Bengang Steel Plates Co., Ltd. Annual Report 2021
Bengang Steel Plates Co., Ltd.
Annual Report 2021
March, 2022
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Bengang Steel Plates Co., Ltd. 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.
Huo Gang, Legal representative, Wang Donghui, Chief financial officer, and Li
Xiaowei, Chief accountant, (the person in charge of the accounting), make the pledge
for the authenticity, accuracy and integrity of the attached financial statements.
All the members of the Board of Directors attended the board meeting on which this
report was examined.
The prospective statements contained in this annual report do not constitute any
substantial commitment to the investors. Investors should pay attention to the risks
attached to investment decisions. This report is prepared in both of Chinese and English.
The Chinese version shall prevail when there are any controversial statements in the
two versions.
The company has described the existing risks and countermeasures in detail in this
report. Please refer to Section 3-11 “Prospects for the Future Development of the
Company”. “China Securities Journal”, “Securities Times”, “Hong Kong Commercial
Daily” and Juchao Information Network (www.cninfo.com.cn) are the company's
selected information disclosure media. All information of the company is based on the
information published in the above-mentioned designated media. Investors are advised
to pay attention to investment risks.
The company’s profit distribution plan is approved by the board of directors. Taking
4,108,191,379 shares as the base, a cash dividend of 6.0 yuan (tax included) will be
distributed to all shareholders for every 10 shares, and stock dividend is 0 (tax included).
The capital reserve will not be converted into share capital.
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Bengang Steel Plates Co., Ltd. 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 .................................................................................................. 29
V. ENVIRONMENTAL AND SOCIAL RESPONSIBILITY .......................................................... 49
VI. IMPORTANT EVENTS ................................................................................................................ 53
Ⅶ. STATUS OF SHARE CAPITAL CHANGES AND SHAREHOLDERS ................................ 85
Ⅷ. STATUS OF PREFERRED SHARES ...................................................................................... 91
Ⅸ. STATUS OF CONVERTIBLE CORPORATE BONDS ............................................................ 92
Ⅹ. FINANCIAL REPORT ................................................................................................................... 95
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Bengang Steel Plates Co., Ltd. Annual Report 2021
Reference File Directory
1. Financial statements signed and sealed by Legal representative, Chief financial
officer, Chief accountant, (the person in charge of the accounting.
2. The original audit report with the seal of the accounting firm and the signature and
seal of the certified public accountant.
3. The originals of all company documents and announcements publicly disclosed
during the reporting period.
4. Annual reports published in other securities markets.
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Bengang Steel Plates Co., Ltd. Annual Report 2021
Definition
Terms to be defined Refers to Definition
Bengang Bancai, Bengang Steel, the Company, the
Refers to Bengang Steel Plates Co., Ltd.
Listed Company
Ansteel Group Refers to Ansteel Group Co., Ltd.
Bengang Group Refers to Bengang Group Co., Ltd.
Benxi Steel & Iron CO., Bengang Co. Refers to Benxi Steel & Iron (Group) Co., Ltd.
Liaoning Provincial State-asset Administration Refers to Liaoning State-owned Asset Supervisory and Management Committee
SSE Refers to Shenzhen Stock Exchange
Bengang Puxiang Refers to Bengang Puxiang Cool Rolling Steel Sheet Co., Ltd.
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Bengang Steel Plates Co., Ltd. Annual Report 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
本钢板材
Chinese
Company name in English (If any) BENGANG STEEL PLATES CO., LTD.
Abbreviation of Company name in
BSP
English (If any)
Legal representative Huo Gang
Registration Address No.16, Renmin Road, Pingshan District, Benxi City, Liaoning Province
Post Code of registration Address 117000
Changes in the company's registered
None
address history
Office address No.16, Renmin Road, Pingshan District, Benxi City, Liaoning Province
Post Code of office address 117000
Web Address None
Email bgbcdm@163.com
II. Contact Information
Secretary of Board of Directors Representative of Securities Affairs
Name Gao Desheng Chen Liwen
No.16, Renmin Road, Pingshan District, No.16, Renmin Road, Pingshan District,
Address
Benxi City, Liaoning Province Benxi City, Liaoning Province
Tel 024-47827003 024-47828980
Fax 024-47827004 024-47827004
Email bgbcdm@163.com bgbcclw@126.com
III. Information Disclosure and Place for Consulting
Press media for information disclosure China Securities Journal, Securities Times, Hong Kong Commercial Daily
Web address for the annual report as
http://www.cninfo.com.cn
assigned by CSRC
Place for inquiry of the annual report Secretary Office of the Board, Bengang Steel Plate Co., Ltd.
IV. Change of Business Registration
Organization Code 91210000242690243E
Changes of principal business
No change
activities since listing (if any)
On August 20, 2021, the State-owned Assets Supervision and Administration
Changes of the controlling Commission of the Liaoning Provincial People's Government which is the former
shareholder in the past (if any) actual controller of the company, signed the “Free Transfer Agreement on the State-
owned Equity of Bengang Group Co., Ltd.” with Ansteel Group Co., Ltd. Liaoning
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Bengang Steel Plates Co., Ltd. Annual Report 2021
State-owned Assets Supervision and Administration Commission transfered its 51%
stake of Bengang Group Co., Ltd. to Ansteel Group for free.
On October 12, 2021, the industrial and commercial registration of change was
completed, and Ansteel Group Co., Ltd. became the indirect controlling shareholder
of the company. The direct controlling shareholder of the company remains
unchanged, which is still Benxi Iron and Steel (Group) Co., Ltd.
V. Other Information
Accountants’ firm engaged by the Company:
Name of the accountants’ firm BDO China Shu Lun Pan Certified Public Accountants LLP
Address of the accountants’ firm Address: 4/F 61 Nanjing Rd. East, Huangpu, Shanghai
Signing name of accountants Li Yongjiang, Li Guiying
Sponsor engaged by the Company to conduct sustained supervision during the reporting period
√ Applicable □ Not applicable
Name of the sponsor Address of the sponsor Name of the sponsor Sustained supervision
institution institution representative period
Guotai Junan Securities No. 768, Nanjing West Road, August 5th, 2020 to
Yuan Yechen, Yang Keyi
Co., Ltd. Jingan District, Shanghai December 31st, 2021
Financial consultancy institution engaged by the Company to conduct sustained supervision during the reporting
period
□ Applicable √ Not applicable
VI. Main Accounting Data and Financial Index
Whether the company needs to retrospectively adjust or restate accounting data for previous years
□ Yes √ No
Changes over
2021 2020 2019
last year
Operating income（RMB） 77,912,144,981.46 48,684,792,685.58 60.03% 52,741,353,582.28
Net profit attributable to the
shareholders of the listed 2,500,582,902.58 384,252,740.78 550.77% 555,646,971.40
company（RMB）
Net profit after deducting of
non-recurring gain/loss
attributable to the 2,517,758,656.14 381,469,784.99 560.02% 549,528,817.13
shareholders of listed
company（RMB）
Net Cash flow generated by
413,473,454.04 -2,039,000,213.29 120.28% 6,977,824,041.16
business operation（RMB）
Basic earnings per share
0.60 0.10 500.00% 0.143
(RMB/Share)
Diluted earnings per share
0.50 0.10 400.00% 0.143
(RMB/Share)
Weighted average net assets
11.88% 1.90% 9.98% 2.88%
yield
Changes over
2021 2020 2019
last year
Gross assets（RMB） 55,147,123,275.30 65,007,470,749.20 -15.17% 60,731,425,193.90
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Bengang Steel Plates Co., Ltd. Annual Report 2021
Net assets attributable to
shareholders of the listed 22,500,969,014.30 21,018,296,389.10 7.05% 19,487,665,261.17
company（RMB）
The lower of the company’s net profit before and after deduction of non-recurring gains and losses in the most recent
three fiscal years is negative, and the audit report of the most recent year shows that the company’s ability to continue
operations is uncertain
□ Yes √ No
The lower of the net profit before and after deducting non-recurring gains and losses is negative
□ Yes √ No
VII. Differences between Domestic and Foreign Accounting Standards
1. Differences of net profit and net assets disclosed in financial reports prepared under IFRS
and Chinese accounting standards.
□ Applicable √ Not applicable
There are no differences of net profit and net assets disclosed in financial reports prepared under IFRS and Chinese
accounting standards during the reporting period.
2. Differences of net profit and net assets disclosed in financial reports prepared under
overseas and Chinese accounting standards.
□ Applicable √ Not applicable
There are no differences of net profit and net assets disclosed in financial reports prepared under overseas and
Chinese accounting standards during the reporting period.
VIII. Main Financial Index by Quarters
Unit: Yuan
First quarter Second quarter Third quarter Fourth quarter
Operation income 15,252,265,770.99 23,335,862,441.15 22,839,272,300.53 16,484,744,468.79
Net profit attributable to the
shareholders of the listed 686,599,759.65 1,522,198,408.26 1,568,670,728.28 -1,276,885,993.61
company
Net profit after deducting
non-recurring gain/loss
attributable to the 678,208,256.33 1,520,934,306.97 1,564,674,812.54 -1,246,058,719.70
shareholders of listed
company
Net cash flows generated
-966,470,265.23 2,491,386,485.26 18,904,467.35 -1,130,347,233.34
by operating activities
Whether significant variances exist between the above financial index or the index with its sum and the financial
index of the quarterly report as well as semi-annual report index disclosed by the Company
□ Yes √ No
IX. Items and Amount of Non-recurring Profits and Losses
√ Applicable □ Not applicable
Unit: Yuan
Item 2021 2020 2019 Notes
Gains and losses on disposal of non-current -60,100,706.71 -92,695,525.95 -77,292,030.26
assets (including the write off part of the
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Bengang Steel Plates Co., Ltd. Annual Report 2021
provision for impairment)
Government subsidy attributable to profit
and loss of current period (except such
government subsidy closely related to the
company's normal business operation, 66,345,976.64 81,193,591.56 83,914,522.47
meeting the regulation of national policy
and enjoyed constantly in certain quota or
quantity according to a certain standard)
Profit or loss from investment or
2,436,869.33 0.00 605,795.19
assets entrusted to others
Gains and losses of debt restructuring 32,800.02 50,640.00
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, -37,205,991.34 13,500,000.00
and disposal of transactional financial
assets and derivative financial assets,
financial liabilities held for trading,
derivative financial liabilities and other
debt investments
Other non-operating income and expenses
5,176,371.41 1,592,660.62 779,757.58
other than above
Other profit and loss items that meet the
2,084.65
definition of non-recurring gains and losses
Less: impact of income tax -5,969,319.73 786,094.20 1,818,703.48
impact of minority equity (after tax) -202,407.38 54,476.26 123,911.88
Total -17,175,753.56 2,782,955.79 6,118,154.27 --
Other profit and loss items that meet the definition of non-recurring profit and loss:
□ Applicable√ Not applicable
There exists no situation of other profit and loss items that meet the definition of non-recurring profit and loss.
Explanation on defining the non-recurring profit and loss items listed in the "Explanatory Announcement No. 1 on
Information Disclosure of Companies Offering Securities to the Public - Non-recurring Profit and Loss" as recurring
profit and loss items.
□ Applicable√ Not applicable
The company does not define the non-recurring profit and loss items listed in the "Explanatory Announcement No.
1 on Information Disclosure of Companies Offering Securities to the Public - Non-recurring Profit and Loss" as
recurring profit and loss items.
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Bengang Steel Plates Co., Ltd. Annual Report 2021
III. Management Discussion and Analysis
I. Industry situation of the company during the reporting period
The industry to which the company belongs is the steel industry. The steel industry is a significant basic industry of
country's national economy, a significant support for building a modern and powerful country, and a significant field
for realizing green and low-carbon development.
The national economy continued recovery in 2021, and provided a good environment for the development of the
steel industry. With the continuous improvement of the new development pattern of "dual circulation" at domestic
and abroad, the supply-side reform and demand-side management have formed a higher level of dynamic balance.
The steel industry actively responds to changes in domestic and foreign demand situations, strives to overcome the
impact of Various factors, such as a high price of raw materials and fuels, and a sharp rise in environmental protection
costs. The industry is generally operating well and in line with policy guidance and market expectations. In the first
half of the year, the steel industry worked hard to meet the strong demand for steel market brought about by the rapid
growth of downstream industries, fully released production capacity, and formed a booming situation in both of
production and sales. In the second half of the year, with the implementation of production restriction measures and
the slowdown in demand growth in downstream industries, the steel industry timely controlled production capacity.
Throughout the year, country's steel supply and demand were basically balanced and making outstanding
contributions to meeting the steel demand of downstream industries and ensuring the sustained recovery of the
national economy.
The year 2022 is a crucial year for the country to implement the "14th Five-Year Plan", and it is also a crucial year
for the steel industry to achieve high-quality development. From the perspective of the overall external environment,
at the end of 2021, the shock wave of the new coronavirus variant strain Omicron swept the world, adding more
variables to the world economic situation. Under the background of the national "dual carbon" goal, the steel industry
has entered a critical period of high-quality development. Green and low-carbon, intelligent manufacturing, etc. have
brought more severe challenges and disruptive changes, and market uncertainty has further increased. At the same
time, China's economy has a solid foundation and strong resilience, and will remain a long-term improvement
fundamental in the future. The National Development and Reform Commission and the Ministry of Industry and
Information Technology issued the "Implementation Plan on Reinvigorating the Operation of the Industrial Economy
and Promoting the High-quality Development of the Industry", which proposed policies and measures such as
"vigorously increasing the effective supply of the bulk raw material market", "tapping the demand potential and
expanding the market space of the industrial economy", which is conducive to guiding Market expectations and
create new opportunities for the development of iron and steel enterprises.
Currently, China has entered a critical stage of comprehensive and high-quality development. The country has clearly
put forward the goal of striving to achieve carbon peaking by 2030 and carbon neutrality by 2060, which 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 steel industry. The steel industry is facing a series of changes in the domestic
steel demand structure, steel product supply structure, steel production process structure, and steel production
resource structure.
II. The main business of the company during the reporting period
1. 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 and have 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%. The leading products for automotive surface panels, home appliance panels, petroleum pipeline steel,
container panels, 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.
2. 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,
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Bengang Steel Plates Co., Ltd. Annual Report 2021
and consultation. The procurement of foreign materials is carried out through long-term cooperative procurement,
direct procurement, open and invitational bidding, inquiry and price comparison, competitive negotiation,
negotiation procurement, etc., which mainly act by Bengang Steel Group International Economic and Trade Co., Ltd.
Sales model: The company's sales are divided into domestic sales and export sales. Domestic sales mainly adopt the
direct sales model. The company sells directly to large customers, and other small and medium customers sell to
them through regional sales subsidiaries. Export sales mainly act through the strong marketing network accumulated
in international trade by Bengang Steel Group International Economic and Trade Co., Ltd., which act as agent of the
export sales and charge the agency fee.
3. Key drivers of performance
The company seized the favorable opportunity of the reorganization between Ansteel Group Co., Ltd. and Bengang
steel Group Co., Ltd., deeply carried out the three-year action of state-owned enterprise reform and three system
reforms, with the goal of achieving "five promotions and two reductions", and earnestly implemented the "5+1"
work pattern and "1+4" important mission.
Implement the "General Plant System", continuously improve management efficiency and benefits, build a
technological innovation system, create innovative platforms such as "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. Continuing to carry out in-depth benchmarking exchanges,
adhere to the direction of market-oriented reform, and continuously promote the high-quality development of
diversified industries, various tasks have achieved relatively gratifying business performance.
During the reporting period, the company's main business and business model remained unchanged.
III. Analysis on Core Competitiveness
The company adheres to the innovation-driven and "quality + 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 enterprises to achieve high-quality,
green and intelligent development.
1. Manufacturing capabilities. Innovate management ideas, strengthen professional management and control of the
entire chain, and continuously improve corporate management efficiency. All departments and units interact with
each other, continue to implement the concept of priority on output, adhere to the iron system as the core, focus on
the process connection 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 Continuously
standardize and refine, make every effort to maximize quality, efficiency and production scale, and promote the
entire production chain toward high-end manufacturing.
2. Equipment transformation and upgrading. In 2021, the company issued a fixed asset investment plan of 3.85
billion yuan. Implemented a new round of large-scale technological transformation and ultra-low emission
transformation projects represented by key projects such as special steel electric furnace upgrading, special steel
rolling mill renovation, CCPP power generation project, 220KVA substation project, Taizi River bridge renovation,
1700mm production line improvement, and coke oven flue gas desulfurization and denitrification. At present, the
1700mm production line has been improved, the CCPP power generation project and the 220KVA substation project
will be put into operation one after another. The special steel electric furnace upgrade and transformation project will
be commissioned and put a set of electric furnaces and supporting refining equipment, continuous casting equipment
into production at the end of August 2022.
3. New product development capabilities. So far, 49 grades have been developed. Except for the pre-researched cold-
rolled dual-phase steel DP1180, other new products have been sold in the market. Realized the full coverage of
strength grade series of hot-rolled automobile structural steel represented by "automobile beam" and "steel for box
body". Successfully developed dual-phase steel of 1180 strength level and hot-dip galvanized composite phase steel
CR980T/700Y-MP, which are leading domestically. Developed hot-rolled anti-oxidation coating-free hot-formed
steel CF-PHS1500 to achieve the world's first launch, reaching the international leading level.
4. Technological innovation ability. In terms of scientific and technological cooperation, to undertake meetings of
the Expert Committee of the Metals, establish the strategic docking between Bengang group and China Iron and
Steel Research Group, strengthen cooperation with Northeastern University and other universities and research
institutes, and invite national academicians and authoritative experts to discuss the latest technological progress and
industry development trends. , To direct and to promote the high-quality development of Benxi Iron and Steel Group.
In terms of scientific and technological achievements, it has won 4 metallurgical science and technology awards and
3 scientific and technological progress awards in Liaoning Province. Among them, "the research and development
of hot stamping steel with the highest strength and extra-thick specifications and its serial development" won the
first prize in the metallurgical industry. The industry's highest award. In terms of intellectual property rights, 3
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Bengang Steel Plates Co., Ltd. Annual Report 2021
national standards and 11 corporate standards were drafted; 211 patents were accepted by the National Bureau, a
year-on-year increase of 21.2%; 108 patents were authorized by the National Bureau, including 16 inventions and
92 utility models. Bengang Steel Plate Co., Ltd. won the Quality Award from the Governor of Liaoning Province
and was identified as "the first batch of high-value patent cultivation centers in Liaoning Province."
5. Green development capability. In combination with the steel industry and local ultra-low emission policy
requirements, the company has the courage to assume social responsibilities, relying on professional planning and
research institutions to prepare an environmental protection improvement plan and an annual implementation plan.
A total of more than 40 ultra-low emission projects have been teased out, all of which have been included in the
investment plan and are under construction or preliminary work. Through all-round green improvement such as
cleaner production level, three waste management, environmental protection management, the company achieve
community-based environmental quality, promote the integration of industry and city, strive to achieve ultra-low
emission by the end of 2023, and build the company into an "ecological steel" that develops harmoniously with the
city. At present, the two dust collectors of the second sintering product of the iron smelting plant have completed the
transformation to meet the emission standards. The CCPP power generation project using surplus gas is expected to
be completed and put into operation in the first quarter of 2022.
6. Intelligent manufacturing capabilities. The company has vigorously promoted the construction of intelligent
manufacturing related projects such as informatization and intelligence. In 2021, investment has been made to carry
out centralized control and intelligent manufacturing of iron, burning, coke, special steel processes, raw material
management, energy management, etc. Carry out the improvement of the basic information platform, production and
manufacturing management, intelligent equipment for cold rolling areas, and the upgrading and transformation of
railway transportation dispatching and commanding information systems Intelligent transformation in other fields.
keep up with the pace of enterprise development in the era of big data, and achieve high-quality development.
IV. Management Discussion and Analysis
1. General
During the reporting period, the company has always adhered to the new development concept, promoted
efficient development, and fully implemented the spirit of General Secretary Xi Jinping's instructions on
Northeast Revitalization and Liaoning Revitalization. It has carried out a series of fruitful work with the
core of "refining and strengthening listed companies, and promoting high-quality development",
overcoming the influence of unfavorable factors such as market shocks, and achieving a high starting
point for the "14th Five-Year Plan". The annual sales revenue was 77.912 billion yuan, a year-on-year
increase of 60%; the profit was 3.435 billion yuan, a year-on-year increase of 724%; pig iron completed
9.838 million tons, a year-on-year decrease of 2.3%; crude steel completed 10.438 million tons, a year-
on-year increase of 1.24%; Plates completed 13.217 million tons, an increase of 8.02% year-on-year;
cold-rolled sheets completed 6.1078 million tons, an increase of 8.1% year-on-year; special steel products
completed 622,000 tons, a year-on-year decrease of 13.7%. Reviewing the work of the year, it is mainly
reflected in the following aspects:
1. Strengthen process linkage to make production operation more efficient
Among them, the steel plant has established a high-efficiency production model, and the monthly output
has exceeded 1 million tons, which is the best level in history. The hot continuous rolling mill has
continuously set new production records, and the production capacity has reached the level of 10 million
tons. The cold rolling plant took multiple measures to break through the "bottleneck" of production. Each
unit has set a record of 40 times of production capacity, and some units have exceeded the designed
capacity by 120%. The steel rolling output of special steel mills has shown a good trend of increasing
month by month, and the daily output has increased by 165 tons year-on-year. The scrap steel plant
recovered 63,000 tons of non-production scrap, ensuring high production and consumption reduction.
2. Strict process control and more precise cost control
Established the management and control concept of "low cost to win high efficiency", and various cost
reduction measures have achieved remarkable results. The financial system refines capital management
and saves interest expenses; the production system strictly controls the port transportation consumption
ratio to reduce the cost of raw material loss; the equipment system strengthens the repair of spare parts
by outsourcing, and reduces the purchase cost of new products; the energy system increases the
proportion of self-generated electricity and avoids peak production, direct purchase of electricity and
other measures to effectively reduce electricity costs.
3. Implement the innovation-driven strategy, and achieve new results in the field of scientific and
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Bengang Steel Plates Co., Ltd. Annual Report 2021
technological research and development
Adhere to the concept of "strengthening the enterprise with science and technology", carry out scientific
research and research and development of new products, make every effort to achieve technological
leadership, promote varieties and create benefits, and effectively improve the enterprise's ability to resist
risks. Throughout the year, 20 grades of cold series products, 15 grades of thermal series products and
14 grades of special steel products were developed. Successfully developed domestic leading 1180-
strength dual-phase steel and high-performance 50BW470 high-efficiency silicon steel for Ningde Tebo,
as well as ultra-deep-drawn electro-galvanized automotive outer panels for Iran's Saipa Automobile. For
the first time, it cooperated with foreign R&D institutions - General Automobile Research Institute of
North America and Northeastern University to develop "coating-free hot-formed steel", breaking through
barriers to technical cooperation, breaking through patent monopoly, and completing industrialization
tests. In the whole year, 100 scientific research projects were established, an increase of 69.5% year-on-
year, and the planned implementation rate reached over 90%. Successfully jointly applied for the "13th
Five-Year" National Key R&D Program "Genetic Engineering and Artificial Intelligence Design of
Aviation Key Materials" and was approved. The linkage of "sales, research and production" was achieved,
and 20 certification and delisting projects were completed throughout the year, with a total of 47 brands.
Mercedes-Benz certification has made a breakthrough. Users of pickling products have completed
stamping certification and assembly, and are conducting road tests in Germany and Turkey. At the same
time, it has passed the Japanese JIS certification, which provides a strong guarantee for the consolidation
of overseas markets.
4. Consolidate the construction of the management system, and the level of enterprise management has
climbed to a new level
Based on the construction of six management systems of safety, quality, energy, environmental protection,
integration of industrialization and informatization, and measurement, we constantly improve various
management systems, so as to ensure that there is a basis for doing things, and there is evidence for
investigations, so as to achieve closed-loop management. Adhere to safety first and build a "red line"
awareness. Quickly implement the safety management requirements of "three managements and three
musts", "five cleanups and five eliminations" and "four cannot be relaxed for a moment", and
responsibilities are consolidated layer by layer. Vigorously promote consistent management and
strengthen process compliance. Carry out research on energy conservation and consumption reduction,
realize green and low-carbon operation, and make energy management more refined and professional.
The investment in metering equipment was increased, and the integration and commissioning of the
energy metering network was completed, laying the foundation for precise control of energy consumption.
Continue to explore new paths for legal management of environmental protection work, establish and
improve daily management and control and emergency management systems and measures, fully
promote the construction of key low-carbon energy conservation projects, and promote green and low-
carbon development of enterprises. Implement the new development concept and build a digital and
intelligent enterprise. Taking solving practical production problems as the focus, sticking to the main
direction of intelligence, taking the cold rolling production line with a high degree of automation as a
pilot, vigorously promoting the application of innovative technologies such as unmanned driving and
industrial robots, and effectively promoting the improvement of labor productivity.
5. Actively promote the deepening of reform, and make new progress in corporate governance
In accordance with the goal of "becoming better and stronger to promote the high-quality development
of listed companies", the key reform work has been determined, which has pointed out the direction for
deepening the reform of Bengang Bancai and solving the problems of enterprise development. Reshape
the organizational structure, achieve lean and efficient management, establish an authorization system,
improve decision-making efficiency, and control decision-making risks; strengthen performance
management, and promote precise incentives. In accordance with the principle of "complete undertaking,
comprehensive decomposition, step-by-step pressure, and differentiated design", the company's operator
performance and organizational performance indicators will be decomposed and implemented step by
step, giving full play to the motivational role of performance appraisal, realizing the company's benefits
and employees' benefits. Promote management innovation, improve management efficiency, establish a
management mechanism centered on efficiency and follow the principle of process compliance, and
continue to improve management effectiveness and efficiency.
6. Highlight the leading role of party building, and show new achievements in group organization work
Thoroughly study and implement the spirit of the 19th National Congress of the Communist Party of
China and all previous plenary sessions of the 19th National Congress of the Communist Party of China,
as well as the spirit of the National Party Building Work Conference of State-owned Enterprises, give
13
Bengang Steel Plates Co., Ltd. Annual Report 2021
full play to the fighting fortress of the party organization and the vanguard and exemplary role of party
members, strengthen cadre evaluation and echelon construction, and establish a leadership management
and evaluation system, by adopting a multi-dimensional work performance evaluation method, and
solidly carry out the selection and recruitment of leading cadres. Adhere to the tracking and training of
young cadres, build a platform for talent growth in multiple directions, and create conditions for
outstanding talents to stand out. Comprehensively and strictly manage the party to advance in depth, and
create a clean and upright business environment; implement the study of the party's history and solve the
people's worries, and actively do practical things and solve problems for the workers and the masses.
7. Multi-measures are taken at the same time and the organization is closely organized, and the epidemic
prevention and control has become normalized
Strictly implement the various epidemic prevention policies of Bengang Group, comprehensively
consolidate the foundation of epidemic prevention and control, and ensure that the thinking is not loose
and the standards are not lowered. Adhere to daily information control and supervision of epidemic
prevention measures, and do a solid job in the reception of foreign personnel and the management of
personnel going out, as well as disinfection and personal protection in public places. Establish an
emergency response liaison mechanism with the Municipal Health Commission and the hospital,
implement measures such as consultation on vaccination matters, and rapid response to emergencies. At
present, 9 batches of vaccines have been organized for centralized vaccination, and the vaccination ratio
has reached 98%, which has built a strong anti-epidemic barrier.
2. Income and Cost
(1) Breakdown of Operating Income
Unit: Yuan
2021 2020 Change over
Amount Proportion Amount Proportion last year
Total operating income 77,912,144,981.46 100% 48,684,792,685.58 100% 60.03%
By industries
Industry 77,912,144,981.46 100.00% 48,684,792,685.58 100.00% 60.03%
By products
Steel plate 69,992,675,798.60 89.84% 45,321,849,577.55 93.09% 54.43%
Others 7,919,469,182.86 10.16% 3,362,943,108.03 6.91% 135.49%
By regions
Northeast 31,503,298,043.72 40.43% 20,420,940,894.42 41.95% 54.27%
North China 3,199,355,088.45 4.11% 1,608,496,520.50 3.30% 98.90%
East China 33,516,981,788.40 43.02% 21,783,663,312.31 44.74% 53.86%
Northwest 68,888,026.23 0.09% 48,736,790.89 0.10% 41.35%
Southwest 135,459,678.97 0.17% 241,981,145.95 0.50% -44.02%
Central south 3,152,641,431.89 4.05% 25,508,604.19 0.05% 12,259.13%
Export 6,335,520,923.80 8.13% 4,555,465,417.32 9.36% 39.08%
By sales model
Sales in domestic 71,576,624,057.66 91.87% 44,129,327,268.26 90.64% 1.23%
market
Sales in export market 6,335,520,923.80 8.13% 4,555,465,417.32 9.36% -1.23%
(2) Industry, Product and Regions Accounting for the Company’s Operating Income or Profit
over 10%
√ Applicable □ Not applicable
Unit: Yuan
Operating income Operating costs Gross Operating Operating costs Gross margin
14
Bengang Steel Plates Co., Ltd. Annual Report 2021
margin income change change over last change over
over last year year last year
By industries
Industry 77,912,144,981.46 71,891,598,336.96 7.73% 60.03% 54.96% 3.02%
By products
Steel plate 69,992,675,798.60 64,770,421,744.20 7.46% 54.43% 49.51% 3.05%
Others 7,919,469,182.86 7,121,176,592.76 10.08% 135.49% 131.98% 1.36%
By regions
Northeast 31,503,298,043.72 28,935,779,253.16 8.15% 54.27% 49.04% 3.22%
North China 3,199,355,088.45 2,932,208,938.56 8.35% 98.90% 92.03% 3.28%
East China 33,516,981,788.40 31,078,317,077.55 7.28% 53.86% 49.47% 2.73%
Northwest 68,888,026.23 63,948,754.75 7.17% 41.35% 37.41% 2.66%
Southwest 135,459,678.97 126,180,690.96 6.85% -44.02% -45.55% 2.62%
Central south 3,152,641,431.89 2,884,036,381.89 8.52% 12,259.13% 11,820.00% 3.37%
Export 6,335,520,923.80 5,871,127,240.09 7.33% 39.08% 34.77% 2.96%
By sales model
Sales in
71,576,624,057.66 66,020,471,096.87 7.76% 62.20% 57.06% 3.02%
domestic market
Sales in export
6,335,520,923.80 5,871,127,240.09 7.33% 39.08% 34.77% 2.96%
market
Operating data of recent one year according to adjusted statistics caliber at the year-end in the case that the
Company's main business statistics caliber has changed during the reporting period
□ Applicable √ Not applicable
(3) Whether the Company’s Physical Sales Income Exceeded Service Income
√ Yes □ No
Change over last
Industry classification Item Unit 2021 20120
year
Sales ton 13,883,661.11 12,968,385.12 7.06%
Production ton 13,996,055.15 12,940,697.06 8.16%
Inventory ton 601,916.23 489,522.19 22.96%
Steel rolling processing
industry
Sales
Production
Inventory
The main reasons that the relevant data changed more than 30%
□ Applicable √ Not applicable
(4) Performance of Significant Sales and Purchase Contract Signed-up in this Reporting
Period
□ Applicable √ Not applicable
(5) Breakdown of Operating Cost
Industry classification
Unit: Yuan
Industry 2021 2020 Change over
Item
classification Amount Proportion Amount Proportion last year
15
Bengang Steel Plates Co., Ltd. Annual Report 2021
Steel rolling
Raw material 37,341,970,406.79 51.94% 23,138,475,447.81 49.88% 2.06%
processing industry
Steel rolling Supplementary
2,839,512,165.81 3.95% 2,089,395,547.62 4.50% -0.55%
processing industry materials
Steel rolling Spare parts and 785,960,965.25 1.09% 737,780,144.94 1.59% -0.50%
processing industry tools
Steel rolling 22,184,848,601.81 30.86% 12,727,140,058.39 27.43% 3.43%
Fuel
processing industry
Steel rolling 3,182,838,986.67 4.43% 2,687,362,561.57 5.79% -1.36%
Energy
processing industry
Steel rolling Salary and 2,582,531,198.03 3.59% 1,980,205,516.91 4.27% -0.68%
processing industry benefits
Steel rolling 2,333,028,229.90 3.25% 2,191,070,638.31 4.72% -1.47%
Depreciation
processing industry
Steel rolling 640,907,782.70 0.89% 840,750,647.04 1.81% -0.92%
Others
processing industry
Steel rolling 71,891,598,336.96 100.00% 46,392,180,562.59 100.00% 0.00%
Total
processing industry
Instruction:
None
(6) Whether Changes Occurred in Consolidation Scope in the Reporting Period
√ Yes □ No
In this period, the wholly-owned subsidiary Xiamen Bengang Iron & Steel Sales Co., Ltd. was cancelled.
(7) Relevant Information of Significant Changes or Adjustment of the Business, Product or
Service in the Reporting Period
□ Applicable √ Not applicable
(8) Information of Main Customers and Main Suppliers
Information of the Company’s main customers
Total sales amount of the top five customers (Yuan) 17,086,188,258.07
Total sales amount of the top five customers accounted for the proportion of total
21.93%
annual sales
The proportion of the total sales of the related parties in the top five customers 7.17%
Information of the top 5 customers
No. Name Amount (Yuan) Proportion
1 Benxi Beiying Steel & Iron (Group) Co., Ltd. 5,584,776,929.07 7.17%
2 Ouyeel Cloud Trade Co., Ltd. 3,913,604,189.08 5.02%
3 Shanghai Ouyeel Supply Chain Co., Ltd. 2,637,122,244.90 3.38%
4 Xiamen Jian Fa Metal Co., Ltd. 2,554,449,548.71 3.28%
5 Ningbo AUX Trade Co., Ltd. 2,396,235,346.31 3.08%
Total -- 17,086,188,258.07 21.93%
Other information of principal customers
□ Applicable √ Not applicable
Information of the Company’s main suppliers
Total purchase amount of the top five suppliers (Yuan) 33,829,243,762.16
Total purchase amount of the top five suppliers accounted for the proportion of
47.06%
total purchase
The proportion of the total purchase of the related parties in the top five suppliers 40.82%
16
Bengang Steel Plates Co., Ltd. Annual Report 2021
Information of the top 5 suppliers
No. Name Amount (Yuan) Proportion
Bengang Group International Economic and
1 17,309,186,976.50 24.08%
Trading Co., Ltd.
2 Benxi Steel & Iron (Group) Mining Co., Ltd. 7,936,735,203.17 11.04%
3 Benxi Beiying Steel & Iron (Group) Co., Ltd. 4,095,327,573.23 5.70%
4 Heilongjiang Dragon Coal Group Co., Ltd. 2,294,033,830.68 3.19%
Liaoning Electric Power Co., Ltd. Benxi Electric
5 2,193,960,178.58 3.05%
Power Supply Company
Total -- 33,829,243,762.16 47.06%
Other information of principal suppliers
□ Applicable √ Not applicable
3. Expenses
Unit: Yuan
Change over Notes to significant
2021 2020
last year change
Increase in salary and
Selling and distribution expenses 141,394,565.57 97,279,280.21 45.35% import and export
agency fees
Increase in salary,
General and administrative expenses 1,187,239,442.10 792,826,294.81 49.75%
heating costs, etc.
Increase in foreign
Financial expenses 536,593,635.06 364,775,155.62 47.10%
exchange losses
Increase in R&D
Research and development expenses 56,401,594.44 37,989,623.28 48.47%
investment
4. Research and Development Input
√ Applicable □ Not applicable
Main R&D project Expected impact on the future
Project purpose Project Progress intended goal
name development of the company
In the first half of the
The pass rate of high- year, a total of
grade cold-rolled outer 1,724.2 tons of mid-
sheet in 2020 is 70.6%. to-high-end cold-
The current main defects rolled automotive
and proportions are: outer sheets were
12.78% roll printing, produced, with a pass
Stable and
6.79% inclusions, 2.27% rate of 73.8%, an
improved quality of The mass production pass rate The annual profit is more than
oblique printing, 1.9% increase of 6.9% over
high-grade cold- reaches 80%. 1.5 million yuan.
scratches, 1.72% rubber the same period in
rolled outer sheet
roll printing, rust 1.32%, 2020. In April, it
other 2.66%. Special reached 95.1%,
research is needed to creating the best level
reduce the downgrade in history and
rate and further improve ensuring the stable
product quality. supply of
downstream users.
In today's increasingly Improve Bengang's auto steel It made up for the blank of
homogeneous products, material selection data system, Bengang, and systematically
Bengang the pursuit of The project and the database contains combined EVI with database
Automotive Body- differentiated competition objectives have been 100% of auto steel grades. All establishment and application
in-White Solution is the key for enterprises completed. body-in-white body materials technology testing for the first
to get out of low-level are Benxi Steel's automotive time, which led to the overall
homogeneous steel products, and high- improvement of Bengang's
17
Bengang Steel Plates Co., Ltd. Annual Report 2021
competition. Therefore, it strength and ultra-high- application technology.
is necessary to carry out strength automotive steels
EVI work to enhance the account for more than 65%.
influence of enterprises.
Using narrow The end hardenability meets
In 2020, the output of
hardenability belt the technical requirements, the
gearbox gear steel
control technology, J9 value of the key control
FAS3420(R)H is more
Research and non-metallic point is not less than 80% of
than 1,000 tons
Development of inclusion control the 4HC bandwidth; the
(accounting for only 3%
Steel FAS3420(R)H technology in oxygen content is not more
of gear steel), and the The annual profit is more than
for 12-speed vulcanized steel, and than 18ppm, and the
technical quality level is 2 million yuan.
Transmission Gears band structure control proportion below 12ppm is not
relatively low. The grades
of Heavy-Duty technology in heat more than 80%; Other
have been stably
Vehicles treatment state, the indicators such as inclusions
controlled, and the quality
product quality and low magnification
of steel has reached the
basically meets the structures meet the technical
domestic advanced level.
needs of users. requirements.
The size of the continuous
casting billet in the
converter process of
Benxi Steel is
350×470mm, and it can
only produce the national
standard high carbon
bearing steel with the To achieve stable production
specification ≤ Ф The product grade of
of national standard materials
Research on Process Bengang's bearing steel has
85mm. Specifications>Ф below Φ150mm, the central
Technology of been improved, and the
85mm steel center porosity level is less than or
Large Size High The end project goal specifications of the high-
Carbon Chromium porosity level is too high, has been completed. equal to 1.0, and the residual quality national standard
and even shrinkage holes shrinkage hole level is 0.
Bearing Steel material of Bengang's bearing
exist, which cannot be Ultrasonic flaw detection
GCr15 steel have been further
produced normally. At meets the requirements of
expanded.
present, the bearing GB/T 4162 standard B level.
industry has a large
demand for Ф 90 ～ Ф
150mm national standard
materials, so it is
necessary to study large-
scale bearing steel to meet
the market demand.
Due to the existence of
defects such as zinc slag,
zinc ash and roll printing,
Production it cannot meet the
technology requirements of
Completed 2 user
integration of cold- automobile OEMs.
hot-dip galvanized To achieve stable supply, the The annual profit is more than
rolled hot-dip Through the research on
outer plate pass rate is more than 70%. 2.8 million yuan.
galvanized the key technology of hot-
certification.
automobile surface dip galvanized surface
sheet plate, the stable supply of
medium and high-end
automobile OEMs is
realized.
Information of research and development personnel by the company
2021 2020 Change over last year
Number of Research and
1,798 1,732 3.81%
Development staff
Proportion of number of
Research and Development 9.53% 10.34% -0.81%
staff
Educational structure of
—— —— ——
research and development staff
Bachelor 1,233 1,208 2.07%
18
Bengang Steel Plates Co., Ltd. Annual Report 2021
Master's degree 162 151 7.28%
Age composition of research
—— —— ——
and development staff
Under the age of 30 109 132 -17.40%
30 to 40 years old 586 487 20.30%
Information of research and development input by the company
2021 2020 Change over last year
Amount of Research and
Development Investment (In 2,343,822,000.00 1,541,651,000.00 52.03%
RMB)
Proportion of Research and
Development investment to 3.01% 3.17% -0.16%
operating income
Amount of capitalized Research
0.00 0.00 0.00%
and Development investment
Proportion of capitalized
Research and Development
investment accounted to total 0.00% 0.00% 0.00%
Research and Development
investment
Illustrations of significant change in the composition of the company's Research and Development personnel
□ Applicable √ Not applicable
Illustrations of the prominent change in proportion of research and development input occupying the operating
income over same period last year
□ Applicable √ Not applicable
Illustrations of significant change in the research and development input’s capitalization rate and its reasonableness
□ Applicable √ Not applicable
5. Cash Flow
Unit: Yuan
Item 2021 2020 Change over last year
Subtotal of cash inflows from
56,328,587,878.30 40,062,379,161.40 40.60%
operating activities
Subtotal of cash outflows from
55,915,114,424.26 42,101,379,374.69 32.81%
operating activities
Net cash flows from operating
413,473,454.04 -2,039,000,213.29 120.28%
activities
Subtotal of cash inflows from
11,402,720,358.72 14,037,738.77 81,129.04%
investing activities
Subtotal of cash outflows from
7,504,976,365.56 6,213,928,829.62 20.78%
investing activities
Net cash flows from investing
3,897,743,993.16 -6,199,891,090.85 162.87%
activities
Subtotal of cash inflows from
8,162,945,228.08 22,997,390,314.56 -64.50%
financing activities
Subtotal of cash outflows from
15,363,346,740.69 18,941,067,286.47 -18.89%
financing activities
Net cash flows from financing
-7,200,401,512.61 4,056,323,028.09 -277.51%
activities
Net increase in cash and cash
-2,930,318,531.64 -4,211,997,393.46 -30.43%
equivalents
Illustrations of key factors of significant changes over same period last year
√ Applicable □ Not applicable
(1) The subtotal of cash inflows from operating activities increased by 40.6% over the previous period, which was
mainly due to the increase in the sales price of steel products and the substantial increase in income.
19
Bengang Steel Plates Co., Ltd. Annual Report 2021
(2) The net cash flow from operating activities increased by 120.28% over the previous period, which was mainly
due to the increase in the sales price of steel and the substantial increase in income.
(3) The subtotal of cash inflows from investing activities increased by 81,129.04% over the previous period, which
was mainly due to the maturity and recovery of large-denomination time deposits.
(4) The net cash flow from investing activities increased by 162.87% compared with the previous period, which was
mainly due to the maturity and recovery of large term deposits.
(5) The subtotal of cash inflows from financing activities decreased by 64.5% compared with the previous period,
which was mainly due to the decrease in borrowings in the current period.
(6) The net cash flow from financing activities decreased by 277.51% compared with the previous period, which
was mainly due to the decrease in borrowings and the payment of dividends in the current period.
(7) The net increase in cash and cash equivalents decreased by 30.43% over the previous period, which was due to
the decrease in borrowings and the payment of dividends in the current period.
Illustrations of significant difference between cash flow from operating activities and net profit during the reporting
period
□ Applicable √ Not applicable
Ⅴ. Analysis of Non-core Business
√ Applicable □ Not applicable
Unit: yuan
Proportion of Whether it is
Amount Reason for formation
total profit sustainable or not
Due to investment income
Investment income -120,519,309.82 -3.51% from disposal of financial No
assets held for trading
Due to the increase in the
Asset impairment -113,671,335.02 -3.31% provision for inventory No
impairment
Non-operating Due to the income from
7,783,225.80 0.23% No
income disposal of non-current assets
Due to the disposal of assets in
Operating expenses 64,272,629.43 1.87% No
the current period
Ⅵ. Assets and Liabilities
1. Significant Change of Assets Components
Unit: Yuan
Ending balance of 2021 Beginning balance of 2021
Notes to
Proportion in Proportion in Proportion
significant
Amount the total assets Amount the total assets change
change
(%) (%)
Cash at bank and on The company
8,831,095,737.85 16.01% 13,126,666,915.26 20.58% -4.57%
hand repays the loan
Accounts receivable 256,850,782.71 0.47% 245,217,182.66 0.38% 0.09%
Inventories 10,190,166,138.98 18.48% 9,040,065,342.65 14.17% 4.31%
Long-term equity
2,981,784.07 0.01% 2,742,064.73 0.00% 0.01%
investment
Fixed assets 25,480,674,048.94 46.20% 26,284,567,956.44 41.21% 4.99%
Construction in
2,434,182,101.13 4.41% 1,839,933,715.58 2.88% 1.53%
process
Right-of-use assets 1,440,365,248.31 2.61% 1,500,739,782.73 2.35% 0.26%
The company
Short-term loans 4,053,088,140.00 7.35% 10,067,731,000.00 15.78% -8.43%
repays the loan
20
Bengang Steel Plates Co., Ltd. Annual Report 2021
Contract liabilities 4,708,188,093.78 8.54% 4,458,671,819.90 6.99% 1.55%
Long-term loans 4,222,821,771.74 7.66% 3,502,934,427.65 5.49% 2.17%
Lease liabilities 1,424,667,169.15 2.58% 1,463,444,635.94 2.29% 0.29%
High proportion of abroad assets
□ Applicable √ Not applicable
2. Assets and Liabilities Measured at Fair Value
□ Applicable √ Not applicable
3. Restricted Assets by the End of the Period
Items Ending balance Reason
Cash at bank and on hand 2,531,996,674.37 Deposit for notes and letter of credit
Notes receivable that the company
has endorsed and not yet matured
Notes Receivable 1,133,932,188.36
on the balance sheet date were not
derecognition at the end of period
Other equity instrument investments 1,037,735,849.00 Pledged for loans
Fixed assets 89,963,211.93 Mortgage for fund borrowing
Intangible assets 36,188,476.93 Mortgage for fund borrowing
Total 4,829,816,400.59
Ⅶ. Investment
1. General
□ Applicable √ Not applicable
2. Acquiring Significant Equity Investment in the Reporting Period
□ Applicable √ Not applicable
3. Undergoing Significant Non-Equity Investment in the Reporting Period
□ Applicable √ Not applicable
4. Investment of Financial Assets
(1) Investment in Securities
□ Applicable √ Not applicable
There was no investment in securities during the reporting period.
(2) Investment in Derivatives
□Applicable √ Not applicable
There was no investment in derivatives during the reporting period.
5. Use of Raised Funds
√ Applicable □ Not applicable
21
Bengang Steel Plates Co., Ltd. Annual Report 2021
(1) Use of Raised Funds
√Applicable □ Not applicable
Unit: 10 thousand yuan
The total Cumulativ The
Cumulativ Amount of
amount of e purpose
Used The total e total The total funds
funds raised proportion and
Method of Total amount of used amount of amount of raised after
for change of total destination
Year raising amount of raised amount of funds funds being idle
of purpose raised of the
funds raised funds fund this funds raised for raised not for more
during the funds for raised
period raised change of used than two
reporting changes of funds not
purpose years
period purposes yet used
Private
placement 3,965,799,9 64,473,99 3,342,063 623,736,95
2018 Deposit
to raise 88.19 2.52 ,034.97 3.22
funds
Issue of
6,759,200,0 1,147,724 3,610,684 3,148,515,
2020 convertibl Deposit
00 ,418.83 ,085.61 914.39
e bonds
10,724,999, 1,212,198 6,952,747 3,772,252,
Total -- 0 0 0.00% -- 0
988.19 ,411.35 ,120.58 867.61
Description of the overall use of raised funds
1.Status of use of funds for investment projects with raised funds
For the actual use of the company's raised funds in 2021, please refer to the attached table for the use of the raised funds and the
commitment projects of the raised funds.
2.Status of changes in the implementation location and implementation method of the projects invested by raised funds
During the reporting period, there is no situation of change the investment projects of raised funds or their implementation locations
and implementation methods.
3.Status of preliminary investment and replacement of raised funds for investment projects
(1) Status of preliminary investment and replacement of funds raised from non-public offering of stocks
At the 14th meeting of the 7th Board of Directors and the 10th meeting of the 7th Board of Supervisors of the Company, “t About the
use of raised funds to replace pre-invested raised funds for investment projects “was reviewed and approved. Before the raised funds
arrive in the account, in order to ensure the smooth implementation of the raised investment projects, the company uses self-raised
funds for project construction. As of February 28, 2018, the pre-invested amount of self-raised funds replaced by raised funds was
RMB 1,822,749,211.07, including RMB 1,484,133,089.39 for the cold-rolled high-strength steel reconstruction project and RMB
338,616,121.68 for the hot-dip galvanizing production line project of the third cold rolling plant.
During the period from March 1, 2018 to February 28, 2019, the company paid RMB 88,296,207.56 for the construction of projects
with self-raised funds, of which RMB 86,709,830.40 was invested in the cold-rolled high-strength steel reconstruction project, and
the third cold-rolling plant was hot-dip galvanized. The zinc production line project is 1,586,377.16 yuan (not yet replaced from the
special account of raised funds). The company has transferred 86,709,830.40 yuan from the fundraising account to the general deposit
account in 2020.
During the period from March 1, 2019 to May 31, 2021, the company paid RMB 62,608,242.01 for the construction of the project
with self-raised funds, of which RMB 50,391,999.49 was invested in the cold-rolled high-strength steel reconstruction project, and
the third cold-rolling plant was hot-dip galvanized. The zinc production line project is 12,216,242.52 yuan. The company has
transferred the above amount from the fundraising account to the general deposit account in 2021.
(2) Status of preliminary investment and replacement of funds raised from public issuance of convertible corporate bonds
After the 13th meeting of the 8th Board of Directors and the 11th meeting of the 8th Board of Supervisors of the Company, the
"Proposal on Using Raised Funds to Replacing Pre-invested Raised Funds for Investment Projects and Self-raised Funds for which
Issuance Fees Have Been Paid" was reviewed and approved. The company used the raised funds to replace the self-raised funds
that had been invested in the investment projects with raised funds and had paid the issuance fees, and the total replacement amount
was 366,180,860.17 yuan. There is no disguised change in the use of the raised funds in this replacement, and it does not affect the
normal progress of the investment projects with the raised funds. The replacement time is less than 6 months from the time when
the raised funds arrive in the account, which is in line with the relevant laws and regulations.
Before the raised funds arrive in the account, the company has used self-raised funds to pre-invest in the raised investment projects
according to the progress of the project. As of May 31, 2020, the pre-invested amount of self-raised funds replaced by raised funds
22
Bengang Steel Plates Co., Ltd. Annual Report 2021
was 365,630,860.17 yuan, including 76,278,945.59 yuan for the No. 8 casting machine project of the steelmaking plant,
119,043,290.09 yuan for the No. 5 blast furnace capacity replacement project in the ironmaking plant, and special The steel electric
furnace upgrade and reconstruction project is 59,948,807.90 yuan, the CCPP power generation project is 95,098,084.16 yuan, and
the steel plant No. 4-6 converter environmental protection renovation project is 15,261,732.43 yuan. As of July 6, 2020, the above-
mentioned issuance fee of RMB 550,00.00 paid by the company's own funds will be replaced with the raised funds.
During the period from March 1, 2019 to May 31, 2021, the company used self-raised funds to pay the raised funds to invest in the
project construction amount of RMB 1,082,356,809.47. The No. 5 casting machine project is 55,364,729.08 yuan, the No. 5 blast
furnace capacity replacement project in the iron plant is 628,049,033.12 yuan, the special steel electric furnace upgrading project is
253,298,156.22 yuan, the CCPP power generation project is 115,353,050.36 yuan, and the No. 4-6 converter environmental protection
renovation project in the steel plant Item 30,111,840.69 yuan. The company has transferred the above amount from the fundraising
account to the general deposit account in 2021.
4. Status of temporary replenishment of working capital with idle raised funds
During the reporting period, according to the construction progress of the company's raised funds investment projects and the use
plan of the raised funds, part of the funds raised by the company's non-public offering was temporarily idle. In accordance with the
provisions of the "Administrative Measures for the Raised Funds of Listed Companies in Shenzhen Stock Exchange" and other
normative documents, in line with the principle of following the principle of maximizing the interests of shareholders, and on the
premise of ensuring the capital needs of the raised funds investment projects and the normal progress of the raised funds investment
projects, in order to improve the use efficiency of raised funds will further reduce the company's financial costs, reduce financial
expenditures, and protect the interests of investors. The company plans to use idle raised funds to temporarily supplement working
capital. The use period shall not exceed 12 months from the date of deliberation and approval by the board of directors. Liquidity
will save the company financial expenses.
(1) Temporary replenishment of working capital with funds raised from non-public offering of stocks
1) In March 2018, the funds raised by the non-public offering of shares temporarily supplemented the working capital
In 2018, the company used 530,000,000.00 yuan of idle raised funds to temporarily supplement working capital, and the period of
use shall not exceed 12 months from the date of approval by the board of directors (March 13, 2018). As of March 11, 2019, the
company has returned all the above-mentioned idle raised funds of RMB 530,000,000.00 used to temporarily supplement working
capital to the company's special account for raised funds.
2) In March 2019, the funds raised from the non-public offering of shares temporarily supplemented working capital
In 2019, the company used idle raised funds of RMB 742,000,000.00 to temporarily supplement working capital, and the period of
use shall not exceed 12 months from the date of approval by the board of directors (March 21, 2019). As of March 23, 2020, the
company has returned all the above-mentioned idle raised funds of RMB 742,000,000.00 used to temporarily supplement working
capital to the company's special account for raised funds.
3) In March 2020, the funds raised by the non-public offering of stocks temporarily supplement the working capital
The company used idle raised funds of RMB666,000,000.00 (RMB370,000,000.00 for the cold-rolled high-strength steel
reconstruction project, and RMB296,000,000.00 for the hot-dip galvanizing production line project of the third cold rolling plant) to
temporarily supplement the working capital. It was reviewed and approved at the ninth meeting and the eighth meeting of the eighth
supervisory committee. The independent directors of the company issued a clear agreement, and the replenishment of working capital
should not exceed 12 months.
The sponsor of the company's non-public offering agreed to the company's use of idle raised funds to temporarily supplement working
capital and issued "Guotai Junan Securities Co., Ltd.'s Verification Opinions on the Company's Use of Idle Raised Funds to
Temporarily Supplement Working Capital".
As of July 27, 2020, the company has returned all the above-mentioned idle raised funds of RMB 666,000,000.00 used to temporarily
supplement working capital to the company's special account for raised funds.
4) In July 2020, the funds raised by the non-public offering of stocks temporarily supplement the working capital
The company used idle raised funds of 666,000,000.00 yuan (370,000,000.00 yuan for the cold-rolled high-strength steel renovation
project, and 296,000,000.00 yuan for the hot-dip galvanizing production line project of the third cold rolling plant) to temporarily
supplement the working capital. The fourth meeting and the 12th meeting of the 8th Supervisory Committee have reviewed and
approved, and the independent directors of the company have issued a clear agreement, and the time for replenishing working capital
should not exceed 12 months.
The sponsor of the company's non-public offering agreed to the company's use of idle raised funds to temporarily supplement working
capital and issued "Guotai Junan Securities Co., Ltd.'s Verification Opinions on the Company's Use of Idle Raised Funds to
Temporarily Supplement Working Capital".
As of July 27, 2021, the company has returned all the above-mentioned idle raised funds of RMB 666,000,000.00 used to temporarily
supplement working capital to the company's special account for raised funds.
(5) In July 2021, the funds raised from the non-public offering of stocks will temporarily supplement working capital
The company used idle raised funds of 604,000,000.00 yuan (320,000,000.00 yuan for the cold-rolled high-strength steel
reconstruction project, and 284,000,000.00 yuan for the hot-dip galvanizing production line project of the third cold rolling plant) to
23
Bengang Steel Plates Co., Ltd. Annual Report 2021
temporarily supplement the working capital. The 19th meeting and the 17th meeting of the 8th Supervisory Committee reviewed and
approved, and the independent directors of the company have expressed their clear consent, and the replenishment of working capital
shall not exceed 12 months.
The sponsor of the company's non-public offering agreed to the company's use of idle raised funds to temporarily supplement working
capital and issued "Guotai Junan Securities Co., Ltd.'s Verification Opinions on the Company's Use of Idle Raised Funds to
Temporarily Supplement Working Capital".
As of December 31, 2021, the company used the idle funds raised from non-public issuance of stocks to temporarily supplement the
balance of working capital of RMB 604,000,000.00.
2. Temporary replenishment of working capital with funds raised from public issuance of convertible corporate bonds
(1) Public issuance of convertible corporate bonds in July 2020 to raise funds to temporarily supplement working capital
The company used idle raised funds of RMB4,180,000,000.00 (RMB1,010,000,000.00 yuan for the high-grade high magnetic
induction non-oriented silicon steel project, RMB220,000,000.00 for the No. 8 casting machine project of the steelmaking plant,
RMB800,000,000.00 for the production capacity replacement project of the No. 5 blast furnace in the ironmaking plant, and
RMB1,300,000,000.00 for special steel electric furnace upgrade and reconstruction project, RMB700,000,000.00 for CCPP power
generation project, RMB150,000,000.00 for steel plant No. 4-6 converter environmental protection renovation project) Temporarily
supplementing working capital matters was approved on the 14th meeting of the 8th Board of Directors of the company held on
July 28, 2020, It was reviewed and approved at the 12th meeting of the 8th Supervisory Committee, and the independent directors
of the company have issued a clear agreement, and the replenishment of working capital shall not exceed 12 months.
The sponsor of the company's public offering of convertible corporate bonds agreed that the company will use idle raised funds to
temporarily supplement working capital and issued the "Guotai Junan Securities Co., Ltd.'s Verification Opinions on the Company's
Use of Idle Raised Funds to Temporarily Supplement Working Capital".
As of July 27, 2021, the company has returned all the above-mentioned idle raised funds of RMB 4,180,000,000.00 used to
temporarily supplement working capital to the company's special account for raised funds.
(2) The public offering of convertible corporate bonds in July 2021 to raise funds to temporarily supplement working capital
The company used idle raised funds of 3,030,000,000.00 yuan (1,010,000,000.00 yuan for the high-grade high magnetic induction
non-oriented silicon steel project, 150,000,000.00 yuan for the No. 8 casting machine project of the steelmaking plant,
160,000,000.00 yuan for the production capacity replacement project of the No. 5 blast furnace in the ironmaking plant, and special
steel electric furnace upgrade and reconstruction project. 1,000,000,000.00 yuan, CCPP power generation project 590,000,000.00
yuan, steel plant No. 4-6 converter environmental protection renovation project 120,000,000.00 yuan) Temporary replenishment of
working capital The nineteenth meeting of the eighth board of directors of the company held on July 28, 2021 It was reviewed and
approved at the 17th meeting of the 8th Supervisory Committee, and the independent directors of the company have issued a clear
agreement, and the time for replenishing working capital should not exceed 12 months.
The sponsor of the company's public offering of convertible corporate bonds agreed that the company will use idle raised funds to
temporarily supplement working capital and issued the "Guotai Junan Securities Co., Ltd.'s Verification Opinions on the Company's
Use of Idle Raised Funds to Temporarily Supplement Working Capital".
As of December 31, 2021, the company used the idle funds raised from the public issuance of convertible corporate bonds to
temporarily supplement the balance of working capital of RMB 3,030,000,000.00.
5. Cash management with idle raised funds
The Company does not use idle raised funds for cash management.
6. Use of surplus raised funds
The Company does not use the surplus funds of raised fund investment projects for other raised fund investment projects or non-
raised fund investment projects.
7. Use of over-raised funds
The company does not use over-raised funds.
8. Purpose and whereabouts of unused raised funds
As of December 31, 2021, in addition to the above-mentioned "(3) Preliminary investment and replacement of raised funds
investment projects", "(4) Temporary replenishment of working capital with idle raised funds", the company has raised funds. In
addition to replacing and temporarily supplementing working capital with idle raised funds, the remaining raised funds are
temporarily deposited in a special account for raised funds.
9. Other information on the use of raised funds
There was no other situations about the use of raised funds of the company.
24
Bengang Steel Plates Co., Ltd. Annual Report 2021
(2) Fundraising commitments
√Applicable □ Not applicable
Whether Total Cumulativ Has the
Amount Investment Benefits
the item committe e Item Whether project
Adjusted invested progress realized
Commitment to has been d investment reaches the feasibilit
total during by the end during
investment projects and changed investme amount by scheduled expected y
investme the of the the
over-raised funds (includin nt of the end of availability benefit is changed
nt (1) reporting period (3) reporting
g some raised the period date achieved significa
period = (2)/ (1) period
changes) funds (2) ntly
Commitment to Investment Projects
Cold-rolled high-
December
strength steel No 226,580 226,580 5,225.78 192,692.07 85.04% 55,318.42 No No
31, 2017
renovation project
Hot-dip galvanizing
production line project December
No 70,000 70,000 1,221.62 41,514.24 59.31% 18,241.1 Yes No
of the third cold rolling 31, 2018
plant
Not Not
Repay bank loan No 100,000 100,000 0 100,000 No
applicable applicable
High grade high
magnetic induction
Not
non-oriented silicon No 101,620 101,620 18 141 0.14% No
applicable
steel engineering
project
Steel Plant No. 8
October 31,
Casting Machine No 33,500 33,500 6,483.67 16,348.11 48.80% 55,967.04 Yes No
2020
Project
No. 5 blast furnace
November
capacity replacement No 96,000 96,000 63,370.81 76,693.55 79.89% 52,879.53 Yes No
30, 2020
project in ironworks
Special Steel Electric
Not
Furnace Upgrade and No 141,600 141,600 30,018.62 41,721.96 29.46% No
applicable
Reconstruction Project
CCPP power Not
No 83,300 83,300 11,870.16 21,440.31 25.74% No
generation project applicable
Environmental
protection renovation
December Not
project of converter No 19,900 19,900 3,011.18 4,723.48 23.74% No
31, 2020 applicable
No. 4-6 in steelmaking
plant
Not
Repay bank loan No 200,000 200,000 0 200,000 100.00% No
applicable
Subtotal of Committed 121,219.8 182,406.0
-- 1,072,500 1,072,500 695,274.72 -- -- -- --
Investment Projects 4 9
Over-raised funds are invested in
Not
None No
applicable
121,219.8 182,406.0
Total -- 1,072,500 1,072,500 695,274.72 -- -- -- --
4 9
Situations and reasons The market environment has undergone major changes. The cold-rolled high-strength steel reconstruction project
for not reaching the and the hot-dip galvanizing production line project of the third cold rolling plant have basically reached their
planned progress or production capacity. During the reporting period, other projects did not meet the planned progress or expected
expected benefits (by income.
specific projects)
Status of description of material changes in project feasibility None
Not applicable
Status of amount, purpose and progress of use of over-raised funds
25
Bengang Steel Plates Co., Ltd. Annual Report 2021
Not applicable
Status of changes in Implementation Locations of Raised Funds
Investment Projects
Not applicable
A Status of adjustment of the Implementation Method of Raised
Funds for Investment Projects
Status of preliminary investment and replacement of raised funds for Applicable
investment projects For details, please refer to the special report III. (3)
Status of temporary replenishment of working capital with idle Applicable
raised funds For details, please refer to the special report III. (4)
Applicable
Reasons and amount for the balance of raised funds in project
implementation There was no balance of raised funds for project implementation
this year.
Use and whereabouts of unused raised funds For details, please refer to the special report III. (8)
Problems or other situations in the use and disclosure of raised funds There is no problem or otherwise
(3) The situation for raised funds change project
□ Applicable √ Not applicable
During the reporting period, the company did not have any changes in the fundraising project.
Ⅷ. Significant Assets and Equity Sold in Reporting Period
1. Significant Assets Sold
□ Applicable √ Not applicable
There was no significant asset sold during the reporting period.
2. Substantial Equity Sold
□ Applicable √ Not applicable
Ⅸ. Analysis on Main Subsidiaries and Share Participating Companies
√ Applicable □ Not applicable
Main subsidiaries and the joint-stock companies influencing over 10% net profit of the Company
Unit: Yuan
Company Main Registered Operating Operating
Company Name Total assets Net assets Net Profit
type business capital income profit
Bengang
Processing
Puxiang Cool 4,104,855,060 2,167,667,196 11,529,193,71 296,055,419.5 143,131,193.3
Subsidiary and sales 1,920,000,000
Rolling Steel .02 .95 5.01 9 9
of steel
Sheet Co., Ltd.
Acquirement and disposal of subsidiaries during the reporting period
□ Applicable √ Not applicable
Illustration of main joint-stock companies
None
Ⅹ. Structure Entities controlled by the Company
□ Applicable √ Not applicable
26
Bengang Steel Plates Co., Ltd. Annual Report 2021
XI. Prospect for Future Development of the Company
(1) The development trend of the industry and the market competition pattern the company faces
The year 2022 is a crucial year for the country to implement the "14th Five-Year Plan", and it is also a crucial year
for the steel industry to achieve high-quality development. From the perspective of the overall external environment,
at the end of 2021, the shock wave of the new coronavirus variant strain Omicron swept the world, adding more
variables to the world economic situation. Under the background of the national "dual carbon" goal, the steel industry
has entered a critical period of high-quality development. Green and low-carbon, intelligent manufacturing, etc. have
brought more severe challenges and disruptive changes, and market uncertainty has further increased. At the same
time, China's economy has a solid foundation and strong resilience, and will remain a long-term improvement
fundamental in the future. The National Development and Reform Commission and the Ministry of Industry and
Information Technology issued the "Implementation Plan on Reinvigorating the Operation of the Industrial Economy
and Promoting the High-quality Development of the Industry", which proposed policies and measures such as
"vigorously increasing the effective supply of the bulk raw material market", "tapping the demand potential and
expanding the market space of the industrial economy", which is conducive to guiding Market expectations and
create new opportunities for the development of iron and steel enterprises.
(2) Company development strategy
The overall work idea for 2022: Guided by General Secretary Xi Jinping's new era of socialism with Chinese
characteristics，study and implement the spirit of the 19th National Congress of the Communist Party of China and
the previous 19th plenary sessions in-depth , adhere to the two "consistent" requirements, adhere to the focus on
efficiency, committed to becoming a better and stronger listed company. On the basis of normalized epidemic
prevention and control, we will make every effort to promote the key work of "1+2+3", lead development with
reform, achieve the future with hard work, and make unremitting efforts to build a high-quality sheet metal base with
high international competitiveness led by automobile sheets.
(3) Business plan
Production and operation goals in 2022: Strive to complete 10.71 million tons of pig iron, 11.47 million tons of crude
steel, 14.78 million tons of hot-rolled sheets, 6.4 million tons of cold-rolled sheets, and 340,000 tons of special steel,
and achieve "three zeros" in safety production.
In order to achieve the above goals, we will focus on the following aspects:
1. Focus on efficiency and enhance the competitiveness of the industry
2. Strengthen safety management and realize energy-saving and green development
3. Deepen the linkage of "sales, research and production" and improve the ability of efficiency
4. Strengthen the leadership of the technical system and build a strong digital intelligent enterprise
5. Comprehensively deepen the reform and continuously improve the efficiency of governance
6. Strengthen the Communist Party's leadership over enterprises and provide a strong political guarantee
(4) Maintain the current business and complete the funding arrangements required for the investment projects under
construction
The company will use its own funds and bank loans to meet the funds required for production and operation and
technological transformation.
(5) Possible risks
1. Environmental risks
Risk: The state has continuously strengthened the supervision and enforcement of environmental pollution, and the
pollutant discharge standards have been continuously improved. The public's awareness of environmental protection
and the requirements of environmental protection for enterprises increase continuous. enterprises belong to Iron and
steel industry are facing huge environmental protection pressure. Reduction of carbon is imperative for the steel
industry, according to the goal of "emission peak" and "carbon neutrality" stated by The China Iron and Steel
Association, and "14th Five-Year" Industrial Green Development Plan issued by Ministry of Industry and
Information Technology.
Response measures: Adhere to support Xi Jinping's thought on ecological civilization, focus on improving the quality
of the ecological environment, conscientiously implement the decisions and arrangements of the Party Central
Committee and the State Council, adhere to the concept of "ecological priority and green development", make every
effort to promote pollution control, focus on source control, and consolidate the environment Protect the basic work,
continue to improve the environmental protection management system, and continuously improve the company's
environmental protection performance level. At the same time, optimize the process structure route, further improve
the recycling rate of various resources, and increase the proportion of scrap steel; pay attention to various national
environmental protection policies, improve enterprise environmental protection standards to meet and appropriately
exceed national standards; strengthen the company's self-discharge of various pollution sources Supervision and
27
Bengang Steel Plates Co., Ltd. Annual Report 2021
inspection, 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.
2. Energy Risk
Risk: At present, the contradiction between global energy supply and demand has intensified, and prices of overseas
fossil energy have risen sharply. With the implementation of this round of "double control of energy consumption",
various provinces have cut off electricity, limited production, and staggered labor. Affected by the dual control of
energy consumption and the shortage of power supply, the capacity utilization rate continued to decline, and the
output declined. Due to the characteristics of high load capacity and high emissions, the iron and steel industry is
superior to other companies in its power cutoff. Companies need to solve energy security urgently, reduce energy
risks, and ensure normal production operations.
Response measures: Continuously improve the production process, use off-peak electricity, reduce the energy
consumption of main processes, improve production efficiency, and monitor key energy indicators in real time.
Effectively use our own energy to improve the utilization rate of generator sets, and actively build a clean, low-
carbon, safe and effective energy system, to help energy structure adjustment and high-quality development of
carbon peak and carbon neutrality. Ensure energy security while further improving energy efficiency.
3. Market risk
Risks: Affected by the repeated changes in the epidemic, high inflation, and the withdrawal of the Fed's loose
monetary policy, the global economic operation is facing greater uncertainty. Coupled with the tightening of
domestic policies such as "housing, not speculating," and under the multiple influences of shrinking market consumer
demand and supply shocks, the growth momentum of consumption and investment has weakened, the supply chain
has been blocked, and the operating rates of downstream infrastructure and real estate have fallen across the board.
Steel market demand slowed down slightly.
Response measures: The company will continue to consolidate the lean production system, focus on customers, adapt
to and lead downstream demand, focus on product structure adjustment, focus on breaking through the production
and sales of high-profitability and high-value-added steel varieties, and increase the proportion of strategic products
and regional markets, Market segment pricing power to deal with the risk of industry homogeneous competition.
4. Foreign trade risk
Risks: Affected by the aftermath of the century-old blockage of the Suez Canal, all ports were severely congested,
and the cost of sea transportation increased significantly; secondly, the operation of sea transportation was not
smooth, and there was a gap in transportation capacity, especially the tension between supply and demand of sea
transportation; thirdly, all ports across the country implemented epidemic prevention and control measures.
Controlling the whole process of closed-loop management, under strict epidemic prevention requirements, the cost
of port epidemic prevention has suddenly increased, and the operating cost has increased significantly. The company
still needs to actively respond to ensure that the imported ore is stored in a timely manner to prevent normal
production and operation from being affected, resulting in economic losses and adverse effects on the company.
Response measures: Continuously optimize the logistics system and management methods; at the same time optimize
the raw material supply structure, strengthen resource utilization, comprehensively consider various factors affecting
logistics costs, and make logistics route optimization decisions; build better cooperative relationships with upstream
and downstream enterprises, Actively sign long-term transportation contracts with liner companies to ensure long-
term and stable supply chain services.
XII. Researches, visits and interviews received in this reporting period
□ Applicable √ Not applicable
During the reporting period, the Company did not receive any research, communication, interviews and other
activities.
28
Bengang Steel Plates Co., Ltd. Annual Report 2021
Ⅳ. Corporate Governance
I. Basic Situation of Corporate Governance
During the reporting period, the Company has been following the laws, regulations and documents
such as the Company Law, Securities Law, Governance Guidelines for Listed Companies,
Guidelines for the Normative Operation of Listed Companies on the Shenzhen Stock Exchange and
Articles of Association. Based on the actual situation of the company, the Company has been
continuously improving the corporate governance structure and internal control system of the
company, improves the governance level, and promotes the company's standardized operation. As
of the end of the reporting period, the actual situation of corporate governance meets the
requirements of the regulatory documents related to the governance of listed companies.
1. Shareholders and Shareholders' General Meeting: The company has formulated the "Rules of
Procedures for General Meetings of Shareholders" in strict accordance with the "Company Law",
"Rules for Shareholders' General Meetings of Listed Companies" and the company's "Articles of
Association" to ensure the exercise of the rights of the company's shareholders and the standard
operation of the shareholders' meeting. The company's previous shareholder meetings have provided
two attendance channels, on-site voting and online voting, to facilitate shareholders. Involving
major issues that affect the interests of small and medium investors, the company counts the votes
of small and medium investors individually and discloses them in a timely manner to ensure that all
shareholders enjoy equal status and fully exercise their rights. And by hiring lawyers to witness and
ensure the legal compliance of the convening, convening and voting procedures of the meeting, the
legitimate rights and interests of the company and shareholders have been safeguarded.
2. Directors and the board of directors: the company's board of directors has clear responsibilities,
and the company's directors exercise their powers in strict accordance with the "Articles of
Association", "Rules of Procedures of the Company's Board of Directors", "Company Independent
Directors Work System" and other related systems, perform their duties with integrity and diligence,
and safeguard the legitimate rights and interests of the company and shareholders. The company's
board of directors has four special committees, namely audit, strategy, nomination, remuneration
and assessment, each of which performs its own responsibilities and functions, and can carry out its
work in accordance with the rules of procedure of each special committee. During the reporting
period, the convening and holding procedures of the company's board of directors complied with
the “Company Law”, “Articles of Association” and “Rules of Procedure of the Board of Directors”
and other relevant laws and regulations.
3. Supervisors and Board of Supervisors: The company's supervisors can earnestly perform their
duties, independently and effectively perform supervision and inspection functions. The company's
supervisors attend shareholders' meetings, attend board meetings as non-voting delegates, regularly
inspect the company's legal operations and financial conditions, and issue opinions from the board
of supervisors. Supervise the company's finances, the performance of the company's directors and
senior management personnel, and the capital exchanges with related parties, so as to safeguard the
legal rights and interests of the company and shareholders. The number and structure of the board
of supervisors meet the requirements of laws and regulations, and its convening and convening are
strictly implemented in accordance with the "Articles of Association" and "Rules of Procedure of
the Board of Supervisors" to ensure that the board of supervisors effectively performs its duties.
4. Controlling shareholders and the company: The company has independent and complete business
and independent management capabilities, and is independent of the controlling shareholders and
actual controllers in terms of business, personnel, assets, institutions, and finances; The company's
board of directors, board of supervisors and other internal institutions operate independently; The
company's major decisions are made by the board of directors or the general meeting of shareholders
in accordance with the law. Controlling shareholders and actual controllers can strictly regulate their
own behavior. There is no direct or indirect intervention in the company's decision-making and
29
Bengang Steel Plates Co., Ltd. Annual Report 2021
production and operation activities beyond the general meeting of shareholders, nor does it harm
the interests of the company and other shareholders.
5. Information disclosure and transparency: The company strictly complies with the requirements
of the "Shenzhen Stock Exchange Stock Listing Rules" and the "Information Disclosure
Management System" and other requirements, truthful, accurate, and complete, without false
records, misleading statements or major omissions in performing information disclosure obligation,
"China Securities Journal", "Securities Times", "Hong Kong Commercial Daily" and
www.cninfo.com.cn are the designated media for company information disclosure. The company
publishes regular reports and temporary announcements through the above-mentioned information
disclosure media to ensure that all shareholders of the company can obtain information with equal
opportunities.
6. Investor relationship management: The company continues to strengthen communication with
investors to deepen investors' understanding and recognition of the company. The company appoints
the secretary of the board of directors as the person in charge of investor relations management, and
the office of the board of directors is the organization that undertakes the daily work of investor
relations management. The company makes full use of on-site meetings, dedicated telephone calls,
investor interaction platforms and other methods to communicate with the company's shareholders,
listens carefully to the opinions and suggestions of investors on the company's strategic development
and production and operation, and has established a good communication mechanism with investors,
which enhances investors' understanding and investment confidence in the company.
Whether there exists any difference in compliance with corporate governance, PRC Company Law
and relevant provisions of CSRC
□ Yes √ No
There exists no difference in compliance with corporate governance, PRC Company Law and
relevant provisions of CSRC.
II. Explanation on Structural Independence of the Company on Business, Personnel, Assets,
Organization and Finance from the Controlling Shareholder and Actual Controller
The Company is separated from the controlling shareholder in aspects of business, personnel, assets,
organization and finance, etc. and has its own independent and complete business operation.
(1) In business operation: The Company has its own production and business planning, financial
affairs check and calculate, labor and personnel, raw material supplies and products selling business
system independently and completely.
(2) In personnel: The Company and controlling shareholder are separate in such aspects as labor,
personnel and salary management. Such senior executives as general manager, vice general manager,
secretary of Board of Directors, etc. get salary from the Company, and none of them hold the
important position other than a director in shareholder.
(3) In Asset: The Company is separated from the controlling shareholder's clearly in asset. The
Company has its own independent purchase, production, and marketing system.
(4) In organization: The internal operations of the Company are independent; organization structure
and working function are totally independent.
(5) In finance: The company has independent financial management department, the accounting and
financial management system where are complete and operated independently, and has bank account
and pay taxes independently.
III. Competition Situations of the Industry
√ Applicable □ Not applicable
Question Types of Compan Company Cause Solution Progress and follow-up
30
Bengang Steel Plates Co., Ltd. Annual Report 2021
type affiliations y name Type plans
with listed
companies
Based on the principle of
In 2021, the benefiting the
company's original development of Bengang
actual controller, Steel and safeguarding
Liaoning State- the interests of
owned Assets shareholders, especially
Supervision and the interests of small and
Ansteel Group
Administration medium shareholders,
has made
AnSteel Commission, Ansteel Group will
Industry Controlling commitments
Co., Other transfered its 51% comprehensively use
competition shareholder to avoid
Ltd. stakes in Bengang various methods such as
Industry
Group to Ansteel asset restructuring,
competition..
Group for free, business adjustment, and
and Ansteel Group entrusted management to
will become the steadily promote the
company's indirect integration of related
controlling businesses to solve the
shareholder problem of horizontal
competition.
IV. Annual General Meeting and Extraordinary Shareholders’ Meetings in the Reporting
Period
1. Annual General Meeting
Investor Date of Index of information
Sessions Type Meeting Date
participation ratio disclosure disclosure
Annual
Annual Shareholders Announcement No.:
General 80.56% May 27, 2021 May 28,2021
General Meeting of 2020 2020
Meeting
Announcement on
Resolutions of First
First Extraordinary Extraordinary
Extraordinary
Shareholders General General 66.31% Sep 15,2021 Sep 16,2021
Shareholders
Meeting of 2021 Meeting
General Meeting of
2021
Announcement on
Resolutions of
Second Extraordinary Extraordinary Second
Shareholders General General 63.36% Dec 07,2021 Dec 08,2021 Extraordinary
Meeting of 2021 Meeting Shareholders
General Meeting of
2021
Announcement on
Resolutions of Third
Third Extraordinary Extraordinary
Extraordinary
Shareholders General General 63.70% Dec 24,2021 Dec 25,2021
Shareholders
Meeting of 2021 Meeting
General Meeting of
2021
2. Request for Extraordinary General Meeting by Preferred Stockholders Whose Voting Rights
Restore
□ Applicable √ Not applicable
Ⅴ. Status of Directors, Supervisors, Senior Executives and Employees
1. Basic situation
Name Position Office Sex Age Starting Expiry Shares Shares Shares Other Shares Reasons
31
Bengang Steel Plates Co., Ltd. Annual Report 2021
status date date of held at increased decreased increase held at for
of office office the during the during the / the increase
term term year- reporting reporting decrease periodr- or
begin period period end decrease
of
shares
Dec 07, May 16,
Huo Gang Chairman In office Male 48
2021 2022
Director,
Wang Deputy Nov 18, May 16,
In office Male 47
Shiyou General 2021 2022
Manager
Dec 25, May 16,
Niu Li Director In office Male 53
2021 2022
Director,
Deputy May 27, May 16,
Lin Dong In office Male 51
General 2021 2022
Manager
May 27, May 16,
Han Mei Director In office Female 52
2021 2022
Director,
Gao Dec 07, May 16,
Secretary of In office Male 47
Desheng 2021 2022
the Board
Zhang Independent May 16, May 16,
In office Female 66
Suxun Director 2019 2022
Yuan Independent May 20, May 16,
In office Male 40
Zhizhu Director 2020 2022
Zhong Independent May 27, May 16,
In office Female 65
Tianli Director 2021 2022
Chairman of
May 27, May 16,
Cheng Bin Supervisory In office Male 58
2021 2022
Committee
Zhao May 27, May 16,
Supervisor In office Female 37
Zhonghua 2021 2022
Dec 07, May 16,
Lu Weijun Supervisor In office Male 46
2021 2022
Zhang Jan 26, May 16,
Supervisor In office Male 49
Yanlong 2014 2022
Zhao Jun 26, May 16,
Supervisor In office Male 44
Xingtao 2019 2022
Deputy
Yang Apr 16, May 16,
General In office Male 57
Xiaofang 2021 2022
Manager
Wang Chief Nov 18, May 16,
In office Male 52
Donghui accountant 2021 2022
Deputy
Nov 18, May 16,
Jin Tao General In office Male 51
2021 2022
Manager
Leave Mar 14, Nov 18,
Gao Lie Chairman Male 54
office 2019 2021
Jiang Deputy Leave May 27, Nov 18,
Male 56
Guangwei Chairman office 2021 2021
Deputy Leave Jun 03, May 27,
Cao Aimin Male 54
Chairman office 2010 2021
Director,
Shen Leave May 16, May 27,
General Male 53
Qiang office 2019 2021
Manager
32
Bengang Steel Plates Co., Ltd. Annual Report 2021
Huang Leave May 24, May 28,
Director Male 58
Xinghua office 2018 2021
Zhao Independent Leave May 21, May 27,
Male 61
Xinan Director office 2015 2021
Leave Feb 19, May 27,
Li Lin Supervisor Female 53
office 2014 2021
Leave Mar 14, Sep 13,
Li Xiaowei Supervisor Male 46
office 2019 2021
Deputy
Leave Apr 26, Nov 18,
Chen Xin General Male 51
office 2021 2021
Manager
Deputy
Bao Leave Dec 28, Apr 26,
General Male 58
Mingwei office 2012 2021
Manager
Deputy
Wang Leave Jan 26, Apr 26,
General Male 56
Fengmin office 2014 2021
Manager
Chief
Cong Leave Apr 26, Sep 13,
Financial Female 51
Yajuan office 2021 2021
Officer
During the reporting period, is there any resignation of directors and supervisors and dismissal of
senior management personnel in the report period.
□Yes √ No
Changes in directors, supervisors and senior management of the company
√Applicable □Not applicable
Name Position Office status Date Reason
Shen Qiang Director Leave office Apr 26, 2021 Voluntary turnover
Bao Mingwei Deputy General Manager Leave office Apr 26, 2021 Job change
Wang Fengmin Deputy General Manager Leave office Apr 26, 2021 Job change
Zhao Xinan Independent Director Expiry of term May 27, 2021 Leaving office after expiry of term
Cao Aimin Deputy Chairman Leave office May 27, 2021 Voluntary turnover
Huang Xinghua Director Leave office May 27, 2021 Voluntary turnover
Cong Yajuan Chief Financial Officer Leave office Sep 13, 2021 Job change
Lin Dong General Manager Appoint and remove Nov 18, 2021 Job change
Chen Xin Deputy General Manager Leave office Nov 18, 2021 Job change
Han Mei Deputy Chairman Appoint and remove Nov 18, 2021 Voluntary turnover
Gao Lie Chairman Leave office Nov 18, 2021 Voluntary turnover
Jiang Guangwei Deputy Chairman Leave office Nov 18, 2021 Voluntary turnover
Wang Donghui Director Appoint and remove Nov 18, 2021 Voluntary turnover
Li Xiaowei Director Leave office Sep 13, 2021 Voluntary turnover
Chairman of Supervisory
Han Mei Appoint and remove Apr 26, 2021 Voluntary turnover
Committee
Li Lin supervisor Leave office Apr 26, 2021 Voluntary turnover
Huo Gang Deputy General Manager Leave office Apr 26, 2021 Job change
2. Posts holding
Work experience, professional background and currently mainly responsibilities of Directors,
Supervisors and Senior Executives in current office
Huo Gang, male, 48 years old, Ph. D., professor-researcher-level senior engineer. He successively
served as the director of the steel rolling branch of Benxi Iron and Steel Cold Rolling Plant; the
33
Bengang Steel Plates Co., Ltd. Annual Report 2021
deputy director of the technology department of Benxi Iron and Steel No. 2 Cold Rolling Plant; the
deputy director of the technology department and the director of the inspection laboratory, the
director of the production department, the assistant to the general manager, the deputy general
manager, General Manager; Secretary of the Party Committee and Executive Deputy Director and
Director of the Third Cold Rolling Plant of Benxi Steel Plate Company; Deputy General Manager
and Director of the Cold Rolling Plant of Bengang Steel Plate Co., Ltd.; Secretary of the Party
Committee, Chairman and Chairman of the Labor Union of Benxi Iron and Steel International Trade
Company. He is currently the Secretary of the Party Committee and Chairman of Bengang Steel
Plate Co., ltd., and Chairman of Bengang Posco Co., ltd.
Wang Shiyou, male, 47 years old, master, senior engineer. He successively served as the director of
the thermal workshop and the secretary of the party branch of the iron-making plant of Bengang
Steel Plate Company, the deputy director of the new No. 1 blast furnace workshop, the director of
the fifth blast furnace workshop and the secretary of the party branch, the chief of the production
section, the chief of the planning section, and the deputy director; Benxi Steel Director of Standard
Management of the Manufacturing Department of the Plate Company; Director of the Iron-making
Plant of Benxi Iron and Steel Beiying Company; Secretary of the Party Committee and Director of
the Iron-making General Plant of Benxi Iron and Steel Plate Company. He is currently the deputy
secretary of the party committee, director and deputy general manager of Bengang Steel Plate Co.,
Ltd. (temporarily responsible for overall production and operation).
Niu Li, male, 54 years old, master, engineer. He successively served as the director of the office of
Benxi Iron and Steel Group Corporation, the secretary of the Party Committee of the organization;
the head of the Legal Affairs Department of Benxi Iron and Steel Group Corporation, the secretary
of the Party Committee of the organization; the deputy secretary of the Disciplinary Committee of
Benxi Iron and Steel Group Corporation, the director of the Supervision Department, the director of
the Office of the Leading Group of the Party Committee Inspection Work, and the secretary of the
Disciplinary Committee of Benxi Iron and Steel Company He is currently the deputy secretary of
the party committee, employee director, head of the preparatory team of the Disciplinary Committee
and chairman of the labor union of Bengang Steel Plate Co., Ltd..
Lin Dong, male, 51 years old, doctoral student, professor-researcher-level senior engineer. He
successively served as deputy director and chief engineer, factory director and deputy secretary of
the party committee of the steelmaking plant of Benxi Iron and Steel Sheets Co., Ltd.; deputy head
of the steelmaking material improvement group of Benxi Iron and Steel; manager of the extension
project department of the industrial chain of Benxi Iron and Steel; Benxi Iron and Steel Plate Co.,
Ltd. Director of the company's technology center; director of the quality management center of
Bengang Steel Plate Co., Ltd.; director, deputy secretary of the party committee, general manager
and director of the manufacturing department of Bengang Steel Plate Co., Ltd. He is currently the
director and deputy general manager of Bengang Steel Plate Co., Ltd.
Han Mei, female, 52 years old, Bachelor, senior accountant. She successively served as the deputy
director of the finance department of Bengang Steel Plate Co., Ltd.; the deputy director of the audit
department of Benxi Iron and Steel Group Co., Ltd. and the director of the supervisory board
management department, the deputy chairman of the third board of supervisors, the supervisor of
Benxi Iron and Steel Group Finance Company, and the auditor of Benxi Iron and Steel (Group) Co.,
Ltd. Director of the Department; Director of the Audit Department of Bengang Group Co., Ltd.,
Chairman and Vice Chairman of the Supervisory Committee of Bengang Steel Plate Co., Ltd. She
is currently the Deputy Chief Accountant of Benxi Iron and Steel Group Corporation, General
Manager of the Finance Department of Benxi Iron and Steel Group, and Director of Benxi Iron and
Steel Plate Company.
Gao Desheng, male, 47 years old, master, senior economist. He successively served as the acting
director of the Business Planning Division of the Operation Improvement Department of Benxi Iron
and Steel Group Corporation, the director of the Property Rights Management Division of the
Operation Improvement Department of Benxi Iron and Steel Group Corporation, a director of the
Automobile Transportation Company, the vice chairman of the First Supervisory Committee, and
the secretary of the board of directors of the Benxi Iron and Steel Plate Company. He is currently
34
Bengang Steel Plates Co., Ltd. Annual Report 2021
the director and board secretary of Bengang Steel Plate Co., Ltd.
Zhang Suxun Female, 66 years old, bachelor degree, professor. She has served as a teacher at the
Business School of Liaoning University; now she is retired.
Yuan Zhizhu, male, 40 years old, Ph.D., associate professor of accounting at Northeastern
University, master tutor, non-practicing member of Chinese certified public accountants. He has
served as a lecturer in the School of Business Administration of Northeastern University; he is
currently the director of the Accounting Department of the School of Business Administration of
Northeastern University, and serves as a director of the Liaoning Accounting and Abacus Mental
Arithmetic Society and a director of the Liaoning Auditing Society.
Zhong Tianli, Female, born in 1965, professor (doctoral supervisor) of Northeastern University. She
successively served as the deputy dean of the School of Business Administration of Northeastern
University; the dean of the School of Basic Studies of Northeastern University and the director of
the Institute of Financial Management of the Business School of Northeastern University; she is
currently a professor of the Accounting Department of the School of Business Administration of
Northeastern University.
Brief introduction of the members of the supervisory board:
Cheng Bin, male, 58 years old, university degree, senior engineer. He successively served as the
director of the material supply department of Benxi Iron and Steel; the vice chairman of the board,
the secretary of the party committee and the chairman of the labor union, the secretary of the
Disciplinary Committee, and the deputy manager of Bengang International Trade Co., Ltd.; the
director of the customer service department of the sales department of Bengang Steel Plate Co., Ltd.;
Secretary of the Party Committee and Manager of the Center; Secretary of the Party Committee and
Deputy Director of the Hot Rolling Plant of Bengang Steel Plate Co., Ltd., Ltd.; Director of the
Audit Department of Bengang Group; currently Chief Auditor of Bengang Group Corporation and
Chairman of the Supervisory Board of Bengang Steel Plate Co., Ltd.
Zhao Zhonghua, female, 37 years old, master, senior accountant. She successively served as the
assistant to the director of the finance department of Bengang Group Co., Ltd.; the deputy manager
of Bengang Group Finance Co., Ltd.; the director of the finance department of Bengang Steel Plate
Co., Ltd.; and the deputy director of the finance department of Bengang Group Co., Ltd. She is
currently the Supervisor and Deputy Manager of the Finance Department of Bengang Steel Plate
Co., Ltd.
Lu Weijun, male, 46 years old, master, senior accountant. He successively served as the chief of the
cost section of the finance department of Benxi Iron and Steel (Group) Construction Co., Ltd.; the
chief business engineer of the audit department of Benxi Iron and Steel Sheet Co., Ltd.; the chief
business engineer of the audit department of Benxi Iron and Steel Group Corporation. He is
currently the Supervisor and Deputy Manager of the Finance Department of Bengang Steel Plate
Co., Ltd.
Zhang Yanlong Male, 44 years old, university degree, senior engineer. He successively served as
production director of steelmaking workshop of Bengang Steel Plate Co., Ltd. steelmaking plant;
deputy section chief of technical quality section of Bengang Steel Plate Co., Ltd. steelmaking plant;
director of steelmaking workshop of Bengang Steel Plate Co., Ltd. steelmaking plant; Bengang Steel
Plate Co., Ltd. Chief of the production section of the company's steelmaking plant; assistant to the
director of the steelmaking plant of Bengang Steel Plate Co., Ltd.; currently deputy director of the
steelmaking plant of Bengang Steel Plate Co., Ltd.; supervisor of Bengang Steel Plate Co., Ltd.
Zhao Xingtao Male, 50 years old, university degree, master of engineering, senior engineer. He has
successively served as Deputy Chief Engineer of Bengang Posco Company; Deputy General
Manager of Bengang Posco Company; Deputy Director of Cold Rolling Plant of Bengang Steel
Sheet Co., Ltd.; Secretary of Party Committee and Chairman of Labor Union of Bengang Steel Sheet
Co., Ltd. Cold Rolling Plant; currently Bengang Steel Co., Ltd. Deputy Secretary of the Party
35
Bengang Steel Plates Co., Ltd. Annual Report 2021
Committee of the Cold Rolling General Plant of Plate Co., Ltd., leader of the Disciplinary
Committee Preparation Team, Chairman of the Labor Union, and Supervisor of Bengang Steel Plate
Co., Ltd.
Profile of non-director senior management:
Yang Xiaofang, male, 58 years old, doctoral student, senior engineer. He successively served as
deputy director of Bengang Cold Rolling Plant; deputy general manager of Bengang Posco
Company; director of cold rolling plant of Bengang Steel Plate Co., Ltd.; manager of asset
management company; chairman and manager of Liaoning Henderson asset management company;
Executive Deputy Director of No. 3 Cold Rolling Plant of Plate Co., Ltd.; Deputy General Manager
and Head of Equipment Department of Bengang Steel Plate Co., Ltd. He is currently the Deputy
General Manager of Bengang Steel Plate Co., Ltd.
Wang Donghui, male, 52 years old, bachelor's degree, senior accountant. He successively served as
the director of the general division of the finance department of Benxi Iron and Steel Group; the
director and chief financial officer of the Mechanism Company of Benxi Iron and Steel Company;
the deputy general manager of the finance company of Benxi Iron and Steel Group; the deputy
director of the operation and management department of Benxi Iron and Steel Group; , Director of
Operation Improvement Department; Vice Minister of Finance Department of Benxi Iron and Steel
Group Corporation and Chief Accountant of Beiying Company; Director of Finance Department of
Benxi Iron and Steel Group Corporation; Director of Bengang Steel Plate Co., Ltd. He is currently
the chief accountant of Bengang Steel Plate Co., Ltd. and director of Bengang Posco Company.
Jing Tao, male, 51 years old, master, senior engineer. He successively served as the director of the
finishing workshop and the deputy secretary of the Party branch, the chief of the technical quality
section and the secretary of the Party branch, the assistant to the factory manager, and the deputy
director of the hot rolling mill of Benxi Steel Sheet Company; Deputy Director, Manager of
Packaging Project Department, Manager of Packaging Company; Director of Hot Rolling Plant of
Bengang Steel Plate Co., Ltd. Secretary of Party Committee and Chairman of Labor Union and
Vice President of Bengang Plate Company Technology Research Institute; Minister of Science and
Technology Innovation Department of Benxi Iron and Steel Group Company. He is currently the
Deputy General Manager of Bengang Steel Plate Co., Ltd.
Positions in shareholder units
√ Applicable □ Not applicable
Does he /she
Expiry receive
Names of the Names of the Titles engaged in the Starting date of date of remuneration
persons in office shareholders shareholders office term office or allowance
term from the
shareholder
Han Mei Bengang Group Co., Deputy Chief Accountant, Feb 01, 2021 Yes
Ltd General Manager of Finance
Department
Cheng Bin Bengang Group Co., Chief Auditor Feb 01, 2021 Yes
Ltd
Description of the
position in the None
shareholder
Posts holding in other companies
√Applicable □Not applicable
Does he /she
Titles engaged Expiry receive
Names of the Names of the other Starting date of
in other date of remuneration or
persons in office companies office term
companies office term allowance from
the shareholder
Bengang POSCO Cold- No
Huo Gang Chairman Nov 01, 2021
rolled Sheet Co., Ltd.
36
Bengang Steel Plates Co., Ltd. Annual Report 2021
Chairman of the
Dongbei Special Steel
Han Mei Supervisory Feb 01, 2021 No
Group Co., Ltd.
Board
Description of the
position in other None
companies
Punishment by the security’s regulatory authorities in last three years
□ Applicable √ Not applicable
3. Remuneration to Directors, Supervisors and Senior Executives
Decision-making procedures, basis of recognition and actual payment of the remuneration to Directors, Supervisors
and Senior Executives
Decision making procedures
1. The Remuneration and Assessment Committee will produce a plan or proposal, which will be implemented upon
approval of the Board or the Shareholders’ Meeting;
2. According to performance assessment criteria and procedures, the Remuneration and Assessment Committee
undertakes assessment on the Directors and Senior Executives;
3. Remuneration amounts and ways of rewards will be proposed according to the assessment and remuneration
policies for Directors, Supervisors and Senior Executives, and adopted by voting;
4. To be implemented upon approval of the Board.
Basis of recognition
Remuneration scheme for a particular position is recognized basing on the range of responsibilities, duties.
Remunerations are distributed based on the assessment results and remuneration policies.
Actual payment of the remuneration
Remuneration is paid on monthly basis according to the remuneration allocation policies.
Remuneration of Directors, Supervisors and Senior Executives during the reporting period
Unit: in the thousand yuan
Total
Whether receive
remuneratio
remuneration in
Name Position Sex Age Office status n received
the Company's
from the
related parties
shareholder
Huo Gang Chairman Male 48 In office 18.45 Yes
Wang Shiyou Director, Deputy General Manager Male 47 In office 40.2 No
Niu Li Director Male 53 In office 0.82 Yes
Lin Dong Director, Deputy General Manager Male 51 In office 36.96 No
Han Mei Director Female 52 In office Yes
Gao Desheng Director, Secretary of the Board Male 47 In office 30.12 Yes
Zhang Suxun Independent Director Female 66 In office 5 No
Yuan Zhizhu Independent Director Male 40 In office 5 No
Zhong Tianli Independent Director Female 65 In office No
Cheng Bin Chairman of Supervisory Committee Male 58 In office Yes
Zhao Zhonghua Supervisor Female 37 In office Yes
Lu Weijun Supervisor Male 46 In office Yes
Zhang Yanlong Supervisor Male 49 In office 34.92 No
Zhao Xingtao Supervisor Male 44 In office 33 No
Yang Xiaofang Deputy General Manager Male 57 In office 27.18 Yes
Wang Donghui Chief accountant Male 52 In office 6.16 Yes
Jin Tao Deputy General Manager Male 51 In office 6.18 Yes
Gao Lie Chairman Male 54 Leaving office Yes
Jiang Guangwei Deputy Chairman Male 56 Leaving office Yes
Cao Aimin Deputy Chairman Male 54 Leaving office Yes
37
Bengang Steel Plates Co., Ltd. Annual Report 2021
Shen Qiang Director, General Manager Male 53 Leaving office 5.8 Yes
Huang Xinghua Director Male 58 Leaving office Yes
Zhao Xinan Independent Director Male 61 Leaving office 5 No
Li Lin Supervisor Female 53 Leaving office 12 No
Li Xiaowei Supervisor Male 46 Leaving office Yes
Chen Xin Deputy General Manager Male 51 Leaving office 29.1 Yes
Bao Mingwei Deputy General Manager Male 58 Leaving office 2.32 Yes
Wang Fengmin Deputy General Manager Male 56 Leaving office 2.04 Yes
Cong Yajuan Chief Financial Officer Female 51 Leaving office 21.84 Yes
Total -- -- -- -- 322.09 --
Ⅵ. Duty fulfillment of directors during the reporting period
1. The situation of Board of Directors during the Reporting Period
Sessions Meeting Date Date of disclosure Index of information disclosure
Announcement on Resolutions
17th Eighth plenary session April 26, 2021 April 28, 2021
of 17th Eighth plenary session
Announcement on Resolutions
18th Eighth plenary session May 27, 2021 May 28, 2021
of 18th Eighth plenary session
Announcement on Resolutions
19th Eighth plenary session July 28, 2021 July 29, 2021
of 19th Eighth plenary session
Announcement on Resolutions
20th Eighth plenary session August 25, 2021 August 26, 2021
of 20th Eighth plenary session
Announcement on Resolutions
21st Eighth plenary session September 13, 2021 September 14, 2021
of 21st Eighth plenary session
Announcement on Resolutions
22nd Eighth plenary session October 22, 2021 October 23, 2021
of 22nd Eighth plenary session
Announcement on Resolutions
23rd Eighth plenary session November 18, 2021 November 19, 2021
of 23rd Eighth plenary session
Announcement on Resolutions
24th Eighth plenary session December 7, 2021 December 7, 2021
of 24th Eighth plenary session
2. The situation of directors attending the BOD and shareholders meeting
Attendance of Directors at Board of Directors and General Meetings of Shareholders
Number of
Board Failure to
Number of Number
meetings personally
Number of meetings Number of of general
necessary to be Number of attend board
Director name spot attended by attendances by meetings
attended absences meetings
attendances Communicatio representative to be
during the successively
n attended
reporting twice (Yes/No)
period
Huo Gang 1 1 0 0 0 No 2
Wang Shiyou 1 1 0 0 0 No 2
Niu Li 0 0 0 0 0 No 0
Lin Dong 7 2 5 0 0 No 4
Han Mei 7 2 5 0 0 No 4
Gao Desheng 1 1 0 0 0 No 2
38
Bengang Steel Plates Co., Ltd. Annual Report 2021
Zhang Suxun 8 3 5 0 0 No 4
Yuan Zhizhu 8 3 5 0 0 No 4
Zhong Tianli 7 2 5 0 0 No 4
Gao Lie 7 2 5 0 0 No 2
Jiang Guangwei 6 1 5 0 0 No 2
Cao Aimin 1 1 0 0 0 No 0
Shen Qiang 1 1 0 0 0 No 0
Huang Xinghua 1 1 0 0 0 No 0
Zhao Xinan 1 1 0 0 0 No 1
Wang Donghui 6 1 5 0 0 No 2
Explanation of two consecutive absences from attending the board of directors in person
3. Objection of Directors on Relevant Issues
Objection of independent directors on some relevant issues
□ Yes √ No
Independent directors proposed no objection against the relevant matters during the reporting period.
4. Other Notes to Duty Fulfillment of Directors
Whether any director’s advice to the company was accepted
√ Yes □ No
Illustration of acceptance of or failure to accept a director’s advice to the company
Directors have not made recommendations during the reporting period.
Ⅶ. Duty Fulfillment of the Special Committees under the Board during the reporting period
Important Specific
Number of Other
Meeting comments and circumstances
Committees Membership meetings Meeting content performance of
date suggestions of the objection
held duties
raised (if any)
1. 2020 annual report and
summary; 2. 2020 final
financial report; 3. 2020
profit distribution plan; 4.
2021 first quarter report;
5. Proposal on the
proposed re-appointment
of accounting firms; 6.
Proposal on the prediction
of daily transactions of
Zhang related parts in 2021;7.
Fully
Audit Suxun, Yuan April 16, Proposal on re-signing the
1 financial service Agree communicate No
Committee Zhizhu, Cao 2021
agreement; 8. Risk with auditors
Aimin
disposal plan on handling
deposit and loan business
in Bengang Group
Finance Co., Ltd.; 9. The
proposal of framework
agreement about financial
leasing cooperation with
Liaoning Hengyi
Financial Leasing Co.,
Ltd. 10. The proposal on
revising the raw material
39
Bengang Steel Plates Co., Ltd. Annual Report 2021
and service supply
agreement; 11. The
company's internal control
evaluation report in 2020;
12. The proposal on the
provision for asset
impairment; 13. Proposal
on the use of self-owned
short-term idle funds for
entrusted financial
management; 14. Risk
assessment report of
Bengang Group Finance
Co., Ltd.; 15. Special
report on the deposit and
use of raised funds in
2020
Proposal on using idle
July 21,
raised funds as working Agree Not applicable No
2021
capital temporarily
1. 2021 semi-annual
report;2, Risk Assessment
Report of Bengang Group
August Finance Co., Ltd.; 3.
Agree Not applicable No
16, 2021 Special report on the
Deposit and Use of Raised
Funds in the Semi-annual
2021
Zhang
Audit Suxun, Yuan October
4 15, 2021 2021 third quarter report Agree Not applicable No
Committee Zhizhu, Han
Mei 1. Proposal on the new
routine related party
transaction; 2. Proposal on
signing a financial service
agreement with Ansteel
Decemb
Finance Co., Ltd.; 3.
er 01, Agree Not applicable No
Proposal on signing a
2021
supply chain financial
service framework
agreement with Ansteel
Group Capital Holdings
Co., Ltd.
1. Proposal on the
nomination of candidates
for directors; 2. Proposal
on the nomination of
candidates for
independent directors; 3.
April 16, Proposal on the
Agree Not applicable No
2021 appointment of Mr. Lin
Dong as the general
Yuan manager of the company;
Zhizhu, 4. Proposal on the
Nomination appointment of senior
Zhang 3
Committee management personnel of
Suxun, Gao
Lie the company
Proposal on the
Septemb
appointment Chief
er 08, Agree Not applicable No
Financial Officer of
2021
company
1. Proposal on the
Novemb appointment senior
er 12, manager of the company; Agree Not applicable No
2021 2. Proposal on the
nomination of director
40
Bengang Steel Plates Co., Ltd. Annual Report 2021
candidates
1. 2020 annual report of
Gao Lie,
Strategy April 16, the board of directors;
Shen Qiang, 1 Agree Not applicable No
Committee 2021 2. 2021 investment
Zhao Xinan
framework plan proposal
Ⅷ. Duty Fulfillment of the Supervisory Committee
Whether the supervisory board made any objection against the supervision issue during the reporting
period
□ Yes √ No
The Supervisory Board made no objection against the supervision issue during the reporting period.
Ⅸ. Staff Condition
1. Staff Population, Professional Structure and Education Level
Population of in-service staff in parent company 18,232
Population of in-service staff in main subsidiaries 626
Total population of in-service staff 18,858
Total population of staff receiving remuneration in 18,858
the current period
Population of retired staff whose expense was 23,608
borne by parent company and major subsidiary
companies
Professional Composition
Type of Professional Composition Population
Production Staff 15,083
Sales Staff 181
Technician Staff 1,480
Financial Staff 148
Administrative Staff 1,966
Total 18,858
Educational Degree
Type of Educational Degree Population
PhD. 13
Postgraduate 351
Undergraduate 4,238
Junior College 6,668
Technical secondary school 460
High School and Technical School 3,743
Middle School and others 3,385
Total 18,858
2. Remuneration Policies
In 2021, the company establish a complete performance management system which based on the
determined annual production and operation guidelines, policies and overall management goals. The
company evaluate the operation indicators and work tasks of various functional departments,
factories and mines, set key performance evaluation indicators, and implement monthly evaluations.
Salary based on position, ability and performance. Salary is determined by post, and salary is
changed by post, guide employees to improve their abilities, establish a salary distribution
mechanism that relies on competition and income by contribution, and highlights the assessment of
key performance indicators, so as to truly realize that income can be increased or decreased.
Continue to promote the total salary contract, guide all units to rationally allocate human resources,
optimize the allocation mechanism and improve labor productivity, and give full play to the role of
salary incentives and constraints.
41
Bengang Steel Plates Co., Ltd. Annual Report 2021
3. Training Plan
In 2021, the company aims to deeply implement the talent-first development strategy, significantly
enhance the ability of talent training, take the overall improvement of the overall quality of
employees as the ultimate goal, focus on meeting training needs, and focus on updating training
concepts, innovating training methods, and improving training quality. The focus is to adhere to the
principle of "controlling the total amount, optimizing the structure, and focusing on practical results",
and while closely focusing on the production and operation center, comprehensively carry out
systematic, modular, and precise education and training. Promote the development of training
products that combine long and short, high and low matching, and parallel sizes, and strive to create
characteristic high-quality training programs, effectively release training effectiveness, and further
improve the overall quality of the workforce, laying a solid foundation for the high-quality
development of the steel sheet.
In 2021, the company completed 80 training projects throughout the year, training 14,474 person-
times, the training rate of all employees reached 70%, and the implementation rate of the annual
training plan will reach 85%. Achieving training objectives in full.
4. Outsourcing
□ Applicable √ Not applicable
Ⅹ. Profit Distribution or Capital Reserve Conversion
Formulation, implementation and adjustment of profit distribution policy of common shares especially
cash dividend policy during the reporting period
√ Applicable □ Not applicable
Interim profit distribution in 2021: Based on the total share capital of 3,885,060,605 shares at the
end of June 2021, a cash dividend of RMB 5 (tax included) will be distributed to all shareholders
for every 10 shares, with a total cash dividend of RMB 1,942,530,302.5. No capital reserve will be
converted into share capital for this distribution. The company has completed the implementation
on October 13, 2021.
Profit distribution in 2021: As audited by BDO China Shu Lun Pan Certified Public Accountants
LLP., the company's net profit attributable to the parent company in 2021 is RMB 2,500,582,902.58,
plus the undistributed profit at the beginning of the year of RMB 2,692,018,405.40, and deducting
the actual dividend of RMB 1,981,284,017.82 from the previous year and the statutory surplus
reserve of RMB 234,010,992.52, and the undistributed profit at the end of the year is
RMB2,977,306,297.64. Profits distribution plan of 2021: based on the company’s existing share
capital of 4,108,191,379 shares, a cash dividend of 6.0 yuan (including tax) will be distributed to all
shareholders for every 10 shares. The proposed distribution of ordinary share dividends is RMB
2,464,914,827.40, and the remaining RMB 512,391,470.24 will be carried forward to the next year’s
undistributed profits.
Special description of cash dividend policy
Whether it meets the requirements of the company's articles of
Yes
association or the resolutions of the shareholders meeting:
Whether the dividend standard and ratio are clear: Yes
Whether the relevant decision-making procedures and
Yes
mechanisms are complete:
Whether independent directors have performed their duties due
Yes
diligence and played their due role:
Whether small and medium shareholders have sufficient
opportunities to express their opinions and demands, and whether Yes
their legitimate rights and interests are fully protected:
42
Bengang Steel Plates Co., Ltd. Annual Report 2021
If the cash dividend policy is adjusted or changed, whether the
Yes
conditions and procedures are compliant and transparent:
Both the Company’s profit and the parent company’s retained earnings are positive however no proposal of cash
dividend distribution was proposed during the reporting period
□ Applicable √ Not applicable
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) 6.00
The base of the share capital of the distribution
4,108,191,379.00
plan (shares)
Cash dividend amount (yuan) (tax included) 2,464,914,827.40
Cash dividend amount in other ways (such as share
0.00
repurchase) (yuan)
Total cash dividends (including other methods)
2,464,914,827.40
(yuan)
Distributable profit (yuan) 2,977,306,297.64
The ratio of total cash dividends (including other
82.79%
methods) to total profit distribution
Cash dividend of the current period
If the company's development stage is in the growth period and has major capital expenditure arrangements,
when the profit distribution is carried out, the proportion of cash dividends in this profit distribution should be at
least 20%.
Notes to the profit distribution or capital reserve transfer plan
The profit distribution plan or proposal and the plan or proposal of conversion of the capital reserve
into share capital in recent three years (including the reporting period)
1.Profit distribution proposal of 2021
As audited by BDO China Shu Lun Pan Certified Public Accountants LLP., the company's net profit
attributable to the parent company in 2021 is RMB 2,500,582,902.58, plus the undistributed profit at
the beginning of the year of RMB 2,692,018,405.40, and deducting the actual dividend of RMB
1,981,284,017.82 from the previous year and the statutory surplus reserve of RMB 234,010,992.52,
and the undistributed profit at the end of the year is RMB2,977,306,297.64.
Profits distribution plan of 2021: based on the company’s existing share capital of 4,108,191,379
shares, a cash dividend of 6.0 yuan (including tax) will be distributed to all shareholders for every 10
shares. The proposed distribution of ordinary share dividends is RMB 2,464,914,827.40, and the
remaining RMB 512,391,470.24 will be carried forward to the next year’s undistributed profits.
2. The company's 2021 interim profit distribution plan
Based on the total share capital of 3,885,060,605 shares at the end of June 2021, a cash dividend of
RMB 5 (tax included) will be distributed to all shareholders for every 10 shares, with a total cash
dividend of RMB 1,942,530,302.5. No capital reserve will be converted into share capital for this
distribution.
3. Profit distribution proposal of 2020
As audited by BDO China Shu Lun Pan Certified Public Accountants LLP., the company's net profit
attributable to the parent company in 2020 is RMB 384,252,740.78, plus the undistributed profit at the
beginning of the year of RMB 2,307,765,664.62, and the undistributed profit at the end of the year is
RMB 2,692,018,405.40.
Profits distribution plan of 2020: based on the company’s existing share capital of 3,875,371,532
shares, a cash dividend of 0.1 yuan (including tax) will be distributed to all shareholders for every 10
43
Bengang Steel Plates Co., Ltd. Annual Report 2021
shares. The proposed distribution of ordinary share dividends is RMB 38,753,715.32, and the
remaining RMB 2,653,264,690.08 will be carried forward to the next year’s undistributed profits.
4. Profit distribution proposal of 2019
As audited by BDO China Shu Lun Pan Certified Public Accountants LLP., the net profit attributable
to the parent company of the year 2019 was RMB 555,646,971.40. After adding the retained profit of
RMB 1,945,887,269.82 at the beginning of the year, and deducting the actual dividend of RMB
193,768,576.6 from the previous year, the balance of undistributed profit was RMB 2,307,765,664.62.
Profits distribution plan of 2019: Considering the uncertainty of the Coronavirus on the economy, the
company did not make profit distribution or convert the provident fund into capital in 2019.
XI. Implementation of company equity incentive plans, employee stock ownership plans or
other employee incentives
□ Applicable √ Not applicable
During the reporting period, the company had no equity incentive plan, employee stock ownership plan
or other employee incentive measures and their implementation.
XII. Construction and implementation of internal control system during the reporting period
1. Construction and implementation of internal control system
In order to further improve the internal management level of the enterprise, standardize the internal control and the
orderly operation of various business activities of the enterprise's production and operation, and strengthen the
construction of the risk prevention and control mechanism, the company has carried out the construction of internal
control in an all-round way. The business process and other aspects have been further sorted out and established and
improved the relevant systems of internal control, and a relatively complete internal control system has been
constructed. On the basis of daily supervision and special supervision of internal control, the soundness and
effectiveness of the construction and supervision of the company's internal control system Evaluate.
2. Significant defects of the internal control found in the internal control self-assessment
report in the reporting period
□ Yes √ No
XIII. The company's management and control of subsidiaries during the reporting period
Problems
Integration Solutions Solutions follow-up
Name Integration plan encountered in
progress implemented progress resolution plan
integration
Xiamen Bengang
Has been
Steel & Iron Deregistration Not applicable Not applicable Not applicable Not applicable
cancelled
Sales Co., Ltd.
XIV. Internal control self-evaluation report or internal control audit report
1. Self-Evaluation Report on Internal Control
Disclosing date of internal control auditing
March 24, 2022
report full text
Index of the internal control auditing report
http://www.cninfo.com.cn
full text
Proportion of total assets of subsidiaries
97.07%
belong to the scope of self-evaluation
44
Bengang Steel Plates Co., Ltd. Annual Report 2021
report in the total assets of the Company’s
consolidated financial statements
Proportion of operation income of
subsidiaries belong to the scope of self-
evaluation report in the operation income 89.49%
of the Company’s consolidated financial
statements
Standards of Defects Evaluation
Category Financial Report Non-financial Report
1. The company's daily
operation internal
control defect
identification standards:
1) Material deficiencies:
have a materrial impact
on the normal operation
of the company: affect
most of the main
business types/main
functional areas of the
company; have a
significant impact on the
overall operation of the
company and are
difficult to recover in the
long run.
2) Significant
deficiencies: have a
greater impact on the
1. Material deficiencies: fraud of directors, normal operation of the
supervisors and senior management; the company: affect some of
company corrects its published financial the company's main
statements; there is a material misstatement in business types/main
the financial statements, and the internal functional areas; have a
control fails to detect the misstatement during greater impact on the
the operation; the corporate audit committee company's overall
and the internal audit institution have no operations, and require a
effect on the supervision of internal control. greater price to recover
Qualitative criteria 2. Significant deficiencies: the seriousness in a long period of time.
and economic consequences of accounting 3) General deficiencies:
policies, accounting and financial reporting Moderate or below
are lower than material deficiencies, but there impact on the normal
are still internal control defects that may operation of the
cause the company to deviate from the control company: Affects a
objectives. certain main business
3. General deficiencies: other than material type/main functional
and significant deficiencies, other internal area or general business
control deficiencies in financial reporting. type/general functional
area of the company;
Moderate or below
impact on the overall
operation of the
company, requiring a
certain amount of effort
within a certain period
of time cost recovery.
2. The company's
business objectives to
achieve internal control
defects identification
standards:
1) Material deficiencies:
have a significant
impact on the company's
business objectives:
have a significant
impact on any type of
budget indicators of the
45
Bengang Steel Plates Co., Ltd. Annual Report 2021
company; affect most of
the company's important
management objectives;
have a significant
impact on liquidity (0.8
times ≤ current asset
turnover rate < 1 time );
have a significant
impact on any type of
budget indicators of the
company (profit ≥
800 million yuan).
2) Significant
deficiencies: have a
greater impact on the
company's business
objectives: have a
greater impact on any
type of budget
indicators of the
company; affect some
important management
objectives of the
company; have a greater
impact on the working
capital (0.5 times ≤
current asset turnover
rate ﹤ 0.8 times);
have a greater impact on
any type of budget
indicators of the
company (400 million
yuan ≤ profit ﹤ 800
million yuan).
3) General deficiencies:
Moderate or below
impact on the
company’s business
objectives: Moderate or
below impact on any
type of budget
indicators of the
company; Affects one
important management
target or some general
management targets of
the company; Moderate
impact on working
capital and below
(current asset turnover
rate ﹤ 0.5 times);
moderate or below
impact on any type of
budget indicators of the
company (profit ﹤
400 million yuan).
3. The company's safety
internal control defect
identification standards:
1) Material deficiencies:
affecting a certain
number of
employees/public
health/safety, especially
major accidents.
2) Significant
46
Bengang Steel Plates Co., Ltd. Annual Report 2021
deficiencies: affecting
some employees/public
health/safety, major
accidents.
3) General deficiencies:
affecting a small number
of employees/public
health/safety, major
accidents.
4. The company's
environmental
protection internal
control defects
identification standards:
1) Material deficiencies:
serious environmental
damage, occurrence of
major environmental
incidents (national level
II) or above
environmental
protection accidents.
2) Significant
deficiencies: large
environmental damage
and large environmental
incidents (national level
III).
3) General deficiencies:
moderate and below
environmental impact,
general environmental
incidents (national level
IV).
1. Material deficiencies：1）
misstatement≥5% of the total profits; 2）
misstatement≥3% of the total assets; 3）
misstatement≥1% of the total operating
income; 4）misstatement≥1% of the total
amount of the owner’s equity. 2. Significant
deficiencies：1) 3% of the total profits
≤misstatement＜5% of the total profits；2）
0.5% of the total assets ≤misstatement＜3%
of the total assets；3）0.5% of the total
Quantitative criteria operating income ≤misstatement＜1% of the None
total operating income； 4）0.5% of the
total amount of the owner’s equity
≤misstatement＜1% of the total amount of
the owner’s equity。3. General
deficiencies：1）misstatement＜3% of the
total profits；2）misstatement＜0.5% of the
total assets；3）misstatement＜0.5% of the
total operating income；4）misstatement＜
0.5% of the total amount of the owner’s
equity。
Number of material deficiencies in
0
financial reporting(a)
Number of material deficiencies in non-
0
financial reporting (a)
Number of significant deficiencies in
0
financial reporting(a)
Number of significant deficiencies in non-
0
financial reporting(a)
47
Bengang Steel Plates Co., Ltd. Annual Report 2021
2. Internal Control Audit Report
√√ Applicable □ Not applicable
Opinion in the internal control audit report
We acknowledge that internal control of Bengang Bancai is effective in all material respects and is compliance
with ‘Fundamental Rules of Enterprise Internal Control’ up to December 31, 2021.
Internal Control Audit Report
Disclosure
Status
Disclosure date of audit report of
March 31, 2022
internal control (full-text)
Index of audit report of internal
http://www.cninfo.com.cn
control (full-text)
Internal audit report’s opinion Standard unqualified opinion
Whether there is significant defect
No
in non-financial report
Whether the accountants’ firm issued a qualified opinion on report of internal control audit
□ Yes √ No
Whether the internal control audit report issued by the accountants’ firm agree with the self-
assessment report of the Board of Directors
√ Yes □ No
XV. Self-examination and rectification of listed company governance special actions
During the reporting period, the company actively implemented the directive spirit of the "Opinions of the State
Council on Further Improving the Quality of Listed Companies". According to the requirements of China Securities
Regulatory Commission [2020] No. 69 "Announcement on Carrying out Special Actions on Corporate Governance
of Listed Companies”, the principle of self-examination and self-correction of listed companies' governance has been
carried out, and the "Special Self-examination List of Listed Company Governance" has been compiled, which truly,
accurately and completely reflects the legal problems of listed companies and the rectification of relevant norms.
Drive, improve the corporate governance system and rules, build a good corporate governance ecology, etc., further
improve the listed company governance structure in which each performs its own duties and responsibilities,
coordinates operations, and effectively checks and balances, consolidates the foundation for the high-quality
development of listed companies, and improves the governance level of listed companies.
48
Bengang Steel Plates Co., Ltd. Annual Report 2021
V. Environmental and Social Responsibility
I. Major environmental issues
Whether the listed company and its subsidiaries belong to the key pollutant discharge units announced
by the environmental protection department
√ Yes □ No
Names of Emission Number of Distribution Emission Implemente Total Total Excessive
major method discharge of discharge concentratio d pollutant emissions approved emissions
Company or
pollutants outlets outlets n discharge emissions
subsidiary
and standards
name
characteristi
c pollutants
Bengang COD Continuous 1 Energy 25.3 50 228.11 Not None
Steel Plates General approved by
Co.,Ltd. Plant the
Sewage government
Treatment
Plant
Bengang Ammonia Continuous 1 Energy 0.96 8 3.16 Not None
Steel Plates nitrogen General approved by
Co.,Ltd. Plant the
Sewage government
Treatment
Plant
Bengang Particulate Continuous 183 Raw Raw Raw Particulate Not None
Steel Plates matter and material material 14- material 25; matter ： approved by
Co.,Ltd. intermittent dumper, 23; sintering sintering 13569 the
transfer 8-40; iron 50-30; iron government
station, making 7- making 25;
receiving 35; steel steel
tank, pre- making 20- making 20-
batching; 50; special 50; special
iron-making steel 7-15; steel 20;
casting coking 5- coking 10-
yard, 50; power 50; power
furnace generation generation
roof, fuel, 3-30; cold 5-30; cold
solvent, rolling 4-18; rolling 20-
granulation, hot rolling 30; hot
ore coke 6-15. rolling 20-
tank, 30.
sintering
head dust
removal,
desulfurizati
on, machine
tail dust
removal;
iron and
steel water
pretreatmen
t , north-
south
pouring
station,
tundish,
primary
dust
removal,
secondary
49
Bengang Steel Plates Co., Ltd. Annual Report 2021
dust
removal,
refining
dust
removal;
special steel
electric
furnace,
refining
furnace;
coking coal
addition,
coke
pushing, dry
quenching,
chimney
desulfurizati
on and
denitrificati
on; power
boiler dust
removal,
desulfurizati
on and
denitrificati
on; cold
rolling acid
regeneration
, pickling,
straightenin
g, welding,
leveling,
annealing,
roasting; hot
rolling
furnace.
Bengang Sulphur Continuous 64 Sintering Sintering Sintering 4720 Not None
Steel Plates dioxide and head; coke head 12-40; head 200; approved by
Co.,Ltd. intermittent oven coke oven coke oven the
chimney; 30-100; 30-100; government
power power power
generation generation generation
boiler 5-70; cold 35-200 cold
desulfurizati rolling 25- rolling 100;
on; cold 98; hot hot rolling
rolling rolling 48- 150.
roasting and 128.
annealing;
hot rolling
heating
furnace.
Bengang Nitrogen Continuous 57 Sintering Sintering Sintering 12242 Not None
Steel Plates oxides and head; head 100- head 300; approved by
Co.,Ltd. intermittent coking 230; coking coking the
chimney; chimney chimney government
power 150-268; 150-500;
generation power power
boiler; cold generation generation
rolling 30-140; 50-200;
roasting, cold rolling cold rolling
annealing; 60-170; hot 200; hot
hot rolling rolling 83.5- rolling 300.
heating 124.
furnace.
Construction and operation of pollution prevention facilities
Bengang Bancai has a total of 202 sets of environmental pollution prevention and control facilities, and each process
50
Bengang Steel Plates Co., Ltd. Annual Report 2021
is equipped with dust removal, desulfurization and denitrification, and online facilities in accordance with pollutant
discharge standards. Wet desulfurization of sintering machine head, dry desulfurization and denitrification of coke
oven chimney, wet desulfurization and SCR denitration of power generation, etc. The 2300mm production line of
the hot rolling plant is designed for use 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
licenses
In 2021, the EIA registration and filing work of 18 projects including the coke oven flue gas desulfurization and
denitrification transformation project of the iron smelting plant will be completed; 7 EIA report forms including the
220KV substation project will be submitted for approval. The environmental protection acceptance work of 8
projects including the No. 7 coke oven desulfurization and denitrification project and the No. 5 blast furnace capacity
replacement project of the iron smelting plant was carried out.
In 2021, the company completed the renewal of pollutant discharge licenses for 9 units of the company.
Emergency plan for environmental emergencies
The company and its 14 subordinate units strictly follow the "Emergency Response Law of the People's Republic of
China", the "Notice on Printing and Distributing the "Guidelines for Risk Assessment of Environmental Emergencies
for Enterprises (Trial)", and "Enterprise and Institutional Emergency Response Plans for Environmental
Emergencies." Management Measures (for Trial Implementation)” and other existing laws and regulations to carry
out environmental emergency management work. In 2021, entrust a third-party unit to revise the emergency plan for
environmental emergencies, carry out risk assessment and emergency resource investigation again, and conduct
assessments according to the management requirements of the Municipal Bureau., for the record. At the same time,
each unit of the company formulates a drill plan according to the pre-plan and carries out the corresponding pre-plan
drill work.
Environmental Self-Monitoring Program
The 2021 self-monitoring plan is carried out in accordance with the requirements of the discharge permit. Pollution
source monitoring points: 185 flue gas monitoring points, 10 wastewater monitoring points, 13 boundary noise points,
27 atmospheric dust reduction points, and 71 unorganized monitoring points. Monitoring is carried out on a quarterly,
semi-annual and annual frequency. There are 27 atmospheric dust fall points distributed in the factory area, and 162
monitoring data have been obtained; the routine monitoring tasks of flue gas and atmospheric unorganized
monitoring have been completed, and a total of 1286 monitoring data have been obtained throughout the year; the
noise monitoring points at the factory boundary 13 monitoring data, 208 monitoring data; 10 wastewater monitoring
points, 1983 monitoring data. There are 541 temporary monitoring data, and the monitoring station reports a total of
4180 monitoring data, forming monthly reports, quarterly reports and separate monitoring reports for each factory
and mine.
Administrative penalties for environmental issues during the reporting period
Influence on the
Company or Reason for The company's
Violations Penalty result production and operation
subsidiary name punishment rectification measures
of listed companies
None None None None None None
Other environmental information that should be disclosed
In 2021, according to the list of key pollutant discharging enterprises issued by the Municipal Environmental
Protection Bureau, the environmental information disclosure of 12 units of the company will be completed. The
contents of the announcement include basic information, pollution discharge information, construction and operation
of pollution prevention and control facilities, environmental impact assessment of construction projects and other
environmental protection administrative licenses, emergency plans for environmental emergencies, environmental
self-monitoring plans, and other environmental information that should be disclosed.
Measures taken to reduce carbon emissions during the reporting period and their effects
√ Applicable □ Not applicable
In 2021, the company will invest 44.18 million yuan to implement 6 energy-saving and carbon-reducing projects,
including the transformation of high-energy-consuming motors in the coking branch of the iron smelting plant, and
the nitrogen production increase of the pre-cooling system of the No. 8 oxygen generator in the energy management
and control center. The 2021 carbon emission accounting is expected to be completed in June 2022, and the carbon
emission reduction amount has not yet been determined.
Other environmental protection related information
51
Bengang Steel Plates Co., Ltd. Annual Report 2021
None.
Ⅱ. Social responsibility situation
The company actively fulfills its social responsibilities, and has publicly disclosed the 2021 Corporate Social
Responsibility Report of Bengang Steel Plates Co., Ltd. For the full text of the report, please refer to
http://www.cninfo.com.cn on March 26, 2022.
Ⅲ. Consolidate and expand the achievements of poverty alleviation and rural
revitalization
The company has selected 8 outstanding cadres to participate in the rural revitalization work, and there are still 4
people who serve as the first secretary in the village. During the special period of normal epidemic prevention and
control, the cadres in the village did not forget their original aspirations, kept their mission in mind, strengthened
their confidence, and worked tenaciously. The company provides growth points for the rural collective economy
through direct investment in the construction of mushroom greenhouses, employee welfare procurement of
agricultural and sideline products in rural areas, etc., effectively increasing per capita income, and completing
poverty alleviation work for more than 800 people. The company has been rated as "Advanced Unit for Fixed-point
Poverty Alleviation in Liaoning Province" for many consecutive years.
52
Bengang Steel Plates Co., Ltd. Annual Report 2021
VI. Important Events
I. Performance of Committed Issues
1. The fulfilled commitments during the reporting period and under-fulfillment commitments
by the end of the period made by actual controller, acquirer, director, supervisor, senior
management personnel and other related parties.
Commitment Type of Commitment Commitment
Commitments Contents Performance
party commitment time period
Commitment of shares
reform
In order to maintain the
independence of
Bengang Steel, Ansteel
Group undertakes the
following: 1. Ansteel
Group guarantees to
keep separate from
Bengang Steel in terms
of assets, personnel,
finance, organization
and business, and strictly
abides by the China
Securities Regulatory
Commission's
regulations on the
independence of listed
companies It does not
use its controlling
position to interfere with
the standard operation of
Bengang Steel, interfere
Commitment made in the with Bengang Steel's
Ansteel Group Other business decisions, or August Under normal
acquisition report or the Long term
Co., Ltd. commitment damage the legitimate 20,2021 fulfillment
equity change report
rights and interests of
Bengang Steel and other
shareholders. Ansteel
Group and other
subsidiaries controlled
by it promise not to
illegally occupy the
funds of Bengang Plate
and its controlled
subsidiaries in any way.
2. The above
commitments will
continue to be effective
during the period when
Ansteel Group has
control over Bengang
Steel Sheets. If Ansteel
Group fails to fulfill the
above-mentioned
commitments and causes
losses to Bengang Steel
Sheets, Ansteel Group
53
Bengang Steel Plates Co., Ltd. Annual Report 2021
will bear the
corresponding liability
for compensation.
In order to avoid
horizontal competition
matters, Ansteel Group
undertakes the
following: (1) In view of
the overlapping business
between Ansteel Group
and Bengang Steel after
the completion of the
acquisition, according to
the requirements of
existing laws,
regulations and relevant
policies, Ansteel Group
will issue a letter of
commitment from this
letter of commitment.
Within 5 years from the
date of issue, and strive
to use a shorter time, in
accordance with the
requirements of the
relevant securities
regulatory authorities,
under the premise of
complying with the
applicable laws and
regulations and relevant
regulatory rules at that
time, in order to facilitate
the development of
Ansteel Group Other Bengang Steel Sheets August Under normal
Long term
Co., Ltd. commitment and safeguard the 20,2021 fulfillment
interests of shareholders,
especially It is the
principle of the interests
of small and medium
shareholders, and
comprehensively uses
various methods such as
asset restructuring,
business adjustment, and
entrusted management to
steadily promote the
integration of relevant
businesses to solve the
problem of horizontal
competition. The
aforesaid solutions
include but are not
limited to: 1) Asset
reorganization: purchase
assets, asset
replacement, asset
transfer or other feasible
reorganization methods
in different ways
permitted by relevant
laws and regulations,
such as cash
consideration or issue
share consideration, and
gradually reorganize
Anshan Iron and Steel
54
Bengang Steel Plates Co., Ltd. Annual Report 2021
Group and Benxi Iron
and Steel Group. Sort out
and reorganize the assets
of the overlapping parts
of the business of the
sheet metal to eliminate
the overlapping of some
businesses; 2) Business
adjustment: Sort out the
business boundaries and
try our best to achieve
differentiated operations,
such as through asset
transactions, business
division and other
different methods.
Business distinction,
including but not limited
to business composition,
product grade,
application field and
customer groups, etc.; 3)
Entrusted management:
by signing an
entrustment agreement,
one party will make
decisions related to the
operation of some
related assets with
overlapping businesses
4) Other feasible
solutions within the
scope permitted by laws,
regulations and relevant
policies. The
implementation of the
above-mentioned
solutions is premised on
performing the
necessary deliberation
procedures for listed
companies and the
approval procedures of
securities regulatory
authorities and relevant
competent authorities in
accordance with relevant
laws and regulations. (2)
Anshan Iron and Steel
Group has not yet
formulated a specific
implementation plan and
time arrangement for
solving the problem of
partial business overlap
between Anshan Iron
and Steel Group and
Bengang Steel. (3) In
addition to the above
circumstances, when
Ansteel Group or other
subsidiaries obtain
business opportunities
that may compete with
the business of Bengang
Steel, Ansteel Group will
do its best to give
Bengang Steel the
55
Bengang Steel Plates Co., Ltd. Annual Report 2021
priority to develop such
opportunities and The
right of first refusal to
purchase the project
makes the price of the
relevant transaction fair
and reasonable, and will
be based on the business
practices followed in
normal commercial
transactions with
independent third
parties; (4) Ansteel
Group guarantees that it
will strictly abide by
laws, regulations and
According to the Articles
of Association of
Bengang Plate Co., Ltd.
and its relevant
management system, the
company shall not use its
position as an indirect
controlling shareholder
of Bengang Plate to seek
illegitimate interests,
thereby impairing the
rights and interests of
other shareholders of
Bengang Plate; During
the period of control over
the steel sheet, the above
commitments made by
Ansteel Group are all
valid. In the event of
violation of the above
commitments, resulting
in damage to the rights
and interests of Bengang
Steel, Ansteel Group is
willing to assume the
corresponding liability
for damages.
In order to standardize
and reduce the related
transactions between
Ansteel Group and listed
companies, Ansteel
Group has made
commitments: 1. Ansteel
Group will ensure that
Bengang Steel’s
business is independent,
its assets are complete,
Ansteel Group Other and it has independent August Under normal
Long term
Co., Ltd. commitment and complete 20,2021 fulfillment
production, supply, sales
and other auxiliary
facilities. system. 2.
Ansteel Group and other
enterprises controlled by
Ansteel Group will not
take advantage of the
control over Bengang
Steel Sheets to seek
preferential transactions
with Bengang Steel
56
Bengang Steel Plates Co., Ltd. Annual Report 2021
Sheets and its
subordinate enterprises.
3. Ansteel Group and
other enterprises
controlled by Ansteel
Group will avoid and
reduce unnecessary
transactions with
Bengang Steel Sheets
and its subordinate
enterprises. If there is a
truly necessary and
unavoidable transaction,
Ansteel Group and other
enterprises controlled by
Ansteel Group will sign
an agreement with
Bengang Steel Sheets
and its subordinate
enterprises in
accordance with the
principles of fairness,
fairness, and
compensation for equal
value, perform legal
procedures, and will
comply with the law.
According to the
requirements of relevant
laws, regulations and
normative documents
and the "Articles of
Association of Bengang
Plate Co., Ltd.", perform
information disclosure
obligations and perform
relevant internal
decision-making and
approval procedures in
accordance with the law,
and ensure that no price
is unfair compared with
market prices. conditions
and conduct transactions
with Bengang Steel and
its subordinate
enterprises, and do not
use such transactions to
engage in any behavior
that damages the
legitimate rights and
interests of Bengang
Steel and other
shareholders of Bengang
Steel. 4. In the event of
violation of the above
commitments, resulting
in damage to the
legitimate rights and
interests of Bengang
Steel, Ansteel Group will
compensate for the
losses caused to
Bengang according to
law.
Commitment made during
asset restructuring
57
Bengang Steel Plates Co., Ltd. Annual Report 2021
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
behavior of company
directors and senior
management personnel.
4. I promise not to use
Company the Company’s assets to
Commitment made during
directors, Other do investment and May 22, 2019 Long term Under normal
initial public offering or
senior commitment consumption activities fulfillment
refinancing
management 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
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
58
Bengang Steel Plates Co., Ltd. Annual Report 2021
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
Bengang International
Trade Co., Ltd. and
Bengang Steel plates in
the same region
Benxi Steel & guarantee independent
Iron (Group) personnel, independent
Co., Ltd. and Other business, independent Under normal
Bengang Commitment finance, and independent July 24,2019 Long term
fulfillment
Group Co., assets, and are
Ltd. 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
59
Bengang Steel Plates Co., Ltd. Annual Report 2021
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 )
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
60
Bengang Steel Plates Co., Ltd. Annual Report 2021
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.,
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
61
Bengang Steel Plates Co., Ltd. Annual Report 2021
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
competition with Benxi
Steel Plates and the
measures and
commitments to avoid
inter-industry
competition 1. During
the period when the
Group is the controlling
shareholder of Bengang
Steel Plates, in addition
Bengang to the matters listed in
Group Co., Article 1 of this
Ltd. & Benxi Other Commitment Letter, the Normal Under normal
Steel & Iron Commitment Group and other July 24,2019 execution fulfillment
(Group) Co., enterprises controlled by
Ltd. the Group other than
Bengang Steel Plates no
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
62
Bengang Steel Plates Co., Ltd. Annual Report 2021
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
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
63
Bengang Steel Plates Co., Ltd. Annual Report 2021
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.,
Ltd. (hereinafter
collectively referred to
as the "Group"), as a
direct controlling
shareholder and an
indirect controlling
Benxi Steel & shareholder of Bengang
Iron (Group) Steel Plates Co., Ltd.
Co., Ltd. and Other (hereinafter referred to Under normal
Bengang Commitment as "Bengang Steel July 24,2019 Long term
fulfillment
Group Co., Plates"), in order to
Ltd. 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
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
64
Bengang Steel Plates Co., Ltd. Annual Report 2021
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
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
65
Bengang Steel Plates Co., Ltd. Annual Report 2021
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
No
fulfilled on time or not
2. The Company made illustrations that there are assets or projects which meet the original
profit forecast and the reasons when there are assets or projects profit forecast of the
Company and the reporting period is still in the forecast period
□ Applicable √ Not applicable
II. Non-operating capital occupation of listed companies by controlling
shareholders and other related parties
□ Applicable √ Not applicable
There was no non-operating occupation of funds by the controlling shareholder and related parties
III. Non-compliance with external guarantees
□ Applicable √ Not applicable
There was no non-operating occupation of funds by the controlling shareholder and related parties
IV. Note by the Board of Directors on the latest "Non-Standard Audit Report"
□ Applicable √ Not applicable
V. Notes by the Board of Directors, the Supervisory Committee and the
Independent Directors (if any) on the "non-standard audit report" of the
accounting firm for the current reporting period
□ Applicable √ Not applicable
VI. Illustrations of Changes in the Accounting Policy, Accounting Estimate and
Measurement Methods as Compared with the Financial Report of Last Year
√Applicable □ Not applicable
66
Bengang Steel Plates Co., Ltd. Annual Report 2021
(1) Implementation of CAS 21 - Leases (revised in 2018)
The Ministry of Finance revised AS 21 - Leases (the "New Lease Standard") in fiscal 2018. The Company
implemented the New Lease Standard effective January 1, 2021. Under the revised standard, the Company has
elected not to reassess whether a contract that existed prior to the date of first-time implementation is a lease or
contains a lease at the date of first-time implementation.
(2) Implementation of ASBE Interpretation No. 14
On 2 February 2021, the Ministry of Finance issued Interpretation No. 14 of Accounting Standards for Business
Enterprises (Caihui [2021] No. 1, hereinafter referred to as "Interpretation No. 14"), which is effective from the date
of its issuance. relevant operations added from 1 January 2021 to the date of implementation are adjusted in
accordance with Interpretation No. 14.
(3) Implementation of the Circular on Adjustment of the Scope of Application of the Regulations on Accounting for
Rent Concessions Related to the New Crown Pneumonia Epidemic
The Ministry of Finance issued the "Regulations on Accounting for Rent Concessions Related to the New Crown
Pneumonia Epidemic" (Caihui [2020] No. 10) on 19 June 2020, under which enterprises may choose to adopt the
simplified method of accounting for rent concessions such as rent reductions and deferred rent payments that meet
the conditions directly arising from the New Crown Pneumonia Epidemic.
VII. Illustrations of Changes of the Consolidation Scope as Compared with the
Financial Report of Last Year
√Applicable □ Not applicable
Xiamen Bengang Steel & Iron Sales Co., Ltd. was written off during the reporting period.
VIII. Appointment and Dismiss of Certified Accountant’s Firm
Accountant’s firm currently appointed
Name of the domestic accountant’s firm BDO China Shu Lun Pan Certified Public Accountants LLP
Payment to the domestic accountant’s firm (in 10
280
thousand yuan)
Service life of domestic accountant’s firm providing
14
audit service
Name of CPAs from the domestic accountant’s firm Li Yongjiang, Li Guiying
Service life of domestic accountants’ providing audit
0
service
Name of the overseas accountant’s firm (if any) None
Payment to overseas accountant’s firm (in 10
0
thousand yuan) (if any)
Service life of overseas accountant’s firm providing
None
audit service (if any)
Name of CPAs from the overseas accountant’s firm
None
(if any)
Whether the accountant’s firm was changed during the reporting period
□ Yes √ No
Engagement of accountant’s firms, financial consultants or sponsors for internal control auditing
√ Applicable □ Not applicable
The Company appointed BDO China Shu Lun Pan Certified Public Accountants LLP as the auditor of internal
control auditing at RMB 600,000.
IX. Risk of Suspension or Termination of Listing after the Disclosure of Annual
Report
□ Applicable √ Not applicable
67
Bengang Steel Plates Co., Ltd. Annual Report 2021
X. Bankrupt and Reforming Events
□ Applicable √ Not applicable
There was no bankrupt and reforming event during the reporting period.
XI. Significant Lawsuits and Arbitrations
□ Applicable √ Not applicable
There was no significant lawsuit or arbitrations during the reporting period.
XII. Punishment and Rectification
□ Applicable √ Not applicable
There was no punishment or rectification during the reporting period.
XIII. Credit Status of the Company and its Controlling Shareholders and Actual
Controllers
□ Applicable √ Not applicable
XIV. Major Related Party Transactions
1. Related party transactions relevant to daily operations
√ Applicable □ Not applicable
The
Amount
approve Means
Pricing of Whethe Availab
Content d of
Type of principl Price of related Proporti r exceed le
of trading paymen Index
related e of related party on of the market Date of
Related Relation related limit of t of of
party related party transacti similar approve price of disclosu
parties ship party transacti related disclos
transacti party transacti ons (in transacti d similar re
transacti ons (in party ure
ons transacti ons 10 ons limited transacti
ons 10 transacti
ons thousan (Y/N) ons
thousan ons
d)
d)
Benxi Purchasi Execute
Iron and ng accordi
parent on Related
Steel goods / repair 30,456. ng to 2021/4/
compan agreeme agreeme 0.00% 40,000 No Yes
(Group) receivin cost 09 the 28
y nt nt price
Co. g labor agreeme
services nt
Benxi Purchasi Execute
Iron and ng Raw and accordi
parent on Related
Steel goods / auxiliary ng to 2021/4/
compan agreeme agreeme 18.13 No Yes
(Group) receivin material the 28
y nt nt price
Co. g labor s agreeme
services nt
Bensteel
Purchasi Execute
Stainless
ng accordi
Steel same on Related
goods / Stock ng to 2021/4/
Cold controll agreeme agreeme 83.1 30 No Yes
receivin goods the 28
Rolled er nt nt price
g labor agreeme
Dandong
services nt
Co.
Benxi same Purchasi on Related Execute
Iron and Labor 3,882.3
controll ng accordi Yes 2021/4/
agreeme agreeme 0.00% 900,000 No
Steel er goods / cost nt nt price
8 ng to 28
(Group) receivin the
68
Bengang Steel Plates Co., Ltd. Annual Report 2021
Mining g labor agreeme
Co. services nt
Benxi Purchasi Execute
Iron and ng Raw and accordi
same on Related
Steel goods / auxiliary 789,791 ng to 2021/4/
controll agreeme agreeme 0.11% No Yes
(Group) receivin material .14 the 28
er nt nt price
Mining g labor s agreeme
Co. services nt
Benxi Purchasi Execute
Iron and ng accordi
same on Related
Steel goods / ng to 2021/4/
controll freight agreeme agreeme No Yes
(Group) receivin the 28
er nt nt price
Mining g labor agreeme
Co. services nt
Benxi
Purchasi Execute
Iron and
ng Raw and accordi
Steel same on Related
goods / auxiliary 48,914. ng to 2021/4/
(Group) controll agreeme agreeme 0.01% 40,000 No Yes
receivin material 81 the 28
Metallurg er nt nt price
g labor s agreeme
ical Slag
services nt
Co.
Benxi
Iron and
Purchasi Execute
Steel
ng accordi
(Group) same on Related
goods / process ng to 2021/4/
Steel controll agreeme agreeme 9.75 70 No Yes
receivin cost the 28
Processin er nt nt price
g labor agreeme
g and
services nt
Distributi
on Co.
Benxi
Iron and Purchasi Execute
Steel ng accordi
same on Related
(Group) goods / spare 7,430.2 ng to 2021/4/
controll agreeme agreeme 0.00% 10,000 No Yes
Machiner receivin part 4 the 28
er nt nt price
y g labor agreeme
Manufact services nt
uring Co.
Benxi
Iron and Purchasi Execute
Steel ng accordi
same on Related
(Group) goods / Repair 7,183.4 ng to 2021/4/
controll agreeme agreeme 0.00% No Yes
Machiner receivin labor 9 the 28
er nt nt price
y g labor agreeme
Manufact services nt
uring Co.
Benxi Purchasi Execute
Iron and ng accordi
same on Related
Steel goods / spare 2,177.7 ng to 2021/4/
controll agreeme agreeme 0.00% 50,000 No Yes
(Group) receivin part 2 the 28
er nt nt price
Construct g labor agreeme
ion Co. services nt
Benxi Purchasi Execute
Iron and ng accordi
same on Related
Steel goods / Enginee 34,708. ng to 2021/4/
controll agreeme agreeme 0.00% No Yes
(Group) receivin ring cost 5 the 28
er nt nt price
Construct g labor agreeme
ion Co. services nt
Benxi Purchasi Execute
Iron and ng accordi
same on Related
Steel goods / Repair 27,810. ng to 2021/4/
controll agreeme agreeme 0.00% No Yes
(Group) receivin labor 4 the 28
er nt nt price
Construct g labor agreeme
ion Co. services nt
69
Bengang Steel Plates Co., Ltd. Annual Report 2021
Benxi Purchasi Execute
Iron and ng Raw and accordi
same on Related
Steel goods / auxiliary 1,609.7 ng to 2021/4/
controll agreeme agreeme 0.00% No Yes
(Group) receivin material 9 the 28
er nt nt price
Construct g labor s agreeme
ion Co. services nt
Benxi Purchasi Execute
Iron and ng accordi
same on Related
Steel goods / ng to 2021/4/
controll freight agreeme agreeme 414.09 0.00% No Yes
(Group) receivin the 28
er nt nt price
Construct g labor agreeme
ion Co. services nt
Benxi
Purchasi Execute
Iron and
ng Raw and accordi
Steel same on Related
goods / auxiliary 19,531. ng to 2021/4/
(Group) controll agreeme agreeme 0.00% 30,000 No Yes
receivin material 75 the 28
Industrial er nt nt price
g labor s agreeme
Develop
services nt
ment Co.
Benxi
Purchasi Execute
Iron and
ng accordi
Steel same on Related
goods / Repair ng to 2021/4/
(Group) controll agreeme agreeme 1,489.9 0.00% No Yes
receivin labor the 28
Industrial er nt nt price
g labor agreeme
Develop
services nt
ment Co.
Benxi
Purchasi Execute
Iron and
ng accordi
Steel same on Related
goods / ng to 2021/4/
(Group) controll freight agreeme agreeme 118.49 No Yes
receivin the 28
Industrial er nt nt price
g labor agreeme
Develop
services nt
ment Co.
Benxi
Purchasi Execute
Iron and
ng accordi
Steel same engineer on Related
goods / ng to 2021/4/
(Group) controll ing agreeme agreeme 141.29 No Yes
receivin the 28
Industrial er funds nt nt price
g labor agreeme
Develop
services nt
ment Co.
Benxi Purchasi Raw and Execute
Iron and ng auxiliary accordi
same on Related
Steel goods / material ng to 2021/4/
controll agreeme agreeme 314.15 20,000 No Yes
(Group) receivin s and the 28
er nt nt price
Construct g labor spare agreeme
ion Co. services parts nt
Benxi Purchasi Execute
Iron and ng accordi
same on Related
Steel goods / Enginee 1,222.3 ng to 2021/4/
controll agreeme agreeme 0.00% No Yes
(Group) receivin ring cost 3 the 28
er nt nt price
Construct g labor agreeme
ion Co. services nt
Benxi Purchasi Execute
Iron and ng accordi
same on Related
Steel goods / repair 17,249. ng to 2021/4/
controll agreeme agreeme 0.00% No Yes
(Group) receivin cost 62 the 28
er nt nt price
Construct g labor agreeme
ion Co. services nt
Bensteel Associat Purchasi Execute
Raw and
Electric es of the ng on Related accordi
auxiliary 14,466. 2021/4/
Limited parent goods / agreeme agreeme 0.00% 20,000 No ng to Yes
material 12 28
Liability compan receivin nt nt price the
s
Company y g labor agreeme
70
Bengang Steel Plates Co., Ltd. Annual Report 2021
services nt
Bensteel Purchasi Execute
Associat
Electric ng accordi
es of the on Related
Co. goods / Repair 3,076.6 ng to 2021/4/
parent agreeme agreeme 0.00% No Yes
receivin labor 4 the 28
compan nt nt price
g labor agreeme
y
services nt
Benxi It Purchasi Execute
High-tech belongs ng accordi
on Related
Drilling to Benxi goods / spare ng to 2021/4/
agreeme agreeme 35.5 50 No Yes
Tools Iron and receivin part the 28
nt nt price
Manufact steel g labor agreeme
uring Co. group services nt
Benxi Purchasi Execute
New ng accordi
same on Related
Business goods / Repair ng to 2021/4/
controll agreeme agreeme 22.74 21,500 No Yes
Develop receivin labor the 28
er nt nt price
ment Co. g labor agreeme
services nt
Benxi Purchasi Execute
Raw and
New ng accordi
same auxiliary on Related
Business goods / ng to 2021/4/
controll material agreeme agreeme 599.56 0.00% No Yes
Develop receivin the 28
er s and nt nt price
ment Co. g labor agreeme
meals
services nt
Liaoning Purchasi Execute
Metallurg ng accordi
same on Related
ical goods / spare ng to 2021/4/
controll agreeme agreeme 0.32 1,000 No Yes
Technicia receivin part the 28
er nt nt price
n College g labor agreeme
services nt
Liaoning
Purchasi Execute
Metallurg
ng accordi
ical same engineer on Related
goods / ng to 2021/4/
Vocationa controll ing agreeme agreeme 700 No Yes
receivin the 28
l and er funds nt nt price
g labor agreeme
Technical
services nt
College
Liaoning
Purchasi Execute
Metallurg
ng accordi
ical same on Related
goods / Repair 2,084.8 ng to 2021/4/
Vocationa controll agreeme agreeme 0.00% No Yes
receivin labor 2 the 28
l and er nt nt price
g labor agreeme
Technical
services nt
College
Bensteel
It Purchasi Execute
Group
belongs ng Raw and accordi
Internatio on Related
to Benxi goods / auxiliary 1,683,6 1,750,0 ng to 2021/4/
nal agreeme agreeme 0.23% No Yes
Iron and receivin material 63.51 00 the 28
Economic nt nt price
steel g labor s agreeme
and Trade
group services nt
Co.
Bensteel
It Purchasi Execute
Group
belongs ng accordi
Internatio on Related
to Benxi goods / Agency 7,140.1 ng to 2021/4/
nal agreeme agreeme 0.00% No Yes
Iron and receivin fee 2 the 28
Economic nt nt price
steel g labor agreeme
and Trade
group services nt
Co.
Bensteel It Purchasi Port Execute
on Related
Group belongs ng miscella 40,115. accordi Yes 2021/4/
agreeme agreeme 0.01% No
Internatio to Benxi goods / neous 06 ng to 28
nt nt price
nal Iron and receivin charges the
71
Bengang Steel Plates Co., Ltd. Annual Report 2021
Economic steel g labor agreeme
and Trade group services nt
Co.
Benxi
Iron and Purchasi Execute
Steel ng accordi
same on Related
(Group) goods / spare ng to 2021/4/
controll agreeme agreeme 238.24 4,000 No Yes
Informati receivin part the 28
er nt nt price
on g labor agreeme
Automati services nt
on Co.
Benxi
Iron and Purchasi Execute
Steel ng accordi
same on Related
(Group) goods / Enginee ng to 2021/4/
controll agreeme agreeme 773.19 0.00% No Yes
Informati receivin ring cost the 28
er nt nt price
on g labor agreeme
Automati services nt
on Co.
Benxi
Iron and Purchasi Execute
Steel ng accordi
same on Related
(Group) goods / Repair 5,828.8 ng to 2021/4/
controll agreeme agreeme 0.00% No Yes
Informati receivin labor 9 the 28
er nt nt price
on g labor agreeme
Automati services nt
on Co.
Benxi
Purchasi Execute
Iron and
ng accordi
Steel same on Related
goods / Heating ng to 2021/4/
(Group) controll agreeme agreeme 193.57 200 No Yes
receivin cost the 28
Thermal er nt nt price
g labor agreeme
Develop
services nt
ment Co.
Benxi
Purchasi Execute
Iron and
ng Raw and accordi
Steel same on Related
goods / auxiliary ng to 2021/4/
(Group) controll agreeme agreeme 431.58 0.00% No Yes
receivin material the 28
Thermal er nt nt price
g labor s agreeme
Develop
services nt
ment Co.
Benxi
Iron and Purchasi Execute
Steel ng accordi
same on Related
(Group) goods / Design ng to 2021/4/
controll agreeme agreeme 37.08 200 No Yes
Design receivin fee the 28
er nt nt price
and g labor agreeme
Research services nt
Institute
Benxi Purchasi Execute
Beiping ng Raw and accordi
same on Related
Iron and goods / auxiliary 341,396 ng to 2021/4/
controll agreeme agreeme 0.05% 350,000 No Yes
Steel receivin material .62 the 28
er nt nt price
(Group) g labor s agreeme
Co. services nt
Benxi Purchasi Execute
Beiping ng accordi
same on Related
Iron and goods / Energy 57,415. ng to 2021/4/
controll agreeme agreeme 0.01% No Yes
Steel receivin power 98 the 28
er nt nt price
(Group) g labor agreeme
Co. services nt
Benxi same Purchasi on Related Execute 2021/4/
Beiying controll ng freight agreeme agreeme 503.57 0.00% No accordi Yes 28
Iron and er goods / nt nt price ng to
72
Bengang Steel Plates Co., Ltd. Annual Report 2021
Steel receivin the
(Group) g labor agreeme
Co. services nt
Benxi Purchasi Execute
Beiying ng accordi
same on Related
Iron and goods / Labor 8,366.9 ng to 2021/4/
controll agreeme agreeme 0.00% No Yes
Steel receivin cost 2 the 28
er nt nt price
(Group) g labor agreeme
Co. services nt
Benxi Purchasi Execute
Beiying ng accordi
same on Related
Iron and goods / spare 1,609.0 ng to 2021/4/
controll agreeme agreeme 0.00% No Yes
Steel receivin part 4 the 28
er nt nt price
(Group) g labor agreeme
Co. services nt
Benxi Purchasi Execute
Beiying ng accordi
same on Related
Iron and goods / Agency ng to 2021/4/
controll agreeme agreeme 240.64 No Yes
Steel receivin fee the 28
er nt nt price
(Group) g labor agreeme
Co. services nt
Liaoning
Hengtong Purchasi Execute
Raw
Metallurg ng accordi
same material on Related
ical goods / 6,772.4 ng to 2021/4/
controll s and agreeme agreeme 0.00% 10,000 No Yes
Equipmen receivin 7 the 28
er spare nt nt price
t g labor agreeme
parts
Manufact services nt
uring Co.
Liaoning
Hengtong Purchasi Execute
Metallurg ng accordi
same Repair on Related
ical goods / ng to 2021/4/
controll and agreeme agreeme 921.44 0.00% No Yes
Equipmen receivin the 28
er labor nt nt price
t g labor agreeme
Manufact services nt
uring Co.
Liaoning Purchasi Execute
Raw
Hengtai ng accordi
same material on Related
Heavy goods / ng to 2021/4/
controll s and agreeme agreeme 177.97 1,000 No Yes
Machiner receivin the 28
er spare nt nt price
y Co. g labor agreeme
parts
services nt
Liaoning Purchasi Execute
Hengtai ng accordi
same Repair on Related
Heavy goods / 2,565.2 ng to 2021/4/
controll and agreeme agreeme 0.00% No Yes
Machiner receivin 7 the 28
er labor nt nt price
y Co. g labor agreeme
services nt
Bensteel Purchasi Execute
Group ng accordi
Property on Related
Co. Controll goods / ng to 2021/4/
manage agreeme agreeme 20,000 No Yes
er receivin the 28
ment fee nt nt price
g labor agreeme
services nt
Bensteel Purchasi Execute
Group ng accordi
on Related
Co. Controll goods / Labor 10,326. ng to 2021/4/
agreeme agreeme 0.14% No Yes
er receivin cost 61 the 28
nt nt price
g labor agreeme
services nt
Anshan It Purchasi Repair on Related Execute Yes 2021/4/
109 No
Steel belongs ng labor agreeme agreeme accordi 28
73
Bengang Steel Plates Co., Ltd. Annual Report 2021
Electric to goods / nt nt price ng to
Co. Angang receivin the
Group g labor agreeme
services nt
Anshan
Purchasi Execute
Iron and It
ng Raw and accordi
Steel belongs on Related
goods / auxiliary 1,066.4 ng to 2021/4/
Scrap to agreeme agreeme 0.00% 0 No Yes
receivin material 3 the 28
Resources Angang nt nt price
g labor s agreeme
(Anshan) Group
services nt
Co.
Anshan
Iron and
Purchasi Execute
Steel It
ng Raw and accordi
Scrap belongs on Related
goods / auxiliary ng to 2021/4/
Resources to agreeme agreeme 605.2 0.00% No Yes
receivin material the 28
(Anshan) Angang nt nt price
g labor s agreeme
Co Ltd Group
services nt
Chaoyang
Branch
Anshan Purchasi Execute
It
Steel ng Raw and accordi
belongs on Related
Rope Co. goods / auxiliary ng to 2021/4/
to agreeme agreeme 1.64 No Yes
receivin material the 28
Angang nt nt price
g labor s agreeme
Group
services nt
Anshan
Iron and Purchasi Execute
It
Steel ng accordi
belongs on Related
Group goods / Enginee ng to 2021/4/
to agreeme agreeme 415.65 0.00% No Yes
Engineeri receivin ring cost the 28
Angang nt nt price
ng and g labor agreeme
Group
Technolo services nt
gy Co.
Anshan
Iron and
Purchasi Execute
Steel It
ng Raw and accordi
Group belongs on Related
goods / auxiliary 15,892. ng to 2021/4/
Internatio to agreeme agreeme 0.00% No Yes
receivin material 03 the 28
nal Angang nt nt price
g labor s agreeme
Economic Group
services nt
and Trade
Co.
Anshan Purchasi Execute
It
Steel ng accordi
belongs on Related
Construct goods / Enginee ng to 2021/4/
to agreeme agreeme 138 No Yes
ion Group receivin ring cost the 28
Angang nt nt price
Co. g labor agreeme
Group
services nt
Anshan
Steel Purchasi Execute
It
Industrial ng accordi
belongs on Related
Group goods / Repair ng to 2021/4/
to agreeme agreeme 62.12 No Yes
Metallurg receivin labor the 28
Angang nt nt price
ical g labor agreeme
Group
Machiner services nt
y Co.
Anshan Purchasi Execute
Steel It
ng accordi
Steel belongs on Related
goods / Labor ng to 2021/4/
Processin to agreeme agreeme 1.23 No Yes
receivin cost the 28
g and Angang nt nt price
g labor agreeme
Distributi Group
services nt
on
74
Bengang Steel Plates Co., Ltd. Annual Report 2021
(Dalian)
Co.
Anshan
Iron and
Steel Purchasi Execute
It
Group ng accordi
belongs on Related
Engineeri goods / Enginee ng to 2021/4/
to agreeme agreeme 6.64 No Yes
ng and receivin ring cost the 28
Angang nt nt price
Technolo g labor agreeme
Group
gy services nt
Develop
ment Co.
Bensteel Execute
Associat Selling
Electric accordi
es of the goods / on Related
Limited Energy ng to 2021/4/
parent providin agreeme agreeme 94.22 100 No Yes
Liability power the 28
compan g labor nt nt price
Company agreeme
y services
nt
Benxi Raw and Execute
Selling
Beiying auxiliary accordi
same goods / on Related
Iron and material 536,149 ng to 2021/4/
controll providin agreeme agreeme 0.07% 240,000 No Yes
Steel s and .62 the 28
er g labor nt nt price
(Group) spare agreeme
services
Co. parts nt
Benxi Execute
Selling
Beiping accordi
same goods / on Related
Iron and commod 3,228.6 ng to 2021/4/
controll providin agreeme agreeme 0.00% No Yes
Steel ity 7 the 28
er g labor nt nt price
(Group) agreeme
services
Co. nt
Benxi Execute
Selling
Beiying accordi
same goods / on Related
Iron and Energy 19,099. ng to 2021/4/
controll providin agreeme agreeme 0.00% No Yes
Steel power 4 the 28
er g labor nt nt price
(Group) agreeme
services
Co. nt
Benxi
Iron and Execute
Selling
Steel accordi
same goods / on Related
(Group) Energy ng to 2021/4/
controll providin agreeme agreeme 3.68 10 No Yes
Real power the 28
er g labor nt nt price
Estate agreeme
services
Develop nt
ment Co.
Benxi
Iron and
Execute
Steel Selling
accordi
(Group) same goods / on Related
Energy ng to 2021/4/
Steel controll providin agreeme agreeme 0.46 30 No Yes
power the 28
Processin er g labor nt nt price
agreeme
g and services
nt
Distributi
on Co.
Benxi
Iron and Execute
Selling
Steel accordi
same goods / on Related
(Group) commod 2,699.7 ng to 2021/4/
controll providin agreeme agreeme 0.03% 5,000 No Yes
Machiner ity 3 the 28
er g labor nt nt price
y agreeme
services
Manufact nt
uring Co.
Benxi same Selling Energy on Related Execute 2021/4/
Iron and controll goods / agreeme agreeme 2,213 0.00% No accordi Yes
power 28
Steel er providin nt nt price ng to
75
Bengang Steel Plates Co., Ltd. Annual Report 2021
(Group) g labor the
Machiner services agreeme
y nt
Manufact
uring Co.
Benxi
Iron and Raw and Execute
Selling
Steel auxiliary accordi
same goods / on Related
(Group) material ng to 2021/4/
controll providin agreeme agreeme 112.95 No Yes
Machiner s and the 28
er g labor nt nt price
y spare agreeme
services
Manufact parts nt
uring Co.
Benxi Execute
Selling
Iron and accordi
same goods / on Related
Steel Energy ng to 2021/4/
controll providin agreeme agreeme 783.21 0.00% 8,000 No Yes
(Group) power the 28
er g labor nt nt price
Construct agreeme
services
ion Co. nt
Benxi Raw and Execute
Selling
Iron and auxiliary accordi
same goods / on Related
Steel material 16,451. ng to 2021/4/
controll providin agreeme agreeme 0.00% No Yes
(Group) s and 31 the 28
er g labor nt nt price
Construct spare agreeme
services
ion Co. parts nt
Benxi Execute
Selling
Iron and accordi
same goods / on Related
Steel Energy 71,376. ng to 2021/4/
controll providin agreeme agreeme 0.01% 100,000 No Yes
(Group) power 36 the 28
er g labor nt nt price
Mining agreeme
services
Co. nt
Benxi Raw and Execute
Selling
Iron and auxiliary accordi
same goods / on Related
Steel material 11,481. ng to 2021/4/
controll providin agreeme agreeme 0.00% No Yes
(Group) s and 75 the 28
er g labor nt nt price
Mining spare agreeme
services
Co. parts nt
Benxi Execute
Selling
Iron and accordi
same goods / on Related
Steel Freight ng to 2021/4/
controll providin agreeme agreeme 963.5 0.00% No Yes
(Group) income the 28
er g labor nt nt price
Mining agreeme
services
Co. nt
Benxi Execute
Selling
Iron and accordi
same goods / on Related
Steel commod ng to 2021/4/
controll providin agreeme agreeme 955.33 0.00% No Yes
(Group) ity the 28
er g labor nt nt price
Mining agreeme
services
Co. nt
Benxi
Execute
Iron and Selling
accordi
Steel same goods / on Related
Energy 4,649.9 ng to 2021/4/
(Group) controll providin agreeme agreeme 0.00% 5,000 No Yes
power 3 the 28
Thermal er g labor nt nt price
agreeme
Develop services
nt
ment Co.
Benxi
Raw and Execute
Iron and Selling
auxiliary accordi
Steel same goods / on Related
material 3,595.8 ng to 2021/4/
(Group) controll providin agreeme agreeme 0.00% No Yes
s and 4 the 28
Thermal er g labor nt nt price
spare agreeme
Develop services
parts nt
ment Co.
76
Bengang Steel Plates Co., Ltd. Annual Report 2021
Benxi
Execute
Iron and Selling
accordi
Steel same goods / on Related
Energy ng to 2021/4/
(Group) controll providin agreeme agreeme 972.98 0.00% 3,000 No Yes
power the 28
Industrial er g labor nt nt price
agreeme
Develop services
nt
ment Co.
Benxi
Execute
Iron and Selling
accordi
Steel same goods / on Related
commod 2,506.4 ng to 2021/4/
(Group) controll providin agreeme agreeme 0.00% No Yes
ity 3 the 28
Industrial er g labor nt nt price
agreeme
Develop services
nt
ment Co.
Benxi
Raw and Execute
Iron and Selling
auxiliary accordi
Steel same goods / on Related
material 1,206.9 ng to 2021/4/
(Group) controll providin agreeme agreeme 0.00% No Yes
s and 2 the 28
Industrial er g labor nt nt price
spare agreeme
Develop services
parts nt
ment Co.
Benxi
Iron and Execute
Selling
Steel accordi
same goods / on Related
(Group) Energy ng to 2021/4/
controll providin agreeme agreeme 12.73 20 No Yes
Informati power the 28
er g labor nt nt price
on agreeme
services
Automati nt
on Co.
Benxi Execute
Selling
Iron and accordi
same goods / on Related
Steel Energy ng to 2021/4/
controll providin agreeme agreeme 123.95 500 No Yes
(Group) power the 28
er g labor nt nt price
Construct agreeme
services
ion Co. nt
Benxi Raw and Execute
Selling
Iron and auxiliary accordi
same goods / on Related
Steel material ng to 2021/4/
controll providin agreeme agreeme 346.39 No Yes
(Group) s and the 28
er g labor nt nt price
Construct spare agreeme
services
ion Co. parts nt
Benxi
Execute
Iron and Selling
accordi
Steel same goods / on Related
Energy ng to 2021/4/
(Group) controll providin agreeme agreeme 565.72 0.00% 30,000 No Yes
power the 28
Metallurg er g labor nt nt price
agreeme
ical Slag services
nt
Co.
Benxi
Raw and Execute
Iron and Selling
auxiliary accordi
Steel same goods / on Related
material 48,920. ng to 2021/4/
(Group) controll providin agreeme agreeme 0.01% No Yes
s and 96 the 28
Metallurg er g labor nt nt price
spare agreeme
ical Slag services
parts nt
Co.
Benxi
Iron and
Execute
Steel Selling
accordi
(Group) same goods / on Related
commod 3,047.7 ng to 2021/4/
Metallurg controll providin agreeme agreeme 0.00% No Yes
ity 3 the 28
ical Slag er g labor nt nt price
agreeme
Limited services
nt
Liability
Company
77
Bengang Steel Plates Co., Ltd. Annual Report 2021
Benxi
Execute
Iron and Selling
accordi
Steel parent goods / on Related
Energy ng to 2021/4/
(Group) compan providin agreeme agreeme 241.94 2,000 No Yes
power the 28
Limited y g labor nt nt price
agreeme
Liability services
nt
Company
Benxi
Raw and Execute
Iron and Selling
auxiliary accordi
Steel parent goods / on Related
material ng to 2021/4/
(Group) compan providin agreeme agreeme 599.48 0.00% No Yes
s and the 28
Limited y g labor nt nt price
spare agreeme
Liability services
parts nt
Company
Benxi Execute
Selling
New accordi
same goods / on Related
Business Energy ng to 2021/4/
controll providin agreeme agreeme 22.43 50 No Yes
Develop power the 28
er g labor nt nt price
ment Co. agreeme
services
nt
Dalian It
Execute
Polole belongs Selling
accordi
Steel Pipe to Benxi goods / on Related
commod 1,381.9 ng to 2021/4/
Co. Iron and providin agreeme agreeme 0.00% 2,000 No Yes
ity 2 the 28
Steel g labor nt nt price
agreeme
Group services
nt
Co., Ltd
Benxi
Iron and Execute
Selling
Steel accordi
same goods / on Related
(Group) Energy ng to 2021/4/
controll providin agreeme agreeme 10 No Yes
Zhengtai power the 28
er g labor nt nt price
Building agreeme
services
Materials nt
Co.
Liaoning
Hengtong Execute
Selling
Metallurg accordi
same goods / on Related
ical Energy ng to 2021/4/
controll providin agreeme agreeme 0.03 2,000 No Yes
Equipmen power the 28
er g labor nt nt price
t agreeme
services
Manufact nt
uring Co.
Liaoning
Hengtong Raw and Execute
Selling
Metallurg auxiliary accordi
same goods / on Related
ical material ng to 2021/4/
controll providin agreeme agreeme 302.02 No Yes
Equipmen s and the 28
er g labor nt nt price
t spare agreeme
services
Manufact parts nt
uring Co.
Liaoning
Hengtong Execute
Selling
Metallurg accordi
same goods / on Related
ical commod 2,591.9 ng to 2021/4/
controll providin agreeme agreeme 0.00% No Yes
Equipmen ity 1 the 28
er g labor nt nt price
t agreeme
services
Manufact nt
uring Co.
Bensteel Selling Execute
Stainless same goods / on Related accordi
commod 2021/4/
Steel controll providin agreeme agreeme 295.41 3,000 No ng to Yes
ity 28
Cold er g labor nt nt price the
Rolled services agreeme
78
Bengang Steel Plates Co., Ltd. Annual Report 2021
Dandong nt
Co.
Suzhou Execute
Selling
Bensteel Joint accordi
goods / on Related
Industrial stock commod 66,835. ng to 2021/4/
providin agreeme agreeme 0.01% 55,000 No Yes
Co. compan ity 91 the 28
g labor nt nt price
y agreeme
services
nt
Bensteel It Execute
Selling
Group belongs accordi
goods / on Related
Finance to Benxi Energy ng to 2021/4/
providin agreeme agreeme 1.39 2 No Yes
Co. Iron and power the 28
g labor nt nt price
steel agreeme
services
group nt
Bensteel Execute
Selling
Group accordi
goods / on Related
Co. Controll Energy ng to 2021/4/
providin agreeme agreeme 12.45 2,000 No Yes
er power the 28
g labor nt nt price
agreeme
services
nt
Bensteel Raw and Execute
Selling
Group auxiliary accordi
goods / on Related
Co. Controll material 1,282.0 ng to 2021/4/
providin agreeme agreeme 0.00% No Yes
er s and 8 the 28
g labor nt nt price
spare agreeme
services
parts nt
Bensteel Execute
Selling
Group accordi
goods / on Related
Co. Controll Labor 7,542.3 ng to 2021/4/
providin agreeme agreeme 0.00% No Yes
er cost 2 the 28
g labor nt nt price
agreeme
services
nt
Bensteel Execute
Selling
Group accordi
goods / on Related
Co. Controll commod 12,781. ng to 2021/4/
providin agreeme agreeme 0.00% No Yes
er ity 64 the 28
g labor nt nt price
agreeme
services
nt
Liaoning Execute
Selling
Hengtai accordi
same goods / on Related
Heavy Energy ng to 2021/4/
controll providin agreeme agreeme 50 No Yes
Machiner power the 28
er g labor nt nt price
y Co. agreeme
services
nt
Liaoning Execute
Selling
Hengtai accordi
same goods / on Related
Heavy commod ng to 2021/4/
controll providin agreeme agreeme 38.97 No Yes
Machiner ity the 28
er g labor nt nt price
y Co. agreeme
services
nt
Ansteel Execute
It Selling
Chemical accordi
belongs goods / on Related
Technolo commod ng to 2021/4/
to providin agreeme agreeme 1,032.8 0.00% No Yes
gy Co. ity the 28
Angang g labor nt nt price
agreeme
Group services
nt
Ansteel Raw and Execute
It Selling
Energy auxiliary accordi
belongs goods / on Related
Technolo material ng to 2021/4/
to providin agreeme agreeme 79.62 15,000 No Yes
gy Co. s and the 28
Angang g labor nt nt price
spare agreeme
Group services
parts nt
Ansteel It Selling Energy on Related 0.01 No Execute Yes 2021/4/
79
Bengang Steel Plates Co., Ltd. Annual Report 2021
Electric belongs goods / power agreeme agreeme accordi 28
Co. to providin nt nt price ng to
Angang g labor the
Group services agreeme
nt
Panzhong Execute
It Selling
Yihong accordi
belongs goods / on Related
Metal commod ng to 2021/4/
to providin agreeme agreeme 806.99 0.00% No Yes
Products ity the 28
Angang g labor nt nt price
(Chongqi agreeme
Group services
ng) Co. nt
Deyin Execute
It Selling
Landport accordi
belongs goods / on Related
Supply commod 9,987.2 ng to 2021/4/
to providin agreeme agreeme 0.00 No Yes
Chain ity 6 the 28
Angang g labor nt nt price
Services agreeme
Group services
Co. nt
Bensteel It
Raw and Execute
Bidding belongs Selling
auxiliary accordi
Co. to Benxi goods / on Related
material ng to 2021/4/
Iron and providin agreeme agreeme 10.8 No Yes
s and the 28
Steel g labor nt nt price
spare agreeme
Group services
parts nt
Co., Ltd
4,039,2 3,741,5
Total -- -- -- -- -- -- -- --
68.72 22
Details of any sales return of a large
No applicable
amount
Give the actual situation during the
reporting period where a forecast had
been made for the total amounts of
No applicable
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
No applicable
Market price for reference (if
applicable)
2. Related transactions relevant to asset acquisition or sold
□ Applicable √ Not applicable
There was no related transaction relevant to asset acquisition or sold during the reporting period.
3. Related transactions relevant to joint investments
□ Applicable √ Not applicable
There was no related transaction relevant to joint investments during the reporting period.
4. Credits and liabilities with related parties
□ Applicable √ Not applicable
Whether there are non-operating related creditor's rights and debts
5. Transactions with related financial companies
√Applicable □ Not applicable
Deposit business
80
Bengang Steel Plates Co., Ltd. Annual Report 2021
Amount for this period
Maximum The total
Beginning Total deposit Closing
Connection daily deposit deposit rate amount
Related party balance (10 amount for the withdrawn in balance (ten
relation limit (10 range
thousand yuan) current period the current thousand yuan)
thousand yuan) (10 thousand
period (10
yuan)
thousand yuan)
Ansteel Group
Both belong to
Finance Co., 450,000 1.725% 0 467,965.63 25,000 442,965.63
Ansteel Group
Ltd.
Bengang
Both belong to
Group Finance 1,100,000 3.0%~3.5% 1,332,199.78 20,900,552.77 22,232,752.56 0
Bengang Group
Co., Ltd.
Loan business
Amount for this period
Total
Loan Amount Beginning Total loan Closing
Connection Loan Interest repayment
Related party (10 thousand balance (10 amount for the
relation Rate Range amount for the balance (10
yuan) thousand yuan) current period current period thousand yuan)
(10 thousand
(10 thousand
yuan)
yuan)
Credit or other financial business
Actual amount (ten
Related party Connection relation Business type Total (ten thousand yuan)
thousand yuan)
6. Other significant related transactions
□Applicable √ Not applicable
There is no deposit, loan, credit or other financial business between the financial company controlled by the company
and its related parties.
7. Transactions between financial companies controlled by the company and related parties
□Applicable √ Not applicable
During the reporting period, the company had no other significant related transactions.
XV. Major Contracts and Their Performance
1. Trusteeship, contracting and lease
(1) Trusteeship
□ Applicable √ Not applicable
There was no trusteeship during the reporting period.
(2) Contracting
□ Applicable √ Not applicable
There was no contracting during the reporting period.
(3) Lease
√Applicable □ Not applicable
Description of lease
Company as the lessor
81
Bengang Steel Plates Co., Ltd. Annual Report 2021
Currency unit: Yuan
Lessee Lease capital category Lease income of 2021 Lease income of 2020
Benxi Steel & Iron (Group) Warehouse and ancillary
Steel & Iron Process and facilities 500,000.00
Logistics Co., Ltd.
Benxi Iron and Steel Tendering Plants and ancillary
480,000.00
Co., Ltd. facilities
Company as the lessee
Currency unit: Yuan
Rent paid
Rental expense for
short-term leases and
leases of low-value
Lessor Lease capital category Assume interest
assets and variable Increased right-of- Confirmed rental
expense on lease
lease payments not use assets of 2021 fee of 2020
liability of 2021
included in the
measurement of
lease liabilities
Land use right
Benxi Steel & Iron 7,669,068.17 square meter.
1,060,272,624.21 39,600,209.28 57,383,355.31
(Group) Co., Ltd Land use right
42,920.00 square meter
Benxi Steel & Iron 2300 Hot rolling product
208,155,611.73 7,982,648.96 16,711,424.34
(Group) Co., Ltd line, related real estate
Benxi Beiying
1780 Hot rolling product
Steel & Iron 160,309,755.83 6,147,787.68 15,578,677.65
(Group) Co., Ltd. line, related real estate
Bengang Group Land use right
72,001,790.96 2,666,923.92 9,945,423.08
Co., Ltd. 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 (Group)on April 7, 1997, December 30, 2005 and subsequent, the
Company leases land from Benxi Steel (Group), with a monthly rent of 0.594 yuan per square meter. The leased
land is 7,669,068.17 square meters and the annual rent is 54,665.10 thousand yuan.
2. On August 14, 2019, the Company signed the "House Lease Agreement" with Benxi Steel (Group) and
Beiying Iron and Steel Company, and leased the houses and auxiliary facilities occupied by the 2300 hot rolling
mill production line and the 1780 hot rolling mill production line. The lease term of the houses and ancillary
facilities is until December 31, 2038.
3. On July 15, 2019, the Company signed "Land Lease Agreement" with Bengang Group and Bengang Steel
(Group) respectively, leased and used a total of 8 pieces of land from Bengang Group and Bengang Group
Company, with leased areas of 42,920.00 square meters and 728,282.30 square meters. The lease term is 20
years, the rental price is 1.138 yuan per square meter per month.
Projects that bring profits and losses to the company reaching more than 10% of the company's total profit during
the reporting period
□ Applicable √ Not applicable
82
Bengang Steel Plates Co., Ltd. Annual Report 2021
During the reporting period of the company, there was no leasing project that brought the company's profit and loss
to more than 10% of the company's total profit during the reporting period.
2. Guarantee
□ Applicable √ Not applicable
There was no guarantee during the reporting period.
3. Entrusting Others for Managing Cash Asset
(1) Entrusted Finance
√Applicable □ Not applicable
Overview of entrusted wealth management during the reporting period
Unit: In ten thousand yuan
Overdue but
The source of funds Amount not uncollected
Amount of entrusted Outstanding
Specific type for entrusted wealth collected after amount has been
wealth management balance
management the due date accrued for
impairment
Bank financial
products
self - owned 95,000
Bank financial
products
self - owned 85,000
Bank financial
products
self - owned 430,000
Bank financial
products
self - owned 10,000
Total 620,000
Specific circumstances of high-risk entrusted wealth management with a single large amount or low security and
low liquidity
□ Applicable √ Not applicable
Entrusted wealth management is expected to be unable to recover the principal or there are other circumstances that
may lead to impairment
□ Applicable √ Not applicable
(2) Entrusted Loans
□ Applicable √ Not applicable
There was no entrusted loan during the reporting period.
4. Other Major Contracts
□ Applicable √ Not applicable
There was no other major contract during the reporting period.
XVI. Description of other major events
√ Applicable □ Not applicable
On April 15, 2021, the company received the notice from the indirect controlling shareholder Benxi Iron and Steel
Group Co., Ltd. and known that Angang Group Co., Ltd. was planning to restructure Benxi Iron and Steel Group,
which may lead to the change of control of the company. The reorganization is still in the planning stage, and the
plan needs to be approved by relevant departments after being determined. For details, see the suggestive
83
Bengang Steel Plates Co., Ltd. Annual Report 2021
announcement on the strategic restructuring of indirect controlling shareholder Benxi Iron and Steel Group Co., Ltd.
published on the designated information disclosure media on April 15, 2021.
On July 15, 2021, Benxi Steel Group Co., Ltd., the indirect controlling shareholder of the company, signed the
agreement on free transfer of trust beneficial rights with Liaoning Engineering Consulting Group Co., Ltd., Liaoning
urban and Rural Construction Group Co., Ltd. and Liaoning Rongda Investment Co., Ltd. respectively. The
provincial engineering consulting group, Liaoning urban and rural construction group and Liaoning Rongda
transferred their relevant trust beneficial rights to Benxi Steel Group free of charge. For details, please refer to the
prompt announcement of Benxi steel plate Co., Ltd. on the change of shareholders' equity (2021-039), the simplified
report on the change of shareholders' equity of Benxi steel plate Co., Ltd. and the legal opinion on the exemption
from the offer of Benxi Steel Group Co., Ltd. for the increase of shares of Benxi steel plate Co., Ltd. published on
the designated information disclosure media on July 17, 2021.
On July 30, 2021, the state-owned assets supervision and Administration Commission of Liaoning Provincial
People's government agreed that Liaoning Communications Investment Co., Ltd. would transfer its 182842883
shares of the company to Benxi Iron and Steel Group for free. For details, please refer to the prompt announcement
of Benxi steel plate Co., Ltd. on the free transfer of some state-owned equity and the change of shareholders' equity
(2021-044), the report on the change of simplified equity of Benxi steel plate Co., Ltd. and the legal opinion on the
exemption of Benxi Steel Group Co., Ltd. from issuing an offer for the increase of shares of Benxi steel plate Co.,
Ltd. published on the designated information disclosure media on July 31, 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 Anshan Iron and Steel Group
Co., Ltd. would restructure Benxi Iron and Steel Group Co., Ltd. and the Liaoning SASAC would transfer 51% of
the equity of Benxi Iron and Steel Group to Anshan Iron and Steel Group free of charge. Due to necessary procedures
need to be performed for this transfer have not been completed, there is still uncertainty whether it can obtain relevant
approval and whether the transfer can be implemented smoothly. For details, please refer to the Company's
publication on 19 August 2021 in the designated information disclosure media” Announcement on the Gratis-free
Transfer of 51% Equity Interest in Bensteel Group, the Indirect Controlling Shareholder, Approved by the State-
owned Assets Supervision and Administration Commission of the State Council and the People's Government of
Liaoning Province”.
On August 20, 2021, the State-owned Assets Supervision and Administration Commission of Liaoning Provincial
People's government, the actual controller of the company, and Anshan Iron and Steel Group Co., Ltd. signed the
free transfer agreement between the State-owned Assets Supervision and Administration Commission of Liaoning
Provincial People's government and Anshan Iron and Steel Group Co., Ltd. on the state-owned equity of Benxi Iron
and Steel Group Co., Ltd. According to the free transfer agreement, “Liaoning SASAC will transfer its 51% equity
of Benxi Iron and Steel Group Co., Ltd. to Angang Group free of charge.” After the completion of this transfer,
Angang Group will hold 51% equity of Benxi Iron and Steel Group, and Benxi Iron and Steel Group will become a
holding subsidiary of Angang Group. Angang Group indirectly controls 81.07% of the shares of the company through
Benxi Iron and Steel Group, Benxi Iron and steel (Group) Co., Ltd. and Angang Group Capital Holding Co., Ltd.
The direct controlling shareholder of the company remains unchanged and remains Benxi Iron and steel (Group)
Co., Ltd. The actual controller of the company is changed to SASAC of the State Council. For details, please refer
to the suggestive announcement on the free transfer of 51% equity of Benxi Iron and Steel Group Co., Ltd. by the
state owned assets supervision and Administration Commission of Liaoning Provincial People's government to
84
Bengang Steel Plates Co., Ltd. Annual Report 2021
Anshan Iron and Steel Group Co., Ltd. and Anshan Iron and Steel Group Co., Ltd. becoming the indirect controlling
shareholder of the company published on the designated information disclosure media on August 21 and August 24,
2021, as well as the short form equity change statement and acquisition report.
On October 12, 2021, the industrial and commercial change registration procedures for free equity transfer were
completed. For details, please refer to “the announcement on the free transfer of 51% equity of Benxi Iron and Steel
Group Co., Ltd. by the state-owned assets supervision and Administration Commission of Liaoning Provincial
People's government to Anshan Iron and Steel Group Co., Ltd. and the industrial and commercial change registration
and change of indirect controlling shareholder” published on the designated information disclosure media on October
13, 2021.
XVII. Major events of subsidiaries of the company
□ Applicable √ Not applicable
Ⅶ. 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
1. State shareholdings
2. State-own Legal-
person Shareholding
3. Other domestic
shareholdings
Including: Domestic
legal person holding
Domestic
person holding
3. Foreign shareholding
Including: Foreign
legal person
Foreign nature person
II. Non-restricted Shares 3,875,371,532 100.00% 232,819,847 232,819,847 4,108,191,379 100.00%
1. Common shares in
3,475,371,532 89.68% 232,819,847 232,819,847 3,708,191,379 90.26%
RMB
2. Foreign shares in
400,000,000 10.32% 400,000,000 9.74%
domestic market
3. Foreign shares in
foreign market
4.Other
III. Total shares 3,875,371,532 100.00% 232,819,847 232,819,847 4,108,191,379 100.00%
Causation of share capital changes
√ Applicable □ Not applicable
During the reporting period, 11,688,554 convertible corporate bonds issued by the company were converted into
85
Bengang Steel Plates Co., Ltd. Annual Report 2021
shares, and the total share capital of the company increased by 232,819,847 shares.
Status of approval of share capital changes
□Applicable √Not applicable
Status of registration process of transferred shares
□Applicable √Not applicable
Influences of share capital changes on financial indices such as basic earnings per share, diluted earnings per share,
and net asset per share attributed to common shareholders in the most recent year and the most recent period
□Applicable √Not applicable
Other information that 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
1. Status of Security Issuance (Excluding Preferred Shares) in the Reporting Period
□ Applicable √ Not applicable
2. Status of total Share and Shareholder Change and Asset and Liability Structure Change
□ Applicable √ Not applicable
3. Status of existing internal employee shares
□ Applicable √ Not applicable
Ⅲ. Shareholders and actual controllers
1. Status of number of shareholders and shareholding of the company
Unit: shares
Total
The total number of Total preferred
shareholders at
shareholders at the
Total number of the end of the preferred shareholders end of the previous
common shareholders previous voting rights restored at 0
69,162 67,655 month from the date 0
at the end of the month from the end of the reporting of disclosing the
reporting period the date of period (if any) (refer to annual report (refer to
disclosing the Notes 8) Notes 8)
annual report
Shareholding of shareholders holding more than 5% or top 10 shareholders
Holding Number of Changes in Restricted Number of pledged or
Name of the Nature of Un-restricted frozen shares
Percentage shares held at reporting shares
shareholder shareholder shares held
(%) period-end period held Status Number
Benxi Steel & Iron State-owned Pledged 360,000,000
58.65% 2,409,628,094 2,409,628,094
(Group) Co., Ltd. legal person Frozen 108,326,179
Bengang steel Group State-owned
17.95% 737,371,532 737,371,532 737,371,532
Co., Ltd. legal person
Hong Kong Securities
Foreign legal
Clearing Company 0.78% 32,029,801 32,029,801 32,029,801
person
Ltd.
Domestic
Lyv Ruijun 0.48% 19,832,700 14,823,100 19,832,700
natural person
86
Bengang Steel Plates Co., Ltd. Annual Report 2021
Domestic
Zhang Wenyou 0.47% 19,149,967 19,149,967 19,149,967
natural person
MORGAN STANLEY
& CO. Foreign legal
0.30% 12,136,919 12,136,919 12,136,919
INTERNATIONAL person
PLC
Huatai Securities CO., State-owned
0.21% 8,805,038 8,805,038 8,805,038
LTD legal person
Domestic
Zhou Wei 0.19% 7,632,931 7,632,931 7,632,931
natural person
Guosen Securities Co., State-owned
0.18% 7,500,000 7,500,000 7,500,000
Ltd. legal person
CHINA
INTERNATIONAL
CAPITAL Foreign legal
0.17% 6,999,972 6,999,972 6,999,972
CORPORATION person
HONG KONG
SECURITIES LTD
Strategy investors or general legal
person becomes top 10 shareholders
None
due to rights issued (if any) (See
Notes 3)
Benxi Iron and Steel (Group) Co., Ltd. has an associated relationship with Benxi Iron and Steel
Explanation of relationship or ‘action Group Co., Ltd., and is a person acting in concert as stipulated in the "Administrative Measures
in concert’ among the top 10 for the Acquisition of Listed Companies". The company is not aware of whether there is an
shareholders. associated relationship between other shareholders or whether they are persons acting in concert
as stipulated in the "Administrative Measures for the Acquisition of Listed Companies".
Explanation of the above-mentioned
shareholders involving The above shareholders do not involve entrustment, entrusted voting rights or abstention from
entrusted/entrusted voting rights and voting rights.
abstention from voting rights
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
Bengang steel Group Co., Ltd. 737,371,532 Common shares in RMB 737,371,532
Hong Kong Securities Clearing Company Ltd. 32,029,801 Common shares in RMB 32,029,801
Common shares in RMB 14,022,700
Lyv Ruijun 19,832,700
Domestic listed foreign shares 5,810,000
Zhang Wenyou 19,149,967 Common shares in RMB 19,149,967
MORGAN STANLEY & CO.
12,136,919 Domestic listed foreign shares 12,136,919
INTERNATIONAL PLC
Huatai Securities CO., LTD 8,805,038 Common shares in RMB 8,805,038
Zhou Wei 7,632,931 Common shares in RMB 7,632,931
Guosen Securities Co., Ltd. 7,500,000 Common shares in RMB 7,500,000
CHINA INTERNATIONAL CAPITAL
CORPORATION HONG KONG 6,999,972 Domestic listed foreign shares 6,999,972
SECURITIES LTD
Benxi Steel & Iron (Group) Co., Ltd. has an associated relationship with Bengang steel
Notes to relationship or ‘action in concert’ Group Co., Ltd., and is a person acting in concert as stipulated in the "Administrative
among the top 10 non-restricted shareholders, Measures for the Acquisition of Listed Companies". The company is not aware of
and among the top 10 non-restricted whether there is an associated relationship among the remaining shareholders or
shareholders and top 10 shareholders whether they are parties acting in concert as prescribed in the Measures for the
Administration of Acquisitions of Listed Companies.
Shareholders among the top 10 participating Benxi Steel & Iron (Group) Co., Ltd. Holds182,842,833 shares of the Company’s stock
in securities margin trading (if any) (see Note through security account and holds 554,528,649 shares of the Company’s stock through
4) the asset management plan, totaling 737,371,532 shares. Lyv Ruijun holds 5,832,900
87
Bengang Steel Plates Co., Ltd. Annual Report 2021
shares of the company's stock through security account and holds 13,999,800shares
through investor credit securities account. Zhang Wenyou holds 19,149,967 shares
through investor credit securities account. Zhou Wei holds 7,632,931 shares through
investor credit securities account.
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.
2. Controlling Shareholder
Nature of Controlling Shareholders: Central state-owned holdings
Type of Controlling Shareholders: Legal person
Name of the
Legal representative Date of Organization
Controlling Principal business activities
/ person in charge incorporation Code
shareholder
Business scope: steel smelt, mine
exploitation, panel rolling, oxygen
manufacturing, pipe manufacturing, power
generating, coal industry, special steel
material manufacturing, heating, supply of
the water, electricity, wind and gas, metal
processing, electro mechanics builds, device
manufacturing, architecture installation,
railway, highway transportation, import and
export trade, traveling industry, construction
material, refractory material, measuring
Benxi Steel &
9121050011972 device instrument, goods and materials
Iron (Group) Zhai Hongwei July 10,1996
6263U supply and marketing, development of real
Co., Ltd.
estate, scientific research, design,
information service, property management,
telecommunication, processing of waste
iron, property leasing, exchange of steel
material, and recycling of waste oils (to the
extent of licensed to the subsidiary
companies) , property management;
publishing of Bengang Daily; designing and
making of presswork and advertisement,
releasing, producing of TV advertisements in
the country and abroad.
Equity of
other
domestic/forei
gn listed
company with
share
controlling None
and share
participation
by controlling
shareholder in
reporting
period
Changes of controlling shareholders during the reporting period
□Applicable√ Not applicable
The controlling shareholder of the company did not change during the reporting period.
3. Actual Controller
Actual controller nature: Central State-owned Assets Management Agency
Actual controller type: Legal person
Name of the controlling Legal representative Date of Organization
Principal business activities
shareholder / Person in charge incorporation Code
88
Bengang Steel Plates Co., Ltd. Annual Report 2021
Steel, iron, vanadium, titanium,
stainless steel, special steel
production and manufacturing, non-
ferrous metal production and
manufacturing, steel rolling
processing, iron, vanadium, titanium
and other non-ferrous metal, non-
metallic mining and comprehensive
utilization, mining auxiliary industry,
cleaning Energy power generation,
sales of coal and products, chemical
products and gases (excluding
hazardous chemicals), production and
sales of refractory materials,
industrial and mining engineering,
metallurgical engineering
construction, engineering and
technical services, equipment
manufacturing, Internet of Things
information services, energy
conservation, environmental
protection technical services , R&D
of new materials, development of
renewable resources, mechanical
91210000558 processing, technology development,
Ansteel Group Co., Ltd. Tan Chengxu July 28, 2010
190456G transfer and services, transportation
services, real estate development,
urban energy supply, software and
information technology services,
intelligent manufacturing and
services, domestic and foreign trade,
financial management, bidding
Services, medical and health care
services, vocational skills training,
economic information consulting
services, enterprise management,
hotel catering services, operating
other state-owned assets and
investments within the scope
authorized by the State-owned Assets
Supervision and Administration
Commission of the State Council;
branch operations are limited to the
following: newspaper distribution,
publication printing, Packaging
decoration and other print printing.
(For projects subject to approval
according to law, business activities
can only be carried out after approval
by relevant departments)
Equity of other
domestic/foreign listed
company with share
During the reporting period, Ansteel Group Co., Ltd. indirectly held 53.33% of the shares
controlling and share
of Ansteel and indirectly held 58.68% of the shares of Pansteel Vanadium and Titanium.
participation by
controlling shareholder
in reporting period
Change of actual controller during the reporting period
√ Applicable □Not applicable
Liaoning Provincial State-owned Assets
Name of the original actual controller:
Supervision and Administration Commission
Name of the new actual controller Ansteel Group Co., Ltd.
Change date October 12, 2021
Query index in Specify the website Announcement number:2021-063
Disclosure date in Specify the website October 13, 2021
89
Bengang Steel Plates Co., Ltd. Annual Report 2021
Block diagram of the ownership and control relations between the Company and the actual controller
Whether the actual controller is controlling the Company through trusteeship or other asset management service
□ Applicable √ Not applicable
4. The company's controlling shareholder or the largest shareholder and its concerted action
person's cumulative pledged shares account for 80% of the company's shares held by them
□ Applicable √ Not applicable
5. Shareholders holding More than 10% of the Shares
□ Applicable √ Not applicable
6. Status of Share Reduction Limitation of Controlling Shareholders, Actual Controller,
Restructuring Party and Other Commitment Subjects
□ Applicable √ Not applicable
IV. The specific implementation of share repurchase during the reporting period
Implementation progress of share repurchase
□ Applicable √ Not applicable
Implementation progress of reducing share repurchased by centralized bidding
□ Applicable √ Not applicable
90
Bengang Steel Plates Co., Ltd. Annual Report 2021
Ⅷ. Status of Preferred Shares
□ Applicable √ Not applicable
There was no preferred stock in the company during the reporting period.
91
Bengang Steel Plates Co., Ltd. Annual Report 2021
Ⅸ. Status of Convertible Corporate Bonds
√ Applicable □ Not applicable
Ⅰ. corporate bonds
□ Applicable √ Not applicable
There were no corporate bonds in the company during the reporting period.
Ⅱ. company bonds
□ Applicable √ Not applicable
There were no company bonds in the company during the reporting period.
Ⅲ. Non-financial corporate debt financing instruments
□ Applicable √ Not applicable
There were no non-financial corporate debt financing instruments in the company during the reporting period.
Ⅳ. Convertible corporate bonds
√Applicable □ Not applicable
1. Previous adjustment of conversion price
(1) The initial conversion price of "Bengang Convertible Bonds" is RMB 5.03 per share.
(2) Due to the company's implementation of the 2020 equity distribution plan, the conversion price of "Bengang
Convertible Bonds" will be adjusted to 5.02 yuan per share on July 19, 2021.
(3) Due to the company's implementation of the 2021 mid-term equity distribution plan, the conversion price of
"Bengang Convertible Bonds" will be adjusted to 4.55 yuan per share on October 13, 2021.
2. Status of cumulative share transfer
√Applicable □ Not applicable
Proportion of
Cumulative Cumulative the number Proportion of
Total
Convertible Conversion Total share number of of converted Amount not unconverted
amount
bond starts and amount conversion shares shares to the yet converted amount to
issued
abbreviation end date issued amount converted total issued (RMB) total issued
(bonds)
(RMB) (shares) shares before amount
conversion
Bengang
Convertible 2021-01-04 68,000,000 6,800,000,000.00 1,168,855,400.00 232,819,847 6.01% 5,631,144,600.00 82.81%
Bonds
92
Bengang Steel Plates Co., Ltd. Annual Report 2021
3. Top ten holders of convertible bonds
Unit: shares
Number of Amount of
Percentage of
Nature of convertible bonds convertible bonds
Convertible bond convertible bonds
No. convertible held at the end of the held at the end of the
holders held at the end of the
bond holders reporting period reporting period
reporting period
(bonds) (yuan)
China CITIC Group
Corporation Limited
1 Enterprise Annuity Plan Other 2,330,006 233,000,600.00 4.14%
- China CITIC Bank
Corporation Limited
Foreign legal
2 UBS AG 1,738,753 173,875,300.00 3.09%
person
Industrial Bank Co., Ltd.
- Tianhong Yongli Bond
3 Other 1,399,381 139,938,100.00 2.49%
Securities Investment
Fund
China Construction
Bank Corporation -
China Merchants Stable
4 Other 1,352,501 135,250,100.00 2.40%
Profit Increase Bond
Securities Investment
Fund
China Huaneng Group
Corporation Enterprise
Annuity Plan －
5 Other 1,244,595 124,459,500.00 2.21%
Industrial and
Commercial Bank of
China Limited
China Construction
Bank Corporation -
Huashang Credit
6 Other 1,076,193 107,619,300.00 1.91%
Enhanced Bond
Securities Investment
Fund
China AMC Yannian
Yishou No. 9 Fixed
7 Income Pension Product Other 995,917 99,591,700.00 1.77%
－ China Merchants
Bank Co., Ltd.
Shanghai Pudong
Development Bank Co.,
8 Ltd. - E Fund Yuxiang Other 991,760 99,176,000.00 1.76%
Return Bond Securities
Investment Fund
Basic Pension Insurance
9 Other 963,240 96,324,000.00 1.71%
Fund 107 Portfolio
Industrial and
Commercial Bank of
China Limited -
10 Other 903,820 90,382,000.00 1.61%
Huashang Convertible
Bond Bond Securities
Investment Fund
4. Significant changes in the guarantor's profitability, asset condition and credit standing
□ Applicable √ Not applicable
93
Bengang Steel Plates Co., Ltd. Annual Report 2021
5. At the end of the reporting period, the company's liabilities, changes in credit and cash
arrangements and debt repayment in future years
At the end of the reporting period, the company's major accounting data and financial indicators and the company's
credit rating of convertible bonds in the past two years have not changed this year.
Ⅴ. The loss in the consolidated statement during the reporting period exceeded 10%
of the net assets at the end of the previous year
□ Applicable √ Not applicable
Ⅵ. Overdue Interest-bearing debts except bonds at the end of the reporting period
□ Applicable √ Not applicable
Ⅶ. Status of violation of rules and regulations during the period reporting period
□ Yes √ No
Ⅷ. The main accounting data and financial indicators of the company in the
past two years at the end of the reporting period
Item At the end of this period At the end of last period Change
Current ratio 113.99% 104.00% 9.61%
Liabilities to Assets Ratio 58.17% 66.85% -8.68%
Quick ratio 66.12% 77.00% -14.13%
At the end of this period At the end of last period Change
Net profit after deducting non-
2,517,758,656.14 381,469,784.99 560.02%
recurring gains and losses (RMB)
EBITDA total liabilities ratio 19.23% 7.00% 12.23%
Interest coverage ratio 4.37 1.4 212.14%
Cash interest coverage ratio 2.35 -0.96 -344.42%
EBITDA interest coverage ratio 6.12 7.91 -22.63%
Loan repayment rate 100.00% 100.00% 0.00%
Interest repayment rate 100.00% 100.00% 0.00%
94
Bengang Steel Plates Co., Ltd. Annual Report 2021
Ⅹ. Financial Report
Opinion of audit report Unqualified audit opinion
Date of audit report 24th March 2022
Name of CPA Firm BDO China Shu Lun Pan CPAs LLP
Audit report number Xin Kuai Shi Bao Zi [2022] No. ZB10094
Name of CPA Li Yongjiang; Li Guiying
Auditor’s Report
(English Translation for Reference Only)
Xin Kuai Shi Bao Zi [2022] No. ZB10094
To the Shareholders of Bengang Steel Plates Co., Ltd.:
Auditor’s Opinion
We have audited the accompanying financial statements of Bengang Steel Plates Co., Ltd.
(hereinafter referred to as “the Company” or “Bengang Steel Plates”) which comprise the
consolidated and company’s statements of financial position as at 31 December 2021, the
consolidated and company’s statements of comprehensive income, the consolidated and
company’s statements of cash flows, and the consolidated and company’s statements of changes
in shareholders’ equity, for the year then ended, and notes to the financial statements.
In our opinion, the accompanying financial statements present fairly, in all material respects,
the consolidated and company’s financial position as at 31 December 2021, and the
consolidated and company’s financial performance and cash flows for the year then ended in
accordance with the requirements of Accounting Standards for Business Enterprises.
Basis for Opinion
We conducted our audit in accordance with China Standards on Auditing (“CSAs”). Our
responsibilities under those standards are further described in the Auditor's Responsibilities for
the Audit of the Financial Statements section of our report. We are independent of the Company
in accordance with the Code of Ethics for Professional Accountants of the Chinese Institute of
Certified Public Accountants (“CICPA Code”), and we have fulfilled our other ethical
responsibilities in accordance with the CICPA Code. We believe that the audit evidence we have
obtained is sufficient and appropriate to provide a basis for our opinion.
Key Audit Matters
Key audit matters are those matters that, in our professional judgment, were of most
significance in our audit of the financial statements of the current period. These matters were
addressed in the context of our audit of the financial statements as a whole, and in forming our
opinion thereon and we do not provide a separate opinion on these matters.
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Bengang Steel Plates Co., Ltd. Annual Report 2021
We identified the following key audit matters in our audit.
Key Audit Matters Audit Procedure
1. Revenue recognition
Refer to Note (24) Revenue under “3. Our audit procedures to evaluate revenue
Significant accounting policies and accounting recognition included the following:
estimates” and Note (37) Operating income and
operating cost under “5. Notes to consolidated 1. Understanding and evaluating the design
financial statements”. and operating effectiveness of key internal
controls related to revenue recognition.
For the year ended 31 December 2021, the
Company and its subsidiaries generated revenue 2. Checking sales contracts, on sample
totaling RMB 77,912,144,981.46, with an basis, to identify terms and conditions
increase of 60.03% compared with that of 2020. related to transfer of control of goods, and
evaluating whether the Company's revenue
We identified revenue recognition as a key audit recognition policy is in compliance with
matter because revenue is the key performance the relevant requirements of the
indicator for the Company, and there may exists Accounting Standards for Business
risk of material misstatement in revenue Enterprises.
recognition.
3. Selecting revenues from sales details
recorded during the year, on sample basis,
to check corresponding sales contracts,
invoices, goods delivery notice,
acceptance notice, customs declaration,
ocean bills of lading and other supporting
documents, in order to evaluate whether
the relevant revenue was recognized in
accordance with the Company's
accounting policies on revenue
recognition.
4. Performing analytical procedures on
revenue in terms of gross profit in main
products by comparing with that in
previous year and within industry, and
performing fluctuation analysis, so as to
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Bengang Steel Plates Co., Ltd. Annual Report 2021
identify any unusual trend.
5. Confirming revenue recognized in
current year by including revenue amount
in confirmations sent to selected customers
with balance of accounts receivable.
6. Checking sales to related parties to
evaluate whether the transactions were
conducted at arm’s length.
7. Selecting revenue transactions recorded
before and after the balance sheet date,
inspecting supporting documents related to
revenue recognition, and evaluating
whether the relevant revenue was recorded
in proper accounting period.
8. Checking presentation of operating
income in the financial statements for a
proper disclosure.
2. Inventory provision
Refer to Note （ 11 ） Inventory under “ 3. Our audit procedures to evaluate
Significant accounting policies and accounting impairment of inventory include:
estimates ” and (7) Inventory under “ 5.
1. Evaluating the design and operation of
Notes to consolidated financial statements”.
internal control related to provision for
decline in the value of inventories;
As at 31 December 2021, the Company and its
subsidiaries had a balance of inventory of RMB
2. Observing inventory count by checking
10,275,974,432.07 (before provision) with a
the quantity and status of inventories,
provision for decline in value of inventory of
especially the long-aging ones;
RMB 85,808,293.09, so that the balance of
inventory was RMB 10,190,166,138.98 after
3. Obtaining the calculation of provision
provision. Inventory is measured at the lower of
for decline in the value of inventories to
cost and net realizable value. The financial
check whether the calculation is in
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Bengang Steel Plates Co., Ltd. Annual Report 2021
statements would be greatly impacted if accordance with the related accounting
inventory provision was not sufficiently policies of the Company, and to check
provided. changes during current year regarding
inventory provision made in prior years so
The net realizable value of inventories is as to analyze whether the provision is
calculated by estimated sale price of inventories sufficient;
less estimated sale expense and relevant taxes.
4. For inventories with selling price in
Management determines the estimated selling active market, inquiring the price
price of the inventories based on their status, information independently and comparing
which involved significant judgement. that with estimated selling price applied in
the calculation of inventory provision. For
We identified inventory provision as a key audit those without selling price in active
matter because balance of inventory was market, comparing the estimated selling
significant as at 31 December 2021, which price with the latest actual selling price or
involves estimate for net realizable value. selling price after the reporting period.
5. Comparing the estimated sales expenses
and related taxes and fees with historical
data of similar products and with the actual
costs incurred after the balance sheet date.
Other Information
Management of the Company (“Management”) is responsible for the other information. The
other information comprises all of the information included in the 2021 annual report of the
Company, other than the financial statements and our auditor's report thereon.
Our opinion on the financial statements does not cover the other information and we do not
express any form of assurance conclusion thereon.
In connection with our audit of the financial statements, our responsibility is to read the other
information and, in doing so, consider whether the other information is materially inconsistent
with the financial statements or our knowledge obtained in the audit or otherwise appears to be
materially misstated.
If, based on the work we have performed, we conclude that there is a material misstatement of
the other information, we are required to report that fact. We have nothing to report in this
regard.
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Bengang Steel Plates Co., Ltd. Annual Report 2021
Responsibilities of Management and Those Charged with Governance for the Financial
Statements
Management is responsible for the preparation and fair presentation of the financial statements
in accordance with the requirements of Accounting Standards for Business Enterprises, and for
such internal control as management determines is necessary to enable the preparation of
financial statements that are free from material misstatement, whether due to fraud or error.
In preparing the financial statements, Management is responsible for assessing the Company's
ability to continue as a going concern, disclosing, if applicable, matters related to going concern
and using the going concern basis of accounting unless management either intends to liquidate
the Company or to cease operations, or has no realistic alternative but to do so.
Those charged with governance are responsible for overseeing the Company's financial
reporting process.
Auditor's Responsibilities for the Audit of the Financial Statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a
whole are free from material misstatement, whether due to fraud or error, and to issue an
auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance but
is not a guarantee that an audit conducted in accordance with CSAs will always detect a material
misstatement when it exists. Misstatements can arise from fraud or error and are considered
material if, individually or in aggregate, they could reasonably be expected to influence the
economic decisions of users taken on the basis of these financial statements.
As part of an audit in accordance with CSAs, we exercise professional judgment and maintain
professional skepticism throughout the audit. We also:
(1) Identify and assess the risks of material misstatement of the financial statements, whether
due to fraud or error, design and perform audit procedures responsive to those risks, and obtain
audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of
not detecting a material misstatement resulting from fraud is higher than for one resulting from
error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the
override of internal control.
(2) Obtain an understand of internal control relevant to the audit in order to design audit
procedures that are appropriate in the circumstances.
(3) Evaluate the appropriateness of accounting policies used and the reasonableness of
accounting estimates and related disclosures made by management.
(4) Conclude on the appropriateness of management’s use of the going concern basis of
accounting and, based on the audit evidence obtained, whether a material uncertainty exists
related to events or conditions that may cast significant doubt on Bengang Steel Plate’s ability
to continue as a going concern. If we conclude that a material uncertainty exists, we are required
to draw attention in our auditor’s report to the related disclosures in the financial statements or,
if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the
audit evidence obtained up to the date of our auditor’s report. However, future events or
conditions may cause Bengang Steel Plates to cease to continue as a going concern.
(5) Evaluate the overall presentation (including the disclosures), structure and contents of the
financial statements, and whether the financial statements represent the underlying transactions
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Bengang Steel Plates Co., Ltd. Annual Report 2021
and events in a manner that achieves fair presentation.
(6) Obtain sufficient appropriate audit evidence regarding the financial information of the
entities or business activities within Bengang Steel Plates to express an opinion on the
consolidated financial statements. We are responsible for the direction, supervision and
performance of the group audit. We remain solely responsible for our audit opinion.
We communicate with those charged with governance regarding, among other matters, the
planned scope and timing of the audit and significant audit findings, including any significant
deficiencies in internal control that we identify during our audit.
We also provide those charged with governance with a statement that we have complied with
relevant ethical requirements regarding independence, and communicate with them all
relationships and other matters that may reasonably be thought to bear on our independence
and, where applicable, related safeguards.
From the matters communicated with those charged with governance, we determine those
matters that were of most significance in the audit of the financial statements of the current
period and are therefore the key audit matters. We describe these matters in our auditor's report
unless law or regulation precludes public disclosure about the matter or when, in extremely rare
circumstances, we determine that a matter should not be communicated in our report because
the adverse consequences of doing so would reasonably be expected to outweigh the public
interest benefits of such communication.
BDO CHINA SHU LUN PAN CERTIFIED Certified Public Accountants of China
PUBLIC ACCOUNTANTS LLP (Engagement Partner)
Certified Public Accountants of China
Shanghai, the People’s Republic of China 24 March 2022
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Bengang Steel Plates Co., Ltd. Annual Report 2021
BENGANG STEEL PLATES CO., LTD.
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
As at 31 December 2021
(Expressed in Renminbi unless otherwise indicated)
(English Translation for Reference Only)
Assets Notes 5 31 Dec, 2021 31 Dec, 2020
Current assets
Cash at bank and on hand (1) 8,831,095,737.85 13,126,666,915.26
Settlement provisions
Capital lent
Financial assets held for trading
Derivative financial assets
Notes receivable (2) 1,540,482,182.07
Accounts receivable (3) 256,850,782.71 245,217,182.66
Accounts receivable financing (4) 1,530,735,647.38 4,189,977,871.92
Prepayments (5) 994,370,345.64 2,108,044,777.65
Premium receivable
Reinsurance accounts receivable
Receivable deposit for reinsurance contract
Other receivables (6) 165,937,280.41 142,101,351.27
Redemptory financial assets for sale
Inventories (7) 10,190,166,138.98 9,040,065,342.65
Contract assets
Assets held for sale
Non-current assets due within one year
Other current assets (8) 754,948,193.56 5,523,646,836.01
Total current assets 24,264,586,308.60 34,375,720,277.42
Non-current assets
Loan and advances issued
Debt Investments
Other debt investments
Long-term receivables
Long-term equity investments (9) 2,981,784.07 2,742,064.73
Other equity instrument investments (10) 1,042,024,829.00 1,042,024,829.00
Other non-current financial assets
Investment property
Fixed assets (11) 25,480,674,048.94 26,284,567,956.44
Construction in progress (12) 2,434,182,101.13 1,839,933,715.58
Productive biological assets
Oil and gas assets
Right-of-use assets (13) 1,440,365,248.31
Intangible assets (14) 297,921,548.81 264,932,652.54
Development expenditure
Goodwill
Long-term deferred expenses
Deferred tax assets (15) 153,756,548.31 201,708,932.84
Other non-current assets (16) 30,630,858.13 995,840,320.65
Total non-current assets 30,882,536,966.70 30,631,750,471.78
Total assets 55,147,123,275.30 65,007,470,749.20
The notes to the financial statements attached form part of these financial statements.
Legal Representative: Chief Financial Officer: Chief Accountant:
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Bengang Steel Plates Co., Ltd. Annual Report 2021
BENGANG STEEL PLATES CO., LTD.
CONSOLIDATED STATEMENT OF FINANCIAL POSITION (Continued)
As at 31 December 2021
(Expressed in Renminbi unless otherwise indicated)
(English Translation for Reference Only)
Liabilities and equities Notes 5 31 Dec, 2021 31 Dec, 2020
Current Liabilities
Short-term loans （17） 4,053,088,140.00 10,067,731,000.00
Loan from central bank
Loan from other banks
Financial liability held for trading
Derivative financial liabilities
Notes payable （18） 4,635,083,376.48 9,814,149,348.42
Accounts payable （19） 5,352,272,685.89 5,914,228,256.82
Advance from customers
Contract liabilities （20） 4,708,188,093.78 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 （21） 152,095,376.49 25,749,485.25
Taxes payable （22） 114,267,988.70 55,302,080.96
Other payables （23） 1,348,025,731.98 709,448,301.92
Handling charges and commission payable
Reinsurance accounts payable
Liabilities held for sale
Non-current liabilities due within one year （24） 310,780,518.14 1,308,030,361.43
Other current liabilities （25） 612,064,452.20 579,627,336.58
Total current liabilities 21,285,866,363.66 32,932,937,991.28
Non-current liabilities
Provision for insurance contract
Long-term loans （26） 4,222,821,771.74 3,502,934,427.65
Bonds payable （27） 5,054,251,668.83 5,752,229,339.52
Including: Preferred stock
Perpetual bond
Leasing liabilities （28） 1,424,667,169.15
Long-term payables （29） 1,114,232,362.74
Long-term employee benefits payable
Estimated liabilities
Deferred income （30） 93,106,285.89 154,451,833.23
Deferred tax liabilities
Other non-current liabilities
Total non-current liabilities 10,794,846,895.61 10,523,847,963.14
Total liabilities 32,080,713,259.27 43,456,785,954.42
Shareholders' equity:
Share capital （31） 4,108,191,379.00 3,875,371,532.00
Other equity instruments （32） 947,882,663.63 1,146,290,662.42
Including: Preferred stock
Perpetual bond
Capital reserves （33） 13,272,134,173.09 12,343,209,847.29
Less: treasury shares
Other comprehensive income
Special reserves （34） 337,978.57 300,412.14
Surplus reserves （35） 1,195,116,522.37 961,105,529.85
General risk reserve
Undistributed profits （36） 2,977,306,297.64 2,692,018,405.40
Total equity attributable to equity holders of the parent company 22,500,969,014.30 21,018,296,389.10
Non-controlling interests 565,441,001.73 532,388,405.68
Total shareholder's equity 23,066,410,016.03 21,550,684,794.78
Total of liabilities and owners’ equity 55,147,123,275.30 65,007,470,749.20
The notes to the financial statements attached form part of these financial statements.
Legal Representative： Chief Financial Officer: Chief Accountant:
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Bengang Steel Plates Co., Ltd. Annual Report 2021
BENGANG STEEL PLATES CO., LTD.
COMPANY’S STATEMENT OF FINANCIAL POSITION
As at 31 December 2021
(Expressed in Renminbi unless otherwise indicated)
(English Translation for Reference Only)
Assets Notes 14 31 Dec, 2021 31 Dec, 2020
Current assets
Cash at bank and on hand 7,580,872,007.38 11,808,618,300.87
Financial assets held for trading
Derivative financial assets
Notes receivable （1） 1,514,416,395.80
Accounts receivable （2） 353,631,563.42 289,865,462.20
Accounts receivable financing （3） 1,504,640,362.79 4,143,431,412.08
Prepayments 1,004,241,075.82 2,117,204,935.75
Other receivables （4） 268,606,048.52 228,180,190.02
Inventories 8,289,784,141.78 7,420,499,172.20
Contract assets
Assets held for sale
Non-current assets due within one year
Other current assets 670,787,069.41 5,437,282,088.94
Total current assets 21,186,978,664.92 31,445,081,562.06
Non-current assets
Debt investments
Other debt investments
Long-term receivables
Long-term equity investments （5） 2,015,186,190.50 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 24,110,222,815.60 24,755,665,765.30
Construction in progress 2,401,120,232.45 1,798,639,941.58
Productive biological assets
Oil and gas assets
Right-of-use assets 1,440,365,248.31
Intangible assets 178,414,033.19 142,163,903.40
Development expenditure
Goodwill
Long-term deferred expenses
Deferred tax assets 124,046,003.13 98,480,706.23
Other non-current assets 22,010,941.60 988,475,426.53
Total non-current assets 31,332,990,293.78 30,841,332,474.20
Total assets 52,519,968,958.70 62,286,414,036.26
The notes to the financial statements attached form part of these financial statements.
Legal Representative: Chief Financial Officer: Chief Accountant:
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Bengang Steel Plates Co., Ltd. Annual Report 2021
BENGANG STEEL PLATES CO., LTD.
COMPANY’S STATEMENT OF FINANCIAL POSITION (Continued)
As at 31 December 2021
(Expressed in Renminbi unless otherwise indicated)
(English Translation for Reference Only)
Liabilities and shareholders' equities Notes 14 31 Dec, 2021 31 Dec, 2020
Current liabilities
Short-term loans 3,353,088,140.00 9,107,731,000.00
Financial liability held for trading
Derivative financial liabilities
Notes payable 4,650,517,420.18 8,348,607,405.21
Accounts payable 5,674,841,169.66 6,280,468,684.34
Advance from customers
Contract liabilities 4,660,051,055.89 5,324,357,761.83
Employee benefits payable 151,595,453.62 23,981,010.53
Taxes payable 40,949,825.13 42,514,891.31
Other payables 683,141,570.83 368,374,954.61
Liabilities held for sale
Non-current liabilities due within one year 310,780,518.14 1,308,030,361.43
Other current liabilities 605,806,637.27 692,166,509.04
Total current liabilities 20,130,771,790.72 31,496,232,578.30
Non-current liabilities
Long term loans 4,222,821,771.74 3,502,934,427.65
Bonds payable 5,054,251,668.83 5,752,229,339.52
Including: Preferred stock
Perpetual bond
Lease liabilities 1,424,667,169.15
Long-term payables 1,108,412,163.50
Long-term employee benefits payable
Estimated liabilities
Deferred income 93,106,285.89 154,451,833.23
Deferred tax liabilities
Other non-current liabilities
Total non-current liabilities 10,794,846,895.61 10,518,027,763.90
Total liabilities 30,925,618,686.33 42,014,260,342.20
Shareholder’s equity:
Share capital 4,108,191,379.00 3,875,371,532.00
Other equity instruments 947,882,663.63 1,146,290,662.42
Including: Preferred stock
Perpetual bond
Capital reserves 12,851,982,490.97 11,923,058,165.17
Less: Treasury shares
Other comprehensive income
Special reserves 155,469.58 120,972.62
Surplus reserves 1,195,116,522.37 961,105,529.85
Undistributed Profits 2,491,021,746.82 2,366,206,832.00
Total shareholder's equity 21,594,350,272.37 20,272,153,694.06
Total liabilities and shareholder’s equity 52,519,968,958.70 62,286,414,036.26
The notes to the financial statements attached form part of these financial statements.
Legal Representative: Chief Financial Officer: Chief Accountant:
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Bengang Steel Plates Co., Ltd. Annual Report 2021
BENGANG STEEL PLATES CO., LTD.
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
For the year ended 31 December 2021
(Expressed in Renminbi unless otherwise indicated)
(English Translation for Reference Only)
Items Notes 5 Current period Previous period
1. Total operating income 77,912,144,981.46 48,684,792,685.58
Including: Operating income (37) 77,912,144,981.46 48,684,792,685.58
Interest income
Premium earned
Income from handling charges and commission
2. Total operating cost 74,244,688,137.82 47,900,922,736.61
Including: Operating cost (37) 71,891,598,336.96 46,392,180,562.59
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 (38) 431,460,563.69 215,871,820.10
Selling and distribution expenses (39) 141,394,565.57 97,279,280.21
General and administrative expenses (40) 1,187,239,442.10 792,826,294.81
Research and development expenses (41) 56,401,594.44 37,989,623.28
Financial expenses (42) 536,593,635.06 364,775,155.62
Including: Interest expense 1,007,595,231.75 1,028,857,436.14
Interest income 393,818,460.36 378,523,984.03
Add: Other income (43) 66,345,976.64 81,305,181.92
Income on investment（“-” for loss） (44) -120,519,309.82 13,951,362.33
Including: Income from associates and joint ventures 520,432.46 374,119.86
Income from derecognition of financial assets measured at amortized cost
Exchange gains（“-” for loss）
Net exposure hedge income（“-” for loss）
Gains from change of fair value （“-” for loss）
Credit impairment loss （“-” for loss） (45) -7,754,375.77 -304,019,761.75
Assets impairment loss （“-” for loss） (46) -113,671,335.02 -67,185,869.37
Assets disposal gains（“-” for loss） (47) 130,675.05 325,651.61
3. Operational profit（“-” for loss） 3,491,988,474.72 508,246,513.71
Add: Non-operating income (48) 7,783,225.80 4,328,563.52
Less: Non-operating expenses (49) 64,272,629.43 95,724,280.44
4. Total profit (“-” for loss) 3,435,499,071.09 416,850,796.79
Less: Income tax expenses (50) 901,863,572.46 25,371,230.56
5. Net profit（“-” for loss） 2,533,635,498.63 391,479,566.23
1.Classification by continuing operating
1.Net profit from continuing operation（“-” for loss） 2,533,635,498.63 391,479,566.23
2.Net profit from discontinued operation（“-” for loss）
2.Classification by ownership
1. Net profit attributable to the owners of parent company （“-” for loss） 2,500,582,902.58 384,252,740.78
2. Net profit attributable to non-controlling shareholders （“-” for loss） 33,052,596.05 7,226,825.45
6.Other comprehensive income
Other comprehensive income attributable to owners of the parent company after tax
1.Other comprehensive income items that will not be reclassified into gains/losses
1) Re-measurement of defined benefit plans of changes in net debt or net assets
2) Other comprehensive income under the equity method cannot be reclassified into
profit or loss
3) Changes in fair value of investments in other equity instruments
4) Changes in fair value of company's credit risk
2.Other comprehensive income that will be reclassified into profit or loss.
1) Other comprehensive income under the equity method which 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) Cash flow hedges reserve
6) Translation differences in foreign currency financial statements
7) Others
Other comprehensive income attributable to non-controlling shareholders’ equity after tax
7. Total comprehensive income 2,533,635,498.63 391,479,566.23
Total comprehensive income attributable to the owner of the parent company 2,500,582,902.58 384,252,740.78
Total comprehensive income attributable to non-controlling shareholders 33,052,596.05 7,226,825.45
8. Earnings per share
1）Basic earnings per share (51) 0.600 0.099
2）Diluted earnings per share (51) 0.496 0.099
The notes to the financial statements attached form part of these financial statements.
Legal Representative: Chief Financial Officer: Chief Accountant:
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Bengang Steel Plates Co., Ltd. Annual Report 2021
BENGANG STEEL PLATES CO., LTD.
COMPANY’S STATEMENT OF COMPREHENSIVE INCOME
For the year ended 31 December 2021
(Expressed in Renminbi unless otherwise indicated)
(English Translation for Reference Only)
Items Notes 14 Current period Previous period
1. Total operating income (6) 78,721,461,725.71 48,811,106,474.73
Less: Operating cost (6) 73,203,463,475.56 46,742,700,421.70
Tax and surcharges 381,385,801.80 182,486,280.99
Selling and distribution expenses 122,357,594.15 86,927,530.44
General and administrative expenses 1,123,575,016.51 738,689,535.43
Research and development expenses 56,401,594.44 37,989,623.28
Financial expenses 521,028,798.20 339,059,288.37
Including: Interest expense 971,156,413.61 973,520,152.09
Interest income 372,598,200.22 348,394,576.76
Add: Other income 65,897,317.34 80,671,964.84
Income on investment（“-” for loss） (7) -123,815,558.88 13,577,242.47
Including: Income from associates and joint ventures
Income from derecognition of financial assets
measured at amortized cost
Net exposure hedge income（“-” for loss）
Gains from change of fair value （“-” for loss）
Credit impairment loss（“-” for loss） -8,563,525.91 1,333,341.31
Assets impairment loss（“-” for loss） -113,671,335.02 -67,185,869.37
Assets disposal gains（“-” for loss） 130,675.05 325,651.61
2. Operational profit（“-” for loss） 3,133,227,017.63 711,976,125.38
Add: Non-operating income 3,831,724.04 3,588,687.69
Less: Non-operating expenses 62,183,332.01 95,171,437.11
3. Total profit (“-” for loss) 3,074,875,409.66 620,393,375.96
Less: Income tax expenses 734,765,484.50 -3,562,037.01
4. Net profit（“-” for loss） 2,340,109,925.16 623,955,412.97
1.Net profit from continuing operation (“-” for loss) 2,340,109,925.16 623,955,412.97
2.Net profit from discontinued operation (“-” for loss)
5.Other comprehensive income
1.Other comprehensive income items that will not be reclassified
into gains/losses
1) Re-measurement of defined benefit plans of changes
2) Other comprehensive income under the equity method cannot
be reclassified into profit or loss
3) Changes in fair value of investments in other equity
instruments
4) Changes in fair value of company's credit risk
2.Other comprehensive income that will be reclassified into profit
or loss.
1) Other comprehensive income under the equity method investee
can be reclassified into profit or loss
2) Changes in fair value of other debt investments
3) Amount of financial assets reclassified into other
comprehensive income
4) Credit impairment provision of other debt investments
5) Cash flow hedges reserve
6) Translation differences in foreign currency financial statements
7) Others
6. Total comprehensive income 2,340,109,925.16 623,955,412.97
7. Earnings per share
1）Basic earnings per share
2）Diluted earnings per share
The notes to the financial statements attached form part of these financial statements.
Legal Representative: Chief Financial Officer: Chief Accountant:
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Bengang Steel Plates Co., Ltd. Annual Report 2021
BENGANG STEEL PLATES CO., LTD.
CONSOLIDATED STATEMENT OF CASH FLOWS
For the year ended 31 December 2021
(Expressed in Renminbi unless otherwise indicated)
(English Translation for Reference Only)
Items Notes 5 Current period Previous period
1.Cash flow from operating activities
Cash received from sale of goods or rendering of services 55,748,897,664.65 38,849,024,657.06
Net increase of customers’ deposit and interbank deposit
Net increase of loan from central bank
Net increase of loans from other financial institutions
Cash received for premium of original insurance contract
Net cash received for reinsurance business
Net increase of deposit and investment of the insured
Cash from receiving interest, handling charge and commission
Net increase of loans from borrowing funds
Net increase of fund for repurchase business
Net cash received from traded securities
Tax rebate received 78,323,445.53 396,399,799.91
Other cash received relating to operating activities (52) 501,366,768.12 816,954,704.43
Subtotal of cash inflows from operating activities 56,328,587,878.30 40,062,379,161.40
Cash paid for goods and services 50,647,643,333.57 38,688,312,946.57
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 2,451,084,010.00 1,973,351,870.94
Cash paid for all types of taxes 2,673,210,895.18 952,434,837.20
Other cash paid relating to operating activities (52) 143,176,185.51 487,279,719.98
Subtotal of cash outflows from operating activities 55,915,114,424.26 42,101,379,374.69
Net cash flows from operating activities 413,473,454.04 -2,039,000,213.29
2. Cash flows from investing activities
Cash received from disposal of investments 11,400,000,000.00
Cash received from return on investments 2,717,582.45 13,852,296.30
Net cash received from disposal of fixed assets, intangible assets and other 2,776.27 185,442.47
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 11,402,720,358.72 14,037,738.77
Cash paid for acquisition of fixed assets, intangible assets and other long- 1,304,976,365.56 1,013,928,829.62
term assets
Cash paid for investments 6,200,000,000.00 5,200,000,000.00
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 7,504,976,365.56 6,213,928,829.62
Net cash flows from investing activities 3,897,743,993.16 -6,199,891,090.85
3. Cash flows from financing activities
Proceeds from investment
Including: Proceeds from investment of non-controlling shareholders of
subsidiary
Proceeds from borrowings 5,801,673,020.00 21,667,514,000.00
Other proceeds relating to financing activities (52) 2,361,272,208.08 1,329,876,314.56
Subtotal of cash inflows from financing activities 8,162,945,228.08 22,997,390,314.56
Cash repayments of borrowings 12,072,544,553.18 18,115,736,896.61
Cash payments for distribution of dividends, profit or interest expenses 2,550,802,187.51 749,821,254.37
Including: Cash paid to non-controlling shareholders as dividend and profit
by subsidiaries
Other cash payments relating to financing activities (52) 740,000,000.00 75,509,135.49
Subtotal of cash outflows from financing activities 15,363,346,740.69 18,941,067,286.47
Net cash flows from financing activities -7,200,401,512.61 4,056,323,028.09
4. Effect of foreign exchange rate changes on cash and cash equivalents -41,134,466.23 -29,429,117.41
5. Net increase in cash and cash equivalents -2,930,318,531.64 -4,211,997,393.46
Add: Cash and cash equivalents at the beginning of the period 9,229,417,595.12 13,441,414,988.58
6. Cash and cash equivalents at the ending of the period 6,299,099,063.48 9,229,417,595.12
The notes to the financial statements attached form part of these financial statements.
Legal Representative: Chief Financial Officer: Chief Accountant:
107
Bengang Steel Plates Co., Ltd. Annual Report 2021
BENGANG STEEL PLATES CO., LTD.
COMPANY’S STATEMENT OF CASH FLOWS
For the year ended 31 December 2021
(Expressed in Renminbi unless otherwise indicated)
(English Translation for Reference Only)
Items Notes 14 Current period Previous period
1. Cash flow from operating activities
Cash received from sale of goods or rendering of services 60,408,664,898.10 43,332,373,821.90
Tax rebate received 21,209,047.83 324,045,932.64
Other cash received relating to operating activities 461,672,257.35 786,085,304.22
Subtotal of cash inflows from operating activities 60,891,546,203.28 44,442,505,058.76
Cash paid for goods and services 55,735,903,034.60 43,585,984,954.05
Cash paid to and on behalf of employees 2,345,338,852.62 1,870,605,772.33
Cash paid for all types of taxes 2,498,120,146.95 824,396,654.24
Other cash paid relating to operating activities 123,901,730.49 476,274,984.82
Subtotal of cash outflows from operating activities 60,703,263,764.66 46,757,262,365.44
Net cash flows from operating activities 188,282,438.62 -2,314,757,306.68
2. Cash flows from investing activities
Cash received from disposal of investments 11,400,000,000.00
Cash received from return on investments 2,436,869.33 13,577,242.47
Net cash received from disposal of fixed assets, intangible 1,637.16
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 11,402,436,869.33 13,578,879.63
Cash paid for acquisition of fixed assets, intangible assets and 1,304,157,060.45 1,013,911,078.29
other long-term assets
Cash paid for investments 6,200,000,000.00 5,200,000,000.00
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 7,504,157,060.45 6,213,911,078.29
Net cash flows from investing activities 3,898,279,808.88 -6,200,332,198.66
3. Cash flows from financing activities
Proceeds from investment
Cash received from borrowings 5,101,673,020.00 20,607,514,000.00
Other cash received relating to financing activities 1,374,782,185.21 1,294,921,225.43
Subtotal of cash inflows from financing activities 6,476,455,205.21 21,902,435,225.43
Cash repayments of borrowings 11,112,544,553.18 16,715,736,896.61
Cash payments for distribution of dividends, profit or interest 2,518,311,312.47 701,262,726.60
Other cash payments relating to financing activities 740,000,000.00 72,689,078.37
Subtotal of cash outflows from financing activities 14,370,855,865.65 17,489,688,701.58
Net cash flows from financing activities -7,894,400,660.44 4,412,746,523.85
4. Effect of foreign exchange rate changes on cash and -41,145,257.65 -29,414,313.38
cash equivalents
5. Net increase in cash and cash equivalents -3,848,983,670.59 -4,131,757,294.87
Add: Cash and cash equivalents at the beginning of the period 8,897,859,003.60 13,029,616,298.47
6. Cash and cash equivalents at the ending of the period 5,048,875,333.01 8,897,859,003.60
The notes to the financial statements attached form part of these financial statements.
Legal Representative: Chief Financial Officer: Chief Accountant:
108
Bengang Steel Plates Co., Ltd. Annual Report 2021
BENGANG STEEL PLATES CO., LTD.
CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS’ EQUITY
For the year ended 31 December 2021
(Expressed in Renminbi unless otherwise indicated)
(English Translation for Reference Only)
Current period
Owner's equity attributable to parent company
Total of
Items Other equity instruments Less: Other General Non-controlling
shareholders’
Share capital Preference Perpetual Capital reserves Treasury comprehensive Special reserves Surplus reserves risk Undistributed profit Subtotal interest
Others equity
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) 232,819,847.00 -198,407,998.79 928,924,325.80 37,566.43 234,010,992.52 285,287,892.24 1,482,672,625.20 33,052,596.05 1,515,725,221.25
1) Total comprehensive income 2,500,582,902.58 2,500,582,902.58 33,052,596.05 2,533,635,498.63
2) Capital increase and decrease by
232,819,847.00 -198,407,998.79 928,924,325.80 963,336,174.01 963,336,174.01
shareholders
(1) Common share invested by shareholders
(2) Capital input by the holder of other equity
instruments
(3) Share-based payment attributable to
owners’ equity
(4) Others 232,819,847.00 -198,407,998.79 928,924,325.80 963,336,174.01 963,336,174.01
3) Profit distribution 234,010,992.52 -2,215,295,010.34 -1,981,284,017.82 -1,981,284,017.82
(1) Appropriation to surplus reserves 234,010,992.52 -234,010,992.52
(2) Appropriation to general risk reserve
(3) Profit distribution to shareholders -1,981,284,017.82 -1,981,284,017.82 -1,981,284,017.82
(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 37,566.43 37,566.43 37,566.43
(1) Provision of special reserves 63,036,424.58 63,036,424.58 63,036,424.58
(2) Use of special reserves 62,998,858.15 62,998,858.15 62,998,858.15
6) Others
4. Ending balance of current year 4,108,191,379.00 947,882,663.63 13,272,134,173.09 337,978.57 1,195,116,522.37 2,977,306,297.64 22,500,969,014.30 565,441,001.73 23,066,410,016.03
The notes to the financial statements attached form part of these financial statements
Legal Representative: Chief Financial Officer: Chief Accountant:
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Bengang Steel Plates Co., Ltd. Annual Report 2021
BENGANG STEEL PLATES CO., LTD.
CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS’ EQUITY (Continued)
For the year ended 31 December 2021
(Expressed in Renminbi unless otherwise indicated)
(English Translation for Reference Only)
Previous period
Owner's equity attributable to parent company
Items Other equity instruments Less: Other General Non-controlling Total of shareholders’
Undistributed
Share capital Preference Perpetual Capital reserves Treasury comprehensive Special reserves Surplus reserves risk Subtotal interest equity
Others profit
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
The notes to the financial statements attached form part of these financial statements
Legal Representative: Chief Financial Officer: Chief Accountant:
110
Bengang Steel Plates Co., Ltd. Annual Report 2021
BENGANG STEEL PLATES CO., LTD.
COMPANY’S STATEMENT OF CHANGES IN OWNERS’ EQUITY
For the year ended 31 December 2021
(Expressed in Renminbi unless otherwise indicated)
(English Translation for Reference Only)
Current period
Other equity instruments Less: Other
Items Special Undistributed
Share capital Preference Perpetual Capital reserves Treasury comprehensi Surplus reserves Total owners’ equity
Others reserves profits
shares bond shares ve 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) 232,819,847.00 -198,407,998.79 928,924,325.80 34,496.96 234,010,992.52 124,814,914.82 1,322,196,578.31
1) Total comprehensive income 2,340,109,925.16 2,340,109,925.16
2) Capital increase and decrease by shareholders 232,819,847.00 -198,407,998.79 928,924,325.80 963,336,174.01
(1) Common share invested by shareholders
(2) Capital input by the holder of other equity instruments
(3) Share-based payment attributable to shareholders’ equity
(4) Others 232,819,847.00 -198,407,998.79 928,924,325.80 963,336,174.01
3) Profit distribution 234,010,992.52 -2,215,295,010.34 -1,981,284,017.82
(1) Appropriation of surplus reserves 234,010,992.52 -234,010,992.52
(2) Profit distribution to shareholders -1,981,284,017.82 -1,981,284,017.82
(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 34,496.96 34,496.96
(1) Provision of special reserves 43,962,017.71 43,962,017.71
(2) Use of special reserves 43,927,520.75 43,927,520.75
6) Others
4. Ending balance of current year 4,108,191,379.00 947,882,663.63 12,851,982,490.97 155,469.58 1,195,116,522.37 2,491,021,746.82 21,594,350,272.37
The notes to the financial statements attached form part of these financial statements
Legal Representative: Chief Financial Officer: Chief Accountant:
111
Bengang Steel Plates Co., Ltd. Annual Report 2021
BENGANG STEEL PLATES CO., LTD.
COMPANY’S STATEMENT OF CHANGES IN OWNERS’ EQUITY (Continued)
For the year ended 31 December 2021
(Expressed in Renminbi unless otherwise indicated)
(English Translation for Reference Only)
Previous period
Other equity instruments Less: Other
Items Special Undistributed
Share capital Preference Perpetual Capital reserves Treasury comprehensi Surplus reserves Total owners’ equity
Others reserves profits
shares bond shares ve 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
The notes to the financial statements attached form part of these financial statements
Legal Representative: Chief Financial Officer: Chief Accountant:
112
Bengang Steel Plates Co., Ltd. Annual Report 2021
Bengang Steel Plates Co., Ltd.
Notes to the financial statements
For the year ended 31 December 2021
(Expressed in Renminbi unless otherwise indicated)
(English Translation for Reference Only)
1. Basic Information of the Company
(1) Company profile
Bengang Steel Plates Co., Ltd. (hereinafter referred to as “Bengang Steel Plates” or “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. (“Benxi Iron
and Steel 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 HKD 2.38 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(hereinafter referred to as the Liaoning SASAC), Benxi Iron
and Steel 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 Benxi Iron and Steel Group and the proceeds
would be used to purchase the related assets of the Benxi Iron and Steel Group. On the same
day, Benxi Iron and Steel Group received circular Zheng-Jian-Gong-Si-Zi [2006] No. 127
113
Bengang Steel Plates Co., Ltd. Annual Report 2021
issued by China Securities Regulatory Committee, On the same day, Benxi Iron and Steel Group
obtained the document "Zheng Jian Company Zi (2006) No. 127" issued by the China Securities
Regulatory Commission, which agreed to exempt Benxi Iron and Steel Group from the
acquisition of 2 billion new shares issued by the company, resulting in the number of shares
held by the company reaching 2.5752 billion shares (accounting for the company's 82.12% of
the total share capital) to fulfill the tender offer obligation. On 28 August 2006, as approved by
China Securities Depository & Clearing Corporation Ltd. Shenzhen Office, the registration and
conditional placing procedures of the 2 billion new shares were completed. On 28 September
2006, the privately placed shares were approved by Shenzhen Stock Exchange to be placed in
the stock market. The placing price was RMB4.6733 per share.
Approved by the China Securities Regulatory Commission [2017] No. 1476, Bengang Steel
Plate Co., Ltd. privately placed no more than 739,371,534 RMB ordinary shares (A shares) to
no more than 10 issuers. The non-public offering was completed on 9 February 2018, and
739,371,532 shares were actually issued. The placing price was RMB5.41 per share.
On August 20, 2021, Liaoning Provincial State-owned Assets Supervision and Administration
Commission (hereinafter referred to as the Liaoning SASAC) and Ansteel Group Co., Ltd.
(hereinafter referred to as Ansteel Group) signed the "Liaoning Provincial People's Government
State-owned Assets Supervision and Administration Commission and Ansteel Group Co., Ltd.
on Free Transfer Agreement on the State-owned Equity of Bengang Group Co., Ltd. According
to the agreement, Liaoning State-owned Assets Supervision and Administration Commission
will transfer its 51% shares of Bengang Group Co., Ltd. (hereinafter referred to as Bengang
Group) to Angang Group for free. After the completion of the free transfer, Ansteel Group will
become the controlling shareholder of Bengang Group, and Ansteel Group will hold 81.07% of
the total share capital of Bengang Group Co., Ltd. indirectly.
As at 31 December 2021, the capital shares were totaled to 4,108,191,379 shares.
The Company’s uniform social credit code: 91210000242690243E.
The Company’s registered address: 16th Renmin Road, Pingshan District, Benxi, Liaoning
Province.
The Company’s legal representative: Huo Gang.
The parent company of Bengang Steel Plates Co., Ltd is Benxi Steel and Iron (Group) Co., Ltd.
and the actual controller is Ansteel Group Co., Ltd.
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.
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Bengang Steel Plates Co., Ltd. Annual Report 2021
The financial statements have been approved for reporting by the board of directors of the
Company on 24 March 2022.
(2) Consolidation scope
Please refer to “7. Equity in other entities” in this note for the relevant information of the
Company's subsidiaries.
Please refer to “6. Changes in the scope of consolidation” in this note for the changes in the
scope of consolidation during the reporting period.
2. Basis of preparation
(1) Basis of preparation
The financial statements have been prepared on the going concern basis of actual trading and
events in accordance with “Accounting Standards for Business Enterprises – Basic Standard”
and relevant specific standards, application materials, interpretations (together hereinafter
referred to as “Accounting Standards for Business Enterprises”) issued by the Ministry of
Finance, and “Information Disclosure Rules for Companies of securities for public issuance No.
15 – General Regulations for Financial Statements” issued by the China Securities Regulatory
Commission.
(2) Going concern
The Company is operating normally and in a good condition, and thus has the capability to
continue to operate in the next twelve months from the end of reporting period.
3. Significant accounting policies and accounting estimates
Notes for specific accounting policies and accounting estimates:
The following disclosed content covers the specific accounting policies and accounting
estimates that are adopted by the Company based on the actual production and operation
characteristics. Please see Note (10) Financial instruments, (11) Inventory, (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
115
Bengang Steel Plates Co., Ltd. Annual Report 2021
The financial statements present truly and completely the financial position, operation results
and cash flows of the Company during the reporting period in accordance with China
Accounting Standards for Business Enterprises.
(2) Accounting year
The Accounting year is from 1 January to 31 December.
(3) Operating period
The operating period is twelve months.
(4) Functional currency
The Company’s functional currency is RMB.
(5) The accounting treatment for Business combination under/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 acquiree’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
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for the business combination shall be recorded into the initial recognition amount of equity
securities.
(6) Consolidation of Financial Statements
1. Scope of consolidation
The scope of consolidation of consolidated financial statements is determined based on control.
All the subsidies (including separable sections of the investees controlled by the Company)
have been consolidated into the scope of consolidation for this period ended.
2. Procedure of consolidation
The consolidated financial statements shall be presented by the parent based on the financial
statements of the parent and its subsidiaries, and using other related information. When
preparing consolidated financial statements, the parent shall consider the entire group as an
accounting entity, adopt uniform accounting policies and apply the requirements of Accounting
Standard for Business Enterprises related to recognition, measurement and presentation. The
consolidated financial statements shall reflect the overall financial position, operating results
and cash flows of the group.
The accounting policy and accounting period of the subsidiaries within the consolidation scope
shall be in accordance with those of the Company. If not, it is necessary to make the adjustment
according to the Company’s accounting policies and accounting period when preparing the
consolidated financial statements. For subsidiaries through acquisition that are now under
common control, the financial statements are adjusted according to fair value of identifiable net
assets on the acquisition date. 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
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during the reporting period, it shall adjust the beginning balance in the consolidated statement
of financial position when preparing consolidated statement of financial position. The revenue,
expenses and profits of the subsidiaries from the acquisition date to the end of the reporting
period are included in the Company’s consolidated statement of comprehensive income. The
cash flow of the subsidiaries from the acquisition date to the end of the reporting period is
included in the Company’s consolidated statement of cash flows. And meanwhile the
Company shall adjust the relevant items of the comparative financial statements as if the
reporting entity for the purpose of consolidation has been in existence since the date the
ultimate controlling party first obtained control.
When the Company becomes capable of exercising control over an investee under common
control due to additional investment or other reasons, adjustment shall be made as if the
reporting entity after the combination has been in existence since the date the ultimate
controlling party first obtained control. The investment income recognized between date of
previously obtaining equity investment and the date the acquiree and acquirer are under
common control, which is later, and the combining date, other comprehensive income and
other changes of net assets arising from the equity investment previously-held before obtaining
the control the acquiree shall be adjusted against the prior retained earnings of the comparative
financial statements and the current profit or loss respectively.
If it is now under common control, the Company shall not adjust the beginning balance in the
consolidated statement of financial position when preparing consolidated statement of
financial position. The revenue, expenses and profits of the subsidiaries from the acquisition
date to the end of the reporting period are included in the parent company’s consolidated
statement of comprehensive income. The cash flow of the subsidiaries from the acquisition
date to the end of the reporting period is included in the Company’s consolidated statement of
cash flows.
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.
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(2) Disposing subsidiaries or businesses
1. General treatment
If the Company disposes a subsidiary during the reporting period, the revenue, expenses and
profits of the subsidiary from the beginning of the reporting period to disposal date are
included in the Company’s consolidated statement of comprehensive income. The cash flow
of the subsidiaries from the beginning of the reporting period to disposal date is included in
the Company’s consolidated statement of cash flows.
When the Company loses control over an investee due to partial disposal or other reasons, the
acquirer shall re-measure the remaining equity interests in the acquiree to its fair value at the
acquisition date. The difference, between sums of consideration received for disposal equity
shares and fair value of the remaining shares, and sums of share of net assets of the subsidiary
calculated continuously from the acquisition date or the combination date based on the
previous shareholding proportion and goodwill, shall be recognized as investment income for
the period when the Company loses control over acquiree. When the previously-held equity
investment is accounted for under the equity method, any other comprehensive income
previously recognized in relation to the acquiree’s equity changes, and other equity changes
rather than changes from net profit, other comprehensive income and profit distribution, shall
be transferred to investment income for the current period when the Company loses control
over acquiree. Other comprehensive income arising from re-measurement of defined benefit
plan is excluded. When the Company loses control over a subsidiary due to the increase of
capital from other investors and thus the shareholding ratio of the Company declines,
accounting treatment shall be in accordance with the above-mentioned principles.
2. Disposing subsidiaries by multiple transactions
Where the Company loses control of a subsidiary in multiple transactions in which it disposes
of its subsidiary in stages, in determining whether to account for the multiple transactions as
a single transaction, the Company shall consider all of the terms and conditions of the
transactions and their economic effects. One or more of the following may indicate that the
Company shall account for the multiple arrangements as a single transaction:
(a) Arrangements are entered into at the same time or in contemplation of each other;
(b) Arrangements work together to achieve an overall commercial effect;
(c) The occurrence of one arrangement is dependent on the occurrence of at least one
other arrangement; and
(d) One arrangement considered on its own is not economically justified, but it is
economically justified when considered together with other arrangements.
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
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as a single transaction. In the consolidated financial statements, the difference between the
consideration received and the corresponding proportion of the subsidiary’s net assets in each
transaction prior to the loss of control shall be recognized in other comprehensive income and
transferred to the profit or loss when the Company eventually loses control of the subsidiary.
If each of the multiple transactions which eventually results in loss of control of the subsidiary
do not form part of a bundled transaction, apply the treatment of disposing partial long-term
equity investments in a subsidiary without loss of control prior to the loss of control. After
the loss of control, apply the treatment of disposing the subsidiary in common cases.
(3) Acquiring the subsidiaries’ equity interest held by non-controlling shareholders
Where the Company has acquired a subsidiary’s equity interest held by non-controlling
shareholders, the difference between the increase in the cost of long-term investments as a
result of acquisition of non-controlling interests and the share of net assets of the subsidiary
calculated continuously from the acquisition date or the combination date based on the new
shareholding proportion shall be adjusted to the capital reserve( capital premium or share
premium) in the consolidated financial statements. If the balance of the capital reserve is not
sufficient, any excess shall be adjusted against retained earnings.
(4) Disposing portion of equity investments in subsidiaries without losing control
When the Company disposes of a portion of the long-term equity investments in a subsidiary
without loss of control, the difference between the amount of the consideration received and
the corresponding portion of the nest assets of the subsidiary calculated continuously from
the acquisition date or the combination date related to the disposal of the long-term equity
investments shall be adjusted to the capital reserve (capital premium or share premium) in the
consolidated financial statements. If the balance of the capital reserve is not sufficient, any
excess shall be adjusted against retained earnings.
(7) Classification of joint venture arrangements and accounting treatment
Joint venture arrangements are divided into joint operations and joint ventures.
When the Company is a joint venture party of a joint venture arrangement and have the assets
related to the arrangement and assumes the liabilities related to the arrangement, it is a joint
operation.
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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.
(8) Recognition of cash and cash equivalents
The term “cash” refers to the cash on hand and the unrestricted deposit. And the term “cash
equivalents” refers to short-term (maturing within three months from acquisition) and highly
liquid investments that are readily convertible to known amounts of cash and which are subject
to an insignificant risk of change in value.
(9) Foreign currency transaction and translation of foreign currency financial statements
1. Foreign currency transaction
Foreign currency transactions are translated into RMB at the current rate at the day of
transactions.
The foreign currency monetary items shall be translated at the spot exchange rate on the balance
sheet date. The balance of exchange arising from the difference between the spot exchange rate
on the balance sheet date and the spot exchange rate at the time of initial recognition or prior to
the balance sheet date, except those arising from the raising of special foreign debt for the
purchase or construction of capitalizable assets thus shall be capitalized according to the
borrowing costs capitalization principle, shall be recorded into the profits and losses at the
current period.
2. Translation of foreign currency financial statements
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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.
(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 amortized cost, financial assets measured at fair value through
other comprehensive income and financial assets measured at fair value through profit or loss
at initial measurement.
A financial asset shall be measured at amortized 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.
The Company may make an election at initial recognition for non-trading equity instrument
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investments whether it is designated as a financial asset (equity instrument) that is measured at
fair value through other comprehensive income. The designation is made on the basis of a single
investment, and the related investment meets the definition of an equity instrument from the
issuer's perspective.
Other financial assets other than these are classified as financial assets measured at fair value
through profit or loss. At the initial recognition, in order to eliminate or significantly reduce
accounting mismatches, financial assets that should be classified as measured at amortized
value or financial assets measured at fair value through other comprehensive income can be
designated as financial assets measured at fair value through profit or loss.
The Company shall classify financial liabilities as financial liabilities measured at amortized
cost and financial liabilities measured at fair value through profit or loss at initial measurement.
In the initial recognition, in order to eliminate or significantly reduce accounting mismatches,
financial assets can be designated as financial assets measured at fair value and their changes
included in the current profit and loss. According to the above conditions, the Company does
not have such designated financial assets.
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.
2. Recognition and measurement of financial instruments
(1) Financial assets measured at amortized 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
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directly attributable to the acquisition or issue of the financial asset. The Company shall
measure account receivables at their transaction price if the account receivables do not contain
a significant financing component and accounts receivables that the company has decided not
to consider for a financing component of no more than one year.
Interests calculated by using the effective interest method during the holding period shall be.
recognized in profit or loss.
When recovering or disposing the receivables, the difference between the price obtained and.
the carrying value shall be recognized in current profit or loss.
(2) Financial assets measured at fair value through other comprehensive income (debt
instruments)
Financial assets measured at fair value through other comprehensive income (debt instruments)
include receivables financing, other debt investments, etc. At initial recognition, the Company
shall measure a financial asset at its fair value plus transaction costs that are directly attributable
to the acquisition or issuance of the financial asset. The financial assets are subsequently
measured at fair value. Changes in fair value are included in other comprehensive income
except for interest calculated using the effective interest method, impairment losses or gains
and exchange gains and losses. When the financial assets are derecognized, the accumulated
gain or loss previously recognized in other comprehensive income is transferred from other
comprehensive income and recognized in profit or loss.
(3) Financial assets at fair value through other comprehensive income (equity
instruments)
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 recognized in profit and loss.
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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 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 recognized in profit or loss. Changes in fair value are included in profit or loss.
When the financial assets are derecognized, the difference between the fair value and the.
initially recorded amount is recognized as investment income, and the gains and losses from
changes in fair value are adjusted.
(5) Financial liabilities at fair value through profit or loss
Financial liabilities at fair value through profit or loss include current financial liabilities,
derivative financial liabilities, etc.
The Company shall measure the financial assets at fair value at initial recognition. Transaction
costs are recognized 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 amortized cost
Financial liabilities measured at amortized 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.
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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 recognized in profit and loss.
3. Termination of recognition of financial assets and financial assets transfer
When one of the following conditions is met, the company terminates the recognition of
financial assets.
- Termination of contractual rights to receive cash flows from financial assets;
- The financial assets have been transferred, and almost all the risks and rewards in the
ownership of the financial assets have been transferred to the transferee;
- The financial assets have been transferred. Although the company has neither transferred
nor retained almost all the risks and rewards of the ownership of the financial assets, it
has not retained control of the financial assets.
If it retained nearly all of the risks and rewards related to the ownership of the financial asset,
it shall not stop recognizing the financial asset.
To judge whether the transfer of a financial asset can satisfy the conditions as prescribed in
these Standards for stopping the recognition of a financial asset, the Company shall follow the
principle of the substance over form. Transfer of an entire financial asset can be divided into
partial financial assets transfer and entire financial asset transfer. If the transfer of an entire
financial asset satisfies the conditions for de-recognition, the difference between the amounts
of the following 2 items shall be recorded in the profits and losses of the current period:
(1) The book value of the transferred financial asset; and
(2) The sum of consideration received from the transfer, and the accumulative amount of the
changes of the fair value originally recorded in the owners' equities (in the event that the
financial asset involved in the transfer is a financial asset Available-for-sale).
If the transfer of partial financial asset satisfies the conditions to derecognize, the entire book
value of the transferred financial asset shall, between the portion whose recognition has been
stopped and the portion whose recognition has not been stopped (under such circumstance,
the service asset retained shall be deemed as a portion of financial asset whose recognition
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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 terminate the recognition of the existing financial
liability or part of it, and at the same time recognize the financial liability after revising the
contractual stipulations as a new financial liability.
Where the recognition of a financial liability is totally or partially terminated, the Company
shall include into the profits and losses of the current period the difference between the
carrying amount which has been terminated from recognition and the considerations it has paid
(including the non-cash assets it has transferred out and the new financial liabilities it has
assumed).
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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 recognize the expected credit loss on financial assets measured at amortized cost,
financial assets measured at fair value through other comprehensive income (debt instruments),
financial guarantee contract, and so on, on the individual or portfolio basis.
The Company considers all reasonable and relevant information, including past events, current
conditions, and forecasts of future economic conditions, and uses the risk of default as the
weight to calculate the probability-weighted amount of present value of difference between the
cash flow receivable from the contract and the cash flow expected to be received to confirm the
expected credit loss.
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.
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The measurement of expected credit loss depends on whether there is a significant increase in
credit risk of financial assets since the initial recognition.
The company compares the risk of default on the balance sheet date of financial instruments
with the risk of default on the date of initial recognition to determine the relative change in the
risk of default during the expected life of the financial instrument to assess whether there is a
significant increase in credit risk of financial assets since the initial recognition. 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 recognize provision for impairment of the financial asset individually.
For account receivables and contract assets recognized according to Accounting Standards for
Business Enterprises No. 14 Revenue (2017), 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 lease receivables, the Company shall always measure the loss allowance at an amount equal
to lifetime expected credit losses.
(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.
Inventory is initially measured at cost. Inventory cost includes purchase cost, processing cost
and other expenditures incurred to bring inventory to its current location and state.
2. Valuation method for inventory dispatched
The weighted average method is used to confirm the actual cost of the inventories dispatched.
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3. The basis for confirming the net realizable value of inventories and the methods to make
provision for the inventory impairment loss
On the balance sheet date, inventories shall be measured at the lower of cost and net realizable
value. When the cost of inventories is higher than its net realizable value, provision for
inventory impairment loss shall be made. The net realizable value refers to the amount of the
estimated selling price of the inventory minus the estimated costs that will occur at the time of
completion, estimated selling expenses, and relevant taxes in daily activities.
The net realizable value of inventories (finished products, stock commodity, material, etc.) held
for direct selling in the daily business activity shall be calculated by deducting the estimated
sale expense and relevant taxes from the estimated sale price of inventories; The net realizable
value of inventories for further processing in the daily business activity shall be calculated by
deducting the estimated cost of completion, estimated sale expense and relevant taxes from the
estimated sale price of inventories; The net realizable value of inventories held for the execution
of sales contracts or labor contracts shall be calculated on the ground of the contract price. If
the Company holds more inventories than the quantities subscribed in the sales contract, the net
realizable value of the excessive part of the inventories shall be calculated on the ground of the
general sales price.
After the inventory impairment is withdrawn, if the factors that previously affected the write-
down of the inventory value have disappeared, causing the net realizable value of the inventory
to be higher than its book value, it shall be reversed within the amount of the inventory
impairment that has been withdrawn, and the reverted amount shall be included in the current
profit and loss.
4. Inventory system
The Company uses perpetual inventory system.
5. Amortization of low-valued consumables and packing materials
(1) Low-valued consumables shall be amortized in full amount on issuance.
(2) Packing materials shall be amortized in full amount on issuance.
(12) Contract asset
1. Recognition methods and criteria of contract assets
When either party to a contract has performed, the Company shall present the contract in the
statement of financial position as a contract asset or a contract liability, depending on the
relationship between the Company’s performance and the customer’s payment. If the
Company have the rights to receive consideration (the right is conditioned on factors other
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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.
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For a business combination not under common control, the initial investment cost of the long-
term equity investment shall be the acquisition cost at the acquisition date. When an investor
becomes capable of exercising control over an investee due to additional investment or other
reasons, the initial investment cost under the cost method shall be the carrying amount of
previously-held equity investment together with the additional investment cost.
(2) The initial cost of the long-term equity investment other than from business acquisition
The initial cost of a long-term equity investment obtained by making payment in cash shall be
the purchase cost which is actually paid.
The initial cost of a long-term equity investment obtained on the basis of issuing equity
securities shall be the fair value of the equity securities issued.
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
investor’s interest in the fair values of an investee’s identifiable net assets at the acquisition date,
no adjustment shall be made to the initial investment cost. Where the initial cost is less than the
investor’s interest in the fair values of the investee’s identifiable net assets at the acquisition
date, the difference shall be credited to profit or loss for the current period, and the cost of long-
term equity investment shall be adjusted accordingly.
The Company shall recognize its share of the investee’s net profits or losses, as well as its share
of the investee’s other comprehensive income, as investment income or losses and other
comprehensive income, and adjust the carrying amount of the investment accordingly. The
carrying amount of the investment shall be reduced by the portion of any profit distributions or
cash dividends declared by the investee that is attributable to the investor. The investor’s share
of the investee’s owners’ equity changes, other than those arising from the investee’s net profit
or loss, other comprehensive income or profit distribution, and the carrying amount of the long-
term equity investment shall be adjusted accordingly.
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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, except the
transaction of investment or sale of assets is a business. Any losses resulting from transactions
between the investor and investee which are attributable to asset impairment shall be recognized
in full.
The company’s net losses incurred by joint ventures or associates, in addition to assuming
additional loss obligations, are limited to the book value of long-term equity investments and
other long-term equity that essentially constitutes net investment in joint ventures or associates.
If a joint venture or associated enterprise realizes net profits in the future, the company resumes
recognizing its share of profits after the share of profits makes up for the share of unrecognized
losses.
(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.
Partial disposal of long-term equity investments accounted for by the equity method, and the
remaining equity is still accounted for by the equity method, the other comprehensive income
recognized by the original equity method shall be carried forward according to the same basis
as the direct disposal of related assets or liabilities by the investee. All other changes in the
interests of the holders are carried forward to the current profit and loss on a pro rata basis.
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, 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. Other owner's equity change shall be
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transferred into profit or loss of current period in full when the Company cease to adopt the
equity method.
When an investor can no longer control the investee due to partial disposal, when the individual
financial statements are prepared, the remaining equity can exercise joint control or significant
influence on the investee, the equity method shall be used to account for the remaining equity.
It is deemed that the equity method is adopted for adjustment since the acquisition, and the other
comprehensive income recognized before the control of the investee is obtained is carried
forward on the same basis as the direct disposal of related assets or liabilities by the investee,
because the equity method is used for accounting. The confirmed changes in other owners’
equity are carried forward to the current profit and loss on a pro rata basis. If the remaining
equity cannot exercise joint control or exert significant influence on the investee, it shall be
recognized as a financial asset, and the difference between its fair value and book value on the
date when control is lost shall be included in the current profit and loss, and other
comprehensive income and other owner’s interests previously recognized shall be transferred
to profit or loss in full.
If the equity investment of a subsidiary is disposed through multiple transactions until it loses
control, which is a package transaction, each transaction shall be accounted as a transaction that
disposes of the equity investment of the subsidiary and loses control. Each transaction before
the loss of control, the difference between the disposal price and the book value of the
corresponding disposed part of long-term equity investment is firstly recognized as other
comprehensive income in individual financial statements, and then transferred to the current
profit and loss when the control is lost. If it is not a package transaction, each transaction shall
be accounted separately.
(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).
Subsequent expenditures related to investment property are included in the cost of investment
property when the relevant economic benefits are likely to flow in and their costs can be reliably
measured. Otherwise, they are included in the current profit and loss when incurred.
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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.
Fixed assets are initially measured at cost (and considering the impact of expected dismantling
cost factors).
Subsequent expenditures related to fixed assets are included in the cost of fixed assets when the
related economic benefits are likely to flow in and their costs can be reliably measured; the
book value of the replaced part is derecognized; all other subsequent expenditures are incurred
shall be included in the current profit and loss.
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 Depreciation Rate
Category Depreciation method
Period Rate (%) (%)
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Plants and Buildings straight line method 10-45 years 0.00 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. Disposal of fixed assets
When a fixed asset is disposed, or it is expected that no economic benefits will be generated
through use or disposal, the recognition of fixed asset shall be de terminated. The amount of
disposal income of fixed assets raising from sell, transfer, scrapping or damage shall be included
in the current profit and loss after deducting its book value and related taxes.
(16) Construction in progress
Construction in progress is measured at the actual cost incurred. The actual cost includes
construction costs, installation costs, borrowing costs that meet the capitalization conditions,
and other necessary expenditures incurred before the construction in progress reaches its
intended use status.
Construction in progress is transferred to fixed asset when it has reached its working condition
for its intended use and depreciation will be accrued from the next month.
(17) Borrowing costs
1. Principle of the recognition of capitalized borrowing costs
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 property, 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.
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.
The borrowing costs shall not be capitalized unless they simultaneously meet the following
requirements:
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(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.
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.
3. The suspension of capitalization of borrowing costs
Where the acquisition and construction or production of a qualified asset is interrupted
abnormally and the interruption period lasts for more than 3 months, the capitalization of the
borrowing costs shall be suspended. If the interruption is a necessary step for making the
qualified asset under acquisition and construction or production ready for the intended use or
sale, the capitalization of the borrowing costs shall continue. The borrowing costs incurred
during such period shall be recognized as expenses, and shall be recorded into the profits and
losses of the current period, till the acquisition and construction or production of the asset
restarts.
4. Method of calculating the capitalization rate and capitalized amount of borrowing costs
For interest expense (minus the income of interests earned on the unused borrowing loans as a
deposit in the bank or investment income earned on the loan as a temporary investment) and
the ancillary expense incurred to a specifically borrowed loan, those incurred before a qualified
asset under acquisition, construction or production is ready for the intended use or sale shall be
capitalized at the incurred amount when they are incurred, and shall be recorded into the costs
of the asset eligible for capitalization.
The Company shall calculate and determine the to-be-capitalized number 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.
During the capitalization period, the exchange difference between the principal and interest of
the foreign currency special loan is capitalized and included in the cost of the assets that meet
the capitalization conditions. Exchange differences arising from the principal and interest of
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foreign currency borrowings other than foreign currency special borrowings are included in the
current profits and losses.
(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.
(2) Subsequent Measurement
The Company shall analyze and judge the beneficial period of intangible assets upon acquisition.
Intangible assets with finite beneficial period shall be amortized under the straight-line method
during the period when the intangible asset can bring economic benefits to the enterprise. If it
is unable to estimate the beneficial period of the intangible asset, it shall be regarded as an
intangible asset with uncertain service life and shall not be amortized.
2. Estimated useful lives of intangible assets with limited useful lives
Item Estimated useful life Criteria
Land use right 50 years Land use right certificate
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
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model, fixed assets, construction in progress, intangible assets with limited useful lives etc.,
the Company shall perform impairment tests at the period end if there is clear indication of
impairment. If the recoverable amounts of long-term assets are less than their carrying amounts,
the carrying amounts of the assets shall be written down to their recoverable amounts. The
write-downs are recognized as impairment losses and charged to current profit and loss. The
recoverable amounts of long-term assets are the higher of their fair values less costs to sell and
the present values of the future cash flows expected to be derived from the assets. The
Company shall estimate its recoverable amount on an individual basis. Where it is difficult to
do so, it shall determine the recoverable amount of the assets on the basis of the asset group to
which the asset belongs. The term "assets group” refers to a minimum combination of assets
by which the cash flows could be generated independently
The goodwill, intangible assets with uncertain useful life and intangible assets not meeting the
expected condition for use they 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.
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Impairment losses on long-term assets shall not be reversed in subsequent accounting periods
once recognized.
(20) Long-term deferred expense
The long-term deferred expense refers to the expenses incurred but shall be borne by current
and subsequent accounting period, which is more than one year.
The long-term deferred expense shall be amortized over its beneficiary period evenly.
(21) 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 recognize, 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 welfare expenses incurred by the company are included in the current profit and
loss or related asset costs based on the actual amount when they actually occur. Among them,
non-monetary benefits are measured at fair value.
2. Accounting treatment of post-employment benefits
(1) Defined contribution plan
The Company shall recognize, in the accounting period in which an employee provides
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service, pension fund and unemployment fund for employees as a liability according to the
local government regulations. The amount shall be calculated according to local prescribed
bases and percentages in determining the amount of employee benefits, with a
corresponding charge to the profit or loss or cost of an asset for the current period.
(2) Defined benefit plan
None.
3. Accounting treatment of termination benefits
The Company 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
The obligation pertinent to a contingency 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.
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:
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(1) If the Contingencies concern a single item, it shall be determined in the light of the most
likely outcome.
(2) If the Contingencies concern two or more items, the best estimate shall be calculated and
determined in accordance with all possible outcomes and the relevant probabilities.
When all or some of the expenses necessary for the liquidation of an estimated debts of an
enterprise is expected to be compensated by a third party, the compensation shall be separately
recognized as an asset only when it is virtually certain that the reimbursement will be obtained.
The amount recognized for the reimbursement shall not exceed the book value of the estimated
debts.
The company reviews the book value of the estimated liabilities on the balance sheet date. If
there is conclusive evidence that the book value does not reflect the current best estimate, the
book value will be adjusted according to the current best estimate.
(24) Revenue
1.The general principle of revenue recognition and measurement
The company shall recognize 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
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financing component in the contract, the company shall recognize 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.
The company transfers control of a good or service over time and, therefore, satisfies a
performance obligation and recognizes 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 recognize 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 recognize 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 recognize
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;
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(e) The customer has accepted the promised goods or services.
2.The specific criteria of revenue recognition and measurement
Commodity sales contracts between companies and customers usually only include
performance obligations for the transfer of steel and other commodities or service. This type of
performance obligation is a performance obligation performed at a certain point in time. The
company recognizes revenue when the customer obtains control of the relevant goods or
services. When judging whether the customer has obtained control of goods or services, the
company considers the following signs:
The company obtains the present right of collection of receivables, the legal ownership of the
goods is transferred to the customer, the physical assets of the goods are transferred to the
customer, the company transfers the main risks and rewards of the ownership of the goods to
the customer, and the customer has accepted the goods.
(25) Contract costs
Contract costs include costs to fulfill a contract and incremental costs of obtaining a contract.
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 recognize 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 recognize as an asset the incremental costs of obtaining a contract with a
customer if the company expects to recover those costs.
An asset recognized in accordance with contract costs shall be amortized in consistent with the
transfer to the customer of the goods or services to which the asset relates. The company may
recognize the incremental costs of obtaining a contract as an expense when incurred if the
amortization period of the asset is one year or less.
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The company shall recognize 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
recognized as expenses.
The company shall recognize in profit or loss a reversal of some or all of an impairment loss
previously recognized 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 recognized 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.
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.
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For the the government subsidy which does not specify the subsidy object in government
document will be classified as asset-related or income-related judgment basis: if a long-
term asset can be formed, the government subsidy part corresponding to the asset value
shall be regarded as an asset-related subsidy, the rest are regarded as government
subsidies related to income; if it is difficult to distinguish, the whole government subsidies
are regarded as government subsidies related to income.
2. Recognition
Government subsidies related to assets are recognized when it actually received, and
transferred the deferred income to the current profit and loss according to the estimated
using period of the long-term assets from when the long-term assets are available.
Government subsidies related to income are recognized when it actually received. Which
to compensate the relevant expenses or losses in subsequent periods shall be included in
the current non-operating income during the period when the relevant expenses are
recognized. Which to compensate expenses or losses already incurred shall be recognized
in current non-operating income.
3. Accounting treatment
Government subsidies related to assets shall be recognized by deducting the subsidies at
the caring amount of the assets or recognized as deferred income. Subsidies that
recognized as deferred income shall be recognized in profit or loss on a systematic basis
over the periods during the useful lives of the relevant assets (Subsidies related to daily
activities should be recorded in Other Income. Subsidies that unrelated to daily activities
should be recorded in Non-operating Income).
The government subsidies related to incomes to compensate future expenses, shall be
recognized as deferred income and transferred to current profit or loss (Subsidies related
to daily activities should be recorded in Other Income. Subsidies that unrelated to daily
activities should be recorded in Non-operating Income) in the period during which the
expenses compensation is recognized or deduct relevant cost or loss. Government
subsidies to compensate expenses or losses already incurred shall be recognized in current
profit and loss (Subsidies related to daily activities should be recorded in Other Income.
Subsidies unrelated to daily activities should be recorded in Non-operating Income) or
deduct relevant cost or loss.
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The policy discount loans obtained by the company are divided into the following two
situations and are separately accounted for:
(a) If 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 company will
take the actual amount of the loan received as the entry value of the loan and calculate
the relevant borrowing costs based on the loan principal and the policy preferential
interest rate.
(b) If the government directly allocates the discounted funds to the company, the
company will offset the relevant borrowing costs with the corresponding discounts.
(27) Deferred tax assets and deferred tax liabilities
Income tax includes current income tax and deferred income tax. Except for income tax arising
from business mergers and transactions or events that are directly included in owner's equity
(including other comprehensive income), the company will include current income tax and
deferred income tax in current profit and loss.
Deferred income tax assets and deferred income tax liabilities are calculated and confirmed
based on the difference (temporary difference) between the tax base of assets and liabilities
and their book value.
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).
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For taxable temporary differences related to investments in subsidiaries, associates and joint
ventures, deferred income tax liabilities are recognized, unless the company can control the
timing of the reversal of the temporary differences and the temporary differences are likely
not to be transferred back in the foreseeable future. For deductible temporary differences
related to investments in subsidiaries, associates and joint ventures, when the temporary
differences are likely to be reversed in the foreseeable future and are likely to be used to deduct
the taxable income of deductible temporary differences in the future, income tax assets are
recognized.
On the balance sheet date, deferred income tax assets and deferred income tax liabilities are
measured at the applicable tax rate during the period when the relevant assets are expected to
be recovered or the relevant liabilities are expected to be recovered in accordance with the
provisions of the tax law.
On the balance sheet date, the company reviews the book value of deferred income tax assets.
If it is probable that sufficient taxable income cannot be obtained in the future to offset the
benefits of deferred income tax assets, the book value of the deferred income tax assets shall
be written down. When it is possible to obtain sufficient taxable income, the reduced amount
shall be reversed.
When the Company has the statutory right to offset and intend to offset or obtain assets and
pay off liabilities at the same time, the current income tax assets and current income tax
liabilities are presented at the net amount after offsetting.
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
A lease is a contract whereby the lessor transfers the right of usage on asset to the lessee for
consideration within a certain period of time.
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On the contract commencement date, the company evaluates whether the contract is a lease or
includes a lease. If one party in the contract transfers the right to control the use of one or more
identified assets within a certain period in exchange for consideration, the contract is a lease
or includes a lease.
If the contract contains multiple separate leases at the same time, the company will split the
contract and conduct accounting treatment for each separate lease. If the contract includes both
lease and non-lease parts, the company, as the lessor and lessee, will split the lease and non-
lease parts for accounting treatment.
For rent reductions, exemptions, deferred payments and other rental reductions directly caused
by the COVID-19 epidemic and reached on existing lease contracts, if the following conditions
are met at the same time, the company adopts a simplified method for all lease selections, and
does not evaluate whether there is a lease change. Lease classification is not reassessed:
The lease consideration after the concession is reduced or basically unchanged from that
before the concession. The lease consideration may be undiscounted or discounted at the
discount rate before the concession;
The concession is only for lease payments payable before June 30, 2022, an increase in lease
payments payable after June 30, 2022 does not affect meeting this condition, and a decrease
in lease payments payable after June 30, 2022 does not satisfy this condition;
The other terms and conditions of the lease have not changed significantly after taking into
account both qualitative and quantitative factors.
1. The company as lessee
(1) Right-of-use assets
On the beginning date of the lease term, the Group recognizes the right to use assets for leases
other than short-term leases and low value asset leases. The right of use assets are initially
measured at cost. This cost includes:
1) Initial measurement amount of lease liabilities;
2) For the lease payment paid on or before the beginning of the lease term, if there is lease
incentive, the relevant amount of lease incentive enjoyed shall be deducted;
3) Initial direct costs incurred;
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4) The estimated costs incurred for dismantling and removing the leased assets, restoring
the site where the leased assets are located or restoring the leased assets to the state
agreed in the lease terms.
Depreciation method of right of use assets the company adopts the straight-line method for
depreciation. If it can be reasonably determined that the ownership of the leased asset will be
obtained at the expiration of the lease term, the company shall accrue depreciation within the
remaining useful life of the leased asset; otherwise, the leased asset shall be depreciated within
the shorter of the lease term and the remaining useful life of the leased asset.
For the principles which company determines whether the right-of-use asset has been impaired,
please refer to Note (19) Impairment of long-term assets under “3. Significant accounting
policies and accounting estimates”.
(2) Lease liabilities
At the beginning of the lease term, the company recognizes the present value of the unpaid
lease payments as lease liabilities, except for short-term leases and low value asset leases. The
lease liability is initially measured at the present value of outstanding lease payments. Lease
payments include:
1) Fixed payments (including actual fixed payments), if there is a lease incentive, deduct
the relevant amount of the lease incentive;
2) Variable lease payments that depend on an index or ratio;
3) The expected payment according to the residual value of the guarantee provided by the
company;
4) The exercise price of the purchase option, provided that the company is reasonably
certain that the option will be exercised;
5) Payments for exercising the option to terminate the lease, provided that the lease term
reflects that the company will exercise the 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 rate is used as the discount rate.
The company calculates the interest expense of the lease liability in each period of the lease
term according to the fixed periodic interest rate, and includes it into the current profit and
loss or the cost of related assets.
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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 are actually
incurred.
After the commencement date of the lease term, the Company shall re-measure the lease
liabilities and adjust the corresponding right-of-use assets under the following circumstances.
If the book value of the right-of-use assets has been reduced to zero, but the lease liabilities
still need to be further reduced, the difference is included in the current profit and loss:
When there is a change in the evaluation results of the purchase option, lease renewal
option or termination option, or the actual exercise of the aforementioned options is
inconsistent with the original evaluation result, the Company shall calculate the lease
payment amount after the change and the revised discounted value. Remeasure the lease
liability at the present value of the rate calculation;
When the actual fixed payment changes, the estimated payable amount of the residual
value guarantee 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 Remeasure the lease liability. However, where changes in lease
payments result from changes in floating interest rates, a 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 includes the relevant lease payments in the current profit
and loss or related asset costs on a straight-line basis over each period of the lease term. Short-
term leases refer to leases with a lease term of not more than 12 months and excluding
purchase options on the commencement date of the lease term. A low-value asset lease refers
to a lease with a lower value when a single leased asset is a brand-new asset. If the company
subleases or expects to sublease the leased assets, the original lease is not a low-value asset
lease.
(4) Lease change
If the lease changes and the following conditions are met at the same time, the company will
account for the lease change as a separate lease:
The lease modification expands the scope of the lease by adding the right to use one or more
leased assets;
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The increased consideration is equivalent to the amount adjusted by the individual price of
the expanded part of the lease scope according to the contract.
If the lease change is not accounted for as a separate lease, on the effective date of the lease
change, the company re-allocates the consideration of the contract after the change, re-
determines the lease term, and calculates the current value based on the lease payment after
the change and the revised discount rate. value to remeasure the lease liability.
If the lease change leads to the narrowing of the lease scope or the shortening of the lease term,
the company will reduce the book value of the right-of-use asset accordingly, and include the
relevant gains or losses on partial or complete termination of the lease into the current profit
and loss. If other lease changes result in re-measurement of lease liabilities, the Company
adjusts the book value of the right-of-use asset accordingly.
(5) Rent concessions related to COVID-19
For those adopting the simplified method of rent reduction related to the new crown
pneumonia epidemic, the company does not assess whether there is a lease change, and
continues to calculate the interest expense of the lease liability at the same discount rate as
before the reduction and include it in the current profit and loss, and continue to use the same
discount rate as before the reduction. The right-of-use asset is depreciated using the same
method as before. In the event of rent reduction or exemption, the company will treat the
reduced rent as the variable lease payment amount. When the original rent payment obligation
is relieved by reaching a concession agreement, the discounted amount at the undiscounted or
pre-discount discount rate will be used to offset the cost of relevant assets. or expenses, and
adjust the lease liabilities accordingly; if the rent payment is delayed, the company offsets the
lease liabilities recognized in the previous period when the actual payment is made.
For short-term leases and low-value asset leases, the company continues to include the original
contract rent in the cost or expense of the relevant assets in the same way as before the
concession. In the event of rent reduction or exemption, the company will take the reduced
rent as the variable lease payment, and write down the relevant asset costs or expenses during
the reduction or exemption period; if the rent payment is delayed, the company will recognize
the rent payable as payable during the original payment period. When the actual payment is
made, the payables recognized in the previous period are offset.
2. The company as lessor
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On the lease commencement date, the Company classifies leases into finance leases and
operating leases. A financial lease is a lease that essentially transfers almost all the risks and
rewards associated with the ownership of the leased asset, regardless of whether the ownership
is ultimately transferred. Operating leases refer to leases other than finance leases. When the
company acts as a sublease lessor, it classifies the sublease based on the right-of-use asset
arising from the original lease.
(1) Accounting treatment of operating leases
Lease receipts from operating leases are recognized as rental income on a straight-line basis
over each period of the lease term. The Company capitalizes the initial direct expenses
incurred in relation to operating leases, and is amortized and included in the current profit and
loss on the same basis as the rental income is recognized during the lease term. Variable lease
payments not included in lease receipts are included in profit or loss for the period when they
are actually incurred. If the operating lease is changed, the company will account for it as a
new lease from the effective date of the change, and the advance receipts or lease receivables
related to the lease before the change are regarded as the receipts of the new lease.
(2) Accounting treatment of financial lease
On the lease commencement date, the Company recognizes the finance lease receivables for
the finance lease and derecognizes the finance lease assets. When the Company initially
measures the finance lease receivables, the net investment in the lease is regarded as the entry
value of the finance lease receivables. The net lease investment is the sum of the unguaranteed
residual value and the present value of the lease receipts not yet received at the commencement
date of the lease term, discounted at the interest rate implicit in the lease.
The company calculates and recognizes the interest income in each period of the lease period
according to the fixed periodic interest rate. For the derecognition and impairment of finance
lease receivables, please refer to Note (10) Financial instruments under “3. Significant
accounting policies and accounting estimates”.
Variable lease payments that are not included in the net lease investment measurement are
included in the current profit and loss when they are actually incurred.
If the financial lease is changed and the following conditions are met at the same time, the
company will account for the change as a separate lease:
The change expands the scope of the lease by increasing the right to use one or more of the
leased assets;
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The increased consideration is equivalent to the stand-alone price of the expanded lease area,
adjusted for the contract.
If the modification of a financial lease is not accounted for as a separate lease, the Company
shall deal with the modified lease under the following circumstances:
If the change takes effect on the lease inception date, the lease will be classified as an
operating lease, and the company will account for it as a new lease from the effective date of
the lease change, and use the net lease investment before the effective date of the lease change
as the book value of the leased asset;
If the change takes effect on the lease commencement date, the lease will be classified as a
financial lease, and the Company will conduct accounting treatment in accordance with the
policy on revising or renegotiating contracts in Note (10) Financial instruments under “3.
Significant accounting policies and accounting estimates”.
(3) Rent concessions related to COVID-19
For operating leases that adopt the simplified method of rent reduction related to the new
crown pneumonia epidemic, the company continues to recognize the original contract rent as
rental income in the same way as before the reduction; if rent reduction or exemption occurs,
the company treats the reduced rent as a variable lease The payment amount shall be offset
from the lease income during the reduction or exemption period; if the rental collection is
delayed, the company shall recognize the receivable rent as an account receivable during the
original collection period, and offset the receivable recognized in the previous period when it
is actually received.
For financial leases that adopt the simplified method of rent reduction related to the new crown
pneumonia epidemic, the company continues to calculate the interest at the same discount rate
as before the reduction and recognize it as lease income. In the event of rent reduction or
exemption, the company will treat the reduced rent as variable lease payments, and when a
concession agreement is reached, etc. to waive the right to receive the original rent, the
discounted amount at the undiscounted or pre-discount discount rate will be used to offset the
originally recognized amount. For lease income, the part that is not enough to be written off
is included in investment income, and the finance lease receivables are adjusted accordingly;
if the rent is delayed, the company offsets the finance lease receivables recognized in the
previous period when it is actually received.
Accounting policies before January 1, 2021
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Leases are classified into finance leases and operating leases. A finance lease is a lease that
transfers substantially all the risks and rewards associated with ownership of an asset.
Operating leases refer to leases other than finance leases.
For rent reductions, exemptions, deferred payments and other rental reductions directly caused
by the COVID-19 epidemic and reached on existing lease contracts, if the following
conditions are met at the same time, the company adopts a simplified method for all lease
options. Reassess the lease classification:
The lease consideration after the concession is reduced or basically unchanged from that
before the concession. The lease consideration may be undiscounted or discounted at the
discount rate before the concession;
The concession is only for lease payments payable before June 30, 2021, an increase in lease
payments payable after June 30, 2021 does not affect the satisfaction of this condition, and a
decrease in lease payments payable after June 30, 2021 does not satisfy this condition;
The other terms and conditions of the lease have not changed significantly after taking into
account both qualitative and quantitative factors.
1. Accounting treatment of operating lease
(1) The lease fee paid by the company for renting assets shall be apportioned on a straight-
line basis over the entire lease period without deducting the rent-free period, and shall be
included in the current expenses. The initial direct expenses related to leasing transactions
paid by the company are included in the current expenses.
When the asset lessor bears the lease-related expenses that should be borne by the company,
the company deducts the part of the expenses from the total rent, and the deducted rental
expenses are apportioned during the lease period and included in the current expenses.
For operating leases that adopt the simplified method of rent reduction related to the new
crown pneumonia epidemic, the company continues to include the original contract rent in the
cost or expense of the relevant assets in accordance with the same method as before the
reduction. In the event of rent reduction or exemption, the company will treat the reduced rent
as contingent rent, which will be included in profit or loss during the period of reduction or
exemption; if the rent payment is delayed, the company will recognize the rent payable as
payable during the original payment period, and offset the previous period when the actual
payment is made. Confirmed payables.
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(2) The lease fee charged by the company for leasing assets shall be apportioned on a straight-
line basis over the entire lease term without deducting the rent-free period, and recognized as
lease-related income. The initial direct expenses related to leasing transactions paid by the
company are included in the current expenses; if the amount is larger, they shall be capitalized
and included in the current income in installments 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 the part of the expenses from the total rental income, and distributes the
deducted rental expenses within the lease term.
For operating leases that adopt the simplified method of rent reduction related to the new
crown pneumonia epidemic, the company continues to recognize the original contract rent as
rental income in the same way as before the reduction; if there is rent reduction or exemption,
the company will treat the reduced rent as contingent rent , and offset the lease income during
the reduction or exemption period; if the rental collection is delayed, the company recognizes
the rent receivable as an account receivable during the original collection period, and offsets
the account receivable recognized in the previous period when it is actually received.
2. Accounting treatment of financial leasing
(1) Financial leased assets:
On the lease start date, 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. The recorded value, and the difference is
regarded as unrecognized financing expense. The company adopts the effective interest rate
method to amortize the unrecognized financing expenses during the asset lease period and
include them in the financial expenses. The initial direct costs incurred by the company are
included in the value of the leased assets.
For the financing leases that adopt the simplified method of rent reduction related to the new
crown pneumonia epidemic, the company will continue to recognize the unrecognized
financing expenses as the current financing expenses at the same discount rate as before the
reduction, and continue to use the same method as before the reduction. The leased assets are
accrued for depreciation. For the rent reduction or exemption that occurs, the company regards
the reduced rent as contingent rent, and when a concession agreement is reached to release the
original rent payment obligation, it is included in the current profit and loss, and the long-term
payables are adjusted accordingly. Or discounted at the discount rate before the discount and
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included in the current profit and loss and adjusted the unrecognized financing expenses; if
the rent payment is delayed, the company will offset the long-term payables recognized in the
previous period when the actual payment is made.
(2) Assets leased out by financing:
On the lease start date, the company recognizes the difference between the sum of the financial
lease receivables, the sum of the unguaranteed residual value and its present value as
unrealized financing income, and it is recognized as an unrealized financing income in each
period when the rent is received in the future. rental income. The initial direct expenses related
to the lease transaction incurred by the company are included in the initial measurement of the
finance lease receivables, and the amount of income recognized during the lease period is
reduced.
For finance leases that adopt the simplified method of rent reduction related to the new crown
pneumonia epidemic, the Company continues to recognize unrealized financing gains as lease
income at the same interest rate embedded in the lease as before the reduction. In the event of
rent reduction or exemption, the company will treat the reduced rent as contingent rent. When
a concession agreement is reached, etc., when the original rent collection right is waived, the
originally recognized lease income will be offset, and the insufficient offset will be included
in investment income, and adjusted accordingly. Long-term receivables, or discounted at the
discount rate before discount and included in the current profit and loss and adjusted for
unrealized financing income; if the rental collection is delayed, the company will offset the
long-term receivables recognized in the previous period when it is actually received.
(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:
(1) The component stands for an independent main business or a major business area;
(2) The component is a part of disposal plan of an independent main business or a major
business area;
(3) The component is a subsidiary which is acquired only for sale again.
The profit and loss from continuing operations and the profit and loss from discontinued
operations are separately listed in the income statement. Operational gains and losses such as
impairment losses and reversal amount and disposal gains and losses from discontinued
operations are reported as discontinued operation gains and losses. For the discontinued
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operations reported in the current period, the Company adjusts the information previously
disclosed as continuing operations profits and losses in the current financial statements as the
discontinued operations profits and losses for the comparable accounting period.
(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 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.
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(3) Impairment of other assets except inventory and financial assets
As mentioned in note (19) 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 cannot reliably obtain the public market
price of assets (or asset groups), and cannot 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 (15) Fixed Assets and note (18) Intangible Assets under “3 Significant
accounting policies and accounting estimates”, the company shall accrue depreciation for the
fixed assets and amortization for intangible assets within the useful life after considering their
residual value. The company regularly reviews the useful life of related assets to determine
the amount of depreciation and amortization expenses to be included in each reporting period.
The useful life of assets is determined by the company based on past experience with similar
assets and in combination with anticipated technological changes. If the previous estimates
change significantly, the depreciation and amortization expenses will be adjusted in the future.
(5) Deferred tax assets
When it is estimated that sufficient taxable income can be obtained in the future to use the
unrecovered tax losses and deductible temporary differences, the relevant deferred tax assets
are calculated and confirmed on the basis of the applicable income tax rate during the period
when the asset is expected to be recovered and the amount of taxable income is limited to
deductible tax losses and deductible temporary differences likely to be obtained by the
Company. The Company needs to use judgment to estimate the time and amount of future
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Bengang Steel Plates Co., Ltd. Annual Report 2021
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
A. Change of major accounting policy during this reporting period
(1) Implementation of “Accounting Standards for Business Enterprises No. 21-Lease”
(revised in 2018)
The Ministry of Finance revised the "Accounting Standards for Business Enterprises No. 21-
Lease" in 2018. The Company implemented the new lease standard from January 1, 2021.
According to the revised standard, for contracts that existed before the date of initial
application, the company chooses not to reassess whether it is a lease or contains a lease on
the date of initial application.
The company as lessee
The company chooses to adjust the amount of retained earnings and other related items in the
financial statements at the beginning of the year in which the new lease standards are
implemented for the first time according to the cumulative impact of the first implementation
of the new lease standards, and does not adjust the comparable period information.
For operating leases that existed before the date of initial application, the Company measures
the lease liability on the date of initial application based on the present value of the remaining
lease payments discounted at the company's incremental borrowing rate on the date of initial
application, and for each lease, choose one of the following two methods to measure right-of-
use assets.
- Assuming that the book value of the new lease standard is adopted from the commencement
date of the lease term, the Company's incremental borrowing rate on the date of initial
application is used as the discount rate.
- An amount equal to the lease liability, adjusted as necessary for prepaid rent.
For operating leases prior to the date of initial application, the Company applies one or more
of the following simplified treatments for each lease while applying the above method:
1) Leases that will be completed within 12 months of the date of initial execution are treated
as short-term leases;
2) When measuring lease liabilities, the same discount rate is used for leases with similar
characteristics;
3) The measurement of the right-of-use asset excludes initial direct costs;
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Bengang Steel Plates Co., Ltd. Annual Report 2021
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 and other latest information before
the date of initial execution;
5) As an alternative to the right-of-use asset impairment test, assess whether a contract
involving a lease is a onerous contract before the date of initial application and adjust the
right-of-use asset based on the amount of the loss allowance recorded on the balance sheet at
the date of initial application;
6) For lease changes that occurred before the date of initial implementation, no retrospective
adjustment will be made, and accounting treatment will be carried out in accordance with the
new lease standards according to the final arrangements for lease changes.
In measuring the lease liability, the Company discounts the lease payments using the lessee
incremental borrowing rate (weighted average: 3.93%) at 1 January 2021.
Outstanding minimum lease payments for significant operating leases
2,473,024,885.15
disclosed in the financial statements at December 31, 2020
Present value discounted at the company's incremental borrowing rate as
1,500,739,782.73
of January 1, 2021
Lease liabilities under the new lease standard 1 January 2021 1,500,739,782.73
The difference between the discounted present value of the above and the
972,285,102.42
lease liability
For the financial leases that existed before the date of initial application, the Company shall
measure the right-of-use assets and lease liabilities according to the original book values of
the assets under the financial lease and the financial lease payments payable on the date of
initial application.
The company as lessor
For sub-leases classified as operating leases before the date of initial application and
subsistence after the date of initial application, the Company re-evaluates on the date of initial
application based on the remaining contract terms and terms of the original lease and sub-
lease, and classifies them in accordance with the provisions of the new lease standards. If it is
reclassified as a finance lease, the Company will account for it as a new finance lease.
Except for sub-lease, the Company does not need to adjust its lease as a lessor in accordance
with the new lease standards. The Company conducts accounting treatment in accordance with
the new lease standards from the date of initial implementation.
The main impacts of the Company's implementation of the new lease standards on
the financial statements are as follows:
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Amount of impact on the balance on Jan
Change of accounting
Affected items 1, 2021
policy content and reason
Consolidated Parent Company
Adjustments made by the Right-of-use assets 1,500,739,782.73 1,500,739,782.73
company as a lessee to Lease liability 1,463,444,635.94 1,463,444,635.94
operating leases that Non-current
existed before the date of liabilities due within 37,295,146.79 37,295,146.79
initial application one year
(2) Implementation of “Interpretation of Accounting Standards for Business Enterprises No.
14”
The Ministry of Finance issued the “Interpretation of Accounting Standards for Business
Enterprises No. 14” (Caikuai (2021) No.1, hereinafter referred to as “Interpretation No. 14”)
at February 2, 2021, which be effective from the date of publication. The relevant business
newly added from January 1, 2021 to the implementation date shall be adjusted according to
Interpretation No. 14.
a. Government-Private Partnership (PPP) project contract
Interpretation No. 14 is applicable to PPP project contracts that meet both the "dual
characteristics" and "dual control" described in the Interpretation. Retrospective adjustments
should be made to relevant PPP project contracts that have been implemented before
December 31, 2020 and have not been completed by the implementation date. If retrospective
adjustment is not practical, the application shall be applied from the beginning of the earliest
period of retrospective adjustment, and the cumulative impact adjustment shall be made in the
current year of the implementation date. The retained earnings at the beginning of the year
and other related items in the financial statements shall not be adjusted for the comparable
period information. The implementation of this provision has not had a significant impact on
the financial position and operating results of the Company.
b. Reform of base rate
Interpretation No. 14 simplifies the accounting treatment for situations in which the reform of
base rate leads to changes in the basis for determining cash flows related to financial
instrument contracts and lease contracts. According to the provisions of the Interpretation, the
business related to the base rate reform that occurred before December 31, 2020 should be
adjusted retrospectively, except where retrospective adjustment is not practical, and there is
no need to adjust the data in the comparative financial statements of the previous period. On
the implementation date of the interpretation, the difference between the original book value
162
Bengang Steel Plates Co., Ltd. Annual Report 2021
and the new book value of financial assets, financial liabilities, etc., is included in the retained
earnings or other comprehensive income at the beginning of the annual reporting period in
which the interpretation is implemented. The implementation of this provision has not had a
significant impact on the financial position and operating results of the Company.
(3) Implement the “Notice on Adjusting the Scope of Application of the Regulations on the
Accounting Treatment of Rent Concessions Related to the New Coronary Pneumonia
Epidemic”
On June 19, 2020, the Ministry of Finance issued the "Regulations on the Accounting
Treatment of Rent Reductions Related to the New Coronary Pneumonia Epidemic" (Cai Kuai
[2020] No. 10), for rent concessions directly caused by the New Coronary Pneumonia
epidemic, such as rent reduction or exemption and deferral of payments, etc, businesses can
choose to simplify accounting treatment.
On May 26, 2021, the Ministry of Finance issued the "Notice on Adjusting the Application
Scope of the Regulations on the Accounting Treatment of Rent Concessions Related to the
New Coronary Pneumonia Epidemic" (Cai Kuai [2021] No. 9), which will be implemented
on May 26, 2021. Adjusted the scope of application from “Concessions are only for lease
payments payable before 30 June 2021” to “Concessions are only for lease payments payable
up to 30 June 2022”, with other applicable conditions unchanged.
The company has chosen to adopt the simplified method for accounting treatment of all lease
contracts that meet the conditions before the adjustment of the scope of application, and also
adopts the simplified method for accounting treatment of all similar lease contracts that meet
the requirements after the adjustment of the scope of application. Retrospective adjustments
will be made to the relevant lease contracts for which the accounting treatment is changed, but
the comparative financial statement data of the previous period will not be adjusted; the
relevant rental concessions that have occurred between January 1, 2021 and the
implementation date of the notice that have not been accounted for in accordance with the
notice, make adjustments based on the notification. The implementation of this provision has
not had a significant impact on the financial position and operating results of the Company.
(4) Implementation of “Interpretation of Accounting Standards for Business Enterprises No.
15”-Presentations related to centralized management of funds
The Ministry of Finance issued the “Interpretation of Accounting Standards for Business
Enterprises No. 15” (Cai Kuai (2021) No.35, hereinafter referred to as “Interpretation No. 15”)
at December 30, 2021, which be effective from the date of publication and the financial
statement data of the comparable period shall be adjusted accordingly.
163
Bengang Steel Plates Co., Ltd. Annual Report 2021
Interpretation No. 15 clearly stipulates how the balance involved in the centralized and unified
management of the funds of the parent company and member units through internal settlement
centers, financial companies, etc., should be presented and disclosed in the balance sheet.
The implementation of this provision has not had a significant impact on the financial position
and operating results of the Company.
B. Change of accounting estimate during the reporting period
None.
C. The Adjustment of relevant items in the financial statements at the beginning of the
year in which the new lease standards are implemented for the first time
Consolidated Statement of Financial Position
Ending Beginning Adjusted amounts
It
balance of the last balance of the Reclassif Remeasur
ems Total
period current period ication ement
Ri
Not 1,500,739 1,500,739 1,500,739
ght-of-use
applicable ,782.73 ,782.73 ,782.73
assets
L
1,308,030 1,345,325 37,295,1 37,295,14
ease
,361.43 ,508.22 46.79 6.79
liability
N
on-
current
Not 1,463,444 1,463,444 1,463,444
liabilities
applicable ,635.94 ,635.94 ,635.94
due
within
one year
Statement of Financial Position of the Parent Company
Beginning Adjusted amounts
Ending balance
Items balance of the current
of the last period Reclassification Remeasurement
period
Right-
Not applicable 1,500,739,782.73 1,500,739,782.73 1,500,
of-use assets
Lease
1,308,030,361.43 1,345,325,508.22 37,295,146.79 37,
liability
Non- Not applicable 1,463,444,635.94 1,463,444,635.94 1,463,
164
Bengang Steel Plates Co., Ltd. Annual Report 2021
Beginning Adjusted amounts
Ending balance
Items balance of the current
of the last period Reclassification Remeasurement
period
current
liabilities due
within one
year
4. Taxes
(1) Major type of taxes and corresponding tax rates
Tax Taxation Method Tax Rate
The balance of output VAT calculated
based on product sales and taxable
Value-added Tax (VAT) services revenue in accordance with the 6%, 9%, 13%
tax laws after subtracting the deductible
input VAT of the period
City maintenance and construction tax Based on VAT actually paid 7%, 5%
Enterprise income tax Based on taxable profit 25%
(2) Tax Preference
None.
5. Notes to the consolidated financial statements
(3) Cash at bank and on hand
Items 20211231 201201231
Cash on hand 24,334.93 3,026.68
Cash at bank 6,299,074,728.55 9,229,414,568.44
Including：Deposited with finance company 4,429,656,296.13 5,712,508,430.36
Other monetary funds 2,531,996,674.37 3,897,249,320.14
Total 8,831,095,737.85 13,126,666,915.26
Including: Total amount deposited abroad
The details of restricted funds resulted from mortgage, pledge or freezing, restrictions on
withdrawals due to centralized management of funds, and monetary funds abroad which
restricted from repatriation are as follows:
165
Bengang Steel Plates Co., Ltd. Annual Report 2021
Items 20211231 20201231
Margin for bank acceptance bill 1,492,236,674.37 3,306,509,320.14
Margin for letter of credit 125,000,000.00 78,000,000.00
Time deposit or notice deposit
174,000,000.00 512,000,000.00
for guarantee
Loan deposit 760,000.00 740,000.00
Restricted deposit 740,000,000.00
Total 2,531,996,674.37 3,897,249,320.14
(4) Notes receivable
1. Notes receivable disclosed by category
Items 20211231 20201231
Bank acceptance bill
Commercial acceptance bill 1,540,482,182.07
Total 1,540,482,182.07
2. The company has no pledged notes receivable at the end of period
3. Notes receivable which has been endorsed or discounted by the company and have
not yet matured at the end of period
Amount confirmed at the end of Amount not confirmed at the
Items
the period end of the period
Bank acceptance bill
Commercial acceptance bill 1,133,932,188.36
Total 1,133,932,188.36
4. No Notes receivable has been transferred into accounts receivable due to inability of
drawer to meet acceptance bill at the end of period
(5) Accounts receivable
1. Accounts receivable disclosed by aging analysis
Items 20211231 20201231
Within 1 year (inclusive) 256,620,123.38 245,084,695.28
1-2 years (inclusive) 6,224,788.02 57,537,987.36
166
Bengang Steel Plates Co., Ltd. Annual Report 2021
2-3 years (inclusive) 57,059,913.27 251,762,129.07
Over 3 years 427,997,121.96 179,465,975.74
Sub-total 747,901,946.63 733,850,787.45
Less: Provision for bad
491,051,163.92 488,633,604.79
debts
Total 256,850,782.71 245,217,182.66
2. Accounts receivable disclosed by bad debt accrual method
20211231
Carrying amount Provision for bad debts
Items Bad
Percentage Book value
Amount Amount debts
(%)
ratio (%)
Provision for bad debts
352,985,418.30 47.20 352,985,418.30 100.00
individually
Provision for bad debts
394,916,528.33 52.80 138,065,745.62 34.96 256,850,782.71
based on portfolio
Include:
Portfolio 1: Aging
394,916,528.33 52.80 138,065,745.62 34.96 256,850,782.71
portfolio
Total 747,901,946.63 100.00 491,051,163.92 256,850,782.71
20201231
Carrying amount Provision for bad debts
Items Bad
Percentage Book value
Amount Amount debts
(%)
ratio (%)
Provision for bad debts
352,985,418.30 48.10 352,985,418.30 100.00
individually
Provision for bad debts
380,865,369.15 51.90 135,648,186.49 35.62 245,217,182.66
based on portfolio
Include:
Portfolio 1: Aging
380,865,369.15 51.90 135,648,186.49 35.62 245,217,182.66
portfolio
167
Bengang Steel Plates Co., Ltd. Annual Report 2021
Total 733,850,787.45 100.00 488,633,604.79 245,217,182.66
Accounts receivables tested for impairment individually:
20211231
Items Carrying Provision for Bad debts
ratio (%) Reason
amount bad debts
Brilliance
Bankruptcy
Automotive Group 305,223,081.12 305,223,081.12 100.00
Holdings Co., Ltd. reorganization
Benxi Nanfen Xinhe
Metallurgical
47,762,337.18 47,762,337.18 100.00 Discontinued
Furnace Material Co.,
Ltd
Total 352,985,418.30 352,985,418.30
Provision for bad debts by portfolio: Aging analysis
Portfolio accrual item: Aging portfolio
20201231
Items Account Provision for Bad debt
Receivable bad debts ratio（%）
Within 1
256,620,123.38 2,566,201.23 1.00
year (inclusive)
1-2 years
1,380,656.01 138,065.60 10.00
(inclusive)
2-3 years
1,942,837.68 388,567.53 20.00
(inclusive)
Over 3
134,972,911.26 134,972,911.26 100.00
years
Total 394,916,528.33 138,065,745.62
3. The provision for bad debts accrued, reversed or recovered in the current period
The amount of bad debt provision accrued in the current period is RMB 2,417,959.10.
4. The amount of accounts receivable has been written off in the current period is
RMB 399.97.
5. Top five debtors at the end of period
168
Bengang Steel Plates Co., Ltd. Annual Report 2021
20211231
Company Percentage of total Accounts Provision for
Amount
receivable (%) bad debts
The first 305,223,081.12 40.81 305,223,081.12
The second 99,222,882.66 13.27 992,228.83
The third 80,584,547.00 10.77 805,845.47
The fourth 47,762,337.18 6.39 47,762,337.18
The fifth 30,777,943.03 4.12 307,779.43
Total 563,570,790.99 75.36 355,091,272.03
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.
(6) Accounts receivable financing
1. Details of accounts receivable financing
Items 20211231 20201231
Notes Receivable 1,530,735,647.38 4,189,977,871.92
Including: Bank acceptance
1,530,735,647.38 1,875,594,439.85
bill
Commercial acceptance
2,314,383,432.07
bill
Accounts receivable
Total 1,530,735,647.38 4,189,977,871.92
Notes: Accounts receivable financing reflects notes receivable and accounts receivable
that are measured at fair value through other comprehensive income on the balance sheet
date.
2. At the end of the period, the company has no commercial bills pledged in accounts
receivable financing
3. At the end of the period, the company's endorsed or discounted commercial bills in
accounts receivable financing accounting and not yet matured on the balance sheet
date are as follows
169
Bengang Steel Plates Co., Ltd. Annual Report 2021
Amount Amount not
Item confirmed at the end of confirmed at the end of
the period the period
Bank acceptance bill 20,681,484,641.73
Commercial acceptance
bill
Total 20,681,484,641.73
4. No Notes receivable has been transferred into accounts receivable due to inability of
drawer to meet acceptance bill at the end of period
(7) Prepayments
1. Prepayments disclosed by aging
20211231 20201231
Aging
Amount Percentage (%) Amount Percentage (%)
Within 1 year 977,541,107.55 98.31 2,096,232,640.14 99.44
1-2 years 16,681,487.73 1.68 11,812,137.51 0.56
2-3 years 147,750.36 0.01
Over 3 years
Total 994,370,345.64 100.00 2,108,044,777.65 100.00
Notes: As of December 31, 2021, there were no outstanding prepayments over 1 year.
2. Top five prepaid companies at the end of period
Name of the company Amount Percentage (%)
The First 562,083,080.63 56.53
The Second 107,790,801.73 10.84
The Third 46,820,475.20 4.71
The Fourth 46,764,418.62 4.70
The Fifth 39,448,845.58 3.97
Total 802,907,621.76 80.75
(8) Other receivables
Items 20211231 20201231
Interest receivables 2,523,993.39 33,685,359.01
Dividend receivables
Other receivables 163,413,287.02 108,415,992.26
170
Bengang Steel Plates Co., Ltd. Annual Report 2021
Total 165,937,280.41 142,101,351.27
1．Interest receivable
(1) Interest receivable disclosed by category
Items 20211231 20201231
Deposit interest 2,523,993.39 33,685,359.01
Subtotal 2,523,993.39 33,685,359.01
Less: provision for bad debts
Total 2,523,993.39 33,685,359.01
(2) The company has no significant provision for overdue interest and bad debts.
2．Other receivables
(1) Other receivables disclosed by aging
Items 20211231 20201231
Within 1 year (inclusive) 153,188,899.24 53,420,775.41
1-2 years (inclusive) 4,959,792.25 42,323,476.43
2-3 years (inclusive) 3,778,131.84 12,988,305.06
Over 3 years 74,186,274.07 68,267,923.76
Sub-total 236,113,097.40 177,000,480.66
Less: Provision for bad 72,699,810.38 68,584,488.40
debts
Total： 163,413,287.02 108,415,992.26
（2）Information of provision for bad debts
Stage one Stage two Stage three
lifetime lifetime
Provision for
12-month expected credit losses expected credit losses Total
bad debts expected credit (Credit (Credit
losses impairment has not impairment has
occurred) already occurred)
Beginning 352,376.05 9,566,849.71 58,665,262.64 68,584,488.40
balance
Beginning
balance in the current
171
Bengang Steel Plates Co., Ltd. Annual Report 2021
Stage one Stage two Stage three
lifetime lifetime
Provision for
12-month expected credit losses expected credit losses Total
bad debts expected credit (Credit (Credit
losses impairment has not impairment has
occurred) already occurred)
period
--Transfer to -3,525.58 3,525.58
the second stage
--Transfer to - 3,048,177.80
the third stage 3,048,177.80
--Write-back to
the second stage
--Write-back to
the first stage
Accrual for the 494,264.90 1,021,959.28 6,040,356.18 7,556,580.36
current period
Reversal
during the current
period
Write-back of 316,314.67 1,238,763.21 1,886,180.50 3,441,258.38
the current period
Write-off
during the current
period
Other changes
Ending balance 526,800.70 6,305,393.56 65,867,616.12 72,699,810.38
Changes in the book value of other receivables are as follows:
Stage one Stage two Stage three
lifetime lifetime
expected credit expected credit
Book value 12-month losses losses Total
expected credit losses (Credit (Credit
impairment has not impairment has
occurred) already occurred)
Beginning 97,730,535.73 20,604,580.70 58,665,364.23 177,000,480.66
balance
Beginning
balance in the
172
Bengang Steel Plates Co., Ltd. Annual Report 2021
Stage one Stage two Stage three
lifetime lifetime
expected credit expected credit
Book value 12-month losses losses Total
expected credit losses (Credit (Credit
impairment has not impairment has
occurred) already occurred)
current period
--Transfer -316,691.48 316,691.48
to the second stage
--Transfer -8,964,690.04 8,964,690.04
to the third stage
--Write-
back to the second
stage
--Write-
back to the first
stage
Increase 462,627,944.95 3,469,155.79 123,742.35 466,220,843.09
Termination 400,030,603.31 5,191,442.54 1,886,180.50 407,108,226.35
of confirmation
Other
changes
Ending 160,011,185.89 10,234,295.39 65,867,616.12 236,113,097.40
balance
(3) The amount of other accounts receivable actually written off in the current
period is RMB 1,221,094.69.
(4) Other receivables disclosed by nature
Nature 20211231 20201231
Receivable and payable 224,540,231.45 167,775,115.62
Others 11,572,865.95 9,225,365.04
Total 236,113,097.40 177,000,480.66
(5) Top five debtors at the end of period
173
Bengang Steel Plates Co., Ltd. Annual Report 2021
Percentage of total
Provision for
Company Nature Amount Aging other receivables
bad debts
(%)
The First Accounts 2,819,946.26 within 1 year 1.19
The Second Accounts 2,798,975.71 within 1 year to over 3 years 1.19 2,585,594.69
The Third Accounts 2,261,360.00 over 3 years 0.96 2,261,360.00
The Fourth Accounts 1,908,708.06 over 3 years 0.81 1,908,708.06
The Fifth Accounts 1,740,000.00 over 3 years 0.74
Total 11,528,990.03 4.89 6,755,662.75
(6) There are no other receivables relates to any government subsidies in the
reporting period.
(7) There are no other receivables derecognized due to the transfer of financial
assets in the reporting period
(8) There no assets and liabilities formed by transfer of other receivables and
continued involvement in the reporting period
(9) Inventories
1. Inventories disclosed by category
20211231 20201231
Items
Carrying amount Impairment Book value Carrying amount Impairment Book value
Raw material
4,730,515,761.34 26,986,533.69 4,703,529,227.65 4,535,270,857.67 26,986,533.69 4,508,284,323.98
and main material
Work in process and self-
2,105,832,905.07 25,390,821.52 2,080,442,083.55 1,732,705,334.71 1,946,088.69 1,730,759,246.02
made semi-finished
product
Finished goods 3,439,625,765.66 33,430,937.88 3,406,194,827.78 2,805,646,918.75 4,625,146.10 2,801,021,772.65
Total 10,275,974,432.07 85,808,293.09 10,190,166,138.98 9,073,623,111.13 33,557,768.48 9,040,065,342.65
2. Provision for inventory impairment and provision for impairment of contract
performance costs
Increase Decrease
Category 20211231 Write-back 20201231
Provision Others Others
or write-off
174
Bengang Steel Plates Co., Ltd. Annual Report 2021
Raw material
26,986,533.69 26,986,533.69
and main material
Work in process and 1,946,088.69 25,390,821.52 1,946,088.69 25,390,821.52
self-made semi-finished
product
Finished goods 4,625,146.10 33,430,937.88 4,625,146.10 33,430,937.88
Total 33,557,768.48 58,821,759.40 6,571,234.79 85,808,293.09
3. Descriptions on closing balance of inventories containing capitalized amount of
borrowing costs
None
4. Descriptions on current amortization amount of contract performance costs
None
(10) Other current assets
Items 20211231 20201231
Prepaid tax 444,009,128.46 183,320,437.20
VAT input tax 310,939,065.10 86,091,954.53
Time deposit 5,254,234,444.28
Total 754,948,193.56 5,523,646,836.01
175
Bengang Steel Plates Co., Ltd. Annual Report 2021
(11) Long-term equity investment
Increase/decrease
Total
Investment Gains Other
Investees Add Reduce Other Declaration of Impairme
20201231 and Losses Comprehen Provision 20211231
Invest Investme Equity Cash Dividends Others nt Ending
Recognized under sive Income
ment nt Changes or Profit Balance
the Equity Method Adjustment
Joint Venture
Zhejiang Bengang Jingrui 2,742,064.73 520,432.46 -280,713.12 2,981,784.07
Steel Processing Co., Ltd..
Subtotal 2,742,064.73 520,432.46 -280,713.12 2,981,784.07
Total 2,742,064.73 520,432.46 -280,713.12 2,981,784.07
176
Bengang Steel Plates Co., Ltd. Annual Report 2021
(12) Other equity instrument investments
Item 20201231
20211231
Equity of Suzhou Bengang
3,888,980.00 3,888,980.00
Industrial Co., Ltd.
Equity of Zhonggang
Shanghai Steel Processing Co., Ltd.
Equity of Northeast Special
1,037,735,849.00 1,037,735,849.00
Steel Group Co., Ltd.
Equity of Guangzhou Benpu
200,000.00 200,000.00
Automobile Panel Sales Co., Ltd.
Equity of Wuhan Bengang
200,000.00 200,000.00
Yuanhong Trading Co., Ltd.
Total 1,042,024,829.00 1,042,024,829.00
Notes:
The Company holds 15% equity of Zhonggang Shanghai Steel Processing Co., Ltd.
9.93% equity of Northeast Special Steel Group Co., Ltd. held by the Company has been
pledged to Bank of Dalian, Shenyang branch.
(13) Fixed assets
1. Fixed assets and Disposal of fixed assets
Items 20211231 20201231
Fixed assets 25,480,674,048.94 26,284,567,956.44
Disposal of fixed assets
Total 25,480,674,048.94 26,284,567,956.44
2. Details of fixed assets
Transportation
Houses and Mechanical
Items and other Total
buildings equipment
equipment
1. Total original value
20201231
12,992,173,762.87 48,920,259,525.40 912,920,312.85 62,825,353,601.12
Increase
in current period 335,742,397.75 1,299,099,252.52 13,828,051.62 1,648,669,701.89
Including: Purchase
21,261,478.78 13,462,077.65 34,723,556.43
Transferred from
construction in progress 335,742,397.75 1,277,837,773.74 365,973.97 1,613,946,145.46
Merging
177
Bengang Steel Plates Co., Ltd. Annual Report 2021
Transportation
Houses and Mechanical
Items and other Total
buildings equipment
equipment
Decrease in current
period 83,262,784.29 737,609,827.88 5,789,627.60 826,662,239.77
Including: Disposal or
scrapping 83,262,784.29 737,609,827.88 5,789,627.60 826,662,239.77
Others
20211231
13,244,653,376.33 49,481,748,950.04 920,958,736.87 63,647,361,063.24
2.Total accumulated
depreciation
20201231
6,133,288,869.64 29,679,421,087.16 629,132,131.82 36,441,842,088.62
Increase
in current period 325,467,326.07 1,985,674,168.41 21,886,735.42 2,333,028,229.90
Including: Provision
325,467,326.07 1,985,674,168.41 21,886,735.42 2,333,028,229.90
Decrease in current
period 47,133,558.25 648,898,692.49 5,629,149.44 701,661,400.18
Including: Disposal or
scrapping 47,133,558.25 648,898,692.49 5,629,149.44 701,661,400.18
20211231
6,411,622,637.46 31,016,196,563.08 645,389,717.80 38,073,208,918.34
3. Total impairment
20201231
36,963,620.92 61,979,935.14 98,943,556.06
Increase
in current period 48,396,211.92 6,453,363.70 54,849,575.62
Including: accrued
48,396,211.92 6,453,363.70 54,849,575.62
Others
Decrease in current
period 1,261,418.52 59,053,617.20 60,315,035.72
Including: Disposal or
scrapping 1,261,418.52 59,053,617.20 60,315,035.72
20211231
84,098,414.32 9,379,681.64 93,478,095.96
4. Total net book value
of Fixed assets
20211231
6,748,932,324.55 18,456,172,705.32 275,569,019.07 25,480,674,048.94
20201231
6,821,921,272.31 19,178,858,503.10 283,788,181.03 26,284,567,956.44
3. Fixed assets idled temporarily
Accumulated Net book
Items Gross value Impairment Notes
depreciation value
Houses and buildings 223,416,300.48 139,189,651.03 84,098,414.32 128,235.13
Mechanical equipment 100,086,005.34 89,198,289.39 9,379,681.64 1,508,034.31
Transportation and 1,042,125.89 1,042,125.89
Other equipment
Total 324,544,431.71 229,430,066.31 93,478,095.96 1,636,269.44
178
Bengang Steel Plates Co., Ltd. Annual Report 2021
4. Fixed assets leased in through financial leasing
As of the end of last reporting period, the value of the fixed assets leased in through financial
leasing was RMB 1,114,232,362.74, all of which were leased from the related party Liaoning
Hengyi Financial Leasing Co., Ltd. In this period, the company terminated the financial leasing
business with Liaoning Hengyi Financial Leasing Co., Ltd., and pay the full amount.
5. Fixed assets leased out through financial leasing
Item Ending balance
Houses and buildings 1,239,002.14
Total 1,239,002.14
6. Fixed assets without property rights certificates at the year-end
Items Book value Reason
Houses and buildings 1,062,356,103.50 Being processed
(14) Construction in progress
1. Construction in progress and Construction materials
Items 20211231 20201231
Construction in progress 2,431,761,889.08 1,837,160,389.66
Project materials 2,420,212.05 2,773,325.92
Total 2,434,182,101.13 1,839,933,715.58
2. Details of construction in progress
20211231 20201231
Items Total Total
Gross value Net book value Gross value Net book value
impairment impairment
Cold-rolled
high-strength
steel 23,961,023.15 23,961,023.15
renovation
project
CCPP power
generation 662,907,316.06 662,907,316.06 300,907,874.71 300,907,874.71
project
Special steel
rolling mill
renovation 225,662,005.25 225,662,005.25 151,433,585.06 151,433,585.06
project
360 square
meter sintering 88,340,997.99 88,340,997.99 82,878,409.99 82,878,409.99
machine
Chemical Coke
Oven Gas
Project –
Bengang 21,840,791.70 21,840,791.70
transferred to
Liaoning Coal
No. 7 blast
furnace dry dust
removal and 70,402,228.77 70,402,228.77
energy-saving
179
Bengang Steel Plates Co., Ltd. Annual Report 2021
20211231 20201231
Items Total Total
Gross value Net book value Gross value Net book value
impairment impairment
Environmental
protection
overhaul project 66,322,604.36 66,322,604.36
of No. 6 blast
furnace
Flue gas
desulfurization
and
denitrification 28,774,283.25 28,774,283.25
of No. 7 coke
oven in the plate
coking plant
Special Steel
Electric Furnace
Capacity 975,649,876.97 975,649,876.97 358,101,195.01 358,101,195.01
Replacement
Project
220kV
Substation
Project of 23,302,571.03 23,302,571.03
General Energy
Plant
Advanced
Treatment and
Reuse Project of
Reclaimed 98,563,871.96 98,563,871.96
Water in
General Energy
Plant
One-tower
desulfurization
revamp in the 31,893,853.65 31,893,853.65
coking plant
The overall
improvement of
Benxi Steel's 36,748,743.10 36,748,743.10 29,824,289.00 29,824,289.00
manufacturing
Energy General
Plant No. 1
Converter Gas
Tank System 66,477,477.13 66,477,477.13 24,008,553.86 24,008,553.86
Transformation
Project
Caixi Special
Steel Feeding
Station of Steel 38,375,436.67 38,375,436.67 1,231,879.70 1,231,879.70
Plate Scrap
Plant
Coking Plant
No. 8 and No. 9
Coke Oven Flue
Gas 12,708,765.66 12,708,765.66
Desulfurization
and
Denitrification
Electrostatic
precipitator for
sintering system
in ironworks 14,956,633.00 14,956,633.00
renovation
project
Manufacturing
Management
System 16,091,178.68 16,091,178.68
Improvement
(2020)
Casting of the
new No. 1 blast
furnace hearth
in the Plate
Ironworks
Benxi Steel
Baojin
Processing and 22,088,294.34 22,088,294.34 15,998,341.25 15,998,341.25
Distribution
Project
180
Bengang Steel Plates Co., Ltd. Annual Report 2021
20211231 20201231
Items Total Total
Gross value Net book value Gross value Net book value
impairment impairment
Renovation of
Desulfurization
System in
Purification
17,588,986.17 17,588,986.17
Zone 2 of
Coking Plant
Improvement
of
Environmental
Protection and
Efficiency of 19,034,328.00 19,034,328.00
360M2
Sintering
Machine in
Steel Plate
Other 315,511,741.57 315,511,741.57 427,335,141.70 427,335,141.70
Total 2,431,761,889.08 2,431,761,889.08 1,837,160,389.66 1,837,160,389.66
181
Bengang Steel Plates Co., Ltd. Annual Report 2021
3. The change of major construction in progress
Budget (in Input Accumulated Including: Capi
Other
10 of Progre amount of capitalized taliza Source of
Project 20201231 Increase Transfer to FA decrea 20211231
thousand se Budget ss (%) capitalized interest of tion fund
yuan) (%) interest current period rate
Cold-rolled high-
Self-
strength steel
701,535.00 23,961,023.15 67,964,463.27 91,925,486.42 85.00 100.00 857,867,059.71 raised &
renovation
Other
project
Self-
CCPP power
raised
generation 106,000.00 300,907,874.71 361,999,441.35 662,907,316.06 63.00 65.00 14,497,562.06 8,138,558.77 3.93
&Loans
project
&Other
Special steel
rolling mill Loans
82,386.00 151,433,585.06 173,423,847.58 99,195,427.39 225,662,005.25 40.00 40.00 6,770,232.91 2,864,335.85 3.93
renovation &Other
project
360 square meter
Loans
sintering 137,723.00 82,878,409.99 23,551,905.29 18,089,317.29 88,340,997.99 92.00 95.00 68,627,433.26
&Other
machine
Chemical Coke
Oven Gas Project
– Bengang 2,557.00 21,840,791.70 21,840,791.70 85.00 95.00 Other
transferred to
Liaoning Coal
No. 7 blast
furnace dry dust 9,267.00 70,402,228.77 1,590,550.81 71,992,779.58 78.00 95.00 455,304.64 161,324.57 3.93
Loans
removal and &Other
energy-saving
Environmental
protection 25,225.00 66,322,604.36 188,679.25 66,511,283.61 76.00 100.00 Other
overhaul project
182
Bengang Steel Plates Co., Ltd. Annual Report 2021
Budget (in Input Accumulated Including: Capi
Other
10 of Progre amount of capitalized taliza Source of
Project 20201231 Increase Transfer to FA decrea 20211231
thousand se Budget ss (%) capitalized interest of tion fund
yuan) (%) interest current period rate
of No. 6 blast
furnace
Flue gas
desulfurization
and
denitrification of 5,337.38 28,774,283.25 5,104,951.95 33,879,235.20 63.00 65.00 Other
No. 7 coke oven
in the plate
coking plant
Special Steel
Electric Furnace Self-
Capacity 192,343.00 358,101,195.01 617,548,681.96 975,649,876.97 51.00 55.00 raised &
Replacement Other
Project
220kV
Substation
Project of 31,500.00 23,302,571.03 135,130,101.16 158,432,672.19 50.00 80.00 Other
General Energy
Plant
Advanced
Treatment and
Reuse Project of 17,570.00 98,563,871.96 15,375,754.95 113,939,626.91 65.00 85.00 Other
Reclaimed Water
in General
Energy Plant
One-tower
desulfurization 9,174.00 31,893,853.65 22,991,749.16 54,885,602.81 60.00 100.00 Other
revamp in the
coking plant
183
Bengang Steel Plates Co., Ltd. Annual Report 2021
Budget (in Input Accumulated Including: Capi
Other
10 of Progre amount of capitalized taliza Source of
Project 20201231 Increase Transfer to FA decrea 20211231
thousand se Budget ss (%) capitalized interest of tion fund
yuan) (%) interest current period rate
The overall
improvement of 5,600.00 29,824,289.00 6,924,454.10 36,748,743.10 66.00 80.00 Other
Benxi Steel's
manufacturing
Energy General
Plant No. 1
Converter Gas 16,086.00 24,008,553.86 42,468,923.27 66,477,477.13 41.00 60.00 Other
Tank System
Transformation
Project
Caixi Special
Steel Feeding 12,114.00 1,231,879.70 38,839,910.07 1,696,353.10 38,375,436.67 33.00 60.00 Other
Station of Steel
Plate Scrap Plant
Coking Plant No.
8 and No. 9 Coke
Oven Flue Gas
9,898.00 12,708,765.66 59,675,758.76 72,384,524.42 73.00 100.00 Other
Desulfurization
and
Denitrification
Electrostatic
precipitator for
sintering system 4,500.00 14,956,633.00 9,507,953.00 24,464,586.00 54.00 100.00 Other
in ironworks
renovation
project
Manufacturing
Management 2,639.00 16,091,178.68 6,718,790.00 22,809,968.68 86.00 100.00 Other
System
184
Bengang Steel Plates Co., Ltd. Annual Report 2021
Budget (in Input Accumulated Including: Capi
Other
10 of Progre amount of capitalized taliza Source of
Project 20201231 Increase Transfer to FA decrea 20211231
thousand se Budget ss (%) capitalized interest of tion fund
yuan) (%) interest current period rate
Improvement
(2020)
Casting of the
new No. 1 blast
furnace hearth in 8,200.00 47,485,826.92 47,485,826.92 58.00 95.00 Other
the Plate
Ironworks
New construction
8# single-strand Self-raised &
64,341.00 103,473,209.19 103,473,209.19 70.00 80.00
slab casting Other
machine project
5# blast furnace
ex-situ overhaul Self-raised &
124,087.00 51,731,262.32 51,731,262.32 72.00 90.00 31,410,224.05
(new 2# blast Other
furnace)
1700 Hot Rolling
Improvement 25,000.00 21,789,258.69 21,789,258.69 80.00 90.00 Other
Transformation
Environmental
protection Self-raised &
27,000.00 25,042,287.39 25,042,287.39 70.00 95.00 2,799,798.26 Other
renovation of No.
4-6 converters
Renovation of
Desulfurization
System in 6,000.00 17,588,986.17 13,012,782.04 30,601,768.21 51.00 80.00 Other
Purification Zone
2 of Coking Plant
Improvement of
Environmental
Protection and 5,573.00 19,034,328.00 14,047,395.24 33,081,723.24 59.00 80.00 Other
Efficiency of
360M2 Sintering
185
Bengang Steel Plates Co., Ltd. Annual Report 2021
Budget (in Input Accumulated Including: Capi
Other
10 of Progre amount of capitalized taliza Source of
Project 20201231 Increase Transfer to FA decrea 20211231
thousand se Budget ss (%) capitalized interest of tion fund
yuan) (%) interest current period rate
Machine in Steel
Plate
Benxi Steel
Baojin
Processing and 31,037.39 15,998,341.25 6,089,953.09 22,088,294.34 7.00 10.00 Other
Distribution
Project
Total 1,409,825,247.96 1,871,677,890.81 1,165,252,991.26 2,116,250,147.51 982,427,614.89 11,164,219.19
The main projects that Cold-rolled high-strength steel renovation project and 360 square meter sintering machine and5# blast furnace ex-situ overhaul (new 2# blast
furnace) had been transferred to fixed assets in previous years
186
Bengang Steel Plates Co., Ltd. Annual Report 2021
4. There is no impairment of construction in progress during the current period.
5. Construction materials
20211231 20201231
Items Net Book Net Book
Gross value Impairment Gross value Impairment
Value Value
Construction
2,420,212.05 2,420,212.05 2,773,325.92 2,773,325.92
materials
Total 2,420,212.05 2,420,212.05 2,773,325.92 2,773,325.92
(15) Right-of-use assets
Items Land Houses and buildings Total
1.Total gross value
20201231 1,132,274,415.17 368,465,367.56 1,500,739,782.73
Increase
Including: New lease
Merger
Revaluation adjustment
Decrease
Including: Transfer to fixed assets
Disposal
20211231 1,132,274,415.17 368,465,367.56 1,500,739,782.73
2. Total of Accumulated Amortization
20201231
Increase 39,904,236.22 20,470,298.20 60,374,534.42
Including: Accrued 39,904,236.22 20,470,298.20 60,374,534.42
Decrease
Including: Transfer to fixed assets
Disposal
20211231 39,904,236.22 20,470,298.20 60,374,534.42
3. Total Impairment
20201231
Increase
Including: Accrued
187
Bengang Steel Plates Co., Ltd. Annual Report 2021
Decrease
Including: Transfer to fixed assets
Disposal
20211231
4. Total Net value
20211231 1,092,370,178.95 347,995,069.36 1,440,365,248.31
20201231 1,132,274,415.17 368,465,367.56 1,500,739,782.73
(16) Intangible assets
1. Details of intangible assets
Items Land use right Software Total
1.Total gross value
20201231 327,028,797.84 310,401.55 327,339,199.39
Increase 40,640,000.00 40,640,000.00
Including: Purchase 40,640,000.00 40,640,000.00
Internal Research and Development
Merger
Decrease
Including: Disposal
Invalid and terminated confirmation
20211231 367,668,797.84 310,401.55 367,979,199.39
2. Total of Accumulated Amortization
20201231 62,257,844.20 148,702.65 62,406,546.85
Increase 7,624,308.81 26,794.92 7,651,103.73
Including: Accrued 7,624,308.81 26,794.92 7,651,103.73
Decrease
Including: Disposal
Invalid and terminated confirmation
20211231 69,882,153.01 175,497.57 70,057,650.58
3. Total Impairment
2020231
Increase
Including: Accrued
Decrease
188
Bengang Steel Plates Co., Ltd. Annual Report 2021
Including: Disposal
Invalid and terminated confirmation
20211231
4. Total Net value
20211231 297,786,644.83 134,903.98 297,921,548.81
20201231 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 period
Items Book value Reason
Land use right 39,556,267.07 Being processed
Total 39,556,267.07
(17) Deferred tax asset and deferred tax liability
1. Undedicated deferred tax asset
20211231 20201231
Deductible Deductible
Items
temporary Deferred tax asset temporary Deferred tax asset
differences differences
Impairment of assets 451,808,313.33 112,952,078.33 398,431,973.43 99,607,993.35
Internal unrealized 93,178,777.44 23,294,694.36 74,424,898.92 18,606,224.73
profit
Depreciation of fixed 21,906,259.43 5,476,564.86 333,978,859.03 83,494,714.76
assets
Other 48,132,843.04 12,033,210.76
Total 615,026,193.24 153,756,548.31 806,835,731.38 201,708,932.84
2. Unrecognized deferred tax assets
Items 20211231 20201231
Deductible temporary differences 305,643,743.02 305,702,137.30
Deductible losses 45,093,302.90 54,629,940.42
Total 350,737,045.92 360,332,077.72
3. The deductible loss of unrecognized deferred tax assets due in the following period
Items 20211231 20201231 Notes
189
Bengang Steel Plates Co., Ltd. Annual Report 2021
Year 2021 10,945,961.04
Year 2022 1,001,166.72 1,001,166.72
Year 2023 10,336,118.65 14,114,953.21
Year 2024 13,696,334.51 17,910,573.13
Year 2025 10,723,063.42 10,657,286.32
Year 2026 9,336,619.60
Total 45,093,302.90 54,629,940.42
(18) Other non-current assets
20211231 2020123
Items Net book
Gross value Impairment Gross value Impairm
value
Prepaid
long-term 30,630,858.13 30,630,858.13 995,840,320.65
assets
Total 30,630,858.13 30,630,858.13 995,840,320.65
(19) Short-term loans
1. Short-term loan disclosed by type
Items 20211231 20201231
Pledge loans
Mortgage loans
Guaranteed loans 3,823,088,140.00 9,687,731,000.00
Credit loans 230,000,000.00 380,000,000.00
Total 4,053,088,140.00 10,067,731,000.00
2.There is no short-term loans that were overdue at the end of the reporting period
(20) Notes payable
Items 20211231 20201231
Bank acceptance bill 2,286,000,000.00 7,747,043,186.29
Commercial acceptance bill 1,724,083,376.48 857,106,162.13
Domestic letter of credit 625,000,000.00 1,210,000,000.00
Total 4,635,083,376.48 9,814,149,348.42
190
Bengang Steel Plates Co., Ltd. Annual Report 2021
At the end of the reporting period, there is no notes payable due and unpaid.
(21) Accounts payable
(1) Accounts payable disclosed by category
Items 20211231 20201231
Accounts payable for goods 4,272,890,365.57 5,122,416,750.84
Accounts payable for labor 51,392,037.81 18,697,483.74
Accounts payable for project and equipment 557,316,885.80 513,842,739.32
Repair expense and others 470,673,396.71 259,271,282.92
Total 5,352,272,685.89 5,914,228,256.82
(2) Significant accounts payable aging over one year
Of which:
Items Ending balance
more than one year
Company 1 20,685,977.47 16,579,573.22
Company 2 14,200,000.00 14,200,000.00
Company 3 14,519,435.78 13,946,435.78
Company 4 227,930,805.86 10,163,913.21
Total 277,336,219.11 54,889,922.21
Other notes: The above significant accounts payable aged over one year have not yet
reached the settlement conditions.
(22) Contract liabilities
1. Details of contract liabilities
Items 20211231 20201231
Advance for goods 4,708,188,093.78 4,458,671,819.90
Total 4,708,188,093.78 4,458,671,819.90
As at December 31, 2021, the value-added tax received in advance from customers was RMB
612,064,452.20 (December 31, 2020: RMB 579,627,336.58) and disclosed as other current
liabilities.
(23) Employee benefits payable
1. Employee benefits payable
191
Bengang Steel Plates Co., Ltd. Annual Report 2021
Items 20201231 Increase Decrease 20211231
Short-term employee
25,748,902.30 2,356,609,073.18 2,230,262,598.99 152,095,376.49
benefits
Post-employment benefits
- defined contribution 582.95 221,340,145.12 221,340,728.07
plans
Termination benefits 25,981.50 25,981.50
Other benefits due within
one year
Total 25,749,485.25 2,577,975,199.80 2,451,629,308.56 152,095,376.49
2. Short-term employee benefits
Items 20201231 Increase Decrease 20211231
(1) Salary, bonus, 16,591,117.11 1,860,128,031.35 1,737,972,314.57 138,746,833.89
allowance and subsidy
(2) Employee welfare 147,741,924.10 147,741,924.10
(3) Social Insurance 653,712.74 146,522,560.74 147,176,273.48
Including: Medical 3,683.11 112,150,597.68 112,154,280.79
insurance
Work injury 650,029.63 34,351,650.00 35,001,679.63
insurance
Maternity 20,313.06 20,313.06
insurance
(4) Housing funds 6,859,195.00 131,612,225.64 131,608,625.64 6,862,795.00
(5) Union funds and staff 1,644,877.45 48,124,295.36 43,283,425.21 6,485,747.60
education fee
(6) Short-term
compensated absences
(7) Short-term profit -
sharing scheme
(8) Other 22,480,035.99 22,480,035.99
Total 25,748,902.30 2,356,609,073.18 2,230,262,598.99 152,095,376.49
3. Defined contribution plans
192
Bengang Steel Plates Co., Ltd. Annual Report 2021
Items 20201231 Increase Decrease 20211231
Basic pension fund 565.28 213,156,905.63 213,157,470.91
Unemployment insurance 17.67 8,183,239.49 8,183,257.16
Total 582.95 221,340,145.12 221,340,728.07
(24) Taxes payable
Items 20211231 20201231
Value-added tax 29,696,795.33 22,541,925.74
Corporate income tax 35,810,190.67 9,589,798.62
City maintenance and construction tax 2,362,795.25 4,490,656.56
House property tax 16,819,232.89 3,661,600.13
Educational surcharges 1,710,729.40 3,211,296.48
Land holding tax 2,878,545.36 1,180,402.66
Environmental tax 9,935,977.17 8,398,902.77
Others 15,053,722.63 2,227,498.00
Total 114,267,988.70 55,302,080.96
(25) Other payables
Items 20211231 20201231
Interest payables
Dividend payables
Other payables 1,348,025,731.98 709,448,301.92
Total 1,348,025,731.98 709,448,301.92
1. Other payables
(1) Other payables disclosed by nature
Items 20211231 20201231
Deposit 1,556,363.89 1,713,563.89
Margin 127,642,584.79 98,316,454.89
Accounts 1,133,934,695.19 525,775,209.97
Others 84,892,088.11 83,643,073.17
193
Bengang Steel Plates Co., Ltd. Annual Report 2021
Total 1,348,025,731.98 709,448,301.92
(2) At the end of period, no significant other payables aged over one year
(26) Non-current liabilities due within one year
Items 20211231 20201231
Long-term loans due within one year 246,949,595.95 1,287,630,361.43
Bond payables due within one year 25,053,455.40 20,400,000.00
Lease liabilities due within one year 38,777,466.79
Total 310,780,518.14 1,308,030,361.43
(27) Other current liabilities
Items 20211231 20201231
Output tax to be transferred 612,064,452.20 579,627,336.58
Total 612,064,452.20 579,627,336.58
(28) Long-term loans
Long-term loans disclosed by category
Categories 20211231 20201231
Pledged loans 622,600,000.00 622,600,000.00
Mortgage loan
Guaranteed loans 595,921,771.74 798,714,362.65
Credit loans 3,004,300,000.00 2,081,620,065.00
Total 4,222,821,771.74 3,502,934,427.65
(29) Bonds payables
1.Bonds payables disclosed by category
Items 20211231 20201231
Convertible Bond 5,054,251,668.83 5,752,229,339.52
Total 5,054,251,668.83 5,752,229,339.52
194
Bengang Steel Plates Co., Ltd. Annual Report 2021
2. Changes in Bonds payables (Excluding other financial instruments such as preferred stocks and perpetual bonds classified as financial liabilities)
Premium and
Issue Term to Issuance Balance at the end of the Current Interest accrued at Repayment Convert to stock this Balance at the end of the
Items Book value discount
date maturity amount previous year issue face value this period period current year
amortization
Convertible Jun 2
Bond (Bond 6,800,000,000.00 9, 20 6 years 6,800,000,000.00 5,752,229,339.52 45,161,128.80 516,038,858.11 1,168,855,400.00 5,054,251,668.83
code:127018) 20
Total 6,800,000,000.00 5,752,229,339.52 45,161,128.80 516,038,858.11 1,168,855,400.00 5,054,251,668.83
3.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 were 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.
During the period from January 1, 2021 to December 31, 2021, the Company's A-share convertible bonds of RMB 1,168,855,400.00 were converted into the
Company's A-share ordinary shares, and the number of converted shares was 232,819,847 shares. Of which:
In the first quarter of 2021, Bengang's convertible bonds decreased by RMB 2,656,000.00 (26,560 bonds) due to share conversion, the number of shares converted
195
Bengang Steel Plates Co., Ltd. Annual Report 2021
was 527,021 shares, and the conversion price was RMB 5.03 per share;
In the second quarter of 2021, Bengang's convertible bonds decreased by RMB 46,087,200.00 (460,872 bonds) due to share conversion, the number of shares
converted was 9,162,052 shares, and the conversion price was RMB 5.03 per share;
In the third quarter of 2021, Bengang's convertible bonds decreased by RMB 1,119,957,200.00 (11,199,572 bonds) due to share conversion, the number of shares
converted was 223,096,752 shares, and the conversion price was RMB 5.02 per share;
In the fourth quarter of 2021, Bengang's convertible bonds decreased by RMB 155,000.00 (1,550 bonds) due to share conversion, the number of shares converted
was 34,022 shares, and the conversion price was RMB 4.55 per share;
As at December 31, 2021, the company's remaining balance of convertible bonds was RMB 5,631,144,600.00 (56,311,446 bonds).
196
Bengang Steel Plates Co., Ltd. Annual Report 2021
4.Notes to other financial instruments classified as financial liabilities
(30) Lease liabilities
Items 20211231
Lease liabilities 1,463,444,635.94
Include: lease liabilities due within 1 year 38,777,466.79
Lease liabilities ending balance 1,424,667,169.15
(31) Long-term payables
Items 20211231 20201231
Long-term payables 1,114,232,362.74
Special payables
Total 1,114,232,362.74
Notes：At the end of the reporting period, the company has repaid all the financial lease payments
1.long-term payables
Items 20211231 20201231
Financing lease payments 1,114,232,362.74
Including: unrealized financing 779,232,152.85
expenses
Total 1,114,232,362.74
Notes: At the end of the reporting period, the amount of financing lease payment and the amount
of unrealized financing expenses and the minimum amount of financial lease payment to be paid
after the balance sheet date was zero.
(32) Deferred income
Items 20201231 Increase Decrease 20211231 Reason
Government
154,451,833.23 3,793,520.00 65,139,067.34 93,106,285.89
Subsidy
Total 154,451,833.23 3,793,520.00 65,139,067.34 93,106,285.89
197
Bengang Steel Plates Co., Ltd. Annual Report 2021
Projects of government subsidies:
Related to
Transfer to current Other
Items 20201231 Increase 20211231 assets or
profit and loss decrease
income
Liaoning Province "Hundred, Thousand, Thousand, 250,000.00 30,000.00 220,000.00
Assets
Thousand Talents Project" funding project in 2018
2018 Municipal Skill Master Workstation Fee 66,616.34 7,850.00 58,766.34 Assets
2019 Municipal Skill Master Workstation Fee 180,000.00 81,915.84 98,084.16 Assets
2020 Ecological Civilization Construction Project 20,000,000.00 20,000,000.0
Assets
(Special Steel Electric Furnace Upgrade Project)
Advanced Treatment Project of Carbon Fiber 9,500,000.00 1,900,000.00 7,600,000.00 Assets
Wastewater in Dongfeng Plant Area of Plate Coking
Plant
Desulfurization and Denitrification Project of Coal- 3,600,000.00 600,000.00 3,000,000.00
fired Boiler in High-pressure Workshop of Bengang Assets
Power Plant
Research and development of high-strength steel for the 2,320,000.00 580,000.00 1,740,000.00
Assets
third generation of automobiles
198
Bengang Steel Plates Co., Ltd. Annual Report 2021
Related to
Transfer to current Other
Items 20201231 Increase 20211231 assets or
profit and loss decrease
income
7 sets of 130 tons combustion boiler flue gas 9,600,000.00 4,800,000.00 4,800,000.00
Assets
desulfurization project in power plant
Power plant three power plant cogeneration reform 4,000,000.00 2,000,000.00 2,000,000.00
Assets
project
Industrial enterprise energy management center 2,320,000.00 2,320,000.00
Assets
construction demonstration project
Automatic air quality monitoring system 35,000.00 35,000.00 Assets
Cold-rolled high-strength steel renovation project 100,000,000.00 50,000,000.00 50,000,000.00 Assets
Liaoning Artisan Subsidy 21.89 21.89 Assets
Construction of professional technology innovation 200,000.00 200,000.00
Assets
platform for automobile steel industry
Research on the Influence Mechanism and Control of
Rare Earth Oxide Sulfide on Automobile Steel 349,517.26 189,520.00 81,623.76 457,413.50 Assets
Plasticity
Introduce special funds for overseas advanced and
2,000,000.00 2,000,000.00 Assets
applicable technologies
199
Bengang Steel Plates Co., Ltd. Annual Report 2021
Related to
Transfer to current Other
Items 20201231 Increase 20211231 assets or
profit and loss decrease
income
“Steel for high-strength pipelines under low-
temperature and high-pressure service conditions” 30,677.74 62,000.00 92,677.74 Assets
Project national support funds
Design of metallurgical slag system of rare earth steel
340,000.00 340,000.00 Income
and research on its chemical properties
Provincial Science and Technology Department
National Natural Science Foundation of China- 334,000.00 334,000.00 Income
Liaoning Provincial Government Joint Fund Project
2019 Provincial Skilled Master Workstation Fee 200,000.00 200,000.00 Income
2020 Provincial Skilled Master Workstation Fee 100,000.00 100,000.00 Income
Basic research on new technology of composite iron
168,000.00 168,000.00 Income
coke low carbon ironmaking charge
The second batch of planned projects of the 2020
Liaoning Provincial Central Government to guide local 300,000.00 300,000.00 Income
science and technology development funds
200
Bengang Steel Plates Co., Ltd. Annual Report 2021
Related to
Transfer to current Other
Items 20201231 Increase 20211231 assets or
profit and loss decrease
income
2020 Liaoning Province "Hundreds of Thousands of
50,000.00 50,000.00 Income
Talents Project" Funding Project
Air Pollution Prevention and Control Fund-Second
Burning Finishing Dust Removal Ultra-Low Emission 2,050,000.00 410,000.00 1,640,000.00 Assets
Transformation Project
Total 154,451,833.23 3,793,520.00 65,139,067.34 93,106,285.89
201
Bengang Steel Plates Co., Ltd. Annual Report 2021
(33) Share capital
Increase/decrease (+, -)
Items 20201231 Bonus Transferred
Issuing of new share Others Subtotal 20211231
shares from reserves
Capital shares 3,875,371,532.00 232,819,847.00 232,819,847.00 4,108,191,379.00
Notes：
The increase in the current period was due to the conversion of the A-share convertible bonds issued by the company into 232,819,847 A-share ordinary shares in the current period. For
details, please refer to “Note 5 (27) Bonds Payable”.
(34) 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 (27) Bonds
payable”.
2. Changes in financial instruments such as preferred stocks and perpetual bonds issued at the end of the period
20201231 Increase Decrease 20211231
Items Numb Bo Book Book
Number Book value Number Number
er ok value value value
Converti 68,000,000 1,146,290,66 11,688,554 198,407,99 56,311,446 947,882,66
ble corporate .00 2.42 .00 8.79 .00 3.63
202
Bengang Steel Plates Co., Ltd. Annual Report 2021
20201231 Increase Decrease 20211231
Items Numb Bo Book Book
Number Book value Number Number
er ok value value value
bonds
68,000,000 1,146,290,66 - - 11,688,554 198,407,99 56,311,446 947,882,66
Total .00 2.42 .00 8.79 .00 3.63
Notes:
The decrease in the current period is due to the accumulative amount of RMB 1,168,855,400.00 (11,688,554 bonds) of A-share convertible bonds issued by the company being converted into
the company’s A-share ordinary shares. As at December 31 2021, the remaining convertible bond balance of the company is RMB5,631,144,600.00(56,311,446 bonds). For details, please
refer to “Note 5. (27) Bonds Payable”.
203
Bengang Steel Plates Co., Ltd. Annual Report 2021
(35) Capital reserves
Items 20201231 Increase Decrease 20211231
Capital premium 12,227,292,378.47 928,924,325.80 13,156,216,704.27
Other capital reserves 115,917,468.82 115,917,468.82
Total 12,343,209,847.29 928,924,325.80 13,272,134,173.09
Notes:
The increase in the current period is due to the conversion of the A-share convertible bonds issued by
the company into A-share ordinary shares in the current period. For details, please refer to “Note 5.
(27) Bonds Payable”.
(36) Special Reserves
Items 20201231 Increase Decrease 20211231
Safety production cost 300,412.14 63,036,424.58 62,998,858.15 337,978.57
Total 300,412.14 63,036,424.58 62,998,858.15 337,978.57
(37) Surplus Reserves
Items 20201231 20210101 Increase Decrease 20211231
Statutory 961,105,529.85 961,105,529.85 234,010,992.52 1,195,116,522.37
surplus reserves
Total 961,105,529.85 961,105,529.85 234,010,992.52 1,195,116,522.37
(38) Undistributed Profits
Items 2021 2020
Before adjustments: undistributed profits at last year- 2,692,018,405.40 2,307,765,664.62
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 company 2,500,582,902.58 384,252,740.78
Less: Statutory surplus reserves 234,010,992.52
Discretionary reserves
General risk reserves
204
Bengang Steel Plates Co., Ltd. Annual Report 2021
Items 2021 2020
Common shares dividend payable 1,981,284,017.82
Common shares dividend transferred to paid-in capital
Ending balance of undistributed profits 2,977,306,297.64 2,692,018,405.40
(39) Operating income and operating cost
2021 2020
Items
Revenue Cost Revenue Cost
Principal business 69,992,675,798.60 64,770,421,744.20 45,321,849,577.55 43,322,474,075.93
Other business 7,919,469,182.86 7,121,176,592.76 3,362,943,108.03 3,069,706,486.66
Total 77,912,144,981.46 71,891,598,336.96 48,684,792,685.58 46,392,180,562.59
Details for operating income:
Principal Other
Item
business business
Classified by business area 69,992,675,798.60 7,919,469,182.86
Including：Domestic 63,657,154,874.80 7,919,469,182.86
Abroad 6,335,520,923.80 -
Classified by the time of commodity
69,992,675,798.60 7,919,469,182.86
transfer
Including: recognize at a certain point in
69,992,675,798.60 7,916,590,751.39
time
recognize over a certain period of
2,878,431.47
time
Total 69,992,675,798.60 7,919,469,182.86
(40) Tax and surcharges
Items 2021 2020
City maintenance and construction tax 123,495,868.43 39,002,807.95
Educational surcharge 88,373,442.32 28,155,477.26
Housing property tax 81,377,911.78 79,753,764.80
Land use right tax 13,696,962.53 13,090,099.93
Environmental tax 41,124,449.80 28,417,193.46
Stamp duty 82,245,033.15 26,523,801.64
Others 1,146,895.68 928,675.06
Total 431,460,563.69 215,871,820.10
(41) Selling and distribution expenses
205
Bengang Steel Plates Co., Ltd. Annual Report 2021
Items 2021 2020
Import and export agency fee 73,807,602.10 55,316,442.53
Salary and benefits 35,270,978.16 25,955,134.20
Package fee 6,901,048.55 6,179,183.22
Others 25,414,936..76 9,828,520.26
Total 141,394,565.57 97,279,280.21
(42) General and administrative expenses
Items 2021 2020
Salary and benefits 656,796,852.87 368,149,507.51
Repair expense 249,469,415.56 216,309,807.28
Land use right fee 39,930,546.94 65,600,418.40
Depreciation 42,367,710.99 39,060,982.28
Heating fee 91,825,534.38 25,929,633.73
Water resources fee 7,059,455.17 18,956,412.81
Sewage charges 14,522,765.23 13,186,781.11
Others 85,267,160.96 45,632,751.69
Total 1,187,239,442.10 792,826,294.81
(43) Research and development expenses
Items 2021 2020
Depreciation, materials and compensation, etc. 56,401,594.44 37,989,623.28
Total 56,401,594.44 37,989,623.28
(44) Financial expenses
Items 2021 2020
Interest expenditure 1,007,595,231.75 1,028,857,436.14
Including：Lease liability interest expense 56,397,569.84
Less: Interest income 393,818,460.36 378,523,984.03
Exchange loss -86,313,266.83 -307,919,937.19
Others 9,130,130.50 22,361,640.70
Total 536,593,635.06 364,775,155.62
206
Bengang Steel Plates Co., Ltd. Annual Report 2021
(45) Other income
Items 2021 2020
Government subsidy 66,345,976.64 81,193,591.56
Others 111,590.36
Total 66,345,976.64 81,305,181.92
(46) Income on investment
Items 2021 2020
Income on long-term equity investment by equity method 520,432.46 374,119.86
Income from disposal of long-term equity investment 1,434,393.28
Income on disposal of financial assets holding for trading -124,911,004.89 13,500,000.00
Dividend income obtained during the holding period of other 77,242.47
equity instrument investments
Other 2,436,869.33
Total -120,519,309.82 13,951,362.33
(47) Credit impairment losses
Items 2021 2020
Loss from bad debts of account
2,417,959.10 302,302,638.01
receivable
Loss from bad debts of other
5,336,416.67 1,717,123.74
receivables
Total 7,754,375.77 304,019,761.75
Note: Loss is shown as positive figures
(48) Assets impairment loss
Items 2021 2020
Impairment of inventory
58,821,759.40 6,571,234.79
and contract performance costs
Impairment of fixed assets 54,849,575.62 60,614,634.58
Total 113,671,335.02 67,185,869.37
Note: Loss is shown as positive figures
(49) Asset disposal income
The amount
Items 2021 2020 recognized in non-
recurring profit
Disposal gains or
losses arising from 130,675.05 325,651.61 130,675.05
disposal of fixed assets
207
Bengang Steel Plates Co., Ltd. Annual Report 2021
The amount
Items 2021 2020 recognized in non-
recurring profit
not held for sale
Total 130,675.05 325,651.61 130,675.05
Note: Loss is shown as positive figures
(50) Non-operating income
The amount
Items 2021 2020 recognized in non-
recurring profit
Non-current assets scrapped gains 2,606,854.39 2,703,102.88 2,606,854.39
Debt restructuring gain 32,800.02
Others 5,176,371.41 1,592,660.62 5,176,371.41
Total 7,783,225.80 4,328,563.52 7,783,225.80
(51) Non-operating expense
The amount
Items 2021 2020 recognized in non-
recurring profit
Donations
Non-current assets scrapped loss 64,272,629.43 95,724,280.44 64,272,629.43
Others
Total 64,272,629.43 95,724,280.44 64,272,629.43
(52) Income tax expenses
1. Income tax expenses
Items 2021 2020
Income tax payable for the current year 853,911,187.93 35,594,567.91
Adjustment of deferred income tax 47,952,384.53 -10,223,337.35
Total 901,863,572.46 25,371,230.56
2. Accounting profit and income tax expense adjustment process
Items 2021
Total profit 3,435,499,071.09
Income tax expense calculate according to the official or applicable tax rate 858,874,767.77
Effect of different tax rates applied by subsidiaries
208
Bengang Steel Plates Co., Ltd. Annual Report 2021
Items 2021
5,955,617.82
Effect of adjustment of the income tax expense of prior period
Effect of non-taxable income -824,062.27
Effect of undeductible costs, expenses or losses 130,996.77
Effect of use of deductible losses of unrecognized deferred tax asset of prior
period
Effect of deductible temporary differences or deductible losses of unrecognized
163,459.93
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 the additional deductible expenses and tax rate
adjustments required by the tax law
Others 37,562,792.44
Income tax expenses 901,863,572.46
(53) Earnings 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 2021 2020
Consolidated net profit
attributable to ordinary 2,500,582,902.58 384,252,740.78
shareholders of parent company
The weighted average
number of common shares issued 4,168,950,364.25 3,875,371,532.00
by the company
Basic earnings per share 0.600 0.099
Including: basic earnings
per share for continuing 0.600 0.099
operations
Basic earnings per
share for discontinued operations
2. Diluted earnings per share
Diluted earnings per share is calculated by dividing the consolidated net profit attributable.
to the common shareholders of the parent company (diluted) by the weighted average
number of ordinary shares issued by the company (diluted):
Items 2021 2020
Consolidated net profit
2,735,242,850.60 384,252,740.78
attributable to ordinary
209
Bengang Steel Plates Co., Ltd. Annual Report 2021
Items 2021 2020
shareholders of parent company
(diluted)
The weighted average
number of common shares issued 5,509,699,078.54 3,875,371,532.00
by the company (diluted)
Diluted earnings per share 0.496 0.099
Including: Diluted earnings
per share for continuing 0.496 0.099
operations
Diluted earnings per
share for discontinued operations
Other instructions: Since convertible bonds have caused anti-dilution in previous period,
diluted earnings per share are disclosed in accordance with basic earnings per share.
(54) Notes of statement of cash flows
1. Cash received related to other operating activities
Items 2021 2020
Withdraw of current accounts, advance for another 4,269,927.26 415,131,996.05
Interest income 424,979,825.98 365,343,047.49
Special subsidy income 3,752,120.00 27,624,696.63
Non-operating income 3,029,073.33 673,106.88
Others 65,335,821.55 8,181,857.38
Total 501,366,768.12 816,954,704.43
2. Cash paid related to other operating activities
Items 2021 2020
19,482,383.93 347,552,655.29
Current accounts, advance for another
14,638,578.99 72,862,184.48
Sales expenses
86,597,752.51 44,664,338.51
Administrative expenses
22,157,726.11 20,710,711.34
Charges
299,743.97 1,489,830.36
Others
143,176,185.51 487,279,719.98
Total
3. Cash received related to other financing activities
Items 2021 2020
Margin for bill, letter of guarantee and letter of credit 2,105,252,645.77 1,076,807,422.35
Proceeds from negotiation 41,310,294.37 253,068,892.21
210
Bengang Steel Plates Co., Ltd. Annual Report 2021
Items 2021 2020
Others 214,709,267.94
Total 2,361,272,208.08 1,329,876,314.56
4. Cash paid related to other financing activities
Items 2021 2020
34,424,434.31
Margin for bill, letter of guarantee and letter of credit
41,084,701.18
Convertible bond issuance fees
740,000,000.00
Targeted Payment to short-term borrowing
740,000,000.00 75,509,135.49
Total
(55) Supplementary details of statement of cash flows
1. Supplementary details for statement of cash flows
Items 2021 2020
1. A reconciliation of net profit to cash flows from
operating activities:
Net profit 2,533,635,498.63 391,479,566.23
Add: Credit impairment loss 7,754,375.77 304,019,761.75
Impairment of assets 113,671,335.02 67,185,869.37
Depreciation of fixed assets 2,333,028,229.90 2,191,070,638.31
Depreciation of productive biological assets
Depletion of oil and gas properties
Depreciation of right-of-use assets 60,374,534.42
Amortization of intangible assets 7,651,103.73 6,567,370.80
Amortization of long-term deferred expenses
Losses proceeds from disposal of fixed assets, intangible
-130,675.05 -325,651.61
assets and other long-term assets (Earnings marked“－”)
Scrapped losses from fixed assets (Earnings
61,665,775.04 93,021,177.56
marked“－”)
Loss from changes in fair value (Earnings
marked“－”)
Financial expenses (Earnings marked“－”) 921,281,964.92 720,937,498.95
Investment losses (Earnings marked“－”) 120,519,309.82 -13,951,362.33
Deferred tax assets reduction (Addition marked“－”) 47,952,384.53 -10,223,337.35
Deferred tax liabilities increased (Reduction
marked“－”)
Reduction of inventory (Addition marked“－”) -1,202,351,320.94 -1,302,981,909.11
Operating receivable items reduction (Addition
2,159,270,698.56 -2,847,086,786.29
marked“－”)
Operating payable items increase (Less marked"－") -6,750,849,760.31 -1,638,713,049.57
Others
Net cash flows generated from operating activities 413,473,454.04 -2,039,000,213.29
211
Bengang Steel Plates Co., Ltd. Annual Report 2021
Items 2021 2020
2. Payments of investing and financing activities not
involving cash:
Liabilities transferred to capital
Convertible corporate bonds due within one year
Fixed assets financed by leasing
3. The net increase in cash and cash equivalents:
Ending balance of cash 6,299,099,063.48 9,229,417,595.12
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 -2,930,318,531.64 -4,211,997,393.46
2. The structure of cash and cash equivalents
Items 20211231 20201231
6,299,099,063.48 9,229,417,595.12
1. Cash
24,334.93 3,026.68
Including: Cash on hand
6,299,074,728.55 9,229,414,568.44
Bank deposits available on demand
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
6,299,099,063.48 9,229,417,595.12
3. Ending balance of cash and cash equivalents
Including: Cash and cash equivalents limited to use by the
parent company of another subsidiary in the group
(56) Assets of which ownership or right to use are restricted
Items Ending balance Reason
Cash at bank and on hand 2,531,996,674.37 Deposit for notes and letter of credit
Notes receivable that the company has
endorsed and not yet matured on the
Notes Receivable 1,133,932,188.36
balance sheet date were not
derecognition at the end of period
Other equity instrument
1,037,735,849.00 Pledged for loans
investments
Fixed assets 89,963,211.93 Mortgage for fund borrowing
Intangible assets 36,188,476.93 Mortgage for fund borrowing
212
Bengang Steel Plates Co., Ltd. Annual Report 2021
Items Ending balance Reason
Total 4,829,816,400.59
(57) Foreign currency monetary items
1. Foreign currency monetary items
Ending balance in Exchange rate at Ending balance
Items
foreign currency the year-end translated to RMB
Cash at bank and on hand 21,926,797.58
Including: USD 2,815,562.23 6.3757 17,951,179.87
EUR 15,038.78 7.2197 108,575.47
HKD 4,729,748.36 0.8176 3,867,042.24
Short-term loans 575,088,140.00
Including: USD 90,200,000.00 6.3757 575,088,140.00
EUR
JPY
Non-current liabilities due 99,549,595.95
within one year
Including: USD 4,700,000.00 6.3757 29,965,790.00
EUR 9,460,158.72 7.2197 68,299,507.91
JPY 23,176,000.00 0.0554 1,284,298.04
Long-term loans 354,971,367.69
Including: USD 11,850,000.00 6.3757 75,552,045.00
EUR 37,635,017.31 7.2197 271,713,534.45
JPY 139,056,000.00 0.0554 7,705,788.24
213
Bengang Steel Plates Co., Ltd. Annual Report 2021
2. The Company has no overseas operating entities.
(58) Government subsidies
1. Government subsidies related to assets
The amount included in the Items
current profit or loss or offsetting the loss included in
of related costs the current
Items profit or
Item Amount listed on the loss or
balance sheet offsetting
2021 2020
the loss of
related
costs
Liaoning
Province "Hundred,
Thousand, Thousand, Deferred Other
250,000.00 30,000.00
Thousand Talents Income income
Project" funding
project in 2018
2018
Municipal Skill Deferred Other
240,000.00 7,850.00 120,423.00
Master Workstation Income income
Fee
2019
Municipal Skill Deferred Other
180,000.00 81,915.84
Master Workstation Income income
Fee
Advanced
Treatment Project of
Carbon Fiber Deferred Other
9,500,000.00 1,900,000.00
Wastewater in Income income
Dongfeng Plant Area
of Plate Coking Plant
Desulfurization
and Denitrification
Project of Coal-fired Deferred Other
6,000,000.00 600,000.00 600,000.00
Boiler in High- Income income
pressure Workshop of
Bengang Power Plant
Research and Deferred Other
2,900,000.00 580,000.00 580,000.00
development of high- Income income
214
Bengang Steel Plates Co., Ltd. Annual Report 2021
The amount included in the Items
current profit or loss or offsetting the loss included in
of related costs the current
Items profit or
Item Amount listed on the loss or
balance sheet offsetting
2021 2020
the loss of
related
costs
strength steel for the
third generation of
automobiles
7 sets of 130
tons combustion
Deferred Other
boiler flue gas 24,000,000.00 4,800,000.00 4,800,000.00
Income income
desulfurization
project in power plant
Power plant
three power plant Deferred Other
10,000,000.00 2,000,000.00 2,000,000.00
cogeneration Income income
renovation project
Industrial
Deferred Other
enterprise energy 11,600,000.00 2,320,000.00 2,320,000.00
Income income
management center
Research and
development of anti- Deferred Other
250,000.00 84,847.73
oxidation hot forming Income income
steel PHS1500A
Automatic air
Deferred Other
quality monitoring 350,000.00 35,000.00 70,000.00
Income income
system
Cold-rolled
Deferred Other
high-strength steel 250,000,000.00 50,000,000.00 50,000,000.00
Income income
renovation project
Liaoning Deferred Other
100,002.97 99,981.08
Artisan Subsidy Income income
Construction
of professional
technology Deferred Other
1,000,000.00 200,000.00 800,000.00
innovation platform Income income
for automobile steel
industry
Research on Deferred Other
547,040.00 81,623.76
the Influence Income income
215
Bengang Steel Plates Co., Ltd. Annual Report 2021
The amount included in the Items
current profit or loss or offsetting the loss included in
of related costs the current
Items profit or
Item Amount listed on the loss or
balance sheet offsetting
2021 2020
the loss of
related
costs
Mechanism and
Control of Rare Earth
Oxide Sulfide on
Automobile Steel
Plasticity
Introduce
special funds for
Deferred Other
overseas advanced 14,420,000.00 2,000,000.00 2,000,000.00
Income income
and applicable
technologies
Steel for high-
strength pipelines
under low-
temperature and high- Deferred Other
188,000.00 92,677.74 90,322.26
pressure service Income income
conditions Project
national support
funds
Finishing Dust
Removal Ultra-Low
Deferred Other
Emission 2,050,000.00 410,000.00
Income income
Transformation
Project
High-grade
electro-galvanized
Deferred Other
sheet production line 41,040,000.00 8,208,000.00
Income income
project for
automobiles
Energy saving
and environmental
Deferred Other
protection project of 5,800,000.00 1,160,000.00
Income income
sintering machine in
ironworks
Benxi Iron and Deferred Other
1,000,000.00 1,000,000.00
Steel Group Co., Ltd. Income income
216
Bengang Steel Plates Co., Ltd. Annual Report 2021
The amount included in the Items
current profit or loss or offsetting the loss included in
of related costs the current
Items profit or
Item Amount listed on the loss or
balance sheet offsetting
2021 2020
the loss of
related
costs
Auto Sheet
Engineering
Laboratory
Engineering
Construction
2. Government subsidies related to income
The amount included in the Items
current profit or loss or offsetting included in the
the loss of related costs current profit
Amount or loss or
Items
offsetting the
2021 2020
loss of related
costs
Addition
al tax relief for 758,250. 758,250.
758,250.00
retired soldiers 00 00
in 2021
Tax 440,059. 440,059.
569,547.42 569,547.42
refund 30 30
work-
for-training 44,400.00 8,600.00 44,400.00 8,600.00
grants
Relocati 1,626,919. 1,626,919. -
on 00 00
compensation
of railway
company
Liaoning 5,000,000. 5,000,000. -
Provincial 00 00
Local Financial
Supervision and
Administration
Bureau
217
Bengang Steel Plates Co., Ltd. Annual Report 2021
The amount included in the Items
current profit or loss or offsetting included in the
the loss of related costs current profit
Amount or loss or
Items
offsetting the
2021 2020
loss of related
costs
supports special
funds for the
development of
enterprises
listed on the
market
Stable 19,151.07 19,151.07 -
Job Subsidy
3. Return of government subsidies during the reporting period
None
(59) Lease
As a lessee
Item 2021
Interest expense from lease liability 56,397,569.84
Short-term lease expenses from simplified
treatment included in the cost of related assets or the 1,919,704.52
current profit and loss
Low-value asset lease expenses from simplified
treatment included in the cost of related assets or the
current profit and loss (Except short- term lease expenses
from low-value asset)
Variable lease payments without including in the
measurement of the lease liability included in the cost of
related assets or the current profit and loss
Including：sale-leaseback transaction generation
part
Income from subletting the right-of-use assets
Total cashflow out related to leasing 1,919,704.52
Profit and loss from sale-leaseback transactions
Cash inflows from sale-leaseback transactions
Cash outflows from leaseback
218
Bengang Steel Plates Co., Ltd. Annual Report 2021
6. Changes in the scope of consolidation
There was no changes to the scope of consolidation during the current period.
7. Equity in other entities
(1) Equity in subsidiaries
1. Constitution of enterprise group
Principal Shareholding ratio
Registered Notes of
Name of the subsidiaries place of Acquiring method
address business Direct Indirect
business
Wuxi Bengang Steel & Iron Sales Business combination
Wuxi Wuxi Sales 100.00
Co., Ltd. under common control
Tianjin Bengang Steel & Iron Trading Business combination
Tianjin Tianjin Sales 100.00
Co., Ltd. under common control
Nanjing Bengang Materials Sales Co., Business combination
Nanjing Nanjing Sales 100.00
Ltd. under common control
Yantai Bengang Steel & Iron Sales Business combination
Yantai Yantai Sales 100.00
Co., Ltd. under common control
Harbin Bengang Economic and Business combination
Harbin Harbin Sales 100.00
Trading Co., Ltd. under common control
Changchun Bengang Steel & Iron Business combination
Changchun Changchun Sales 100.00
Sales Co., Ltd. under common control
Guangzhou Bengang Steel & Iron
Guangzhou Guangzhou Sales 100.00 Establishment
Trading Co., Ltd.
Shanghai Bengang Metallurgy
Shanghai Shanghai Sales 100.00 Establishment
Science and Technology Co., Ltd.
Bengang Steel Plates Liaoyang Pellet
Liaoyang Liaoyang Manufacturing 100.00 Establishment
Co., Ltd.
Dalian Benruitong Automobile
Dalian Dalian Manufacturing 65.00 Establishment
Material Technology Co., Ltd.
Bengang POSCO Cold-rolled Sheet Business combination
Benxi Benxi Manufacturing 75.00
Co., Ltd. under common control
Benxi Bengang Steel Sales Co., Ltd Benxi Benxi Sales 100.00 Establishment
Shenyang Bengang Metallurgical
Shenyang Shenyang Sales 100.00 Establishment
Science and Technology Co., Ltd.
219
Bengang Steel Plates Co., Ltd. Annual Report 2021
Principal Shareholding ratio
Registered Notes of
Name of the subsidiaries place of Acquiring method
address business Direct Indirect
business
Chongqing Liaoben Steel & Iron
Chongqing Chongqing Sales 100.00 Establishment
Trading Co., Ltd.
Bengang Baojin (Shenyang) auto new Business combination
Shenyang Shenyang Manufacturing 85.00
material technology Co., Ltd. under common control
2. Significant but not wholly-owned subsidiaries
Profits and Dividend Ending
Proportion of
losses declared to balance of
non-
Name of the subsidiaries attributing to distribute to non-
controlling
non-controlling non-controlling controlling
interests (%)
shareholders shareholders interests
Bengang POSCO Cold-
25.00 35,782,798.35 541,916,799.24
rolled Sheet Co., Ltd.
3. Financial information of significant but not wholly-owned subsidiaries
20211231
Non-
Name of the
Non-current Current current
subsidiaries Current assets Total assets Total liabilities
assets liabilities liabilitie
s
Bengang POSCO
2,969,950,327.43 1,134,904,732.59 4,104,855,060.02 1,937,187,863.07 1,937,187,863.07
Cold-rolled Sheet
Co., Ltd.
20201231
Non-
Name of the Current Non-current Current
Total assets current Total liabilities
subsidiaries assets assets liabilities
liabilities
Bengang 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
POSCO Cold-
220
Bengang Steel Plates Co., Ltd. Annual Report 2021
20201231
rolled Sheet Co.,
Ltd.
2021
Total Net cash flows
Name of the subsidiaries Operating
Net profit comprehensive from operating
income
income activities
Bengang POSCO Cold-rolled 11,529,193,715.01 143,131,193.39 143,131,193.39 205,955,801.18
Sheet Co., Ltd.
2020
Total
Name of the subsidiaries Operating Net cash flows from
Net profit comprehensiv
income operating activities
e income
Bengang POSCO Cold-rolled 7,327,060,880.66 42,005,550.17 42,005,550.17 301,022,342.34
Sheet Co., Ltd.
4. Significant restrictions on the use of enterprise group assets and the settlement of
enterprise group debts
None.
5. Financial or other support provided to structured entities included in the scope of
consolidated financial statements
None.
(2) The shareholder's equity in the subsidiary has changed and still control the subsidiary's
transactions
The Company does not exist such matters.
(3) Equity in joint venture or associates
1. Important joint ventures and associates
The Company has no important joint ventures or associates
221
Bengang Steel Plates Co., Ltd. Annual Report 2021
2. Summary of financial information of unimportant joint ventures and associates
20211231/2021 20201231/2020
Joint ventures:
Total book value of investment: 2,981,784.07 2,742,064.73
The total amount of the following
items calculated according to the
shareholding ratio
—Net profit 520,432.46 374,119.86
—Other comprehensive income
—Total comprehensive income 520,432.46 374,119.86
3. Explanation on the significant limitation of the ability of the joint venture or associate to
transfer funds to the company
The Company does not exist such matters.
4. Excess losses incurred by joint ventures or associates
The Company does not exist such matters.
5. Unconfirmed commitments related to joint venture investment
The Company does not exist such matters.
6. Contingent liabilities related to joint venture or associate investment
The Company does not exist such matters.
(4) Important joint operations
The Company does not exist such matters.
(5) Equity in structured entities that not included in the scope of consolidated financial
statements
The Company does not exist such matters.
222
Bengang Steel Plates Co., Ltd. Annual Report 2021
8. Risks associated with financial instruments
The company faces various financial risks in its operation: credit risk, market risk and liquidity
risk. The company's board of directors is fully responsible for the determination of risk
management objectives and policies, and assumes ultimate responsibility for the risk
management objectives and policies. However, the board of directors has authorized the
company's planning and development department to design and implement procedures that
ensure the effective implementation of risk management objectives and policies. The board of
directors reviews the effectiveness of the implemented procedures and the rationality of risk
management objectives and policies through reports submitted by the planning and
development department. The company's internal auditors also audit risk management policies
and procedures, and report relevant findings to the audit committee.
The overall goal of the company's risk management is to formulate a risk management policy
that minimizes risks without excessively affecting the company's competitiveness and resilience.
(1) Credit risk
Credit risk refers to a financial loss to a party due to failure to discharge an obligation by the
counterparties. The Company is exposed to credit risk arising from customers’ failure to
discharge an obligation in sales on credit. Before signing a new contract, the company will
assess the credit risk of new customers, including external credit ratings and bank credit
certificates in certain cases (when this information is available). The company has set a credit
limit for each customer, which is the maximum amount that does not require additional approval.
The Company ensures that the company's overall credit risk is within a controllable range
through regular monitoring of existing customers' credit ratings and periodic review of aging
analysis of accounts receivable. In addition, the Company strictly approves the line of credit,
and only sells on credit to important customers for newly-developed products. In the monitoring
of credit risk of customers, the Company sorts customers into groups by their credit
characteristics. Those customers which are rated as “high risk” will be put in the restricted client
list. The Company can only sell to these customers on credit with additional approval; otherwise,
the Company must ask for a corresponding deposit in advance.
(2) Liquidity risk
Liquidity risk refers to the risk of a shortage of funds when an enterprise fulfills its obligation
to settle by delivering cash or other financial assets. It is the Company's policy to ensure that
sufficient cash is available to meet debt obligations as they fall due. Liquidity risk is centrally
controlled by the Company's financial department. The finance department ensures that the
company has sufficient funds to repay its debts under all reasonable forecasts by monitoring
223
Bengang Steel Plates Co., Ltd. Annual Report 2021
unrestricted monetary fund balances, bank acceptance bills that will be realized when due, and
rolling forecasts of cash flows for the next 12 months.
The following table sets forth the remaining contractual maturity dates of the Company's non-
derivative financial liabilities that should be repaid in accordance with the terms of the
agreement. The table has been prepared based on the undiscounted cash flows of financial
liabilities based on the earliest date on which the Company can be required to pay. Cash flow
including interest and principal:
(In 10 thousand Yuan)
20211231
Items Instant Over 5
Within 1 year 1-2years 2-5years Total
repayment years
Trade and other payables 1,133,538.18 1,133,538.18
Borrowing and Interest 441,115.83 226,971.68 832,756.07 1,500,843.58
Total 1,574,654.01 226,971.68 832,756.07 2,634,381.76
20201231
Items Instant Over 5
Within 1 year 1-2years 2-5years Total
repayment years
Trade and other payables 1,643,593.66 111,423.24 1,755,016.90
Borrowing and Interest 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
(3) 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.
224
Bengang Steel Plates Co., Ltd. Annual Report 2021
2. Currency risk
Currency risk refers to fluctuations of fair value or future cash flows due to exchange rate
changes. The Company has been constantly working on the adjustment of the organizational
framework of risk management and optimization of debt structures to lower the currency risk.
The currency risk facing the Company originates from the assets and liabilities measured by
US dollars, Euro, Hongkong dollars and Japanese Yen. The ending balance of the assets and
liabilities after converted in RMB is shown as below:
(In 10 thousand Yuan)
20211231
Items
USD Others Total
Assets 1,795.12 397.56 2,192.68
Liabilities 68,060.60 34,900.31 102,960.91
Total 69,855.72 35,297.87 105,153.59
20201231
Items
USD Others Total
Assets 46,968.50 63.75 47,032.25
Liabilities 134,771.81 38,819.77 173,591.58
Total 181,740.31 38,883.52 220,623.83
On December 31, 2021, with all other variables held constant, if the relevant currency
appreciates or depreciates against RMB by 5%, the company will decrease or increase the net
profit of RMB 3,778.81 in 10 thousand (On December 31, 2020: RMB 4,745.98 in 10 thousand).
Management believes that 5% reasonably reflects the reasonable range of possible currency-to-
renminbi changes in the next year.
9. Disclosure of fair value
The input value used in fair value measurement is divided into three levels:
The input value of the first level is the unadjusted quotation of the same asset or liability that
can be obtained on the measurement date in an active market.
The input value of the second level is the input value of the related assets or liabilities that is
directly or indirectly observable except the input value of the first level.
The third level of input value is the unobservable input value of related assets or liabilities.
The level to which the fair value measurement result belongs is determined by the lowest level
to which the input value that is important to the fair value measurement as a whole belongs.
(1) Fair value of assets and liabilities measured at fair value
225
Bengang Steel Plates Co., Ltd. Annual Report 2021
Fair value at the end of the period
Fair Fair
value value Fair value
Item
measureme measureme measurement in the Total
nt in the nt in the third level
first level second 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
(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
226
Bengang Steel Plates Co., Ltd. Annual Report 2021
Fair value at the end of the period
Fair Fair
value value Fair value
Item
measureme measureme measurement in the Total
nt in the nt in the third level
first level second level
and loss
(1)
Investment in
debt
instruments
(2)
Others
◆
Accounts 1,530,735,647. 1,530,735,647.
receivable 38 38
financing
◆
Other debt
investments
◆
Investment in 1,042,024,829. 1,042,024,829.
other equity 00 00
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
227
Bengang Steel Plates Co., Ltd. Annual Report 2021
Fair value at the end of the period
Fair Fair
value value Fair value
Item
measureme measureme measurement in the Total
nt in the nt in the third level
first level second level
instruments
(c)
Derivative
financial assets
(d)
Others
(2)
Designated as a
financial asset
measured at
fair value and
its changes are
included in the
current profit
and loss
(a)
Investment in
debt
instruments
(b) Others
Total
assets
2,572,760,476. 2,572,760,476.
continuously
38 38
measured at
fair value
◆
Financial
liabilities held
for trading
Including:
Issued
trading bonds
Derivati
ve financial
liabilities
Others
228
Bengang Steel Plates Co., Ltd. Annual Report 2021
Fair value at the end of the period
Fair Fair
value value Fair value
Item
measureme measureme measurement in the Total
nt in the nt in the third level
first level second level
◆
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
continuously
at fair value
229
Bengang Steel Plates Co., Ltd. Annual Report 2021
(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
Other equity instrument investments that are continuously measured at level 3 fair value are
unlisted equity investments held by the Company. Receivable financing with continuous third-
level fair value measurement is the bank acceptance bill held by the company, and its fair value
is confirmed with reference to the par value.
The Company adopted valuation techniques for fair value measurement, mainly using the
valuation technique of the listed company comparison method, referring to the stock prices of
similar securities and taking into account liquidity discounts.
(5) For continuous fair value measurement projects, where conversion between various levels
occurs during the period, the reason for the conversion and the policy for determining the
timing of conversion
During the current period, there was no conversion between various levels.
(6) Changes in valuation techniques and reasons for changes during the period
No changes during the period.
(7) Fair value of financial assets and financial liabilities not measured at fair value
No
10. Related party transactions
(1) Details of parent company
Registered Share Voting
Name of parent Place of Notes of
Capital proportion rights
company Registry Business
（billion） (%) (%)
230
Bengang Steel Plates Co., Ltd. Annual Report 2021
Benxi Steel & Iron Benxi,
Manufacturing 6.292 58.65 58.65
(Group) Co., Ltd. Liaoning
Note:
The ultimate controlling party of the Company is Ansteel Group Co., Ltd.
(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
For details of significant joint ventures and associates of the company please refer to Note 7
“Equity in other entities”.
Other joint ventures or associates that have related party transactions with the company in the
current period, or have related party transactions with the company in the previous period and
formed a balance are as follows:
Name of joint ventures and associates Relationship
Zhejiang Bengang Jingrui Steel Processing
Associate
Co., Ltd.
(4) Details of other related parties
Name of other related parties Relationship
Bengang Group Co., Ltd. (hereinafter Parent company &controlling
referred to as “Bengang Group”) shareholder
Benxi Steel Stainless Steel Cold Rolling
same parent company
Dandong Co., Ltd.
Benxi Iron and Steel (Group) Mining
same parent company
Co., Ltd.
Benxi Iron and Steel (Group)
same parent company
Metallurgical Slag Co., Ltd.
Benxi Iron and Steel (Group) Steel
same parent company
Processing and Distribution Co., Ltd.
Benxi Iron and Steel (Group) Real Estate
same parent company
Development Co., Ltd.
Benxi Iron and Steel (Group) Machinery
same parent company
Manufacturing Co., Ltd.
Benxi Iron and Steel (Group)
same parent company
Construction Co., Ltd.
231
Bengang Steel Plates Co., Ltd. Annual Report 2021
Name of other related parties Relationship
Benxi Iron and Steel (Group) Industrial
same parent company
Development Co., Ltd.
Benxi Iron and Steel (Group)
same parent company
Construction Co., Ltd.
Associates of the parent
Bengang Electric Co., Ltd.
company
Benxi High-tech Drilling Tools Both belong to Bengang
Manufacturing Co., Ltd. Group
Benxi New Business Development Co.,
same parent company
Ltd.
Liaoning Metallurgical Technician
same parent company
College
Liaoning Metallurgical Vocational and
same parent company
Technical College
Benxi Iron and Steel Group International Both belong to Bengang
Economic and Trade Co., Ltd. Group
Benxi Iron and Steel (Group)
same parent company
Information Automation Co., Ltd.
Benxi Iron and Steel (Group) Thermal
same parent company
Development Co., Ltd.
Benxi Iron and Steel (Group) Design and
same parent company
Research Institute
Benxi Beiying Iron and Steel (Group) Both belong to Bengang
Co., Ltd. Group
Liaoning Hengtong Metallurgical
same parent company
Equipment Manufacturing Co., Ltd.
Liaoning Hengtai Heavy Machinery Co.,
same parent company
Ltd.
Angang Electric Co., Ltd. Both belong to Ansteel Group
Ansteel Scrap Resources (Anshan) Co.,
Both belong to Ansteel Group
Ltd.
Chaoyang Branch of Ansteel Scrap
Both belong to Ansteel Group
Resources (Anshan) Co., Ltd.
Angang Steel Rope Co., Ltd. Both belong to Ansteel Group
Ansteel Group Engineering Technology
Both belong to Ansteel Group
Co., Ltd.
Ansteel Group International Economic
Both belong to Ansteel Group
and Trade Co., Ltd.
Ansteel Construction Group Co., Ltd. Both belong to Ansteel Group
Ansteel Industrial Group Metallurgical
Both belong to Ansteel Group
Machinery Co., Ltd.
Ansteel Steel Processing and Both belong to Ansteel Group
232
Bengang Steel Plates Co., Ltd. Annual Report 2021
Name of other related parties Relationship
Distribution (Dalian) Co., Ltd.
Ansteel Group Engineering Technology
Both belong to Ansteel Group
Development Co., Ltd.
Dalian Boroller Steel Pipe Co., Ltd. Same parent company
Liaoning Benxi Iron and Steel Trading
Same parent company
Co., Ltd.
Benxi Iron and Steel (Group) Chint
Same parent company
Building Materials Co., Ltd.
Suzhou Bengang Industrial Co., Ltd. Shareholding company
Benxi Iron and Steel Group Finance Co., Both belong to Bengang
Ltd. Group
Ansteel Chemical Technology Co., Ltd. Both belong to Ansteel Group
Ansteel Energy Technology Co., Ltd. Both belong to Ansteel Group
Panzhong Yihong Metal Products
Both belong to Ansteel Group
(Chongqing) Co., Ltd.
Delin Land Port Supply Chain Service
Both belong to Ansteel Group
Co., Ltd.
Both belong to Bengang
Benxi Iron and Steel Tendering Co., Ltd.
Group
Anshan Iron and Steel Co., Ltd. Both belong to Ansteel Group
Liaoning Hengyi Financial Leasing Co., Both belong to Bengang
Ltd. Group
Ansteel Group Finance Co., Ltd. Both belong to Ansteel Group
Ansteel Scrap Resources (Anshan) Co.,
Both belong to Ansteel Group
Ltd.
Ansteel Heavy Machinery Co., Ltd. Both belong to Ansteel Group
Ansteel Mining Machinery
Both belong to Ansteel Group
Manufacturing Co., Ltd.
Benxi Iron and Steel (Group)
Same parent company
Engineering Construction Supervision Co., Ltd.
Tianjin Angang Steel Processing and
Both belong to Ansteel Group
Distribution Co., Ltd.
Guangzhou Free Trade Zone Benxi Steel
Same parent company
Sales Co., Ltd.
(5) Related Party Transactions
1. Related party transactions of purchasing goods and services
Company as the purchaser
(In 10 thousand Yuan)
233
Bengang Steel Plates Co., Ltd. Annual Report 2021
The content of related
Name 2021 2020
party transactions
Benxi Steel & Iron (Group) Co., Ltd. Repair expense 30,456.09 30,206.47
Raw material and
Benxi Steel & Iron (Group) Co., Ltd. 18.13 2,121.13
supplementary material
Bengang Cold-rolled Stainless Steel Dandong Co., Ltd. Products 83.10 22.39
Benxi Steel & Iron (Group) Mining Co., Ltd. Labor cost 3,882.38 3,213.23
Raw material and
Benxi Steel & Iron (Group) Mining Co., Ltd. 789,791.14 514,193.50
supplementary material
Benxi Steel & Iron (Group) Mining Co., Ltd. Freight 1,227.47
Benxi Steel & Iron (Group) Metallurgy Residues Co., Raw material and
48,914.81 34,303.84
Ltd. supplementary material
Benxi Steel & Iron (Group) Steel & Iron Process and
Processing fee 9.75 63.22
Logistics Co., Ltd.
Benxi Steel & Iron (Group) Machinery Manufacture
Spare parts 7,430.24 5,984.04
Co., Ltd.
Benxi Steel & Iron (Group) Machinery Manufacture
Repair services 7,183.49 2,773.62
Co., Ltd.
Benxi Steel & Iron (Group) Construction Co., Ltd. Spare parts 2,177.72 1,624.97
Benxi Steel & Iron (Group) Construction Co., Ltd. Project fee 34,708.50 20,274.33
Benxi Steel & Iron (Group) Construction Co., Ltd. Repair services 27,810.40 18,022.98
Raw material and
Benxi Steel & Iron (Group) Construction Co., Ltd. 1,609.79 1,241.22
supplementary material
Benxi Steel & Iron (Group) Construction Co., Ltd. Freight 414.09 51.39
Benxi Steel & Iron (Group) Industrial Development Raw material and
19,531.75 21,095.06
Co., Ltd. supplementary material
Benxi Steel & Iron (Group) Industrial Development
Repair services 1,489.90 1,537.66
Co., Ltd.
Benxi Steel & Iron (Group) Industrial Development
Freight 118.49
Co., Ltd.
Benxi Steel & Iron (Group) Industrial Development
Project fee 141.29 107.01
Co., Ltd.
234
Bengang Steel Plates Co., Ltd. Annual Report 2021
The content of related
Name 2021 2020
party transactions
Raw material &
Benxi Steel & Iron (Group) Construction and
supplementary 314.15 228.18
Repairing Co., Ltd.
materials & spare parts
Benxi Steel & Iron (Group) Construction and
Project fee 1,222.33 1,911.38
Repairing Co., Ltd.
Benxi Steel & Iron (Group) Construction and
Repair expense 17,249.62 17,475.94
Repairing Co., Ltd.
Raw material and
Bengang Electronics and Gas Co., Ltd. 14,466.12 13,856.30
supplementary material
Bengang Electronics and Gas Co., Ltd. Repair services 3,076.64 3,063.31
Benxi High-tech Drilling Tools Manufacture Co., Ltd. Spare parts 35.50 39.00
Benxi New Career Development Co., Ltd. Repair services 22.74
Raw material and
Benxi New Career Development Co., Ltd. supplementary material 599.56 1,028.90
and food
Liaoning Metallurgy Technician College Spare parts 0.32 933.26
Liaoning Metallurgy Vocational Technical College Repair services 2,084.82 648.24
Bengang Group International Economic and Trading Raw material and
1,683,663.51 508,961.39
Co., Ltd. supplementary material
Bengang Group International Economic and Trading
Agency fee 7,140.12 5,531.64
Co., Ltd.
Bengang Group International Economic and Trading
Port surcharges 40,115.06 9,279.98
Co., Ltd.
Benxi Steel & Iron (Group) Information and Automatic
Spare parts 238.24 850.35
Tech Co., Ltd.
Benxi Steel & Iron (Group) Information and Automatic
Project fee 773.19 1,121.38
Tech Co., Ltd.
Benxi Steel & Iron (Group) Information and Automatic
Repair services 5,828.89 1,732.50
Tech Co., Ltd.
Benxi Steel & Iron (Group) Thermal Power
Heating costs 193.57 119.00
Development Co., Ltd.
235
Bengang Steel Plates Co., Ltd. Annual Report 2021
The content of related
Name 2021 2020
party transactions
Benxi Steel & Iron (Group) Thermal Power Raw material and
431.58 71.04
Development Co., Ltd. supplementary material
Benxi Steel & Iron (Group) Designing Institute Design fees 37.08 125.98
Raw material and
Benxi Beiying Steel & Iron (Group) Co., Ltd. 341,396.62 492,390.02
supplementary material
Benxi Beiying Steel & Iron (Group) Co., Ltd. Energy & Power 57,415.98 46,589.86
Benxi Beiying Steel & Iron (Group) Co., Ltd. Freight 503.57 407.53
Benxi Beiying Steel & Iron (Group) Co., Ltd. Labor cost 8,366.92 7,190.62
Benxi Beiying Steel & Iron (Group) Co., Ltd. Spare parts 1,609.04 1,710.81
Benxi Beiying Steel & Iron (Group) Co., Ltd. Agency fee 240.64
Liaoning Hengtong Metallurgical Equipment Raw material and spare
6,772.47 8,336.02
Manufacture Co., Ltd. parts
Liaoning Hengtong Metallurgical Equipment
Repair services 921.44 661.14
Manufacture Co., Ltd.
Raw material and spare
Liaoning Hengtai Heavy Machinery Co., Ltd. 177.97 138.59
parts
Liaoning Hengtai Heavy Machinery Co., Ltd. Repair and labor cost 2,565.27 716.99
Bengang Group Co., Ltd. Labor cost 10,326.61 18,876.38
Angang Electric Co., Ltd. Repair labor 109.00
Ansteel Scrap Resources (Anshan) Co., Ltd. Raw materials 1,066.43
Chaoyang Branch of Ansteel Scrap Resources
Raw materials 605.20
(Anshan) Co., Ltd.
Angang Steel Rope Co., Ltd. Raw materials 1.64
Ansteel Group Engineering Technology Co., Ltd. Project costs 415.65
Ansteel Group International Economic and Trade Co.,
Raw materials 15,892.03
Ltd.
Ansteel Construction Group Co., Ltd. Project costs 138.00
Ansteel Industrial Group Metallurgical Machinery Co.,
Repair labor 62.12
Ltd.
Ansteel Steel Processing and Distribution (Dalian) Co.,
labor fee 1.23
Ltd.
236
Bengang Steel Plates Co., Ltd. Annual Report 2021
The content of related
Name 2021 2020
party transactions
Ansteel Group Engineering Technology Development
Project costs 6.64
Co., Ltd.
Company as the seller
(In 10 thousand Yuan)
The content of related
Name 2021 2020
party transactions
Bengang Electronics and Gas Co., Ltd. Energy & Power 94.22 72.4
Raw material &
Benxi Beiying Steel & Iron (Group) Co., Ltd. supplementary materials 536,149.62 138,409.84
& spare parts
Benxi Beiying Steel & Iron (Group) Co., Ltd. Products 3,228.67 2,150.96
Benxi Beiying Steel & Iron (Group) Co., Ltd. Energy & Power 19,099.40 22,602.26
Benxi Steel & Iron (Group) Real-estate
Energy & Power 3.68 8.65
Development Co., Ltd.
Benxi Steel & Iron (Group) Steel & Iron
Energy & Power 0.46 25.88
Process and Logistics Co., Ltd.
Benxi Steel & Iron (Group) Machinery
Products 2,699.73 1,898.85
Manufacture Co., Ltd.
Benxi Steel & Iron (Group) Machinery
Energy & Power 2,213.00 2,088.72
Manufacture Co., Ltd.
Raw material &
Benxi Steel & Iron (Group) Machinery
supplementary materials 112.95 338.56
Manufacture Co., Ltd.
& spare parts
Benxi Steel & Iron (Group) Construction Co.,
Energy & Power 783.21 699.16
Ltd.
Raw material &
Benxi Steel & Iron (Group) Construction Co.,
supplementary materials 16,451.31 6,452.06
Ltd.
& spare parts
Benxi Steel & Iron (Group) Mining Co., Ltd. Energy & Power 71,376.36 62,020.89
237
Bengang Steel Plates Co., Ltd. Annual Report 2021
The content of related
Name 2021 2020
party transactions
Raw material &
Benxi Steel & Iron (Group) Mining Co., Ltd. supplementary materials 11,481.75 9,678.23
& spare parts
Benxi Steel & Iron (Group) Mining Co., Ltd. Freight revenue 963.50 743.9
Benxi Steel & Iron (Group) Mining Co., Ltd. Products 955.33 1,107.48
Benxi Steel & Iron (Group) Thermal Power
Energy & Power 4,649.93 2,995.62
Development Co., Ltd.
Raw material &
Benxi Steel & Iron (Group) Thermal Power
supplementary materials 3,595.84 1,750.62
Development Co., Ltd.
& spare parts
Benxi Steel & Iron (Group) Industrial
Energy & Power 972.98 824.47
Development Co., Ltd.
Benxi Steel & Iron (Group) Industrial
Products 2,506.43 3.97
Development Co., Ltd.
Raw material &
Benxi Steel & Iron (Group) Industrial
supplementary materials 1,206.92 1,914.44
Development Co., Ltd.
& spare parts
Benxi Steel & Iron (Group) Information and
Energy & Power 12.73 14.64
Automatic Tech Co., Ltd.
Benxi Steel & Iron (Group) Construction and
Energy & Power 123.95 125.15
Repairing Co., Ltd.
Raw material &
Benxi Steel & Iron (Group) Construction and
supplementary materials 346.39 368.03
Repairing Co., Ltd.
& spare parts
Benxi Steel & Iron (Group) Metallurgy
Energy & Power 565.72 659.84
Residues Co., Ltd.
Raw material &
Benxi Steel & Iron (Group) Metallurgy
supplementary materials 48,920.96 26,839.91
Residues Co., Ltd.
& spare parts
Benxi Steel & Iron (Group) Metallurgy 3,047.73 423.53
Products
Residues Co., Ltd.
Benxi Steel & Iron (Group) Co., Ltd. Energy & Power 241.94 205.47
238
Bengang Steel Plates Co., Ltd. Annual Report 2021
The content of related
Name 2021 2020
party transactions
Raw material &
Benxi Steel & Iron (Group) Co., Ltd. supplementary materials 599.48 1,013.53
& spare parts
Benxi New Career Development Co., Ltd. Energy & Power 22.43 38.37
Dalian Boluole Steel Tube Co., Ltd. Products 1,381.92 1,136.33
Benxi Steel & Iron (Group) Zhengtai
Energy & Power 2.16
Construction Materials Co., Ltd.
Liaoning Hengtong Metallurgical Equipment 0.03
Energy & Power
Manufacture Co., Ltd.
Raw material &
Liaoning Hengtong Metallurgical Equipment
supplementary materials 302.02 731.86
Manufacture Co., Ltd.
& spare parts
Liaoning Hengtong Metallurgical Equipment
Products 2,591.91 908.89
Manufacture Co., Ltd.
Raw material &
Bengang Cold-rolled Stainless Steel Dandong
supplementary materials
Co., Ltd.
& spare parts
Bengang Cold-rolled Stainless Steel Dandong
Products 295.41 2,716.09
Co., Ltd.
Suzhou Bengang Industrial Co., Ltd. Products 66,835.91 49,983.82
Bengang Group Finance Co., Ltd. Energy & Power 1.39 1.3
Bengang Group Co., Ltd. Energy & Power 12.45 7.33
Raw material &
Bengang Group Co., Ltd. supplementary materials 1,282.08 1,539.32
& spare parts
Bengang Group Co., Ltd. labor fee 7,542.32
Bengang Group Co., Ltd. products 12,781.64
Liaoning Hengtai Heavy Machinery Co., Ltd. products 38.97 29.54
Ansteel Chemical Technology Co., Ltd. commodity 1,032.80
Ansteel Energy Technology Co., Ltd. Raw materials and
79.62
spare parts
Angang Electric Co., Ltd. energy power 0.01
239
Bengang Steel Plates Co., Ltd. Annual Report 2021
The content of related
Name 2021 2020
party transactions
Panzhong Yihong Metal Products commodity
806.99
(Chongqing) Co., Ltd.
Delin Land Port Supply Chain Service Co., commodity
9,987.26
Ltd.
Benxi Iron and Steel Tendering Co., Ltd. Raw materials and
10.80
spare parts
2. Lease information of related parties
Company as the lessor
Currency unit: Yuan
Lease capital Lease income Lease income
Lessee
category of 2021 of 2020
Benxi Steel & Iron (Group) Steel & Warehouse and 500,000.00
Iron Process and Logistics Co., Ltd. ancillary facilities
Benxi Iron and Steel Tendering Co., Plants and ancillary 480,000.00
Ltd. facilities
240
Bengang Steel Plates Co., Ltd. Annual Report 2021
Company as the lessee
Currency unit: Yuan
Rental expense for Rent
short-term leases paid
and leases of low-
Interest
value assets and
Increased right-of-use expense on
Lessor Lease capital category variable lease Rental fee of 2020
assets of 2021 lease liability of
payments not
2021
included in the
measurement of
lease liabilities
Land use right
Benxi Steel & Iron 7,669,068.17 square meter.
1,060,272,624.21 39,600,209.28 57,383,355.31
(Group) Co., Ltd Land use right
42,920.00 square meter
Benxi Steel & Iron 2300 Hot rolling product
208,155,611.73 7,982,648.96 16,711,424.34
(Group) Co., Ltd line, related real estate
241
Bengang Steel Plates Co., Ltd. Annual Report 2021
Benxi Beiying Steel
1780 Hot rolling product
& Iron (Group) Co., 160,309,755.83 6,147,787.68 15,578,677.65
line, related real estate
Ltd.
Bengang Group Land use right
72,001,790.96 2,666,923.92 9,945,423.08
Co., Ltd. 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 (Group)on
April 7, 1997, December 30, 2005 and subsequent, the Company leases land from Benxi Steel (Group), with a monthly rent of 0.594 yuan per square meter. The
leased land is 7,669,068.17 square meters and the annual rent is 54,665.10 thousand yuan.
2. On August 14, 2019, the Company signed the "House Lease Agreement" with Benxi Steel (Group) and Beiying Iron and Steel Company, and leased the houses
and auxiliary facilities occupied by the 2300 hot rolling mill production line and the 1780 hot rolling mill production line. The lease term of the houses and ancillary
facilities is until December 31, 2038.
3. On July 15, 2019, the Company signed "Land Lease Agreement" with Bengang Group and Bengang Steel (Group) respectively, leased and used a total of 8
pieces of land from Bengang Group and Bengang Group Company, with leased areas of 42,920.00 square meters and 728,282.30 square meters. The lease term is
20 years, the rental price is 1.138 yuan per square meter per month.
242
Bengang Steel Plates Co., Ltd. Annual Report 2021
3. Information of Guarantee among related parties
Company as a guarantor:
None
Company as the warrantee
Starting date Ending date of Has the guarantee
Warrantor Amount of guarantee
of Guarantee Guarantee been fulfilled
Benxi Iron and
Steel Group Co.,
Ltd., Benxi Iron CNY 588,000,000.00 2021/9/30 2022/9/15 not fulfilled
and Steel (Group)
Co., Ltd.
Benxi Iron and
Steel Group Co.,
Ltd., Benxi Iron CNY 200,000,000.00 2021/10/15 2022/10/14 not fulfilled
and Steel (Group)
Co., Ltd.
Benxi Iron and
Steel Group Co.,
Ltd., Benxi Iron CNY 200,000,000.00 2021/10/21 2022/10/20 not fulfilled
and Steel (Group)
Co., Ltd.
Benxi Iron and
Steel Group Co.,
Ltd., Benxi Iron CNY 200,000,000.00 2021/10/20 2022/10/19 not fulfilled
and Steel (Group)
Co., Ltd.
Benxi Iron and
Steel Group Co., CNY 420,000,000.00 2021/11/29 2022/11/29 not fulfilled
Ltd.
Benxi Iron and
Steel Group Co., CNY 200,000,000.00 2021/12/3 2022/12/3 not fulfilled
Ltd.
243
Bengang Steel Plates Co., Ltd. Annual Report 2021
Starting date Ending date of Has the guarantee
Warrantor Amount of guarantee
of Guarantee Guarantee been fulfilled
Benxi Iron and
Steel Group Co., CNY 490,000,000.00 2021/12/30 2022/12/30 not fulfilled
Ltd.
Benxi Iron and
Steel Group Co., CNY 250,000,000.00 2021/12/30 2022/12/30 not fulfilled
Ltd.
Benxi Iron and
Steel Group Co., USD 90,000,000.00 2021/2/1 2022/2/19 not fulfilled
Ltd.
Benxi Iron and
Steel Group Co., USD 200,000.00 2021/7/30 2022/7/31 not fulfilled
Ltd.
Benxi Iron and
Steel Group Co., CNY 11,700,000.00 2015/3/26 2022/3/21 not fulfilled
Ltd.
Benxi Iron and
Steel Group Co., CNY 76,200,000.00 2016/12/27 2024/6/21 not fulfilled
Ltd.
Benxi Iron and
Steel Group Co.,
Ltd., Benxi Iron CNY 60,000,000.00 2016/3/30 2025/3/20 not fulfilled
and Steel (Group)
Co., Ltd.
Benxi Iron and
Steel Group Co.,
Ltd., Benxi Iron CNY 340,000,000.00 2017/2/27 2025/2/20 not fulfilled
and Steel (Group)
Co., Ltd.
Benxi Iron and
Steel Group Co., EUR 4,686,195.91 2015/3/12 2025/9/30 not fulfilled
Ltd.
244
Bengang Steel Plates Co., Ltd. Annual Report 2021
Starting date Ending date of Has the guarantee
Warrantor Amount of guarantee
of Guarantee Guarantee been fulfilled
Benxi Iron and
Steel Group Co., EUR 8,356,120.03 2015/3/12 2026/4/30 not fulfilled
Ltd.
Benxi Iron and
Steel Group Co., EUR 9,309,597.54 2015/3/12 2025/10/30 not fulfilled
Ltd.
Benxi Iron and
Steel Group Co., EUR 7,938,531.19 2015/3/12 2025/6/30 not fulfilled
Ltd.
Benxi Iron and
Steel Group Co., EUR 7,344,572.64 2015/3/12 2025/8/29 not fulfilled
Ltd.
Benxi Iron and
Steel Group Co., USD 11,850,000.00 2016/12/27 2024/6/21 not fulfilled
Ltd.
Benxi Iron and
Steel Group Co., JPY 139,056,000.00 1999/10/10 2027/9/10 not fulfilled
Ltd.
Benxi Iron and
Steel Group Co., CNY 100,000,000.00 2021/2/1 2022/2/1 not fulfilled
Ltd.
Benxi Iron and
Steel Group Co.,
Ltd., Benxi Iron CNY 200,000,000.00 2021/7/9 2022/7/8 not fulfilled
and Steel (Group)
Co., Ltd.
Benxi Iron and
Steel Group Co.,
Ltd., Benxi Iron CNY 200,000,000.00 2021/7/13 2022/7/12 not fulfilled
and Steel (Group)
Co., Ltd.
245
Bengang Steel Plates Co., Ltd. Annual Report 2021
Starting date Ending date of Has the guarantee
Warrantor Amount of guarantee
of Guarantee Guarantee been fulfilled
Benxi Iron and
Steel Group Co.,
Ltd., Benxi Iron CNY 200,000,000.00 2021/10/13 2022/8/10 not fulfilled
and Steel (Group)
Co., Ltd.
4. Remuneration of key management personnel
(In 10 thousand Yuan)
Name 2021 2020
Remuneration of key management
322.09 309.04
personnel
5. Receivables and payables of the related parties
1、Receivables of the Company
(In 10 thousand yuan)
20211231 20201231
Provision Provision
Items Name Carrying Carrying
for bad for bad
amount amount
debts debts
Notes Benxi Beiying Iron and Steel
114,601.96 230,217.55
receivable (Group) Co., Ltd.
Notes Benxi Iron and Steel (Group)
690.65
receivable Mining Co., Ltd.
Notes Benxi Steel & Iron (Group)
81.99
receivable Co., Ltd.
Notes Suzhou Bengang Industrial Co.,
658.00
receivable Ltd.
Receivables Benxi Beiying Steel & Iron
230.00
Financing (Group) Co., Ltd.
Receivables Benxi Iron and Steel (Group)
50.00
Financing Co., Ltd.
246
Bengang Steel Plates Co., Ltd. Annual Report 2021
20211231 20201231
Provision Provision
Items Name Carrying Carrying
for bad for bad
amount amount
debts debts
Accounts Benxi Iron and Steel Group
receivable International Economic and 3,077.79 30.78 10,463.45 104.63
Trade Co., Ltd.
Accounts Benxi Iron and Steel (Group)
700.71 7.01 2,692.94 26.93
receivable Thermal Development Co., Ltd.
Accounts Benxi Steel Stainless Steel Cold
188.46 1.88
receivable Rolling Dandong Co., Ltd.
Accounts Benxi Iron and Steel (Group)
0.10
receivable Metallurgical Slag Co., Ltd.
Benxi Iron and Steel Group
Prepayments International Economic and 56,208.31 114,662.12
Trade Co., Ltd.
Benxi Iron and Steel (Group)
Prepayments Machinery Manufacturing Co., 4,676.44 6,470.61
Ltd.
Benxi New Business
Prepayments 252.52
Development Co., Ltd.
Liaoning Hengtong
Prepayments Metallurgical Equipment 36.50
Manufacturing Co., Ltd.
Benxi Iron and Steel (Group)
Other
Real Estate Development Co., 279.90 258.56 278.31 253.84
receivables
Ltd.
Other Benxi Iron and Steel Group Co.,
140.35
receivables Ltd.
Other Benxi Iron and Steel Tendering
60.20 0.60
receivables Co., Ltd.
Other
Anshan Iron and Steel Co., Ltd. 42.11 42.11
receivables
247
Bengang Steel Plates Co., Ltd. Annual Report 2021
20211231 20201231
Provision Provision
Items Name Carrying Carrying
for bad for bad
amount amount
debts debts
Benxi Iron and Steel (Group)
Other
Chint Building Materials Co., 27.05 21.12 27.05 19.96
receivables
Ltd.
Other Liaoning Metallurgical
5.80 5.80 5.80 5.80
receivables Technician College
Benxi Iron and Steel Group
Other non-
International Economic and 601.21
current assets
Trade Co., Ltd.
Other Ansteel Construction Group Co.,
922.21
receivables Ltd.
Other non- Liaoning Hengyi Financial
86,459.06
current assets Leasing Co., Ltd.
2、 Payables of the Company
(In 10 thousand yuan)
Items Name 2021.12.31 2020.12.31
Benxi Iron and Steel Group
Notes payable International Economic and Trade Co., 259,100.00 345,103.76
Ltd.
Benxi Iron and Steel (Group) Industrial
Notes payable 2,732.32 5,253.76
Development Co., Ltd.
Liaoning Metallurgical Vocational and
Notes payable 289.19 47.90
Technical College
Benxi Iron and Steel (Group)
Notes payable 244.15
Construction Co., Ltd.
Liaoning Metallurgical Technician
Notes payable 108.72 133.27
College
Ansteel Industrial Group Metallurgical
Notes payable 61.63
Machinery Co., Ltd.
248
Bengang Steel Plates Co., Ltd. Annual Report 2021
Items Name 2021.12.31 2020.12.31
Liaoning Hengtai Heavy Machinery
Notes payable 53.26 84.78
Co., Ltd.
Notes payable Bengang Electric Co., Ltd. 37.13 6,414.33
Liaoning Hengtong Metallurgical
Notes payable 6.37 868.28
Equipment Manufacturing Co., Ltd.
Benxi Iron and Steel (Group) Mining
Notes payable 3.09 91,857.00
Co., Ltd.
Benxi Iron and Steel (Group)
Notes payable 1.55 255.94
Machinery Manufacturing Co., Ltd.
Liaoning Hengyi Financial Leasing Co.,
Notes payable 4,602.43
Ltd.
Benxi Steel & Iron (Group)
Notes payable 16.62
Metallurgy Residues Co., Ltd.
Benxi Iron and Steel (Group) Mining
Accounts payable 22,793.08 20,807.68
Co., Ltd.
Liaoning Hengyi Financial Leasing Co.,
Accounts payable 24,364.64 5,799.10
Ltd.
Benxi Iron and Steel (Group)
Accounts payable 17,733.28 5,182.75
Construction Co., Ltd.
Benxi Iron and Steel (Group)
Accounts payable 12,738.21 2,394.63
Construction Co., Ltd.
Benxi Beiying Iron and Steel (Group)
Accounts payable 15,853.11 3,172.95
Co., Ltd.
Benxi Iron and Steel (Group)
Accounts payable 8,511.25 1,645.14
Metallurgical Slag Co., Ltd.
Benxi Iron and Steel (Group) Industrial
Accounts payable 6,550.57 385.20
Development Co., Ltd.
Benxi Iron and Steel (Group)
Accounts payable 6,447.06 1,852.50
Information Automation Co., Ltd.
Accounts payable Bengang Electric Co., Ltd. 1,862.72 1,500.74
Liaoning Hengtai Heavy Machinery
Accounts payable 1,736.69 2,171.25
Co., Ltd.
Accounts payable Benxi Iron and Steel Group Co., Ltd. 1,626.00 1,246.38
249
Bengang Steel Plates Co., Ltd. Annual Report 2021
Items Name 2021.12.31 2020.12.31
Benxi Iron and Steel Group
Accounts payable International Economic and Trade Co., 1,168.49 579.53
Ltd.
Liaoning Metallurgical Technician
Accounts payable 1,129.01 1,388.84
College
Benxi Iron and Steel (Group)
Accounts payable 686.96 964.33
Machinery Manufacturing Co., Ltd.
Benxi Steel Stainless Steel Cold
Accounts payable 610.83 616.72
Rolling Dandong Co., Ltd.
Ansteel Scrap Resources (Anshan) Co.,
Accounts payable 425.75
Ltd.
Liaoning Metallurgical Vocational and
Accounts payable 350.93 746.81
Technical College
Liaoning Hengtong Metallurgical
Accounts payable 252.71 1,297.91
Equipment Manufacturing Co., Ltd.
Benxi Iron and Steel (Group) Thermal
Accounts payable 243.04 178.73
Development Co., Ltd.
Accounts payable Ansteel Heavy Machinery Co., Ltd. 157.25
Accounts payable Angang Electric Co., Ltd. 123.17
Ansteel Industrial Group Metallurgical
Accounts payable 112.51
Machinery Co., Ltd.
Accounts payable Angang Steel Rope Co., Ltd. 91.35
Benxi Iron and Steel (Group) Real
Accounts payable 61.52 61.52
Estate Development Co., Ltd.
Ansteel Mining Machinery
Accounts payable 30.45
Manufacturing Co., Ltd.
Benxi High-tech Drilling Tools
Accounts payable 22.12 38.60
Manufacturing Co., Ltd.
Benxi New Business Development Co.,
Accounts payable 6.76 415.37
Ltd.
Benxi Iron and Steel (Group)
Accounts payable Engineering Construction Supervision 3.91 65.51
Co., Ltd.
250
Bengang Steel Plates Co., Ltd. Annual Report 2021
Items Name 2021.12.31 2020.12.31
Benxi Iron and Steel (Group) Chint
Accounts payable 0.24 0.24
Building Materials Co., Ltd.
Contract
liabilities/other Suzhou Bengang Industrial Co., Ltd. 2,350.61 5,374.03
current liabilities
Contract
Delin Land Port Supply Chain Service
liabilities/other 2,039.21
Co., Ltd.
current liabilities
Contract
liabilities/other Benxi Iron and Steel Group Co., Ltd. 1,567.51
current liabilities
Contract
Panzhong Yihong Metal Products
liabilities/other 722.78
(Chongqing) Co., Ltd.
current liabilities
Contract
liabilities/other Dalian Boroller Steel Pipe Co., Ltd. 236.19 181.60
current liabilities
Contract
Benxi Iron and Steel (Group)
liabilities/other 112.40 161.66
Metallurgical Slag Co., Ltd.
current liabilities
Contract
Benxi Iron and Steel (Group) Industrial
liabilities/other 74.55 55.77
Development Co., Ltd.
current liabilities
Contract
liabilities/other Ansteel Energy Technology Co., Ltd. 44.52
current liabilities
Contract
Benxi Steel Stainless Steel Cold
liabilities/other 37.73
Rolling Dandong Co., Ltd.
current liabilities
Contract
Tianjin Angang Steel Processing and
liabilities/other 26.00
Distribution Co., Ltd.
current liabilities
251
Bengang Steel Plates Co., Ltd. Annual Report 2021
Items Name 2021.12.31 2020.12.31
Contract
Liaoning Hengtong Metallurgical
liabilities/other 19.99 52.81
Equipment Manufacturing Co., Ltd.
current liabilities
Contract
liabilities/other Ansteel Chemical Technology Co., Ltd. 12.74
current liabilities
Contract Benxi Iron and Steel Group
liabilities/other International Economic and Trade Co., 43.70
current liabilities Ltd.
Other payables Benxi Iron and Steel (Group) Co., Ltd. 24,973.92 13,013.80
Benxi Iron and Steel Group
Other payables International Economic and Trade Co., 2,808.40 1,277.85
Ltd.
Benxi Iron and Steel (Group)
Other payables 2,483.47 436.25
Construction Co., Ltd.
Benxi Iron and Steel (Group) Industrial
Other payables 1,828.37 31.33
Development Co., Ltd.
Benxi Iron and Steel (Group) Steel
Other payables 1,686.92 1,681.17
Processing and Distribution Co., Ltd.
Guangzhou Free Trade Zone Benxi
Other payables 267.44 267.44
Steel Sales Co., Ltd.
Benxi Iron and Steel (Group) Thermal
Other payables 218.75 561.73
Development Co., Ltd.
Benxi New Business Development Co.,
Other payables 206.91 197.61
Ltd.
Benxi Iron and Steel (Group) Real
Other payables 143.59 143.59
Estate Development Co., Ltd.
Ansteel Scrap Resources (Anshan) Co.,
Other payables 50.00
Ltd.
Liaoning Metallurgical Technician
Other payables 19.05 1.34
College
Other payables Benxi Iron and Steel Group Co., Ltd. 15.57
252
Bengang Steel Plates Co., Ltd. Annual Report 2021
Items Name 2021.12.31 2020.12.31
Benxi Iron and Steel (Group)
Other payables 1.01 1.01
Machinery Manufacturing Co., Ltd.
Liaoning Hengyi Financial Leasing Co.,
Other payables 208.60
Ltd.
Benxi Iron and Steel Group Finance
Other payables 0.98
Co., Ltd.
Liaoning Hengyi Financial Leasing Co.,
Other payables 111,423.24
Ltd.
6. Centralized management of funds
1、 The main contents of the centralized management of funds that the company participates
in and implements are as follows:
In April 2021, after negotiation with Bengang Group Finance Co., Ltd. (hereinafter referred
to as Bengang Finance Co., Ltd.), the Financial Services Agreement was signed to stipulate
the relevant financial business terms and related transactions between the company and its
subsidiaries and Bengang Finance Co., Ltd. Amount cap. The agreement stipulates that the
maximum daily deposit balance of the company and its controlled subsidiaries in the next
twelve months will be 11 billion yuan, the maximum loan and other credit business will be
8 billion yuan, and the maximum credit line will be 8 billion yuan.
In December 2021, after negotiation with Ansteel Group Finance Co., Ltd. (hereinafter
referred to as Ansteel Finance Co., Ltd.), the Financial Services Agreement (2022-2024) was
signed to agree on the agreement between the company and its subsidiaries and Ansteel in
2022, 2023, and 2024. Relevant financial business terms and relevant transaction amount
caps between financial companies. The agreement stipulates that the maximum daily deposit
balance of the company and its holding subsidiaries in Ansteel Finance Company in the next
twelve months is 4.5 billion yuan, and the maximum credit limit of loans, bills and other
forms is 5 billion yuan, and Ansteel Finance Company provides entrusted loans to the
company. The maximum limit is 2 billion yuan.
253
Bengang Steel Plates Co., Ltd. Annual Report 2021
2、 Funds collected by the company to the group
Funds deposited by the company directly into the finance company without being collected
into the account of the parent company of the group
Items 20211231 20201231
Amount Provision Amount Provision
Cash at bank (deposited in Ansteel
442,965.63
Group Finance Co., Ltd.)
Cash at bank (deposited in Bengang
1,332,199.78
Group Finance Co., Ltd.)
Total 442,965.63 1,332,199.78
Including：Restricted funds due to
240,882.28
centralized management of funds
Notes: The company will transfer funds to Ansteel Group Finance Co., Ltd. at the end of 2021
3、 Funds collected by the company to the group
Items 20211231 20201231
Other payables 82,081,562.50 78,545,625.00
Total 82,081,562.50 78,545,625.00
Dalian Benruitong Automotive Materials Technology Co., Ltd., a subsidiary of the company,
borrowed RMB 75,000,000.00 from Benxi Iron and Steel (Group) Co., Ltd. As of December
31, 2021, the company's unpaid interest was RMB7,081,562.50 (as of December 31, 2020,
the company's unpaid interest was RMB3,535,937.50).
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
254
Bengang Steel Plates Co., Ltd. Annual Report 2021
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 December 31, 2021, the amount of irrevocable letter of credit that was not fulfilled
was 0.625 billion yuan.
(2) Contingencies
As at December 31, 2021, no significant contingencies need to be disclosed.
12. Subsequent events
(1) Important non-adjustment matters
None
(2) Profit Distribution
255
Bengang Steel Plates Co., Ltd. Annual Report 2021
On March 24, 2022, the 2021 annual dividend distribution
plan was approved by the resolution of the 27th meeting of the
company’s 8th board of directors. It is planned to distribute cash
dividends of RMB6.00 (tax included) to all shareholders for
Profit
every 10 shares based on 4,108,191,379 shares at the end of
or dividend to
2021. A total of common stock dividends distribution of
be distributed
RMB2,464,914,827.40, this distribution will not be converted
into share capital from capital reserves. The above profit
distribution plan still needs to be reviewed and approved by the
general meeting of shareholders.
(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
(2) Debt restructuring
None
(3) Asset replacement
None
(4) Annuity plan
None
256
Bengang Steel Plates Co., Ltd. Annual Report 2021
(5) Termination of business
None
(6) Segment information
Since the Company's main product is steel, other products account have a small proportion of sales,
the main production base is in Liaoning, and the disclosure of the segment report is not applicable.
(7) Other important matters that have an impact on investor decisions
1. The controlling shareholder pledges the Company's shares
As of the balance sheet date, the Company's controlling shareholder Benxi Iron and Steel (Group)
Co., Ltd. held 2,409,628,094 shares of the Company, of which 360,000,000 shares were in pledged
status and 108,326,179 shares were in restricted sales and frozen status.
14. Notes to the financial statements of parent company
(1) Notes receivable
1. Notes receivable disclosed by category
Items 20211231 20201231
Bank acceptance bill
Commercial acceptance bill 1,514,416,395.80
Total 1,514,416,395.80
2.The company has no pledged notes receivable at the end of period
3.Notes receivable which have been endorsed or discounted by the company and have not
yet matured at the end of period
Derecognition amount at the end of Amount not derecognition amount
Items
period at the end of period
Bank acceptance bill
Commercial acceptance bill 1,107,866,402.09
Total 1,107,866,402.09
4. No Notes receivable has been transferred into accounts receivable due to inability of
drawer to meet acceptance bill at the end of period
257
Bengang Steel Plates Co., Ltd. Annual Report 2021
(2) Accounts receivable
1.Accounts receivable disclosed by aging
Items 20211231 20201231
Within 1 year (inclusive) 352,756,383.14 283,561,303.90
1-2 years (inclusive) 1,380,655.78 2,420,511.80
2-3 years (inclusive) 1,942,837.68 6,500,255.55
Over 3 years 180,383,550.49 177,111,797.34
Sub-total 536,463,427.09 469,593,868.59
Less: Provision for bad 182,831,863.67 179,728,406.39
debts
Total 353,631,563.42 289,865,462.20
2. Accounts receivable disclosed by category
258
Bengang Steel Plates Co., Ltd. Annual Report 2021
20211231 20201231
Provision for Carrying Provision for
Carrying amount
bad debts amount bad debts
Items Ba Book B Book
Pe P
Amou Amou d debts value Amou Amo ad debts value
rcentage ercenta
nt nt ratio nt unt ratio
(%) ge (%)
(%) (%)
Provisio 47,762, 8.9 47,762,3 1 47,762, 1 47,762, 1
n for Bad Dept 337.18 0 37.18 00.00 337.18 0.17 337.18 00.00
individually
Provisio 488,701 91. 135,069, 2 353,631, 421,831 8 131,966 3 289,865,
n for Bad Dept ,089.91 10 526.49 7.64 563.42 ,531.41 9.83 ,069.21 1.28 462.20
by portfolio
Include:
Portfolio 328,112 61. 135,069, 4 193,043, 245,720 5 131,966 5 113,754,
1: Aging ,713.51 16 526.49 1.17 187.02 ,903.60 2.33 ,069.21 3.71 834.39
Portfolio 160,588 29. 160,588, 176,110 3 176,110,
2: Combined ,376.40 93 376.40 ,627.81 7.50 627.81
related party
536,463 100 182,831, 353,631, 469,593 1 179,728 289,865,
Total
,427.09 .00 863.67 563.42 ,868.59 00.00 ,406.39 462.20
259
Bengang Steel Plates Co., Ltd. Annual Report 2021
20211231
Bad
Items Accounts Provision for debts
Reason
receivable bad debts ratio
（%）
Benxi Nanfen
Benxi Nanfen Xinhe
47,762,337.18 47,762,337.18 100.00 Xinhe has halt
Metallurgical Co., Ltd.
operation.
Total 47,762,337.18 47,762,337.18
Accounts receivable tested for impairment by portfolio:
Portfolio tested by aging
20211231
Items
Carrying amount Provision for bad debts Bad debts ratio (%)
Within 1 year 192,168,006.74 1,921,680.07 1.00
1-2 years 1,380,655.78 138,065.58 10.00
2-3 years 1,942,837.68 388,567.53 20.00
Over 3 years 132,621,213.31 132,621,213.31 100.00
Total 328,112,713.51 135,069,526.49
(3) Information of provision, reversal or recovery of bad debts of current period.
The amount of bad debt provision reversed in the current period is RMB3,103,457.28
(4) No accounts receivable has been written off this year.
(5) Top five debtors at the year-end
20211231
Company Percentage of total Provision for
Amount
accounts receivable (%) bad debts
The first 160,588,376.40 29.93
The second 99,222,882.66 18.50 992,228.83
The third 80,584,547.00 15.02 805,845.47
The fourth 47,762,337.18 8.90 47,762,337.18
The fifth 9,008,967.00 1.68 9,008,967.00
260
Bengang Steel Plates Co., Ltd. Annual Report 2021
20211231
Company Percentage of total Provision for
Amount
accounts receivable (%) bad debts
Total 397,167,110.24 74.03 58,569,378.48
(6) There are no accounts receivable derecognized due to the transfer of financial assets
in the current period.
(7) There is no assets and liabilities formed by continued involvement due to the
transfer of Account receivables.
(3) Accounts receivable financing
1. Details of accounts receivable financing
Items 20211231 20201231
Notes receivable 1,504,640,362.79 4,143,431,412.08
Include: Bank acceptance bill 1,504,640,362.79 1,876,753,316.46
Commercial acceptance bill 2,266,678,095.62
Total 1,504,640,362.79 4,143,431,412.08
Other information: The "receivable financing" item reflects the notes and accounts receivable
that are measured at fair value at the balance sheet date and whose changes are included in other
comprehensive income.
2. At the end of the period, the company has no commercial bills pledged in accounts
receivable financing
3. At the end of the period, the company's endorsed or discounted commercial bills in
accounts receivable financing accounting and not yet matured on the balance sheet
date are as follows
Items Derecognized amount Not derecognized amount
Bank acceptance bill 17,940,518,873.62
Commercial acceptance bill
Total 17,940,518,873.62
261
Bengang Steel Plates Co., Ltd. Annual Report 2021
4.No Notes receivable has been transferred into accounts receivable due to inability of
drawer to meet acceptance bill at the end of period
(4) Other receivables
Item 20211231 20201231
Interest receivables 2,014,931.61 23,028,942.73
Dividend receivables
Other receivables 266,591,116.91 205,151,247.29
Total 268,606,048.52 228,180,190.02
1. Interest receivables
(1) Interest receivable disclosed by category
Items 20211231 20201231
Deposit interest 2,014,931.61 23,028,942.73
Subtotal 2,014,931.61 23,028,942.73
Less: provision for bad debt
Total 2,014,931.61 23,028,942.73
(2) There is no significant provision for overdue interest and bad debt provision.
(3) There is no provisions for interest receivable
2. Other receivables disclosed by aging
Items 20211231 20201231
Within 1 year (inclusive) 144,080,381.27 35,550,478.46
1-2 years (inclusive) 4,002,692.25 42,319,451.22
2-3 years (inclusive) 3,776,577.88 13,842,023.46
Over 3 years 186,249,689.29 180,717,695.14
Sub-total 338,109,340.69 272,429,648.28
Less: Provision for bad 71,518,223.78 67,278,400.99
debts
Total 266,591,116.91 205,151,247.29
(1) Provision for bad debt provision
262
Bengang Steel Plates Co., Ltd. Annual Report 2021
Stage
Stage two Stage three
one
Provisio Lifetime
Lifetime Total
n for bad debts 12- expected credit
expected credit
month expected losses (credit
losses (no credit
credit losses impairment
impairment)
occurred)
Beginni 352,376. 9,475,267. 57,450,757. 67,278,400.
ng balance 05 75 19 99
Beginni
ng balance in
current period
-- - 3,525.58
Transfer to 3,525.58
Stage two
-- - 3,036,762.8
Transfer to 3,036,762.80 0
Stage three
--
Reversal to
Stage two
--
Reversal to
Stage one
Current 494,264. 1,021,959. 6,028,941.1 7,545,165.3
period 90 28 8 6
provision
Current
period reversal
Current 316,314. 1,158,596. 1,830,431.6 3,305,342.5
period write- 67 25 5 7
back
Current
period write-
off
Other
change
Ending 526,800. 6,305,393. 64,686,029. 71,518,223.
balance 70 56 52 78
263
Bengang Steel Plates Co., Ltd. Annual Report 2021
(2) Changes of other receivables
Stage
Stage one Stage two
three
Provisi
Lifetime
on for bad Lifetime Total
12-month expected credit
debts expected credit
expected credit losses (credit
losses (no credit
losses impairment
impairment)
occurred)
Beginn 194,557,37 20,421,41 57,450,85 272,429,64
ing balance 2.69 6.81 8.78 8.28
Beginn
ing balance in
current period
-- - 316,691.4
Transfer to 316,691.48 8
Stage two
-- - 8,941,860.
Transfer to 8,941,860.04 04
Stage three
--
Reversal to
Stage two
--
Reversal to
Stage one
Curren 312,200,67 3,469,155. 123,742.3 315,793,57
t period 8.92 79 5 7.06
increase
Curren 243,252,34 5,031,108. 1,830,431. 250,113,88
t period 4.35 65 65 4.65
derecognition
Other
change
Ending 263,189,01 10,234,29 64,686,02 338,109,34
balance 5.78 5.39 9.52 0.69
(3) The amount of other accounts receivable actually written off in the current period is
RMB 1,220,245.84.
264
Bengang Steel Plates Co., Ltd. Annual Report 2021
(4) Other receivables disclosed by nature
Nature 20211231 20201231
Receivable and payable 327,876,947.80 264,617,899.56
Other 10,232,392.89 7,811,748.72
Total 338,109,340.69 272,429,648.28
(5) Top five debtors at the year-end
Percentage of
Provision for
Company Nature or content Amount Aging total other
bad debts
receivables (%)
The First Receivable and payable 2,462,794.16 Within 1 year to 3 years 0.73 2,249,413.14
The Second Receivable and payable 2,261,360.00 Over 3 years 0.67 2,261,360.00
The Third Receivable and payable 1,908,708.06 Over 3 years 0.56 1,908,708.06
The Fourth Receivable and payable 1,740,000.00 Over 3 years 0.51
The Fifth Receivable and payable 1,503,037.23 Within 1 year to 3 years 0.44 1,202,429.78
Total 9,875,899.45 2.91 7,621,910.98
（6）No other receivables involving government subsidies in the current period.
（7）There are no other receivables derecognized due to the transfer of financial assets in
the current period.
（8）No assets and liabilities formed by continued involvement due to the transfer of other
receivables in the current period.
(5) Long-term equity investment
Ending balance Beginning balance
I I
Items Carryin Book Carrying Book
mpairm mpair
g amount value amount value
ent ment
Subsi 2,015,186, 2,015,186, 2,016,281, 2,016,281,
diaries 190.50 190.50 902.16 902.16
Joint
Venture
2,015,186, 2,015,186, 2,016,281, 2,016,281,
Total
190.50 190.50 902.16 902.16
265
Bengang Steel Plates Co., Ltd. Annual Report 2021
Details of investment in subsidiaries
E
I
nding
mpairm
Name of Beginning In Decre Ending balance
ent of
entity balance crease ase balance of
current
impair
period
ment
Guangzhou
Bengang Steel & 30,000,00 30,000,000.
Iron Trading Co., 0.00 00
Ltd.
Shanghai
Bengang
Metallurgy 30,000,00 30,000,000.
Science and 0.00 00
Technology Co.,
Ltd.
Bengang
Steel Plates 529,899,8 529,899,80
Liaoyang Pellet 01.38 1.38
Co., Ltd.
Dalian
Benruitong
Automobile 65,000,00 65,000,000.
Material 0.00 00
Technology Co.,
Ltd.
Bengang
POSCO Cold- 1,019,781, 1,019,781,5
rolled Sheet Co., 571.10 71.10
Ltd.
Changchun
Bengang Steel & 28,144,87 28,144,875.
Iron Sales Co., 5.36 36
Ltd.
Harbin
Bengang 29,923,39 29,923,398.
Economic and 8.23 23
Trading Co., Ltd.
Nanjing
2,081,400. 2,081,400.6
Bengang Materials
65 5
Sales Co., Ltd.
266
Bengang Steel Plates Co., Ltd. Annual Report 2021
E
I
nding
mpairm
Name of Beginning In Decre Ending balance
ent of
entity balance crease ase balance of
current
impair
period
ment
Wuxi
Bengang Steel & 29,936,71 29,936,718.
Iron Sales Co., 8.57 57
Ltd.
Xiamen
Bengang Steel & 1,095,711. 1,095,
Iron Sales Co., 66 711.66
Ltd.
Yantai
Bengang Steel & 49,100,32 49,100,329.
Iron Sales Co., 9.41 41
Ltd.
Tianjin
Bengang Steel & 60,318,09 60,318,095.
Iron Trading Co., 5.80 80
Ltd.
Benxi
30,000,00 30,000,000.
Bengang Steel
0.00 00
Sales Co., Ltd
Shenyang
Bengang
Metallurgical 30,000,00 30,000,000.
Science and 0.00 00
Technology Co.,
Ltd.
Chongqing
Liaoben Steel & 30,000,00 30,000,000.
Iron Trade Co., 0.00 00
Ltd.
Bengang
Baojin (Shenyang)
Automobile New 51,000,00 51,000,000.
Materials 0.00 00
Technology Co.,
Ltd.
2,016,281, 1,095, 2,015,186,1
Total
902.16 711.66 90.50
267
Bengang Steel Plates Co., Ltd. Annual Report 2021
(6) Operating Income and Operating Cost
Operating income and operating cost
Ite 2021 2020
ms Revenue Cost Revenue Cost
Princ
69,727,193, 65,005,072, 44,436,384, 42,659,983,
ipal
761.59 705.35 616.09 317.54
business
Oth 8,994,267,9 8,198,390,7 4,374,721,8 4,082,717,1
er business 64.12 70.21 58.64 04.16
Tota 78,721,461, 73,203,463, 48,811,106, 46,742,700,
l 725.71 475.56 474.73 421.70
Details for operating income:
Items Principal Business Other Business
Classified by business
69,727,193,761.59 8,994,267,964.12
area
Including：Domestic 64,316,404,987.60 8,994,267,964.12
Abroad 5,410,788,773.99
Classified by the time of
69,727,193,761.59 8,994,267,964.12
commodity transfer
Including: recognize at a
69,727,193,761.59 8,991,389,532.65
certain point in time
recognize over a certain
2,878,431.47
period of time
Total 69,727,193,761.59 8,994,267,964.12
(7) Income on investment
Items 2021 2020
Income from disposal of long-term equity -1,341,423.32
investment
Income on disposal of financial assets -124,911,004.89 13,500,000.00
holding for trading
Dividend income obtained during the 77,242.47
holding period of other equity instrument
investments
Other 2,436,869.33
Total -123,815,558.88 13,577,242.47
268
Bengang Steel Plates Co., Ltd. Annual Report 2021
15. Supplementary information
(1) Details of non-recurring profit and loss
Items Amount Notes
Profit or loss from disposal of non-current assets -60,100,706.71
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 66,345,976.64
regulation of national policy and enjoyed constantly in
certain quota or quantity according to a certain standard)
Fund occupation fee charged to non-financial enterprises
2,436,869.33
included in current profit and loss
Except for the effective hedging business related to the
normal operation of the company, the fair value changes
arising from the holding of held-for-trading financial assets,
derivative financial assets, held-for-trading financial
liabilities, and derivative financial liabilities, and the disposal -37,205,991.34
of held-for-trading financial assets, derivative financial
Investment income from assets, held-for-trading financial
liabilities, derivative financial liabilities and other debt
investments
Other non-operating revenue and expenditure other than
5,176,371.41
above items
Subtotal -23,347,480.67
Impact of income tax 5,969,319.73
Impact of minority interests 202,407.38
Total -17,175,753.56
(2) Net asset yield and earnings per share
Weighted average Earnings per share (Yuan)
Profit in the Reporting Period
net assets yield (%) Basic EPS Diluted EPS
Net profit attributable to ordinary shareholders 11.88 0.600 0.496
269
Bengang Steel Plates Co., Ltd. Annual Report 2021
Net profit attributable to ordinary shareholders
11.96 0.604 0.500
after deducting non-recurring profit and loss
Bengang Steel Plates Co., Ltd.
24 March 2022
270
