Per
Iron goods & Execute
the related Per
(Group) and suppleme per 2021/4/
same party Agree 660.84 0.00% No Yes
Industrial renderin ntary agreeme 28
controll agreeme ment
Develop g of materials nt
er nt price
ment Co., services & spare
Ltd. parts
Benxi
Steel &
Sale of
Iron Under Per
goods Execute
(Group) the related Per
and Energy & per 2021/4/
Informati same party Agree 5.23 0.00% 20 No Yes
renderin Power agreeme 28
on and controll agreeme ment
g of nt
Automati er nt price
services
c Tech
Co., Ltd.
Benxi
Steel & Sale of
Under Per
Iron goods Execute
the related Per
(Group) and Energy & per 2021/4/
same party Agree 59.55 0.00% 500 No Yes
Construct renderin Power agreeme 28
controll agreeme ment
ion and g of nt
er nt price
Repairing services
Co., Ltd.
Benxi
Steel & Sale of
Under Per
Iron goods Execute
the related Per
(Group) and Energy & per 2021/4/
same party Agree 103.98 0.00% 30,000 No Yes
Metallurg renderin Power agreeme 28
controll agreeme ment
y g of nt
er nt price
Residues services
Co., Ltd.
Benxi Raw
Steel & Sale of material
Under Per
Iron goods & Execute
the related Per
(Group) and suppleme 22,587. per 2021/4/
same party Agree 0.01% No Yes
Metallurg renderin ntary 81 agreeme 28
controll agreeme ment
y g of materials nt
er nt price
Residues services & spare
Co., Ltd. parts
Sale of
Benxi Per
goods Execute
Steel & Parent related Per
and Energy & per 2021/4/
Iron compan party Agree 263.06 0.00% 2,000 No Yes
renderin Power agreeme 28
(Group) y agreeme ment
g of nt
Co., Ltd. nt price
services
Benxi Parent Sale of Raw Per Per Execute 2021/4/
Steel & compan goods material related Agree 346.98 0.00% No per Yes
28
Iron y and & party ment agreeme
42
Bengang Steel Plates Co., Ltd. Semi-Annual Report 2021
The
Amount
approve Means
Pricing Price of Whethe Availabl
d of
Type of Content of principle of related Proporti r exceed e
trading paymen Index
related related of relate party on of the market Date of
Related Relation limit of t of of
party party related d transacti similar approve price of disclosu
parties ship transacti related disclos
transacti transactio party party ons (in transacti d similar re
ons (in party ure
ons ns transacti transa 10 ons limited transacti
10 transacti
ons ctions thousan (Y/N) ons
thousan ons
d)
d)
(Group) renderin suppleme agreeme nt
Co., Ltd. g of ntary nt price
services materials
& spare
parts
Benxi Sale of
Under Per
New goods Execute
the related Per
Career and Energy & per 2021/4/
same party Agree 11.63 0.00% 50 No Yes
Develop renderin Power agreeme 28
controll agreeme ment
ment Co., g of nt
er nt price
Ltd. services
Sale of
Dalian Under Per
goods Execute
Boluole the related Per
and per 2021/4/
Steel same Products party Agree 655.6 0.00% 2,000 No Yes
renderin agreeme 28
Tube Co., controll agreeme ment
g of nt
Ltd. er nt price
services
Benxi Sale of
Under Per
Steel & goods Execute
the related Per
Iron and Energy & per 2021/4/
same party Agree No Yes
(Group) renderin Power agreeme 28
controll agreeme ment
General g of nt
er nt price
Hospital services
Benxi
Steel &
Sale of
Iron Under Per
goods Execute
(Group) the related Per
and Energy & per 2021/4/
Zhengtai same party Agree 1.31 0.00% No Yes
renderin Power agreeme 28
Construct controll agreeme ment
g of nt
ion er nt price
services
Materials
Co., Ltd.
Liaoning
Raw
Hengtong
Sale of material
Metallurg Under Per
goods & Execute
ical the related Per
and suppleme per 2021/4/
Equipmen same party Agree 35.59 0.00% 2,000 No Yes
renderin ntary agreeme 28
t controll agreeme ment
g of materials nt
Manufact er nt price
services & spare
ure Co.,
parts
Ltd.
Bengang
Sale of
Cold- Under Per
goods Execute
rolled the related Per
and per 2021/4/
Stainless same Products party Agree 295.41 0.00% 3,000 No Yes
renderin agreeme 28
Steel controll agreeme ment
g of nt
Dandong er nt price
services
Co., Ltd.
Under Sale of Per
Suzhou Execute
the goods related Per
Bengang 38,315. per 2021/4/
same and Products party Agree 0.01% 55,000 No Yes
Industrial 21 agreeme 28
controll renderin agreeme ment
Co., Ltd. nt
er g of nt price
43
Bengang Steel Plates Co., Ltd. Semi-Annual Report 2021
The
Amount
approve Means
Pricing Price of Whethe Availabl
d of
Type of Content of principle of related Proporti r exceed e
trading paymen Index
related related of relate party on of the market Date of
Related Relation limit of t of of
party party related d transacti similar approve price of disclosu
parties ship transacti related disclos
transacti transactio party party ons (in transacti d similar re
ons (in party ure
ons ns transacti transa 10 ons limited transacti
10 transacti
ons ctions thousan (Y/N) ons
thousan ons
d)
d)
services
Sale of
Under Per
Bengang goods Execute
the related Per
Group and Energy & per 2021/4/
same party Agree 0.65 0.00% 2 No Yes
Finance renderin Power agreeme 28
controll agreeme ment
Co., Ltd. g of nt
er nt price
services
Sale of
Per
goods Execute
Bengang acutal related Per
and Energy & per 2021/4/
Group controll party Agree 61.46 0.00% 2,000 No Yes
renderin Power agreeme 28
Co., Ltd. er agreeme ment
g of nt
nt price
services
Raw
Sale of material
Per
goods & Execute
Bengang acutal related Per
and suppleme 240,324 per 2021/4/
Group controll party Agree 0.06% No Yes
renderin ntary .13 agreeme 28
Co., Ltd. er agreeme ment
g of materials nt
nt price
services & spare
parts
Liaoning Sale of
Under Per
Hengtai goods Execute
the related Per
Heavy and per 2021/4/
same Products party Agree 17.43 0.00% 50 No Yes
Machiner renderin agreeme 28
controll agreeme ment
y Co., g of nt
er nt price
Ltd. services
1,979,7 3,725,8
Total -- -- -- -- -- -- -- --
04.39 02
Details of any sales return of a large
N/A
amount
Give the actual situation during the
reporting period where a forecast had
been made for the total amounts of N/A
routine related-party transactions，by
type to occur in the current period(if
any)
Reason for any significant difference
between the transaction price and the N/A
Market price for reference (if
applicable)
2. Related transactions relevant to asset acquisition or sold
□ Applicable √ Not applicable
There was no related transaction relevant to asset acquisition or sold during the reporting period.
3. Related transactions relevant to joint investments
□ Applicable √ Not applicable
44
Bengang Steel Plates Co., Ltd. Semi-Annual Report 2021
There was no related transaction relevant to joint investments during the reporting period.
4. Credits and liabilities with related parties
□ Applicable √ Not applicable
There were no related credits and debts during the reporting period.
5. Deals with related financial companies and financial companies controlled by the company
√ Applicable □ Not applicable
Deposit business
Maximum
Beginning Transaction Ending balance
daily deposit Deposit interest
Related party Relationship balance（10 （10 （10
limit（10 rate range
thousand） thousand） thousand）
thousand）
Bengang Group Under the same
1,100,000.00 3.0%-3.5% 1,332,199.78 8,587,031.95 857,465.16
Finance Co., Ltd. controller
Loan Business
Beginning Transaction Ending balance
Loan limit（10 Loan interest
Related party Relationship balance（10 （10 （10
thousand） rate range
thousand） thousand） thousand）
Credit or other financial services
Amount（10 Actual amount（10
Related party Relationship Business type
thousand） thousand）
Bengang Group Under the same
250,000.00 27,000.00
Finance Co., Ltd. controller
6. Other significant related transactions
□ Applicable √ Not applicable
There was no other significant related transaction during the reporting period.
XII. Major Contracts and Performance
1. Trusteeship, contracting, and leasing matters
(1) Trusteeship
□ Applicable √ Not applicable
There was no trusteeship during the reporting period.
(2) Contracting
□ Applicable √ Not applicable
There was no contracting during the reporting period.
45
Bengang Steel Plates Co., Ltd. Semi-Annual Report 2021
(3) Lease
□ Applicable √ Not applicable
There was no lease during the reporting period.
2. Major Guarantee
□ Applicable √ Not applicable
There was no guarantee during the reporting period.
3. Entrusted Finance
√ Applicable □ Not applicable
Unit: ten thousand
Impairment accrued for
Amount not
Transaction Unexpired financial product that
Type Source of Fund recovered after the
amount balance has not been recovered
due date
after the due date
Bank financing product Equity fund 50,000 50,000 0 0
Bank financing product Equity fund 10,000 10,000 0 0
Bank financing product Equity fund 10,000 10,000 0 0
Bank financing product Equity fund 20,000 20,000 0 0
Bank financing product Equity fund 10,000 10,000 0 0
Bank financing product Equity fund 50,000 50,000 0 0
Bank financing product Equity fund 10,000 10,000 0 0
Bank financing product Equity fund 100,000 0 0 0
Bank financing product Equity fund 200,000 0 0 0
Total 460,000 160,000 0 0
The specific situation of high-risk entrusted finance with a large single amount or low security, poor liquidity, and no
capital protection
□ Applicable √ Not applicable
Entrusted finance is expected to be unable to recover the principal or there are other situations that may cause impairment
□ Applicable √ Not applicable
4. Routine Operation Major Contracts
□ Applicable √ Not applicable
5. Other Major Contracts
□ Applicable √ Not applicable
There was no other major contract during the reporting period.
46
Bengang Steel Plates Co., Ltd. Semi-Annual Report 2021
XIII. Other Major Events
√ Applicable □ Not applicable
On April 15, 2021, the company received a notice from the indirect controlling shareholder Bengang Group Co., Ltd. that
it was informed that Ansteel Group Co., Ltd. is planning to reorganize the Bengang Group, which may lead to changes in
the company's control rights. The reorganization is still in the planning stage, and the approval of relevant departments is
still required after the plan is finalized. For details, please refer to the "Indicative Announcement on the Strategic
Restructuring of the Indirect Controlling Shareholder Bengang Group Co., Ltd." published on the designated information
disclosure media by the company on April 15, 2021.
On August 18, 2021, the State-owned Assets Supervision and Administration Commission of the State Council and the
People's Government of Liaoning Province jointly issued a notice agreeing that Ansteel Group Co., Ltd. will reorganize
Bengang Group Co., Ltd., and the Liaoning Provincial State-owned Assets Supervision and Administration Commission
will transfer 51% equity of Bengang Group to Ansteel Group for free. The transfer still needs to perform the necessary
procedures, and there is still uncertainty about whether the relevant approval can be obtained and whether the transfer can
be implemented smoothly. For details, please refer to the Announcement on the Approval of the State-owned Assets
Supervision and Administration Commission of the State Council and the People's Government of Liaoning Province on
the free transfer of 51% equity of Bengang Group, the indirect controlling shareholder, published on the designated
information disclosure media by the company on August 19, 2021 ".
On August 20, 2021, the State-owned Assets Supervision and Administration Commission of the People's Government
of Liaoning Province, indirect controlling shareholder of the company and with 80% of the Bengang Group’s share, and
Anstel Group Co., Ltd., which is 100% owned by the State-owned Assets Supervision and Administration Commission
of the State Council signed the agreement: "Agreement on the Gratuitous Transfer of State-owned Equity of Bengang
Group Co., Ltd. between the State-owned Assets Supervision and Administration Commission of the People's
Government of Liaoning Province and Ansteel Group Co., Ltd.". According to the agreement, the State-owned Assets
Supervision and Administration Commission of Liaoning Province will transfer its 51% equity in Bengang Group to
Ansteel Group for free. After the completion of this transfer, Ansteel Group will become the controlling shareholder of
Bengang Group. Ansteel Group indirectly controls 81.08% of the company’s shares through Bengang Group, Benxi Iron
and Steel (Group) Co., Ltd. and Ansteel Group Capital Holding Co., Ltd. The direct controlling shareholder of the
company remains unchanged, still Benxi Iron & Steel (Group) Co., Ltd., and the actual controller of the company is
changed to the State-owned Assets Supervision and Administration Commission of the State Council. For details, please
refer to the company's relevant announcement published on the designated information disclosure media on August 21,
2021.
XIV. Major Events of Subsidiaries
□ Applicable √ Not applicable
47
Bengang Steel Plates Co., Ltd. Semi-Annual Report 2021
VI. Status of Share Capital Changes and Shareholders
I. Share Capital Changes
1. Share capital changes
Unit: Share
Before the change Increase/decrease(+，-) After the Change
Capitaliz
ation of
Percenta Issuing of Bonus Percenta
Quantity common Others Subtotal Quantity
ge new share shares ge
reserve
fund
I. Restricted Shares
2. State-own Legal-person
Shareholding
3. Other domestic
shareholdings
Including: Domestic legal
person holding
Domestic
person holding
II. Non-restricted Shares 3,875,371,532 100.00% 9,689,073 9,689,073 3,885,060,605 100.00%
1. Common shares in
3,475,371,532 89.68% 9,689,073 9,689,073 3,485,060,605 89.70%
RMB
2. Foreign shares in
400,000,000 10.32% 400,000,000 10.30%
domestic market
2. Foreign shares in
oversea market
4.Others
III. Total shares 3,875,371,532 100.00% 9,689,073 9,689,073 3,885,060,605 100.00%
Reason of share capital changes
√Applicable □Not applicable
During the reporting period, the Company's publicly issued convertible corporate bonds were converted
into shares of 487,432 shares, and the company's total share capital increased by 9,689,073 shares.
Approval of share capital changes
□ Applicable √ Not applicable
48
Bengang Steel Plates Co., Ltd. Semi-Annual Report 2021
Status of registration process of transferred shares
□ Applicable √ Not applicable
Progress of Share Repurchase
□ Applicable √ Not applicable
Implementation Progress of Reducing Holdings of Repurchase Shares by Centralized Bidding
□ Applicable √ Not applicable
Influences of share capital changes on financial indices such as basic earnings per share, diluted earnings
per share, and net asset per share attributed to common shareholders
□ Applicable √ Not applicable
Other information the Company deems necessary to be disclosed or required by the authority
□ Applicable √ Not applicable
2. Changes of Restricted Shares
□Applicable √Not applicable
II. Securities Issuance and Listing
√Applicable □Not applicable
Name of
Stock and Issue price Approved Termination
Issue Date for Disclosure Disclosure
other Issue date (interest quantity for of
quantity listing index Date
derivatives rate) trading transaction
securities
Stock
Convertible Bond, Warrant bond and Corporate bond
Bengang
29th June 6,800,000,0 4th August 6,800,000,0 28th June
Convertible 100
2020 00 2020 00 2026
Bond
Other derivatives securities
49
Bengang Steel Plates Co., Ltd. Semi-Annual Report 2021
III. Total Number of shareholders and shareholding
Unit: Shares
The total number of
Total number of
preferred shareholders
common shareholders 0
58,435 voting rights restored at
at the end of the
the end of the reporting
reporting period
period (See Notes 8)
Shareholding of shareholders holding more than 5% or top 10 shareholders
Number of Changes in Number of pledged or
Name of the Nature of Holding Restricted Un-restricted
shares held at reporting frozen shares
shareholder shareholder Percentage shares held shares held
period-end period Status Number
Benxi Steel & Iron State-owned Pledged 1,577,545,000
62.02% 2,409,628,094 2,409,628,094
(Group) Co., Ltd. legal person Frozen 108,326,179
CCB Principal Asset
Management – ICBC
– CR Trust – CR
Others 4.76% 184,842,883 184,842,883
Trust Xing Sheng
No. 5 Collective Fund
Trust Plan
Bei Xin Rui Feng
Fund – China
Merchants Bank – Bei
Xin Rui Feng Fund Others 4.76% 184,842,883 184,842,883
Feng Qing No. 229
Asset Management
Plan
China Life AMP
Fund– ICBC – China
Life AMP – Hua Xin
Trust Targeted Others 4.76% 184,842,883 184,842,883
Additional Shares
Issuance No. 10 Asset
Management Plan
Liaoning Provincial
Transportation State-owned
3.82% 148,528,983 -1,941,900 148,528,983
Investment Group legal person
Co., Ltd.
MORGAN STANLEY
Foreign legal
& CO. 0.37% 14,366,619 14,366,619 14,366,619
person
INTERNATIONAL
50
Bengang Steel Plates Co., Ltd. Semi-Annual Report 2021
PLC
Huatai Securities Co., State-owned
0.30% 11,541,080 11,541,080 11,541,080
Ltd. legal person
CITIC Securities Co., State-owned
0.24% 9,490,396 9,490,396 9,490,396
Ltd. legal person
China Resources
Yuanta Fund-Huatai
Securities-China
Resources Yuanta
Others 0.23% 8,990,023 8,990,023 8,990,023
Fund Runhong
Prosperity Collective
Asset Management
Plan
Domestic
Lu Ruijun 0.21% 8,000,000 8,000,000 8,000,000
natural person
Strategy investors or general legal
person becomes top 10 shareholders due None
to rights issued (if any) (See Notes 3)
It is unknown to the Company whether there is any related connection or ‘Action in Concert’ as
Notes to relationship or ‘action in
described by Rules of Information Disclosing Regarding Changing of Shareholding Status of
concert’ among the top 10 shareholders.
Listed Companies existing among the above shareholders.
Explanation of the above-mentioned
The above shareholders are not involved in the entrustment, entrusted voting rights, or abstention
shareholders' entrusted/entrusted voting
of voting rights.
rights and waiver of voting rights
Special instructions for the existence of
special repurchase accounts among the Benxi Iron and Steel (Group) Co., Ltd. holds 467,545,000 shares of the company through pledge
top 10 shareholders (if any) (see Note repurchase.
11)
Shareholding of top 10 unrestricted shareholders
Un-restricted shares held at Category of shares
Name of the shareholder
the end of the reporting period Category of shares Quantity
Benxi Steel & Iron (Group) Co., Ltd. 2,409,628,094 Common shares in RMB 2,409,628,094
CCB Principal Asset Management – ICBC – CR
Trust – CR Trust Xing Sheng No. 5 Collective 184,842,883 Common shares in RMB 184,842,883
Fund Trust Plan
Bei Xin Rui Feng Fund – China Merchants
Bank – Bei Xin Rui Feng Fund Feng Qing No. 184,842,883 Common shares in RMB 184,842,883
229 Asset Management Plan
China Life AMP Fund– ICBC – China Life
184,842,883 Common shares in RMB 184,842,883
AMP – Hua Xin Trust Targeted Additional
51
Bengang Steel Plates Co., Ltd. Semi-Annual Report 2021
Shares Issuance No. 10 Asset Management Plan
Liaoning Provincial Transportation Investment
148,528,983 Common shares in RMB 148,528,983
Group Co., Ltd.
MORGAN STANLEY & CO.
14,366,619 Common shares in RMB 14,366,619
INTERNATIONAL PLC
Huatai Securities Co., Ltd. 11,541,080 Common shares in RMB 11,541,080
CITIC Securities Co., Ltd. 9,490,396 Common shares in RMB 9,490,396
China Resources Yuanta Fund-Huatai
Securities-China Resources Yuanta Fund
8,990,023 Foreign shares in domestic exchange 8,990,023
Runhong Prosperity Collective Asset
Management Plan
Lu Ruijun 8,000,000 Common shares in RMB 8,000,000
Benxi Steel & Iron (Group) Co., Ltd., the holding shareholder, has no relationship with
any of the other shareholders among the top 10 shareholders, neither being regarded as
action-in-concert parties by the Information Disclosure Regulations for Change of
Notes to relationship or ‘action in concert’
Shareholding in PLC. The Company is not aware of any relationship among the other
among the top 10 non-restricted shareholders,
shareholders, neither being regarded as action-in-concert parties by the Information
and among the top 10 non-restricted
Disclosure Regulations for Change of Shareholding in PLC. The Company is not aware
shareholders and top 10 shareholders
of any relationship among the top 10 shareholders, neither being regarded as action-in-
concert parties by the Information Disclosure Regulations for Change of Shareholding in
PLC.
China Resources Yuanta Fund-Huatai Securities-China Resources Yuanta Fund Runhong
Shareholders among the top 10 participating in Prosperity Collective Asset Management Plan holds 8,990,023 shares of the company
securities margin trading (if any) (see Note 4) through investor credit securities accounts; Lu Ruijun holds 8,000,000 shares of the
company through investor credit securities accounts.
Whether top 10 common shareholders and top 10 un-restricted common shareholders have a buy-
back agreement dealing in reporting period
□ Yes √ No
Top 10 common shareholders and top 10 un-restricted common shareholders had no buy-back
agreement dealing in reporting period.
IV. Change of controlling shareholder or actual controller
√Applicable □Not applicable
Number Number Number Number Number of Number of Number of
Status of
Name Position of shares of of shares of shares restricted restricted restricted
office
held at additional sold out held at stocks stocks stocks granted
52
Bengang Steel Plates Co., Ltd. Semi-Annual Report 2021
the shares in the the end of granted at granted in at the end of
beginning held in current the period the the current the period
of the the period (shares) beginning period (shares)
period current (shares) of the (shares)
(shares) period period
(shares) (shares)
Chairman
Gao Lie of the Incumbent
board
Jiag Vice
Incumbent
Guangwei Chairman
Vice
Han Mei Incumbent
Chairman
Director,
Lin Dong general Incumbent
manager
Wang
Director Incumbent
Donghui
Zhang Independe
Incumbent
Suxun nt director
Yuan Independe
Incumbent
Zhizhu nt director
Zhong Independe
Incumbent
Tianli nt director
Chairman
of the
Cheng Bin Incumbent
Supervisor
y Board
Li Xiaowei Supervisor Incumbent
Zhao
Supervisor Incumbent
Zhonghua
Zhang
Supervisor Incumbent
Yanlong
Zhao
Supervisor Incumbent
Xingtao
Deputy
Chen Xin General Incumbent
Manager
Deputy
Yang
General Incumbent
Xiaofang
Manager
Chief
Cong
Accountan Incumbent
Yajuan
t
53
Bengang Steel Plates Co., Ltd. Semi-Annual Report 2021
Gao Board
Incumbent
Desheng secretary
Vice
Cao Aimin Departure
Chairman
Director,
Shen
general Departure
Qiang
manager
Huang
Director Departure
Xinghua
Zhao Independe
Departure
Xinan nt director
Li Lin Supervisor Departure
Deputy
Bao
General Departure
Mingwei
Manager
Deputy
Wang
General Departure
Fengmin
Manager
Deputy
Huo Gang General Departure
Manager
合计 -- -- 0 0 0 0 0 0 0
V. Change of controlling shareholder or actual controller
Change of controlling shareholder during the reporting period
□ Applicable √ Not applicable
There was no change of holding shareholder in the report period.
Change of actual controller during the reporting period
□ Applicable √ Not applicable
There was no change of substantial controller in the report period.
VIII. Status of Preferred Shares
□ Applicable √ Not applicable
There were no preferred shares during the reporting period.
54
Bengang Steel Plates Co., Ltd. Semi-Annual Report 2021
IX. Status of Bonds
√ Applicable □ Not applicable
I. Enterprise bonds
□ Applicable √ Not applicable
During the reporting period, the company did not have Enterprise bonds.
II. Corporate bonds
□ Applicable √ Not applicable
During the reporting period, the company did not have corporate bonds.
III. Debt financing tools for non-financial companies
□ Applicable √ Not applicable
During the reporting period, the company did not have non-financial corporate debt financing
instruments.
IV. Convertible corporate bonds
√ Applicable □ Not applicable
1. Previous adjustments to the conversion price
1. The initial conversion price of "Bengang Convertible Bonds" is 5.03 yuan per share.
2. As the company implemented the 2020 equity distribution plan, the conversion price of "Bengang
Convertible Bonds" was adjusted to RMB 5.02 per share on July 19, 2021.
2. Cumulative share conversion
√ Applicable □ Not applicable
Proportion Proportion
Cumulative Cumulative Amount of
Name of of converted of
Start date of Total issue Total issue conversion conversion shares not
Convertible shares to the unconverted
conversion quantity amount amount quantity(sha converted
Bond total issue amount to
(Yuan) res) (Yuan)
quantity the total
55
Bengang Steel Plates Co., Ltd. Semi-Annual Report 2021
issue
amount
Bengang
4th Jan 6,800,000,0 48,743,200. 6,751,256,8
Convertible 68,000,000 487,432 0.72% 99.28%
2021 00.00 00 00.00
Bond
3. The top ten holders of convertible bonds
Number of Percentage
convertible Amount of of
Nature of bonds held convertible bonds convertible
No. Convertible bond holders convertible bond at the end of held at the end of bonds held at
holders the reporting the reporting the end of
period period (yuan) the reporting
(sheets) period
State-owned legal
1 Benxi Iron and Steel (Group) Co., Ltd. 5,097,390 509,739,000.00 7.55%
person
The Hongkong and Shanghai Banking
2 Foreign legal person 3,432,943 343,294,300.00 5.08%
Corporation Limited
Shanghai Pudong Development Bank
3 Co., Ltd.-Yifangda Yuxiang Return Others 2,646,781 264,678,100.00 3.92%
Bond Securities Investment Fund
4 UBS AG Foreign legal person 2,509,838 250,983,800.00 3.72%
China Huaneng Group Corporation
5 Enterprise Annuity Plan-Industrial and Others 1,226,287 122,628,700.00 1.82%
Commercial Bank of China Co., Ltd.
Basic Pension Insurance Fund 107
6 Others 1,107,844 110,784,400.00 1.64%
Portfolio
Agricultural Bank of China Co., Ltd.-
7 Wells Fargo Convertible Bond Others 1,007,060 100,706,000.00 1.49%
Securities Investment Fund
National Social Security Fund 210
8 Others 990,795 99,079,500.00 1.47%
Combination
CITIC Securities Trust Fu Hualing
Fixed-income Pension Products-
9 Others 966,630 96,663,000.00 1.43%
Industrial and Commercial Bank of
China Co., Ltd.
E Fund-Minsheng Bank-Bank of
10 Others 888,048 88,804,800.00 1.32%
Hangzhou Co., Ltd.
4. Significant changes in the guarantor’s profitability, asset status, and credit status
□ Applicable √ Not applicable
56
Bengang Steel Plates Co., Ltd. Semi-Annual Report 2021
5. At the end of the reporting period, the company's liabilities, changes in credit standing, and cash
arrangements for debt repayment in future years
Not applicable
V. The loss in the scope of consolidated statements during the reporting period
exceeded 10% of the net assets at the end of the previous year
□ Applicable √ Not applicable
VI. The company’s main accounting data and financial indicators for the past two
years as of the end of the reporting period
Unit: ten thousand yuan
Item Changes over ending
30 June 2021 31 December 2020
balance of last year
Current ratio 1.20% 1.04% 0.16%
Debt-to-asset ratio 63.25% 66.85% -3.60%
Quick ratio 0.89% 0.77% 0.12%
Changes over previous
Current period Previous period
period
Net profit after deducting
non-recurring gains and 2,199,142,563.3 239,885,472.54 816.75%
losses
EBITDA total debt ratio 11.48% 4.41% 7.07%
Interest Interest Coverage
6.26 1.6 291.25%
ratio
Cash Interest Coverage ratio -1.88 0.68 -376.47%
EBITDA Interest Coverage
8.32 4.3 93.49%
ratio
Loan repayment rate 100.00% 100.00% 0.00%
Interest repayment rate 100.00% 100.00% 0.00%
57
Bengang Steel Plates Co., Ltd. Semi-Annual Report 2021
X. Financial Report
I. Audit report
Whether the semi-annual report is audited
□ Yes √ No
The semi-annual report is not audited.
II. Financial Statements
Statement in Notes are carried in RMB Yuan
1. CONSOLIDATED STATEMENT OF FINANCIAL POSITION
Prepared by: Bengang Steel Plates Co., Ltd.
Unit: Yuan
Items 30 June 2021 31 December 2020
Current assets
Cash at bank and on hand 9,510,700,502.67 13,126,666,915.26
Settlement provisions
Capital lent
Financial assets held for trading
Derivative financial assets
Notes receivable
Accounts receivable 225,510,568.92 245,217,182.66
Accounts receivable financing 5,143,627,467.44 4,189,977,871.92
Prepayments 2,027,008,212.85 2,108,044,777.65
Premium receivable
Reinsurance accounts receivable
Receivable deposit for reinsurance contract
Other receivables 160,180,391.22 142,101,351.27
Including: Interest receivables 51,637,650.49 33,685,359.01
Dividend receivables
Redemptory financial assets for sale
Inventories 8,663,345,615.68 9,040,065,342.65
Contract assets
Assets held for sale
Non-current assets due within one year
Other current assets 7,138,313,168.95 5,523,646,836.01
Total current assets 32,868,685,927.73 34,375,720,277.42
Non-current assets
Loan and advances issued
Debt Investments
Other debt investments
Long-term receivables
58
Bengang Steel Plates Co., Ltd. Semi-Annual Report 2021
Items 30 June 2021 31 December 2020
Long-term equity investments 3,024,013.88 2,742,064.73
Other equity instrument investments 1,042,024,829.00 1,042,024,829.00
Other non-current financial assets
Investment property
Fixed assets 25,137,148,377.89 26,284,567,956.44
Construction in progress 2,878,339,506.26 1,839,933,715.58
Productive biological assets
Oil and gas assets
Right-of-use assets 1,510,538,778.93
Intangible assets 261,648,967.14 264,932,652.54
Development expenditure
Goodwill
Long-term deferred expenses
Deferred tax assets 199,553,629.68 201,708,932.84
Other non-current assets 851,101,139.47 995,840,320.65
Total non-current assets 31,883,379,242.25 30,631,750,471.78
Total assets 64,752,065,169.98 65,007,470,749.20
Liabilities and equities
Current Liabilities
Short-term loans 7,495,419,000.00 10,067,731,000.00
Loan from central bank
Loan from other banks
Financial liability held for trading
Derivative financial liabilities
Notes payable 6,114,692,166.66 9,814,149,348.42
Accounts payable 5,505,623,541.96 5,914,228,256.82
Advance from customers
Contract liabilities 6,182,094,798.39 4,458,671,819.90
Financial assets sold for repurchase
Deposits from customers and interbank
Receipt from vicariously traded securities
Receipt from vicariously underwriting securities
Employee benefits payable 33,208,964.92 25,749,485.25
Current tax liabilities 350,870,891.00 55,302,080.96
Other payables 712,159,087.35 709,448,301.92
Including：Interest payables
Dividend payables 38,753,715.32
Handling charges and commission payable
Reinsurance accounts payable
Liabilities held for sale
Non-current liabilities due within one year 137,878,355.58 1,308,030,361.43
Other current liabilities 803,672,323.79 579,627,336.58
Total current liabilities 27,335,619,129.65 32,932,937,991.28
Non-current liabilities
Provision for insurance contract
Long-term loans 4,309,786,941.97 3,502,934,427.65
Bonds payable 5,732,396,546.29 5,752,229,339.52
Including: Preferred stock
Perpetual bond
Lease liabilities 1,549,600,900.45
Long-term payables 1,907,492,831.36 1,114,232,362.74
Long-term employee benefits payable
Estimated liabilities
Deferred income 123,466,469.89 154,451,833.23
59
Bengang Steel Plates Co., Ltd. Semi-Annual Report 2021
Items 30 June 2021 31 December 2020
Deferred tax liabilities
Other non-current liabilities
Total non-current liabilities 13,622,743,689.96 10,523,847,963.14
Total liabilities 40,958,362,819.61 43,456,785,954.42
Shareholders' equity:
Share capital 3,885,060,605.00 3,875,371,532.00
Other equity instruments 1,138,070,880.42 1,146,290,662.42
Including: Preferred stock
Perpetual bond
Capital reserves 12,381,969,365.52 12,343,209,847.29
Less: treasury shares
Other comprehensive income
Special reserves 18,330,611.35 300,412.14
Surplus reserves 961,105,529.85 961,105,529.85
General risk reserve
Undistributed profits 4,862,062,857.99 2,692,018,405.40
Total equity attributable to equity holders of the parent
23,246,599,850.13 21,018,296,389.10
company
Non-controlling interests 547,102,500.24 532,388,405.68
Total shareholder's equity 23,793,702,350.37 21,550,684,794.78
Total of liabilities and owners’ equity 64,752,065,169.98 65,007,470,749.20
Legal Representative: Gao Lie Person in charge of accounting: Lin Dong Accounting Dept. Leader: Cong Yajuan
2. STATEMENT OF FINANCIAL POSITION OF THE PARENT COMPANY
Unit: Yuan
Items 30 June 2021 31 December 2020
Current assets
Cash at bank and on hand 9,010,915,677.50 11,808,618,300.87
Financial assets held for trading
Derivative financial assets
Notes receivable
Accounts receivable 248,701,019.49 289,865,462.20
Accounts receivable financing 4,967,026,780.38 4,143,431,412.08
Prepayments 2,062,013,838.67 2,117,204,935.75
Other receivables 241,659,108.07 228,180,190.02
Including: Interest receivables 46,266,951.12 23,028,942.73
Dividend receivables
Inventories 6,254,749,916.24 7,420,499,172.20
Contract assets
Assets held for sale
Non-current assets due within one year
Other current assets 7,000,000,000.00 5,437,282,088.94
Total current assets 29,785,066,340.35 31,445,081,562.06
Non-current assets
Debt investments
Other debt investments
60
Bengang Steel Plates Co., Ltd. Semi-Annual Report 2021
Items 30 June 2021 31 December 2020
Long-term receivables
Long-term equity investments 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 23,745,957,631.09 24,755,665,765.30
Construction in progress 2,834,878,491.65 1,798,639,941.58
Productive biological assets
Oil and gas assets
Right-of-use assets 1,510,538,778.93
Intangible assets 140,510,834.76 142,163,903.40
Development expenditure
Goodwill
Long-term deferred expenses
Deferred tax assets 96,325,403.07 98,480,706.23
Other non-current assets 851,101,139.47 988,475,426.53
Total non-current assets 32,237,219,010.13 30,841,332,474.20
Total assets 62,022,285,350.48 62,286,414,036.26
Current liabilities
Short-term loans 7,195,419,000.00 9,107,731,000.00
Financial liability held for trading
Derivative financial liabilities
Notes payable 5,816,080,763.35 8,348,607,405.21
Accounts payable 5,528,443,992.45 6,280,468,684.34
Advance from customers
Contract liabilities 5,829,654,787.35 5,324,357,761.83
Employee benefits payable 32,760,446.39 23,981,010.53
Current tax liabilities 332,417,391.02 42,514,891.31
Other payables 367,238,464.60 368,374,954.61
Including：Interest payables
Dividend payables 38,753,715.32
Liabilities held for sale
Non-current liabilities due within one year 137,878,355.58 1,308,030,361.43
Other current liabilities 757,855,122.36 692,166,509.04
Total current liabilities 25,997,748,323.10 31,496,232,578.30
Non-current liabilities
Long term loans 4,309,786,941.97 3,502,934,427.65
Bonds payable 5,732,396,546.29 5,752,229,339.52
Including: Preferred stock
Perpetual bond
Lease liabilities 1,549,600,900.45
61
Bengang Steel Plates Co., Ltd. Semi-Annual Report 2021
Items 30 June 2021 31 December 2020
Long-term payables 1,900,392,952.74 1,108,412,163.50
Long-term employee benefits payable
Estimated liabilities
Deferred income 123,466,469.89 154,451,833.23
Deferred tax liabilities
Other non-current liabilities
Total non-current liabilities 13,615,643,811.34 10,518,027,763.90
Total liabilities 39,613,392,134.44 42,014,260,342.20
Shareholder’s equity:
Share capital 3,885,060,605.00 3,875,371,532.00
Other equity instruments 1,138,070,880.42 1,146,290,662.42
Including: Preferred stock
Perpetual bond
Capital reserves 11,961,817,683.40 11,923,058,165.17
Less: Treasury shares
Other comprehensive income
Special reserves 15,912,566.72 120,972.62
Surplus reserves 961,105,529.85 961,105,529.85
Undistributed Profits 4,446,925,950.65 2,366,206,832.00
Total shareholder's equity 22,408,893,216.04 20,272,153,694.06
Total liabilities and shareholder’s equity 62,022,285,350.48 62,286,414,036.26
3. CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
Unit: Yuan
Items Jan – Jun 2021 Jan – Jun 2020
1. Total operating income 38,588,128,212.14 22,184,537,260.05
Including: Operating income 38,588,128,212.14 22,184,537,260.05
Interest income
Premium earned
Income from handling charges and commission
2. Total operating cost 35,641,572,522.11 21,927,105,960.14
Including: Operating cost 34,592,825,792.72 20,440,246,362.67
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 241,555,494.92 88,398,436.68
Selling and distribution expenses 59,652,669.72 642,393,218.78
General and administrative expenses 388,678,843.23 380,828,316.41
Research and development expenses 22,504,022.68 20,202,985.20
Financial expenses 336,355,698.84 355,036,640.40
Including: Interest expense 554,219,518.90 439,861,353.93
Interest income 222,276,204.79 154,882,284.33
Add: Other income 32,659,483.34 38,587,332.40
Income on investment（“-” for loss） 1,835,124.19 29,304.00
Including: Income from associates and joint ventures 281,949.15 29,304.00
Income from derecognition of financial assets measured at amortized
cost
Exchange gains（“-” for loss）
Net exposure hedge income（“-” for loss）
62
Bengang Steel Plates Co., Ltd. Semi-Annual Report 2021
Items Jan – Jun 2021 Jan – Jun 2020
Gains from change of fair value （“-” for loss）
Credit impairment loss （“-” for loss） 2,049,977.83 3,487,783.42
Asset impairment loss （“-” for loss） 6,629,442.12 -15,321,598.62
Assets disposal gains（“-” for loss） 130,675.05 325,651.61
3. Operational profit（“-” for loss） 2,989,860,392.56 284,539,772.72
Add: Non-operating income 3,273,128.46 1,140,364.12
Less: Non-operating expenses 22,989,643.14 20,035,471.42
4. Total profit (“-” for loss) 2,970,143,877.88 265,644,665.42
Less: Income tax expenses 746,977,590.45 9,237,815.08
5. Net profit（“-” for loss） 2,223,166,287.43 256,406,850.34
1.Classification by continuing operating
1.Net profit from continuing operation（“-” for loss） 2,223,166,287.43 256,406,850.34
2.Net profit from discontinued operation（“-” for loss）
2.Classification by ownership
1. Net profit attributable to the owners of parent company （“-” for loss） 2,208,798,167.91 254,644,204.33
2. Net profit attributable to non-controlling shareholders （“-” for loss） 14,368,119.52 1,762,646.01
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
5）Others
2.Other comprehensive income that will be reclassified into profit or loss.
1）Other comprehensive income under the equity method investee can be reclassified
into profit or loss
2）Changes in fair value of other debt investments
3）Amount of financial assets reclassified into other comprehensive income
4）Credit impairment provision of other debt investments
5）The effective portion of cash flow hedges and losses
6) Translation differences in foreign currency financial statements
7）Other
Other comprehensive income attributable to non-controlling shareholders’ equity after tax
7. Total comprehensive income 2,223,166,287.43 256,406,850.34
Total comprehensive income attributable to the owner of the parent company 2,208,798,167.91 254,644,204.33
Total comprehensive income attributable to non-controlling shareholders 14,368,119.52 1,762,646.01
8. Earnings per share
1）Basic earnings per share (Yuan/share) 0.57 0.07
2）Diluted earnings per share (Yuan/share) 0.57 0.07
In the current period of business combination under common control, the net profit realized by the merged party
before the merger is: yuan, and the net profit realized by the merged party in the previous period is: yuan
Legal Representative: Gao Lie Person in charge of accounting: Lin Dong Accounting Dept. Leader: Cong Yajuan
4. STATEMENT OF COMPREHENSIVE INCOME OF THE PARENT COMPANY
Unit: Yuan
Items Jan – Jun 2021 Jan – Jun 2020
1. Total operating income 39,081,201,858.29 21,759,781,682.12
Less: Operating cost 35,285,590,888.70 20,379,148,281.27
Tax and surcharges 213,178,320.80 74,240,782.35
Selling and distribution expenses 55,267,199.05 386,932,932.93
General and administrative expenses 360,747,887.96 354,627,152.28
Research and development expenses 22,504,022.68 20,202,985.20
Financial expenses 327,299,367.65 337,504,255.84
Including: Interest expense 304,352,578.12 410,264,451.89
Interest income 210,228,568.88 141,297,649.84
Add: Other income 32,210,883.34 38,002,345.53
Income on investment（“-” for loss） 1,553,175.04
Including: Income from associates and joint ventures
63
Bengang Steel Plates Co., Ltd. Semi-Annual Report 2021
Items Jan – Jun 2021 Jan – Jun 2020
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） 2,049,977.83 2,627,938.73
Assets impairment loss（“-” for loss） 6,571,234.79 -15,321,598.62
Assets disposal gains（“-” for loss） 130,675.05 325,651.61
2. Operational profit（“-” for loss） 2,859,130,117.50 232,759,629.50
Add: Non-operating income 1,295,851.57 811,659.87
Less: Non-operating expenses 22,989,643.14 19,487,380.11
3. Total profit (“-” for loss) 2,837,436,325.93 214,083,909.26
Less: Income tax expenses 717,963,491.96 -3,173,414.97
4. Net profit（“-” for loss） 2,119,472,833.97 217,257,324.23
1.Net profit from continuing operation (“-” for loss) 2,119,472,833.97 217,257,324.23
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
5）Others
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
4）Amount of financial assets reclassified into other comprehensive
income
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 2,119,472,833.97 217,257,324.23
7. Earnings per share
1）Basic earnings per share (Yuan/share)
2）Diluted earnings per share (Yuan/share)
5. CONSOLIDATED STATEMENT OF CASH FLOWS
Unit: Yuan
Items Jan – Jun 2021 Jan – Jun 2020
1.Cash flow from operating activities
Cash received from sale of goods or rendering of services 27,681,479,863.67 15,423,965,198.05
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
64
Bengang Steel Plates Co., Ltd. Semi-Annual Report 2021
Items Jan – Jun 2021 Jan – Jun 2020
Net increase of loans from borrowing funds
Net increase of fund for repurchase business
Net cash received from traded securities
Tax rebate received 40,128,927.12 310,509,228.43
Other cash received relating to operating activities 239,319,537.30 174,016,797.00
Subtotal of cash inflows from operating activities 27,960,928,328.09 15,908,491,223.48
Cash paid for goods and services 24,177,763,290.52 14,428,717,102.76
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 972,651,151.35 884,844,841.18
Cash paid for all types of taxes 1,082,217,676.19 520,116,275.37
Other cash paid relating to operating activities 203,379,990.00 226,288,711.25
Subtotal of cash outflows from operating activities 26,436,012,108.06 16,059,966,930.56
Net cash flows from operating activities 1,524,916,220.03 -151,475,707.08
2. Cash flows from investing activities
Cash received from disposal of investments 3,000,000,000.00
Cash received from return on investments 1,553,175.04
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 3,001,553,175.04
Cash paid for acquisition of fixed assets, intangible assets and other long-term assets 1,148,767,202.27 706,681,059.07
Cash paid for acquisition of investments 4,600,000,000.00
Net increase of mortgage loan
Net cash received from subsidiary and other operating unit
Other cash paid relating to investing activities
Subtotal of cash outflows from investing activities 5,748,767,202.27 706,681,059.07
Net cash flows from investing activities -2,747,214,027.23 -706,681,059.07
3. Cash flows from financing activities
Proceeds from investment
Including: Proceeds from investment of non-controlling shareholders of subsidiary
Proceeds from borrowings 1,512,381,000.00 4,987,194,000.00
Other proceeds relating to financing activities
Subtotal of cash inflows from financing activities 1,512,381,000.00 4,987,194,000.00
Cash repayments of borrowings 4,477,892,475.61 5,671,544,896.99
Cash payments for distribution of dividends, profit, or interest expenses 567,804,337.49 480,183,996.49
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 5,045,696,813.10 6,151,728,893.48
Net cash flows from financing activities -3,533,315,813.10 -1,164,534,893.48
4. Effect of foreign exchange rate changes on cash and cash equivalents -16,349,859.91 -1,130,665.43
5. Net increase in cash and cash equivalents -4,771,963,480.21 -2,023,822,325.06
Add: Cash and cash equivalents at the beginning of the period 9,229,417,595.12 13,441,414,988.58
65
Bengang Steel Plates Co., Ltd. Semi-Annual Report 2021
Items Jan – Jun 2021 Jan – Jun 2020
6. Cash and cash equivalents at the ending of the period 4,457,454,114.91 11,417,592,663.52
6. CASH FLOW STATEMENT OF THE PARENT COMPANY
Unit: Yuan
Items Jan – Jun 2021 Jan – Jun 2020
1. Cash flow from operating activities
Cash received from sale of goods or rendering of services 27,601,858,925.93 15,003,373,098.45
Tax rebate received 15,393,055.96 260,246,235.34
Other cash received relating to operating activities 230,589,337.92 163,299,247.34
Subtotal of cash inflows from operating activities 27,847,841,319.81 15,426,918,581.13
Cash paid for goods and services 24,802,523,270.32 14,323,769,183.95
Cash paid to and on behalf of employees 926,763,546.78 840,886,166.89
Cash paid for all types of taxes 984,236,622.57 465,606,411.99
Other cash paid relating to operating activities 139,392,329.61 159,126,577.28
Subtotal of cash outflows from operating activities 26,852,915,769.28 15,789,388,340.11
Net cash flows from operating activities 994,925,550.53 -362,469,758.98
2. Cash flows from investing activities
Cash received from disposal of investments 3,000,000,000.00
Cash received from return on investments 1,553,175.04
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 3,001,553,175.04
Cash paid for acquisition of fixed assets, intangible assets
1,131,314,182.16 696,005,001.44
and other long-term assets
Cash paid for acquisition of investments 4,600,000,000.00
Net cash paid for acquisition of subsidiary and other
operating unit
Other cash paid relating to investing activities
Subtotal of cash outflows paid for investing activities 5,731,314,182.16 696,005,001.44
Net cash flows from investing activities -2,729,761,007.12 -696,005,001.44
3. Cash flows from financing activities
Proceeds from investment
Cash received from borrowings 1,412,381,000.00 4,747,194,000.00
Other cash received relating to financing activities
Subtotal of cash inflows from financing activities 1,412,381,000.00 4,747,194,000.00
Cash repayments of borrowings 3,722,892,475.61 5,051,544,896.99
Cash payments for distribution of dividends, profit or
544,896,337.46 433,692,125.89
interest
Other cash payments relating to financing activities
Subtotal of cash outflows from financing activities 4,267,788,813.07 5,485,237,022.88
Net cash flows from financing activities -2,855,407,813.07 -738,043,022.88
66
Bengang Steel Plates Co., Ltd. Semi-Annual Report 2021
Items Jan – Jun 2021 Jan – Jun 2020
4. Effect of foreign exchange rate changes on cash and
-16,347,695.55 -1,134,392.87
cash equivalents
5. Net increase in cash and cash equivalents -4,606,590,965.21 -1,797,652,176.17
Add: Cash and cash equivalents at the beginning of the
8,897,859,003.60 13,029,616,298.47
period
6. Ending balance of cash and cash equivalents 4,291,268,038.39 11,231,964,122.30
67
Bengang Steel Plates Co., Ltd. Semi-Annual Report 2021
7. CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Unit: Yuan
Jan – Jun 2021
Non-controlling Total of owner's
Owner's equity attributable to parent company
interest equity
Items
Other equity instruments Less: Other General
Special Undistributed
Share capital Preferenc Perpetual Capital reserves Treasury comprehensive Surplus reserves risk Others Subtotal
Others reserves profit
e shares bond shares income reserve
1. Ending balance of last year 3,875,371,532.00 1,146,290,662.42 12,343,209,847.29 300,412.14 961,105,529.85 2,692,018,405.40 21,018,296,389.10 532,388,405.68 21,550,684,794.78
Add: Change of accounting policies
Correction of errors for last period
Business consolidation under common control
Others
2. Beginning balance of current year 3,875,371,532.00 1,146,290,662.42 12,343,209,847.29 300,412.14 961,105,529.85 2,692,018,405.40 21,018,296,389.10 532,388,405.68 21,550,684,794.78
3. Changes in current year (“-” for decrease) 9,689,073.00 -8,219,782.00 38,759,518.23 18,030,199.21 2,170,044,452.59 2,228,303,461.03 14,714,094.56 2,243,017,555.59
1) Total comprehensive income 2,208,798,167.91 2,208,798,167.91 14,368,119.52 2,223,166,287.43
2) Capital increase and decrease by
9,689,073.00 -8,219,782.00 38,759,518.23 40,228,809.23 40,228,809.23
shareholders
(1) Common share invested by shareholders
(2) Capital input by the holder of other equity
9,689,073.00 -8,219,782.00 38,759,518.23 40,228,809.23 40,228,809.23
instruments
(3) Share-based payment attributable to
owners' equity
(4) Others
3) Profit distribution -38,753,715.32 -38,753,715.32 -38,753,715.32
(1) Appropriation to surplus reserves
(2) Appropriation to general risk reserve
(3) Profit distribution to shareholders -38,753,715.32 -38,753,715.32 -38,753,715.32
(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 18,030,199.21 18,030,199.21 345,975.04 18,376,174.25
(1) Provision of special reserves 24,398,347.80 24,398,347.80 345,975.04 24,744,322.84
(2) Use of special reserves 6,368,148.59 6,368,148.59 6,368,148.59
6) Others
4. Ending balance of current year 3,885,060,605.00 1,138,070,880.42 12,381,969,365.52 18,330,611.35 961,105,529.85 4,862,062,857.99 23,246,599,850.13 547,102,500.24 23,793,702,350.37
68
Bengang Steel Plates Co., Ltd. Semi-Annual Report 2021
Jan – Jun 2020
Non-controlling Total of owner's
Owner's equity attributable to parent company
interest equity
Items
Other equity instruments Less: Other General
Special Undistributed
Share capital Preferenc Perpetual Capital reserves Treasury comprehensive Surplus reserves risk Others Subtotal
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) 1,146,290,662.42 87,724.73 384,252,740.78 1,530,631,127.93 7,226,825.45 1,537,857,953.38
1) Total comprehensive income 384,252,740.78 384,252,740.78 7,226,825.45 391,479,566.23
2) Capital increase and decrease by
1,146,290,662.42 1,146,290,662.42 1,146,290,662.42
shareholders
(1) Common share invested by shareholders
(2) Capital input by the holder of other equity
1,146,290,662.42 1,146,290,662.42 1,146,290,662.42
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 87,724.73 87,724.73 87,724.73
(1) Provision of special reserves 54,000,536.58 54,000,536.58 54,000,536.58
(2) Use of special reserves 53,912,811.85 53,912,811.85 53,912,811.85
6) Others
4. Ending balance of current year 3,875,371,532.00 1,146,290,662.42 12,343,209,847.29 300,412.14 961,105,529.85 2,692,018,405.40 21,018,296,389.10 532,388,405.68 21,550,684,794.78
69
Bengang Steel Plates Co., Ltd. Semi-Annual Report 2021
8. STATEMENT OF CHANGE IN OWNER’S EQUITY OF THE PARENT COMPANY
Unit: Yuan
Jan – Jun 2021
Other equity instruments Less: Other
Items Special Undistributed Total shareholder’s
Share capital Preferen Perpetual Capital reserves Treasury comprehens Surplus reserves Others
Others reserves profits equity
ce shares bond shares ive income
1. Ending balance of last year 3,875,371,532.00 1,146,290,662.42 11,923,058,165.17 120,972.62 961,105,529.85 2,366,206,832.00 20,272,153,694.06
Add: Change of accounting policies
Correction of errors for last period
Others
2. Beginning balance of current year 3,875,371,532.00 1,146,290,662.42 11,923,058,165.17 120,972.62 961,105,529.85 2,366,206,832.00 20,272,153,694.06
3. Changes in current year (“-” for decrease) 9,689,073.00 -8,219,782.00 38,759,518.23 15,791,594.10 2,080,719,118.65 2,136,739,521.98
1) Total comprehensive income 2,119,472,833.97 2,119,472,833.97
2) Capital increase and decrease by shareholders 9,689,073.00 -8,219,782.00 38,759,518.23 40,228,809.23
(1) Common share invested by shareholders
(2) Capital input by the holder of other equity instruments 9,689,073.00 -8,219,782.00 38,759,518.23 40,228,809.23
(3) Share-based payment attributable to shareholders' equity
(4) Others
3) Profit distribution -38,753,715.32 -38,753,715.32
(1) Appropriation of surplus reserves
(2) Profit distribution to shareholders -38,753,715.32 -38,753,715.32
(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 15,791,594.10 15,791,594.10
(1) Provision of special reserves 21,981,008.86 21,981,008.86
(2) Use of special reserves 6,189,414.76 6,189,414.76
6) Others
4. Ending balance of current year 3,885,060,605.00 1,138,070,880.42 11,961,817,683.40 15,912,566.72 961,105,529.85 4,446,925,950.65 22,408,893,216.04
70
Bengang Steel Plates Co., Ltd. Semi-Annual Report 2021
Jan – Jun 2020
Other equity instruments Less: Other
Items Special Undistributed Total shareholder’s
Share capital Preference Perpetual Capital reserves Treasury comprehens Surplus reserves Others
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 53,330.99 961,105,529.85 1,742,251,419.03 18,501,839,977.04
Add: Change of accounting policies
Correction of errors for last period
Others
2. Beginning balance of current year 3,875,371,532.00 11,923,058,165.17 53,330.99 961,105,529.85 1,742,251,419.03 18,501,839,977.04
3. Changes in current year (“-” for decrease) 1,146,290,662.42 67,641.63 623,955,412.97 1,770,313,717.02
1) Total comprehensive income 623,955,412.97 623,955,412.97
2) Capital increase and decrease by shareholders 1,146,290,662.42 1,146,290,662.42
(1) Common share invested by shareholders
(2) Capital input by the holder of other equity instruments 1,146,290,662.42 1,146,290,662.42
(3) Share-based payment attributable to shareholders' equity
(4) Others
3) Profit distribution
(1) Appropriation of surplus reserves
(2) Profit distribution to shareholders
(3) Others
4) Transfers within shareholders' equity
(1) Capital reserves transferred into paid-in capital (or stock)
(2) Surplus reserves transferred into paid-in capital (or stock)
(3) Surplus reserves to recover loss
(4) Net changes of defined contribution plans transferred
into Retained Earnings
(5) Other comprehensive income transferred into retained
earnings
(6) Others
5) Special reserves 67,641.63 67,641.63
(1) Provision of special reserves 47,926,472.22 47,926,472.22
(2) Use of special reserves 47,858,830.59 47,858,830.59
6) Others
4. Ending balance of current year 3,875,371,532.00 1,146,290,662.42 11,923,058,165.17 120,972.62 961,105,529.85 2,366,206,832.00 20,272,153,694.06
71
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2021
Notes to the financial statements
III. 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.
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
72
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2021
Notes to the financial statements
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 2021, the capital shares were totaled to 3,885,060,605 shares.
The Company’s uniform social credit code: 91210000242690243E.
The Company’s registered address: No.16 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 25 August 2021.
(2) Consolidation scope
As at 30 June 2021, 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
Shenyang Bengang Metallurgical Science and Technology Co., Ltd.
Chongqing Liaoben Steel & Iron Trading Co., Ltd.
73
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2021
Notes to the financial statements
Name of the subsidiaries
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.
IV. Basis of preparation
(1) Basis of preparation
The financial statements have been prepared on the going concern basis of actual trading and events in accordance with
“Accounting Standards for Business Enterprises – Basic Standard” and relevant specific standards, application materials,
interpretations (together hereinafter referred to as “Accounting Standards for Business Enterprises”) issued by the
Ministry of Finance, and “Information Disclosure Rules for Companies of securities for public issuance No. 15 – General
Regulations for Financial Statements” issued by the China Securities Regulatory Commission.
(2) Going concern
The Company is operating normally and in a good condition, and thus has the capability to continue to operate in the
next twelve months from the end of reporting period.
V. Significant accounting policies and accounting estimates
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, (15) Fixed assets, (18) Intangible assets, (24) 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.
74
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2021
Notes to the financial statements
(3) Operating period
The operating period is twelve months.
(4) Functional currency
The Company’s functional currency is RMB.
(5) The accounting treatment for Business combination under/not under common control
Business combination under common control
The assets and liabilities that the Company acquired in a business combination shall be measured on the basis of their
carrying amount of aquiree’s assets, liabilities (as well as the goodwill arising from the business combination) in the
consolidated financial statement of the ultimate controller on the combining date. As for the balance between the carrying
amount of the net assets obtained by the Company and the carrying amount of the consideration paid by it (or the total
par value of the shares issued), capital reserve needs to be adjusted. If the capital reserve is not sufficient, any excess
shall be adjusted against retained earnings.
Business combination not under common control
The Company shall, on the acquisition date, measure the assets given and liabilities incurred or assumed by an enterprise
for a business combination in light of their fair values, and shall record the balances between them and their carrying
amounts into the profits and losses at the current period. The Company shall recognize the positive balance between the
combination costs and the fair value of the identifiable net assets it obtains from the acquiree as goodwill. The Company
shall treat the negative balance between the combination costs and the fair value of the identifiable net assets it obtains
from the acquiree into the profits and losses of the current period.
The intermediary costs and relevant fees for the business combination paid by the acquirer, including the expenses for
audit, assessment and legal services, shall be recorded into the profits and losses at the current period. The transaction
expenses for the issuance of equity securities for the business combination shall be recorded into the initial recognition
amount of equity securities.
(6) Consolidation of Financial Statements
1. Scope of consolidation
The scope of consolidation of consolidated financial statements is determined based on 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
75
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2021
Notes to the financial statements
shall consider the entire group as an accounting entity, adopt uniform accounting policies and apply the requirements of
Accounting Standard for Business Enterprises related to recognition, measurement and presentation. The consolidated
financial statements shall reflect the overall financial position, operating results and cash flows of the group.
The accounting policy and accounting period of the subsidiaries within the consolidation scope shall be in accordance
with those of the Company. If not, it is necessary to make the adjustment according to the Company’s accounting policies
and accounting period when preparing the consolidated financial statements. For subsidiaries through acquisition that
are now under common control, the financial statements are adjusted according to fair value of identifiable net assets on
the acquisition date. For subsidiaries through acquisition that are under common control, the assets, liabilities (as well
as the goodwill arising from purchasing the subsidiary by the ultimate controller) are adjusted according to book value
of net assets in the financial statements of the ultimate controller.
The owners’ interests, profit or loss, and comprehensive income of the subsidiary attributable to the non-controlling
shareholders shall be presented separately in the shareholders’ equity of the consolidated balance sheet and under the
item of net profit of the consolidated statement of comprehensive income and under the item of total comprehensive
income. Where losses assumed by the minority exceed the minority’s interests in the beginning equity of a subsidiary,
the excess shall be charged against the minority’s interests.
(1) Increasing new subsidiaries and businesses
If the Company has a new subsidiary due to business combination under common control during the reporting period,
it shall adjust the beginning balance in the consolidated statement of financial position when preparing consolidated
statement of financial position. The revenue, expenses and profits of the subsidiaries from the acquisition date to the
end of the reporting period are included in the Company’s consolidated statement of comprehensive income. The cash
flow of the subsidiaries from the acquisition date to the end of the reporting period is included in the Company’s
consolidated statement of cash flows. And meanwhile the Company shall adjust the relevant items of the comparative
financial statements as if the reporting entity for the purpose of consolidation has been in existence 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.
76
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2021
Notes to the financial statements
If it is now under common control, the Company shall not adjust the beginning balance in the consolidated statement
of financial position when preparing consolidated statement of financial position. The revenue, expenses and profits of
the subsidiaries from the acquisition date to the end of the reporting period are included in the parent company’s
consolidated statement of comprehensive income. The cash flow of the subsidiaries from the acquisition date to the end
of the reporting period is included in the Company’s consolidated statement of cash flows.
When the Company becomes capable of exercising control over an investee now under common control due to
additional investment or other reasons, the acquirer shall remeasure its previously held equity interest in the acquiree
to its fair value at the acquisition date. The difference between the fair value and the carrying amount shall be recognized
as investment income for the period when the acquisition takes place. When the previously-held equity investment is
accounted for under the equity method, any other comprehensive income previously recognized in relation to the
acquiree’s equity changes shall be transferred to profit or loss for the current period when the acquisition takes place.
Other comprehensive income arising from remeasurement of defined benefit plan is excluded.
(2) Disposing subsidiaries or businesses
1. General treatment
If the Company disposes a subsidiary during the reporting period, the revenue, expenses and profits of the subsidiary
from the beginning of the reporting period to disposal date are included in the Company’s consolidated statement of
comprehensive income. The cash flow of the subsidiaries from the beginning of the reporting period to disposal date is
included in the Company’s consolidated statement of cash flows.
When the Company loses control over an investee due to partial disposal or other reasons, 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
77
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2021
Notes to the financial statements
stages, in determining whether to account for the multiple transactions as a single transaction, the Company shall
consider all of the terms and conditions of the transactions and their economic effects. One or more of the following
may indicate that the Company shall account for the multiple arrangements as a single transaction:
(a) Arrangements are entered into at the same time or in contemplation of each other;
(b) Arrangements work together to achieve an overall commercial effect;
(c) The occurrence of one arrangement is dependent on the occurrence of at least one other arrangement; and
(d) One arrangement considered on its own is not economically justified, but it is economically justified when
considered together with other arrangements.
If each of the multiple transactions forms part of a bundled transaction which eventually results in loss of control of
the subsidiary, these multiple transactions shall be accounted for as a single transaction. In the consolidated financial
statements, the difference between the consideration received and the corresponding proportion of the subsidiary’s net
assets in each transaction prior to the loss of control shall be recognized in other comprehensive income and transferred
to the profit or loss when the Company eventually loses control of the subsidiary.
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
78
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2021
Notes to the financial statements
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;
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.
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Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2021
Notes to the financial statements
2. Translation of foreign currency financial statements
The asset and liability items in the statement of financial position shall be translated at a spot exchange rate on the balance
sheet date. Among the owner's equity items, except the ones as "undistributed profits", others shall be translated at the
spot exchange rate at the time when they are incurred. The income and expense items in the income statement shall be
translated using an exchange rate that is determined in a systematic and reasonable manner and approximates the spot
exchange rate on the transaction date.
When disposing an overseas business, the Company shall shift the balance, which is presented under the items of the
owner's equities in the statement of financial position and arises from the translation of foreign currency financial
statements related to this oversea business, into the disposal profits and losses of the current period. If the overseas
business is disposed of partially, the Company shall calculate the balance arising from the translation of foreign currency
statements of the part of disposal based on the disposal rate and shall shift them into the profits and losses of the current
period.
(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.
80
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2021
Notes to the financial statements
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:
(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.
81
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2021
Notes to the financial statements
(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)
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,
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Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2021
Notes to the financial statements
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.
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
83
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2021
Notes to the financial statements
(2) The sum of consideration received from the transfer, and the accumulative amount of the changes of the fair value
originally recorded in the owners' equities (in the event that the financial asset involved in the transfer is a financial
asset Available-for-sale).
If the transfer of partial financial asset satisfies the conditions to derecognize, the entire book value of the transferred
financial asset shall, between the portion whose recognition has been stopped and the portion whose recognition has
not been stopped (under such circumstance, the service asset retained shall be deemed as a portion of financial asset
whose recognition has not been stopped), be apportioned according to their respective relative fair value, and the
difference between the amounts of the following 2 items shall be included into the profits and losses of the current
period :
(1) The book value of the portion whose recognition has been stopped; and
(2) The sum of consideration of the portion whose recognition has been stopped, and the portion of the accumulative
amount of the changes in the fair value originally recorded in the owner's equities which is corresponding to the portion
whose recognition has been stopped (in the event that the financial asset involved in the transfer is a financial asset
Available-for-sale).
If the transfer of financial assets does not satisfy the conditions to stop the recognition, it shall continue to be recognized
as financial assets and the consideration received shall be recognized as financial liabilities.
4. 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.
84
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2021
Notes to the financial statements
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
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.
85
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2021
Notes to the financial statements
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).
(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
86
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2021
Notes to the financial statements
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.
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
87
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2021
Notes to the financial statements
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) Long-term equity investment
1. Criteria of joint control and significant influence
Joint control is the contractually agreed sharing of control of an arrangement, which exists only when decisions about
the relevant activities require the unanimous consent of the parties sharing control. If the Company and other joint venture
have joint control of the investee and have rights to the net assets of the investee, the investee is a joint venture of the
Company.
Significant influence is the power to participate in the financial and operating policy decisions of the investee but not
control or join control of those policies. If the Company could exert significant influence over the investee, the investee
is the associate of the Company.
2. The initial cost of long-term equity investment from business acquisition
(1) Long-term equity investment from business acquisition
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
88
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2021
Notes to the financial statements
investee due to additional investment or other reasons, the initial investment cost under the cost method shall be the
carrying amount of previously-held equity investment together with the additional investment cost.
(2) The initial cost of the long-term equity investment other than from business acquisition
The initial cost of a long-term equity investment obtained by making payment in cash shall be the purchase cost which
is actually paid.
The initial cost of a long-term equity investment obtained on the basis of issuing equity securities shall be the fair value
of the equity securities issued.
If the exchange of non-monetary assets is commercial in nature and the fair values of both the assets received and
surrendered can be reliably measured, the fair value of the assets surrendered shall be used as the basis for determining
the cost of the assets received, unless there is any exact evidence showing that the fair value of the assets received is
more reliable. Where any non-monetary assets transaction does not meet the conditions as prescribed above, the carrying
value and relevant payable taxes of the assets surrendered shall be the initial cost of the assets received.
The initial cost of a long-term equity investment obtained by debt restructuring shall be ascertained on the basis of fair
values.
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
89
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2021
Notes to the financial statements
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”.
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.
90
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2021
Notes to the financial statements
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 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.
(14) Investment property
Investment property refers to real estate held for the purpose of earning rent or capital appreciation, or both, including
leased land use rights, land use rights held and prepared for transfer after appreciation, and leased buildings ( Buildings
that are leased after completion of self-construction or development activities and buildings that are being used for rental
in the future during construction or development).
91
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2021
Notes to the financial statements
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.
(15) Fixed assets
1. Recognition of Fixed assets
The term "fixed assets" refers to the tangible assets held for the sake of producing commodities, rendering labor service,
renting or business management and of which useful life is in excess of one fiscal year. No fixed asset may be recognized
unless it simultaneously meets the conditions as follows:
(1) The economic benefits pertinent to the fixed asset are likely to flow into the enterprise; and
(2) The cost of the fixed asset can be measured reliably.
2. Fixed assets depreciation
Fixed assets are depreciated under the straight line method. The depreciation rate is determined according to the category
of assets, the useful life and the expected residual rate. If the components of the fixed assets have different useful lives
or provide the economic benefits in a different way, then different depreciation rate or method shall be applied and the
depreciation of the components shall be calculated separately.
Fixed assets acquired under financial leasing is depreciated over the useful life if it is reasonably certain that the
ownership of the leased assets will be acquired upon expiry of lease, or over the shorter of lease term and useful life if it
is not reasonably certain that the ownership of the leased assets will be acquired upon expiry of lease.
Details of classification, depreciation period, residual value rate and annual depreciation rate are as follows:
Depreciation Residual Value Rate Depreciation Rate
Category Depreciation method
Period (%) (%)
Plants and Buildings straight line method 10-45 years 0 2.22-10.00
Machinery straight line method 10-28 years 3.00 3.46-9.70
Transportation and
straight line method 8-22 years 3.00 4.41-12.13
other equipment
3. Recognition criteria for fixed asset leased in by financial leasing and its valuation
Where a lease satisfies one or more of the following criteria, it shall be recognized as a financial leasing:
(1) The ownership of the leased asset is transferred to the lessee when the term of lease expires;
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Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2021
Notes to the financial statements
(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.
(16) Construction in progress
The cost of fixed assets transferred from a construction in progress includes all the necessary expenses incurred for
bringing the asset to the expected conditions for use. Construction in progress is transferred to fixed asset when it has
reached its working condition for its intended use. In case the final project accounts have not been completed or approved,
the asset shall be transferred to fixed assets at an estimated value by considering project budget, cost or actual cost of the
project and etc., and the deprecation of the said fixed assets shall be provided in accordance with the Company’s
accounting policy since it has reached its working condition for its intended use. After the project accounts have been
approved, the estimated values shall be adjusted based on the actual cost, but those provided deprecation shall not be
adjusted.
(17) Borrowing costs
1. Principle of the recognition of capitalized borrowing costs
The borrowing costs shall include interest on borrowings, amortization of discounts or premiums on borrowings,
ancillary expenses, and exchange balance on foreign currency borrowings.
Where the borrowing costs incurred to an enterprise can be directly attributable to the acquisition and construction or
production of assets eligible for capitalization, it shall be capitalized and recorded into the costs of relevant assets. Other
borrowing costs shall be recognized as expenses on the basis of the actual amount incurred, and shall be recorded into
the current profits and losses.
Assets eligible for capitalization refer to the fixed assets, investment real estate, inventories and other assets, of which
the acquisition and construction or production may take quite a long time to get ready for its intended use or for sale.
93
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2021
Notes to the financial statements
The borrowing costs shall not be capitalized unless they simultaneously meet the following requirements:
(1) The asset disbursements have already incurred, which shall include cash, transferred non-cash assets or interest
bearing debts paid for the acquisition and construction or production activities for preparing assets eligible for
capitalization;
(2) The borrowing costs has already incurred; and
(3) The acquisition and construction or production activities which are necessary to prepare the asset for its intended use
or sale have already started.
2. The capitalization period of borrowing costs
The capitalization period shall refer to the period from the commencement to the cessation of capitalization of the
borrowing costs, excluding the period of suspension of capitalization of the borrowing costs.
When the qualified asset under acquisition and construction or production is ready for the intended use or sale, the
capitalization of the borrowing costs shall be ceased.
Where each part of a qualified asset under acquisition and construction or production is completed separately and is
ready for use, the capitalization of the borrowing costs in relation to this part of asset shall be ceased.
Where each part of an asset under acquisition and construction or production is completed separately and is ready for
use or sale during the continuing construction of other parts, but it cannot be used or sold until the asset is entirely
completed, the capitalization of the borrowing costs shall be ceased when the asset is completed entirely.
3. The suspension of capitalization of borrowing costs
Where the acquisition and construction or production of a qualified asset is interrupted abnormally and the interruption
period lasts for more than 3 months, the capitalization of the borrowing costs shall be suspended. If the interruption is a
necessary step for making the qualified asset under acquisition and construction or production ready for the intended use
or sale, the capitalization of the borrowing costs shall continue. The borrowing costs incurred during such period shall
be recognized as expenses, and shall be recorded into the profits and losses of the current period, till the acquisition and
construction or production of the asset restarts.
4. Method of calculating the capitalization rate and capitalized amount of borrowing costs
94
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2021
Notes to the financial statements
For interest expense (minus the income of interests earned on the unused borrowing loans as a deposit in the bank or
investment income earned on the loan as a temporary investment) and the ancillary expense incurred to a specifically
borrowed loan, those incurred before a qualified asset under acquisition, construction or production is ready for the
intended use or sale shall be capitalized at the incurred amount when they are incurred, and shall be recorded into the
costs of the asset eligible for capitalization.
The Company shall calculate and determine the to-be-capitalized amount of interests on the general borrowing by
multiplying the weighted average asset disbursement of the part of the accumulative asset disbursements minus the
general borrowing by the capitalization rate of the general borrowing used. The capitalization rate shall be calculated
and determined in light of the weighted average interest rate of the general borrowing.
(18) Intangible Assets
1. Measurement of Intangible Assets
(1) Initial measurement is based on cost upon acquisition
The cost of an intangible asset on acquisition include the purchase price, relevant taxes and other necessary disbursements
which may be directly attributable to bringing the intangible asset to the conditions for the expected purpose. If the
payment for an intangible asset is delayed beyond the normal credit conditions and it is of the financing nature, the cost
of the intangible asset shall be determined on the basis of the present value of the purchase price.
For intangible assets obtained from debt restructuring as settlement of liabilities from debtors, initial recognition is based
on its fair value, and the difference between the debt restructured and the fair value of the intangible assets are recognized
in the current profit and loss.
For intangible assets obtained from non-monetary transactions with commercial substance, and the fair value of the assets
obtained or surrendered can be reliably measured, the initial recognition of the asset obtained is based on the fair value
of the asset surrendered, unless there is strong evidence that the fair value of the asset obtained is more reliable. For
intangible assets obtained through non-monetary transactions which do not meet the above criteria, the initial recognition
is based on the book value of the assets surrendered and the relevant taxes payable. No gain or loss will be recognized.
(2) Subsequent Measurement
The Company shall analyze and judge the beneficial period of intangible assets upon acquisition.
95
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2021
Notes to the financial statements
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.
(19) Impairment of long-term assets
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
96
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2021
Notes to the financial statements
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.
(20) Long-term deferred expense
The long-term deferred expense refers to the expenses incurred but shall be borne by current and subsequent accounting
period, which is more than one year.
The long-term deferred expense shall be amortized over its beneficiary period evenly.
97
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2021
Notes to the financial statements
(21) 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.
(22) 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.
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.
98
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2021
Notes to the financial statements
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.
(23) 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.
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.
99
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2021
Notes to the financial statements
(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.
(24) 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 transfer of control and the
payment by the customer does not exceed one year, the financing component will not be considered.
100
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2021
Notes to the financial statements
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.
(25) Contract costs
Contract costs include costs to fulfill a contract and incremental costs of obtaining a contract.
101
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2021
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.
(26) 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.
102
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2021
Notes to the financial statements
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.
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
103
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2021
Notes to the financial statements
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:
(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.
(27) 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.
(28) Leases
Accounting policy from January 1, 2021
104
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2021
Notes to the financial statements
Lease refers to a contract in which the lessor transfers the right to use the asset to the lessee within a certain period of
time to obtain consideration.
On the starting date of the contract, the company assesses whether the contract is a lease or contains a lease. If the
contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration, the
contract is, or contains, a lease.
For a contract that contains a lease component and one or more additional lease or non-lease components, a lease shall
allocate the consideration in the contract to each lease component on the basis of the relative stand-alone price of the
lease component and the aggregate stand-alone price of the non-lease components.
1. The company as the lessee
(1) Right-of-use assets
On the start date of the lease term, the company recognizes the right-of-use asset for leases other than short-term leases
and low-value asset leases. Right-of-use assets are initially measured at cost.
This cost includes:
The initial measurement amount of the lease liability;
If there is a lease incentive for the lease payment paid on or before the start of the lease term, the relevant amount of
the lease incentive already enjoyed shall be deducted;
The initial direct expenses incurred by the company;
The company expects to incur costs for dismantling and removing leased assets, restoring the site where leased
assets are located, or restoring leased assets to the state agreed upon in the lease terms, but does not include the costs
incurred for the production of inventory.
The company depreciates the right-of-use assets with reference to the relevant depreciation policies of "3. (15) Fixed
assets" in this note. If it can be reasonably determined that the ownership of the leased asset will be obtained at the end
of the lease term, the company shall depreciate the leased asset during the remaining useful life; otherwise, the leased
asset will be depreciated during the shorter period of the lease term and the remaining useful life of the leased asset .
The company determines whether the right-of-use asset has been impaired in accordance with the principles described
in "3. (19) Long-term asset impairment" in this note, and conducts accounting treatment for the identified impairment
loss.
(2) Lease liabilities
At the beginning of the lease term, the company recognizes lease liabilities for leases other than short-term leases and
105
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2021
Notes to the financial statements
leases of low-value assets. Lease liabilities are initially measured based on the present value of the payments that are
not paid at that date. Lease payments include:
1) Fixed payment (including in-substance fixed payment), less any lease incentives receivable;
2) Variable lease payments that depend on an index or a ratio;
3) Amounts expected to be payable by the lease under residual value guarantees;
4) The exercise price of the purchase option if the lease is reasonably certain to exercise that option;
5) Payments of penalties for terminating the lease, if the lease term reflects the lessee exercising an option to terminate
the lease;
The company uses the interest rate implicit in the lease as the discount rate, but if the interest rate implicit in the lease
cannot be reasonably determined, the company's incremental borrowing interest rate is used as the discount rate.
The company calculates the interest expense of the lease liability during each period of the lease term according to a
fixed periodic interest rate, and includes it in the current profit and loss or the cost of related assets.
Variable lease payments that are not included in the measurement of lease liabilities are included in the current profit
and loss or the cost of related assets when they occur.
After the start of the lease term, if the following circumstances occur, the company re-measures the lease liability and
adjusts the corresponding right-of-use asset. If the book value of the right-of-use asset has been reduced to zero, but the
lease liability still needs to be further reduced, the difference shall be included in the current profit and loss:
When the evaluation result or actual exercise situation of the purchase option, renewal option or termination option
changes, the company remeasures the lease liability based on the present value calculated by the lease payment after the
change and the revised discount rate;
When the actual fixed payment changes, the expected payable amount of the guarantee residual value changes, or the
index or ratio used to determine the lease payment changes, the company calculates the present value based on the
changed lease payment and the original discount rate to remeasure the lease liability. However, if changes in lease
payments originate from changes in floating interest rates, the revised discount rate is used to calculate the present
value.
(3) Short-term leases and low-value asset leases
The company chooses not to recognize right-of-use assets and lease liabilities for short-term leases and low-value asset
leases, and calculates the relevant lease payments in the current profit and loss or related asset costs on a straight-line
basis during each period of the lease term. Short-term lease refers to a lease that does not include purchase options for
a lease period not exceeding 12 months at the beginning of the lease period. Low-value asset leasing refers to a lease
with a lower value when a single leased asset is a new asset. If the company subleases or expects to sublease the leased
assets, the original lease is not a low-value asset lease.
106
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2021
Notes to the financial statements
(4) Lease modifications
The lease shall account for a lease modification as a separate lease if both:
The modification increases the scope of the lease by adding the right to use one or more underlying assets; and
the consideration for the lease increases by an amount commensurate with the stand-alone price for the increase in
scope and any appropriate adjustment to that stand-alone price to reflect the circumstances of the particular contract.
For a lease modification that is not accounted for as a separate lease, at the effective date of the lease modification a
lessee shall allocate the consideration in the modified contract, determine the lease term of the modified lease and
remeasure the lease liabilities by discounting the revised lease payments using a revised discount rate.
For a lease modification that is not accounted for as a separate lease, the lessee shall account for the remeasurement of
the lease liabilities by decreasing the carrying amount of the right-of-use assets to reflect the partial or full termination
of the lease for lease modifications that decrease the scope of the lease. The lessee shall recognize in profit or loss any
gain or loss relating to the partial or full termination of the lease; or by making a corresponding adjustment to the right-
of-asset for all other lease modifications.
2. The company as the lessor
On the commencement date of the lease, the company divides the lease into finance lease and operating lease. Finance
lease refers to a lease in which almost all the risks and rewards related to the ownership of the leased asset are
transferred regardless of whether the ownership is ultimately transferred. Operating leases refer to leases other than
financial leases. When the company acts as a sublease lessor, it classifies subleases based on the right-of-use assets
generated from the original lease.
(1) Accounting treatment of operating leases
The lease receipts of operating leases are recognized as rental income in each period of the lease term according to the
straight-line method. The company capitalizes the initial direct costs incurred related to operating leases, and allocates
them to the current profit and loss on the same basis as the recognition of rental income during the lease term. Variable
lease payments that are not included in the lease receipts are included in the current profit and loss when they actually
occur.
(2) Accounting treatment of finance leasing
On the start date of the lease, the company recognizes the finance lease receivables for the finance lease and terminates
the recognition of the finance lease assets. When the company initially measures the finance lease receivables, the net
lease investment is taken as the entry value of the financial lease receivables. The net lease investment is the sum of the
unguaranteed residual value and the present value of the lease payment not yet received at the beginning of the lease
107
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2021
Notes to the financial statements
term, discounted at the interest rate implicit in the lease.
The company calculates and recognizes the interest income for each period of the lease term based on a fixed periodic
interest rate. The derecognition and impairment of finance lease receivables shall be accounted for in accordance with
"3. (10) Financial Instruments" in this Note.
Variable lease payments that are not included in the measurement of the net lease investment are included in the current
profit or loss when they actually occur.
A lessor shall account for a modification to a finance lease as a separate lease if both:
The modification increases the scope of the lease by adding the right to use one or more underlying assets;
The consideration for the lease increases by an amount commensurate with the stand-alone price for the increase in
scope and any appropriate adjustments to that stand-alone price to reflect the circumstances of the particular contract.
For a modification to a finance lease that is not accounted for as a separate lease, a lessor shall account for the
modification as follows:
if the lease would have been classified as an operating lease had the modification been in effect at the inception date,
the lessor shall account for the lease modification as a new lease from the effective date of the modification; and measure
the carrying amount of the underlying assets as the net investment in the lease immediately before the effective date of
the lease modification.
If the change takes effect on the lease start date, the lease will be classified as a financial lease, and the company will
perform accounting treatment in accordance with the policy of “3. (10) Financial Instruments” in this Note on the
modification or re-negotiation of the contract.
3. Sale and leaseback transaction
The company evaluates and determines whether the asset transfer in the sale and leaseback transaction is a sale in
accordance with the principles described in "3. (24) Revenue" of this Note.
(1) As the lessee
If the transfer of an asset in the sale and leaseback transaction is a sale, the company as the lessee measures the right-of-
use asset arising from the leaseback at the proportion of the previous carrying amount of the asset that relates to the right-
of-use retained by the lessee and recognize only the amount of any gain or loss that relates to the rights transferred to the
lessor. if the asset transfer in the sale and leaseback transaction does not belong to the sale, the company as the lessee
continues to recognize the transferred assets and at the same time recognize a financial liability equal to the transfer
proceeds. For the accounting treatment of financial liabilities, please refer to "3. (10) Financial Instruments" in this note.
(2) As a lessor
If the asset transfer in the sale and leaseback transaction is a sale, the company acts as the lessor to account for the
108
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2021
Notes to the financial statements
purchase of the asset, and the asset lease is accounted for in accordance with the aforementioned "2. The company as
the lessor" policy; in the sale and leaseback transaction If the transfer of assets is not a sale, the company as the lessor
does not recognize the transferred assets, but recognizes a financial asset equal to the transfer proceeds. For the
accounting treatment of financial assets, please refer to "3. (10) Financial Instruments" in this note.
Accounting policy before January 1, 2021
1. Accounting treatment of operating leases
(1) The lease fee paid by the company for rented assets shall be apportioned on a straight-line basis during the entire
lease period without deducting the rent-free period and included in the current expenses. The initial direct expenses
related to the lease transaction paid by the company shall be included in the current expenses.
When the asset lessor bears the lease-related expenses that should be borne by the company, the company deducts this
part of the expenses from the total rent, and the deducted rent expenses are amortized during the lease term and included
in the current expenses.
(2) The lease fee collected by the company for renting assets shall be apportioned according to the straight-line method
during the entire lease period without deducting the rent-free period and recognized as lease-related income. The initial
direct expenses paid by the company related to the lease transaction shall be included in the current expenses; if the
amount is large, it shall be capitalized and included in the current income in installments based on the same basis as the
lease-related income recognition during the entire lease period.
When the company bears the lease-related expenses that should be borne by the lessee, the company deducts this part
of the expenses from the total rental income, and distributes the deducted rental expenses during the lease term.
2. Accounting treatment of finance lease
(1) Finance lease assets: On the start date of the lease, the company takes the lower of the fair value of the leased asset
and the present value of the minimum lease payment as the entry value of the leased asset, and the minimum lease
payment as the long-term payable Entered value, and the difference is regarded as unrecognized financing expenses.
The company uses the effective interest method to amortize unrecognized financing expenses during the asset lease
period and include them in financial expenses. The initial direct costs incurred by the company are included in the
value of the leased assets.
(2) Assets leased out by financing: On the lease start date, the company recognizes the difference between the sum of
the receivable financing lease payments and the unguaranteed residual value and its present value as unrealized
financing income, and it is recognized as unrealized financing income during each period when the rent is received in
the future. Rental income. The initial direct expenses incurred by the company related to the lease transaction are
109
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2021
Notes to the financial statements
included in the initial measurement of the financial lease receivables, and the amount of income recognized during the
lease period is reduced.
(29) 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;
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.
(30) 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
110
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2021
Notes to the financial statements
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
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
111
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2021
Notes to the financial statements
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
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.
(31) Change of significant accounting policy and accounting estimate
1. Change of major accounting policy during the current reporting period
(1) Implementation of "Accounting Standards for Business Enterprises No. 21-Leases" (revised in 2018)
The Ministry of Finance revised the "Accounting Standards for Business Enterprises No. 21-Leases" (referred to as the
"New Lease Standards") in 2018. The company will implement the new lease standard from January 1, 2021. According
to the revised standards, the company chooses not to reassess whether it is a lease or contains a lease on the date of the
first implementation for the contracts that already existed before the first implementation date.
The company as the lessee
The company chose to adjust the amount of retained earnings and other related items in the financial statements at the
beginning of the year when the new lease standards were first implemented based on the cumulative impact of the first
implementation of the new lease standards, and did not adjust the comparable period information.
For operating leases that existed before the first implementation date, the company measures the lease liability based
on the present value of the remaining lease payments discounted by the Japanese company’s incremental borrowing
interest rate for the first implementation on the first implementation day, and chooses one from the following two
methods according to each lease to measuring right-of-use assets:
-The amount equal to the lease liability, with necessary adjustments based on the prepaid rent.
For operating leases before the first execution date, the company applies the above methods and chooses one or more
of the following simplified treatments according to each lease:
1) Leases completed within 12 months after the first implementation date will be treated as short-term leases;
2) When measuring lease liabilities, leases with similar characteristics use the same discount rate;
3) The measurement of the right-of-use asset does not include the initial direct costs;
4) If there is an option to renew the lease or to terminate the lease, the lease term shall be determined according to the
actual exercise of the option before the first execution date and other latest conditions;
112
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2021
Notes to the financial statements
5) As an alternative to the impairment test of the right-of-use asset, assess whether the contract containing the lease is
a loss-making contract before the first execution date in accordance with "3. (23) Estimated liabilities" of this Note
Adjust the amount of loss reserves for the right-of-use asset;
6) Lease changes that occur before the first implementation date will not be adjusted retrospectively, and will be
accounted for in accordance with the new lease standard according to the final arrangement of the lease change.
When measuring lease liabilities, the company uses the lessee’s incremental borrowing rate on January 1, 2021 to
discount the lease payment.
The unpaid minimum lease payments for major operating leases disclosed in the consolidated
2,530,278,897.76
financial statements on December 31, 2020
The present value discounted by the company's incremental borrowing interest rate as of January 1,
1,541,868,510.81
2021
Lease liabilities under the new lease standard on January 1, 2021 1,541,868,510.81
The difference between the above discounted present value and the lease liability 0.00
For financial leases that existed before the first implementation date, the company measures the right-of-use assets
and lease liabilities based on the original book values of the financial leased assets and the financial lease payables on
the first implementation date.
The company as the lessor
For sub-leases that are classified as operating leases before the first implementation date and continue after the first
implementation date, the company will reassess them based on the remaining contract duration and terms of the original
lease and sub-lease on the first implementation date, and classify them in accordance with the new lease standards. If
it is reclassified as a finance lease, the company treats it as a new finance lease for accounting treatment.
Except for sub-lease, the company does not need to adjust its lease as a lessor in accordance with the new lease
standard. The company conducts accounting treatment in accordance with the new lease standard from the date of
first implementation.
The main impacts of the company’s implementation of the new lease standards on the financial statements are as
follows:
113
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2021
Notes to the financial statements
January 1, 2021
Change of accounting policy
Affected items Consolidated Financial Parent company financial
content and reason
statement statement
The adjustment to Authorization Right of use assets 1,541,868,510.81 1,541,868,510.81
operating lease that existed Lease liabilities 1,502,969,848.79 1,502,969,848.79
before the first adoption date Non-current liabilities
38,898,662.02 38,898,662.02
by the company as the lessee due within one year
2. Change of accounting estimation
None.
3. Adjustments of the beginning balance due to the first implementation of new lease standards
Consolidated statement of financial position:
Ending Beginning Adjustment
Items balance of the balance of the
Reclassification Remeasurement Total
previous year current year
Right of use assets 1,541,868,510.81 1,541,868,510.81 1,541,868,510.81
Lease liabilities 1,502,969,848.79 1,502,969,848.79 1,502,969,848.79
Non-current liabilities
38,898,662.02 38,898,662.02 38,898,662.02
due within one year
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
Right of use
1,541,868,510.81 1,541,868,510.81 1,541,868,510.81
assets
Lease liabilities 1,502,969,848.79 1,502,969,848.79 1,502,969,848.79
114
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2021
Notes to the financial statements
Non-current
liabilities due 38,898,662.02 38,898,662.02 38,898,662.02
within one year
.
VI Taxes
(1) Major type of taxes and corresponding tax rates
Taxation Method Tax Rate (%)
The balance of output VAT calculated based on
product sales and taxable services revenue in
Value-added Tax (VAT) 6, 10, 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
Enterprise income tax Based on taxable profit 25
.
XII Notes to the consolidated financial statements
(1) Cash at bank and on hand
Items 30 June 2021 31 December 2020
Cash on hand 6,271.10 3,026.68
Cash at bank 4,457,447,843.81 9,229,414,568.44
Other monetary funds 5,053,246,387.76 3,897,249,320.14
Total 9,510,700,502.67 13,126,666,915.26
Total amount deposited abroad
The details of restricted monetary funds resulted from guarantee or pledge or freeze accounts are as follows:
115
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2021
Notes to the financial statements
Items 30 June 2021 31 December 2020
Margin for bank acceptance bill 4,161,606,387.76 3,306,509,320.14
Margin for letter of credit 338,900,000.00 78,000,000.00
Fixed deposit or notice deposit
552,000,000.00 512,000,000.00
used for guarantee
Loan margin 740,000.00 740,000.00
Others
Total 5,053,246,387.76 3,897,249,320.14
(2) Accounts receivable
1. Accounts receivable disclosed by aging
Items 30 June 2021 31 December 2020
Within 1 year (inclusive) 226,242,229.74 245,084,695.28
1-2 years (inclusive) 57,104,726.32 57,537,987.36
2-3 years (inclusive) 250,933,831.67 251,762,129.07
Over 3 years 177,992,483.25 179,465,975.74
Total 712,273,270.97 733,850,787.45
Less: Provision for bad debts 486,762,702.05 488,633,604.79
Total 225,510,568.92 245,217,182.66
2. Accounts receivable disclosed by category
30 June 2021
Gross carrying amount Provision for bad debts
Items
Percentage Bad debts Book value
Amount Amount
(%) ratio (%)
Tested for impairment
352,985,418.30 49.56 352,985,418.30 100.00
individually
Tested for impairment by
359,287,852.67 50.44 133,777,283.75 37.23 225,510,568.92
portfolio
Include:
Portfolio 1: Aging portfolio 359,287,852.67 50.44 133,777,283.75 37.23 225,510,568.92
116
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2021
Notes to the financial statements
30 June 2021
Gross carrying amount Provision for bad debts
Items
Percentage Bad debts Book value
Amount Amount
(%) ratio (%)
Total 712,273,270.97 100.00 488,633,604.79 225,510,568.92
31 December 2020
Gross carrying amount Provision for bad debts
Items
Percentage Bad debts Book value
Amount Amount
(%) ratio (%)
Individually significant and
tested for impairment 352,985,418.30 48.1 352,985,418.30 100
individually
Accounts receivable tested
380,865,369.15 51.9 135,648,186.49 35.62 245,217,182.66
for impairment by portfolio
Include:
Other insignificant items but
tested for impairment 380,865,369.15 51.9 135,648,186.49 35.62 245,217,182.66
individually
Total 733,850,787.45 100 488,633,604.79 245,217,182.66
Accounts receivables tested for impairment individually
30 June 2021
Company Gross carrying Provision for bad Bad debts ratio
Reason
amount debts (%)
Brilliance Automotive Group Bankruptcy
305,223,081.12 305,223,081.12 100.00
Holdings Co., Ltd. reorganization
Benxi Nanfen Xinhe
operation
Metallurgical Furnace Material 47,762,337.18 47,762,337.18 100.00
ceased
Co., Ltd
Total 352,985,418.30 352,985,418.30
117
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2021
Notes to the financial statements
Accounts receivable tested for impairment by aging portfolio:
30 June 2021
Items
Gross carrying amount Provision for bad debts Bad debts ratio (%)
Within 1 year (inclusive) 221,398,097.73 2,213,980.98 1.00
1-2 years (inclusive) 1,987,650.73 198,765.07 10.00
2-3 years (inclusive) 5,671,958.15 1,134,391.63 20.00
Over 3 years 130,230,146.07 130,230,146.07 100.00
Total 359,287,852.67 133,777,283.75
3. Information of provision, reversal or recovery of bad debts of current period.
The reversal of bad debts of current period is RMB 1,870,902.74.
4. No accounts receivable has been written off during the current period.
5. Top five debtors at the end of period
30 June 2021
Company Percentage of total Accounts Provision for
Gross carrying amount
receivable (%) bad debts
The first 305,223,081.12 42.85 305,223,081.12
The second 90,812,279.39 12.75 908,122.79
The third 52,940,642.68 7.43 529,406.43
The fourth 47,762,337.18 6.71 47,762,337.18
The fifth 23,016,558.21 3.23 230,165.58
Total 519,754,898.58 72.97 354,653,113.10
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
118
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2021
Notes to the financial statements
Item 30 June 2021 31 December 2020
Notes Receivable 5,143,627,467.44 4,189,977,871.92
Including: Bank acceptance bill 4,727,663,597.31 1,875,594,439.85
Commercial acceptance bill 415,963,870.13 2,314,383,432.07
Total 5,143,627,467.44 4,189,977,871.92
Note: Accounts receivable financing reflects notes receivable and accounts receivable that are measured at fair value
through other comprehensive income.
2. The pledged acceptance bill at the end of the period
Items 30 June 2021
Bank acceptance bill 16,991,847.39
Commercial acceptance bill 6,000,000.00
Total 22,991,847.39
3. 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 23,332,790,273.96
Commercial acceptance bill 573,182,722.67
Total 23,332,790,273.96 573,182,722.67
4. 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 2021 31 December 2020
Aging
Amount Percentage (%) Amount Percentage (%)
Within 1 year (inclusive) 2,015,400,779.69 99.43 2,096,232,640.14 99.44
1-2 years (inclusive) 11,607,433.17 0.57 11,812,137.51 0.56
2-3 years (inclusive)
Over 3 years
119
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2021
Notes to the financial statements
30 June 2021 31 December 2020
Aging
Amount Percentage (%) Amount Percentage (%)
Total 2,027,008,212.86 100.00 2,108,044,777.65 100.00
Notes: As of June 30, 2021, 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 1,371,730,593.76 67.67
The Second 112,823,353.80 5.57
The Third 82,441,146.14 4.07
The Fourth 59,475,880.47 2.93
The Fifth 53,435,651.36 2.64
Total 1,679,906,625.53 82.88
(5) Other receivables
Items 30 June 2021 31 December 2020
Interest receivables 51,637,650.49 33,685,359.01
Dividend receivables
Other receivables 108,542,740.73 108,415,992.26
Total 160,180,391.22 142,101,351.27
1．Interest receivable
(1) Interest receivable disclosed by category
Items 30 June 2021 31 December 2020
Deposit interest 51,637,650.49 33,685,359.01
Subtotal 51,637,650.49 33,685,359.01
Less: provision for bad debts
Total 51,637,650.49 33,685,359.01
(2) The company has no significant overdue interest and provision for bad debts.
2．Other receivables
120
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2021
Notes to the financial statements
(1) Other receivables disclosed by aging
Items 30 June 2021 31 December 2020
Within 1 year (inclusive) 53,547,523.88 53,420,775.41
1-2 years (inclusive) 42,323,476.43 42,323,476.43
2-3 years (inclusive) 12,988,305.06 12,988,305.06
Over 3 years 68,088,848.67 68,267,923.76
Total 176,948,154.04 177,000,480.66
Less: Provision for bad debts 68,405,413.31 68,584,488.40
Total 108,542,740.73 108,415,992.26
(2) Information of provision for bad debts
Stage one Stage two Stage three
lifetime expected credit lifetime expected credit
Provision for bad
12-month expected losses losses Total
debts
credit losses (credit impairment has not (credit impairment has
occurred) already occurred)
Beginning balance 352376.05 9,566,849.71 58,665,262.64 68,584,488.4
Transfer into
second stage
Transfer into third
stage
Transfer back to
second stage
Transfer back to
first stage
Provision during
the current period
Write-back during
179,075.09 179,075.09
the current period
Reversal during the
current period
121
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2021
Notes to the financial statements
Stage one Stage two Stage three
lifetime expected credit lifetime expected credit
Provision for bad
12-month expected losses losses Total
debts
credit losses (credit impairment has not (credit impairment has
occurred) already occurred)
Write-off during the
current period
Other changes
Ending balance 352,376.05 9,387,774.62 58,665,262.64 68,405,413.31
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 97,730,535.73 20,604,580.70 58,665,364.23 177,000,480.66
Transfer into second
stage
Transfer into third
stage
Transfer back to
second stage
Transfer back to first
stage
Increase 160,729,544.48 2,719,095.30 163,448,639.77
Decrease 181,359,715.57 2,050,596.28 90,654.55 183,500,966.40
Other changes
Ending balance 77,100,364.64 21,273,079.72 58,574,709.68 156,948,154.04
(3) There is no other receivables written off in the current period.
(4) Other receivables disclosed by nature
122
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2021
Notes to the financial statements
Nature 30 June 2021 31 December 2020
Current Account 167,883,799.30 167,775,115.62
Others 9,064,354.74 9,225,365.04
Total 176,948,154.04 177,000,480.66
(5) 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 5,926,131.29 within 1 year 3.35
The Second Accounts 4,706,815.40 within 1 year 2.66 47,068.15
The Third Accounts 3,359,795.18 within 1 year 1.90
within 1 year to
The Fourth Accounts 3,125,550.76 1.77 2,538,389.24
over 3 years
The Fifth Accounts 2,394,571.41 within 1 year 1.35
Total 19,512,864.04 11.03 2,585,457.39
(6) There is no other receivables relates to government subsidies at the end of the reporting period.
(7) There is no other receivables derecognized due to the transfer of financial assets at the end of the reporting period.
(8) 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
1. Inventories disclosed by category
30 June 2021 31 December 2020
Items Gross carrying Gross carrying
Impairment Book value Impairment Book value
amount amount
Raw
material
4,267,026,164.99 26,986,533.69 4,240,039,631.30 4,535,270,857.67 26,986,533.69 4,508,284,323.98
and main
material
123
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2021
Notes to the financial statements
30 June 2021 31 December 2020
Items Gross carrying Gross carrying
Impairment Book value Impairment Book value
amount amount
Work in
process and
self-made
1,730,031,748.42 1,730,031,748.42 1,732,705,334.71 1,946,088.69 1,730,759,246.02
semi-
finished
product
Finished
2,693,274,235.96 2,693,274,235.96 2,805,646,918.75 4,625,146.10 2,801,021,772.65
products
Total 8,690,332,149.37 26,986,533.69 8,663,345,615.68 9,073,623,111.13 33,557,768.48 9,040,065,342.65
2. Impairment of inventory
31 December Increase Decrease
Category 2020 1 January 2021 Write-back 30 June 2021
Provision Others Others
or write-off
Raw material and
26,986,533.69 26,986,533.69 26,986,533.69
main material
Work in process and
self-made semi- 1,946,088.69 1,946,088.69 1,946,088.69
finished product
Finished products 4,625,146.10 4,625,146.10 4,625,146.10
Total 33,557,768.48 33,557,768.48 6,571,234.79 26,986,533.69
(7) Other current assets
Items 30 June 2021 31 December 2020
Prepaid tax 183,320,437.20
VAT input tax 138,313,168.95 86,091,954.53
Term Deposit 7,000,000,000.00 5,254,234,444.28
Total 7,138,313,168.95 5,523,646,836.01
124
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2021
Notes to the financial statements
(8) Long-term equity investment
Increase/decrease
31 Income or loss on Other Declaration of
Addition Reduction Other 30 June Total
Investees December investment Comprehensive Cash
of of Equity Others 2021 Impairment
2020 recognized under Income Dividends or Provision
Investment Investment Changes
the equity method Adjustment Profit
1．Joint Venture
Subtotal
2．Associated Enterprise
Zhejiang Bengang Jingrui
Steel Processing Co., 2,742,064.73 281,949.15 3,024,013.88
Ltd..
Subtotal 2,742,064.73 281,949.15 3,024,013.88
Total 2,742,064.73 281,949.15 3,024,013.88
125
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2021
Notes to the financial statements
(9) Other equity instrument investment
Items 30 June 2021 31 December 2020
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 200,000.00 200,000.00
Total 1,042,024,829.00 1,042,024,829.00
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 2021 31 December 2020
Fixed assets 25,137,148,377.89 26,284,567,956.44
Disposal of fixed assets
Total 25,137,148,377.89 26,284,567,956.44
2. Details of fixed assets
Transportation
Items Buildings Machinery equipment and Total
others
1．Gross carrying amount
(1) 31 December 2020 12,992,173,762.87 48,920,259,525.40 912,920,312.85 62,825,353,601.12
(2) Increase in current period 2,072,031.87 17,602,680.61 21,571,760.13 41,246,472.61
Including: Purchase 5,095,357.71 1,550,536.37 6,645,894.08
126
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2021
Notes to the financial statements
Transportation
Items Buildings Machinery equipment and Total
others
Transferred
2,072,031.87 12,507,322.90 20,021,223.76 34,600,578.53
from construction in progress
Merging
(3) Decrease in current period 21,486,289.18 85,651,353.05 13,196,686.98 120,334,329.21
Including: Disposal 21,486,289.18 85,651,353.05 13,196,686.98 120,334,329.21
Others
(4) 30 June 2021 12,972,759,505.56 48,852,210,852.96 921,295,386.00 62,746,265,744.52
2．Total accumulated
depreciation
(1) 31 December 2020 6,133,288,869.64 29,679,421,087.16 629,132,131.82 36,441,842,088.62
(2) Increase in current period 156,696,842.77 916,015,124.86 92,683,049.51 1,165,395,017.14
Including: Provision 156,696,842.77 916,015,124.86 92,683,049.51 1,165,395,017.14
(3) Decrease in current period 7,104,196.69 77,399,251.84 12,559,846.66 97,063,295.19
Including: Disposal 7,104,196.69 77,399,251.84 12,559,846.66 97,063,295.19
(4) 30 June 2021 6,282,881,515.72 30,518,036,960.18 709,255,334.67 37,510,173,810.57
3．Total impairment
(1) 31 December 2020 36,963,620.92 61,979,935.14 98,943,556.06
(2) Increase in current period
Including: Provision
Others
(3) Decrease in current period
Including: Disposal
(4) 30 June 2021 36,963,620.92 61,979,935.14 98,943,556.06
4．Total net book value of
Fixed assets
(1) 30 June 2021 6,652,914,368.92 18,272,193,957.64 212,040,051.33 25,137,148,377.89
(2) 31 December 2020 6,821,921,272.31 19,178,858,503.10 283,788,181.03 26,284,567,956.44
3. Fixed assets idled temporarily
127
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2021
Notes to the financial statements
Items Gross carrying amount Accumulated depreciation Impairment Book value
Buildings 94,707,444.27 59,005,241.87 35,702,202.40
Machinery 539,534,736.81 474,959,225.20 63,241,353.66 1,334,157.95
Transportation
1,042,125.89 1,042,125.89
equipment and others
Total 635,284,306.97 535,006,592.96 98,943,556.06 1,334,157.95
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 1,907,492,831.36, all of which were leased from the related party Liaoning Hengyi Financial
Leasing Co., Ltd.
5. Fixed assets leased out by operating lease
Items Book value
Buildings 6,755,257.55
Total 6,755,257.55
6. Fixed assets without property rights certificates at the end of the period
Items Book value Reason
Buildings 1,145,596,922.34 To be handled
(11) Construction in progress
1. Construction in progress and Construction materials
Items 30 June 2021 31 December 2020
Construction in progress 2,875,627,953.81 1,837,160,389.66
Project materials 2,711,552.45 2,773,325.92
Total 2,878,339,506.26 1,839,933,715.58
128
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2021
Notes to the financial statements
2. Details of construction in progress
30 June 2021 31 December 2020
Items Total
Gross carrying amount Book value Gross carrying amount Total impairment Book value
impairment
Special Steel Electric Furnace Capacity Replacement
586,967,067.58 586,967,067.58 358,101,195.01 358,101,195.01
Project
CCPP power generation project 618,341,552.04 618,341,552.04 300,907,874.71 300,907,874.71
Special steel rolling mill renovation project 221,971,351.85 221,971,351.85 151,433,585.06 151,433,585.06
Advanced Treatment and Reuse Project of Reclaimed
107,261,475.47 107,261,475.47 98,563,871.96 98,563,871.96
Water in General Energy Plant
360 square meter sintering machine 106,378,428.49 106,378,428.49 82,878,409.99 82,878,409.99
No. 7 blast furnace dry dust removal and energy-saving
71,310,841.86 71,310,841.86 70,402,228.77 70,402,228.77
transformation of TRT power generation
Environmental protection overhaul project of No. 6 blast
66,322,604.36 66,322,604.36 66,322,604.36 66,322,604.36
furnace
360 square meter sintering machine waste heat utilization 56,547,049.50 56,547,049.50 56,547,049.50 56,547,049.50
One-tower desulfurization revamp in the coking plant 45,127,284.61 45,127,284.61 31,893,853.65 31,893,853.65
The overall improvement of Benxi Steel's manufacturing
32,540,243.11 32,540,243.11 29,824,289.00 29,824,289.00
management
Flue gas desulfurization and denitrification of No. 7 coke
28,794,085.23 28,794,085.23 28,774,283.25 28,774,283.25
oven in the plate coking plant
Energy General Plant No. 1 Converter Gas Tank System
46,420,310.06 46,420,310.06 24008553.86 24008553.86
Transformation Project
Cold rolled high-strength steel renovation project 62,631,294.36 62,631,294.36 23961023.15 23961023.15
220kV Substation Project of General Energy Plant 85,045,639.28 85,045,639.28 23,302,571.03 23,302,571.03
Chemical Coke Oven Gas Project – Bengang transferred
21,840,791.70 21,840,791.70 21,840,791.70 21,840,791.70
to Liaoning Coal
5#Blast furnace relocation overhaul 30,605,158.49 30,605,158.49
1700 Hot Rolling Improvement 10,197,720.39 10,197,720.39
Environmental protection transformation of No. 4-6
7,583,100.51 7,583,100.51
converter
1# converter energy saving and environmental protection
3,642,180.47 3,642,180.47
transformation
Newly built 8# single-strand slab caster project 33,160,739.55 33,160,739.55
5#-7# Oxygen Generator Nitrogen-increasing and Energy-
877,876.11 877,876.11
saving Modification
129
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2021
Notes to the financial statements
30 June 2021 31 December 2020
Items Total
Gross carrying amount Book value Gross carrying amount Total impairment Book value
impairment
Transformation of No. 2 Casting Machine in Steelmaking
4,652,919.13 4,652,919.13
Plant
Other 627,408,239.66 627,408,239.66 468,398,204.66 468,398,204.66
Total 2,875,627,953.81 2,875,627,953.81 1,837,160,389.66 1,837,160,389.66
130
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2021
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
Items Budget 31 December 2020 during during 30 June 2021 accounted for capitalization n rate in Sources
current period progress interest of funds
current current the proportion amount in current
(%) capitalization
period period of the budget current period period (%)
(%)
Special Steel
Electric Furnace
Capacity 161,761.00 358,101,195.01 228,865,872.57 586,967,067.58 36.00% 40% Capital raised
Replacement
Project
CCPP power
generation 106,000.00 300,907,874.71 317,433,677.33 618,341,552.04 58.00% 60% 9,433,121.11 3,074,117.80 4.35% Capital raised
project
Special steel
rolling mill
59,607.00 151,433,585.06 70,537,766.79 221,971,351.85 37.00% 40% 5,076,881.26 1,170,984.20 4.35% Others
renovation
project
Advanced
Treatment and
Reuse Project of
Reclaimed 17,000.00 98,563,871.96 8,697,603.51 107,261,475.47 63.00% 65% others
Water in
General Energy
Plant
No. 7 blast
furnace dry dust
removal and 9,332.00 70,402,228.77 908,613.09 71,310,841.86 76.00% 75% 361,850.63 67,870.57 4.35% others
energy-saving
transformation
131
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2021
Notes to the financial statements
Project
Transferred Other cumulative Including： Interest
Accumulated
to fixed asset decrease investment Interest capitalizatio
Increase during Project amount of
Items Budget 31 December 2020 during during 30 June 2021 accounted for capitalization n rate in Sources
current period progress interest of funds
current current the proportion amount in current
(%) capitalization
period period of the budget current period period (%)
(%)
of TRT power
generation
Environmental
protection
overhaul project 25,225.00 66,322,604.36 66,322,604.36 75.00% 75% others
of No. 6 blast
furnace
One-tower
desulfurization
7,000.00 31,893,853.65 13,233,430.96 45,127,284.61 64.00% 65% others
revamp in the
coking plant
5#Blast furnace
relocation 124,086.50 30,605,158.49 30,605,158.49 66.00% 70% 36,576,844.35 5,166,620.30 4.35% Capital raised
overhaul
1700 Hot
Rolling 25,000.00 10,197,720.39 10,197,720.39 71.00% 75% others
Improvement
Environmental
protection
transformation 27,000.00 7,583,100.51 7,583,100.51 61.00% 95% 3,729,352.38 929,554.12 4.35% Capital raised
of No. 4-6
converter
1# converter
energy saving
21,800.00 3,642,180.47 3,642,180.47 65.00% 70% 2,220,278.55 449,519.92 4.35% others
and
environmental
132
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2021
Notes to the financial statements
Project
Transferred Other cumulative Including： Interest
Accumulated
to fixed asset decrease investment Interest capitalizatio
Increase during Project amount of
Items Budget 31 December 2020 during during 30 June 2021 accounted for capitalization n rate in Sources
current period progress interest of funds
current current the proportion amount in current
(%) capitalization
period period of the budget current period period (%)
(%)
protection
transformation
Newly built 8#
single-strand
64,341.00 33,160,739.55 33,160,739.55 59.00% 60% others
slab caster
project
5#-7# Oxygen
Generator
Nitrogen-
4,726.10 877,876.11 877,876.11 83.00% 85% others
increasing and
Energy-saving
Modification
Transformation
of No. 2 Casting
Machine in 10,090.00 4,652,919.13 4,652,919.13 87.00% 90% 387,012.00 102,460.41 4.35% others
Steelmaking
Plant
Total 662,968.60 1,077,625,213.52 730,396,658.90 1,808,021,872.42 57,785,340.28 10,961,127.32
133
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2021
Notes to the financial statements
4. There is no impairment of construction in progress during the current period.
5. Construction materials
30 June 2021 31 December 2020
Items Gross carrying Gross carrying
Impairment Book value Impairment Book value
amount amount
Construction
2,711,552.45 2,711,552.45 2,773,325.92 2,773,325.92
materials
Total 2,711,552.45 2,711,552.45 2,773,325.92 2,773,325.92
(12) Right of use assets
Items Book value Reason
Right of use assets 1,510,538,778.93
Total 1,510,538,778.93
(13) Intangible assets
1. Details of intangible assets
Items Land use right Software Total
1．Total of original value
(1) 31 December 2020 327,028,797.84 310,401.55 327,339,199.39
(2) Increase
Including: Purchase
Internal R&D
Increase in Mergers
(3) Decrease
Including: Disposal
Others
(4) 30 June 2021 327,028,797.84 310,401.55 327,339,199.39
2．Total of Accumulated Amortization
(1) 31 December 2020 62,257,844.20 148,702.65 62,406,546.85
134
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2021
Notes to the financial statements
Items Land use right Software Total
(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 2021 65,528,132.14 162,100.11 65,690,232.25
3．Total of Impairment
(1) 31 December 2020
(2) Increase
Including: Provision
Others
(3) Decrease
Including: Disposal
Others
(4) 30 June 2021
4. Total of Net value
(1) 31 December 2020 261,500,665.70 148,301.44 261,648,967.14
(2) 30 June 2021 264,770,953.64 161,698.90 264,932,652.54
2. Land use right without Certificate of Land use right at the end of the period.
None.
(14) Deferred tax asset and deferred tax liability
1. Deferred tax assets before taking into consideration of the balance offsetting
30 June 2021 31 December 2020
Items Deductible temporary Deferred tax Deductible temporary Deferred tax
differences asset differences asset
Impairment 389,810,760.81 97,452,690.20 398,431,973.43 99,607,993.35
Internal unrealized profit 74,424,898.88 18,606,224.72 74,424,898.92 18,606,224.73
135
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2021
Notes to the financial statements
30 June 2021 31 December 2020
Items Deductible temporary Deferred tax Deductible temporary Deferred tax
differences asset differences asset
Differences of depreciation
333,978,859.03 83,494,714.76 333,978,859.03 83,494,714.76
and amortization
Total 798,214,518.72 199,553,629.68 806,835,731.38 201,708,932.84
2. Unrecognized deferred tax assets
Items 30 June 2021 31 December 2020
Deductible temporary differences 305,702,137.30 305,702,137.30
Deductible losses 54,629,940.42
Total 305,702,137.30 360,332,077.72
3. The deductible loss of unrecognized deferred tax assets due in the following period
Items 30 June 2021 31 December 2020 Notes
Year 2021 10,945,961.04
Year 2022 1,001,166.72
Year 2023 14,114,953.21
Year 2024 17,910,573.13
Year 2025 10,657,286.32
Total 54,629,940.42
(15) Other non-current assets
30 June 2021 31 December 2020
Items Gross carrying Impair Gross carrying Impair
Book value Book value
amount ment amount ment
Prepayment
for long-term 851,101,139.47 851,101,139.47 995,840,320.65 995,840,320.65
assets
Total 851,101,139.47 851,101,139.47 995,840,320.65 995,840,320.65
136
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2021
Notes to the financial statements
(16) Short-term loans
1. Classification of short-term loans
Items 30 June 2021 31 December 2020
Pledge loans
Mortgage loans
Guaranteed loans 7,285,419,000.00 9,687,731,000.00
Credit loans 210,000,000.00 380,000,000.00
Total 7,495,419,000.00 10,067,731,000.00
2. There is no short-term loans that were overdue at the end of the reporting period
(17) Notes payables
Items 30 June 2021 31 December 2020
Bank acceptance bill 4,140,752,366.66 7,747,043,186.29
Domestic letter of credit 635,939,800.00 857,106,162.13
Domestic letter of credit 1,338,000,000.00 1,210,000,000.00
Total 6,114,692,166.66 9,814,149,348.42
Notes: There are no outstanding notes payable at the end of this period.
(18) Accounts payable
1. Accounts payable disclosed by category
Items 30 June 2021 31 December 2020
Accounts payable for goods 4,822,988,701.75 5,122,416,750.84
Accounts payable for labor 15,842,004.02 18,697,483.74
Accounts payable for project and equipment 443,173,947.38 513,842,739.32
Repair expense 223,618,888.81 259,271,282.92
Total 5,505,623,541.96 5,914,228,256.82
2. Significant accounts payable aging over one year
137
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2021
Notes to the financial statements
Items Ending balance Amount aging over one year
Company 1 36,218,300.00 36,218,300.00
Company 2 35,081,745.24 30,361,745.24
Company 3 23,579,692.14 23,379,692.14
Company 4 15,810,625.07 15,810,625.07
Company 5 14,200,000.00 14,200,000.00
Company 6 14,126,435.78 12,651,035.78
Total 139,016,798.23
Notes: The above significant accounts payable aged over one year have not yet reached the settlement conditions.
(19) Contract liabilities
Items 30 June 2021 31 December 2020
Payment received in advance 6,182,094,798.39 4,458,671,819.90
Total 6,182,094,798.39 4,458,671,819.90
As of June 30, 2021, the value-added tax received in advance when the payment is received in advance is RMB
803,672,323.79 and is shown as other current liabilities
(20) Employee benefits payable
1. Employee benefits payable
Items 31 December 2020 Increase Decrease 30 June 2021
(1) Short-term employee
25,748,902.30 937,619,306.42 930,159,243.80 33,208,964.92
benefits
(2) Post-employment
benefits - defined 582.95 104,179,630.07 104,180,213.02
contribution plans
(3) Termination benefits
(4) Other benefits due
within one year
Total 25,749,485.25 1,041,798,936.49 1,034,339,456.82 33,208,964.92
2. Short-term employee benefits
138
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2021
Notes to the financial statements
Items 31 December 2020 Increase Decrease 30 June 2021
(1) Salary, bonus,
16,591,117.11 761,247,064.95 754,888,309.88 22,949,872.18
allowance and subsidy
(2) Employee welfare 30,254,179.78 30,254,179.78
(3) Social Insurance 653,712.74 68,075,443.50 68,075,507.09 653,649.15
Including: Medical
3,683.11 52,218,853.23 52,218,853.23 3,683.11
insurance
Work injury
650,029.63 15,846,547.47 15,846,547.47 650,029.63
insurance
Maternity
10,042.80 10,042.80
insurance
(4) Housing 6,859,195.00 62,336,339.00 62,332,739.00 6,862,795.00
(5) Union funds and staff
1,644,877.45 15,706,279.19 14,608,508.05 2,742,648.59
education fee
(6) Short-term
compensated absences
(7) Short-term profit -
sharing scheme
Total 25,748,902.30 937,619,306.42 930,159,243.80 33,208,964.92
3. Defined contribution plans
Items 31 December 2020 Increase Decrease 30 June 2021
Basic pension fund 565.28 100,645,692.28 100,646,257.56
Unemployment insurance 17.67 3,533,937.79 3,533,955.46
Total 582.95 104,179,630.07 104,180,213.02
(21) Current tax liabilities
Items 30 June 2021 31 December 2020
Value-added tax 133,075,994.19 22,541,925.74
Corporate income tax 180,745,973.41 9,589,798.62
City maintenance and construction tax 16,511,584.41 4,490,656.56
House property tax 3,823,901.19 3,661,600.13
139
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2021
Notes to the financial statements
Items 30 June 2021 31 December 2020
Educational surcharges 11,842,865.16 3,211,296.48
Land use right tax 1,180,402.66 1,180,402.66
Environmental tax 775,068.53 8,398,902.77
Others 2,915,101.45 2,227,498.00
Total 350,870,891.00 55,302,080.96
(22) Other payables
Items 30 June 2021 31 December 2020
Interest payables
Dividends payables 38,753,715.32
Other payables 673,405,372.03 709,448,301.92
Total 712,159,087.35 709,448,301.92
1. Interest Payable
Items 30 June 2021 31 December 2020
Loan interests 38,753,715.32
Total 38,753,715.32
2. Other payables
(1) Other payables disclosed by nature
Items 30 June 2021 31 December 2020
Deposit 2,074,097.73 1,713,563.89
Margin 111,559,681.36 98,316,454.89
Accounts 487,437,063.26 525,775,209.97
Others 72,334,529.68 83,643,073.17
Total 673,405,372.03 709,448,301.92
(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
140
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2021
Notes to the financial statements
Items 30 June 2021 31 December 2020
Long-term loans due within one year 71,011,323.08 1,287,630,361.43
Bond payables due within one year 27,200,000.00 20,400,000.00
Long-term payables due within one year 39,667,032.50 38,898,662.02
Total 137,878,355.58 1,346,929,023.45
Notes: Among the long-term loans due within one year, RMB71,011,323.08 is guaranteed loan.
(24) Other current liabilites
Items 30 June 2021 31 December 2020
Output VAT to be recognized 803,672,323.79 579,627,336.58
Total 803,672,323.79 579,627,336.58
(25) Long-term loans
Items 30 June 2021 31 December 2020
Pledged loans 622,600,000.00 622,600,000.00
Mortgage loan
Guaranteed loans 962,934,418.16 798,714,362.65
Credit loans 2,724,252,523.81 2,081,620,065.00
Total 4,309,786,941.97 3,502,934,427.65
(26) Bond payables
(1) Bonds payables disclosed by category
Items 30 June 2021 31 December 2020
Convertible Bond 5,732,396,546.29 5,752,229,339.52
Total 5,732,396,546.29 5,752,229,339.52
141
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2021
Notes to the financial statements
142
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2021
Notes to the financial statements
(1) Changes in Bonds payables ( Excluding other financial instruments such as preferred stocks and perpetual bonds classified as financial liabilities)
Issue Term to Balance at the end of Interest accrued at Premium and discount Repayment in this Balance at the end of
Items Book value Issuance amount Current issue
date maturity the previous year face value amortization period the current year
Convertible Bond
Jun 29, 2
(Bond 6,800,000,000.00 6 years 6,800,000,000.00 5,752,229,339.52 47,600,000.00 26,884,660.81 40,548,132.42 5,732,396,546.29
020
code:127018)
Total 6,800,000,000.00 6,800,000,000.00 5,752,229,339.52 47,600,000.00 26,884,660.81 40,548,132.42 5,732,396,546.29
Description:
Approved by the China Securities Regulatory Commission "Zheng Jian Xu Ke [2020] No. 46", the Company publicly issued 68 million convertible corporate bonds on June 29,
2020, each with a face value of 100 yuan and a total issuance of RMB 6.8 billion. The term to maturity is 6 years from June 29, 2020 to June 28, 2026. The bond coupon rate is
0.6% in the first year, 0.8% in the second year, 1.5% in the third year, 2.9% in the fourth year, 3.8% in the fifth year, and 5.0% in the sixth year. The interest payment method is
once a year, and the starting date of interest calculation is the first day of issuance of the convertible bond, that is, June 29, 2020. The interest payment date of each year is the
first day of the issuance of convertible bonds (June 29, 2020) on the day of each full year. If that day is a legal holiday or a rest day, it will be postponed to the next working day,
and no interest will be paid during the postponement period. Every two adjacent interest payment dates constitute an interest calculation year.
In the initial measurement of the convertible corporate bonds issued by the Company this time, the fair value of the corresponding liability component after deducting the allocated
issuance expenses is RMB 5,612,624,636.40, which is included in the bonds payable; the fair value of the corresponding equity component after deducting the allocated issuance
cost of the Company is RMB 1,146,290,662.42, which is included in other equity instruments. In the subsequent measurement, the liability part is measured and adjusted by
143
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2021
Notes to the financial statements
amortized cost using the effective interest rate method.
(2) Description of the conditions and time for conversion of convertible corporate bonds
Approved by Shenzhen Stock Exchange "Shen Zheng Shang [2020] No. 656", the Company’s RMB 6.80 billion convertible corporate bonds will be listed on the Shenzhen Stock
Exchange on August 4, 2020, and the abbreviation is "Bengang Convertible Bonds". The bond code is "127018". The conversion period of the convertible corporate bonds issued
this time is from the first trading day after six months of the issuance of the convertible corporate bonds (July 3, 2020) to the maturity date of the convertible corporate bonds,
that is, from January 4, 2021 to June 28, 2026. The initial conversion price of the convertible bonds is RMB 5.03 per share. The conversion price of the convertible bonds is
adjusted to RMB 5.02 per share on July 19,2021.
(3) Notes to other financial instruments classified as financial liabilities
None.
144
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2021
Notes to the financial statements
(27) Lease liabilities
Items 30 June 2021 31 December 2020
Special payables 1,549,600,900.45
Total 1,549,600,900.45
(28) Long-term payables
Items 30 June 2021 31 December 2020
Long-term payables 1,907,492,831.36 1,114,232,362.74
Special payables
Total 1,907,492,831.36 1,114,232,362.74
Long-term payables
Items 30 June 2021 31 December 2020
Financing lease payments 1,907,492,831.36 1,114,232,362.74
In which: Unrealized financing expenses 1,190,601,171.64 779,232,152.85
Total 1,907,492,831.36 1,114,232,362.74
Notes: At the end of the reporting period, the amount of unrealized financing expenses payable for financing leases
is RMB1,190,601,171.64;
The minimum financing lease payment to be paid after the balance sheet date is RMB 1,907,492,831.36:
The company needs to pay interest on time, the principal is a one-off payment after the lease contract
expires, and the lease contract that has not been executed has an expiry date of more than 3 years.
(29) Deferred income
Items 31 December 2020 Increase Decrease 30 June 2021 Reason
Government
154,451,833.23 1,225,520.00 32,210,883.34 123,466,469.89
subsidy
Total 154,451,833.23 1,225,520.00 32,210,883.34 123,466,469.89
145
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2021
Notes to the financial statements
Projects of government subsidies:
Transfer to non- Offsetting
Transfer to other Other Related to assets or
Items 31 December 2020 Increase operating cost or 30 June 2021
income decrease income
income expenses
“Steel for high-strength pipelines under low-
temperature and high-pressure service conditions” 30,677.74 30,677.74 Income
Project national support funds
2018 Municipal Skill Master Workstation Fee 66,616.34 66,616.34 Income
Advanced Treatment Project of Carbon Fiber
Wastewater in Dongfeng Plant Area of Plate Coking 9,500,000.00 950,000.00 8550000 Assets
Plant
Desulfurization and Denitrification Project of Coal-
fired Boiler in High-pressure Workshop of Bengang 3,600,000.00 300000 3,300,000.00 Assets
Power Plant
Research and development of high-strength steel for
2,320,000.00 290,000.00 2,030,000.00 Assets
the third generation of automobiles
7 sets of 130 tons combustion boiler flue gas
9,600,000.00 2,400,000.00 7,200,000.00 Assets
desulfurization project in power plant
Power plant three power plant cogeneration reform
4,000,000.00 1,000,000.00 3,000,000.00 Assets
project
Demonstration project of construction of energy
2,320,000.00 1,160,000.00 1,160,000.00 Assets
management center for industrial enterprises
Research and development of anti-oxidation hot
165,152.27 165,152.27 Income
forming steel PHS1500A
Automatic air quality monitoring system 35,000.00 35,000.00 0 Assets
146
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2021
Notes to the financial statements
Transfer to non- Offsetting
Transfer to other Other Related to assets or
Items 31 December 2020 Increase operating cost or 30 June 2021
income decrease income
income expenses
Cold-rolled high-strength steel reconstruction
100,000,000.00 25,000,000.00 75000000 Assets
project
Liaoning Artisan Subsidy 21.89 21.89 Income
Construction of professional technology innovation
200,000.00 200000 Assets
platform for automobile steel industry
Research on the Influence Mechanism and Control
of Rare Earth Oxide Sulfide on Automobile Steel 184,364.99 24,876.50 159,488.49 Income
Plasticity
Introduce special funds for overseas advanced
applicable technology (progress in production 2,000,000.00 1,000,000.00 1,000,000.00 Assets
technology of high-grade electro-galvanized sheet)
2019 Municipal Skills Master Workstation Cost 180,000.00 21006.84 158993.16 Income
2020 Ecological Civilization Construction Project
20,000,000.00 20,000,000.00 Assets
(Special Steel Electric Furnace Upgrade Project)
Liaoning Province "Hundred, Thousand, Thousand,
250,000.00 30,000.00 220,000.00 Income
Thousand Talents Project" funding project in 2018
Research on the Influence Mechanism and Control
of Rare Earth Oxide Sulfide on Automobile Steel 925520 925,520.00 Income
Plasticity
Provincial master station subsidy 300,000.00 300,000.00 Income
Total 154,451,833.23 1,225,520.00 32,210,883.34 123,466,469.89
147
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2021
Notes to the financial statements
(30) Share capital
Increase/decrease (+ , - )
Items 31 December 2020 Issuing of new Transferred from 30 June 2021
Bonus shares Others Subtotal
share reserves
Capital shares 3,875,371,532.00 9,689,073.00 9,689,073.00 3,885,060,605.00
(31) Other equity instruments
1. Information of other financial instruments such as preferred stocks and perpetual bonds issued at the end of the period
The Company’s other equity instruments at the end of the period are the equity part of convertible corporate bonds. For details, please refer to “Note 5 (26) Bonds payable”.
2. Changes in financial instruments such as preferred stocks and perpetual bonds issued at the end of the period
Notes:
20201231 Increase Decrease 20210630
Items
Number Book value Number Book value Number Book value Number Book value
Convertible corporate bonds 68,000,000.00 1,146,290,662.42 487,432 8,219,782.00 67,512,568 1,138,070,880.42
Total 68,000,000.00 1,146,290,662.42 487,432 8,219,782.00 67,512,568 1,138,070,880.42
Other equity instruments' changes in the current period, explanations of the reasons for the changes, and the basis for related accounting treatments:
As of June 30, 2021, convertible corporate bonds have been partially converted into shares, and the number of shares converted is 487,432
148
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2021
Notes to the financial statements
(32) Capital reserves
Items 31 December 2020 Increase Decrease 30 June 2021
Capital premium over par
12,227,292,378.47 12,227,292,378.47
value
Other capital reserves 115,917,468.82 38,759,518.23 154,676,987.05
Total 12,343,209,847.29 38,759,518.23 12,381,969,365.52
(33) Special Reserves
Items 31 December 2020 Increase Decrease 30 June 2021
Safety production
300,412.14 24,398,347.80 6,368,148.59 18,330,611.35
cost
Total 300,412.14 24,398,347.80 6,368,148.59 18,330,611.35
(34) Surplus Reserves
31 December
Items 1 January 2021 Increase Decrease 30 June 2021
2020
Statutory surplus
961,105,529.85 961,105,529.85 961,105,529.85
reserves
Total 961,105,529.85 961,105,529.85 961,105,529.85
(35) Undistributed Profits
Items Current period Previous period
Before adjustments: undistributed profits at last
2,692,018,405.40 2,307,765,664.62
year-end
Adjustments of the beginning distributed profits
(increase + / decease -)
After adjustments: undistributed profit at this year-
2,692,018,405.40 2,307,765,664.62
beginning
Add: undistributed profit belonging to parent
2,208,798,167.91 384,252,740.78
company
Less: Statutory surplus reserves
Discretionary reserves
149
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2021
Notes to the financial statements
Items Current period Previous period
General risk reserves
Common shares dividend payable 38,753,715.32
Common shares dividend transferred to paid-in
capital
Ending balance of undistributed profits 4,862,062,857.99 2,692,018,405.40
(36) Operating income and operating cost
Current period Previous period
Items
Revenue Cost Revenue Cost
Principal
35,798,649,027.39 32,161,874,843.45 20,470,526,587.62 18,886,384,469.92
business
Other business 2,789,479,184.75 2,430,950,949.27 1,714,010,672.43 1,553,861,892.75
Total 38,588,128,212.14 34,592,825,792.72 22,184,537,260.05 20,440,246,362.67
Details for operating income:
Item Principal business Other business
Classified by business area 35,798,649,027.39 2,789,479,184.75
Including：Domestic 31,875,366,736.04 2,789,479,184.75
Abroad 3,923,282,291.35
Classified by the time of commodity transfer 35,798,649,027.39 2,789,479,184.75
Including: recognize at a certain point in time 35,798,649,027.39 2,789,479,184.75
recognize over a certain period of time
Total 35,798,649,027.39 2,789,479,184.75
(37) Tax and surcharges
Items Current period Previous period
City maintenance and construction tax 76,391,993.56 13,467,815.13
Educational surcharge 54,742,060.36 9,674,693.55
Housing property tax 40,482,761.79 40,089,186.70
Land use right tax 6,848,481.27 6,457,679.78
150
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2021
Notes to the financial statements
Items Current period Previous period
Stamp duty and others 10,152,512.38 5,619,563.86
Environmental tax 52,930,399.36 12,962,357.84
others 7,286.20 127,139.82
Total 241,555,494.92 88,398,436.68
(38) Selling and distribution expenses
Items Current period Previous period
Freight 532,184,917.51
Port surcharges 53,812,369.10
Import and export agency fee 36,480,975.97 30,678,165.54
Salary and benefits 15,027,843.69 12,735,597.76
Others 3,787,047.04 9,404,066.26
Package fee 4,356,803.02 3,578,102.61
Total 59,652,669.72 642,393,218.78
(39) General and administrative expenses
Items Current period Previous period
Salary and benefits 174,030,589.62 134,676,282.75
Repair expense 107,230,408.76 102,044,859.99
Land use right fee 32,611,483.62 32,611,483.62
Depreciation 19,687,001.55 18,573,834.52
Heating fee 16,329,843.40 18,050,334.83
Water resources fee 4,078,271.50 12,470,097.22
Environment protection fee 4,145,377.97 4,414,545.30
Others 30,565,866.81 57,986,878.18
Total 388,678,843.23 380,828,316.41
(40) Research and development expenses
Items Current period Previous period
Depreciation, materials and compensation, etc. 22,504,022.68 20,202,985.20
Total 22,504,022.68 20,202,985.20
151
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2021
Notes to the financial statements
(41) Financial expenses
Items Current period Previous period
Interest expenditure 554,219,518.90 439,861,353.93
Less: Interest income 222,276,204.79 154,882,284.33
Exchange loss -15,432,430.80 45,932,418.60
Others 19,844,815.53 24,125,152.20
Total 336,355,698.84 355,036,640.40
(42) Other income
Items Current period Previous period
Government subsidy 32,210,883.34 37,894,126.40
Others 448,600.00 693,206.00
Total 32,659,483.34 38,587,332.40
(43) Income on investment
Items Current period Previous period
Income on disposal of long-term equity investment by
281,949.15 29,304.00
equity method
Investment income from disposal of trading financial assets
Dividend from holding other equity instruments
Income on bank short-term financial products 1,553,175.04
Total 1,835,124.19 29,304.00
(44) Credit impairment loss
Items Current period Previous period
Loss from bad debts of account receivable 1,870,902.74 3,266,886.62
Loss from bad debts of receivable financing
Loss from bad debts of other receivables 179,075.09 220,896.80
Total 2,049,977.83 3,487,783.42
(45) Asset impairment loss
152
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2021
Notes to the financial statements
Items Current period Previous period
Inventory impairment loss 6,629,442.12 -15,321,598.62
Impairment of fixed assets
Total 6,629,442.12 -15,321,598.62
(46) Assets disposal gains
The amount recognized in
Items Current period Previous period
non-recurring profit
Disposal gains or losses
arising from disposal of fixed 130,675.05 325,651.61 130,675.05
assets not classified for sale
Total 130,675.05 325,651.61 130,675.05
(47) Non-operating income
The amount
Items Current period Previous period recognized in non-
recurring profit
Non-current assets scrapped
717,592.73 302,362.80 717,592.73
gains
Debt restructuring gain 32,800.02
Others 2,555,535.73 805,201.30 2,555,535.73
Total 3,273,128.46 1,140,364.12 3,273,128.46
(48) Non-operating expense
The amount
Items Current period Previous period recognized in non-
recurring profit
Non-current assets scrapped
22,989,643.14 20,035,471.42 22,989,643.14
loss
Total 22,989,643.14 20,035,471.42 22,989,643.14
(49) Income tax expense
1. Income tax expense
153
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2021
Notes to the financial statements
Items Current period Previous period
Income tax payable for the current year 744,822,287.29 12,626,191.22
Adjustment of deferred income tax 2,155,303.16 -3,388,376.14
Total 746,977,590.45 9,237,815.08
2. Accounting profit and income tax expense adjustment process
Items Current period
Total profit 2,970,143,877.88
Income tax expense calculate according to the official or applicable tax rate 742,535,969.47
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
Effect of use of deductible losses of unrecognized deferred tax asset of prior
4,441,620.98
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 746,977,590.45
(50) 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
2,208,798,167.91 254,644,204.33
shareholders of parent company
154
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2021
Notes to the financial statements
Items Current period Previous period
The weighted average number of common shares
3,885,060,605.00 3,875,371,532.00
issued by the company
Basic earnings per share 0.57 0.07
Including: basic earnings per share for continuing
0.57 0.07
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):
Since convertible bonds have caused anti-dilution, diluted earnings per share are disclosed
in accordance with basic earnings per share.
(51) 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 14,619,093.59 16,851,204.08
Interest income 222,276,204.79 154,882,284.33
Special subsidy income 1,225,520.00 1,626,919.00
Non-operating income 1,068,391.65 503,009.25
Others 130,327.27 153,380.34
Total 239,319,537.30 174,016,797.00
2. Cash paid related to other operating activities
Items Current period Previous period
Current accounts, advance for another 179,844,208.53 199,605,380.27
Sales expenses 4,351,842.16 4,545,479.59
Administrative expenses 15,765,954.58 18,446,185.30
Bank charges 2,980,552.81 3,331,343.25
155
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2021
Notes to the financial statements
Items Current period Previous period
Others 437,431.93 360,322.84
Total 203,379,990.00 226,288,711.25
(52) 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 2,223,166,287.43 256,406,850.34
Add: Credit impairment loss 2,049,977.83 3,487,783.42
Asset impairment loss 6,629,442.12 -15,321,598.62
Depreciation of fixed assets and so on 1,165,395,017.14 1,201,263,368.47
Amortization of right of use assets 31,329,731.88
Amortization of oil assets
Amortization of intangible assets 3,283,685.40 3,283,685.40
Long-term deferred expenses
Losses proceeds from disposal of PPE, intangible
assets and other long-term assets (Earnings 22,272,050.41 19,733,108.62
marked“－”)
Scrapped losses from fixed assets (Earnings
marked“－”)
Change in fair value loss (Earnings marked“－”)
Financial expenses (Earnings marked“－”) 336,355,698.84 355,036,640.40
Investment losses (Earnings marked“－”)
Deferred tax assets reduction (Addition
-2,155,303.16 -3,388,376.14
marked“－”)
Deferred tax liabilities increased (Reduction
marked“－”)
Reduction of inventory (Addition marked“－”) 376,719,726.97 -1,885,641,689.91
Operating receivable items reduction (Addition
102,664,138.59 -1,938,821,059.08
marked“－”)
156
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2021
Notes to the financial statements
Items Current period Previous period
Operating payable items increase (Less marked"－
-2,742,794,233.42 1,852,485,580.02
")
Other
Net cash flows generated from operating activities 1,524,916,220.03 -151,475,707.08
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 4,457,454,114.91 11,417,592,663.52
Less: Beginning balance of cash 9,229,417,595.12 13,441,414,988.58
Add: Ending balance of cash equivalents
Less: Opening balance of cash equivalents
The net increase in cash and cash equivalents -4,771,963,480.21 -2,023,822,325.06
2. The structure of cash and cash equivalents
Items 30 June 2021 31 December 2020
1. Cash 4,457,454,114.91 11,417,592,663.52
Including: Cash on hand 6,271.10 7,110.40
Bank deposits available on demand 4,457,447,843.81 11,417,585,553.12
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 4,457,454,114.91 11,417,592,663.52
157
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2021
Notes to the financial statements
Items 30 June 2021 31 December 2020
Including: Cash and cash equivalents limited to use by
the parent company of other subsidiary in the
group
(53) Assets of which ownership or right to use are restricted
Items 30 June 2021 Reason
Cash at bank and on hand 5,053,246,387.76 Deposit for notes and letter of credit
Accounts receivable Pledged for acceptance bill and short term
22,991,847.39
financing loan
Other equity instrument
1,037,735,849.00 Pledged for loans
investments
Fixed assets 94,790,118.09 Mortgaged for loans
Intangible assets 37,116,386.66 Mortgaged for loans
Total 6,245,880,588.90
(54) 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 7,190,592.52
Including: USD 1,011,332.92 6.4601 6,533,311.80
EUR 55,902.49 7.6862 429,677.72
HKD 273,528.43 0.8321 227,603.01
Short-term loans 1,227,419,000.00
Including: USD 190,000,000.00 6.4601 1,227,419,000.00
Non-current liabilities due
37,881,323.08
within one year
Including: JPY 23,176,000.00 0.0658 1,524,980.80
EUR 4,730,080.18 7.6862 36,356,342.28
158
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2021
Notes to the financial statements
Ending balance in Exchange rate at the Ending balance
Items
foreign currency end of the period translated to RMB
Long-term loans 386,965,986.45
Including: USD 14,200,000.00 6.4601 77,320,065.00
EUR 37,635,016.95 7.6862 302,021,017.45
JPY 115,880,000.00 0.0658 7,624,904.00
2. The Company has no overseas operating entities.
159
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2021
Notes to the financial statements
(55) Government subsidy
1. Related to assets
Balance sheet The amount included in the current profit and loss or offset the loss of related costs
Items Amount
presentation items Current period Previous period Items
Advanced Treatment Project of Carbon Fiber
Wastewater in Dongfeng Plant Area of Plate 8,550,000.00 Deferred income 950,000.00 Other income
Coking Plant
Desulfurization and Denitrification Project of
Coal-fired Boiler in High-pressure Workshop 3,300,000.00 Deferred income 300,000.00 300,000.00 Other income
of Bengang Power Plant
Research and development of high-strength
2,030,000.00 Deferred income 290,000.00 Other income
steel for the third generation of automobiles
7 sets of 130 tons combustion boiler flue gas
7,200,000.00 Deferred income 2,400,000.00 2,400,000.00 Other income
desulfurization project in power plant
Power plant three power plant cogeneration
3,000,000.00 Deferred income 1,000,000.00 1,000,000.00 Other income
reform project
Industrial enterprise energy management
1,160,000.00 Deferred income 1,160,000.00 1,160,000.00 Other income
center construction demonstration project
Automatic air quality monitoring system - Deferred income 35,000.00 35,000.00 Other income
Cold-rolled high-strength steel reconstruction
75,000,000.00 Deferred income 25,000,000.00 25,000,000.00 Other income
project
160
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2021
Notes to the financial statements
Balance sheet The amount included in the current profit and loss or offset the loss of related costs
Items Amount
presentation items Current period Previous period Items
Construction of a professional technology
innovation platform for the automotive steel 200,000.00 Deferred income 300,000.00 Other income
industry
Introduce special funds for overseas advanced
applicable technology (progress in production
1,000,000.00 Deferred income 1,000,000.00 1,000,000.00 Other income
technology of high-grade electro-galvanized
sheet)
2020 Ecological Civilization Construction
Project (Special Steel Electric Furnace 20,000,000.00 Deferred income Other income
Upgrade Project)
Bengang Automotive Sheet Engineering
Deferred income 160,206.60 Other income
Laboratory Project
Energy saving and environmental protection
Deferred income 580,000.00 Other income
project for sintering machine in ironworks
Production line of high-grade electro-
Deferred income 4,104,000.00 Other income
galvanized sheet for automobile
Total 121,440,000.00 32,135,000.00 36,039,206.60
2. Related to income
161
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2021
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
“Steel for high-strength pipelines under low-
temperature and high-pressure service conditions” 30,677.74 93,575.00 Other income
Project national support funds
2018 Municipal Skill Master Workstation Fee 66,616.34 120,423.00 Other income
Research and development of anti-oxidation hot
165,152.27 Other income
forming steel PHS1500A
Liaoning artisan subsidy 21.89 14,002.80 Other income
Research on the Influence Mechanism and Control of
Rare Earth Oxide Sulfide on Automobile Steel 159,488.49 24,876.50 Other income
Plasticity
2019 Municipal Skills Master Workstation Cost 158,993.16 21,006.84 Other income
Liaoning Province "Hundred, Thousand, Thousand, Other income
220,000.00 30,000.00
Thousand Talents Project" funding project in 2018
Research on the Influence Mechanism and Control of Other income
Rare Earth Oxide Sulfide on Automobile Steel 925,520.00
Plasticity
Provincial master station subsidy 300,000.00 Other income
Others 693,206.00 Other income
162
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2021
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 2,026,469.89 75,883.34 921,206.80
3. Return of government subsidies during the reporting period
None
.
VIII Equity in other entities
(1) Equity in subsidiaries
1. Constitution of enterprise group
Shareholding ratio
Name of the subsidiaries Principal place of business Registered address Notes of business Acquiring method
Direct Indirect
Xiamen Bengang Steel & Iron Sales Co., Ltd. Xiamen Xiamen Sales 100.00 Business combination und
Wuxi Bengang Steel & Iron Sales Co., Ltd. Wuxi Wuxi Sales 100.00 Business combination und
Tianjin Bengang Steel & Iron Trading Co., Ltd. Tianjin Tianjin Sales 100.00 Business combination und
Nanjing Bengang Materials Sales Co., Ltd. Nanjing Nanjing Sales 100.00 Business combination und
Yantai Bengang Steel & Iron Sales Co., Ltd. Yantai Yantai Sales 100.00 Business combination und
Harbin Bengang Economic and Trading Co., Ltd. Harbin Harbin Sales 100.00 Business combination und
163
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2021
Notes to the financial statements
Shareholding ratio
Name of the subsidiaries Principal place of business Registered address Notes of business Acquiring method
Direct Indirect
Changchun Bengang Steel & Iron Sales Co., Ltd. Changchun Changchun Sales 100.00 Business combination und
Guangzhou Bengang Steel & Iron Trading Co., Ltd. Guangzhou Guangzhou Sales 100.00 Establishment
Shanghai Bengang Metallurgy Science and Technology Co., Ltd. Shanghai Shanghai Sales 100.00 Establishment
Bengang Steel Plates Liaoyang Pellet Co., Ltd. Liaoyang Liaoyang Manufacturing 100.00 Establishment
Dalian Benruitong Automobile Material Technology Co., Ltd. Dalian Dalian Manufacturing 65.00 Establishment
Bengang Posco Cold-rolled Sheet Co., Ltd. Benxi Benxi Manufacturing 75.00 Business combination und
Benxi Bengang Steel Sales Co., Ltd Benxi Benxi Sales 100.00 Establishment
Shenyang Bengang Metallurgical Science and Technology Co.,
Shenyang Shenyang Sales 100.00 Establishment
Ltd.
Chongqing Liaoben Steel & Iron Trading Co., Ltd. Chongqing Chongqing Sales 100.00 Establishment
Bengang Baojin (Shenyang) auto new material technology Co.,
Shenyang Shenyang Manufacturing 85.00 Business combination und
Ltd.
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.
164
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2021
Notes to the financial statements
2. Significant but not wholly-owned subsidiaries
Profits and losses Dividend declared
Proportion of non- Ending
attributing to non- to distribute to non-
Name of the subsidiaries controlling interests balance of non-
controlling controlling
(%) controlling interests
shareholders shareholders
Bengang Posco Cold-rolled Sheet Co., Ltd. 25.00% 15,744,812.00 522,224,787.93
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 2021
Name of the
Non-current Non-current
subsidiaries Current assets Total assets Current liabilities Total liabilities
assets liabilities
Bengang Posco Cold-
1,611,242,660.77 1,255,121,323.33 2,866,363,984.10 777,464,832.39 777,464,832.39
rolled Sheet Co., Ltd.
Name of the
31 December 2020
subsidiaries
Name of the Non-current Non-current
Current assets Total assets Current liabilities Total liabilities
subsidiaries assets liabilities
Bengang Posco Cold-
3,799,519,376.39 1,384,600,108.47 5,184,119,484.86 3,159,583,481.30 3,159,583,481.30
rolled Sheet Co., Ltd.
Current period
Name of the subsidiaries Total comprehensive Net cash flows from
Operating income Net profit
income operating activities
Bengang Posco Cold-rolled Sheet Co.,
5,691,380,556.81 62,979,247.98 62,979,247.98 -138,708,467.08
Ltd.
Name of the subsidiaries Previous period
165
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2021
Notes to the financial statements
Total
Net cash flows from operating
Operating income Net profit comprehensive
activities
income
Bengang Posco Cold-rolled Sheet Co.,
3,483,712,504.36 12,484,509.92 12,484,509.92 389,115,477.57
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.
(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 2021/Current period 31 December 2020/Previous period
Joint ventures:
Total book value of investment: 3,024,013.88 2,742,064.73
The total amount of the following items calculated
according to the shareholding ratio
—Net profit 281,949.15 374,119.86
—Other comprehensive income
—Total comprehensive income 281,949.15 374,119.86
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.
166
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2021
Notes to the financial statements
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.
(5) Equity in structured entities not included in the scope of consolidated financial statements
None.
IX. 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
167
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2021
Notes to the financial statements
of customers, the Company sorts customers into groups by their credit characteristics. Those customers which are rated
as “high risk” will be put in the restricted client list. The Company can only sell to these customers on credit with
additional approval; otherwise the Company must ask for a corresponding deposit in advance.
(2) Market risk
Market risk of financial instruments refers to fluctuations of fair value or future cash flows due to market price changes,
including currency risk, interest rate risk, and other price risk.
1. Interest rate risk
Interest rate risk refers to fluctuations of fair value or future cash flows due to market rate changes. The Company’s
exposure to currency risk is primarily arising from variable-rate bank balances and variable-rate borrowings. Currently,
the Company does not have a specific policy to manage its interest rate risk. The management will carefully choose
financing methods, and combine fixed interest rate with variable interest rate, short-term obligations with long-term
obligations. By using effective interest rate risk management methods, the Company closely monitors interest rate risk
and will consider interest-rate swaps to acquire an expected structure of interest rates shall the need arise.
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 2021
Items
USD Euro HKD Japanese Yen Total
Assets 653.33 42.97 22.76 719.06
Liabilities 130,473.91 33,837.74 914.99 165,226.63
31 December 2020
Items
USD Euro HKD Japanese Yen Total
Assets 46,968.50 40.73 23.02 47,032.25
168
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2021
Notes to the financial statements
31 December 2020
Items
USD Euro HKD Japanese Yen Total
Liabilities 134,771.81 37,793.88 1,025.89 173,591.58
On June 30, 2021, 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 82.2538 million. 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 2021
Items Over 5
Within 1 year 1-2 years 2-5 years Total
years
Trade and other payables 1,421,297.62 94,375.48 1,515,673.10
Loans and interests 850,110.65 22,466.81 307,758.00 2,746.22 1,183,081.68
Total 2,271,408.27 22,466.81 307,758.00 97,121.71 2,698,754.78
(In 10 Thousand Yuan)
169
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2021
Notes to the financial statements
31 December 2020
Items Over 5
Within 1 year 1-2 years 2-5 years Total
years
Trade and other payables 1,643,593.66 111,423.24 1,755,016.90
Loans and interests 1,137,576.14 25,647.04 321,586.21 3,060.20 1,487,869.59
Total 2,781,169.80 25,647.04 321,586.21 114,483.44 3,242,886.49
X. 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
Item Fair value measurement in Fair value measurement in
measurement in the Total
the second level the third level
first 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 instruments
(b) Investment in equity instruments
170
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2021
Notes to the financial statements
Fair value at the end of the period
Fair value
Item Fair value measurement in Fair value measurement in
measurement in the Total
the second level the third level
first level
(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 financing 5,143,627,467.44 5,143,627,46
◆ Other debt investments
◆ Investment in other equity
1,042,024,829.00 1,042,024,82
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 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
171
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2021
Notes to the financial statements
Fair value at the end of the period
Fair value
Item Fair value measurement in Fair value measurement in
measurement in the Total
the second level the third level
first level
(b) Others
Total assets continuously measured
6,185,652,296.44 6,185,652,29
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
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
172
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2021
Notes to the financial statements
Fair value at the end of the period
Fair value
Item Fair value measurement in Fair value measurement in
measurement in the Total
the second level the third level
first level
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, 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
173
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2021
Notes to the financial statements
No
XI. Related Party Transactions
(1) Details of parent company
(In 100 Million Yuan)
Place of Registered Share proportion Voting rights
Name of parent company Notes of Business
Registry capital (%) (%)
Benxi Steel & Iron (Group) Co., Ltd. Benxi Manufacturing 62.92 62.02 62.02
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
Bengang Group Co., Ltd. (Hereinafter referred to as "Bengang Group") Controlling shareholder of parent company.
Bengang Group International Economic and Trading Co., Ltd. Belongs to Bengang Group Co., Ltd.
Bengang Cold-rolled Stainless Steel Dandong Co., Ltd. Same parent company
Benxi Beiying Steel & Iron (Group) Co., Ltd. (Hereinafter referred to as
Belongs to Bengang Group Co., Ltd.
"Beiying Steel")
Bengang Electronics and Gas Co., Ltd. Associate of parent company
Benxi Steel & Iron (Group) Real-estate Development Co., Ltd. Same parent company
Benxi Steel & Iron (Group) Steel & Iron Process and Logistics Co., Ltd. Same parent company
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
174
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2021
Notes to the financial statements
Name of Other related parties Relationship
Benxi Steel & Iron (Group) Thermal Power Development Co., Ltd. Same parent company
Benxi Steel & Iron (Group) Designing Institute Same parent company
Benxi Steel & Iron (Group) Industrial Development Co., Ltd. Same parent company
Benxi Steel & Iron (Group) Information and Automatic Tech Co., Ltd. Same parent company
Benxi Steel & Iron (Group) Construction and Repairing Co., Ltd. Same parent company
Benxi Steel & Iron (Group) Metallurgy Residues Co., Ltd. Same parent company
Benxi Iron and Steel (Group) Engineering Construction Supervision Co., Ltd. Same parent company
Benxi Steel & Iron (Group) Zhengtai Construction Materials Co., Ltd. Same parent company
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.
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 Co., Ltd. Same parent company
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 party
Name Current period Previous period
transactions
Benxi Steel & Iron (Group) Co., Ltd. Repair expense 14,746.00 15,947.21
Benxi Steel & Iron (Group) Co., Ltd. Land lease fee 3,261.15 3261.15
Bengang Cold-rolled Stainless Steel Dandong Co.,
Products 63.05 7.95
Ltd.
175
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2021
Notes to the financial statements
The content of related party
Name Current period Previous period
transactions
Benxi Steel & Iron (Group) Mining Co., Ltd. Labor cost 388.19 361.1
Raw material and
Benxi Steel & Iron (Group) Mining Co., Ltd. 333,109.30 280,270.14
supplementary material
Benxi Steel & Iron (Group) Mining Co., Ltd. Freight 665.90 87.47
Benxi Steel & Iron (Group) Metallurgy Residues Co., Raw material and
24,576.01 14,869.84
Ltd. supplementary material
Benxi Steel & Iron (Group) Steel & Iron Process and
Processing fee 5.08 23.81
Logistics Co., Ltd.
Benxi Steel & Iron (Group) Machinery Manufacture
Spare parts 1491.71 2,296.73
Co., Ltd.
Benxi Steel & Iron (Group) Machinery Manufacture
Repair services 292.32 330.54
Co., Ltd.
Benxi Steel & Iron (Group) Construction Co., Ltd. Spare parts 198.76 19.75
Benxi Steel & Iron (Group) Construction Co., Ltd. Project fee 14,057.74 7490.59
Benxi Steel & Iron (Group) Construction Co., Ltd. Repair services 4,168.26 3,660.09
Raw material and
Benxi Steel & Iron (Group) Construction Co., Ltd. 375.59 367.31
supplementary material
Benxi Steel & Iron (Group) Construction Co., Ltd. Freight 87.45 87.94
Benxi Steel & Iron (Group) Industrial Development
Spare parts 2693.64 2568.9
Co., Ltd.
Benxi Steel & Iron (Group) Industrial Development Raw material and
1,567.13 5,906.02
Co., Ltd. supplementary material
Benxi Steel & Iron (Group) Industrial Development
Repair services 18.90 790.53
Co., Ltd.
Benxi Steel & Iron (Group) Industrial Development
Freight 191.68 188.69
Co., Ltd.
Benxi Steel & Iron (Group) Industrial Development
Project fee 360.29 332
Co., Ltd.
Benxi Steel & Iron (Group) Construction and Raw material & supplementary
62.83 128.19
Repairing Co., Ltd. materials & spare parts
Benxi Steel & Iron (Group) Construction and
Project fee 370.74 2,992.87
Repairing Co., Ltd.
Benxi Steel & Iron (Group) Construction and
Repair expense 255.59 2,673.04
Repairing Co., Ltd.
Raw material and
Bengang Electronics and Gas Co., Ltd. 7,365.37 6,886.40
supplementary material
Bengang Electronics and Gas Co., Ltd. Repair services 220.68 1,168.35
Benxi High-tech Drilling Tools Manufacture Co.,
Spare parts 7.96 6.22
Ltd.
Benxi New Career Development Co., Ltd. #N/A 3.01 22.45
176
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2021
Notes to the financial statements
The content of related party
Name Current period Previous period
transactions
Raw material and
Benxi New Career Development Co., Ltd. supplementary material and 113.40 107.92
food
Liaoning Metallurgy Technician College Spare parts 126.16 117.57
Bengang Group International Economic and Trading Raw material and
846115.86 0
Co., Ltd. supplementary material
Bengang Group International Economic and Trading
Agency fee 3648.1 3067.82
Co., Ltd.
Bengang Group International Economic and Trading
Port surcharges 10,544.71 5381.24
Co., Ltd.
Benxi Steel & Iron (Group) Information and
Spare parts 93.14 285.13
Automatic Tech Co., Ltd.
Benxi Steel & Iron (Group) Information and
Project fee 236.53 1,368.24
Automatic Tech Co., Ltd.
Benxi Steel & Iron (Group) Thermal Power
Heating costs 9.18 18.98
Development Co., Ltd.
Benxi Steel & Iron (Group) Thermal Power Raw material and
2.02 55.00
Development Co., Ltd. supplementary material
Benxi Steel & Iron (Group) Designing Institute Design fees 40.96 28.77
Raw material and
Benxi Beiying Steel & Iron (Group) Co., Ltd. 140619.89 466858.5
supplementary material
Benxi Beiying Steel & Iron (Group) Co., Ltd. Energy & Power 24890.63 21856.41
Benxi Beiying Steel & Iron (Group) Co., Ltd. Freight 226.54 166.79
Benxi Beiying Steel & Iron (Group) Co., Ltd. Labor cost 4,041.85 2,016.35
Benxi Beiying Steel & Iron (Group) Co., Ltd. Spare parts 1,154.83 897.66
Liaoning Hengtong Metallurgical Equipment
Raw material and spare parts 3481.53 5120.05
Manufacture Co., Ltd.
Liaoning Hengtong Metallurgical Equipment
Repair services 66.93 0.00
Manufacture Co., Ltd.
Liaoning Hengtai Heavy Machinery Co., Ltd. Raw material and spare parts 70.79 43.48
Liaoning Hengtai Heavy Machinery Co., Ltd. Repair services 425.44 509.57
Bengang Group Co., Ltd. Labor cost 8793.34 0
Bengang Group Co., Ltd. House Rental fee 37.61 37.61
Total 1,455,343.77 860,682.37
Company as the seller
(In 10 Thousand Yuan)
177
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2021
Notes to the financial statements
The content of related party
Name Current period Previous period
transactions
Bengang Electronics and Gas Co., Ltd. Energy & Power 39.46 38.10
Raw material & supplementary
Benxi Beiying Steel & Iron (Group) Co., Ltd. 166,327.67 135,340.23
materials & spare parts
Benxi Beiying Steel & Iron (Group) Co., Ltd. Products 1,150.49 1,271.42
Benxi Beiying Steel & Iron (Group) Co., Ltd. Energy & Power 6,461.23 6,882.65
Benxi Steel & Iron (Group) Real-estate Development
Energy & Power 0.94 6.25
Co., Ltd.
Benxi Steel & Iron (Group) Steel & Iron Process and
Energy & Power 0.46 20.39
Logistics Co., Ltd.
Benxi Steel & Iron (Group) Machinery Manufacture
Products 445.96 1,014.55
Co., Ltd.
Benxi Steel & Iron (Group) Machinery Manufacture
Energy & Power 1,086.20 1,216.43
Co., Ltd.
Benxi Steel & Iron (Group) Machinery Manufacture Raw material & supplementary
16.41 139.52
Co., Ltd. materials & spare parts
Benxi Steel & Iron (Group) Construction Co., Ltd. Energy & Power 377.58 335.07
Raw material & supplementary
Benxi Steel & Iron (Group) Construction Co., Ltd. 171.46 15.12
materials & spare parts
Benxi Steel & Iron (Group) Mining Co., Ltd. Energy & Power 33,426.91 33,585.45
Raw material & supplementary
Benxi Steel & Iron (Group) Mining Co., Ltd. 5,312.62 512.75
materials & spare parts
Benxi Steel & Iron (Group) Mining Co., Ltd. Freight revenue 339.29 497.33
Benxi Steel & Iron (Group) Thermal Power
Energy & Power 3,649.48 2,264.65
Development Co., Ltd.
Benxi Steel & Iron (Group) Thermal Power Raw material & supplementary
893.57 682.22
Development Co., Ltd. materials & spare parts
Benxi Steel & Iron (Group) Industrial Development
Energy & Power 413.68 409.62
Co., Ltd.
Benxi Steel & Iron (Group) Industrial Development
Products 501.34 912.10
Co., Ltd.
Benxi Steel & Iron (Group) Industrial Development Raw material & supplementary
660.84 936.70
Co., Ltd. materials & spare parts
Benxi Steel & Iron (Group) Information and
Energy & Power 5.23 11.69
Automatic Tech Co., Ltd.
Benxi Steel & Iron (Group) Construction and
Energy & Power 59.55 66.60
Repairing Co., Ltd.
Benxi Steel & Iron (Group) Metallurgy Residues Co.,
Energy & Power 103.98 105.91
Ltd.
Benxi Steel & Iron (Group) Metallurgy Residues Co., Raw material & supplementary
22,587.81 13,364.82
Ltd. materials & spare parts
178
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2021
Notes to the financial statements
The content of related party
Name Current period Previous period
transactions
Benxi Steel & Iron (Group) Co., Ltd. Energy & Power 263.06 430.55
Raw material & supplementary
Benxi Steel & Iron (Group) Co., Ltd. 346.98 308.79
materials & spare parts
Benxi New Career Development Co., Ltd. Energy & Power 11.63 381.86
Dalian Boluole Steel Tube Co., Ltd. Products 655.60 279.34
Benxi Steel & Iron (Group) General Hospital Energy & Power - 1.06
Benxi Steel & Iron (Group) Zhengtai Construction
Energy & Power 1.31 3.20
Materials Co., Ltd.
Liaoning Hengtong Metallurgical Equipment Raw material & supplementary
35.59 493.65
Manufacture Co., Ltd. materials & spare parts
Bengang Cold-rolled Stainless Steel Dandong Co.,
Products 295.41 736.33
Ltd.
Suzhou Bengang Industrial Co., Ltd. Products 38,315.21 19,082.32
Bengang Group Finance Co., Ltd. Energy & Power 0.65 0.65
Bengang Group Co., Ltd. Energy & Power 61.46 8.82
Raw material & supplementary
Bengang Group Co., Ltd. 240,324.13 221,356.12
materials & spare parts
Liaoning Hengtai Heavy Machinery Co., Ltd. Products 17.43 -
524,360.62 442,712.26
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
Lease capital Lease income of current Lease income of previous
Lessee
category period period
Benxi Steel & Iron (Group) Steel & Iron Process Warehouse and
250,000.00 250,000.00
and Logistics Co., Ltd. machinery
Company as the lessee
179
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2021
Notes to the financial statements
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 square meter
Benxi Steel & Iron (Group) Co., Ltd. 28,691,677.66 28,691,677.66
Land use right
42,920.00 square meter
2300 Hot rolling product line,
Benxi Steel & Iron (Group) Co., Ltd. 8,355,712.17 8,355,712.17
related real estate
1780 Hot rolling product line,
Benxi Beiying Steel & Iron (Group) Co., Ltd. 7,789,338.83 5,002,327.68
related real estate
Land use right
Bengang Group Co., Ltd. 4,972,711.54 4,972,711.56
728,282.30 square meter
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.
3. On July 15, 2019, the company signed "Land Lease Agreement" with Bengang Group and 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.
Finance lease:
During the reporting period, the company leased machinery and equipment from Liaoning Hengyi Finance Leasing Co., Ltd.
in the form of finance lease. From January to June 2021, the purchase amount is RMB 667,085,164.5, and the amount of
interest and commission is RMB 11,763,370.53 (The aforementioned amounts are tax included.)
180
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2021
Notes to the financial statements
3. Information of Guarantee among related parties
(1) Company as the warrantee
Guarantee of loans:
Has the
Starting date of Ending date of
Warrantor Amount of guarantee guarantee
Guarantee Guarantee
been fulfilled
Bengang Group Co., Ltd. CNY 15,000,000,000.00 2020/8/13 2022/8/12 No
Bengang Group Co., Ltd. CNY 500,000,000.00 2020/6/19 2021/6/18 No
Bengang Group Co., Ltd. CNY 310,000,000.00 2020/5/26 2021/5/25 No
Bengang Group Co., Ltd. CNY 670,000,000.00 2020/5/26 2021/5/25 No
Bengang Group Co., Ltd. CNY 400,000,000.00 2020/10/20 2021/10/19 No
Bengang Group Co., Ltd. CNY 1,280,000,000.00 2020/11/5 2021/11/4 No
Bengang Group Co., Ltd. CNY 400,000,000.00 2020/10/28 2021/10/27 No
Bengang Group Co., Ltd. CNY 1,800,000,000.00 2020/12/1 2021/12/1 No
Bengang Group Co., Ltd. CNY 6,024,000,000.00 2020/3/17 2021/3/17 No
Benxi Steel & Iron (Group) Co., Ltd. CNY 5,024,000,000.00 2020/11/4 2021/11/4 No
Bengang Steel Plates Co., Ltd CNY 250,000.00 2020/5/25 2021/5/25 No
Bengang Steel Plates Co., Ltd CNY 490,000.00 2020/8/20 2021/8/20 No
Bengang Steel Plates Co., Ltd CNY 200,000,000.00 2020/12/24 2021/12/24 No
Bengang Group Co., Ltd. and Benxi
CNY 70,000,000.00 2016/3/30 2025/3/20 No
Steel & Iron (Group) Co., Ltd.
Bengang Group Co., Ltd. and Benxi
CNY 430,000,000.00 2017/2/27 2025/2/20 No
Steel & Iron (Group) Co., Ltd.
Bengang Group Co., Ltd. CNY 622,600,000.00 2017/12/15 2024/8/20 No
Bengang Group Co., Ltd. CNY 87,280,000.00 2018/3/26 2024/6/21 No
Bengang Group Co., Ltd. CNY 24,620,000.00 2017/11/15 2021/12/21 No
Bengang Group Co., Ltd. CNY 30,560,000.00 2015/6/25 2021/9/21 No
Bengang Group Co., Ltd. CNY 24,000,000.00 2015/12/9 2022/3/21 No
Bengang Group Co., Ltd. EUR 166,579.87 2015/6/25 2025/9/30 No
Bengang Group Co., Ltd. EUR 5,691,165.00 2015/8/20 2025/9/30 No
Bengang Group Co., Ltd. EUR 407,161.22 2015/6/25 2026/4/30 No
Bengang Group Co., Ltd. EUR 4,984,751.64 2015/12/28 2026/4/30 No
181
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2021
Notes to the financial statements
Has the
Starting date of Ending date of
Warrantor Amount of guarantee guarantee
Guarantee Guarantee
been fulfilled
Bengang Group Co., Ltd. EUR 2,077,667.88 2016/12/14 2026/4/30 No
Bengang Group Co., Ltd. EUR 6,162.48 2015/6/25 2026/4/30 No
Bengang Group Co., Ltd. EUR 4,069.11 2015/12/28 2026/4/30 No
Bengang Group Co., Ltd. EUR 779,734.95 2017/6/30 2025/10/31 No
Bengang Group Co., Ltd. EUR 2,733,223.28 2016/6/27 2020/4/30 No
Bengang Group Co., Ltd. EUR 334,941.21 2015/6/25 2025/6/30 No
Bengang Group Co., Ltd. EUR 9,577,728.02 2015/6/25 2025/6/30 No
Bengang Group Co., Ltd. EUR 294,013.70 2015/12/28 2025/6/30 No
Bengang Group Co., Ltd. EUR 7,585,942.33 2015/6/25 2025/10/31 No
Bengang Group Co., Ltd. EUR 3,271,319.20 2015/12/28 2025/10/31 No
Bengang Group Co., Ltd. EUR 8,390,619.39 2015/6/25 2025/8/31 No
Bengang Group Co., Ltd. EUR 180,800.00 2015/12/28 2025/8/31 No
Bengang Group Co., Ltd. EUR 609,296.41 2015/6/25 2025/8/31 No
Bengang Group Co., Ltd. JPY 162,232,000.00 1997/10/10 2027/9/10 No
Benxi Steel & Iron (Group) Co., Ltd. CNY 12,000,000,000.00 2019/3/16 2021/9/3 No
Bengang Group Co., Ltd. CNY 740,000,000.00 2021/1/8 2022/1/8 No
4. Assets sale and debt restructuring with related party
Transaction in Transaction in previous
Name of related party Content of transaction
current period period
Benxi Steel & Iron (Group) Co.,
Purchase of 2300 hot rolling mill production line 3,004,988,590.00
Ltd.
Benxi Beiying Iron and Steel
Purchase of 1780 hot rolling mill production line 684,727,905.00
(Group) Co., Ltd.
5. Other related party transactions
(1) Loan from and deposits in Bengang Group Finance Co., Ltd.
(In 10 Thousand Yuan)
Item Beginning balance Increase Decrease Ending balance Notes
Deposits 1,332,199.78 8,587,031.95 9,061,766.57 857,465.16
1. The interests of deposits in Bengang Group Finance Co., Ltd. is RMB 186,359 thousand from January to
182
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2021
Notes to the financial statements
June in 2021. As at 30 June 2021, the interest receivable from Bengang Group Finance Co., Ltd. is RMB
51,637.7 thousand.
2. As at 30 June 2021, the restricted deposits in Bengang Group Finance Co., Ltd. is RMB 427,389.00 thousand.
3. From January to June in 2021, 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 2021. As at 30 June 2021, the amount of acceptance bill opened by Bengang Group Finance
Co., Ltd. was RMB 0.27 billion, and the amount of the acceptance bill that had been opened and unpaid by
Bengang Group Finance Co., Ltd. is RMB0.72 billion, and the proportion of deposit is 100%.
(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 1,753,437.50 during the current period, and as at 30 June 2021, the interest that has not
been paid is RMB 1,753,437.50.
(6) Receivables and payables of the related parties
1. Receivables of the Company
(in 10 thousand yuan)
30 June 2021 31 December 2020
Items Name Name Gross carrying Provision for Gross carrying Provision for
amount bad debts amount bad debts
Accounts receivable Benxi Beiying Steel & Iron
3,601.27 230,217.55
financing (Group) Co., Ltd.
Accounts receivable Benxi Steel & Iron (Group) Co.,
81.99
financing Ltd.
Accounts receivable Benxi Steel & Iron (Group)
financing Thermal Power Development 1,400.00
Co., Ltd.
Bengang Group International
Accounts receivable 9,081.23 90.81 10,463.45 104.63
Economic and Trading Co., Ltd.
183
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2021
Notes to the financial statements
30 June 2021 31 December 2020
Items Name Name Gross carrying Provision for Gross carrying Provision for
amount bad debts amount bad debts
Benxi Steel & Iron (Group)
Accounts receivable Thermal Power Development 2,301.66 23.02 2,692.94 26.93
Co., Ltd.
Accounts receivable Bengang Cold-rolled Stainless
129.47 1.88 188.46 1.88
Steel Dandong Co., Ltd.
Accounts receivable Benxi Steel & Iron (Group)
0.10
Metallurgy Residues Co., Ltd.
Accounts receivable Benxi Steel & Iron (Group)
Machinery Manufacture Co.,
Ltd.
Prepayments Bengang Group International
137,173.06 114,662.12
Economic and Trading Co., Ltd.
Prepayments Benxi Steel & Iron (Group)
Machinery Manufacture Co., 6,470.61
Ltd.
Prepayments Benxi Beiying Steel & Iron
(Group) Co., Ltd.
Other receivables Bengang Group International
592.61 601.21
Economic and Trading Co., Ltd.
Other receivables Benxi Steel & Iron (Group)
Real-estate Development Co., 312.56 253.84 278.31 253.84
Ltd.
Other receivables Benxi Steel & Iron (Group)
Zhengtai Construction Materials 29.36 19.96 27.05 19.96
Co., Ltd.
Other receivables Liaoning Metallurgy Technician
6.30 0.06 5.80 5.80
College
Other receivables Benxi Steel & Iron (Group)
Medical Services Department;
184
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2021
Notes to the financial statements
30 June 2021 31 December 2020
Items Name Name Gross carrying Provision for Gross carrying Provision for
amount bad debts amount bad debts
Other receivables Benxi Steel & Iron (Group)
Industrial Development Co.,
Ltd.
Liaoning Hengyi Financial
Other non-current assets 81,046.11 - 86,459.06 -
Leasing Co., Ltd.
2. Payables of the Company
(in 10 thousand yuan)
Items Name 30 June 2021 31 December 2020
Bengang Group International Economic and Trading
Notes payable 217,045.35 345,103.76
Co., Ltd.
Notes payable Benxi Steel & Iron (Group) Mining Co., Ltd. 153,644.04 91,857.00
Notes payable Bengang Electronics and Gas Co., Ltd. 6,414.33
Benxi Steel & Iron (Group) Industrial Development Co.,
Notes payable 2,036.01 5,253.76
Ltd.
Notes payable Liaoning Hengyi Financial Leasing Co., Ltd. 1,185.05 4,602.43
Liaoning Hengtong Metallurgical Equipment
Notes payable 868.28
Manufacture Co., Ltd.
Benxi Steel & Iron (Group) Machinery Manufacture Co.,
Notes payable 345.00 255.94
Ltd.
Notes payable Liaoning Metallurgy Technician College 133.27
Notes payable Liaoning Hengtai Heavy Machinery Co., Ltd. 77.82 84.78
Notes payable Liaoning Metallurgy Vocational Technical College 47.90
Benxi Steel & Iron (Group) Metallurgy Residues Co.,
Notes payable 144.11 16.62
Ltd.
Benxi Steel & Iron (Group) Information and Automatic
Notes payable 1,222.32
Tech Co., Ltd.
Benxi Steel & Iron (Group) Construction and Repairing Co
Notes payable 106.53
Ltd.
Notes payable Benxi Steel & Iron (Group) Construction Co., Ltd. 658.19
185
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2021
Notes to the financial statements
Items Name 30 June 2021 31 December 2020
Notes payable Benxi Steel & Iron (Group) Co., Ltd. 15,691.17
Liaoning Hengtong Metallurgical Equipment
Notes payable 633.49
Manufacture Co., Ltd.
Accounts payable Benxi Steel & Iron (Group) Mining Co., Ltd. 22,670.45 20,807.68
Accounts payable Liaoning Hengyi Financial Leasing Co., Ltd. 5,552.06 5,799.10
Benxi Steel & Iron (Group) Construction and Repairing
Accounts payable 6,166.19 5,182.75
Co., Ltd.
Accounts payable Benxi Beiying Steel & Iron (Group) Co., Ltd. 4,025.98 3,172.95
Accounts payable Benxi Steel & Iron (Group) Construction Co., Ltd. 2,882.30 2,394.63
Accounts payable Liaoning Hengtai Heavy Machinery Co., Ltd. 2,579.28 2,171.25
Benxi Steel & Iron (Group) Information and Automatic
Accounts payable 2,216.19 1,852.50
Tech Co., Ltd.
Benxi Steel & Iron (Group) Metallurgy Residues Co.,
Accounts payable 1,907.79 1,645.14
Ltd.
Accounts payable Bengang Electronics and Gas Co., Ltd. 1,869.76 1,500.74
Accounts payable Liaoning Metallurgy Technician College 1,709.09 1,388.84
Liaoning Hengtong Metallurgical Equipment
Accounts payable 1,464.80 1,297.91
Manufacture Co., Ltd.
Accounts payable Bengang Group Co., Ltd. 1,399.75 1,246.38
Benxi Steel & Iron (Group) Machinery Manufacture Co.,
Accounts payable 1,046.84 964.33
Ltd.
Accounts payable Liaoning Metallurgy Vocational Technical College 810.77 746.81
Accounts payable Bengang Cold-rolled Stainless Steel Dandong Co., Ltd. 730.99 616.72
Bengang Group International Economic and Trading
Accounts payable 671.63 579.53
Co., Ltd.
Accounts payable Benxi New Career Development Co., Ltd. 452.56 415.37
Benxi Steel & Iron (Group) Industrial Development Co.,
Accounts payable 438.57 385.20
Ltd.
Benxi Steel & Iron (Group) Thermal Power
Accounts payable 212.64 178.73
Development Co., Ltd.
186
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2021
Notes to the financial statements
Items Name 30 June 2021 31 December 2020
Benxi Iron and Steel (Group) Engineering Construction
Accounts payable 83.12 65.51
Supervision Co., Ltd.
Benxi Steel & Iron (Group) Real-estate Development
Accounts payable 74.05 61.52
Co., Ltd.
Accounts payable Benxi High-tech Drilling Tools Manufacture Co., Ltd. 45.85 38.60
Benxi Steel & Iron (Group) Zhengtai Construction
Accounts payable 0.28 0.24
Materials Co., Ltd.
Contract liabilities Suzhou Bengang Industrial Co., Ltd. 4,621.73 5,374.03
Contract liabilities Dalian Boluole Steel Tube Co., Ltd. 120.02 181.60
Contract liabilities Benxi Steel & Iron (Group) Metallurgy Residues Co.,
182.45 161.66
Ltd.
Contract liabilities Benxi Steel & Iron (Group) Industrial Development Co.,
62.63 55.77
Ltd.
Liaoning Hengtong Metallurgical Equipment
Contract liabilities 57.33 52.81
Manufacture Co., Ltd.
Bengang Group International Economic and Trading
Contract liabilities 47.44 43.70
Co., Ltd.
Other payables Benxi Steel & Iron (Group) Co., Ltd. 15,082.08 13,013.80
Benxi Steel & Iron (Group) Steel & Iron Process and
Other payables 1,831.67 1,681.17
Logistics Co., Ltd.
Bengang Group International Economic and Trading
Other payables 1,454.91 1,277.85
Co., Ltd.
Benxi Steel & Iron (Group) Thermal Power
Other payables 668.32 561.73
Development Co., Ltd.
Other payables Benxi Steel & Iron (Group) Construction Co., Ltd. 553.54 436.25
Other payables Guangzhou Free Trade Zone Bengang Sales Co., Ltd. 321.91 267.44
Other payables Liaoning Hengyi Financial Leasing Co., Ltd. 247.80 208.60
Other payables Benxi New Career Development Co., Ltd. 236.40 197.61
Benxi Steel & Iron (Group) Real-estate Development
Other payables 166.51 143.59
Co., Ltd.
187
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2021
Notes to the financial statements
Items Name 30 June 2021 31 December 2020
Benxi Steel & Iron (Group) Industrial Development Co.,
Other payables 39.03 31.33
Ltd.
Other payables Liaoning Metallurgy Technician College 1.65 1.34
Benxi Steel & Iron (Group) Machinery Manufacture Co.,
Other payables 1.14 1.01
Ltd.
Other payables Bengang Group Finance Co., Ltd. 0.27 0.98
Long-term payables Liaoning Hengyi Financial Leasing Co., Ltd. 190,749.28 111,423.24
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.
2. Irrevocable letter of credit
As at June 30, 2021, the amount of irrevocable letter of credit that was not fulfilled is RMB 1.338 billion.
188
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2021
Notes to the financial statements
(2) Contingencies
At the balance sheet date, no significant contingencies need to be disclosed.
12. Subsequent events
(1) Important non-adjustment matters
None
(2) Profit distribution
On April 26, 2021, the seventeenth meeting of the eighth board of directors of the company passed
the 2020 dividend distribution plan. It is planned to use the total share capital of 3,875,371,532
shares at the end of 2020 as the base, and distribute a cash dividend of 0.1 yuan to all shareholders
for every 10 shares (including tax), a total of 38,753,715.32 yuan of cash dividends will be
distributed. This distribution will not be converted from capital reserves to share capital. The above
profit distribution plan has been implemented on July 19.
Profit or dividend to
On August 26, 2021, the 20th meeting of the 8th Board of Directors of the company passed the 2021
be distributed
interim dividend distribution plan. It is planned to use the total share capital of 3,885,060,605 shares
at the end of June 2021 as the base, and distribute cash dividends to all shareholders for every 10
shares. 5 yuan (including tax), a total of 1,942,530,302.5 yuan in cash dividends will be distributed.
In this distribution, the capital reserve will not be converted into share capital. After the company’s
profit distribution plan is announced and before its implementation, if the company’s share capital
changes, adjustments will be made in accordance with the principle that the total amount of the
distribution does not change.
(3) Sales Return
Not applicable.
(4) Divided into assets held for sale and disposal portfolio
Not applicable.
(5) Other subsequent events
Not applicable.
13. Other significant events
(1) Correction of previous accounting errors
None.
189
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2021
Notes to the financial statements
(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.
2. Shares pledged by the Controlling Shareholders
As at 30 June 2021, the total 2,409,628,094 shares were held by the controlling shareholder Benxi Steel & Iron (Group)
Co., Ltd., of which 1,577,545,000 shares were pledged and 108,326,179 shares were frozen.
3. Major strategic restructuring of indirect controlling shareholders
The company received a notice from Bengang Group, the controlling shareholder of the parent company, and learned
that Ansteel Group Co., Ltd. is planning to reorganize the Bengang Group, which may lead to changes in the company's
control. Obtain the approval of relevant departments.
On August 18, 2021, the State-owned Assets Supervision and Administration Commission of the State Council and the
People's Government of Liaoning Province jointly issued a notice agreeing that Ansteel Group Co., Ltd. will reorganize
Bengang Group Co., Ltd., and the Liaoning Provincial State-owned Assets Supervision and Administration Commission
will transfer 51% equity of Bengang Group to Ansteel Group for free. The transfer still needs to perform the necessary
procedures, and there is still uncertainty about whether the relevant approval can be obtained and whether the transfer
can be implemented smoothly.
190
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2021
Notes to the financial statements
On August 20, 2021, the State-owned Assets Supervision and Administration Commission of the People’s Government
of Liaoning Province, which holds 80% of the company’s indirect controlling shareholder Bengang Group Co., Ltd., and
the State-owned Assets Supervision and Administration Commission of the State Council, which hold 100% share of
Ansteel Group Co., Ltd., made an agreement: "agreement on the Gratuitous Transfer of State-owned Equity of Bengang
Group Co., Ltd. between the State-owned Assets Supervision and Administration Commission of the People's
Government of Liaoning Province and Ansteel Group Co., Ltd.". According to the agreement, the State-owned Assets
Supervision and Administration Commission of Liaoning Province will transfer its 51% stake in Bengang Group to
Ansteel Group for free. After the completion of this transfer, Ansteel Group will become the controlling shareholder of
Bengang Group. Ansteel Group indirectly controls 81.08% of the company’s shares through Bengang Group, Benxi Iron
and Steel (Group) Co., Ltd. and Ansteel Group Capital Holding Co., Ltd. The direct controlling shareholder of the
company remains unchanged, still Benxi Iron & Steel (Group) Co., Ltd., and the actual controller of the company is
changed to the State-owned Assets Supervision and Administration Commission of the State Council.
XII. Notes to the Financial Statements of Parent Company
(1) Accounts receivable
1. Accounts receivable disclosed by aging
Items 30 June 2021 31 December 2020
Within 1 year (inclusive) 242,295,140.93 283,561,303.90
1-2 years (inclusive) 2,368,098.28 2,420,511.80
2-3 years (inclusive) 6,457,890.55 6,500,255.55
Over 3 years 175,437,393.38 177,111,797.34
Sub-total 426,558,523.14 469,593,868.59
Less: Provision for bad debts 177,857,503.65 179,728,406.39
Total: 248,701,019.49 289,865,462.20
2. Accounts receivable disclosed by category
30 June 2021
Gross carrying amount Provision for bad debts
Items
Bad debts Book value
Amount Percentage (%) Amount
ratio (%)
Individually significant
and tested for 47,762,337.18 11.20 47,762,337.18 100
impairment
191
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2021
Notes to the financial statements
30 June 2021
Gross carrying amount Provision for bad debts
Items
Bad debts Book value
Amount Percentage (%) Amount
ratio (%)
individually
Accounts receivable
tested for impairment 378,796,185.96 88.80 130,095,166.47 31.28 248,701,019.49
by portfolio
Include:
Portfolio 1: Aging 225,673,278.40 52.90 130,095,166.47 53.71 95,578,111.93
Portfolio 2: Related
party within 153,122,907.56 35.90 153,122,907.56
consolidation scope
Total 426,558,523.14 100.00 177,857,503.65 248,701,019.49
31 December 2020
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 10.17 47,762,337.18 100
individually
Accounts receivable tested
421,831,531.41 89.83 131,966,069.21 31.28 289,865,462.20
for impairment by portfolio
Include:
Portfolio 1: Aging 245,720,903.60 52.33 131,966,069.21 53.71 113,754,834.39
Portfolio 2: Related party
176,110,627.81 37.5 176,110,627.81
within consolidation scope
Total 469,593,868.59 100.00 179,728,406.39 289,865,462.20
Receivables individually insignificant but tested for impairment individually:
192
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2021
Notes to the financial statements
30 June 2021
Items Provision for bad Bad debts
Accounts receivable Reason
debts ratio（%）
Benxi Nanfen Xinhe Metallurgical Benxi Nanfen Xinhe has
47,762,337.18 47,762,337.18 100.00
Co., Ltd. ceased operation.
Total 47,762,337.18 47,762,337.18
Accounts receivable tested for impairment by portfolio
Portfolio tested by aging
30 June 2021
Items
Gross carrying amount Provision for bad debts Bad debts ratio (%)
Within 1 year 89,172,233.37 891,722.33 1.00
1-2 years 2,368,098.28 236,809.83 10.00
2-3 years 6,457,890.55 1,291,578.11 20.00
Over 3 years 127,675,056.20 127,675,056.20 100.00
Total 225,673,278.40 130,095,166.47
3. Information of provision, reversal or recovery of bad debts of current period.
The reversal of bad debts of current period is RMB 1,870,902.74.
4. No accounts receivable has been written off this year.
5. Top five debtors at the end of the period
30 June 2021
Company Percentage of total accounts Provision for
Amount
receivable (%) bad debts
No.1 153,122,907.56 35.90
No.2 55,439,913.76 13.00 554,399.14
No.3 47,762,337.18 11.20 47,762,337.18
No.4 26,597,899.13 6.24 269,294.00
No.5 8,719,094.48 2.04 9,008,967.00
Total 291,642,152.11 68.37 57,594,997.32
193
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2021
Notes to the financial statements
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
Items 30 June 2021 31 December 2020
Notes receivable 4,967,026,780.38 4,143,431,412.08
Include: Bank acceptance bill 4,551,062,910.25 1,876,753,316.46
Commercial acceptance bill 415,963,870.13 2,266,678,095.62
Total 4,967,026,780.38 4,143,431,412.08
Notes: Accounts receivable financing reflects notes receivable and accounts receivable that are measured at fair value
through other comprehensive income.
2. The pledged acceptance bill at the end of the period
Items Pledged amount
Bank acceptance bill 16,991,847.39
Commercial acceptance bill 6,000,000.00
Total 22,991,847.39
3.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 23,332,790,273.96
Commercial acceptance bill 573,182,722.67
Total 23,332,790,273.96 573,182,722.67
4. 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
194
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2021
Notes to the financial statements
Items 30 June 2021 31 December 2020
Interest receivables 46,266,951.12 23,028,942.73
Dividend receivables
Other receivables 195,392,156.95 205,151,247.29
Total 241,659,108.07 228,180,190.02
1. Interest receivable
(1) Interest receivable disclosed by category
Items 30 June 2021 31 December 2020
Deposit interest 46,266,951.12 23,028,942.73
Subtotal 46,266,951.12 23,028,942.73
Less: provision for bad debt
Total 46,266,951.12 23,028,942.73
(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 2021 31 December 2020
Within 1 year (inclusive) 27,403,063.93 35,550,478.46
1-2 years (inclusive) 40,528,700.32 42,319,451.22
2-3 years (inclusive) 13,842,023.46 13,842,023.46
Over 3 years 180,717,695.14 180,717,695.14
Sub-total 262,491,482.85 272,429,648.28
Less: Provision for bad debts 67,099,325.90 67,278,400.99
Total 195,392,156.95 205,151,247.29
(2) Provision for bad debt provision
195
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2021
Notes to the financial statements
Stage one Stage two Stage three
Lifetime expected
Lifetime expected
Provision for bad debts 12-month expected credit losses (credit Total
credit losses (no
credit losses impairment
credit impairment)
occurred)
Beginning balance 352,376.05 9,475,267.75 57,450,757.19 67,278,400.99
Beginning balance in current
period
--Transfer to Stage two
--Transfer to Stage three
--Reversal to Stage two
--Reversal to Stage one
Current period provision
Current period reversal
Current period write-back 179,075.09 179,075.09
Current period write-off
Other change
Ending balance 352,376.05 9,296,192.66 57,450,757.19 67,099,325.90
Changes in the gross carrying amount of other receivables are as follows
Stage one Stage two Stage three
Gross carrying Lifetime expected credit Lifetime expected credit
12-month expected credit Total
amount losses (no credit losses (credit impairment
losses
impairment) occurred)
Ending balance
194,557,372.69 20,421,416.81 57,450,858.78 272,429,648.28
of last year
Beginning
194,557,372.69 20,421,416.81 57,450,858.78 272,429,648.28
balance
--Transfer to
Stage two
--Transfer to
196
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2021
Notes to the financial statements
Stage one Stage two Stage three
Gross carrying Lifetime expected credit Lifetime expected credit
12-month expected credit Total
amount losses (no credit losses (credit impairment
losses
impairment) occurred)
Stage three
--Reversal to
Stage two
--Reversal to
Stage one
Increase 57,173,194.63 6,006,395.62 137,227,870.96
Derecognition 65,320,609.16 7,797,146.52 177,194,576.13
Other change
Ending balance 186,409,958.16 18,630,665.91 57,450,858.78 262,491,482.85
(3) There is no written-off of Other receivables in the current period.
(4) Other receivables disclosed by nature
Nature 30 June 2021 31 December 2020
Receivable and payable 255,494,499.52 264,617,899.56
Other 6,996,983.33 7,811,748.72
Total 262,491,482.85 272,429,648.28
(4) Top five debtors at the year-end
Percentage of total
Provision for bad
Company Nature or content Amount Aging other receivables
debts
(%)
Receivable and
The First 5,492,200.00 Within 1 year 2.81 54,922.00
payable
Receivable and Within 1 year
The Second 3,125,550.76 1.60 2,538,389.24
payable and over 3 years
Receivable and
The Third 2,261,360.00 over 3 years 1.16 2,261,360.00
payable
197
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2021
Notes to the financial statements
Percentage of total
Provision for bad
Company Nature or content Amount Aging other receivables
debts
(%)
Receivable and
The Fourth 2,123,692.31 2-3 years 1.09 424,738.46
payable
RMB353,222.31
Receivable and is 2-3 years and
The Fifth 1,908,708.06 0.98 1,626,130.21
payable the rest is over 3
years
Total 14,911,511.13 7.63 6,905,539.91
(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
30 June 2021 31 December 2020
Items Gross carrying
Impairment Book value Gross carrying amount Impairment Book value
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
Impairm Ending
Ending ent of balance of
Name of entity Beginning balance Increase Decrease
balance current impairme
period nt
Guangzhou Bengang Steel & Iron Trading
30,000,000.00 30,000,000.00
Co., Ltd.
Shanghai Bengang Metallurgy Science and
30,000,000.00 30,000,000.00
Technology Co., Ltd.
198
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2021
Notes to the financial statements
Bengang Steel Plates Liaoyang Pellet Co.,
529,899,801.38 529,899,801.38
Ltd.
Dalian Benruitong Automobile Material
65,000,000.00 65,000,000.00
Technology Co., Ltd.
Bengang Posco Cold-rolled Sheet Co., Ltd. 1,019,781,571.10 1,019,781,571.10
Changchun Bengang Steel & Iron Sales
28,144,875.36 28,144,875.36
Co., Ltd.
Harbin Bengang Economic and Trading
29,923,398.23 29,923,398.23
Co., Ltd.
Nanjing Bengang Materials Sales Co., Ltd. 2,081,400.65 2,081,400.65
Wuxi Bengang Steel & Iron Sales Co., Ltd. 29,936,718.57 29,936,718.57
Xiamen Bengang Steel & Iron Sales Co.,
1,095,711.66 1,095,711.66
Ltd.
Yantai Bengang Steel & Iron Sales Co.,
49,100,329.41 49,100,329.41
Ltd.
Tianjin Bengang Steel & Iron Trading Co.,
60,318,095.80 60,318,095.80
Ltd.
Benxi Bengang Steel Sales Co., Ltd 5,000,000.00 5,000,000.00
Shenyang Bengang Metallurgical Science
30,000,000.00 30,000,000.00
and Technology Co., Ltd.
Chongqing Liaoben Steel & Iron Trade
30,000,000.00 30,000,000.00
Co., Ltd.
Bengang Baojin (Shenyang) Automobile
76,000,000.00 76,000,000.00
New Materials 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 35,825,208,026.61 32,386,871,142.30 19,591,244,860.47 18,369,564,255.82
Other business 3,255,993,831.68 2,898,719,746.40 2,168,536,821.65 2,009,584,025.45
Total 39,081,201,858.29 35,285,590,888.70 21,759,781,682.12 20,379,148,281.27
Details of operating income:
Items Principal Business Other Business
Classified by business area 35,825,208,026.61 3,255,993,831.68
199
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2021
Notes to the financial statements
Items Principal Business Other Business
Including：Domestic 32,477,047,388.32 3,255,993,831.68
Abroad 3,348,160,638.29
Classified by the time of commodity transfer 35,825,208,026.61 3,255,993,831.68
Including: recognize at a certain point in time 35,825,208,026.61 3,255,993,831.68
recognize over a certain period of time
Total 35,825,208,026.61 3,255,993,831.68
(5) Income on investment
Items Current period Previous period
Income from long-term equity investment (cost method)
Short term Bank financial product income 1,553,175.04
Total 1,553,175.04
XIII. Supplementary Information
(1) Details of non-recurring profit and loss
Items Amount Notes
Profit or loss from disposal of non-current assets -22,272,050.41
Tax refund, reduction or exemption of unauthorized approval or no formal approval document
Government subsidy attributable to profit and loss of current period (except such government
subsidy closely related to the company's normal business operation, meeting the regulation of
32,659,483.34
national policy and enjoyed constantly 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
200
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2021
Notes to the financial statements
Items Amount Notes
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
Other non-operating revenue and expenditure other than above items 2,555,535.73
Other non-recurring profit and loss
Subtotal
Impact of income tax 3,235,742.17
Impact of minority interests 51,621.88
Total 9,655,604.61
(2) Net asset yield and earnings per share
Weighted average net assets Earnings per share (Yuan)
Profit in the Reporting Period
yield (%) Basic EPS Diluted EPS
Net profit attributable to ordinary shareholders 9.98 0.569 0.569
Net profit attributable to ordinary shareholders after deducting
9.94 0.566 0.566
non-recurring profit and loss
201
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2021
Notes to the financial statements
(3) Differences between Domestic and Foreign Accounting Standards
Not applicable.
Bengang Steel Plates Co., Ltd.
（Seal）
25 August 2021
202
