Bengang Steel Plates Co., Ltd. 2022 Annual Report
Bengang Steel Plates Co., Ltd.
Annual Report 2022
【Disclosure Time】
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Bengang Steel Plates Co., Ltd. 2022 Annual Report
2022 Annual Report
SECTION 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 omissions in this report, and individually and collectively accept full
responsibility for the authenticity, accuracy and integrity of the information contained in this report.
Li Yan, the person in charge of the Company, Zheng Zhengli, the person in charge of accounting
work, and Sun Yanbin, the person in charge of the accounting department (accounting officer in charge),
have pledged 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 risks and countermeasures in detail in this report, please refer
to Section III. XI "Risks to the Company and countermeasures". China Securities Journal, Securities
Times, the website of Shenzhen Stock Exchange and Cninfo Website are the media selected by the
Company for information disclosure. All information of the Company shall be based on the information
published in the above designated media, and investors are advised to pay attention to the investment
risks.
The Company plans not to pay cash dividends, not to send bonus shares, and not to increase its
share capital by transferring its public reserves.
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Bengang Steel Plates Co., Ltd. 2022 Annual Report
Table of Contents
Section I. IMPORTANT NOTICE, TABLE OF CONTENTS, AND DEFINITIONS .............................. 错误！
未定义书签。
Section II. COMPANY PROFILE AND MAIN FINANCIAL INDEX ................................................ 错误！
未定义书签。
Section III. MANAGEMENT DISCUSSION AND ANALYSIS ........................................................错误！
未定义书签。
Section IV. CORPORATE GOVERNANCE ................................................................................. 错误！
未定义书签。
Section V. ENVIRONMENTAL AND SOCIAL RESPONSIBILITY ...................................................60
Section VI. IMPORTANT EVENTS ...........................................................................................66
Section VII. STATUS OF SHARE CAPITAL CHANGES AND SHAREHOLDERS ............................... 90
Section VIII. STATUS OF PREFERRED SHARES .........................................................................98
Section IX. STATUS OF CONVERTIBLE CORPORATE BONDS .................................................... 99
Section X. FINANCIAL REPORT .............................................................................................. 错误！
未定义书签。
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Bengang Steel Plates Co., Ltd. 2022 Annual Report
Reference File Directory
1. Financial statements containing the signatures and seals of the person in charge of the Company, the person in charge of
accounting work and the person in charge of the accounting institution;
2. The original audit report containing the seal of the accounting firm and the signature and seal of the certified public
accountant.
3. The original copies of all Company documents and announcements that have been publicly disclosed during the
reporting period;
4. Annual reports published in other securities markets.
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Bengang Steel Plates Co., Ltd. 2022 Annual Report
Definition
Interpretation items Refers to Interpretation content
Bengang Steel Plates, Company, the
Refers to Bengang Steel Plates Co., Ltd.
Company, listed company
Ansteel Refers to Ansteel Group Co., Ltd.
Bengang Group Refers to Bengang Group Co., Ltd.
Benxi Iron & Steel, Bengang Company Refers to Benxi Iron & Steel (Group) Co., Ltd.
SSE Refers to Shenzhen Stock Exchange
Liaoning Provincial State-asset Liaoning State-owned Asset Supervisory
Refers to
Administration and Management Committee
Bengang Puxiang Cool Rolling Steel Sheet
Bengang Puxiang Refers to
Co., Ltd.
Ansteel Finance Company Refers to Ansteel Group Finance Co., Ltd.
Angang Refers to Angang Steel Company Limited
Pangang Group Vanadium & Titanium
Vanadium & Titanium Company Refers to
Resources Co., Ltd.
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Bengang Steel Plates Co., Ltd. 2022 Annual Report
SECTION II. COMPANY PROFILE AND MAIN FINANCIAL INDEX
I. Company information
Bengang Steel Plates, Bengang Steel Plates 000761,
Stock abbreviation Stock code
plate B 200761
Stock exchange for listing Shenzhen Stock Exchange
Company name in Chinese 本钢板材股份有限公司
Abbreviation of Company name in Chinese 本钢板材
Company name in English (if any) BENGANG STEEL PLATES CO., LTD.
Abbreviation of Company name in English (if any) BSP
Legal representative Li Yan
Registration address No.16, Renmin Road, Pingshan District, Benxi City, Liaoning Province
Postal code of registration address 117000
Changes in the Company's registered address history None
Office address No.1-1, Steel Road, Pingshan District, Benxi City, Liaoning Province
Postal code of office address 117000
Company website None
E-mail zhengzhengli76@126.com
II. Contact person and contact information
Secretary of Board of Directors Representative of Securities Affairs
Name Zheng Zhengli
No.1-1, Steel Road, Pingshan District,
Contact address
Benxi City, Liaoning Province
Telephone 024-47827003
Fax 024-47827004
E-mail zhengzhengli76@126.com
III. Information disclosure and place for consulting
Website of the stock exchange where the Company discloses
http://www.SSE.cn
the annual report
Name and website of the media in which the Company discloses China Securities Journal, Securities Times, http ：
the annual report //www.cninfo.com.cn
Place for inquiry of the annual report Secretary Office of the Board, Bengang Steel Plates Co., Ltd.
IV. Change of business registration
Uniform social credit code 91210000242690243E
Changes of principal business
No change
activities since listing (if any)
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Bengang Steel Plates Co., Ltd. 2022 Annual Report
On August 20th, 2021, Liaoning State-owned Asset Supervisory
and Management Committee, the former actual controller of
the Company, and Ansteel Group Co., Ltd. signed the Agreement
between Liaoning State-owned Asset Supervisory and
Management Committee and Ansteel Group Co., Ltd. on the Free
Transfer of Bengang Group Co., Ltd. State-owned Equity, in
Historical changes in controlling shareholders (if any) which Liaoning Provincial State-asset Administration transferred
51% of its equity interest in Bengang Group Co., Ltd. to Ansteel
without compensation. On October 12th, 2021, the change of
business was completed and Ansteel Group Co., Ltd. became the
indirect controlling shareholder of the Company. The direct
controlling shareholder of the Company remains unchanged as
Benxi Iron & Steel (Group) Co., Ltd.
V. Other relevant information
Accounting firm engaged by the Company
Name of the accountants’ firm ShineWing Certified Public Accountants LLP
8/F, Block A, Fu Hua Mansion, No.8, Chaoyangmen Beidajie,
Address of the accountants’ firm
Dongcheng District, Beijing, 100027, P.R. China
Name of signatory accountants Fan Jianping, Chen Jian
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 period
institution institution representative
Guotai Junan Securities Co., No.768 Nanjing West Road, August 5th, 2020 to December
Yuan Yechen, Yang Keyi
Ltd. Jing'an District, Shanghai 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 is required to retroactively adjust or restate prior years' accounting data
□Yes No
Increase or decrease
FY2022 FY2021 compared with the FY2020
previous year
Operating income
62,616,621,627.60 77,912,144,981.46 -19.63% 48,684,792,685.58
(RMB)
Net profit attributable
to shareholders of the -1,232,976,557.37 2,500,582,902.58 -149.31% 384,252,740.78
listed company (RMB)
Net profit after non-
recurring gain or loss
attributable to -1,416,415,028.51 2,517,758,656.14 -156.26% 381,469,784.99
shareholders of the
listed company (RMB)
Net cash flow from
operating activities 1,276,362,965.56 413,473,454.04 208.69% -2,039,000,213.29
(RMB)
Basic earnings per -0.300 0.600 -150.00% 0.1000
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Bengang Steel Plates Co., Ltd. 2022 Annual Report
Increase or decrease
FY2022 FY2021 compared with the FY2020
previous year
share (RMB/share)
Diluted earnings per -0.300 0.496 -160.48% 0.1000
share (RMB/share)
Weighted average -5.68% 11.88% -17.56% 1.90%
return on net assets
Increase or decrease
End of FY2022 End of FY2021 compared with the end End of FY2020
of the previous year
Total assets (RMB) 44,114,652,440.64 55,147,123,275.30 -20.01% 65,007,470,749.20
Net assets attributable
to shareholders of 18,789,151,216.62 22,500,969,014.30 -16.50% 21,018,296,389.10
listed companies (RMB)
The lower of the company’s net profit before and after the 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 in accounting data under domestic and foreign accounting standards
1. Differences between net profit and net assets disclosed in financial reports prepared under IFRS and
Chinese accounting standards.
□Applicable Not applicable
There are no differences between net profit and net assets disclosed in financial reports prepared under IFRS and Chinese
accounting standards during the reporting period.
2. Differences in net profit and net assets between financial reports disclosed simultaneously in
accordance with foreign accounting standards and in accordance with Chinese accounting standards
□Applicable Not applicable
There are no differences between the net profit and net assets of the Company in the financial reports disclosed in accordance
with foreign accounting standards and in accordance with Chinese accounting standards in the reporting period.
VIII.Main financial index by quarter
Unit: RMB
First quarter Second quarter Third quarter Fourth quarter
Operating income 16,621,491,876.35 18,393,685,428.63 12,824,043,663.20 14,777,400,659.42
Net profit attributable to shareholders
433,939,380.46 127,795,996.95 -819,660,438.85 -975,051,495.93
of the listed company
Net profit after non-recurring gain or
loss attributable to shareholders of the 423,326,955.85 98,892,471.08 -850,929,263.53 -1,087,705,191.91
listed company
Net cash flow from operating activities 289,055,672.76 -61,603,830.55 1,632,616,396.48 -583,705,273.13
Whether the above financial indicators or the sum of such indicators are significantly different from the relevant financial
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Bengang Steel Plates Co., Ltd. 2022 Annual Report
indicators in the disclosed quarterly and semi-annual reports of the Company
□Yes No
IX. Non-recurring gain or loss items and amounts
Applicable □Not applicable
Unit: RMB
Item FY2022 amount FY2021 amount FY2020 amount Description
Gain or loss on disposal of non-current assets (including
the offsetting portion of the provision for asset 3,648,546.62 -60,100,706.71 -92,695,525.95
impairment)
Government subsidies included in current profit or loss
(except government subsidies that are closely related to
the Company's normal business operations, in
72,300,830.48 66,345,976.64 81,193,591.56
accordance with national policies and continuously
enjoyed in accordance with certain standards and in
fixed or quantitative amounts)
Gains or losses from entrusting others to invest or
2,879,850.07 2,436,869.33 0.00
manage assets
Gains and losses from debt restructuring 1,274,270.98 32,800.02
Gains or losses from changes in fair value of financial
assets and liabilities held for trading, and investment
income from the disposal of financial assets and
-37,205,991.34 13,500,000.00
liabilities for trading and available-for-sale financial
assets, except for effective hedging activities related to
the Company's normal business operations
Non-operating income and expenses other than the
13,507,766.62 5,176,371.41 1,592,660.62
items mentioned above
Other profit or loss items that meet the definition of
92,174,927.78
non-recurring gain or loss
Less: Income tax effect 1,956,581.46 -5,969,319.73 786,094.20
Effect of minority interests (after tax) 391,139.95 -202,407.38 54,476.26
Total 183,438,471.14 -17,175,753.56 2,782,955.79 --
Details of other profit and loss items that meet the definition of non-recurring profit or loss:
Applicable □Not applicable
Description of "other profit and loss items that meet the definition of non-recurring profit or loss"
and items that are defined as non-recurring profit or loss according to the nature and
characteristics of the Company's normal business operations
Item Amount Reason
Other profit and loss items that meet the Gain arising from remeasurement of the remaining equity
4,154,883.39
definition of non-recurring profit or loss interest at fair value after losing control over Shenyang Baojin
Other profit and loss items that meet the Investment income from the disposal of long-term equity
88,020,044.39
definition of non-recurring profit or loss investment in Liaoyang Qiutuan
Explanation of the definition of non-recurring items of profit or loss listed in the Explanatory Announcement No. 1 on Disclosure
of Information by Companies Issuing Public Securities - Non-recurring Profit or Loss as recurring items of profit or loss
□Applicable Not applicable
The Company does not have any non-recurring items of profit or loss listed in Explanatory Announcement No. 1 on Disclosure of
Information by Companies Issuing Public Securities - Non-recurring Profit or Loss that are defined as items of recurring profit or
loss.
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Bengang Steel Plates Co., Ltd. 2022 Annual Report
SECTION III. MANAGEMENT DISCUSSION AND ANALYSIS
I. Industry situation of the company during the reporting period
The Company belongs to the steel industry, which is an important basic industry of China's national economy, an important
support for building a modern and powerful country, and an important area for achieving green and low-carbon development.
In 2022, the steel industry operating environment is more challenging, downstream demand is less than expected, energy prices
are firm, steel prices have fallen, the industry's economic benefits have declined, the global steel market is in the doldrums, and
the benefits of steel companies have fallen year on year. First, steel production fell year-on-year and consumption intensity
weakened. According to the National Bureau of Statistics, the national pig iron and crude steel production in 2022 was 863.83
million tons and 10,133 billion tons, decreasing by 0.8% and 2.1% year-on-year, respectively. Second, steel import and export
volume rose and fell, according to the General Administration of Customs data, the country's cumulative exports of steel were
67.32 million tons, an increase of 0.9% year-on-year. Cumulative steel imports of 10.57 million tons, a decrease of 25.9%. Third,
steel prices rose slightly at the end of the year, according to the China Iron and Steel Industry Association monitoring, the China
Steel Composite Price Index was 113.25 points at the end of December, up 4.32 points, or 4.0%. Fourth, fuel costs rose
significantly, and the cumulative import of ore remained falling. According to data from the General Administration of Customs,
the national import of iron ore and its concentrates amounted to 1.10686 billion tons, a decrease of 1.5% year-on-year.
2023 is the beginning of the year to fully implement the spirit of the 20th Party Congress, which is also the implementation of
the "14th Five-Year Plan" to carry on the important year, China's economy in the expansion of domestic demand stabilization
policy will gradually return to the normal growth track. At the same time, at a time when uncertainty was the norm, large
fluctuations in steel prices and dynamic changes in the market environment and production conditions have significantly
increased the complexity of business decisions, putting higher requirements on the Company's operational planning and
decision-making capabilities. With the domestic optimization of the epidemic prevention and control policy, the domestic
market is expected to improve, steel prices continue to rise, and the domestic market for steel is expected to improve. At the
same time, due to the rise in domestic steel prices and the sharp appreciation of the RMB, China's export offers is higher, the
price advantage has declined, and short-term steel exports will be under pressure. In addition, China's steel industry is still facing
the "double" constraints of promoting capacity reduction and replacement, as well as low-carbon development and increased
energy efficiency. The country has put forth the goal of striving to achieve a carbon peak by 2030 and carbon neutrality by 2060,
which has put forward new requirements for the development of the steel industry and stimulated new momentum for the high-
quality development of the steel industry.
II. 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 state-of-the-art 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
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Bengang Steel Plates Co., Ltd. 2022 Annual Report
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 mode: The Company's procurement mode includes domestic procurement and foreign procurement. Domestic
material procurement is carried out through centralized procurement, unified bidding, price comparison and negotiation. The
procurement of foreign materials is carried out through the modes of long-association procurement, direct procurement, open
and invited bidding, inquiry and comparison, competitive negotiation and negotiation procurement, which are mainly
represented by Benxi Iron & Steel (Group) International Economic and Trading Co., Ltd.
Sales model: The Company's sales are divided into domestic sales and foreign sales, domestic sales are mainly based on
agreement account sales, sales channels are based on direct supply, circulation and engineering, organizing contract orders in
advance by month, and organizing required production according to contract orders. According to different regions, different
channels, different industry characteristics, the implementation of futures mode, one plant and one policy, index pricing and
other price policy sales method; export sales mainly use the Benxi Iron & Steel (Group) International Economic and Trading Co.,
Ltd. over the years in the international trade accumulated strong marketing network, the Company's products exported by its
agent, and pay Benxi Iron & Steel (Group) International Economic and Trading Co., Ltd. agency fees.
3. Main performance drivers
The Company has seized a favorable opportunity during Anben’s restructuring, carried out the three-year action of state-owned
enterprise reform and three systematic reforms, closely focused on Ansteel's "7531" strategic goal and Bengang Group's "1357"
working guidelines, experienced the transformation of deepening reform, the refinement of market decline and the challenge of
epidemic prevention and control, continuously deepened the potential and improved against the standard, and gathered the
powerful energy of all cadres and workers to "lead the new Ansteel, support the new Ansteel", and fully promoted the
implementation of "1+2+3" important work. Establish a management and control model based on comprehensive budget and
planned value management, centered on efficiency, with sales as the leader, finance as the core, benchmarking as the grasp, and
the consistent management of the automobile board as the leader, closely linking "sales, research and production", vigorously
promoting the consistent management of the whole process quality, firmly establishing the sense of responsibility of "seeking
benefits from reform and promoting revitalization by reform", adhere to the innovation drive, create a "source" of original
technology, adhere to the strategy of "talent development", enhance the precise incentive role of job performance assessment,
accelerate the pace of innovation and development to build "a highly competitive international high-quality plate base led by
automotive plates", and achieve hard-won production and management and enterprise reform performance.
During the reporting period, there was no change in the Company's main business or business model.
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.
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Bengang Steel Plates Co., Ltd. 2022 Annual Report
1. Manufacturing capabilities. Focusing on economic benefits, the Company firmly grasps market opportunities, implements the
production and management idea of "the upper process follows the lower process and the whole process follows the market",
adheres to the innovation-driven and "manufacturing + service" strategies, seizes market opportunities, efficiently cooperates
with production lines and the market, continuously optimizes the product structure, and continuously improves the Company's
profitability. Deepen the benchmarking and digging potential, increase cost control, absorb the impact of upstream price
increases, and continuously improve management efficiency.
2. Equipment transformation and upgrading. In 2022, the Company issued a fixed asset investment plan of RMB 1.82 billion.
Implemented the upgrading and transformation of electric furnace of special steel, transformation of special steel rolling mill,
environmental protection transformation of storage one coal yard, environmental protection transformation of storage two coal
yard, acid production from desulfurization waste liquid in the main plant of plate ironmaking, upgrading and transformation of
dry quenching boiler No.1 of coke two in the main plant of plate ironmaking, ultra-low emission transformation of 360
m2sintering flue gas desulfurization and denitrification, ultra-low emission transformation of 2x265 m2 sintering flue gas
desulfurization and denitrification, ultra-low emission transformation of 566 m2sintering flue gas desulfurization and
denitrification, etc. and key projects represent a new round of large-scale technical transformation and ultra-low emission
transformation. At present, the special steel electric furnace upgrade project has put into operation an electric furnace and
supporting refining equipment and continuous casting equipment.
3. New product development capabilities. The annual plan is to develop 38 new products, the actual completion of 41, including
14 grades of cold-rolled products, 19 grades of hot-rolled products and 8 grades of special steel products. Successfully developed
hot-dip galvanized duplex steel CR330Y590T-DH to fill the gap in the research field of galvanized DH steel. Cultivated "wide hot-
rolled high-strength steel series products", the first domestic unique extreme width (2000mm) thin specification high-strength
tank steel 550GT-TH, exclusive supply in the regional market.
4. Technological innovation ability. In terms of scientific and technological cooperation, the Company has signed 9 external
contracts with the University of Science and Technology Beijing, the Chinese Society for Metals, the Institute of Metallurgical
Industry Information Standards, the Institute of Metallurgical Industry Planning and Research, etc. The Company has also carried
out 10 cooperative projects with Dalian University of Technology, Northeastern University and Liaoning University of Science and
Technology, which are members of the "Liaoning Iron and Steel Industry University-Research Innovation Alliance". In terms of
intellectual property rights, it participated in 4 national standards, hosted 2 group standards and participated in 1 group standard.
The number of accepted patents in the year was 283, and the number of authorized patents was 136, among which 31 were
authorized invention patents. In terms of scientific and technological achievements, "2000MPa Hot Press Forming Steel" won the
"First Prize of Technical Innovation in Automotive Lightweighting Application of China Society of Automotive Engineering",
"Research and Development of Low-Cost High Strength Corrosion Resistant Steel Series for Land Transportation Containers" won
the "Second Prize of Science and Technology of China Society of Corrosion and Protection", "Development of High-Quality
Economic Nb Microalloyed Automotive Galvanized Duplex Steel Series" won the "Second Prize of Technical Progress Award of
CITIC Niobium Steel", and "Research on Stability Improvement of Roll Bearing Block in Hot Rolling Mill" won the "First Line
Worker Award of Ansteel Iron and Steel Science and Technology Award".
5. Green development capability. According to the national and Liaoning Province on the steel industry and local ultra-low
emission policy requirements, the Company is brave to assume social responsibility, relying on professional planning and
research institutions, the preparation of environmental protection to enhance the planning and annual implementation plan,
2023 planning and sorting out a total of more than 20 ultra-low emission projects, have all been included in the investment plan,
has launched the construction or preliminary work, through the transformation of the yard, flue gas emission treatment,
desulfurization and denitrification of ultra-low emission transformation and other comprehensive excellent improvements, and
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Bengang Steel Plates Co., Ltd. 2022 Annual Report
strive to achieve ultra-low emission by the end of 2023, the Company will become a harmonious development with the city of
"ecological steel plant".
6. Intelligent manufacturing capabilities. The Company strongly promotes the construction of information technology,
intelligence and other intelligent manufacturing-related projects, and has carried out intelligent transformation in 2022, such as
the integration of information system construction, the overall improvement of steel industry management and information
support, the centralized control of plate energy, blast furnace intelligent management system, steel industry daily cost
management system, and the improvement of production and manufacturing management system. Keep pace with the
development of enterprises in the era of big data to achieve high-quality development.
IV. Management discussion and analysis
1. General
In 2022, the annual production of pig iron was 10.003 million tons, an increase of 165,300 tons; crude steel production was
10.552 million tons, an increase of 114,000 tons; hot-rolled plate production was 13.2874 million tons, an increase of 70,500
tons; cold-rolled plate production was 5.948 million tons, and special steel production was 443,400 tons. Reviewing the work of
the whole year, it is mainly reflected in the following aspects:
(1) Production-oriented to operation-oriented transformation, the Company's operation quality continues to improve
The management and control model based on comprehensive budget and planned value management, centered on efficiency,
sales as the leader, finance as the core, benchmarking as the grip, and the consistent management of the automobile board as
the leader has been established, and the management consciousness of all staff has been enhanced significantly. The Company
intensified its market development efforts and set up 12 technical service teams for priority customers to provide personalized
services. Closely linking "sales, research and production", the annual output of automobile plates reached a record high.
Strengthen financial control, improve the efficiency of capital operation in all aspects, and significantly reduce the balance of
"two funds" compared with the beginning of the year. Vigorously promote the consistent management of the whole process
quality, and the "quality storm" is effective. Build a star production line, equipment operation efficiency continued to improve,
and each unit set new capacity records many times.
(2) Continuing to promote marketization and deepening reform of enterprises
The Company firmly establishes the sense of responsibility of "seeking benefits from reform and promoting revitalization by
reform", and actively and steadily promotes the three-year action of reforming state-owned enterprises in a thorough and
practical manner. The Company has implemented the "recruitment competition with indicators and contract" and 100%
coverage of "two systems and one contract" and "double contract" management. Comprehensively implement the full post-
performance assessment, and continuously enhance the precise incentive role of post-performance assessment. Highlighting the
typical lead the way, "authorization + the same benefit" market-oriented reform to activate the micro subject motivation,
selected grass-roots operation area as a pilot unit combined with their own characteristics to develop a personalized reform
program, the indicators have repeatedly achieved good results, regional workers fully enjoyed the reform dividend, income level
has increased significantly. In accordance with the Korean Puxiang model, the Company will promote the standardized operation
of Bengang Puxiang, create a "special zone" and a "model" for reform and development, and lead Bengang Steel Plates to be on
par with world-class enterprises.
(3) Consolidation of standardized operation and significant enhancement of corporate governance
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Bengang Steel Plates Co., Ltd. 2022 Annual Report
Risk management-oriented, improving the internal control system, deeply analyzing the risk points of each process, dynamic
evaluation, and real-time control. Establish a list management model, realize the list of authority and responsibility boundaries,
institutionalize procedural norms, and streamline the decision-making operation. The Company builds a full-cycle authorization
and evaluation system from three aspects, including corporate governance, standardization of exercise of authority, the
effectiveness of exercise of authority, and implements dynamic management to ensure that the authority is "released, accepted,
and stable". The Company will further strengthen investor relations, improve capital market operations, and pay cash dividends
of RMB 2.465 billion to all shareholders in 2022 to effectively reward investors.
(4) Optimize system management system and improve management efficiency and effectiveness
Taking the promotion of consistent management as a guide, the Company has developed "system" thinking, continued to
improve the construction of the system, optimized the process control points item by item, built a closed-loop control network,
and continuously improved management efficiency and effectiveness. Insist on "safety first", promote "safety storm" special
action, investigate and correct hidden dangers, and achieve full coverage of safety training. Build up the concept of green
development and build the beautiful home of Bengang Steel Plates together. The Company completed 10 ultra-low emission
projects according to the planned nodes throughout the year; the synchronous operation rate of environmental protection
facilities and production facilities was 100%, and the environment of the plant was significantly improved.
(5) Adhere to the innovation-driven, to create the original technology "Source"
Implemented 9 collaborative projects in Anben Science and Technology, 9 innovative cooperation projects in Liaoning Steel
Association's Industry-University-Research Alliance, and 203 scientific research projects. Vigorously promote the digitalization
construction, introduce the integrated operation mode of cross-regional multi-bases in the main steel industry and the
"manufacturing + service" system of multi-bases synergy, and realize business innovation and process reengineering. The "one-
touch steelmaking" in the steel mill was recognized by the industry; the iron front centralized control, the energy centralized
control and the intelligent manufacturing project with the three cold rolling mills as the pilot were all implemented as planned,
laying a solid foundation for the sustainable development of the Company.
(6) Strengthen the leadership of Party building, the work of the group organizations is full of highlights
The main line of learning and propaganda to implement the spirit of the 20th CPC National Congress, through a variety of ways
to grasp the political theory and professional business learning of party members and cadres, so that learning becomes a source
of strength to gather strength and overcome difficulties, and a fundamental guarantee to serve the masses and promote work.
The Company has promoted the standardized construction of party organizations, selected and strengthened the cadres of the
party group system, and promoted the comprehensive improvement, standardization and hardening of the grassroots party
construction work. Adhering to the strategy of "talent development", the Company has established a talent pool and made
efforts to build Bengang Steel Plates' own expert team. To carry out labor competitions and various special activities for youth to
build up their work, all workers overcome difficulties together, establish a new image of young people of Bengang Steel Plates,
and cultivate the main force for the future development of the enterprise.
(7) Deeply rooted in people-oriented, to create a beautiful home for plate workers
The Company strongly promotes the construction of people's livelihood projects, takes the workers' affairs as the top priority
and implements them into action, making every effort to create a "family culture" across the board. The establishment of the
"voice of workers" direct line and the regular promotion of "doing practical things for the masses" has greatly enhanced the
sense of belonging and happiness of the masses of workers. To build a "AAA" level scenic garden factory as a basis, and strive to
improve the plant environment.
14
Bengang Steel Plates Co., Ltd. 2022 Annual Report
2. Income and cost
(1) Breakdown of operating income
Unit: RMB
FY2022 FY2021 Change over
Amount Proportion Amount Proportion last year
Total operating
62,616,621,627.60 100% 77,912,144,981.46 100% -19.63%
income
By Industries
Industry 62,616,621,627.60 100.00% 77,912,144,981.46 100.00% -19.63%
By products
Steel plate 59,395,642,984.38 94.86% 69,992,675,798.60 89.84% -15.14%
Others 3,220,978,643.22 5.14% 7,919,469,182.86 10.16% -59.33%
By regions
Northeast 23,156,472,367.43 36.98% 31,503,298,043.72 40.43% -26.50%
North China 2,727,436,320.34 4.36% 3,199,355,088.45 4.11% -14.75%
East China 28,747,114,756.97 45.91% 33,516,981,788.40 43.02% -14.23%
Northwest 49,874,139.13 0.08% 68,888,026.23 0.09% -27.60%
Southwest 0.00 0.00% 135,459,678.97 0.17% -100.00%
Central south 2,903,291,017.72 4.64% 3,152,641,431.89 4.05% -7.91%
Export 5,032,433,026.01 8.04% 6,335,520,923.80 8.13% -20.57%
By sales model
Sales in domestic
57,584,188,601.59 91.96% 71,576,624,057.66 91.87% -19.55%
market
Sales in export market 5,032,433,026.01 8.04% 6,335,520,923.80 8.13% -20.57%
(2) Industry, product and regions accounting for the Company’s operating income or profit over 10%
Applicable □Not applicable
Unit: RMB
Operating income Operating costs Gross margin
Gross
Operating income Operating costs change over last change over last changes over
margin
year year last year
By industries
Industry 62,616,621,627.60 62,259,334,854.72 0.57% -19.63% -13.40% -7.80%
By products
Steel plate 59,395,642,984.38 59,110,682,153.73 0.48% -15.14% -8.74% -7.58%
Others 3,220,978,643.22 3,148,652,700.99 2.25% -59.33% -55.78% -8.91%
By regions
Northeast 23,156,472,367.43 23,031,001,219.05 0.54% -26.50% -20.41% -8.33%
North China 2,727,436,320.34 2,712,587,336.95 0.54% -14.75% -7.49% -8.56%
East China 28,747,114,756.97 28,591,540,849.21 0.54% -14.23% -8.00% -7.30%
Northwest 49,874,139.13 49,638,921.44 0.47% -27.60% -22.38% -7.25%
Southwest 0.00 0.00 0.00% -100.00% -100.00% -7.35%
Central south 2,903,291,017.72 2,881,938,977.49 0.74% -7.91% -0.07% -8.57%
Export 5,032,433,026.01 4,992,627,550.58 0.79% -20.57% -14.96% -7.11%
By sales model
Sales in
domestic 57,584,188,601.59 57,266,707,304.14 0.55% -19.55% -13.26% -7.86%
market
Sales in export 5,032,433,026.01 4,992,627,550.58 0.79% -20.57% -14.96% -7.11%
15
Bengang Steel Plates Co., Ltd. 2022 Annual Report
Operating income Operating costs Gross margin
Gross
Operating income Operating costs change over last change over last changes over
margin
year year last year
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
Industry classification Item Unit FY2022 FY2021 Change over last year
Sales ton 14,022,304.90 13,883,661.11 1.00%
Production ton 13,892,713.60 13,996,055.15 -0.74%
Steel rolling processing industry
Inventory ton 472,324.93 601,916.23 -21.53%
The main reasons that the relevant data changed by more than 30%
□Applicable Not applicable
(4) Performance of significant sales and purchase contracts signed up in this reporting period
□Applicable Not applicable
(5) Breakdown of operating cost
Industry classification
Industry classification
Unit: RMB
Industry FY2022 FY2021 Change over
Item
classification Amount Proportion Amount Proportion last year
Steel rolling
Raw material 32,656,346,258.98 52.45% 37,341,970,406.79 51.94% 0.51%
processing industry
Steel rolling Supplementary
2,471,539,945.40 3.97% 2,839,512,165.81 3.95% 0.02%
processing industry materials
Steel rolling Spare parts and
664,918,489.57 1.07% 785,960,965.25 1.09% -0.02%
processing industry tools
Steel rolling
Fuel 19,516,799,781.80 31.35% 22,184,848,601.81 30.86% 0.49%
processing industry
Steel rolling
Energy 2,654,880,861.12 4.26% 3,182,838,986.67 4.43% -0.17%
processing industry
Steel rolling
Salary and benefits 1,890,550,009.31 3.04% 2,582,531,198.03 3.59% -0.55%
processing industry
Steel rolling
Depreciation 1,941,797,897.36 3.12% 2,333,028,229.90 3.25% -0.13%
processing industry
Steel rolling
Others 462,501,611.18 0.74% 640,907,782.70 0.89% -0.15%
processing industry
Steel rolling
Total 62,259,334,854.72 100.00% 71,891,598,336.96 100.00% 0.00%
processing industry
Instruction:
None
(6) Whether changes occurred in consolidation scope in the reporting period
Yes □ No
16
Bengang Steel Plates Co., Ltd. 2022 Annual Report
Chongqing Liaoben Steel Trading Co., Ltd., Harbin Nanjing Bengang Economic Trading Co., Ltd., Nanjing Bengang Material Sales
Co., Ltd. and Wuxi Bengang Steel Sales Co., Ltd. were cancelled during the reporting period.
Benxi Steel Baojin (Shenyang) Automobile New Material Technology Co., Ltd. lost control due to the capital increase of Xiamen
Xianghong Investment Co., Ltd. on July 8th, 2022 and was no longer included in the scope of consolidation.
Bengang Steel Plate Liaoyang Qiutuan Co., Ltd. was sold to Benxi Iron & Steel (Group) Mining Co., Ltd. on September 30th, 2022.
(7) Relevant information on significant changes or adjustments of the business, product or service in the reporting period
□Applicable Not applicable
(8) Information of main customers and main suppliers
Information about the Company’s main customers
Total sales amount of the top five customers (RMB) 12,044,601,335.68
Total sales amount of the top five customers accounted for the proportion of total annual sales 19.24%
The proportion of the total sales of the related parties in the top five customers 0.00%
Information on the top 5 customers
No. Name Amount (RMB) Proportion
1 SINO-ORDINS (SHANGHAI) Co., Ltd. 4,733,513,419.58 7.56%
2 Ningbo AUX Trade Co., Ltd. 2,291,124,107.81 3.66%
3 Xiamen Jian Fa Metal Co., Ltd. 1,924,217,733.92 3.07%
4 Shanghai Xiangyu Musheng Trading Co., Ltd. 1,554,697,112.29 2.48%
5 Shanghai Ouyeel Supply Chain Co., Ltd. 1,541,048,962.08 2.46%
Total -- 12,044,601,335.68 19.24%
Other information about principal customers
□Applicable Not applicable
Information on the Company’s main suppliers
Total purchase amount of the top five suppliers (RMB) 26,231,620,231.03
Total purchase amount of the top five suppliers accounted for
42.13%
the proportion of total purchase
The proportion of the total purchase of the related parties in the
31.85%
top five suppliers
Information on the top 5 suppliers
No. Name Amount (RMB) Proportion
Benxi Beiying Steel & Iron
1 14,514,254,816.98 23.31%
(Group) Co., Ltd.
Benxi Steel & Iron (Group)
2 5,318,150,084.18 8.54%
Mining Co., Ltd.
Heilongjiang Dragon Coal
3 3,407,948,503.54 5.47%
Group Co., Ltd.
Liaoning Electric Power Co.,
4 Ltd. Benxi Electric Power 2,048,164,867.34 3.29%
Supply Company
Jiaozuo Guolong Logistics Co.,
5 943,101,958.99 1.51%
Ltd.
Total -- 26,231,620,231.03 42.13%
Other information about principal suppliers
□Applicable Not applicable
17
Bengang Steel Plates Co., Ltd. 2022 Annual Report
3. Expenses
Unit: RMB
Notes to significant
FY2022 FY2021 Change over last year
change
Selling and distribution
128,489,696.80 141,394,565.57 -9.13%
expenses
General and Affected by decreases
administrative 663,080,654.45 1,187,239,442.10 -44.15% in salaries, repair costs,
expenses and labor costs
Financial expenses 523,070,165.35 536,593,635.06 -2.52%
Research and
58,088,008.14 56,401,594.44 2.99%
development expenses
4. Research and development input
Applicable □Not applicable
Expected impact on the
Main R&D project
Project purpose Project progress Intended goal future development of
name
the Company
Through process technology It helps Bengang to
research, realize the enter the high-end
Achieve stable
industrialized production of bearing steel market,
control of chemical
special quality bearing steel improve the economic
Oxygen, titanium, composition,
to provide support for high- efficiency of the
Key technology calcium and inclusions inclusions, low-
speed trains, automobiles, enterprise, and can
research on smelting control process research frequency
wind power and other high- lead the overall special
of special quality is underway, and organization, and
end equipment fields, and steel process
bearing steel production process trials rolling contact
meet the raw material technology progress,
are being conducted. fatigue life of bearing
needs of domestic and laying the foundation
steel greater than
international high-end for building a high-
107 cycles.
bearing manufacturing quality special steel
enterprises. production base.
Through blast furnace
breakage investigation,
Completed breakage The exploration of the
furnace design analysis,
investigation, refractory safe life cycle of
resistant material Clarify the
erosion mechanism castables is of great
performance analysis, mechanism of
research, formed Blast significance to
binder simulation furnace cylinder
Furnace Lining Erosion Bengang, and the
Long life technology experiment and mechanism breakage, improve
Characteristics Analysis successful development
study of blast analysis, blast furnace the blast furnace life
and Blast Furnace of new furnace cylinder
furnace No.5 operation analysis, and blast by 1 year on the
Cylinder Binder Physical technology can
furnace rapid repair basis of design, and
Phase and Performance fundamentally solve
technology analysis, we reach 3.5 years of
Analysis two analysis the problem of the
analyze the causes of castable material life.
reports, completed the short life of large blast
furnace cylinder breakage
mid-term node. furnaces.
and take effective measures
to improve the cylinder life.
Through improving the Expand the market
cleanliness of the strip, order quantity of cold-
High-grade cold- Improve the surface quality
optimizing the acid rolled automobile outer
rolled automotive of high-grade cold-rolled Batch production
rolling speed and plates, improve the
outer plate surface automotive outer plates to qualification rate of
changing the rolling visibility of cold-rolled
quality meet user needs and reduce 72% or more.
mode of the flattening automobile outer plate
improvement manufacturing costs.
machine from constant products, enhance
elongation to constant market
18
Bengang Steel Plates Co., Ltd. 2022 Annual Report
Expected impact on the
Main R&D project
Project purpose Project progress Intended goal future development of
name
the Company
rolling force mode, competitiveness, and
optimizing the final create considerable
rolling temperature of economic benefits.
the hot rolling and the
pressing rate of the cold
rolling, the focus is on
solving the longitudinal
stamping stripe and
wide plate scooping
defects of the high-
grade outer plate.
At present, processing
enterprises mainly purchase
1500mm-based high-
strength tank steel,
materials, equipment
production efficiency is low,
the efficiency of personnel is
low, while because of more
welding seams led to an
Take advantage of the
increase in man-hours, With efficiency as the
2300 unit to produce
aesthetics and other focus, according to
high strength, thin
defects. The market is in the light weight
Completed laboratory specification and wide
Research and urgent need of extra-wide demand of steel for
research, industrial trial width, expand the
development of specification tank steel commercial vehicle
production, has market of such
steel for wide high (width ≥ 1800mm), which tanks, the Company
achieved batch stable products, form unique
strength tank series can effectively improve the has developed a wide
supply. products, fill the gaps in
utilization rate of materials, range of high-
the industry and
equipment, personnel and strength steel for
improve market
production efficiency of tank series.
competitiveness.
processing enterprises.
Using the advantages of the
production line of Bensteel
2300 unit to produce wide
specification high strength
steel, the development of
wide high strength tank
body series with steel to
meet market demand.
Based on the study of Based on the For the current Ti
microstructure, grain metallographic tests, the micro-alloyed
boundary characteristics, grain size of the micro- 500MPa ~ 750MPa
precipitation phase alloyed series of hot-rolled
characteristics, automotive structural automotive
Micro-alloyed series
strengthening mechanism high-strength steels was structural beam
of automotive
and other mechanisms of measured using Image- steel, compartment This project focuses on
structural high-
micro-alloyed automotive Pro Plus software, and steel and hot-rolled increasing sales by
strength steel
structural high-strength the contribution of pickled plate, etc., to improving customer
performance
steel, the micro-alloyed precipitation achieve the average satisfaction.
stability technology
series of hot-rolled strengthening to yield tensile strength
research
automotive structural high- strength was back- ±50MPa range hit
strength beam steel, calculated from the rate from the current
compartment steel and actual performance test 78.71% to 85.00%,
automotive structural steel results, and then the the use of increased
performance stability is differences of Ti content, reduce
19
Bengang Steel Plates Co., Ltd. 2022 Annual Report
Expected impact on the
Main R&D project
Project purpose Project progress Intended goal future development of
name
the Company
improved through the precipitation the amount of
control of steel-making strengthening with precious alloy.
composition and precise different Ti contents and
control of the hot rolling its contribution to yield
process. strength were analyzed.
Information on research and development personnel by the Company
FY2022 FY2021 Change over last year
Number of research and development staff 1,601 1,798 -10.96%
Proportion of number of research and development staff 10.83% 9.53% 1.30%
Educational structure of research and development staff
Bachelor 1,158 1,233 -6.08%
Master's degree 164 162 1.23%
Age composition of research and development staff
Under the age of 30 82 109 -24.77%
30 to 40 years old 471 586 -19.62%
Information on research and development input by the Company
FY2022 FY2021 Change over last year
Amount of research and development investment (RMB) 1,923,920,000.00 2,343,822,000.00 -17.92%
Proportion of research and development investment to operating
3.07% 3.01% 0.06%
income
Amount of capitalized research and development investment 0.00 0.00 0.00%
Proportion of capitalized research and development investment
0.00% 0.00% 0.00%
accounted to total research and development investment
Reasons for and effects of significant changes in the composition of the Company's R&D staff
□Applicable Not applicable
Reasons for the significant change in total R&D investment as a proportion of operating income compared to the previous year
□Applicable Not applicable
Reasons for the significant change in the capitalization rate of R&D investment and its reasonableness
□Applicable Not applicable
5. Cash flow
Unit: RMB
Item FY2022 FY2021 Change over last year
Subtotal of cash inflows from operating activities 51,680,631,749.58 56,328,587,878.30 -8.25%
Subtotal of cash outflows from operating activities 50,404,268,784.02 55,915,114,424.26 -9.86%
Net cash flows from operating activities 1,276,362,965.56 413,473,454.04 208.69%
Subtotal of cash inflows from investing activities 145,128,645.47 11,402,720,358.72 -98.73%
Subtotal of cash outflows from investing activities 1,707,467,068.85 7,504,976,365.56 -77.25%
Net cash flows from investing activities -1,562,338,423.38 3,897,743,993.16 -140.08%
Subtotal of cash inflows from financing activities 4,759,751,595.78 8,162,945,228.08 -41.69%
Subtotal of cash outflows from financing activities 9,497,398,695.88 15,363,346,740.69 -38.18%
Net cash flows from financing activities -4,737,647,100.10 -7,200,401,512.61 -34.20%
Net increase in cash and cash equivalents -5,002,436,380.28 -2,930,318,531.64 70.71%
Illustrations of key factors of significant changes over the same period last year
Applicable □Not applicable
(1) Net cash flow from operating activities increased by 208.69% compared with the previous period, mainly due to the decrease
in profit for the period, the decrease in income tax paid and the receipt of incremental retained tax refund for value-added tax in
20
Bengang Steel Plates Co., Ltd. 2022 Annual Report
the period.
(2) The subtotal cash inflow from investing activities decreased by 98.73% compared with the previous period, mainly due to the
decrease in time deposits in the current period.
(3) The subtotal of cash outflow from investing activities decreased by 77.25% compared with the previous period, which was
mainly due to the absence of investment and financial management activities in the current period.
(4) Net cash flow from investing activities decreased by 140.08% compared with the previous period, mainly due to the decrease
in time deposits collected and the absence of investment and financial management activities in the current period.
(5) The subtotal of cash inflow from financing activities decreased by 41.69% compared with the previous period, mainly due to
the decrease of borrowings in the current period.
(6) The subtotal of cash outflow from financing activities decreased by 38.17% compared with the previous period, mainly due to
the decrease in repayment of loans and interest on loans, and the decrease in restricted monetary funds in the current period.
(7) Net cash flow from financing activities decreased by 34.2% compared with the previous period, mainly due to the decrease in
repayment of loans and interest on loans in the current period.
(8) Net increase in cash and cash equivalents increased by 70.71% compared with the previous period, mainly due to the
decrease in borrowings and dividend payment 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: RMB
Whether it is
Amount Proportion of total profit Reason for formation
sustainable or not
Investment income from disposal of
Investment Income 89,589,183.44 -8.29% No
long-term equity investments
Due to the increase in the provision
Asset impairment -33,475,219.25 0.40% No
for inventory impairment
Non-operating Due to the income from disposal of
40,130,944.39 -3.71% No
income non-current assets
Due to the disposal of assets in
Operating expenses 26,623,177.77 -2.46% No
the current period
VI. Analysis of assets and liabilities
1. Significant change of assets components
Unit: RMB
Ending balance of 2022 Beginning balance of 2022
Notes to
Proportion Proportion Proportion
significant
Amount in the total Amount in the total change
change
assets (%) assets (%)
Due to
Cash and cash repayment of
1,461,145,641.87 3.31% 8,831,095,737.85 16.01% -12.70%
equivalents borrowings by
the Company
Accounts receivable 897,230,896.06 2.03% 256,850,782.71 0.47% 1.56%
Contract assets 0.00%
Inventory 8,463,728,475.18 19.19% 10,190,166,138.98 18.48% 0.71%
Investment properties 0.00%
21
Bengang Steel Plates Co., Ltd. 2022 Annual Report
Long-term equity
51,030,777.18 0.12% 2,981,784.07 0.01% 0.11%
investments
Fixed assets 24,836,556,422.90 56.30% 25,480,674,048.94 46.20% 10.10%
Construction in
3,158,195,899.65 7.16% 2,434,182,101.13 4.41% 2.75%
progress
Right-of-use assets 1,379,990,713.89 3.13% 1,440,365,248.31 2.61% 0.52%
Due to
repayment of
Short-term loans 49,200,000.00 0.11% 4,053,088,140.00 7.35% -7.24%
borrowings by
the Company
Contract liabilities 3,794,115,592.29 8.60% 4,708,188,093.78 8.54% 0.06%
Long-term borrowings 1,726,938,302.30 3.91% 4,222,821,771.74 7.66% -3.75%
Lease liabilities 1,384,348,462.18 3.14% 1,424,667,169.15 2.58% 0.56%
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 Closing balance Restricted reasons
Bank acceptance margin 164,482,958.67 Margin on bills
355,701,965.15 Pledge and endorsement discounting
Letter of credit margin
not yet due
1,016,420,266.27 Release of pledge agreement has been
signed and application for release of
Loan margin
registration of equity pledge is in
process
85,164,490.39 Mortgage to obtain funds for
Time deposit or notice deposit for guarantee
borrowing
35,260,567.22 Mortgage to obtain funds for
Restricted deposits
borrowing
Total 1,657,030,247.70
VII. Analysis of the investment situation
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
22
Bengang Steel Plates Co., Ltd. 2022 Annual Report
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
23
Bengang Steel Plates Co., Ltd. 2022 Annual Report
(1) Use of raised funds
Applicable □Not applicable
Unit: RMB 10,000
Cumula
Amoun
tive The
The total Cumulati t of
propor purpose
amount of ve total funds
tion of and
Used funds amount raised
Method Total The total total The total destinat
amount of raised for of funds after
Ye of amount of used raised amount of ion of
raised change of raised being
ar raising raised amount of funds funds raised the
fund this purpose for idle for
funds funds funds raised for not used raised
period during the change more
change funds
reporting of than
s of not yet
period purpose two
purpos used
years
es
Private
placeme
20
nt to 396,580 4,520.32 338,726.62 57,853.38 Deposit
18
raise
funds
Issue of
20 converti 101,47
675,920 62,608.05 423,676.46 252,243.54 Deposit
20 ble 9
bonds
To 101,47
-- 1,072,500 67,128.37 762,403.08 0 0 0.00% 310,096.92 --
tal 9
Description of the overall use of raised funds
1. Status of use of funds for investment projects with raised funds
Details of the actual use of proceeds in FY2022 of the Company are set out in Appendix I Comparison Table on the Use of Proceeds
from Non-public Offering of Shares and Appendix II Comparison Table on the Use of Proceeds from Public Offering of Convertible
Bonds.
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 in 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, 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 28th, 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 1st, 2018 to February 28th, 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 RMB 1,586,377.16 (not yet
replaced from the special account of raised funds). The Company transferred RMB 86,709,830.40 from the fundraising account to
the general deposit account in 2020.
During the period from March 1st, 2019 to May 31st, 2021, the Company paid RMB 62,608,242.01 for the construction of the project
24
Bengang Steel Plates Co., Ltd. 2022 Annual Report
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 RMB 12,216,242.52. The Company has
transferred the above amount from the fundraising account to the general deposit account in 2021.
During the period from June 1st, 2021 to May 31st, 2022, the Company paid the amount of RMB 37,435,207.38 for the construction
of the raised fund investment project with self-raised funds, all of which was used for the construction of cold-rolled high-strength
steel renovation project. As of December 31st, 2022, the Company has transferred the above amount from the fund-raising account
to the general deposit account in 2022.
(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 RMB 366,180,860.17. 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 31st, 2020, the pre-invested amount of self-raised funds replaced by raised funds
was RMB 365,630,860.17, including RMB 76,278,945.59 for the No. 8 casting machine project of the steelmaking plant, RMB
119,043,290.09 for the No. 5 blast furnace capacity replacement project in the ironmaking plant, and special The steel electric
furnace upgrade and reconstruction project is RMB 59,948,807.90, the CCPP power generation project is 95,098,084.16 yuan, and
the steel plant No. 4-6 converter environmental protection renovation project is RMB 15,261,732.43. As of July 6th, 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 1st, 2019 to May 31st, 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, including high grade high magnetic inductance non-oriented silicon
steel project RMB 180,000.00. The No. 8 casting machine project is RMB 55,364,729.08, the No. 5 blast furnace capacity
replacement project in the iron plant is RMB 628,049,033.12, the special steel electric furnace upgrading project is RMB
253,298,156.22, the CCPP power generation project is RMB 115,353,050.36, and the No. 4-6 converter environmental protection
renovation project in the steel plant item RMB 30,111,840.69. The Company has transferred the above amount from the fundraising
account to the general deposit account in 2021.
During the period from June 1st, 2021 to May 31st, 2022, the Company paid the construction amount of RMB 614,208,698.23 for the
investment projects with self-raised funds, including: No.8 casters project of steel-making plant No.8 RMB 12,881,890.61, No.5 blast
furnace capacity replacement project of iron making plant RMB 17,508,088.97, electric furnace upgrade project of special steel
RMB 364,155,482.35, CCPP power generation project RMB 186,441,497.75, No.4 and No.6 converters environmental improvement
project of steel making plant RMB 33,221,738.55. The Company has transferred the above amount from the fund-raised account to
the general deposit account in 2022.
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 Supervisory Guidelines for Listed Companies No. 2 - Supervisory Requirements for the Management and Use of
Funds Raised by Listed Companies (Revised in 2022) (SFC Announcement [2022] No. 15) 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
25
Bengang Steel Plates Co., Ltd. 2022 Annual Report
In 2018, the Company used RMB 530,000,000.00 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 13th, 2018).
As of March 11th, 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 the 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 21st, 2019).
As of March 23rd, 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 RMB 666,000,000.00 (RMB 370,000,000.00 for the cold-rolled high-strength steel
reconstruction project, and RMB 296,000,000.00 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 27th, 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 RMB 666,000,000.00 (RMB 370,000,000.00 for the cold-rolled high-strength steel renovation
project, and RMB 296,000,000.00 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 been reviewed
and approved, and the independent directors of the Company have issued a clear agreement, that 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 27th, 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 RMB 604,000,000.00 (RMB 320,000,000.00 for the cold-rolled high-strength steel
reconstruction project, and RMB 284,000,000.00 for the hot-dip galvanizing production line project of the third cold rolling plant) to
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 July 28th, 2022, the Company used the idle funds raised from non-public issuance of stocks to temporarily supplement the
26
Bengang Steel Plates Co., Ltd. 2022 Annual Report
balance of working capital of RMB 604,000,000.00.
6) In July 2022, the funds raised from the non-public offering of stocks temporarily supplemented the working capital
The Company used idle funds raised of RMB 592,000,000.00 (RMB 308,000,000.00 for the cold-rolled high-strength steel renovation
project and RMB 284,000,000.00 for hot-dip galvanizing production line projects of three cold-rolling plants) to temporarily
supplement the working capital at the third meeting of the 9th Board of Directors and the third meeting of the 9th Supervisory
Committee of the Company held on July 28th, 2022 considered and approved, and the independent directors of the Company have
expressed their clear consent to the supplemental working capital for a period not exceeding 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 31st, 2022, the balance of the Company's use of the idle proceeds from the non-public offering of shares to
temporarily replenish working capital was RMB 592,000,000.00.
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 RMB 4,180,000,000.00 (RMB 1,010,000,000.00 for the high-grade high magnetic induction
non-oriented silicon steel project, RMB 220,000,000.00 for the No. 8 casting machine project of the steelmaking plant, RMB
800,000,000.00 for the production capacity replacement project of the No. 5 blast furnace in the ironmaking plant, and RMB
1,300,000,000.00 for special steel electric furnace upgrade and reconstruction project, RMB 700,000,000.00 for CCPP power
generation project, RMB 150,000,000.00 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 28th, 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 27th, 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 RMB 3,030,000,000.00 (RMB 1,010,000,000.00 for the high-grade high magnetic induction
non-oriented silicon steel project, RMB 150,000,000.00 for the No. 8 casting machine project of the steelmaking plant, RMB
160,000,000.00 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. RMB 1,000,000,000.00, CCPP power generation project RMB 590,000,000.00,
steel plant No. 4-6 converter environmental protection renovation project RMB 120,000,000.00) Temporary replenishment of
working capital The nineteenth meeting of the eighth Board of Directors of the company held on July 28th, 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 July 28th, 2022, 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.
(3) In July 2022, the funds raised from the public offering of convertible bonds temporarily replenished working capital
The Company used idle proceeds of RMB 3,014,000,000.00 (RMB 1,015,000,000.00 for high grade high magnetic susceptibility non-
27
Bengang Steel Plates Co., Ltd. 2022 Annual Report
oriented silicon steel project, RMB 165,000,000.00 for No. 8 casters project of steel making plant, RMB 175,000,000.00 for No. 5
blast furnace capacity replacement project of iron making plant, RMB 933,000,000.00 for special steel electric furnace upgrade
project, CCPP power generation project RMB 578,000,000.00, and RMB 148,000,000.00 for environmental protection improvement
project of No. 4-6 converters of steel making plant), temporary supplemental working capital matters were considered and
approved at the third meeting of the ninth session of the Board of Directors and the third meeting of the ninth session of the
Supervisory Committee of the Company held on July 28th, 2022, and the independent The directors have expressed their clear
consent to the supplemental liquidity for a period not exceeding 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 31st, 2022, the balance of RMB 3,014,000,000.00 was used by the Company to temporarily replenish working
capital with idle proceeds from the public offering of convertible corporate bonds.
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 31st, 2021, in addition to the above-mentioned "(3) Preliminary investment and replacement of raised funds
investment projects", and "(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.
Other information on the use of raised funds
There were no other situations about the use of raised funds of the Company.
28
Bengang Steel Plates Co., Ltd. 2022 Annual Report
(2) Fundraising commitments
Applicable □Not applicable
Unit: RMB 10,000
Wheth
Has
er the
the
item Item
Total proje
has Cumulative Investment reach
Commitment committe Amount Benefits Whether ct
been Adjusted investment progress es
to investment d invested realized the feasi
change total amount by by the end sched
projects and investme during the during the expected bilit y
d investme the end of of the uled
over-raised nt of reporting reporting benefit is chan
(includi nt (1) the period period (3) availa
funds raised period period achieved ged
ng (2) = (2)/ (1) bility
funds signif
some date
ica
change
ntly
s)
Commitment to Investment Projects
Cold-rolled
high-strength
steel No 226,580 226,580 4,520.32 197,212.39 87.04% -14,582.14 No No
renovation
project
Hot-dip
galvanizing
production
No 70,000 70,000 41,514.24 59.31% -1,797.61 Yes No
line project of
the third cold
rolling plant
Repay bank Not
No 100,000 100,000 100,000 100.00% No
loan applicable
High grade
high magnetic
induction
Not
non-oriented No 101,620 101,620 141 0.14% No
applicable
silicon steel
engineering
project
Steel Plant
No. 8 Casting
No 33,500 33,500 1,300.8 17,648.91 52.68% -8,801.71 Yes No
Machine
Project
No. 5 blast
furnace
capacity
No 96,000 96,000 1,805.68 78,499.23 81.77% -8,672.7 No No
replacement
project in
ironworks
Special Steel
Electric
Furnace Not
No 141,600 141,600 37,182.68 78,904.64 55.72% No
Upgrade and applicable
Reconstructio
n Project
CCPP power No 83,300 83,300 18,996.71 40,437.02 48.54% Not No
29
Bengang Steel Plates Co., Ltd. 2022 Annual Report
Wheth
Has
er the
the
item Item
Total proje
has Cumulative Investment reach
Commitment committe Amount Benefits Whether ct
been Adjusted investment progress es
to investment d invested realized the feasi
change total amount by by the end sched
projects and investme during the during the expected bilit y
d investme the end of of the uled
over-raised nt of reporting reporting benefit is chan
(includi nt (1) the period period (3) availa
funds raised period period achieved ged
ng (2) = (2)/ (1) bility
funds signif
some date
ica
change
ntly
s)
generation applicable
project
Environmental
protection
renovation
project of Not
No 19,900 19,900 3,322.17 8,045.66 40.43% No
converter No. applicable
4-6 in
steelmaking
plant
Repay bank Not
No 200,000 200,000 200,000 100.00% No
loan applicable
Subtotal of
Committed
-- 1,072,500 1,072,500 67,128.37 762,403.08 -- -- -33,854.16 -- --
Investment
Projects
Over-raised funds are invested in
None
Total -- 1,072,500 1,072,500 67,128.37 762,403.08 -- -- -33,854.16 -- --
Explanation
by project, the
situation and
reasons for
not reaching
the planned
progress and
expected The market environment has undergone major changes. The cold-rolled high-strength steel reconstruction project and the hot-
benefits dip galvanizing production line project of the third cold-rolling plant have reached their production capacity. During the
(including the reporting period, other projects did not meet the planned progress or expected income.
reasons for
selecting "Not
applicable" for
"Whether to
achieve the
expected
benefits")
Status of the
description of
material
None
changes in
project
feasibility
30
Bengang Steel Plates Co., Ltd. 2022 Annual Report
Wheth
Has
er the
the
item Item
Total proje
has Cumulative Investment reach
Commitment committe Amount Benefits Whether ct
been Adjusted investment progress es
to investment d invested realized the feasi
change total amount by by the end sched
projects and investme during the during the expected bilit y
d investme the end of of the uled
over-raised nt of reporting reporting benefit is chan
(includi nt (1) the period period (3) availa
funds raised period period achieved ged
ng (2) = (2)/ (1) bility
funds signif
some date
ica
change
ntly
s)
Status of
amount,
purpose and
Not applicable
progress of
use of over-
raised funds
Status of
changes in
implementati
on locations
Not applicable
of raised
funds
investment
projects
Status of
adjustment of
the
implementati
on method of Not applicable
raised
funds for
investment
projects
Status of Applicable
preliminary
investment
and
replacement
For details, please refer to the special report III. (3)
of raised
funds for
investment
projects
Status of Applicable
temporary
replenishment
of working
For details, please refer to the special report III. (4)
capital with
idle raised
funds
Reasons and Not applicable
amount for
the balance of
raised funds in
31
Bengang Steel Plates Co., Ltd. 2022 Annual Report
Wheth
Has
er the
the
item Item
Total proje
has Cumulative Investment reach
Commitment committe Amount Benefits Whether ct
been Adjusted investment progress es
to investment d invested realized the feasi
change total amount by by the end sched
projects and investme during the during the expected bilit y
d investme the end of of the uled
over-raised nt of reporting reporting benefit is chan
(includi nt (1) the period period (3) availa
funds raised period period achieved ged
ng (2) = (2)/ (1) bility
funds signif
some date
ica
change
ntly
s)
project
implementati
on
Use and
whereabouts
For details, please refer to the special report III. (8)
of unused
raised funds
Problems or
other
situations in
There is no problem otherwise
the use and
disclosure of
raised funds
(3) The situation for change of fund-raising projects
□Applicable Not applicable
During the reporting period, the Company did not have any changes in the fund raising project.
VIII.Significant assets and equity sold in the reporting period
1. Significant assets sold
□Applicable Not applicable
There was no significant asset sold during the reporting period.
32
Bengang Steel Plates Co., Ltd. 2022 Annual Report
2. Substantial equity sold
Applicable □Not applicable
Whether the
Net profit implementat
contributed by Proportion ion is on
the equity of net profit Whether the schedule as
interest to the contributed Whethe equity planned,
Affiliati
Equity Transaction listed company Impact of the to the total Equity sale r it is a interests and if not,
on with Disclosure Disclosure
Counterparty interests Sale day price (RMB from the sale on the net profit of pricing related involved the reasons
counter date index
sold 10,000) beginning of Company the listed principles transact have been and the
parties
the period to company ion fully measures
the date of from equity transferred taken by the
sale (RMB sales Company
10,000) should be
explained
The transfer will The
help promote the transaction
Announceme
Company's price is
nt on Equity
100% equity development based on the
Same Transfer and
interest in strategy of equity
subsidia Connected
Benxi Iron & Bengang Septembe "building a high- valuation
ry of October 1st, Transaction
Steel Mining Co., Steel Plates r 29th, 69,798 quality plate value issued Yes Yes yes
Benxi 2022 of Wholly-
Ltd. Liaoyang 2022 base" and further by China
Iron & owned
Pellet Co., solve the United
Steel Subsidiary
Ltd. problem of Assets
(No. 2022-
competition in Appraisal
058)
the same Group Co.,
industry Ltd.
33
Bengang Steel Plates Co., Ltd. 2022 Annual Report
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: RMB
Compa
Compan Main Registered Operating Operating
ny Total assets Net assets Net Profit
y type business capital income profit
name
Bengan
g
Puxiang
Processi
Cool
Subsidia ng and 1,920,000,0 3,674,072,114 2,303,358,054 9,820,616,858 175,215,785. 135,690,857.
Rolling
ry sales of 00 .13 .33 .86 24 38
Steel
steel
Sheet
Co.,
Ltd.
Acquirement and disposal of subsidiaries during the reporting period
Applicable □Not applicable
Method of acquisition and disposal of Impact on overall production
Company name
subsidiaries during the reporting period operations and results
Harbin Nanjing Bengang Economic Trading Co., Ltd. Cancellation None
Nanjing Bengang Material Sales Co., Ltd. Cancellation None
Chongqing Liaoben Steel Trading Co., Ltd. Cancellation None
Wuxi Bengang Steel Sales Co., Ltd. Mergers and acquisitions None
Benxi Steel Baojin (Shenyang) Automobile New Loss of control of the Company due to
None
Material Technology Co., Ltd. capital increase by other shareholders
Illustration of major holding and equity participation companies
Chongqing Liaoben Steel Trading Co., Ltd., Harbin Nanjing Bengang Economic Trading Co., Ltd. and Nanjing Bengang Material
Sales Co., Ltd. were cancelled during the reporting period. Wuxi Bengang Steel Sales Co., Ltd. was absorbed and consolidated
during the reporting period. Benxi Steel Baojin (Shenyang) Automobile New Material Technology Co., Ltd. was no longer included
in the scope of consolidation as the Company lost control due to the capital increase of Xiamen Xianghong Investment Co., Ltd.
X. Structure entities controlled by the Company
□Applicable Not applicable
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 2023 is a "challenge year" for Bengang Steel Plates to improve itself in the face of difficulties. The world economy is
entering a new period of turbulence and change as the century-old changes and the epidemic of the century intertwine,
economic globalization encounters a counter-current, and the game between major powers becomes increasingly fierce. At the
same time, we should also clearly understand the favorable signals released by the Party's 20th National Congress, China's
economic resilience, potential, long-term positive fundamentals have not changed, with the continued force of infrastructure
demand and the steady growth of new energy vehicles, the steel market is expected to end the downturn and gradually stabilize.
34
Bengang Steel Plates Co., Ltd. 2022 Annual Report
2. Company development strategy
Overall work concept in 2023: take Xi Jinping Thoughts on Socialism with Chinese Characteristics in the New Era as the guiding
principle, study and implement the spirit of the 20th Party Congress, rely on "two main lines", adhere to "three leading", follow
the "1357" working policy, anchored on the standard of world-class steel enterprises, deepen and refine the "1+2+3+N" priority
work, which is: focus on one center: adhere to the efficiency-centered high-quality development of listed companies; lay two
foundations: the foundation of safe development and green development; focus on three enhancements: reform and innovation
capacity enhancement, management level enhancement, and "N" measures to ensure a comprehensive benchmarking
enhancement, and strive to build a highly competitive international high-quality plate base and a domestic first-class special
steel base.
3. Business plan
In 2023, the production and operation target: strive to complete 10.3 million tons of pig iron, 11.41 million tons of crude steel,
14.29 million tons of hot-rolled plate, 5.7 million tons of cold-rolled plate and 720,000 tons of special steel.
In order to implement the above overall work concept and production and management objectives, we focus our efforts on the
following aspects:
First, adhere to the efficiency as the center, and comprehensively promote the high-quality development of Bengang Steel Plates
Second, adhere to safe and green development, and enhance the development of Bengang Steel Plates security power in all
aspects
Third, adhere to breaking our limits, comprehensive development of Bengang Steel Plates to create new advantages
Fourth, adhere to the Party's leadership, comprehensive leadership Bengang Steel Plates dream new journey
Fifth, adhere to the people's supremacy and play the theme of Bengang Steel Plates in an all-round way.
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) Market risk
The world economy has not yet the momentum to recover, the overall demand for steel downstream industries is weak, the
steel market supply-demand relationship is weak balance, and the supply exceeds demand market pattern has not changed
fundamentally. Restricted supply channels, geopolitical conflicts and other factors, the supply of energy resources factors market
tightening, ore, coal and coke and other bulk raw fuel prices fluctuate upward, business operating costs increased, and the
market risk highlighted.
Countermeasures: Establish predictive management thinking, strengthen market information collection, enhance analysis and
judgment of market changes, accurately control the market rhythm, dynamically adjust marketing strategies and timely adjust
marketing prices; strengthen regional market synergy, deepen strategic long-term cooperation and enhance the proportion of
35
Bengang Steel Plates Co., Ltd. 2022 Annual Report
direct supply and sales in the market; optimize product structure, adjust raw material structure, seize low-cost resources,
reasonably control inventory and effectively cope with market risks.
(2) Raw material supply risk
With the release and implementation of the "Fourteenth Five-Year Plan" Comprehensive Work Plan for Energy Conservation and
Emission Reduction, the double-high industry capacity production "double limit", total energy consumption intensity "double
control" and carbon peak carbon neutral and other policies continue to deepen, environmental regulations are becoming
increasingly stringent, the upstream coal and coke enterprises to eliminate backward production capacity and environmental
governance continue to increase, coal and coke production capacity is limited, prices run high. In terms of iron ore supply,
domestic supply is insufficient, foreign dependence is still high, influenced by geopolitics, capital speculation and other factors,
there are many uncertainties in the supply and price of iron ore, and ore prices will maintain a wide range of oscillation pattern,
which will have a serious impact on the supply chain security and business performance of steel companies.
Countermeasures: Strengthen the analysis and analysis of raw material production capacity and market demand, actively
promote strategic cooperation in raw material supply, consolidate and expand domestic raw material procurement channels,
deeply aggregate raw material resources, accelerate the formation of domestic and foreign double-cycle supply chain security
pattern, enhance the scale of procurement price advantage; scientifically control the timing of procurement, timely adjustment
of procurement strategy; continuously promote process innovation, optimize the production furnace structure, adjust the
procurement of raw material structure, reasonable control of raw material inventory, adjust raw fuel winter storage policy,
effectively reduce the adverse impact of raw material price fluctuations.
(3) Environmental protection risk
As the iron and steel industry continues to promote ultra-low emission policies and the "Fourteenth Five-Year Plan"
Comprehensive Work Plan for Energy Conservation and Emission Reduction, the Noise Pollution Prevention and Control Law and
other environmental laws and regulations are released and implemented, national and local governments are becoming
increasingly stringent on environmental protection, energy conservation and emission reduction requirements, and enterprises
are facing further pressure for environmental protection and green low-carbon development.
Countermeasures: Deeply implement the concept of green low-carbon development, strictly implement national environmental
protection laws and regulations, focus on the "source reduction, intermediate control, terminal transformation" of the whole
process of environmental management, in accordance with the "three treatment (treatment of gas, water, solid), the
implementation of four (that is, cleaning, greening, beautification, culture) "environmental protection concept, promote the
"higher than standard, better than the city, into the city" green steel plant construction, the full implementation of the "cleaning,
greening, beautification, culture" project, accelerate the formation of "exhaust gas ultra-low emission, waste water zero
discharge, solid waste does not leave the factory" green development pattern, and strive to build the national steel industry
whole process ultra-low emission demonstration project and steel enterprises green development benchmark, to ensure the
realization of environmental and ecological protection and green high-quality development of the "win-win" new situation.
(4) Safety production risk
The government has been increasing the supervision and punishment of enterprise safety production and occupational health. If
production safety measures are not in place and responsibilities are not implemented, various types of accident hazards and
safety risks are interwoven and superimposed during production and maintenance, and production safety accidents may occur,
causing economic losses and adverse effects to enterprises.
36
Bengang Steel Plates Co., Ltd. 2022 Annual Report
Countermeasures: Implement the important remarks of General Secretary Xi Jinping on safe production, firmly establish the
concept of safe development, focus on the goal of preventing and curbing serious accidents, and more in-depth assessment and
grading of the risk points and danger sources identified by the special action, especially to promote the work of grading and
controlling the risks of safe production, promote the scientific, information, standardization, institutionalization and
standardization of accident prevention, to achieve the control of risks before the formation of hidden dangers, and eliminate
hidden dangers in front of accidents.
XII. Researches, visits and interviews received in this reporting period
Applicable □Not applicable
The main content
of the conversation Index of basic
Reception Reception Reception
Reception time Reception object and the information of
location method type
information the research
provided
CITIC Construction Transcript of
Investment-Wang Company investor
February 22nd, Telephone XiaofangShenwan production and relations
Company Institution
2022 communication Hongyuan-Meng operation and activities on
Xiangwen, Chen industry situation February 22nd,
Songtao 2022
Transcript of
Company
investor
production and
April 8 , 2022
th
Company Others Individual Investors relations
operation and
activities on
industry situation
April 8th, 2022
Transcript of
Company
investor
Telephone Hua'an Securities-Xu production and
May 31 , 2022
st
Company Institution relations
communication Yongqi operation and
activities on
industry situation
May 31st, 2022
Transcript of
Company
Hua'an Securities-Xu investor
Telephone production and
June 16th, 2022 Company Institution Yongqi relations
communication operation and
Individual investors activities on
industry situation
June 16th, 2022
CITIC Securities-Tang
Chuanlin
CITIC Securities-
Wang Huixian and
Xiao Fan
Guoshou Pension-Li
Chi
Agricultural Bank of
China-Xu Qiao
Yingda Capital
Management-Zhang
Lichen Transcript of
Company
Huarong Securities-Li investor
Telephone production and
June 27th, 2022 Company Institution Yadong relations
communication operation and
Changxin Fund-Cai activities on
industry situation
Junhua June 27th, 2022
Rongtong Fund
Management Co.,
Ltd.-Li Guandi
Shenzhen Hongchou
Investment Co., Ltd.-
Wang Zhidong
Hangzhou Zhongda
Junyue Investment
Co., Ltd.-Lin Binbin
Shanghai Lizhen
Investment
37
Bengang Steel Plates Co., Ltd. 2022 Annual Report
Management Co.,
Ltd.- Zhu Yujun
Shanghai RuiYi
Investment
Development Center
(Limited Partnership)
- Li Jingyao
PRUDENCE
INVESTMENT
MANAEGEMENT
(HONG KONG)
LIMITED-Zhang
Zhibin
Cinda Securities-
Zhang Chi, Wang
Minglu
Huabao Fund-Sun
Jialun
Huaxin Securities
Asset Management-
Yang Jinglei Transcript of
Company
Evergrande Life - Shi investor
Telephone production and
July 14th, 2022 Company Institution Han relations
communication operation and
UBS SDIC Fund activities on July
industry situation
Management Co., 14th, 2022
Ltd.-Wang Kan
China Capital Orient
Fund Management
Co., Ltd.-Li Jinlong
CPIC Fund
Management Co.,
Ltd.- Tang Jingyi
Transcript of
Company investor
September 6th, production and relations
Company Others Individual Investors
2022 operation and activities on
industry situation September 6th,
2022
Transcript of
Company investor
September 15th, production and relations
Company Others Individual Investors
2022 operation and activities on
industry situation September 15th,
2022
Transcript of
Company investor
September 18th, production and relations
Company Field research Individual Zhang Zheng
2022 operation and activities on
industry situation September 18th,
2022
38
Bengang Steel Plates Co., Ltd. 2022 Annual Report
Section 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, improving the
governance level, and promoting 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 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
39
Bengang Steel Plates Co., Ltd. 2022 Annual Report
behavior. There is no direct or indirect intervention in the Company's decision-making and 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 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 the general manager, vice general manager, secretary of the Board of Directors, etc.
receive a salary from the Company, and none of them holds an important position in the shareholders' entity other than director.
(3) In Asset: The Company and controlling shareholder have a clear ownership relationship. The Company has its own
independent purchase, production, and marketing system.
(4) In organization: The internal operations of the Company are independent; the organization structure and working function
are totally independent.
(5) In finance: The Company has an independent financial management department, the accounting and financial management
system that are complete and operated independently, and has a bank account and pays taxes independently.
40
Bengang Steel Plates Co., Ltd. 2022 Annual Report
III. Competition situations of the industry
Applicable □Not applicable
Type of
Question affiliation Company Company
Cause Solution Progress and follow-up plans
type with listed name nature
companies
Industry Controlling In 2021, the
Based on the principle of
competition shareholder Company's original
benefiting the development of
actual controller,
Bengang Steel and safeguarding
Liaoning State-owned
the interests of shareholders,
Assets Supervision and
Ansteel especially the interests of small
Administration
Group has and medium shareholders,
Commission,
Ansteel made Ansteel Group will
transfered its 51%
Group Other commitments comprehensively use various
stakes in Bengang
Co., Ltd. to avoid methods such as asset
Group to Ansteel
industry restructuring, business
Group for free, and
competition. adjustment, and entrusted
Ansteel Group will
management to steadily promote
become the
the integration of related
Company's indirect
businesses to solve the problem
controlling
of horizontal competition.
shareholder
IV. Annual general meeting and extraordinary shareholders’ meetings in the reporting period
1. Annual general meeting
Investor
Index of information
Sessions Type participation Meeting Date Date of disclosure
disclosure
ratio
First Extraordinary Announcement of Resolutions of
Extraordinary
Shareholders General 63.41% March 3rd, 2022 March 4th, 2022 the First Extraordinary General
General Meeting
Meeting of 2022 Meeting of Shareholders of 2022
Annual Shareholders Announcement of Resolutions of
Annual General
General Meeting of 63.59% April 26th, 2022 April 27th, 2022 the Annual General Meeting of
Meeting
2021 Shareholders of 2021
Second Extraordinary Announcement of Resolutions of
Extraordinary
Shareholders General 76.72% July 22nd, 2022 July 23rd, 2022 the Second Extraordinary General
General Meeting
Meeting of 2022 Meeting of Shareholders of 2022
Third Extraordinary Announcement of Resolutions of
Extraordinary September 9th, September 10th,
Shareholders General 76.82% the Third Extraordinary General
General Meeting 2022 2022
Meeting of 2022 Meeting of Shareholders of 2022
Fourth Extraordinary Announcement of Resolutions of
Extraordinary December 2nd,
Shareholders General 76.86% December 3rd, 2022 the Fourth Extraordinary General
General Meeting 2022
Meeting of 2022 Meeting of Shareholders of 2022
Fifth Extraordinary Announcement of Resolutions of
Extraordinary December 29th, December 30th,
Shareholders General 77.07% the Fifth Extraordinary General
General Meeting 2022 2022
Meeting of 2022 Meeting of Shareholders for 2022
41
Bengang Steel Plates Co., Ltd. 2022 Annual Report
2. Request for an extraordinary general meeting by preferred stockholders whose voting rights restored
□Applicable Not applicable
V. Status of directors, supervisors, senior executives and employees
1. Basic situation
Number of Number of Number of Other Number of
Reasons for
shares held additional shares changes in shares held
change in
Office Starting date Expiry date of at the shares held reduced additions at the end
Name Position Sex Age share
status of office term office term beginning of during the during the and of the
increase or
the period period period deletions period
decrease
(shares) (shares) (shares) (shares) (shares)
December 7th,
Huo Gang Chairman In office Male 49 April 26th, 2025
2021
Director, Deputy
Wang November
General In office Male 48 April 26th, 2025
Shiyou 18th, 2021
Manager
December
Sun Zhen Director In office Male 39 April 26th, 2025
27th, 2022
May 27th,
Han Mei Director In office Female 53 April 26th, 2025
2021
Director, Deputy
Liu August 17th,
General In office Male 48 April 26th, 2025
Zhangman 2022
Manager
Tang Yaowu Director In office Male 50 July 22nd, 2022 April 26th, 2025
Zhang Independent May 16th,
In office Female 67 April 26th, 2025
Suxun Directors 2019
Yuan Independent May 20th,
In office Male 41 April 26th, 2025
Zhizhu Directors 2020
Zhong Independent May 27th,
In office Female 66 April 26th, 2025
Tianli Director 2021
Chairman of the
May 27th,
Cheng Bin Supervisory In office Male 59 April 26th, 2025
2021
Board
Bai Yufei Supervisor In office Female 52 July 22nd, 2022 April 26th, 2025
42
Bengang Steel Plates Co., Ltd. 2022 Annual Report
Number of Number of Number of Other Number of
Reasons for
shares held additional shares changes in shares held
change in
Office Starting date Expiry date of at the shares held reduced additions at the end
Name Position Sex Age share
status of office term office term beginning of during the during the and of the
increase or
the period period period deletions period
decrease
(shares) (shares) (shares) (shares) (shares)
December 7th,
Lu Weijun Supervisor In office Male 47 April 26th, 2025
2021
Zhang January 26th,
Supervisor In office Male 45 April 26th, 2025
Yanlong 2014
Zhao June 26th,
Supervisor In office Male 50 April 26th, 2025
Xingtao 2019
Deputy General November
Jing Tao In office Male 52 April 26th, 2025
Manager 18th, 2021
Deputy General August 17th,
Guo Yuwei In office Male 53 April 26th, 2025
Manager 2022
Secretary of the
Jiang Board of April 26th,
In office Female 51 April 26th, 2025
Xiaoyu Directors, Head 2022
of Finance
Leave December
Niu Li Director Male 54 August 2nd, 2022
office 25th, 2021
Director, Deputy
Leave May 27th,
Lin Dong General Male 52 August 2nd, 2022
office 2021
Manager
Director,
Gao Leave December 7th,
Secretary of the Male 48 July 6th, 2022
Desheng office 2021
Board
Zhao Leave May 27th,
Supervisor Female 38 July 6th, 2022
Zhonghua office 2021
Yang Deputy General Leave April 16th,
Male 58 August 2nd, 2022
Xiaofang Manager office 2021
Wang Chief Leave November
Male 53 April 26th, 2022
Donghui Accountant office 18th, 2021
Total -- -- -- -- -- -- 0 0 0 0 0 --
43
Bengang Steel Plates Co., Ltd. 2022 Annual Report
During the reporting period, is there any resignation of directors and supervisors and dismissal of senior management personnel
in the reporting period?
Yes □No
(1) Mr. Niu Li, a former employee Director of the Company, resigned during the reporting period due to job changes during his
term of office.
(2) Mr. Lin Dong, former Director and Deputy General Manager of the Company resigned during the reporting period due to a
change in his employment during his term of office.
(3) Mr. Gao Desheng, former Director and Secretary of the Board of Directors of the Company resigned during the reporting
period due to changes in his work during his term of office
(4) Mr. Yang Xiaofang, the former Deputy General Manager of the Company, resigned during the reporting period due to
changes in his work during his term of office
(5) Ms. Zhao Zhonghua, the former Supervisor of the Company, resigned during the reporting period due to changes in her work
during her term of office.
(6) Mr. Wang Donghui, the former Chief Accountant of the Company, resigned during the reporting period due to the change in
his work during his term of office.
Changes in directors, supervisors and senior management of the Company
Applicable □Not applicable
Name Position Office status Date Reason
Niu Li Director Leave office August 2nd, 2022 Voluntary turnover
Lin Dong Director, Deputy General Manager Leave office August 2nd, 2022 Voluntary turnover
Gao Desheng Director, Secretary of the Board Leave office July 6th, 2022 Voluntary turnover
Zhao Zhonghua Supervisors Leave office July 6th, 2022 Voluntary turnover
Termination of
Yang Xiaofang Deputy General Manager August 2nd, 2022 Job change
employment
Termination of
Wang Donghui Chief Accountant April 26th, 2022 Job change
employment
2. Posts holding
Professional background, major work experience and current major responsibilities in the Company of the current directors,
supervisors and senior management
Member profiles of the Board of Directors:
Huo Gang, male, 49 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 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 a
member of the Standing Committee of the Party Committee and Deputy General Manager of Bengang Group, Secretary of the
Party Committee and Chairman of the Board of Directors of Sheet Metal Company, and Chairman of the Board of Directors of
44
Bengang Steel Plates Co., Ltd. 2022 Annual Report
Bengang Puxiang Company.
Wang Shiyou, male, 48 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 Plates 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 Plates Co., Ltd.
(temporarily responsible for overall production and operation).
Sun Zhen, male, 39 years old, bachelor of university, assistant economist. He has served as the director of the office of Bengang
Steel Plates Company; secretary of the organ party committee, chairman of the labor union, director of the office and secretary
of the Board of Directors of Bengang Group Company; deputy head of the party committee preparatory group, head of the
disciplinary committee preparatory group, chairman of the labor union, employee director, general counsel, head of the organ
party committee preparatory group of Bengang Steel Mining Company; deputy secretary of the party committee, head of the
disciplinary committee preparatory group, chairman of the labor union, secretary of the organ party committee of Bengang Steel
Plates Company; he is currently the deputy secretary of the party committee, secretary of the disciplinary committee, chairman
of the labor union and secretary of the organ party committee and employee director of Bengang Steel Plates Company.
Liu Zhangman, male, 48 years old, college degree, senior engineer. He has served as deputy director of Beiying Second
Steelmaking Plant, deputy director of Beiying Steelmaking Plant; assistant to the executive vice general manager of Beiying
Company and chairman of Science and Technology Association, director of Technology Center; chief engineer of Beiying Company
and chairman of Science and Technology Association, director of New Products Department, manager of bar and wire
development project department, director of Bar and Wire Institute; deputy general manager and director of Bengang Beiying
Company; deputy director of manufacturing department of Bengang Steel Plates; deputy general manager of the Operations
Management Department of Bengang Group. Currently, he is a director and deputy general manager of Bengang Steel Plates Co.,
Ltd.
Han Mei, female, 53 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.
Tang Yaowu, male, 50 years old, bachelor of university, engineer. He has served as deputy director of the rolling mill of Bengang
Beiying Company; executive deputy director of the rolling mill of Bengang Beiying Company; director of the rolling mill of
Bengang Beiying Company; assistant to the general manager and director of the production department of Bengang Beiying
Company; chief engineer of Bengang Beiying Company; chief engineer and director of the rolling mill of Bengang Beiying
Company; deputy general manager and chief engineer of Bengang Beiying Company; deputy director of energy and
environmental protection department of Bengang Steel Plates. He is currently a full-time director and supervisor of Bengang
Group's office; director of Stainless-Steel Company; director of Machinery Manufacturing Company; director of Bengang Steel
Plates Co., Ltd. and supervisor of Thermal Power Development Company.
45
Bengang Steel Plates Co., Ltd. 2022 Annual Report
Zhang Suxun Female, 67 years old, bachelor's degree, professor. She has served as a teacher at the Business School of Liaoning
University; now she is retired.
Yuan Zhizhu, male, 41 years old, PhD, 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 1966, professor (doctoral supervisor) at 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.
Members profile of the Supervisory Board:
Cheng Bin, male, 59 years old, master, 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.
Bai Yufei, female, 52 years old, master, senior engineer. She has served as assistant professor and lecturer in the construction
teaching and research department of the Department of Mechanical Construction of Bengang Engineering College; director of
the engineering audit division of the audit department of Bengang Group Company; director of the audit department of the
Plates Company; supervisor of the Finance Company; executive deputy head of the preparation group of Bengang Group Tender
Company; manager of Bengang Group Tender Company. Currently, she is the general manager of the audit department of
Bengang Group Company, director of Mining Company, and supervisor of Bengang Steel Plates Co., Ltd.
Lu Weijun, male, 47 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, 45 years old, master, senior engineer. He successively served as production director of the steelmaking
workshop of Bengang Steel Plate Co., Ltd. steelmaking plant; deputy section chief of the technical quality section of Bengang
Steel Plate Co., Ltd. steelmaking plant; director of the 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 served as deputy chief
engineer of Bengang Puxiang Company; deputy general manager of Bengang Puxiang Company; deputy director of the cold
rolling mill of Bengang Steel Plates Co., Ltd.; secretary of the party committee and chairman of labor union of the cold rolling mill
of Bengang Steel Plates Co., Ltd., He is currently the deputy head of the party committee preparatory group, head of the
46
Bengang Steel Plates Co., Ltd. 2022 Annual Report
disciplinary committee preparatory group and chairman of the labor union of Bengang Steel Plates Company Marketing Center,
and supervisor of Bengang Steel Plates Co., Ltd.
Profile of non-director senior management:
Jing Tao, male, 52 years old, master, senior engineer. He has served as director of the finishing workshop and deputy secretary of
the party branch of the hot rolling mill, head of the technical quality section and secretary of the party branch, assistant plant
manager and deputy plant manager of Bengang Steel Plates; deputy director, secretary of the party committee and deputy
director of the quality management center, manager of the packaging project department and manager of the Packaging
Company of Bengang Steel Plates; director of the hot rolling mill of Bengang Steel Plates; secretary of the party committee and
chairman of the labor union and vice president of the technical research institute of Bengang Steel Plates; director of the science
and technology innovation department of Bengang Group. He is currently the deputy general manager and general counsel of
Bengang Steel Plates, and the head of the party committee preparation group of the marketing center of the Plates Company.
Guo Yuwei, male, 53 years old, master's degree, senior engineer. He has served as assistant director of iron making plant and
deputy director of iron making plant of Bengang Steel Plates Company; secretary of the party committee and chairman of the
labor union of iron making plant and deputy director of iron making plant of Bengang Steel Plates Company; member of
preparatory group of the party committee and deputy general manager of Beiying Company, director of Bengang Steel
Construction Company; secretary of the party committee and deputy director of iron making plant of Bengang Steel Plates
Company; He is currently the deputy general manager of Bengang Steel Plates Co., Ltd.
Jiang Xiaoyu, female, 51 years old, university degree, senior accountant. She has been the director of comprehensive
management, director of capital management and deputy general manager of the finance department of Bengang Group
Company, and supervisor of Benxi Beiying Iron & Steel (Group) Co., Ltd. She is currently the assistant general manager, financial
officer and secretary of the Board of Directors of Bengang Steel Plates, and the chairman of the supervisory board of Northeast
Special Steel.
Positions in shareholder units
Applicable □Not applicable
Does he /she receive
Expiry date
Names of the Names of the Titles engaged in the Starting date of remuneration or
of office
persons in office shareholders shareholders office term allowance from the
term
shareholder
Bengang Group
Huo Gang Deputy General Manager October 11th, 2022 Yes
Co., Ltd.
Deputy Chief Accountant,
Bengang Group
Han Mei General Manager of February 1st, 2021 Yes
Co., Ltd.
Finance Department
Bengang Group
Tang Yaowu Full-time Director April 20th, 2022 Yes
Co., Ltd.
Bengang Group
Cheng Bin Chief Auditor February 1st, 2021 Yes
Co., Ltd.
Bengang Group General Manager of Audit
Bai Yufei November 29th, 2021 Yes
Co., Ltd. Department
Description of
the position in None
the shareholder
Posts holding in other companies
Applicable □Not applicable
47
Bengang Steel Plates Co., Ltd. 2022 Annual Report
Does he /she
receive
Names of the Names of the other Titles engaged in Starting date of Expiry date of
remuneration or
persons in office companies other companies office term office term
allowance from
the shareholder
Bengang POSCO Cold-
Huo Gang Chairman November 1st, 2021 No
rolled Sheet Co., Ltd.
Dongbei Special Steel Chairman of the
Han Mei May 11th, 2022 No
Group Co., Ltd. Supervisory Board
Description of
the position in None
other companies
Punishment by the security’s regulatory authorities in the 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
assessments 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
The remuneration scheme for a particular position is recognized based on the range of responsibilities, and 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: RMB 10,000
Total Whether receive
remuneration remuneration in the
Name Position Sex Age Office status
received from Company's related
the shareholder parties
Huo Gang Chairman Male 49 In office 36.95 Yes
Director, Deputy General
Wang Shiyou Male 48 In office 44.1 No
Manager
Sun Zhen Director Male 39 In office 1.2 Yes
Han Mei Director Female 53 In office Yes
Director, Deputy General
Liu Zhangman Male 48 In office 9.86 Yes
Manager
Tang Yaowu Director Male 50 In office Yes
Zhang SuXun Independent Director Female 67 In office 5 No
Yuan Zhizhu Independent Director Male 41 In office 5 No
Zhong Tianli Independent Director Female 66 In office 5 No
Cheng Bin Chairman of the Male 59 In office Yes
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Bengang Steel Plates Co., Ltd. 2022 Annual Report
Total Whether receive
remuneration remuneration in the
Name Position Sex Age Office status
received from Company's related
the shareholder parties
Supervisory Board
Bai Yufei Supervisors Female 52 In office Yes
Lu Weijun Supervisors Male 47 In office 22.2 No
Zhang Yanlong Supervisors Male 45 In office 35.4 No
Zhao Xingtao Supervisors Male 50 In office 33.36 No
Jing Tao Deputy General Manager Male 52 In office 30.52 No
Guo Yuwei Deputy General Manager Male 53 In office 11.92 Yes
Secretary of the Board of
Jiang Xiaoyu Female 51 In office 15.11 Yes
Directors, Head of Finance
Niu Li Directors Male 54 Leaving office 17.45 Yes
Director, Deputy General
Lin Dong Male 52 Leaving office 23.83 Yes
Manager
Gao Desheng Director Male 48 Leaving office Yes
Zhao Zhonghua Supervisors Female 38 Leaving office 12.95 No
Yang Xiaofang Deputy General Manager Male 58 Leaving office 18.1 Yes
Wang Donghui Chief Accountant Male 53 Leaving office 7.68 Yes
Total -- -- -- -- 335.63 --
VI. Duty fulfillment of directors during the reporting period
1. The situation of the Board of Directors during the reporting period
Sessions Meeting Date Date of disclosure Index of information disclosure
Announcement on Resolutions of 25th
25th Eighth plenary session January 27th, 2022 January 28th, 2022
Eighth plenary session
Announcement on Resolutions of 26th
26th Eighth plenary session February 15th, 2022 February 16th, 2022
Eighth plenary session
Announcement on Resolutions of 27th
27th Eighth plenary session March 24th, 2022 March 26th, 2022
Eighth plenary session
Announcement on Resolutions of 1st
1st Ninth plenary session April 26th, 2022 April 27th, 2022
Ninth plenary session
Announcement on Resolutions of 2nd
2nd Ninth plenary session July 6th, 2022 July 7th, 2022
Ninth plenary session
Announcement on Resolutions of 3rd
3rd Ninth plenary session July 27th, 2022 July 28th, 2022
Ninth plenary session
Announcement on Resolutions of 4th
4th Ninth plenary session August 17th, 2022 August 19th, 2022
Ninth plenary session
Announcement on Resolutions of 5th
5th Ninth plenary session September 25th, 2022 September 26th, 2022
Ninth plenary session
Announcement on Resolutions of 6th
6th Ninth plenary session October 26th, 2022 October 28th, 2022
Ninth plenary session
Announcement on Resolutions of 7th
7th Ninth plenary session November 15th, 2022 November 16th, 2022
Ninth plenary session
Announcement on Resolutions of 8th
8th Ninth plenary session December 8th, 2022 December 9th, 2022
Ninth plenary session
49
Bengang Steel Plates Co., Ltd. 2022 Annual Report
2. The situation of directors attending the BOD and shareholders meeting
Attendance of Directors at Board of Directors and General Meetings of Shareholders
Failure to
Number of Number
personally
Board meetings Number of Number of of
Number of Number attend board
necessary to be meetings attendances general
Director name spot of meetings
attended during attended by by meetings
attendances absences successively
the reporting Communication representative to be
twice
period attended
(Yes/No)
Huo Gang 11 2 9 0 0 No 6
Wang Shiyou 11 2 9 0 0 No 6
Sun Zhen 0 0 0 0 0 No 0
Han Mei 11 2 9 0 0 No 6
Liu Zhangman 4 0 4 0 0 No 2
Tang Yaowu 6 0 6 0 0 No 3
Zhang Suxun 11 0 11 0 0 No 6
Yuan Zhizhu 11 0 11 0 0 No 6
Zhong Tianli 11 0 11 0 0 No 6
Niu Li 6 2 4 0 0 No 3
Lin Dong 6 2 4 0 0 No 3
Gao Desheng 5 2 3 0 0 No 2
Explanation of two consecutive absences from attending the Board of Directors in person
None
3. Objections of directors on relevant issues
Objections 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.
50
Bengang Steel Plates Co., Ltd. 2022 Annual Report
VII. Duty fulfillment of the special committees under the board during the reporting period
Important Other Specific
Number of
Committees Membership Meeting date Meeting content comments and performance circumstances of the
meetings held
suggestions raised of duties objection (if any)
Zhang Suxun, Yuan January 20th, 1. Proposal on the implementation of
Audit Committee 7 Agree Not applicable No
Zhizhu, Han Mei 2022 daily connected transactions for 2021
1. 2021 annual report and abstract; 2.
2021 annual financial accounts report; 3.
2021 annual profit distribution proposal;
4. proposal to sign the Raw Materials and
Services Supply Agreement with Ansteel;
5. proposal to sign the Raw Materials and
Fully
Zhang Suxun, Yuan March 13th, Services Supply Agreement (2022-2024)
Audit Committee 7 Agree communicate No
Zhizhu, Han Mei 2022 with Pangang Steel Vanadium and
with auditors
Titanium; 6. proposal to anticipate daily
connected transactions in 2022; 7. 2021
annual internal control evaluation report;
8. proposal to make provision for asset
impairment; 9. 2021 special report on the
deposit and use of funds raised
Zhang Suxun, Yuan
Audit Committee 7 April 20th, 2022 2022 first quarter report Agree Not applicable No
Zhizhu, Han Mei
Zhang Suxun, Yuan Proposal to use idle proceeds to
Audit Committee 7 July 18th, 2022 Agree Not applicable No
Zhizhu, Han Mei temporarily replenish working capital
1. Half-yearly report for 2022; 2. Proposal
Zhang Suxun, Yuan August 10th, to change the accounting firm; 3. Special
Audit Committee 7 Agree Not applicable No
Zhizhu, Han Mei 2022 report on the deposit and use of proceeds
for the half-yearly period of 2022
Zhang Suxun, Yuan October 20th, 1. 2022 Third quarterly report; 2. Proposal
Audit Committee 7 Agree Not applicable No
Zhizhu, Han Mei 2022 for change in accounting estimates
Zhang Suxun, Yuan December 8th, Proposal on estimated daily connected
Audit Committee 7 Agree Not applicable No
Zhizhu, Han Mei 2022 transactions for 2023
1. Proposal on the general election of the
Nominating Yuan Zhizhu, Zhang March 13th, Board of Directors of the Company; 2.
5 Agree Not applicable No
Committee Suxun, Huo Gang 2022 Proposal on the resignation of the
Secretary of the Board of Directors
51
Bengang Steel Plates Co., Ltd. 2022 Annual Report
Important Other Specific
Number of
Committees Membership Meeting date Meeting content comments and performance circumstances of the
meetings held
suggestions raised of duties objection (if any)
1. Proposal to elect the chairman of the
ninth session of the Board of Directors of
Nominating Yuan Zhizhu, Zhang
5 April 20th, 2022 the Company; 2. Proposal to resign the Agree Not applicable No
Committee Suxun, Huo Gang
senior management of the Company; 3.
Proposal to appoint senior management
1. Proposal on the resignation of directors
Nominating Yuan Zhizhu, Zhang of the Company; 2. Proposal on the
5 July 1st, 2022 Agree Not applicable No
Committee Suxun, Huo Gang nomination of candidates for directors of
the Company
Proposal on the appointment of the
Nominating Yuan Zhizhu, Zhang
5 July 21st, 2022 Secretary of the Board of Directors of the Agree Not applicable No
Committee Suxun, Huo Gang
Company
1. Proposal to nominate candidates for
Nominating Yuan Zhizhu, Zhang August 10th, director of the Company; 2. Proposal to
5 Agree Not applicable No
Committee Suxun, Huo Gang 2022 appoint senior management of the
Company
Huo Gang, Wang
1. 2021 annual report of the Board of
Strategy Shiyou, Gao March 13th,
3 Directors; 2. 2022 annual investment Agree Not applicable No
Committee Desheng, Zhong 2022
framework plan proposal
Tianli
Huo Gang, Wang
Proposal on the sale of equity interest in a
Strategy Shiyou, Gao September 19th,
3 wholly-owned subsidiary and connected Agree Not applicable No
Committee Desheng, Zhong 2022
transaction
Tianli
Huo Gang, Wang
Strategy Shiyou, Gao November 10th, Proposal on the acquisition of equity
3 Agree Not applicable No
Committee Desheng, Zhong 2022 interest in Ansteel Group Finance Co., Ltd.
Tianli
52
Bengang Steel Plates Co., Ltd. 2022 Annual Report
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 to the supervision issue during the reporting period.
IX. Staff condition
1. Number of staff, professional structure and education level
Number of in-service staff in the parent company 16,854
Number of in-service staff in main subsidiaries 629
Total population of in-service staff 17,483
Total population of staff receiving remuneration in the current
17,483
period
Number of retired staff whose expense was borne by parent
22,867
company and major subsidiary companies
Professional composition
Type of professional composition Population
Production staff 14,501
Sales staff 234
Technician staff 1,658
Financial staff 119
Administrative Staff 971
Total 17,483
Educational degree
Type of educational degree Population
PhD. 11
Postgraduate 319
Undergraduate 4,062
Junior College 6,374
Technical secondary school 457
High School and Technical School 3,520
Middle School and others 2,740
Total 17,483
2. Remuneration policies
In 2022, the Company established a complete performance management system based on the determined annual production
and operation guidelines, policies and overall management goals. The Company evaluated the operation indicator and work
tasks of various functional departments, factories and mines, set key performance evaluation indicators, and implements
monthly evaluations. Salary is based on position, ability and performance. Salary is determined by post, a 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.
53
Bengang Steel Plates Co., Ltd. 2022 Annual Report
3. Training plan
In 2022, 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. The Company
completed 54 training programs throughout the year, training 43,299 people, with a full training rate of 80% and an annual
training plan implementation rate of 96%. The training target plan was fully achieved.
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
As audited by ShineWing Certified Public Accountants LLP, the net profit attributable to the parent company for the year 2022
was RMB -1,232,976,557.37, plus the undistributed profit of RMB 2,977,306,297.64 at the beginning of the year, net of the profit
distribution of RMB 2,464,914,827.4 made in the current period for the year 2021 and the recovery of the profit from the
disposal of Guangzhou Benpu Automobile Board Sales Co., Ltd. in the current period of RMB 25,416.4. The balance of the
undistributed profit for the period was RMB -720,559,670.73.
The profit distribution plan for FY2022 is: No cash dividend, no bonus shares and no capitalization of capital reserve.
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
Yes
due diligence and played their due role:
Whether small and medium shareholders have sufficient
opportunities to express their opinions and demands, and Yes
whether their legitimate rights and interests are fully protected:
Whether it meets the requirements of the company's articles of
Yes
association or the resolutions of the shareholders meeting:
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
54
Bengang Steel Plates Co., Ltd. 2022 Annual Report
□Applicable Not applicable
The Company plans to distribute no cash dividends, no bonus shares and no increase in capital by way of the transfer of public
reserves for the year.
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
(1) Reconstruct the system of rules and regulations in Bengang Steel Plates. The Company has established a system of rules and
regulations which takes fundamental management regulations as the basis, professional management regulations as the main
body, and work norms as the support. The current effective rules and regulations at the Company level relate to functional
modules and core businesses such as strategic planning, production operation, financial management, etc.
(2) Strictly execute the regulations review procedure, and establish and implement a long-term mechanism for the management
of rules and regulations. the Company has revised and issued Provisions on the Management of the Rules and Regulations in
Bengang Steel Plates Co., Ltd., released Notice on Carrying out the Establishment of Rules and Regulations, pushed forward the
work of issuing, revising, repealing, and interpreting rules and regulations as planned, adhered to the principles of being
compliant with both laws and regulations, being systematic and comprehensive, pragmatic and effective, and being clear in
rights and responsibilities. the Company’s rules and regulations have been analyzed and sorted out, and a total of 215
regulations have been reformulated and revised. The compliance review node has been added to the regulations review
procedure. It’s a must that regulations have passed the compliance review before being released to ensure the rate of the
regulations' compliance review is 100%.
(3) Optimize the special internal control system. the Company has gradually established and improved the internal control
system involving risk internal control, compliance management, and supervision and accountability, based on Regulations on
Comprehensive Risk and Internal Control Management in Bengang Steel Plates Co., Ltd. and supported by Measures for Risk
Assessment and Compliance Review of Important Events in Bengang Steel Plates Co., Ltd., Measures for Internal Control
Evaluation in Bengang Steel Plates Co., Ltd., and Compliance Management Measures in Bengang Steel Plates Co., Ltd.
(4) Improve the standards of risk assessment and internal control defects evaluation. According to the requirements of material
defects, significant defects and general defects evaluation in the enterprise's internal control system and the factors such as the
Company's size, risk appetite and risk tolerance, the Company has nailed down the specific qualitative and quantitative
standards of internal control defects evaluation with reference to the risk assessment standards. Each functional management
department can identify and determine critical risk factors in relevant businesses by analyzing the impact and probability of risks
and considering practical conditions. Based on the internal control inspection of Ansteel Group and the self-examination of
Bengang Steel Plates, the Company has timely rectified the identified internal control defects and fully performed the role of the
Board of Directors in the leadership and supervision of comprehensive internal control evaluation. In the annual internal control
auditing of an external audit institution, the Company has reached the goal of zero material internal control defects.
55
Bengang Steel Plates Co., Ltd. 2022 Annual Report
2. Material internal control defects found during the reporting period
□Yes No
XIII. Management and control of subsidiaries during the reporting period
Integration Integration Problems encountered Solutions Solutions Follow-up
Company name
plan progress during integration implemented progress solutions plan
Harbin Bengang Economic
Deregistration Completed N/A N/A N/A N/A
and Trading Co., Ltd.
Nanjing Bengang
Deregistration Completed N/A N/A N/A N/A
Materials Sales Co., Ltd.
Chongqing Liaoben Steel
Deregistration Completed N/A N/A N/A N/A
& Iron Trading Co., Ltd.
Wuxi Bengang Steel & Iron Mergers and
Completed N/A N/A N/A N/A
Sales Co., Ltd. acquisitions
Bengang Baojin Loss of control
(Shenyang) Automobile due to other
Completed N/A N/A N/A N/A
New Materials Technology shareholders’
Co., Ltd. raised funds
XIV. Internal control self-evaluation report or internal control audit report
1. Internal control self-evaluation report
Disclosing date of the internal
March 30th, 2023
control audit report (full text)
Index of the internal control audit
http://www.cninfo.com.cn
report (full text)
Proportion of total assets of
subsidiaries within the scope of the
self-evaluation report in total assets 97.16%
of the Company’s consolidated
financial statements
Proportion of operating income of
subsidiaries within the scope of self-
evaluation report in operating 92.50%
income of the Company’s
consolidated financial statements
Standards of defects evaluation
Category Financial report Non-financial report
1. Material defects: fraud of directors, 1. the Company's standards of internal control
supervisors and senior management; defects evaluation in terms of daily operation: 1)
the Company corrects its published Material defects: have a material impact on the
financial statements; there is a normal operation of the Company: affect most of
material misstatement in the financial the Company’s main business types/main
statements, and the internal control functional areas; have a significant impact on the
fails to detect the misstatement overall operation of the Company which makes it
Qualitative criteria
during the operation; the corporate difficult to recover in the long run. 2) Significant
audit committee and the internal defects: have a great impact on the normal
audit institution have no effect on the operation of the Company: affect some of the
supervision of internal control. Company's main business types/main functional
2. Significant defects: the seriousness areas; have a large impact on the Company's
and economic consequences of overall operation, requiring a great price for the
accounting policies, accounting and Company to recover in a long period of time. 3)
56
Bengang Steel Plates Co., Ltd. 2022 Annual Report
financial reporting are lower than General defects: have a moderate or less impact
material defects, but there are still on the normal operation of the Company: affect a
internal control defects that may certain main business type/main functional area
cause the Company to deviate from or general business type/general functional area
the control objectives. 3. General of the Company; have a moderate or less impact
defects: other than material and on the overall operation of the Company,
significant defects, other internal requiring some price for the Company to recover
control defects in financial reporting. within a certain period of time. 2. the Company's
standards of internal control defects evaluation in
terms of business objectives: 1) Material defects:
have a significant impact on the Company's
business objectives: have a significant impact on
any type of budget indicators of the 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 ≥
RMB 800 million). 2) Significant defects: have a
great impact on the Company's business
objectives: have a great impact on any type of
budget indicators of the Company; affect some
important management objectives of the
Company; have a great impact on current capital
(0.5 times ≤ current asset turnover rate ﹤ 0.8
times); have a great impact on any type of budget
indicators of the Company (RMB 400 million ≤
profit ﹤ RMB 800 million). 3) General defects:
have a moderate or less impact on the Company’s
business objectives: have a moderate or less
impact on any type of budget indicators of the
Company; affect one important management
objective or several general management
objectives of the Company; have a moderate or
less impact on current capital (current asset
turnover rate ﹤ 0.5 times); have a moderate or
less impact on any type of budget indicators of the
Company (profit ﹤ RMB 400 million). 3. the
Company's standards of internal control defects
evaluation in terms of safety: 1) Material defects:
affect a certain number of employees/public
health/safety, critical accidents. 2) Significant
defects: affect some employees/public
health/safety, major accidents.
3) General defects: affect a small number of
employees/public health/safety, minor accidents.
4. the Company's standards of internal control
defects evaluation in terms of environmental
protection: 1) Material defects: serious
environmental damage, the occurrence of critical
environmental incidents (national level II or above
environmental protection accidents).
2) Significant defects: great environmental
damage and major environmental incidents
(national level III).
3) General defects: moderate or less
environmental impact, general environmental
incidents (national level IV).
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Bengang Steel Plates Co., Ltd. 2022 Annual Report
1. Range of misstatement amount of
material defects in financial
statements: 1) misstatement ≥ 5% of
total profits; 2) misstatement ≥ 3% of
total assets; 3) misstatement ≥ 1% of
total operating income; 4)
misstatement ≥ 1% of total
shareholders’ equity. 2. Range of
misstatement amount of significant
defects in financial statements: 1) 3%
of total profits ≤ misstatement ＜ 5%
of total profits; 2) 0.5% of total assets
≤ misstatement ＜ 3% of total assets;
Quantitative criteria None
3) 0.5% of total operating income ≤
misstatement ＜ 1% of total operating
income; 4) 0.5% of total shareholders’
equity ≤ misstatement ＜ 1% of total
shareholders’ equity. 3. Range of
misstatement amount of general
defects in financial statements: 1)
misstatement ＜ 3% of total profits; 2)
misstatement
＜ 0.5% of total assets; 3)
misstatement ＜ 0.5% of total
operating income; 4) misstatement ＜
0.5% of total shareholders’ equity.
Number of material defects in
0
financial reporting(a)
Number of material defects in non-
0
financial reporting (a)
Number of significant defects in
0
financial reporting(a)
Number of significant defects in
0
non-financial reporting(a)
2. Internal control audit report
Applicable □Not applicable
Opinion in the internal control audit report
According to Fundamental Rules of Enterprise Internal Control and related regulations, Bengang Steel Plates has remained effective
internal control in financial reporting up to December 31st, 2022.
Status of the internal control audit report Disclosure
Disclosing date of the internal control audit report (full text) March 30th, 2023
Index of the internal control audit report (full text) http://www.cninfo.com.cn
Internal audit report’s opinion Standard unqualified opinion
Whether there are significant defects in non-financial reporting No
Whether the accountants’ firm issues a qualified opinion in the internal control audit report
□Yes No
Whether the internal control audit report issued by the accountants’ firm agrees with the self-assessment report of the Board of
Directors
Yes □No
58
Bengang Steel Plates Co., Ltd. 2022 Annual Report
XV. Self-examination and rectification of governance initiatives of listed companies
During the reporting period, the Company actively followed and implemented the spirit of Opinions on Further Improving the
Quality of Listed Companies issued by the State Council and worked out the List of Listed Company Governance Initiatives based
on China Securities Regulatory Commission [2020] No. 69 Announcement on Carrying out Initiatives on Corporate Governance of
Listed Companies and the Company’s practical conditions. The list reflected the problems and rectification of governance in
listed companies in a true, accurate and comprehensive manner. The Company made efforts to strengthen the endogenous
driving force of corporate governance, improve the corporate governance system, and build a healthy ecology of corporate
governance. In those ways, it has further optimized the governance structure as a listed company featuring clear-cut duties and
responsibilities, harmonious coordination and operation, and effective check and balance, and has tamped the foundation for
high-quality development as a listed company and promoted the governance level.
59
Bengang Steel Plates Co., Ltd. 2022 Annual Report
Section V. Environmental and Social Responsibility
I. Major environmental issues
Whether the listed company and its subsidiaries belonging to the key pollutant discharge units announced by the environmental
protection department
Yes □No
Environmental protection policies and industry standards
The Company implemented Environmental Protection Law of the People's Republic of China, Environmental Impact Assessment
Law of the People's Republic of China, Water Pollution Prevention and Control Law of the People's Republic of China, Atmospheric
Pollution Prevention and Control Law of the People's Republic of China, Soil Pollution Prevention and Control Law of the People's
Republic of China, Solid Waste Pollution Prevention and Control Law of the People's Republic of China, and other relevant
ecological and environmental policies, and complied with such industry standards as Water Pollutants Emission Standard for Iron
and Steel Industry (GB13456-2012) and Pollutants Emission Standard for Coking Chemical Industry(GB16171-2012), Sintering and
Sintered Pellets Air Pollutants Emission Standard for Iron and Steel Industry (GB28662-2012), Air Pollutants Emission Standard for
Iron Making Industry (GB28663-2012), Air Pollutants Emission Standard for Steel Rolling Industry (GB28665-2012), and Air
Pollutants Emission Standard for Thermal Power Plants (GB13223-2011).
Environmental protection administrative license
The Company has 14 pollutants discharging units, 11 of which are key pollutants discharging units. The license was obtained for
the first time in December 2018 and was extended to December 2026 in December 2021 according to the requirements of
license management. Three units have been registered and granted the registration receipt of fixed pollution source discharge in
March 2020, which is valid until 2025. the Company strictly implements the stable operation of environmental protection
facilities, strictly controls the discharge of pollutants, and discharges pollutants within the scope of permission every year. It
completes quarterly reporting and annual reporting through online filing as required.
Industry emission standards and the description of pollutants emission involved in production and business activities
60
Bengang Steel Plates Co., Ltd. 2022 Annual Report
Category of
Company Name of major Number Implemented
major Total
or pollutants and Emission of Distribution of discharge Emission pollutants Total Excessive
pollutants and approved
subsidiary characteristic method discharge outlets concentration/intensity discharge emissions emissions
characteristic emissions
name pollutants outlets standards
pollutants
Bengang Not
Steel Wastewater Energy General Plant 66.18 approved by
COD Continuous 1 12.5 50 None
Plates Co., pollutants Sewage Treatment Plant tonnes the
Ltd. government
Bengang Not
Steel Wastewater Ammonia Energy General Plant 2.17 approved by
Continuous 1 0.4 8 None
Plates Co., pollutants nitrogen Sewage Treatment Plant tonnes the
Ltd. government
Raw material dumper,
transfer station, receiving
tank, pre-batching; iron-
making casting yard,
furnace roof, fuel, solvent,
granulation, ore coke
Raw material
tank, sintering head dust
25; sintering
removal, desulfurization,
50-30; iron
machine tail dust removal;
Raw material 14-19; making 25;
iron and steel water
sintering 13-25; iron steel making Smoke
pretreatment, north-
Bengang making 7-35; steel 20-50; 1,231 Not
Continuous south pouring station,
Steel Exhaust gas Particulate making 3-10; special special steel tonnes, approved by
and 191 tundish, primary dust None
Plates Co., pollutants matter steel 3-10; coking 5-50; 20; coking powder the
intermittent removal, secondary dust
Ltd. power generation 3-18; 10-50; power 11,794 government
removal, refining dust
cold rolling 6-18; hot generation tonnes
removal; special steel
rolling 6-15. 5-30; cold
electric furnace, refining
rolling 20-30;
furnace; coking coal
hot rolling
addition, coke pushing,
20-30.
dry quenching, chimney
desulfurization and
denitrification; power
boiler dust removal,
desulfurization and
denitrification; cold rolling
61
Bengang Steel Plates Co., Ltd. 2022 Annual Report
Category of
Company Name of major Number Implemented
major Total
or pollutants and Emission of Distribution of discharge Emission pollutants Total Excessive
pollutants and approved
subsidiary characteristic method discharge outlets concentration/intensity discharge emissions emissions
characteristic emissions
name pollutants outlets standards
pollutants
acid regeneration,
pickling, straightening,
welding, leveling,
annealing, roasting; hot
rolling furnace.
Sintering
head 200;
Sintering head; coke oven
Sintering head 12-40; coke oven
chimney; power
Bengang coke oven chimney 20- 30-100; Not
Continuous generation boiler
Steel Exhaust gas 50; power generation power 3,378 approved by
Sulfur dioxide and 65 desulfurization; cold None
Plates Co., pollutants 5-45; cold rolling 80- generation tonnes the
intermittent rolling roasting and
Ltd. 100; hot rolling 118- 35-200; cold government
annealing; hot rolling
128. rolling
heating furnace.
100; hot
rolling 150.
Sintering
head 300;
Sintering head; coking Sintering head 90-167; coking
Bengang chimney; power coking chimney 60-120; chimney 150- Not
Continuous
Steel Exhaust gas Nitrogen generation boiler; cold power generation 21- 500; power 8,637 approved by
and 58 None
Plates Co., pollutants oxides rolling roasting; 140; cold rolling 69- generation tonnes the
intermittent
Ltd. annealing; hot rolling 172; hot rolling 105- 50-200; cold government
heating furnace. 124. rolling 200;
hot rolling
300.
62
Bengang Steel Plates Co., Ltd. 2022 Annual Report
Pollutants treatment
In 2022, 13 ultra-low emission projects have been completed, involving iron-making yards, mining tank dust removal and
standard upgrading transformation, and sintering head desulfurization and denitrification transformation; secondary dust
removal transformation of steelmaking; coking process VOCs treatment, machine side dust removal, desulfurization and
denitrification and other project transformation. Pollution prevention and control facilities are in stable operation, and the total
amount of pollutant emissions in 2022 decreased by 8.6% year on year.
Environmental self-monitoring program
Manual monitoring points of pollution sources during the reporting period: 261 flue gas monitoring points, 14 wastewater
monitoring points, 13 boundary noise points, 17 atmospheric dust reduction points, and 190 organized flue gas monitoring
points, 71 unorganized flue gas monitoring points. Monitoring is carried out on a weekly, monthly, quarterly, semi-annual and
annual frequency. 204 pieces of monitoring data were obtained at atmospheric dust reduction points. The Company has
accomplished routine monitoring of unorganized atmospheric dust reduction and organized flue gas and acquired 1,985 pieces
of monitoring data throughout the year. 416 pieces of monitoring data were obtained in boundary noise points; 3,457 pieces of
monitoring data were obtained in wastewater monitoring points; 125 pieces of monitoring data were obtained in other points.
Monthly, quarterly and annual monitoring reports were prepared.
Automatic monitoring points of pollution sources during the reporting period: 50 organized flue gas monitoring points, and 2
wastewater monitoring points. The Company has realized continuous automatic monitoring.
Emergency plan for environmental emergencies
Strictly based on 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 Measures for the Filing Management of
Environmental Emergency Response Plans of Enterprises and Undertakings (Trial) and other existing laws and regulations, the
Company and its subsidiaries have carried out environmental emergency management, revised the emergency plan for
environmental emergencies, re-implemented risk assessment and emergency resource investigation, and have already
completed assessment and filing according to the management requirements of the municipal bureau. At the same time, each
unit of Bengang Steel Plates formulates a drill plan according to the emergency plan and carries out the drill.
Investment in environmental governance and protection and payment of environmental protection tax
In 2022, the operating expenses of environmental protection facilities were RMB 1.239 billion. RMB 355 million was invested in
environmental governance and protection, and RMB 37.46 million was paid for environmental protection taxes.
Measures are taken to reduce carbon emissions during the reporting period and their effects
Applicable □Not Applicable
1. Reduce the comprehensive energy consumption of steel in tonne. The Company continuously reduced the comprehensive
energy consumption of steel in tonne by cutting down the energy consumption of the main process and improving secondary
energy recovery in 2022. In the iron-making process, the Company ensured stable blast furnace operation and rose the air
temperature to reduce the fuel ratio, reduced the gas consumption through the centralized control of the hot blast furnace, and
did a good job in the linkage between TRT and the blast furnace to improve the recovery of residual energy, realizing the power
generation of iron in tonne 42.53kwh/t. Under the stable operation of the sintering machine, the power generation of waste heat
reached 13kwh/t, and the comprehensive waste heat recovery of mine in tonne rose to 0.15GJ. In the coking process, the
Company focused on the stable operation of the dry quenching system, increasing the CDQ recovery of coke steam in tonne joule
to 7.0GJ. In the steel-making process, the Company optimized the waste heat recovery by improving gas recovery and
63
Bengang Steel Plates Co., Ltd. 2022 Annual Report
transferring waste heat-saturated steam to support the power generation of 265m2 sintering machine. The comprehensive
energy consumption of steel making remained below -10kgce/t after April. In the hot rolling process, the Company made
continuous efforts to reduce air consumption during the waiting period, and increase the purchase of first- and secondary-level
waste heat steam. In 2022, the Company's comprehensive energy consumption of steel in tonne was planned to be 580kgce/t,
and the actual consumption was 575.92kgce/t which was 4.08kgce/t lower than the plan and 10.42kgce/t lower than the same
period of last year.
2. The fuel consumption of sintered solids in the sintering process was 50.68kg/t, which was 1.52kg/t lower than the plan and
1.67kg/t lower than the same period of last year. The energy consumption of the negative energy steel-making process was -
5.5kgce/t, a year-on-year decrease of 2.81kgce/t. While reducing the comprehensive energy consumption of steel in tonne, the
Company paid continuous, strenuous efforts in the fuel ratio reduction, making the fuel ratio 532.64kg/t in 2022, a year-on-year
decrease of 1.86kg/t.
3. Push forward the implementation of energy-saving projects in full swing. The Company invested a total of RMB 1,257.49
million, completed 7 energy saving projects in 2022 and put them into operation, including CCPP power generation, six-furnace
heat exchanger transformation, cold-fired substation dynamic compensation transformation, hot rolling 1700 production line
reactive power compensation transformation, hot rolling 2300 production line phosphorus removal pump transformation,
converter saturated steam system optimization and energy-saving transformation, converter gas recovery and efficiency
improvement transformation. The projects created benefits of RMB 177.52 million and saved 59,500 tonnes of standard coal per
year.
Administrative penalties for environmental issues during the reporting period
Influence
on the
Company
Causation production
or Consequence of
of Violation and the Company's rectification measures
subsidiary penalty
penalty operation
name
of listed
companies
1.9# The coke oven All have been rectified: 1. The coking
door was not tightly process was implemented in strict
closed, resulting in accordance with the operation procedure.
fugitive emissions of The sealing of the furnace door was
some smoke and dust checked in time. The furnace wall was
in the carbonization welded and repaired, and the furnace door
chamber. 2. The was repaired to reduce sensory pollution. 2.
emission of fugitive The main reason for exceeding the standard
exhaust gas pollutants was as below. The ammonia decomposition
Environmental
on the roof of No.8 furnace of the production facility was
Bengang protection
coke oven exceeded overhauled according to the maintenance
Steel Fugitive penalties were
the standard value; 3. None plan in the gas purification operation area,
Plates emissions imposed 3 times,
During the and the replacement of gas pipelines during
Co., Ltd. totaling RMB
oxygenation blowing the maintenance and relocation process
470,000.
process of steel caused fugitive emissions. The Company
making 7# converter, accelerated the construction progress, and
part of the smoke and resumed normal production. 3. The
dust overflew from the Company strengthened the quality
plant cover to cause inspection of molten iron and coordinated
fugitive emissions, due the replacement of molten iron in time
to poor molten iron when problems were found. The smoke
composition and problem caused by poor molten iron
improper operation. composition was effectively resolved.
64
Bengang Steel Plates Co., Ltd. 2022 Annual Report
Other environmental information that should be disclosed
None
Other environmental protection related information
None
II. Social responsibility
Please refer to 2022 Corporate Social Responsibility Report of Bengang Steel Plates Co., Ltd. disclosed on
http://www.cninfo.com.cn on March 30th, 2023.
III. Consolidate and expand the achievements of poverty alleviation and rural revitalization
1. The Company selected 10 outstanding cadres in a succession to participate in rural revitalization, 4 of which still serve as the
first secretary in villages for the present. During the special period of normal epidemic prevention and control, the cadres in
villages remained true to their original aspiration, kept their mission in mind, strengthened their confidence, and worked
tenaciously. They did a good job in poverty alleviation and prevention from returning to poverty after being lifted out of it in
designated poverty relief regions in 2022. the Company provided growth points for the rural collective economy through
employee welfare procurement of agricultural and sideline products in rural areas, effectively increasing per capita income. It
has been completing rated as Outstanding Unit for Poverty Alleviation in Designated Regions of Liaoning Province for many
consecutive years.
2. To provide assistance for employees in need who were determined in accordance with the standard for the review and
identification of all types of employees in need, the Company made full use of the assistance system of the national trade union
and the normalized assistance mechanism and endeavored to offer substantive assistance to employees in need through a
combination of holiday visits and regular assistance. The Company provided mutual-aid insurance covering hospitalization,
critical illness and accident for employees to further improve their capacity for resisting medical risks.
65
Bengang Steel Plates Co., Ltd. 2022 Annual Report
Section 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 reporting period made by actual controller,
shareholder, party involved, acquirer, company and other related parties
Applicable □Not applicable
Type of Commitment Commitment
Commitments Commitment party Contents Performance
commitment time period
In order to maintain the independence of Bengang Steel Plates, Ansteel
Group undertakes the following: 1. Ansteel Group guarantees to keep
separate from Bengang Steel Plates 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
Commitment made
standard operation of Bengang Steel Plates, interfere with Bengang Steel
in the acquisition Ansteel Group Co., Other August 20th, Under normal
Plates’ business decisions, or damage the legitimate rights and interests of Long term
report or the equity Ltd. commitment 2021 fulfillment
Bengang Steel Plates and other shareholders. Ansteel Group and other
change report
subsidiaries controlled by it promise not to illegally occupy the funds of
Bengang Steel Plates 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 Plates. If Ansteel Group fails to fulfill
the above-mentioned commitments and causes losses to Bengang Steel
Plates, Ansteel Group will bear the corresponding liability for compensation.
In order to avoid horizontal competition, Ansteel Group undertakes the
following: (1) In view of the overlapping business between Ansteel Group
and Bengang Steel Plates after the completion of the acquisition, according
Commitment made
to the requirements of existing laws, regulations and relevant policies,
in the acquisition Ansteel Group Co., Other August 20th, Under normal
Ansteel Group will issue a letter of commitment. Within 5 years or less time Long term
report or the equity Ltd. commitment 2021 fulfillment
if more effort from the date of issue, it will comprehensively adopt various
change report
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, in accordance with the
66
Bengang Steel Plates Co., Ltd. 2022 Annual Report
Type of Commitment Commitment
Commitments Commitment party Contents Performance
commitment time period
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, and in the principle of facilitating the
development of Bengang Steel Plates and safeguard the interests of
shareholders, especially the interests of small and medium shareholders. The
aforesaid solutions include but are not limited to: 1) Asset restructuring: a
different way of asset purchase, asset replacement, asset transfer or other
feasible restructuring methods permitted by relevant laws and regulations,
such as cash consideration or issue share consideration. It will gradually sort
out and reorganize the assets of the overlapping parts of the business
between Ansteel Group and Bengang Steel Plates to eliminate the
overlapping of some businesses. 2) Business adjustment: it will sort out the
business boundaries and try the best to achieve differentiated operations,
such as business categorization through asset transactions, business
separation and other different methods, 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 entrust decision making and management of related asset
operation of overlapping parts to the other party for unified management. 4)
Other feasible solutions 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)
Ansteel Group has not yet formulated a specific implementation plan and
time arrangement for solving the problem of partial business overlap
between Ansteel Group and Bengang Steel Plates. It will timely perform the
duty of disclosing information required by relevant laws and regulations
when a feasible, specific plan is formulated. (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 Plates,
Ansteel Group will do its best to give Bengang Steel Plates the priority to
develop such
opportunities and the right to first refuse or purchase the project, ensure the
price of the relevant transaction is fair and reasonable, and set the price
based on the business practices followed in normal commercial transactions
as independent third parties. (4) Ansteel Group guarantees that it will strictly
67
Bengang Steel Plates Co., Ltd. 2022 Annual Report
Type of Commitment Commitment
Commitments Commitment party Contents Performance
commitment time period
abide by laws, regulations, Articles of Association of Bengang Steel Plates
Co., Ltd. and its relevant management system, and not use its position as an
indirect controlling shareholder of Bengang Steel Plates to seek illegitimate
interests which thereby impair the rights and interests of other shareholders
of Bengang Steel Plates. (5) During the period of control over Bengang Steel
Plates, the above commitments made by Ansteel Group are all valid. In the
event of violation of the above commitments and the damage to the rights
and interests of Bengang Steel Plates is caused, 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 the independence of Bengang Steel Plates’
business, the completeness of its assets, and the independence and
completeness of production, supply, sales and other auxiliary facilities. 2.
Ansteel Group and other enterprises controlled by Ansteel Group will not
take advantage of the control over Bengang Steel Plates to seek preferential
transactions with Bengang Steel Plates and its subordinate enterprises. 3.
Ansteel Group and other enterprises controlled by Ansteel Group will avoid
and reduce unnecessary transactions with Bengang Steel Plates and its
subordinate enterprises. If there is a truly necessary and unavoidable
Commitment made transaction, Ansteel Group and other enterprises controlled by Ansteel
in the acquisition Ansteel Group Co., Other Group will sign an agreement with Bengang Steel Plates and its subordinate August Under normal
Long term
report or the equity Ltd. commitment enterprises in accordance with the principles of fairness, equity, and 20th,2021 fulfillment
change report compensation for equal value, perform legal procedures, and comply with
relevant laws, regulations and standard documents and Articles of
Association of Bengang Steel Plates Co., Ltd. to perform the duty of
disclosing information and execute relevant internal decision making and
approval procedures. Ansteel Group ensures that it will not offer an unfair
price or condition compared with market price in the transactions with
Bengang Steel Plates and its subordinate enterprises and not use such
transactions to engage in any behavior that damages the legitimate rights
and interests of Bengang Steel Plates and its shareholders. 4. In the event of
violation of the above commitments and the damage to the legitimate rights
and interests of Bengang Steel Plates is caused, Ansteel Group will
compensate for the losses caused to Bengang Steel Plates according to laws.
Commitment made Company directors, Other According to the relevant regulations of China Securities Regulatory May 22nd, Under normal
Long term
during initial public senior commitment Commission, all directors and senior management of the Company have 2019 fulfillment
68
Bengang Steel Plates Co., Ltd. 2022 Annual Report
Type of Commitment Commitment
Commitments Commitment party Contents Performance
commitment time period
offering or management/Benxi made the following commitments to the Company’s fulfillment of the diluted
refinancing Steel & Iron immediate return measures: 1. I promise to perform my duties faithfully and
(Group) Co., Ltd. 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 the Company’s assets to do
investment and consumption activities that are not related to the
performance of my duties. 5. Within the scope of my responsibilities and
authority, I promise to make every effort to promote the Company's Board of
Directors or the remuneration system established by the remuneration and
appraisal committee to be linked to the implementation of the Company's
compensation measures, and vote in favor of the relevant proposals
reviewed by the Company's Board of Directors and general meetings (If I
have voting rights). 6. If the Company intends to implement equity
incentives, I promise to, within the scope of my responsibilities and
authority, make every effort to promote the Company’s proposed equity
incentive exercise conditions 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
meetings (If I have voting rights). 7. Between the issuance of this
commitment and the completion of the Company’s public issuance of
convertible corporate bonds, if China Securities Regulatory Commission
announces other new regulations on compensation measures and
commitments and the above commitments cannot meet the regulations, the
Company promises to issue a supplementary promise in accordance with the
latest regulations. The Company's controlling shareholder, Benxi Iron & Steel
(Group) Co., Ltd., promises not to interfere with the Company's operation
and management activities beyond its authority nor to infringe on the
Company's interests.
1. The filing of foreign economic and trade operators, taking into account the
Commitment made Bengang Group Co., need to gradually improve the qualification certification of raw material
during initial public Ltd. and Benxi Steel Other suppliers, customs import and export qualification certification, etc. In the July Under normal
Long term
offering or & Iron (Group) Co., commitment short term, the actual conditions and capabilities for independent import 24th,2019 fulfillment
refinancing Ltd. and export business are still lacking.
In order to ensure the normal business development of Bengang Steel
69
Bengang Steel Plates Co., Ltd. 2022 Annual Report
Type of Commitment Commitment
Commitments Commitment party Contents Performance
commitment time period
Plates, the Group agrees that within the period of no more than 5 years from
the date of issuance of this commitment, the main import and export
business of Bengang Steel Plates will still be represented by Bengang
International Trade until Bengang Steel Plates can independently develop
Import and export business, and Bengang International Trade,during this
period, will provide the necessary support for the establishment and
improvement of Bengang Steel Plates’ 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 steel products of a third party. 2. The sales company under the
Group, Shanghai Bengang Iron and Steel Sales Co., Ltd., is currently no longer
actually engaged in any business activities, specifically: Shanghai Bengang
Iron & Steel Sales Co., Ltd. filed for bankruptcy in 2014, and the Shanghai
Changning District People's Court issued an announcement to appoint
Guohao Lawyer (Shanghai) Office as the bankruptcy administrator. After
communication with the bankruptcy administrator, 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.
In order to avoid horizontal competition, 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 shareholder of
Bengang Steel Plates Co., Ltd. (Hereinafter referred to as Bengang Steel
Plates), undertake the following: 1. During the period when the Group is the
controlling shareholder of Bengang Steel Plates, the Group and other
enterprises controlled by the Group other than Bengang Steel Plates no
Commitment made Bengang Group Co., longer produce or develop any products that compete or may compete with
during initial public Ltd. and Benxi Steel Other the products produced by Bengang Steel Plates and its subsidiaries at home July Under normal
Long term
offering or & Iron (Group) Co., commitment and abroad, and do not directly or indirectly operate any business that 24th,2019 fulfillment
refinancing Ltd. competes with Bengang Steel Plates and its subsidiaries. Businesses that may
constitute competition, nor are they involved in investing in any other
enterprise that competes with or may compete with products or businesses
produced by Bengang Steel Plates and its subsidiaries. 2. If Bengang Steel
Plates and its subsidiaries further expand their business scope, the Group
and other enterprises controlled by the Group will not compete with the
expanded business of Bengang Steel Plates and its subsidiaries. If any
business may compete with the expanded business of Bengang Steel Plates
70
Bengang Steel Plates Co., Ltd. 2022 Annual Report
Type of Commitment Commitment
Commitments Commitment party Contents Performance
commitment time period
and its subsidiaries, it will withdraw from the competition with Bengang
Steel Plates as follows: (1) Stop the business that may or may compete with
Bengang Steel Plates and its subsidiaries; (2) Incorporate the competing
businesses into the business scope of Bengang Steel Plates and its
subsidiaries in a legal and compliant manner; (3) Transfer the competing
business to unrelated third parties. 3. If the Group has engaged in or
participated in any business opportunity that may constitute competition
with Bengang Steel Plates’ operation, the Group shall immediately notify
Bengang Steel Plates of the above opportunity. If Bengang Steel Plates is
willing to take advantage of the business opportunity and replies with an
affirmative answer within a reasonable period specified in the notice, the
Group will endeavor to give the business opportunity to Bengang Steel Plates
with the conditions not worse than those offered to any independent third
party. 4. If the above commitments are violated, the Group is willing to bear
all the responsibilities arising therefrom, and fully compensate or
compensate for all direct or indirect losses caused to Bengang Steel Plates. 5.
This letter of commitment continues to be effective during the period of the
Group as the controlling shareholder of Bengang Steel Plates and cannot be
changed or withdrawn.
In order to regulate The Group's related transaction with Bengang Steel
Plates, 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 shareholder of Bengang Steel Plates Co., Ltd.
(Hereinafter referred to as Bengang Steel Plates), undertake the following: 1.
The Group will fully respect the independent legal person status of Bengang
Steel Plates, ensure the independent operation and independent decision
Commitment made Bengang Group Co., making of Bengang Steel Plates, guarantee the independence of Bengang
during initial public Ltd. and Benxi Steel Other Steel Plates’ business, the completeness of asset, and the independence of July Under normal
Long term
offering or & Iron (Group) Co., commitment personnel and finance to avoid and reduce unnecessary related transactions. 24th,2019 fulfillment
refinancing Ltd. The Group will strictly control related transactions with Bengang Steel Plates
and its subsidiaries. 2. The Group and other enterprises controlled by the
Group promise not to use loans, debt repayment, substitute funds or other
ways to occupy or misappropriate the funds of Bengang Steel Plates and its
subsidiaries, nor require Bengang Steel Plates and its subsidiaries to provide
illegal guarantees for the Group and other enterprises controlled by the
Group. 3. The Group and other enterprises controlled by the Group will
reduce related transactions as much as possible with Bengang Steel Plates. If
71
Bengang Steel Plates Co., Ltd. 2022 Annual Report
Type of Commitment Commitment
Commitments Commitment party Contents Performance
commitment time period
related transactions are indeed necessary and unavoidable, it will strictly
implement the decision making authority, decision making procedures,
avoidance system and other requirements stipulated in Bengang Steel Plates’
Articles of Association and related transaction decision making systems, give
full play to the role of the Board of Supervisors and independent directors,
and earnestly fulfill the obligation of disclosing information to ensure that
transactions are conducted in accordance with the open, fair, and equal
principles of market transactions and normal commercial terms. The Group
and other enterprises controlled by the Group will not require or accept
Bengang Steel Plates to offer preferential treatment which is not given to a
third party in any fair market transaction, thereby protecting other
shareholders and interests of Bengang Steel Plates from damage. 4. The
Group guarantees that the above commitments are continuously effective
and irrevocable as long as Bengang Steel Plates is listed on the domestic
stock exchange and the Group acts as its direct and indirect controlling
shareholder. If any violation of the above commitments occurs, the Group
therefore will bear all the losses caused to Bengang Steel Plates.
Whether
Commitment fulfilled Yes
on time or not
72
Bengang Steel Plates Co., Ltd. 2022 Annual Report
2. The Company remarks 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 the controlling shareholder 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-compliance with external guarantees.
IV. Illustration by the Board of Directors on the latest Qualified Audit Report
□Applicable Not applicable
V. Illustration by the Board of Directors, the Supervisory Committee and the Independent
Directors (if any) on the Qualified Audit Report of the accountants’ firm for the reporting
period
□Applicable Not applicable
VI. Illustration of changes in accounting policy, accounting estimate and significant accounting
error as compared with the financial report of last year
Applicable □Not applicable
Significant changes in accounting policy
① Accounting Standards for Business Enterprises Interpretation No. 15
On December 30th, 2021, the Ministry of Finance issued the Accounting Standards for Business Enterprises Interpretation No. 15
(Caikuai [2021] No. 35, hereinafter referred to as Interpretation No. 15), in which "Accounting for the external sales of products
or by-products produced by an enterprise before the fixed assets reach the usable condition as intended or are in the R&D
Process" and "Judgment on loss-making contracts" came into force on January 1st, 2022.
② Accounting Standards for Business Enterprises Interpretation No. 16
On December 30th, 2022, the Ministry of Finance issued the Accounting Standards for Business Enterprises Interpretation No. 16
(Caikuai [2022] No. 31, hereinafter referred to as Interpretation No. 16), in which "Accounting for deferred income tax related to
assets and liabilities arising from a single transaction which is not subject to the accounting treatment of initial recognition
exemption" came into force on January 1st, 2023. "Accounting for the income tax implications of dividends related to financial
73
Bengang Steel Plates Co., Ltd. 2022 Annual Report
instruments classified by issuers as equity instruments" and "Accounting for enterprises changing from cash-settled share
payment to equity-settled share payment" came into force on the date of promulgation.
Significant changes in accounting estimate
Content and causation of accounting Date of Affected items of financial
Approval process Amount
estimate change application statements
Accumulated depreciation 271,947,090.70
The 6th meeting of the Operating costs 266,457,899.30
Types of fixed assets, Depreciation
Company’s 9th Board of July 1st, 2022 Administrative expenses 5,489,191.40
period, and residual value rate
Directors Total profit 271,947,090.70
Net profit 271,947,090.70
In recent years, the Company has continuously increased investment in fixed assets, launched technical transformation and
technological innovation of the main equipment production line, regularly overhauled the equipment, improved the
performance of the equipment and extended the service life of fixed assets. Following the principle of accounting prudence and
Accounting Standards for Business Enterprises No. 4 - Fixed Assets Article 15 of Chapter 4 about "an enterprise shall reasonably
confirm the service life and estimated net residual value of fixed assets according to the nature and use of fixed assets", the
Company changes the accounting estimates of fixed asset types, depreciation period and residual value rate according to the
nature and use of fixed assets, so that the type, depreciation period and residual value rate of fixed assets are closer to practical
conditions.
On October 26th, 2022, the Company held the 6th meeting of the 9th Board of Directors and deliberated and passed the Proposal
on Changes in Accounting Estimate.
The Company began to implement the changed accounting estimate on July 1st, 2022. This change in accounting estimate had no
impact on the Company's main business scope. The Company's depreciation amount will reduce by RMB 270 million in 2022.
VII. Illustration of changes in the consolidation scope as compared with the financial report of
last year
Applicable □Not applicable
Chongqing Liaoben Steel & Iron Trading Co., Ltd., Harbin Bengang Economic and Trading Co., Ltd., Nanjing Bengang Materials
Sales Co., Ltd., and Wuxi Bengang Steel & Iron Sales Co., Ltd. were deregistered during the reporting period.
The Company lost control over Bengang Baojin (Shenyang) Automobile New Materials Technology Co., Ltd. due to the raised
funds of Xiamen Xianghong Investment Co., Ltd. on July 8th, 2022, and thus Bengang Baojin was no longer included in the
consolidation.
Bengang Steel Plates Liaoyang Pellet Co., Ltd. was sold to Benxi Steel & Iron (Group) Mining Co., Ltd. on September 30th, 2022.
VIII.Appointment and dismissal of certified accountants’ firm
Accountants’ firm currently appointed
Name of the domestic accountants’ firm ShineWing Certified Public Accountants LLP
Payment to the domestic accountants’ firm (in RMB 10,000) 295
Service life of domestic accountants’ firm providing audit service 1
Name of CPAs from the domestic accountants’ firm Fan Jianping, Chen Jian
Service life of domestic accountants’ providing audit service 1
74
Bengang Steel Plates Co., Ltd. 2022 Annual Report
Whether the accountants’ firm is changed during the reporting period
Yes □No
Whether the accountants’ firm is changed during the auditing period
Yes □No
On August 17th, 2022 and September 9th, 2022, the Company respectively held the 4th meeting of the 9th Board of Directors and
the 3rd extraordinary general meeting, deliberated and passed the Proposal on Changes in Accountants’ Firm, and appointed
ShineWing Certified Public Accountants LLP as the Company's audit institution for the year of 2022. The Company has
communicated in advance with BDO China Shu Lun Pan CPAs, the Company's original accounting and audit institution, about the
change of accountants’ firm, and the latter was informed of the change and confirmed that there was no objection.
Whether the change of the accountants’ firm has complied with the approval procedure
Yes □No
Detailed illustration of the appointment and change of the accountants’ firm
The Company took into account the practical conditions including its business development and audit needs, personnel
arrangement and work plans of the accountants’ firm, and intended to ShineWing Certified Public Accountants LLP as the
Company's audit institution for the year of 2022 after comprehensive communication and negotiation, The Company has
communicated in advance with BDO China Shu Lun Pan CPAs, the Company's original accounting and audit institution, about the
change of accountants’ firm, and the latter was informed of the change and confirmed that there was no objection. The
Company's Audit Committee, independent directors and the Board of Directors had no objection to the change of accountants’
firm, which has been deliberated and approved by the Company's general meeting of shareholders. For details, please refer to
the Announcement on the Proposed Change of Accountants’ Firm (2022-051) disclosed by the Company on August 19th, 2022.
Engagement of accountant’s firms, financial consultants or sponsors for internal control auditing
Applicable □Not applicable
The Company appointed ShineWing Certified Public Accountants LLP as the audit institution for internal control auditing at the
price of RMB 600,000.
IX. Risk of suspension or termination of listing after the disclosure of the annual report
□Applicable Not Applicable
X. Bankruptcy and restructuring events
□Applicable Not Applicable
There were no bankruptcy and restructuring events during the reporting period.
75
Bengang Steel Plates Co., Ltd. 2022 Annual Report
XI. Significant lawsuits and arbitrations
Applicable □Not applicable
Total
Basic Where there Judicial result Enforcement of
amount
information are Progress of lawsuits and influence the judgment of Date of Index of
involved
of lawsuits estimated (arbitrations) of lawsuits lawsuits and disclosure disclosure
(RMB
(arbitrations) liabilities (arbitrations) arbitrations
10,000)
Summary of
significant
The Company
lawsuits and Implementation
In has won most
arbitrations 6,961 No according to
judgment/execution cases and is
not reaching laws
not affected.
the standard
of disclosure
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
76
Bengang Steel Plates Co., Ltd. 2022 Annual Report
XIV. Major related transactions
1. Related transactions relevant to daily operations
Applicable □Not applicable
The
Whether
Pricing approved Means of Available
Price of Amount of exceed
Type of related Content of principle of Proportion trading limit payment of market
related related party the Date of Index of
Related parties Relationship party related party related of similar of related price of
party transactions s approved disclosure disclosure
transactions transactions party transactions transactions party similar
transactions (RMB 10,000) limit
transactions (RMB transactions transactions
(Y/N)
10,000)
Benxi Beiying Execute
Purchasing Purchasing Related
Iron and Steel Same On according to March
goods/providing main raw agreement 1,401,540.48 22.51% 1,928,000 No Yes 2022-017
(Group) Co., controller agreement the 26th, 2022
services materials price
Ltd. agreement
Benxi Iron and Execute
Same Purchasing Purchasing Related
Steel (Group) On according to March
parent goods/providing main raw agreement 652,634.84 10.48% 895,000 No Yes 2022-017
Mining Co., agreement the 26th, 2022
company services materials price
Ltd. agreement
Benxi Iron and Execute
Both belong Purchasing Purchasing Related
Steel (Group) On according to March
to Bengang goods/providing main raw agreement 28,954.33 0.47% 51,000 No Yes 2022-017
Metallurgical agreement the 26th, 2022
Group services materials price
Slag Co., Ltd. agreement
Benxi Iron and
Execute
Steel (Group) Both belong Purchasing Purchasing Related
On according to March
Industrial to Bengang goods/providing main raw agreement 40,737.18 0.65% 30,000 Yes Yes 2022-017
agreement the 26th, 2022
Development Group services materials price
agreement
Co., Ltd.
Execute
Anshan Iron Both belong Purchasing Purchasing Related
On according to March
and Steel Co., to Ansteel goods/providing main raw agreement 7,550.44 0.12% 130,000 No Yes 2022-017
agreement the 26th, 2022
Ltd. Group services materials price
agreement
Ansteel Group Execute
Both belong Purchasing Purchasing Related
Mining On according to March
to Ansteel goods/providing main raw agreement 46,171.1 0.74% 160,000 No Yes 2022-017
Gongchangling agreement the 26th, 2022
Group services materials price
Co., Ltd. agreement
77
Bengang Steel Plates Co., Ltd. 2022 Annual Report
The
Whether
Pricing approved Means of Available
Price of Amount of exceed
Type of related Content of principle of Proportion trading limit payment of market
related related party the Date of Index of
Related parties Relationship party related party related of similar of related price of
party transactions s approved disclosure disclosure
transactions transactions party transactions transactions party similar
transactions (RMB 10,000) limit
transactions (RMB transactions transactions
(Y/N)
10,000)
Ansteel Group Execute
Both belong Purchasing Purchasing Related
International On according to March
to Ansteel goods/providing main raw agreement 5,829.2 0.09% 120,000 No Yes 2022-017
Economic and agreement the 26th, 2022
Group services materials price
Trade Co., Ltd. agreement
Ansteel Scrap Execute
Both belong Purchasing Purchasing Related
Resources On according to March
to Ansteel goods/providing main raw agreement 50,126.48 0.81% 70,000 No Yes 2022-017
(Anshan) Co., agreement the 26th, 2022
Group services materials price
Ltd. agreement
Pangang Group
Execute
Vanadium & Both belong Purchasing Purchasing Related
On according to March
Titanium to Ansteel goods/providing main raw agreement 0 0.00% 2,000 No Yes 2022-017
agreement the 26th, 2022
Resources Co., Group services materials price
agreement
Ltd.
Benxi Beiying Execute
Both belong Purchasing Purchasing Related
Iron and Steel On according to March
to Bengang goods/providing supplementary agreement 23,759.86 0.38% 2,000 Yes Yes 2022-017
(Group) Co., agreement the 26th, 2022
Group services materials price
Ltd. agreement
Liaoning
Hengtong Execute
Both belong Purchasing Purchasing Related
Metallurgical On according to March
to Bengang goods/providing supplementary agreement 13,568.94 0.22% 25,000 No Yes 2022-017
Equipment agreement the 26th, 2022
Group services materials price
Manufacture agreement
Co., Ltd.
Associates Execute
Bengang Purchasing Purchasing Related
of the On according to March
Electric Co., goods/providing supplementary agreement 12,121.98 0.19% 20,000 No Yes 2022-017
parent agreement the 26th, 2022
Ltd. services materials price
company agreement
Benxi Iron and
Execute
Steel (Group) Both belong Purchasing Purchasing Related
On according to March
Machinery to Bengang goods/providing supplementary agreement 15,433.29 0.25% 10,000 Yes Yes 2022-017
agreement the 26th, 2022
Manufacturing Group services materials price
agreement
Co., Ltd.
78
Bengang Steel Plates Co., Ltd. 2022 Annual Report
The
Whether
Pricing approved Means of Available
Price of Amount of exceed
Type of related Content of principle of Proportion trading limit payment of market
related related party the Date of Index of
Related parties Relationship party related party related of similar of related price of
party transactions s approved disclosure disclosure
transactions transactions party transactions transactions party similar
transactions (RMB 10,000) limit
transactions (RMB transactions transactions
(Y/N)
10,000)
Liaoning Execute
Both belong Purchasing Purchasing Related
Hengyi Steel On according to March
to Bengang goods/providing supplementary agreement 41,058.53 0.66% 0 Yes Yes 2022-017
Trading Co., agreement the 26th, 2022
Group services materials price
Ltd. agreement
Ansteel Mining Execute
Both belong Purchasing Purchasing Related
Machinery On according to March
to Ansteel goods/providing supplementary agreement 0 0.00% 3,000 No Yes 2022-017
Manufacturing agreement the 26th, 2022
Group services materials price
Co., Ltd. agreement
Execute
Both belong Purchasing Purchasing Related
Angang Steel On according to March
to Ansteel goods/providing supplementary agreement 0 0.00% 1,000 No Yes 2022-017
Rope Co., Ltd. agreement the 26th, 2022
Group services materials price
agreement
Execute
Other Both belong Purchasing Purchasing Related
On according to March
subsidiaries of to Ansteel goods/providing supplementary agreement 15,654.65 0.25% 2,000 Yes Yes 2022-017
agreement the 26th, 2022
Ansteel Group Group services materials price
agreement
Benxi Beiying Execute
Both belong Purchasing Purchasing Related
Iron and Steel On according to March
to Bengang goods/providing energy & agreement 77,911.05 1.25% 60,000 Yes Yes 2022-017
(Group) Co., agreement the 26th, 2022
Group services power price
Ltd. agreement
Benxi Steel & Execute
Both belong Purchasing Receiving Related
Iron (Group) On according to March
to Bengang goods/providing supporting agreement 77,578.83 1.25% 52,000 Yes Yes 2022-017
Construction agreement the 26th, 2022
Group services services price
Co., Ltd. agreement
Benxi Beiying Execute
Both belong Purchasing Receiving Related
Iron and Steel On according to March
to Bengang goods/providing supporting agreement 10,342.45 0.17% 10,000 Yes Yes 2022-017
(Group) Co., agreement the 26th, 2022
Group services services price
Ltd. agreement
Benxi Iron and Execute
Both belong Purchasing Receiving Related
Steel (Group) On according to March
to Bengang goods/providing supporting agreement 13,307.82 0.21% 20,000 No Yes 2022-017
Machinery agreement the 26th, 2022
Group services services price
Engineering agreement
79
Bengang Steel Plates Co., Ltd. 2022 Annual Report
The
Whether
Pricing approved Means of Available
Price of Amount of exceed
Type of related Content of principle of Proportion trading limit payment of market
related related party the Date of Index of
Related parties Relationship party related party related of similar of related price of
party transactions s approved disclosure disclosure
transactions transactions party transactions transactions party similar
transactions (RMB 10,000) limit
transactions (RMB transactions transactions
(Y/N)
10,000)
Co., Ltd.
Benxi Iron and Execute
Same Purchasing Receiving Related
Steel (Group) On according to March
parent goods/providing supporting agreement 3,311.18 0.05% 5,000 No Yes 2022-017
Mining Co., agreement the 26th, 2022
company services services price
Ltd. agreement
Benxi Iron and
Execute
Steel (Group) Both belong Purchasing Receiving Related
On according to March
International to Bengang goods/providing supporting agreement 90,447.11 1.45% 50,000 Yes Yes 2022-017
agreement the 26th, 2022
Economic and Group services services price
agreement
Trade Co., Ltd.
Benxi Iron and
Execute
Steel (Group) Both belong Purchasing Receiving Related
On according to March
Information to Bengang goods/providing supporting agreement 10,458.42 0.17% 13,000 No Yes 2022-017
agreement the 26th, 2022
Automation Group services services price
agreement
Co., Ltd.
Ansteel Steel
Execute
Processing and Both belong Purchasing Receiving Related
On according to March
Distribution to Ansteel goods/providing supporting agreement 10.11 0.00% 1,300 No Yes 2022-017
agreement the 26th, 2022
(Changchun) Group services services price
agreement
Co., Ltd.
Ansteel Group
Execute
Engineering Both belong Purchasing Receiving Related
On according to March
Technology to Ansteel goods/providing supporting agreement 6,337.58 0.10% 201,500 No Yes 2022-017
agreement the 26th, 2022
Development Group services services price
agreement
Co., Ltd.
Execute
Ansteel Both belong Purchasing Receiving Related
On according to March
Construction to Ansteel goods/providing supporting agreement 3,684.09 0.06% 3,000 Yes Yes 2022-017
agreement the 26th, 2022
Group Co., Ltd. Group services services price
agreement
Both belong Purchasing Receiving Related Execute
Bengang Group On March
to Bengang goods/providing supporting agreement 380.48 0.01% 10,000 No according to Yes 2022-017
Co., Ltd. agreement 26th, 2022
Group services services price the
80
Bengang Steel Plates Co., Ltd. 2022 Annual Report
The
Whether
Pricing approved Means of Available
Price of Amount of exceed
Type of related Content of principle of Proportion trading limit payment of market
related related party the Date of Index of
Related parties Relationship party related party related of similar of related price of
party transactions s approved disclosure disclosure
transactions transactions party transactions transactions party similar
transactions (RMB 10,000) limit
transactions (RMB transactions transactions
(Y/N)
10,000)
agreement
Execute
Benxi Steel & Both belong Purchasing Receiving Related
On according to March
Iron (Group) to Bengang goods/providing supporting agreement 29,280.12 0.47% 35,000 No Yes 2022-017
agreement the 26th, 2022
Co., Ltd. Group services services price
agreement
Liaoning Execute
Both belong Purchasing Receiving Related
Hengtai Heavy On according to March
to Bengang goods/providing supporting agreement 4,870.21 0.08% 4,100 Yes Yes 2022-017
Machinery Co., agreement the 26th, 2022
Group services services price
Ltd. agreement
Liaoning Execute
Both belong Purchasing Receiving Related
Metallurgical On according to March
to Bengang goods/providing supporting agreement 1,468.99 0.02% 2,000 No Yes 2022-017
Technician agreement the 26th, 2022
Group services services price
College agreement
Northern Execute
Both belong Purchasing Receiving Related
Hengda On according to March
to Bengang goods/providing supporting agreement 2,553.01 0.04% Yes Yes 2022-017
Logistics Co., agreement the 26th, 2022
Group services services price
Ltd. agreement
Benxi Iron and
Execute
Steel (Group) Both belong Purchasing Receiving Related
On according to March
Machinery to Bengang goods/providing supporting agreement 6,395.63 0.10% 10,000 No Yes 2022-017
agreement the 26th, 2022
Manufacturing Group services services price
agreement
Co., Ltd.
Execute
Ansteel Group Both belong Purchasing Receiving Related
On according to March
Automation to Ansteel goods/providing supporting agreement 7,287.3 0.12% Yes Yes 2022-017
agreement the 26th, 2022
Co., Ltd. Group services services price
agreement
Execute
Other Both belong Purchasing Receiving Related
On according to March
subsidiaries of to Ansteel goods/providing supporting agreement 6,802.95 0.11% 1,570 Yes Yes 2022-017
agreement the 26th, 2022
Ansteel Group Group services services price
agreement
Ansteel Both belong Purchasing Purchasing On Related Execute March
0 0.00% 16,000 No Yes 2022-017
Lianzhong to Ansteel goods/providing steel products agreement agreement according to 26th, 2022
81
Bengang Steel Plates Co., Ltd. 2022 Annual Report
The
Whether
Pricing approved Means of Available
Price of Amount of exceed
Type of related Content of principle of Proportion trading limit payment of market
related related party the Date of Index of
Related parties Relationship party related party related of similar of related price of
party transactions s approved disclosure disclosure
transactions transactions party transactions transactions party similar
transactions (RMB 10,000) limit
transactions (RMB transactions transactions
(Y/N)
10,000)
(Guangzhou) Group services price the
Stainless Steel agreement
Co., Ltd.
Benxi Beiying Execute
Both belong Selling Related
Iron and Steel On according to March
to Bengang goods/providing Selling goods agreement 96,772.69 1.55% 420,000 No Yes 2022-017
(Group) Co., agreement the 26th, 2022
Group services price
Ltd. agreement
Execute
Anshan Iron Both belong Selling Related
On according to March
and Steel Co., to Ansteel goods/providing Selling goods agreement 16,864.38 0.27% 210,000 No Yes 2022-017
agreement the 26th, 2022
Ltd. Group services price
agreement
Benxi Iron and Execute
Same Selling Related
Steel (Group) On according to March
parent goods/providing Selling goods agreement 114,274.98 1.82% 190,000 No Yes 2022-017
Mining Co., agreement the 26th, 2022
company services price
Ltd. agreement
Suzhou Execute
Selling Related
Longben Metal Joint stock On according to March
goods/providing Selling goods agreement 195.2 0.00% 50,000 No Yes 2022-017
Materials Co., company agreement the 26th, 2022
services price
Ltd. agreement
Benxi Iron and Execute
Same Selling Related
Steel (Group) On according to March
parent goods/providing Selling goods agreement 17,875.85 0.29% 50,000 No Yes 2022-017
Metallurgical agreement the 26th, 2022
company services price
Slag Co., Ltd. agreement
Ansteel Group Execute
Both belong Selling Related
International On according to March
to Ansteel goods/providing Selling goods agreement 0 0.00% 30,000 No Yes 2022-017
Economic and agreement the 26th, 2022
Group services price
Trade Co., Ltd. agreement
Panzhong
Execute
Yihong Metal Both belong Selling Related
On according to March
Products to Ansteel goods/providing Selling goods agreement 676.43 0.01% 20,000 No Yes 2022-017
agreement the 26th, 2022
(Chongqing) Group services price
agreement
Co., Ltd.
82
Bengang Steel Plates Co., Ltd. 2022 Annual Report
The
Whether
Pricing approved Means of Available
Price of Amount of exceed
Type of related Content of principle of Proportion trading limit payment of market
related related party the Date of Index of
Related parties Relationship party related party related of similar of related price of
party transactions s approved disclosure disclosure
transactions transactions party transactions transactions party similar
transactions (RMB 10,000) limit
transactions (RMB transactions transactions
(Y/N)
10,000)
Changchun
FAW Ansteel Execute
Both belong Selling Related
Steel On according to March
to Ansteel goods/providing Selling goods agreement 976.82 0.02% 11,000 No Yes 2022-017
Processing and agreement the 26th, 2022
Group services price
Distribution agreement
Co., Ltd.
Benxi Iron and
Execute
Steel (Group) Same Selling Related
On according to March
Thermal parent goods/providing Selling goods agreement 6,111.08 0.10% 10,000 No Yes 2022-017
agreement the 26th, 2022
Development company services price
agreement
Co., Ltd.
Benxi Iron and
Execute
Steel (Group) Same Selling Related
On according to March
Machinery parent goods/providing Selling goods agreement 4,339.83 0.07% 10,000 No Yes 2022-017
agreement the 26th, 2022
Manufacturing company services price
agreement
Co., Ltd.
Ansteel Execute
Both belong Selling Related
Chemical On according to March
to Ansteel goods/providing Selling goods agreement 14,293.74 0.23% 177,822 No Yes 2022-017
Technology agreement the 26th, 2022
Group services price
Co., Ltd. agreement
Benxi Steel & Execute
Same Selling Related
Iron (Group) On according to March
parent goods/providing Selling goods agreement 6,824.78 0.11% 8,000 No Yes 2022-017
Construction agreement the 26th, 2022
company services price
Co., Ltd. agreement
Liaoning
Hengtong Execute
Both belong Selling Related
Metallurgical On according to March
to Bengang goods/providing Selling goods agreement 3,534.73 0.06% 5,000 No Yes 2022-017
Equipment agreement the 26th, 2022
Group services price
Manufacture agreement
Co., Ltd.
Benxi Iron and Same Selling On Related Execute March
Selling goods 4,015.97 0.06% 5,000 No Yes 2022-017
Steel (Group) parent goods/providing agreement agreement according to 26th, 2022
83
Bengang Steel Plates Co., Ltd. 2022 Annual Report
The
Whether
Pricing approved Means of Available
Price of Amount of exceed
Type of related Content of principle of Proportion trading limit payment of market
related related party the Date of Index of
Related parties Relationship party related party related of similar of related price of
party transactions s approved disclosure disclosure
transactions transactions party transactions transactions party similar
transactions (RMB 10,000) limit
transactions (RMB transactions transactions
(Y/N)
10,000)
Industrial company services price the
Development agreement
Co., td.
Execute
Dalian Boroller Same Selling Related
On according to March
Steel Pipe Co., parent goods/providing Selling goods agreement 1,713.88 0.03% 2,000 No Yes 2022-017
agreement the 26th, 2022
Ltd. company services price
agreement
Execute
Benxi Steel & Selling Related
Parent On according to March
Iron (Group) goods/providing Selling goods agreement 1,528.38 0.02% 1,000 Yes Yes 2022-017
company agreement the 26th, 2022
Co., Ltd. services price
agreement
Delin Land Port Execute
Both belong Selling Related
Supply Chain On according to March
to Ansteel goods/providing Selling goods agreement 6,853.43 0.11% 253,000 No Yes 2022-017
Service Co., agreement the 26th, 2022
Group services price
Ltd. agreement
Northern Execute
Both belong Selling Related
Hengda On according to March
to Bengang goods/providing Selling goods agreement 157,552.24 2.52% Yes Yes 2022-017
Logistics Co., agreement the 26th, 2022
Group services price
Ltd. agreement
Zhejiang Execute
Selling Related
Jingrui Steel Joint stock On according to March
goods/providing Selling goods agreement 63,487.86 1.01% Yes Yes 2022-017
Processing Co., company agreement the 26th, 2022
services price
Ltd. agreement
Ansteel Green Execute
Both belong Selling Related
Resources On according to March
to Ansteel goods/providing Selling goods agreement 9,258.71 0.15% Yes Yes 2022-017
Technology agreement the 26th, 2022
Group services price
Co., Ltd. agreement
Wuhan Execute
Selling Related
Yuanhong Joint stock On according to March
goods/providing Selling goods agreement 5,185.43 0.08% Yes Yes 2022-017
Trading Co., company agreement the 26th, 2022
services price
Ltd. agreement
Other Both belong Selling Selling goods On Related 406.56 0.01% 2,355 No Execute Yes March 2022-017
84
Bengang Steel Plates Co., Ltd. 2022 Annual Report
The
Whether
Pricing approved Means of Available
Price of Amount of exceed
Type of related Content of principle of Proportion trading limit payment of market
related related party the Date of Index of
Related parties Relationship party related party related of similar of related price of
party transactions s approved disclosure disclosure
transactions transactions party transactions transactions party similar
transactions (RMB 10,000) limit
transactions (RMB transactions transactions
(Y/N)
10,000)
subsidiaries of to Ansteel goods/providing agreement agreement according to 26th, 2022
Ansteel Group Group services price the
agreement
Benxi Iron and Execute
Same Selling Providing Related
Steel (Group) On according to March
parent goods/providing supporting agreement 637.57 0.01% 1,000 No Yes 2022-017
Mining Co., agreement the 26th, 2022
company services services price
Ltd. agreement
Controlling Execute
Selling Providing Related
Bengang Group Shareholder On according to March
goods/providing supporting agreement 0 0.00% 17,000 No Yes 2022-017
Co., Ltd. of parent agreement the 26th, 2022
services services price
company agreement
Total -- -- 3,240,949.17 -- 5,416,647 -- -- -- -- --
Details of any sales return of a large amount N/A
Illustration of the actual situation during the reporting period where a
forecast had been made by type for the total amounts of routine
N/A
related transactions which would occur during the reporting period(if
any)
Reason for any significant difference between the transaction price
N/A
and the market price for reference (if applicable)
85
Bengang Steel Plates Co., Ltd. 2022 Annual Report
2. Related transactions relevant to asset acquisition or sold
□Applicable Not applicable
There was no related transaction relevant to asset acquisition or sale 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
There were no credits and liabilities with related parties.
5. Transactions with related financial companies
Applicable □Not applicable
Deposit business
Amount for this period
Maximum Beginning Closing
Total deposit Total amount
Related daily deposit deposit balance balance
Relationship amount for the withdrawn in the
party limit (RMB rate range (RMB (RMB
current period current period
10,000) 10,000) 10,000)
(RMB 10,000) (RMB 10,000)
Ansteel
Both belong
Group
to Ansteel 450,000 1.9% 442,965.63 16,081,552.08 16,417,025.86 107,491.85
Finance
Group
Co., Ltd.
Bengang
Both belong
Group
to Bengang 1,100,000 3.0%-3.5% 0 269.72 269.72 0
Finance
Group
Co., Ltd.
Loan business
Amount for this period
Closing
Loan amount Loan Beginning Total loan Total repayment
Related balance
Relationship (RMB interest balance amount for the amount for the
party (RMB
10,000) rate range (RMB 10,000) current period current period
10,000)
(RMB 10,000) (RMB 10,000)
Credit or other financial business
Actual amount (RMB
Related party Relationship Business type Total (RMB 10,000)
10,000)
6. Transactions between financial companies controlled by the Company and related parties
□Applicable Not applicable
There were no deposit business, loan business, credit or other financial business between financial companies controlled by the
Company and related parties.
86
Bengang Steel Plates Co., Ltd. 2022 Annual Report
7. Other significant related transactions
□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
Lessee Lease capital category Lease income of this year Lease income of last year
Ansteel Tendering Co., Ltd. Plants and ancillary facilities 255,045.87
Bengang Tendering Co., Ltd. Plants and ancillary facilities 250,917.43 480,000.00
Company as the lessee
Rental expense for short-
Assumed interest expense on
term leases and leases of Rent paid
lease liability
Lessor Lease capital category low-value assets
Amount for Amount for Amount for Amount for Amount for Amount for
this year last year this year last year this year last year
Land use right
Benxi Steel &
7,669,068.17 m2. Land
Iron (Group) 55,251,233.39 55,251,233.39 38,983,993.51 39,600,209.28
use right 42,920.00
Co., Ltd.
m2.
Benxi Steel & 2300 Hot rolling
Iron (Group) product line, related 16,098,161.06 16,098,161.06 7,657,901.26 7,982,648.96
Co., Ltd. real estate
Benxi Beiying
1780 Hot rolling
Iron and Steel
product line, related 12,397,899.09 12,397,899.09 5,897,685.23 6,147,787.68
(Group) Co.,
real estate
Ltd.
Bengang Land use right
9,945,423.08 9,945,423.08 2,375,669.84 2,666,923.92
Group Co., 728,282.30 m2
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Bengang Steel Plates Co., Ltd. 2022 Annual Report
Rental expense for short-
Assumed interest expense on
term leases and leases of Rent paid
lease liability
Lessor Lease capital category low-value assets
Amount for Amount for Amount for Amount for Amount for Amount for
this year last year this year last year this year last year
Ltd.
Northern
Hengda Real estate of office
120,596.33
Logistics Co., areas
Ltd.
Notes: 1. According to the Land Use Right Lease Contract and subsequent supplementary agreements signed between the
Company and Bengang Group on April 7th, 1997 and December 30th, 2005, the Company leased land from Bengang Group, with a
monthly rent of RMB 0.594/m2. The leased land is 7,669,068.17m2 and the annual rent is RMB 54.6651 million.
2. On August 14th, 2019, the Company signed the House Lease Agreement with Bengang Group and Beiying Iron & Steel Co., Ltd.,
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 December 31st, 2038.
3. On July 15th, 2019, the Company signed Land Lease Agreement with Bengang Group, leased and used a total of 8 pieces of land
from Bengang Group, with leased areas of 42,920.00m2 and 728,282.30m2. The lease term is 20 years, and the rental price is
RMB 1.138/m2 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
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 assets
(1) Entrusted finance
□Applicable Not applicable
There was no entrusted finance during the reporting period.
(2) Entrusted loans
□Applicable Not applicable
There were no entrusted loans during the reporting period.
4. Other major contracts
□Applicable Not applicable
88
Bengang Steel Plates Co., Ltd. 2022 Annual Report
There were no other major contracts during the reporting period.
XVI.Description of other major events
Applicable □Not applicable
On March 21st, 2023, the Company issued the Indicative Announcement of Bengang Steel Plates Co., Ltd. on the Planning of
Significant Asset Replacement and Related Party Transactions. In order to enhance the operating efficiency and profitability of
the Company and accelerate the pace to be a world-class mining development enterprise, it intends to conduct an asset
replacement with its controlling shareholder, Benxi Steel & Iron (Group) Co., Ltd. (hereinafter referred to as "Benxi Steel & Iron"),
specifically, the assets to be received being mining-related assets under Benxi Steel & Iron, to be surrendered being the assets
and liabilities related to all the Company's iron and steel businesses, and the difference between received and surrender made up
in cash by one party to the other. At present, the transaction is still in the planning stage, which means specific information such
as the scope and pricing of the underlying assets have yet to be finalized and no agreement has been signed by the two sides.
The transaction proposal still requires further demonstration, communication and consultation, and is subject to necessary
decision-making and approval procedures in accordance with relevant laws, regulations and the Articles of Association of the
Company. There are still significant uncertainties in the relevant matters.
XVII. Major events of subsidiaries of the Company
Applicable □Not applicable
1. Harbin Bengang Economic and Trading Co., Ltd. completed the deregistration procedure at the Bureau of Industry and
Commerce on August 4th, 2022, with a registered capital of RMB 30,000,000.
2. Nanjing Bengang Materials Sales Co., Ltd. completed the deregistration procedure at the Bureau of Industry and Commerce on
July 1st, 2022, with a registered capital of RMB 1,150,000.
3. Chongqing Liaoben Steel & Iron Trading Co., Ltd. completed the deregistration procedure at the Bureau of Industry and
Commerce on June 16th, 2022, with a registered capital of RMB 30,000,000.
4. Wuxi Bengang Steel & Iron Sales Co., Ltd. was merged and acquired by Shanghai Bengang Metallurgy Science and Technology
Co., Ltd., with a registered capital of RMB 30,000,000, and completed the deregistration procedure at the Bureau of Industry and
Commerce on September 15th, 2022.
5. The Company lost control over Bengang Baojin (Shenyang) Automobile New Materials Technology Co., Ltd. because Xiamen
Xianghong Investment Co., Ltd. Raised funds on July 8th, 2022, and thus Baojin was not included in the consolidation.
The above events of subsidiaries will not exert significant influence on the Company.
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Bengang Steel Plates Co., Ltd. 2022 Annual Report
Section VII. Status of Share Capital Changes and Shareholders
I. Share Capital Changes
1. Share capital changes
Unit: shares
Before the change Increase/decrease(+，-) After the change
Issuing of Bonus Capitalization of
Quantity Percentage Other Subtotal Quantity Percentage
new share shares common reserve fund
I. Restricted shares
1. State shareholdings
2. State-own Legal person shareholding
3. Other domestic shareholdings
Including: Domestic legal person
holding
Domestic natural person holding
3. Foreign shareholding
Including: Foreign legal person holding
Foreign natural person holding
II. Un-restricted shares 4,108,191,379 100.00% 20,838 20,838 4,108,212,217 100.00%
1.Common shares in RMB 3,708,191,379 90.26% 20,838 20,838 3,708,212,217 90.26%
2. Foreign shares in domestic market 400,000,000 9.74% 400,000,000 9.74%
3. Foreign shares in foreign market
Other
III. Total shares 4,108,191,379 100.00% 20,838 20,838 4,108,212,217 100.00%
90
Bengang Steel Plates Co., Ltd. 2022 Annual Report
Causation of share capital changes
Applicable □Not applicable
During the reporting period, 925 convertible corporate bonds issued by the Company were converted into shares, and the total
share capital of the Company increased by 20,838 shares.
Status of approval of share capital changes
□Applicable Not applicable
Status of the 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) during the reporting period
□Applicable Not applicable
2. Status of total shares and shareholder change and assets and liability structure change
□Applicable Not applicable
3. Status of existing internal employee shares
□Applicable Not applicable
91
Bengang Steel Plates Co., Ltd. 2022 Annual Report
III. Shareholders and actual controllers
1. Number of shareholders and their shareholding of the Company
Unit: shares
Total The total number
shareholders of preferred
Total number of at the end of shareholders
Total preferred shareholders at the end
common the previous voting rights
of the previous month from the date of
shareholders at 65,350 month from 65,573 restored at the 0 0
disclosing the annual report (refer to
the end of the the date of end of the
Notes 8)
reporting period disclosing reporting period
the annual (if any) (refer to
report Notes 8)
Shareholding of shareholders holding more than 5% or top 10 shareholders
Number of Number of pledged, marked or frozen shares
Shareholding shares held at Changes during
Name of the Restricted shares Un-restricted
Nature of the shareholder percentage the end of the the reporting
shareholder held shares held Status Number
(%) reporting period
period
Benxi Steel & Iron
State-owned legal person 58.65% 2,409,628,094 2,409,628,094 Pledged 110,000,000
(Group) Co., Ltd.
Benxi Steel & Iron
State-owned legal person 58.65% 2,409,628,094 2,409,628,094 Frozen 102,100,000
(Group) Co., Ltd.
Ansteel Group
State-owned legal person 17.95% 737,371,532 737,371,532
Co., Ltd.
Huatai Youyi No.5
Mixed Pension
Other 0.68% 27,800,000 27,800,000
Product - Bank of
China Co., Ltd
Zhang Wenyou Domestic natural person 0.47% 19,149,967 19,149,967
Guan Hui Domestic natural person 0.42% 17,400,000 17,400,000 17,400,000
Hong Kong
Securities Foreign legal person 0.27% 11,271,134 -20,758,667 11,271,134
Clearing Co., Ltd.
Zhou Wei Domestic natural person 0.21% 8,831,800 1,198,869 8,831,800
Li Chunhou Domestic natural person 0.18% 7,550,000 7,550,000 7,550,000
92
Bengang Steel Plates Co., Ltd. 2022 Annual Report
China
International
Capital
Foreign legal person 0.15% 6,012,372 -987,600 6,012,372
Corporation Hong
Kong Securities
Ltd.
Shanghai Pudong
Development
Bank Co., Ltd. -
Jianxin
Zhongsheng Other 0.11% 4,455,500 4,455,500 4,455,500
Index 1000
Enhanced Launch
Securities
Investment Fund
Strategy investors or general legal persons
become top 10 shareholders due to shares None
newly issued (if any) (See Notes 3)
Benxi Iron and Steel (Group) Co., Ltd. has an associated relationship with Bengang Group Co., Ltd., and is a person acting in concert as
Illustration of relationship or “action in stipulated in the Administrative Measures for the Acquisition of Listed Companies. The Company is not aware of whether there is an
concert” among top 10 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.
Illustration of the above shareholders involving
entrusting/entrusted voting rights and Illustration of the above shareholders do not involve entrusting/ entrusted voting rights or abstention from voting rights
abstention from voting rights
Special remarks for the buy-back accounts of
N/A
top 10 shareholders (if any) (See Notes 10)
Shareholding of top 10 unrestricted shareholders
Category of shares
Name of the shareholder Un-restricted shares held at the end of the reporting period
Category of shares Quantity
Common shares in
Benxi Steel & Iron (Group) Co., Ltd. 2,409,628,094 2,409,628,094
RMB
Common shares in
Ansteel Group Co., Ltd. 737,371,532 737,371,532
RMB
Huatai Youyi No.5 Mixed Pension Product - Common shares in
27,800,000 27,800,000
Bank of China Co., Ltd RMB
Common shares in
Zhang Wenyou 19,149,967 19,149,967
RMB
Guan Hui 17,400,000 Common shares in 17,400,000
93
Bengang Steel Plates Co., Ltd. 2022 Annual Report
RMB
Common shares in
Hong Kong Securities Clearing Co., Ltd. 11,271,134 11,271,134
RMB
Common shares in
Zhou Wei 8,831,800 8,831,800
RMB
Common shares in
Li Chunhou 7,550,000 7,550,000
RMB
China International Capital Domestic listed
6,012,372 6,012,372
Corporation Hong Kong Securities Ltd. foreign shares
Shanghai Pudong Development Bank Co., Ltd. -
Common shares in
Jianxin Zhongsheng Index 1000 Enhanced 4,455,500 4,455,500
RMB
Launch Securities Investment Fund
Illustration of relationship or “action in
Benxi Iron and Steel (Group) Co., Ltd. has an associated relationship with Bengang Group Co., Ltd., and is a person acting in concert as
concert” among top 10 un-restricted
stipulated in the Administrative Measures for the Acquisition of Listed Companies. The Company is not aware of whether there is an
shareholders, and between top 10 un-
associated relationship between other shareholders or whether they are persons acting in concert as stipulated in the Administrative
restricted shareholders and top 10
Measures for the Acquisition of Listed Companies.
shareholders
Illustration of top 10 shareholders Zhang Wenyou holds 19,149,967 shares through an investor credit securities account. Guan Hui holds 17,400,000 shares through an investor
participating in securities margin trading (if credit securities account. Zhou Wei holds 8,831,800 shares through an investor credit securities account. Li Chunhou holds 7,550,000 shares
any) (see Notes 4) through an investor credit securities account.
Whether the top 10 common shareholders and top 10 un-restricted common shareholders have buy-back agreement dealing during the reporting period
□Yes No
The top 10 common shareholders and top 10 un-restricted common shareholders have no buy-back agreement dealing during the reporting period.
2. Controlling shareholder
Nature of controlling shareholders: central state-owned holdings
Type of controlling shareholders: legal person
Name of the controlling Legal representative/person in Date of
Organization code Principal business activities
shareholder charge incorporation
Steel smelting, mine exploitation, plates rolling, pipe manufacturing, power
generation, special steel material manufacturing, heating, supply of the water,
Benxi Steel & Iron electricity, wind and gas, metal processing, electro mechanics repairment and
Zhai Hongwei July 10th,1996 91210500119726263U
(Group) Co., Ltd. manufacturing, equipment manufacturing, architecture installation, railway,
highway transportation, import and export trade, traveling, hotel, catering and
entertaining services, printing, newspaper and periodical distribution, building
94
Bengang Steel Plates Co., Ltd. 2022 Annual Report
Name of the controlling Legal representative/person in Date of
Organization code Principal business activities
shareholder charge incorporation
materials, refractory materials, meters and instruments, material supply and
marketing, real estate development, scientific research, design and
information services, property management, communications, purchase,
processing and sales of scrap steel, housing, civil air defense project leasing,
steel adjustment, waste oil purchase (the above projects are limited to
subsidiaries), assets management, Bengang Daily publishing; design and
production of print advertisements, use Bengang Daily to publish domestic
and foreign advertisements, design and produce TV station advertisements.
Equity of the controlling
shareholder in other
domestic/foreign listed
companies under its None
control or participation
during the reporting
period
Changes of the controlling shareholder during the reporting period
□Applicable Not applicable
The controlling shareholder of the Company did not change during the reporting period.
3. Actual controller and concerted action person
Actual controller nature: Central State-owned Assets Management Agency
Actual controller type: Legal person
Name of the controlling Legal representative/person in Date of
Organization code Principal business activities
shareholder charge incorporation
Steel, iron, vanadium, titanium, stainless steel, special steel production and
manufacturing, nonferrous metal production and manufacturing, steel
rolling processing, iron, vanadium, titanium and other non-ferrous metal,
nonmetallic mining and comprehensive utilization, mining auxiliary industry,
Ansteel Group Co., Ltd. Tan Chengxu July 28th, 2010 91210000558190456G
clean 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
95
Bengang Steel Plates Co., Ltd. 2022 Annual Report
Name of the controlling Legal representative/person in Date of
Organization code Principal business activities
shareholder charge incorporation
manufacturing, Internet of Things information services, energy conservation,
technical services of environmental protection, R&D of new materials,
development of renewable resources, mechanical processing, technology
development, 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 and tendering services, medical and health
care services, vocational skills training, economic information consulting
services, enterprise management, hotel and catering services, operating of
other state-owned assets and investments within the scope authorized by
the State-owned Assets Supervision and Administration Commission of the
State Council; operations of branches include: newspaper distribution,
publication printing, packaging decoration and other print printing. (For
projects subject to approval according to laws, business activities can only be
carried out after approval by relevant departments.)
Equity of the controlling
shareholder in other
domestic/foreign listed During the reporting period, Ansteel Group Co., Ltd. indirectly held 53.35% of the shares of Ansteel and indirectly held 52.62% of the shares of Pansteel Vanadium
companies under its and Titanium.
control during the
reporting period
96
Bengang Steel Plates Co., Ltd. 2022 Annual Report
Change of the actual controller during the reporting period
□Applicable Not applicable
There is no change of the Company’s actual controller during the reporting period.
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. Controlling shareholder or the largest shareholder and its concerted action person's cumulative
pledged shares accounting 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. Share reduction limitation of controlling shareholders, actual controller, restructuring party and other
commitment subjects
□Applicable Not applicable
IV. Implementation of share repurchase during the reporting period
Implementation progress of share repurchase
□Applicable Not applicable
Implementation progress of reducing share repurchase by centralized bidding
□Applicable Not applicable
97
Bengang Steel Plates Co., Ltd. 2022 Annual Report
Section VIII. Preferred shares
□Applicable Not applicable
There were no preferred shares in the Company during the reporting period.
98
Bengang Steel Plates Co., Ltd. 2022 Annual Report
Section IX. 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. Company bonds
Applicable □Not applicable
1. Previous adjustment of conversion price
(1) The initial conversion price of Bengang Convertible Bonds was RMB 5.03 per share.
(2) Due to the Company's implementation of the 2020 annual equity distribution plan, the conversion price of Bengang
Convertible Bonds was adjusted to RMB 5.02 per share on July 19th, 2021.
(3) Due to the Company's implementation of the 2021 mid-term equity distribution plan, the conversion price of Bengang
Convertible Bonds was adjusted to RMB 4.55 per share on October 13th, 2021.
(4) Due to the Company's implementation of the 2021 annual equity distribution plan, the conversion price of Bengang
Convertible Bonds was adjusted to RMB 3.95 per share on October 13th, 2021.
99
Bengang Steel Plates Co., Ltd. 2022 Annual Report
2. Cumulative share conversion
Applicable □Not applicable
Cumulative Proportion of the Proportion of
Conversion Cumulative
Convertible bond Total amount Total amount number of shares number of converted Amount not yet unconverted
beginning and amount of shares
abbreviation issued (bonds) issued (RMB) converted shares to the total issued converted (RMB) amount to total
ending date converted (RMB)
(shares) shares before conversion issued amount
From January
Bengang
4th, 2021 to June 68,000,000 6,800,000,000.00 1,168,947,900.00 232,840,685 6.01% 5,631,052,100.00 82.81%
Convertible Bonds
28th, 2026
3. Top ten holders of convertible bonds
Unit: shares
Number of convertible bonds Amount of convertible bonds Percentage of convertible
Nature of convertible
No. Convertible bond holders held at the end of the held at the end of the reporting bonds held at the end of the
bond holders
reporting period (bonds) period (RMB) reporting period
Industrial Bank Co., Ltd. - Tianhong Yongli Bond
1 Other 2,614,994 261,499,400.00 4.64%
Securities Investment Fund
Bank of China - Yifangda Stable Profit Increase
2 Other 1,804,006 180,400,600.00 3.20%
Bond Securities Investmen Fund
China CITIC Group Corporation Limited
3 Enterprise Annuity Plan - China CITIC Bank Other 1,407,519 140,751,900.00 2.50%
Corporation Limited
China AMC Yannian Yishou No. 9 Fixed Income
4 Pension Product － China Merchants Bank Co., Other 1,362,468 136,246,800.00 2.42%
Ltd.
China Construction Bank Corporation Limited -
5 Zheshang Fengli Enhanced Bond Securities Other 1,000,000 100,000,000.00 1.78%
Investment Fund
Domestic non-state-
6 Great Wall Glory Securities Co., Ltd. 853,440 85,344,000.00 1.52%
owned legal person
Industrial and Commercial Bank of China
7 Limited Enterprise Annuity Plan - China Other 764,258 76,425,800.00 1.36%
Construction Bank Corporation Limited
100
Bengang Steel Plates Co., Ltd. 2022 Annual Report
Number of convertible bonds Amount of convertible bonds Percentage of convertible
Nature of convertible
No. Convertible bond holders held at the end of the held at the end of the reporting bonds held at the end of the
bond holders
reporting period (bonds) period (RMB) reporting period
Dacheng Fund - Postal Savings Bank of China -
8 Dacheng Fund - PSBC No. 1 Integrated Assets Other 751,826 75,182,600.00 1.34%
Management Plan
CITIC Securities - Sany Heavy Industry Co., Ltd. -
9 CITIC Sany Privileged Customized No. 1 Single Other 687,877 68,787,700.00 1.22%
Assets Management Plan
China AMC Yannian Yishou No. 8 Fixed Income
10 Pension Product - China CITIC Bank Corporation Other 679,931 67,993,100.00 1.21%
Limited
101
Bengang Steel Plates Co., Ltd. 2022 Annual Report
4. Significant changes in the guarantor's profitability, asset condition and credit standing
□Applicable Not applicable
5. Liabilities and changes in credit at the end of the reporting period 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. Loss in the consolidation during the reporting period exceeding 10% of the net assets at
the end of the previous year
□Applicable Not applicable
VI. Overdue interest-bearing debts except for bonds at the end of the reporting period
□Applicable Not applicable
VII. Violation of rules and regulations during the 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
Unit: RMB 10,000
Item At the end of this period At the end of last period Change
Current ratio 0.81 1.14 -28.95%
Liabilities to Assets Ratio 56.08% 58.17% -2.09%
Quick ratio 0.21 0.66 -68.18%
At the end of this period At the end of last period Change
Net profit after deducting
-139,183.79 251,775.87 -155.28%
nonrecurring gains and losses (RMB)
EBITDA total liabilities ratio 10.89% 19.23% -8.34%
Interest coverage ratio -0.75 4.37 -117.16%
Cash interest coverage ratio 3.68 2.35 56.60%
EBITDA interest coverage ratio 2.39 6.12 -60.95%
Loan repayment rate 100.00% 100.00% 0.00%
Interest repayment rate 100.00% 100.00% 0.00%
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Bengang Steel Plates Co., Ltd. 2022 Annual Report
Section X. Financial report
I. Auditor’s report
Opinion of audit report Standard unmodified opinion
Date of audit report March 28th, 2023
Name of CPA firm ShineWing Certified Public Accountants LLP
Audit report number XYZH/2023BJAA15B0064
Name of CPA Fan Jianping, Chen Jian
Auditor’s Report
XYZH/2023BJAA15B0064
To the Shareholders of Bengang Steel Plates Co., Ltd.:
Auditor’s opinion
We have audited the financial statements of Bengang Steel Plates Co., Ltd. (hereinafter referred to as “Bengang Steel Plates”),
which comprise the consolidated and the parent company’s statement of financial position as at December 31st, 2022, the
consolidated and the parent company’s income statement, the consolidated and the parent company’s cash flow statement and
the consolidated and the parent company’s statement of changes in shareholders’ equity for the year 2022, and the notes to the
financial statements.
In our opinion, the accompanying financial statements were prepared in accordance with Accounting Standards for Business
Enterprises in all material respects, and presented fairly the consolidated and the parent company’s financial position of Bengang
Steel Plates as of December 31st, 2022, and the consolidated and the parent company’s results of operations and cash flows for
the year 2022.
Basis for Opinion
We conducted our audit in accordance with China Standards on Auditing for Chinese Certified Public Accountants. 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 Bengang Steel Plates in accordance with the Code of Ethics for
Chinese Certified Public Accountants, and we have fulfilled our other ethical responsibilities of the code. We believe that the
audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit.
Key audit matters
Key audit matters are those matters that, in our professional judgment, are considered to be most significant to the audit of the
financial statements for the period. These matters were addressed in the context of our audit of the financial statements as a
whole and, in forming our audit opinion thereon, and we do not express a separate opinion on these matters.
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Bengang Steel Plates Co., Ltd. 2022 Annual Report
1. Cash and cash equivalents matters
Key audit matters Responses in the audit
Please refer to Notes 1 and 52 of "VI. Notes to the principal The audit procedures we performed were as follows:
items of the consolidated financial statements” in the notes to (1) Understanding and testing key internal controls related to
the financial statements. cash and cash equivalents and evaluating whether the
As at December 31st, 2022, the balance of cash and cash relevant controls are properly designed and effectively
equivalents in the Consolidated Statement of Financial Position of implemented;
Bengang Steel Plates was RMB 1,461,145,600, a decrease of RMB (2) Checking original vouchers for receipts and disbursements
7,369,950,100 from the balance at the beginning of the year, and related to cash journals and bank deposit journals; testing
we classified it as a key audit matter in view of the high risk of bank journals for large amounts of receipts and
misstatement arising from the significant changes in cash and disbursements;
cash equivalents. (3) Checking bank statements, obtaining account opening list,
obtaining historical details of bank transactions, performing
two-way verification, and performing correspondence
procedures for bank accounts and fund attribution;
(4) Checking the Statement of Bank Reconciliation and
performing cut-off tests;
(5) Performing audit procedures on other cash and cash
equivalents, examining restricted cash and cash equivalents,
and verifying the reasons for restricted cash and cash
equivalents;
(6) Checking whether the information related to cash and cash
equivalents matters has been properly presented and
disclosed in the financial statements.
2. Bank borrowing matters
Key audit matters Responses in the audit
The audit procedures we performed were as follows:
Please refer to the accounting policies described in Note 17
(1) Understanding and testing key internal controls related to
of "IV. Significant accounting policies and accounting estimates"
long- and short-term borrowings and interest on long- and
and Notes 17, 24 and 26 of "VI. Notes to the principal items of the
short-term borrowings, and evaluating whether the relevant
consolidated financial statements" in the notes to the financial
controls are appropriate and effectively implemented;
statements.
(2) Obtaining borrowing contracts, reviewing the nature of
As at December 31st, 2022, the balance of long- and short-
borrowings, understanding the borrowing intentions of
term borrowings of Bengang Steel Plates amounted to RMB
Bengang Steel Plates, understanding the future plans for the
4,277,308,200, which was significant, and Bengang Steel Plates
relevant borrowing cost capitalization items, and reviewing its
had interest capitalization items, so we classified it as a key audit
internal resolutions related to the capitalization of borrowing
matter.
costs;
104
Bengang Steel Plates Co., Ltd. 2022 Annual Report
(3) Recalculating the borrowing costs of Bengang Steel Plates
and checking whether the classification of the expensed
amount and capitalized amount is correct;
(4) Reviewing in the field the current status of borrowing cost
capitalization items, analyzing and checking whether they
meet the conditions for borrowing cost capitalization, and
checking the accounting treatment related to borrowing cost
capitalization;
(5) Checking whether the information related to borrowing
matters has been properly presented and disclosed in the
financial statements.
3. Revenue recognition matters
Key audit matters Responses in the audit
Please refer to the accounting policies described in Note 24 The audit procedures we performed were as follows:
of "IV. Significant accounting policies and accounting estimates" (1) Understanding and testing key internal controls related to
and Notes 37 of "VI. Notes to the principal items of the revenue and evaluating whether the relevant controls are
consolidated financial statements" in the notes to the financial appropriate and effectively implemented;
statements. (2) Selecting samples to examine sales contracts, identify the
In FY2022, the amount of operating income recognized in contractual terms and conditions related to the transfer of
the consolidated financial statements of Bengang Steel Plates was control of goods, and evaluate whether the timing of revenue
RMB 62,616,621,600. Since revenue is a key performance recognition of Bengang Steel Plates meets the requirements of
indicator of Bengang Steel Plates, and the management of the Accounting Standards for Business Enterprises;
Bengang Steel Plates may be exposed to the risk of material (3) Obtaining details of sales for the current year, selecting
misstatement in revenue recognition, we classified revenue samples of revenue transactions recorded during the year to
recognition as a key audit matter. check supporting documents such as sales contracts, invoices,
outbound orders, acceptance slips, customs declarations,
ocean bills of lading, and evaluate whether the relevant
revenue recognition is in accordance with the Company's
accounting policies;
(4) Performing analytical procedures on revenues, including a
comparison of the gross profit of revenues of major products
for the current period with the gross profit of revenues of the
previous period and the same industry, and an analysis of
fluctuations in revenues to check for abnormalities;
(5) Performing correspondence procedures with a sample of
customers regarding sales revenue for the reporting period in
conjunction with the accounts receivable audit procedures;
(6) Checking sales to related parties, reviewing the fairness of
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Bengang Steel Plates Co., Ltd. 2022 Annual Report
related party transaction prices, and performing
correspondence procedures with related party customers;
(7) Selecting a sample of revenue recognition transactions
around the balance sheet date to examine the original
documents related to revenue recognition, and evaluate
whether revenues are recorded in the appropriate accounting
period;
(8) Checking whether the information related to revenue
matters has been properly presented and disclosed in the
financial statements.
Other Information
The management of Bengang Steel Plates (hereinafter referred to as the Management) is responsible for the other information.
Other information includes the information covered in the 2022 Annual Report of Bengang Steel Plates, but excludes the
financial statements and our auditor’s report.
Our opinion on the financial statements does not cover the other information and we do not 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.
Responsibilities of the Management and those charged with governance for the financial
statements
The Management is responsible for the preparation of the financial statements in accordance with the provisions of the
Accounting Standards for Business Enterprises to achieve a fair presentation, and designing, implementing and maintaining the
necessary internal controls so that the financial statements are free from material misstatement, whether due to fraud or error.
In preparing the financial statements, the Management is responsible for assessing the ability of Bengang Steel Plates to continue
as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting
unless the Management either intends to liquidate Bengang Steel Plates or to cease operations, or have no realistic alternative
but to do so.
Those charged with governance are responsible for overseeing the financial reporting process of Bengang Steel Plates.
Auditor’s responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance as to 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 expresses our opinion. Although reasonable
assurance is a high level of assurance, it is not a guarantee that an audit conducted in accordance with auditing standards will
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Bengang Steel Plates Co., Ltd. 2022 Annual Report
always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are generally considered
material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions that users of
the financial statements make on the basis of the financial statements.
During the course of the audit in accordance with auditing standards, we exercise professional judgement and maintain
professional skepticism. We also carry out the following works:
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 audit. 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.
Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are
appropriate in the circumstances.
Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related
disclosures made by the Management.
Conclude on the appropriateness of the 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 the ability of Bengang Steel Plates 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 in
accordance with the auditing standards or, if such disclosures are inadequate, we shall 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.
Evaluate the overall presentation, structure and content (including disclosures) of the financial statements, and also
whether the financial statements represent the underlying transactions and events in a manner that achieves fair
presentation.
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 audit of the group. 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 etc., 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 those relevant ethical
requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably
be thought to bear on our independence and related safeguards, where applicable.
From the matters communicated with those charged with governance, we determine those matters that were of most
significance in the audit of the financial statements of the current period and are therefore the key audit matters. We describe
these matters in our auditor’s report unless law or regulation prohibited public disclosure about the matter or when, in 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.
ShineWing Certified Public Accountants LLP Chinese Certified Public Accountant: (Engagement partner)
107
Bengang Steel Plates Co., Ltd. 2022 Annual Report
Chinese Certified Public Accountant:
Beijing, China March 28th, 2023
II. Financial statements
The unit of the statements in the financial notes is RMB.
1. Consolidated statement of financial position
Prepared by: Bengang Steel Plates Co., Ltd.
December 31st, 2022
Unit: RMB
Item December 31st, 2022 January 1st, 2022
Current assets:
Cash and cash equivalents 1,461,145,641.87 8,831,095,737.85
Settlement provisions
Capital lent
Financial assets held for trading
Derivative financial assets
Notes receivable 429,707,174.70 1,540,482,182.07
Accounts receivable 897,230,896.06 256,850,782.71
Accounts receivable financing 137,591,996.02 1,530,735,647.38
Prepayments 1,247,177,748.33 994,370,345.64
Premium receivable
Reinsurance accounts receivable
Receivable deposit for reinsurance contract
Other receivables 127,198,692.92 165,937,280.41
Including: Interest receivables 2,523,993.39
Dividends receivable
Redemptory financial assets for sale
Inventories 8,463,728,475.18 10,190,166,138.98
Contract assets
Assets held for sale
Non-current assets due within one year
Other current assets 395,441,136.26 754,948,193.56
Total current assets 13,159,221,761.34 24,264,586,308.60
Non-current assets:
Loan and advances issued
Debt investments
Other debt investments
Long-term receivables
Long-term equity investments 51,030,777.18 2,981,784.07
Other equity instrument investments 1,020,418,482.31 1,042,024,829.00
Other non-current financial assets
Investment property
Fixed assets 24,836,556,422.90 25,480,674,048.94
Construction in progress 3,158,195,899.65 2,434,182,101.13
Productive biological assets
Oil and gas assets
Right-of-use assets 1,379,990,713.89 1,440,365,248.31
Intangible assets 262,784,937.41 297,921,548.81
Development expenditure
Goodwill
Long-term deferred expenses
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Bengang Steel Plates Co., Ltd. 2022 Annual Report
Item December 31st, 2022 January 1st, 2022
Deferred tax assets 136,387,885.28 153,756,548.31
Other non-current assets 110,065,560.68 30,630,858.13
Total non-current assets 30,955,430,679.30 30,882,536,966.70
Total assets 44,114,652,440.64 55,147,123,275.30
Current liabilities:
Short-term loans 49,200,000.00 4,053,088,140.00
Loan from central bank
Loan from other banks
Financial liability held for trading
Derivative financial liabilities
Notes payable 4,389,336,619.36 4,635,083,376.48
Accounts payable 3,696,420,463.85 5,352,272,685.89
Advance from customers 0.00 0.00
Contract liabilities 3,794,115,592.29 4,708,188,093.78
Financial assets sold for repurchase
Deposits from customers and interbank
Receipt from vicariously traded securities
Receipt from vicariously underwriting securities
Employee benefits payable 10,046,363.27 152,095,376.49
Taxes payable 44,392,920.78 114,267,988.70
Other payables 1,247,722,165.47 1,348,025,731.98
Including: Interest payable
Dividends payable
Handling charges and commission payable
Reinsurance accounts payable
Liabilities held for sale
Non-current liabilities due within one year 2,586,250,886.43 310,780,518.14
Other current liabilities 493,235,027.03 612,064,452.20
Total current liabilities 16,310,720,038.48 21,285,866,363.66
Non-current liabilities:
Provision for insurance contract
Long-term loans 1,726,938,302.30 4,222,821,771.74
Bonds payable 5,276,502,232.78 5,054,251,668.83
Including: Preferred stock
Perpetual bond
Leasing liabilities 1,384,348,462.18 1,424,667,169.15
Long-term payables
Long-term employee benefits payable
Estimated liabilities
Deferred income 42,377,015.51 93,106,285.89
Deferred tax liabilities 27,309.01
Other non-current liabilities
Total non-current liabilities 8,430,193,321.78 10,794,846,895.61
Total liabilities 24,740,913,360.26 32,080,713,259.27
Owners' equity:
Share capital 4,108,212,217.00 4,108,191,379.00
Other equity instruments 947,863,834.02 947,882,663.63
Including: Preferred stock
Perpetual bond
Capital reserves 13,272,205,160.21 13,272,134,173.09
Less: Treasury shares
Other comprehensive income -15,904,760.02
Special reserves 2,217,913.77 337,978.57
Surplus reserves 1,195,116,522.37 1,195,116,522.37
General risk reserve
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Bengang Steel Plates Co., Ltd. 2022 Annual Report
Item December 31st, 2022 January 1st, 2022
Undistributed profits -720,559,670.73 2,977,306,297.64
Total equity attributable to owners of the parent company 18,789,151,216.62 22,500,969,014.30
Non-controlling interests 584,587,863.76 565,441,001.73
Total owners’ equity 19,373,739,080.38 23,066,410,016.03
Total of liabilities and owners’ equity 44,114,652,440.64 55,147,123,275.30
Legal Representative: Li Yan Chief Financial Officer: Zheng Zhengli Chief Accountant: Sun Yanbin
2. Statement of financial position of the parent company
Unit: RMB
Item December 31st, 2022 January 1st, 2022
Current assets:
Cash and cash equivalents 585,125,555.12 7,580,872,007.38
Financial assets held for trading
Derivative financial assets
Notes receivable 669,193,401.02 1,514,416,395.80
Accounts receivable 931,035,796.58 353,631,563.42
Accounts receivable financing 127,468,835.80 1,504,640,362.79
Prepayments 1,247,084,271.88 1,004,241,075.82
Other receivables 150,724,545.56 268,606,048.52
Including: Interest receivables 2,014,931.61
Dividends receivable
Inventories 6,988,993,205.61 8,289,784,141.78
Contract assets
Assets held for sale
Non-current assets due within one year
Other current assets 310,293,996.25 670,787,069.41
Total current assets 11,009,919,607.82 21,186,978,664.92
Non-current assets:
Debt investments
Other debt investments
Long-term receivables
Long-term equity investments 2,270,277,904.85 2,015,186,190.50
Other equity instrument investments 1,020,418,482.31 1,041,624,829.00
Other non-current financial assets
Investment property
Fixed assets 23,777,736,434.39 24,110,222,815.60
Construction in progress 3,127,247,793.98 2,401,120,232.45
Productive biological assets
Oil and gas assets
Right-of-use assets 1,379,990,713.89 1,440,365,248.31
Intangible assets 174,295,096.19 178,414,033.19
Development expenditure
Goodwill
Long-term deferred expenses
Deferred tax assets 115,126,210.76 124,046,003.13
Other non-current assets 110,065,560.68 22,010,941.60
Total non-current assets 31,975,158,197.05 31,332,990,293.78
Total assets 42,985,077,804.87 52,519,968,958.70
Current liabilities:
Short-term loans 49,200,000.00 3,353,088,140.00
Financial liability held for trading
Derivative financial liabilities
Notes payable 3,982,738,952.59 4,650,517,420.18
Accounts payable 3,821,848,200.25 5,674,841,169.66
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Bengang Steel Plates Co., Ltd. 2022 Annual Report
Item December 31st, 2022 January 1st, 2022
Advance from customers 0.00 0.00
Contract liabilities 4,805,281,178.80 4,660,051,055.89
Employee benefits payable 9,901,551.31 151,595,453.62
Taxes payable 22,518,649.65 40,949,825.13
Other payables 861,392,691.88 683,141,570.83
Including: Interest payable
Dividends payable
Liabilities held for sale
Non-current liabilities due within one year 2,586,250,886.43 310,780,518.14
Other current liabilities 624,686,553.24 605,806,637.27
Total current liabilities 16,763,818,664.15 20,130,771,790.72
Non-current liabilities:
Long term loans 1,726,938,302.30 4,222,821,771.74
Bonds payable 5,276,502,232.78 5,054,251,668.83
Including: Preferred stock
Perpetual bond
Lease liabilities 1,384,348,462.18 1,424,667,169.15
Long-term payables
Long-term employee benefits payable
Estimated liabilities
Deferred income 42,377,015.51 93,106,285.89
Deferred tax liabilities 27,309.01
Other non-current liabilities
Total non-current liabilities 8,430,193,321.78 10,794,846,895.61
Total liabilities 25,194,011,985.93 30,925,618,686.33
Shareholder’s equity:
Share capital 4,108,212,217.00 4,108,191,379.00
Other equity instruments 947,863,834.02 947,882,663.63
Including: Preferred stock
Perpetual bond
Capital reserves 12,852,053,478.09 12,851,982,490.97
Less: Treasury shares
Other comprehensive income -15,904,760.02
Special reserves 58,212.15 155,469.58
Surplus reserves 1,195,116,522.37 1,195,116,522.37
Undistributed profits -1,296,333,684.67 2,491,021,746.82
Total owners' equity 17,791,065,818.94 21,594,350,272.37
Total liabilities and owners’ equity 42,985,077,804.87 52,519,968,958.70
3. Consolidated income statement
Unit: RMB
Item FY2022 FY2021
I. Total operating income 62,616,621,627.60 77,912,144,981.46
Including: Operating income 62,616,621,627.60 77,912,144,981.46
Interest income
Premium earned
Income from handling charges and commission
II. Total operating cost 63,838,504,250.02 74,244,688,137.82
Including: Operating cost 62,259,334,854.72 71,891,598,336.96
Interest expense
Expenditure for handling charges and commission
Surrender value
Net expenditure for compensation
Net provision for insurance contract appropriated
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Bengang Steel Plates Co., Ltd. 2022 Annual Report
Item FY2022 FY2021
Bonus payment for policy
Reinsurance premium
Tax and surcharges 206,440,870.56 431,460,563.69
Selling and distribution expenses 128,489,696.80 141,394,565.57
General and administrative expenses 663,080,654.45 1,187,239,442.10
Research and development expenses 58,088,008.14 56,401,594.44
Financial expenses 523,070,165.35 536,593,635.06
Including: Interest expense 599,359,597.96 1,007,595,231.75
Interest income 80,619,490.18 393,818,460.36
Add: Other income 72,300,830.48 66,345,976.64
Income on investment (“-” for loss) 89,589,183.44 -120,519,309.82
Including: Income from associates and joint ventures -181,084.64 520,432.46
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) -4,366,027.94 -7,754,375.77
Assets impairment loss (“-” for loss) -33,475,219.25 -113,671,335.02
Assets disposal gains (“-” for loss) 3,648,546.62 130,675.05
III. Operational profit(“-” for loss) -1,094,185,309.07 3,491,988,474.72
Add: Non-operating income 40,130,944.39 7,783,225.80
Less: Non-operating expenses 26,623,177.77 64,272,629.43
IV. Total profit (“-” for loss) -1,080,677,542.45 3,435,499,071.09
Less: Income tax expenses 125,374,177.41 901,863,572.46
V. Net profit(“-” for loss) -1,206,051,719.86 2,533,635,498.63
(I) Classification by continuing operating
1. Net profit from continuing operation(“-” for loss) -1,206,051,719.86 2,533,635,498.63
2. Net profit from discontinued operation(“-” for loss)
(II) Classification by ownership
1. Net profit attributable to the owners of parent company -1,232,976,557.37 2,500,582,902.58
2. Net profit attributable to non-controlling shareholders 26,924,837.51 33,052,596.05
VI. Net after-tax amount of other comprehensive income -15,879,343.62 0.00
Other comprehensive income attributable to owners of the parent company after
-15,879,343.62 0.00
tax
(I) Other comprehensive income items that will not be reclassified into gains/losses -15,879,343.62 0.00
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 -15,879,343.62
4. Changes in fair value of Company's credit risk
5. Others
(II) Other comprehensive income that will be reclassified into profit or loss 0.00 0.00
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 hedge reserves
6. Translation differences in foreign currency financial statements
7. Others
Other comprehensive income attributable to non-controlling shareholders’ equity
after tax
-
VII. Total comprehensive income 2,533,635,498.63
1,221,931,063.48
-
Total comprehensive income attributable to the owner of the parent company 2,500,582,902.58
1,248,855,900.99
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Bengang Steel Plates Co., Ltd. 2022 Annual Report
Item FY2022 FY2021
Total comprehensive income attributable to non-controlling shareholders 26,924,837.51 33,052,596.05
VIII. Earnings per share
(I) Basic earnings per share -0.300 0.600
(II) Diluted earnings per share -0.300 0.496
In the event of a business combination under common control during the period, the net profit realized by the party being
consolidated before the combination was RMB: , and the net profit realized by the consolidated party in the previous period
was RMB: .
Legal Representative: Li Yan Chief Financial Officer: Zheng Zhengli Chief Accountant: Sun Yanbin
4. Income statement of the parent company
Unit: RMB
Item FY2022 FY2021
I. Operating income 63,081,757,089.14 78,721,461,725.71
Less: Operating cost 63,165,254,867.80 73,203,463,475.56
Tax and surcharges 157,419,976.34 381,385,801.80
Selling and distribution expenses 162,072,670.40 122,357,594.15
General and administrative expenses 579,730,173.82 1,123,575,016.51
Research and development expenses 58,088,008.14 56,401,594.44
Financial expenses 523,903,605.28 521,028,798.20
Including: Interest expense 580,671,493.79 971,156,413.61
Interest income 59,532,341.41 372,598,200.22
Add: Other income 71,247,038.47 65,897,317.34
Income on investment (“-” for loss) 260,636,435.24 -123,815,558.88
Including: Income from associates and joint ventures -580,788.56 0.00
Income from derecognition of financial assets measured at amortized cost (“-”
for loss)
Net exposure hedge income (“-” for loss)
Gains from change of fair value (“-” for loss)
Credit impairment loss (“-” for loss) -4,244,546.20 -8,563,525.91
Assets impairment loss (“-” for loss) -33,475,219.25 -113,671,335.02
Assets disposal gains (“-” for loss) 3,669,258.68 130,675.05
II. Operational profit (“-” for loss) -1,266,879,245.70 3,133,227,017.63
Add: Non-operating income 32,814,019.52 3,831,724.04
Less: Non-operating expenses 26,463,198.79 62,183,332.01
III. Total profit (“-” for loss) -1,260,528,424.97 3,074,875,409.66
Less: Income tax expenses 59,489,282.29 734,765,484.50
IV. Net profit (“-” for loss) -1,320,017,707.26 2,340,109,925.16
(I) Net profit from continuing operation (“-” for loss) -1,320,017,707.26 2,340,109,925.16
(II) Net profit from discontinued operation (“-” for loss)
V. Net after-tax amount of other comprehensive income -15,904,760.02 0.00
(I) Other comprehensive income items that will not be reclassified into gains/losses -15,904,760.02 0.00
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 -15,904,760.02
4. Changes in fair value of Company's credit risk
5. Others
(II) Other comprehensive income that will be reclassified into profit or loss 0.00 0.00
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 hedge reserves
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Bengang Steel Plates Co., Ltd. 2022 Annual Report
Item FY2022 FY2021
6. Translation differences in foreign currency financial statements
7. Others
-
VI. Total comprehensive income 2,340,109,925.16
1,335,922,467.28
VII. Earnings per share
(I) Basic earnings per share
(II) Diluted earnings per share
5. Consolidated cash flow statement
Unit: RMB
Item FY2022 FY2021
I. Cash flow from operating activities
Cash received from sale of goods or rendering of services 51,073,772,028.16 55,748,897,664.65
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 483,849,940.14 78,323,445.53
Other cash received relating to operating activities 123,009,781.28 501,366,768.12
Subtotal of cash inflows from operating activities 51,680,631,749.58 56,328,587,878.30
Cash paid for goods and services 46,861,851,072.12 50,647,643,333.57
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 2,802,982,355.80 2,451,084,010.00
Cash paid for all types of taxes 651,109,945.61 2,673,210,895.18
Other cash paid relating to operating activities 88,325,410.49 143,176,185.51
Subtotal of cash outflows from operating activities 50,404,268,784.02 55,915,114,424.26
Net cash flows from operating activities 1,276,362,965.56 413,473,454.04
II. Cash flows from investing activities
Cash received from disposal of investments 422,818.29 11,400,000,000.00
Cash received from return on investments 2,879,850.07 2,717,582.45
Net cash received from disposal of fixed assets, intangible assets and other long-
4,752,720.71 2,776.27
term assets
Net cash received from disposal of subsidiary and other operating units 137,073,256.40 0.00
Other cash paid relating to investing activities
Subtotal of cash inflows from investing activities 145,128,645.47 11,402,720,358.72
Cash paid for acquisition of fixed assets, intangible assets and other long-term assets 1,707,467,068.85 1,304,976,365.56
Cash paid for investments 6,200,000,000.00
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 1,707,467,068.85 7,504,976,365.56
Net cash flows from investing activities -1,562,338,423.38 3,897,743,993.16
III. Cash flows from financing activities
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Bengang Steel Plates Co., Ltd. 2022 Annual Report
Item FY2022 FY2021
Proceeds from investment
Including: Proceeds from the investment of non-controlling shareholders of the
subsidiary
Proceeds from borrowings 2,000,000,000.00 5,801,673,020.00
Other proceeds relating to financing activities 2,759,751,595.78 2,361,272,208.08
Subtotal of cash inflows from financing activities 4,759,751,595.78 8,162,945,228.08
Cash repayments of borrowings 6,245,551,350.67 12,072,544,553.18
Cash payments for the distribution of dividends, profit or interest expenses 2,765,916,748.51 2,550,802,187.51
Including: Cash paid to non-controlling shareholders as dividends and profit by
subsidiaries
Other cash payments relating to financing activities 485,930,596.70 740,000,000.00
Subtotal of cash outflows from financing activities 9,497,398,695.88 15,363,346,740.69
Net cash flows from financing activities -4,737,647,100.10 -7,200,401,512.61
IV. Effect of foreign exchange rate changes on cash and cash equivalents 21,186,177.64 -41,134,466.23
V. Net increase in cash and cash equivalents -5,002,436,380.28 -2,930,318,531.64
Add: Cash and cash equivalents at the beginning of the period 6,299,099,063.48 9,229,417,595.12
VI. Cash and cash equivalents at the end of the period 1,296,662,683.20 6,299,099,063.48
6. Cash flow statement of the parent company
Unit: RMB
Item FY2022 FY2021
I. Cash flow from operating activities
Cash received from the sale of goods or the rendering of services 52,566,695,245.11 60,408,664,898.10
Tax rebate received 446,252,731.21 21,209,047.83
Other cash received relating to operating activities 95,185,405.62 461,672,257.35
Subtotal of cash inflows from operating activities 53,108,133,381.94 60,891,546,203.28
Cash paid for goods and services 48,331,653,935.65 55,735,903,034.60
Cash paid to and on behalf of employees 2,666,197,042.40 2,345,338,852.62
Cash paid for all types of taxes 339,347,119.05 2,498,120,146.95
Other cash paid relating to operating activities 114,224,449.37 123,901,730.49
Subtotal of cash outflows from operating activities 51,451,422,546.47 60,703,263,764.66
Net cash flows from operating activities 1,656,710,835.47 188,282,438.62
II. Cash flows from investing activities
Cash received from disposal of investments 0.00 11,400,000,000.00
Cash received from return on investments 56,019,227.23 2,436,869.33
Net cash received from disposal of fixed assets, intangible assets and other long-
4,341,972.00 0.00
term assets
Net cash received from disposal of subsidiary and other operating units 205,076,325.08 0.00
Other cash received relating to investing activities 0.00 0.00
Subtotal of cash inflows from investing activities 265,437,524.31 11,402,436,869.33
Cash paid for acquisition of fixed assets, intangible assets and other long-term assets 1,698,674,088.11 1,304,157,060.45
Cash paid for investments 850,000,000.00 6,200,000,000.00
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 2,548,674,088.11 7,504,157,060.45
Net cash flows from investing activities -2,283,236,563.80 3,898,279,808.88
III. Cash flows from financing activities
Cash flows from financing activities
Cash received from borrowings 2,000,000,000.00 5,101,673,020.00
Other cash received relating to financing activities 2,759,751,595.78 1,374,782,185.21
Subtotal of cash inflows from financing activities 4,759,751,595.78 6,476,455,205.21
Cash repayments of borrowings 5,545,551,350.67 11,112,544,553.18
Cash payments for distribution of dividends, profit or interest 2,750,764,581.84 2,518,311,312.47
Other cash payments relating to financing activities 485,930,596.70 740,000,000.00
115
Bengang Steel Plates Co., Ltd. 2022 Annual Report
Item FY2022 FY2021
Subtotal of cash outflows from financing activities 8,782,246,529.21 14,370,855,865.65
Net cash flows from financing activities -4,022,494,933.43 -7,894,400,660.44
IV. Effect of foreign exchange rate changes on cash and cash equivalents 20,787,925.20 -41,145,257.65
V. Net increase in cash and cash equivalents -4,628,232,736.56 -3,848,983,670.59
Add: Cash and cash equivalents at the beginning of the period 5,048,875,333.01 8,897,859,003.60
VI. Cash and cash equivalents at the ending of the period 420,642,596.45 5,048,875,333.01
116
Bengang Steel Plates Co., Ltd. 2022 Annual Report
7. Consolidated statement of changes in owners’ equity
Amount in current period
Unit: RMB
FY2022
Equity attributable to owners of the parent company
Item Other equity instruments Less: Other General Non-controlling Total of owners’
Special
Share capital Preference Perpetual Capital reserves Treasury comprehensive Surplus reserves risk Undistributed profit Others Subtotal interest equity
Others reserves
shares bond shares income reserve
I. Closing balance of
4,108,191,379.00 0.00 0.00 947,882,663.63 13,272,134,173.09 0.00 0.00 337,978.57 1,195,116,522.37 0.00 2,977,306,297.64 22,500,969,014.30 565,441,001.73 23,066,410,016.03
the prior year
Add: Change of
0.00
accounting policies
Correction of
0.00
prior-period errors
Business
consolidation under 0.00
common control
Others 0.00
II. Opening balance of
4,108,191,379.00 0.00 0.00 947,882,663.63 13,272,134,173.09 0.00 0.00 337,978.57 1,195,116,522.37 0.00 2,977,306,297.64 0.00 22,500,969,014.30 565,441,001.73 23,066,410,016.03
the current year
III. Changes in current
20,838.00 0.00 0.00 -18,829.61 70,987.12 0.00 -15,904,760.02 1,879,935.20 0.00 0.00 -3,697,865,968.37 0.00 -3,711,817,797.68 19,146,862.03 -3,692,670,935.65
year (“-” for decrease)
(I) Total
comprehensive -15,879,343.62 -1,232,976,557.37 -1,248,855,900.99 26,924,837.51 -1,221,931,063.48
income
(II) Capital increase
and decrease by 20,838.00 0.00 0.00 -18,829.61 70,987.12 0.00 0.00 0.00 0.00 0.00 0.00 0.00 72,995.51 -7,777,975.48 -7,704,979.97
owners
1. Common share
invested by 0.00 0.00
shareholders
2. Capital input by
the holder of other 20,838.00 -18,829.61 70,987.12 72,995.51 72,995.51
equity instruments
3. Share-based
payment attributable 0.00 0.00
to shareholders’
117
Bengang Steel Plates Co., Ltd. 2022 Annual Report
FY2022
Equity attributable to owners of the parent company
Item Other equity instruments Less: Other General Non-controlling Total of owners’
Special
Share capital Preference Perpetual Capital reserves Treasury comprehensive Surplus reserves risk Undistributed profit Others Subtotal interest equity
Others reserves
shares bond shares income reserve
equity
4. Others 0.00 0.00 -7,777,975.48 -7,777,975.48
(III) Profit
0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 -2,464,914,827.40 0.00 -2,464,914,827.40 0.00 -2,464,914,827.40
distribution
1. Appropriation to
0.00 0.00
surplus reserves
2. Appropriation to
0.00 0.00
general risk reserve
3. Profit
distribution to owners -2,464,914,827.40 -2,464,914,827.40 -2,464,914,827.40
(or shareholders)
4. Others 0.00 0.00
(IV) Internal transfer
0.00 0.00 0.00 0.00 0.00 0.00 -25,416.40 0.00 0.00 0.00 25,416.40 0.00 0.00 0.00 0.00
of owners' equity
1. Capital reserve
converted into capital 0.00 0.00
(or share capital)
2. Surplus reserve
converted into capital 0.00 0.00
(or share capital)
3. Recover of loss
0.00 0.00
by surplus reserve
4. Changes in
defined benefit plans
0.00 0.00
carried forward to
retained earnings
5. Other
comprehensive
income carried -25,416.40 25,416.40 0.00 0.00
forward to retained
earnings
6. Others 0.00 0.00
(V) Special reserves 0.00 0.00 0.00 0.00 0.00 0.00 0.00 1,879,935.20 0.00 0.00 1,879,935.20 0.00 1,879,935.20
1. Withdrawn in 77,018,511.80 77,018,511.80 4,978,649.22 81,997,161.02
118
Bengang Steel Plates Co., Ltd. 2022 Annual Report
FY2022
Equity attributable to owners of the parent company
Item Other equity instruments Less: Other General Non-controlling Total of owners’
Special
Share capital Preference Perpetual Capital reserves Treasury comprehensive Surplus reserves risk Undistributed profit Others Subtotal interest equity
Others reserves
shares bond shares income reserve
current period
2. Used in current
75,138,576.60 75,138,576.60 4,978,649.22 80,117,225.82
period
(VI) Others 0.00 0.00
IV. Closing balance of
4,108,212,217.00 0.00 0.00 947,863,834.02 13,272,205,160.21 0.00 -15,904,760.02 2,217,913.77 1,195,116,522.37 0.00 -720,559,670.73 0.00 18,789,151,216.62 584,587,863.76 19,373,739,080.38
the current period
Amount in prior period
Unit: RMB
FY2021
Equity attributable to owners of the parent company
Other equity instruments Gen
Item Less: Other eral Non-controlling Total of owners’
Special
Share capital Preference Perpetual Capital reserves Treasury comprehensive Surplus reserves risk Undistributed profit Others Subtotal interest equity
Others reserves
shares bond shares income rese
rve
I. Closing balance
3,875,371,532.00 0.00 0.00 1,146,290,662.42 12,343,209,847.29 0.00 0.00 300,412.14 961,105,529.85 0.00 2,692,018,405.40 21,018,296,389.10 532,388,405.68 21,550,684,794.78
of the prior year
Add: Change of
accounting 0.00 0.00
policies
Correction of
prior-period 0.00 0.00
errors
Business
consolidation
0.00 0.00
under common
control
Others 0.00 0.00
II. Opening
balance of the 3,875,371,532.00 0.00 0.00 1,146,290,662.42 12,343,209,847.29 0.00 0.00 300,412.14 961,105,529.85 0.00 2,692,018,405.40 0.00 21,018,296,389.10 532,388,405.68 21,550,684,794.78
current year
III. Changes in
232,819,847.00 0.00 0.00 -198,407,998.79 928,924,325.80 0.00 0.00 37,566.43 234,010,992.52 0.00 285,287,892.24 0.00 1,482,672,625.20 33,052,596.05 1,515,725,221.25
current year (“-”
119
Bengang Steel Plates Co., Ltd. 2022 Annual Report
FY2021
Equity attributable to owners of the parent company
Other equity instruments Gen
Item Less: Other eral Non-controlling Total of owners’
Special
Share capital Preference Perpetual Capital reserves Treasury comprehensive Surplus reserves risk Undistributed profit Others Subtotal interest equity
Others reserves
shares bond shares income rese
rve
for decrease)
(I) Total
comprehensive 2,500,582,902.58 2,500,582,902.58 33,052,596.05 2,533,635,498.63
income
(II) Capital
increase and
232,819,847.00 0.00 0.00 -198,407,998.79 928,924,325.80 0.00 0.00 0.00 0.00 0.00 0.00 0.00 963,336,174.01 0.00 963,336,174.01
decrease by
owners
1. Common
share invested by 0.00 0.00
shareholders
2. Capital input
by the holder of
0.00 0.00
other equity
instruments
3. Share-based
payment
attributable to 0.00 0.00
shareholders’
equity
4. Others 232,819,847.00 -198,407,998.79 928,924,325.80 963,336,174.01 963,336,174.01
(III) Profit
0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 234,010,992.52 0.00 -2,215,295,010.34 0.00 -1,981,284,017.82 0.00 -1,981,284,017.82
distribution
1.
Appropriation to 234,010,992.52 -234,010,992.52 0.00 0.00
surplus reserves
2.
Appropriation to
0.00 0.00
general risk
reserve
3. Profit
-1,981,284,017.82 -1,981,284,017.82 -1,981,284,017.82
distribution to
120
Bengang Steel Plates Co., Ltd. 2022 Annual Report
FY2021
Equity attributable to owners of the parent company
Other equity instruments Gen
Item Less: Other eral Non-controlling Total of owners’
Special
Share capital Preference Perpetual Capital reserves Treasury comprehensive Surplus reserves risk Undistributed profit Others Subtotal interest equity
Others reserves
shares bond shares income rese
rve
owners (or
shareholders)
4. Others 0.00 0.00
(IV) Internal
transfer of 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
owners' equity
1. Capital
reserve converted
0.00 0.00
into capital (or
share capital)
2. Surplus
reserve converted
0.00 0.00
into capital (or
share capital)
3. Recover of
loss by surplus 0.00 0.00
reserve
4. Changes in
defined benefit
plans carried 0.00 0.00
forward to
retained earnings
5. Other
comprehensive
income carried 0.00 0.00
forward to
retained earnings
6. Others 0.00 0.00
(V) Special
0.00 0.00 0.00 0.00 0.00 0.00 0.00 37,566.43 0.00 0.00 0.00 0.00 37,566.43 0.00 37,566.43
reserves
1. Withdrawn
63,036,424.58 63,036,424.58 63,036,424.58
in current period
121
Bengang Steel Plates Co., Ltd. 2022 Annual Report
FY2021
Equity attributable to owners of the parent company
Other equity instruments Gen
Item Less: Other eral Non-controlling Total of owners’
Special
Share capital Preference Perpetual Capital reserves Treasury comprehensive Surplus reserves risk Undistributed profit Others Subtotal interest equity
Others reserves
shares bond shares income rese
rve
2. Used in
62,998,858.15 62,998,858.15 62,998,858.15
current period
(VI) Others 0.00 0.00
IV. Closing
1,195,116,522.3
balance of the 4,108,191,379.00 0.00 0.00 947,882,663.63 13,272,134,173.09 0.00 0.00 337,978.57 0.00 2,977,306,297.64 0.00 22,500,969,014.30 565,441,001.73 23,066,410,016.03
7
current period
8. Parent company's statement of changes in owners' equity
Amount in current period
Unit: RMB
FY2022
Other equity instruments Less: Other
Item Special Undistributed Total of owners’
Share capital Preference Perpetual Capital reserves Treasury comprehensive Surplus reserves Others
Others reserves profit equity
shares bond shares income
I. Closing balance of the
4,108,191,379.00 0.00 0.00 947,882,663.63 12,851,982,490.97 0.00 0.00 155,469.58 1,195,116,522.37 2,491,021,746.82 21,594,350,272.37
prior year
Add: Change of
0.00
accounting policies
Correction of prior-
0.00
period errors
Others 0.00
II. Opening balance of
4,108,191,379.00 0.00 0.00 947,882,663.63 12,851,982,490.97 0.00 0.00 155,469.58 1,195,116,522.37 2,491,021,746.82 0.00 21,594,350,272.37
the current year
III. Changes in current
20,838.00 0.00 0.00 -18,829.61 70,987.12 0.00 -15,904,760.02 -97,257.43 0.00 -3,787,355,431.49 0.00 -3,803,284,453.43
period (“-” for decrease)
(I) Total comprehensive
-15,904,760.02 -1,320,017,707.26 -1,335,922,467.28
income
(II) Capital increase and
20,838.00 0.00 0.00 -18,829.61 70,987.12 0.00 0.00 0.00 0.00 -2,422,896.83 0.00 -2,349,901.32
decrease by owners
122
Bengang Steel Plates Co., Ltd. 2022 Annual Report
FY2022
Other equity instruments Less: Other
Item Special Undistributed Total of owners’
Share capital Preference Perpetual Capital reserves Treasury comprehensive Surplus reserves Others
Others reserves profit equity
shares bond shares income
1. Common share
0.00
invested by owners
2. Capital input by the
holder of other equity 20,838.00 -18,829.61 70,987.12 72,995.51
instruments
3. Share-based
payment attributable to 0.00
owners’ equity
4. Others 0.00 0.00 -2,422,896.83 -2,422,896.83
(III) Profit distribution 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 -2,464,914,827.40 0.00 -2,464,914,827.40
1. Appropriation to
0.00
surplus reserves
2. Profit distribution to
-2,464,914,827.40 -2,464,914,827.40
owners (or shareholders)
3. Others 0.00
(IV) Internal transfer of
0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
owners' equity
1. Capital reserve
converted into capital (or 0.00
share capital)
2. Surplus reserve
converted into capital (or 0.00
share capital)
3. Recover of loss by
0.00
surplus reserve
4. Changes in defined
benefit plans carried
0.00
forward to retained
earnings
5. Other
comprehensive income
0.00
carried forward to
retained earnings
6. Others 0.00
(V) Special reserves 0.00 0.00 0.00 0.00 0.00 0.00 0.00 -97,257.43 0.00 0.00 0.00 -97,257.43
123
Bengang Steel Plates Co., Ltd. 2022 Annual Report
FY2022
Other equity instruments Less: Other
Item Special Undistributed Total of owners’
Share capital Preference Perpetual Capital reserves Treasury comprehensive Surplus reserves Others
Others reserves profit equity
shares bond shares income
1. Withdrawn in
60,105,371.53 60,105,371.53
current period
2. Used in current
60,202,628.96 60,202,628.96
period
(VI) Others 0.00
IV. Closing balance of the
4,108,212,217.00 0.00 0.00 947,863,834.02 12,852,053,478.09 0.00 -15,904,760.02 58,212.15 1,195,116,522.37 -1,296,333,684.67 0.00 17,791,065,818.94
current period
Amount in prior period
Unit: RMB
FY2021
Other equity instruments Less:
Other
Treas
Item comprehe Special Oth Total of owners’
Share capital Preference Perpetu Capital reserves ury Surplus reserves Undistributed profit
Others nsive reserves ers equity
shares al bond share
income
s
I. Closing balance of the
3,875,371,532.00 0.00 0.00 1,146,290,662.42 11,923,058,165.17 0.00 0.00 120,972.62 961,105,529.85 2,366,206,832.00 20,272,153,694.06
prior year
Add: Change of
0.00
accounting policies
Correction of prior-
0.00
period errors
Others 0.00
II. Opening balance of
3,875,371,532.00 0.00 0.00 1,146,290,662.42 11,923,058,165.17 0.00 0.00 120,972.62 961,105,529.85 2,366,206,832.00 0.00 20,272,153,694.06
the current year
III. Changes in current
period (“-” for 232,819,847.00 0.00 0.00 -198,407,998.79 928,924,325.80 0.00 0.00 34,496.96 234,010,992.52 124,814,914.82 0.00 1,322,196,578.31
decrease)
(I) Total
2,340,109,925.16 2,340,109,925.16
comprehensive income
(II) Capital increase
and decrease by 232,819,847.00 0.00 0.00 -198,407,998.79 928,924,325.80 0.00 0.00 0.00 0.00 0.00 0.00 963,336,174.01
owners
1. Common share
0.00
invested by owners
124
Bengang Steel Plates Co., Ltd. 2022 Annual Report
2. Capital input by
the holder of other 0.00
equity instruments
3. Share-based
payment attributable to 0.00
owners’ equity
4. Others 232,819,847.00 -198,407,998.79 928,924,325.80 963,336,174.01
(III) Profit distribution 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 234,010,992.52 -2,215,295,010.34 0.00 -1,981,284,017.82
1. Appropriation to
234,010,992.52 -234,010,992.52 0.00
surplus reserves
2. Profit distribution
to owners (or -1,981,284,017.82 -1,981,284,017.82
shareholders)
3. Others 0.00
(IV) Internal transfer of
0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
owners' equity
1. Capital reserve
converted into capital 0.00
(or share capital)
2. Surplus reserve
converted into capital 0.00
(or share capital)
3. Recover of loss by
0.00
surplus reserve
4. Changes in defined
benefit plans carried
0.00
forward to retained
earnings
5. Other
comprehensive income
0.00
carried forward to
retained earnings
6. Others 0.00
(V) Special reserves 0.00 0.00 0.00 0.00 0.00 0.00 0.00 34,496.96 0.00 0.00 0.00 34,496.96
1. Withdrawn in
43,962,017.71 43,962,017.71
current period
2. Used in current
43,927,520.75 43,927,520.75
period
(VI) Others 0.00
125
Bengang Steel Plates Co., Ltd. 2022 Annual Report
IV. Closing balance of
4,108,191,379.00 0.00 0.00 947,882,663.63 12,851,982,490.97 0.00 0.00 155,469.58 1,195,116,522.37 2,491,021,746.82 0.00 21,594,350,272.37
the current period
126
Bengang Steel Plates Co., Ltd. 2022 Annual Report
III. Basic information of the Company
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 March 27th, 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 June 27th, 1997
by Benxi Steel & 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 on Shenzhen Stock Exchange on June 10th, 1997.
On November 3rd, 1997, the Company issued another 120,000,000 A-shares (Renminbi Common Shares)
at RMB 5.40 each and listed on Shenzhen Stock Exchange since January 15th, 1998. The capital shares
totalled 1,136,000,000 shares.
On March 14th, 2006, according to the resolutions of the Shareholders’ Meeting regarding share equity
relocation, the Share Equity Relocation Scheme, Response to Bengang Steel Plates 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 June 30th, 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 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 August 28th, 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 September 28th, 2006, the listing
procedure of the new shares of Bengang Steel Plates in this non-public offering was approved by
Shenzhen Stock Exchange. The issue price of new shares: RMB 4.6733 per share.
Approved by the China Securities Regulatory Commission [2017] No. 1476, Bengang Steel Plates 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 February 9th, 2018, and 739,371,532 shares were actually
issued. The placing price was RMB5.41 per share.
127
Bengang Steel Plates Co., Ltd. 2022 Annual Report
On August 20th, 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 December 31st, 2022, the capital shares totalled 4,108,212,217 shares.
The Company’s uniform social credit code: 91210000242690243E.
The Company’s registered address: 16 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 & Iron (Group) Co., Ltd. and the actual
controller is Ansteel Group Co., Ltd.
Bengang Steel Plates Co., Ltd. belongs to the ferrous metal smelting and rolling processing industry and is
mainly involved in producing and trading of ferrous metal products.
As at December 31st, 2022, there were nine subsidiaries within the scope of the Company's consolidated
financial statements, as detailed below:
Subsidiary name
Guangzhou Benxi Iron and Steel Trade Co., Ltd.
Shanghai Bengang Metallurgy Technology Co., Ltd.
Dalian Benruitong AUTO MATERIALS Technology Co., Ltd.
Changchun Bengang Iron & Steel Sales Co., Ltd.
Yantai Benxi Steel Sales Co., Ltd.
Tianjin Benxi Iron and Steel Trade Co., Ltd.
BX Steel Posco Cold Rolled Sheet Co., Ltd.
Benxi Bengang Steel Sales Co., Ltd.
Shenyang Bengang Metallurgical Technology Co., Ltd.
The number of entities included in the scope of consolidated financial statements for the year decreased
by 6 as compared to the previous year. For details of the change in the scope of consolidation, please
refer to Note "VIII. Changes in the scope of consolidation”.
For details of the Company's subsidiaries, please refer to Note "IX. Equity in other entities".
IV. Basis of preparation
1. Basis of preparation
The Company's financial statements have been prepared on a going concern basis, based on actual
transactions and events, in accordance with the Accounting Standards for Business Enterprises issued by
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the Ministry of Finance and related regulations, and based on the accounting policies and estimates described in
Note "IV. Significant accounting policies and accounting estimates".
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 the reporting period.
V. Significant accounting policies and accounting estimates
Notice of specific accounting policies and accounting estimates: The specific accounting policies and
accounting estimates formulated by the Company based on actual production and operation
characteristics include operating cycle, recognition and measurement of allowance for bad debts of
receivables, measurement of inventories issued, classification of fixed assets and depreciation methods,
amortization of intangible assets, conditions for capitalization of research and development expenses,
and recognition and measurement of revenue.
1. Statement of compliance with China Accounting Standards for Business Enterprises
The financial statements prepared by the Company comply with the requirements of Accounting
Standards for Business Enterprises and give a true and complete picture of the financial position,
operating results and cash flows of the Company.
2. Accounting year
The Accounting year is from January 1st to December 31st.
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 combinations 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), the 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
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the assets given and liabilities incurred or assumed by an enterprise for a business combination in light of
their fair values, and shall record the balances between them and their carrying amounts into the profits
and losses at the current period. The Company shall recognize the positive balance between the
combination costs and the fair value of the identifiable net assets it obtains from the acquiree as goodwill.
The Company shall treat the negative balance between the combination costs and the fair value of the
identifiable net assets it obtains from the acquiree into the profits and losses of the current period.
The intermediary costs and relevant fees for the business combination paid by the acquirer, including the
expenses for audit, assessment and legal services, shall be recorded into the profits and losses at the
current period. The transaction expenses for the issuance of equity securities for the business
combination shall be recorded into the initial recognition amount of equity securities.
6. Consolidation of financial statements
(1) Scope of consolidation
The scope of consolidation of consolidated financial statements is determined based on control. All the
subsidies (including separable sections of the investees controlled by the Company) have been
consolidated into the scope of consolidation for this period ended.
(2) Procedure of consolidation
The consolidated financial statements shall be presented by the parent based on the financial statements
of the parent and its subsidiaries and using other related information. When preparing consolidated
financial statements, the parent shall consider the entire group as an accounting entity, adopt uniform
accounting policies and apply the requirements of Accounting Standards 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 the fair value of identifiable net assets on the acquisition date. For
subsidiaries through acquisition that are under common control, the assets, and liabilities (as well as the
goodwill arising from purchasing the subsidiary by the ultimate controller) are adjusted according to the
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
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If the Company has a new subsidiary due to a business combination under common control during the
reporting period, it shall adjust the beginning balance in the consolidated statement of financial position
when preparing the 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 the 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 the 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 the remeasurement of the defined benefit plan is excluded.
2) Disposing subsidiaries or businesses
① General treatment
If the Company disposes of a subsidiary during the reporting period, the revenue, expenses and profits of
the subsidiary from the beginning of the reporting period to the 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 the 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.
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The difference, between sums of the consideration received for the disposal of 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 the defined benefit
plan is excluded. When the Company loses control over a subsidiary due to the increase of capital from
other investors and thus the shareholding ratio of the Company declines, accounting treatment shall be in
accordance with the above-mentioned principles.
② Disposing subsidiaries by multiple transactions
Where the Company loses control of a subsidiary in multiple transactions in which it disposes of its
subsidiary in stages, in determining whether to account for the multiple transactions as a single
transaction, the Company shall consider all of the terms and conditions of the transactions and their
economic effects. One or more of the following may indicate that the Company shall account for the
multiple arrangements as a single transaction:
(a) Arrangements are entered into at the same time or in contemplation of each other;
(b) Arrangements work together to achieve an overall commercial effect;
(c) The occurrence of one arrangement is dependent on the occurrence of at least one other arrangement;
and
(d) One arrangement considered on its own is not economically justified, but it is economically justified
when considered together with other arrangements.
If each of the multiple transactions forms part of a bundled transaction which eventually results in loss of
control of the subsidiary, these multiple transactions shall be accounted for as a single transaction. In the
consolidated financial statements, the difference between the consideration received and the
corresponding proportion of the subsidiary’s net assets in each transaction prior to the loss of control
shall be recognized in other comprehensive income and transferred to the profit or loss when the
Company eventually loses control of the subsidiary.
If each of the multiple transactions which eventually results in loss of control of the subsidiary does not
form part of a bundled transaction, apply the treatment of disposing of 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 of the subsidiary in common cases.
(3) Acquiring the subsidiaries’ equity interest held by non-controlling shareholders
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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 the 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 net 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 has the assets related to
the arrangement and assumes the liabilities related to the arrangement, it is a joint operation.
The Company confirms the following items related to the share of interest in the joint operation and
performs accounting treatment in accordance with the relevant enterprise accounting standards:
a. Confirm the assets held by the Company separately, and confirm the assets held jointly by the
Company's share;
b. Recognize the liabilities assumed by the Company separately and the liabilities jointly assumed by the
Company's share;
c. Recognize the income generated by the sale of the Company’s share of common operating output;
d. Recognize the revenue generated from the sale of joint operations based on the Company's share;
e. Confirm the expenses incurred separately and the expenses incurred in the joint operation according to
the Company's share.
8. Criteria for determining 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.
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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 on the day of transactions.
The foreign currency monetary items shall be translated at the spot exchange rate on the balance sheet
date. The balance of exchange arising from the difference between the spot exchange rate on the balance
sheet date and the spot exchange rate at the time of initial recognition or prior to the balance sheet date,
except those arising from the raising of special foreign debt for the purchase or construction of
capitalizable assets thus shall be capitalized according to the borrowing costs capitalization principle, shall
be recorded into the profits and losses at the current period.
(2) Translation of foreign currency financial statements
The asset and liability items in the statement of financial position shall be translated at a spot exchange
rate on the balance sheet date. Among the owner's equity items, except the ones as "undistributed
profits", others shall be translated at the spot exchange rate at the time when they are incurred. The
income and expense items in the income statement shall be translated using an exchange rate that is
determined in a systematic and reasonable manner and approximates the spot exchange rate on the
transaction date.
When disposing of 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.
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The Company may make an election at initial recognition for non-trading equity instrument investments
whether it is designated as a financial asset (equity instrument) that is measured at fair value through
other comprehensive income. 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 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 account
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 of 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
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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.
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, and long-term payables.
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At initial recognition, the Company shall measure a financial liability at its fair value plus transaction costs
that are directly attributable to the acquisition or issue of the financial asset. Interests calculated by using
the effective interest method during the holding period shall be recognized in profit or loss.
When the financial liabilities are derecognized, the difference between the price obtained and the
carrying value shall be 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
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 the 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 the financial asset whose recognition has not been stopped), be
apportioned according to their respective relative fair value, and the difference between the amounts of
the following 2 items shall be included into the profits and losses of the current period:
1) The book value of the portion whose recognition has been stopped; and
2) The sum of consideration of the portion whose recognition has been stopped and the portion of the
accumulative amount of the changes in the fair value originally recorded in the owner's equities which is
corresponding to the portion whose recognition has been stopped (in the event that the financial asset
involved in the transfer is a financial asset Available-for-sale).
If the transfer of financial assets does not satisfy the conditions to stop the recognition, it shall continue
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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 (the 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 are 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 in
the profits and losses of the current period the difference between the carrying amount which has been
terminated from recognition and the considerations it has paid (including the non-cash assets it has
transferred out and the new financial liabilities it has assumed).
Where the Company buys back part of its financial liabilities, it shall distribute, on the date of repurchase,
the carrying amount of the whole financial liabilities in light of the comparatively fair value of the part
that continues to be recognized and the part whose recognition has already been terminated. The gap
between the carrying amount which is distributed to the part whose recognition has terminated and the
considerations it has paid (including the noncash assets it has transferred out and the new financial
liabilities it has assumed) shall be recorded into the profits and losses of the current period.
(5) Determination of the fair value of the financial assets (liabilities)
If active markets for the financial instruments exist, the fair value shall be measured by quoted prices in
the active markets. If active markets for the financial instruments do not exist, valuation techniques shall
be applied for the measurement. The Company uses valuation techniques appropriate to 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 recognized 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 an 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 the difference between the cash flow receivable from
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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.
The measurement of expected credit loss depends on whether there is a significant increase in the 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 the
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 the 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 materials in transit, raw material, turnover materials, finished goods, work in process,
issuing commodities, 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.
(3) The basis for confirming the net realizable value of inventories and the methods to make provision for
the inventory impairment loss
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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 a 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
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 right to receive
consideration (the right is conditioned on factors other than the passage of time) by transferring goods or
services to a customer, the entity shall present the contract as a contract asset. Contract assets and
contract liabilities under the same contract are disclosed in net amounts. An entity shall present any
unconditional rights to consideration (only the passage of time is required) separately as a receivable.
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 “IV. Significant accounting policies and accounting
estimates”.
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13. 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 consistence 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.
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 if no impairment loss had been recognized
previously.
14. Long-term equity investment
(1) Criteria of joint control and significant influence
Joint control is the contractually agreed sharing of control of an arrangement, which exists only when
decisions about the relevant activities require the unanimous consent of the parties sharing control. If the
Company and other joint ventures 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.
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Significant influence is the power to participate in the financial and operating policy decisions of the
investee but not control or joint 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 the 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 the
combination date, shall be adjusted to the capital reserve. If the balance of capital reserve is not sufficient,
any excess shall be adjusted to retained earnings.
For a business combination not under common control, the initial investment cost of the long-term equity
investment shall be the acquisition cost at the acquisition date. When an investor becomes capable of
exercising control over an investee due to additional investment or other reasons, the initial investment
cost under the cost method shall be the carrying amount of previously-held equity investment together
with the additional investment cost.
2) The initial cost of the long-term equity investment other than from business acquisition
The initial cost of a long-term equity investment obtained by making payment in cash shall be the
purchase cost which is actually paid.
The initial cost of a long-term equity investment obtained on the basis of issuing equity securities shall be
the fair value of the equity securities issued.
(3) Subsequent measurement and profit or loss recognition
1) Cost method
The Company adopts the cost method for the long-term investment in a 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
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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.
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 attributed 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 a 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 of 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 an 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
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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 transferred into profit or loss of the 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, and 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 of 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. For 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 first 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 for separately.
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
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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 economic benefits in a different way, then different
depreciation rate or methods shall be applied and the depreciation of the components shall be calculated
separately.
Fixed assets acquired under financial leasing are depreciated over the useful life if it is reasonably certain
that the ownership of the leased assets will be acquired upon expiry of the lease, or over the shorter of
the lease term and useful life if it is not reasonably certain that the ownership of the leased assets will be
acquired upon expiry of the lease.
Details of classification, residual value rate and annual depreciation rate are as follows:
Category Depreciation method Depreciation period Residual value rate Annual depreciation rate
Plants and Buildings Year average method 40 5 2.38
Machinery Year average method 17-24 5 3.96-5.59
Transportation and other
Year average method 5-12 5 7.92-19.00
equipment
(3) Disposal of fixed assets
When a fixed asset is disposed of, or it is expected that no economic benefits will be generated through
use or disposal, the recognition of the fixed asset shall be determined. The amount of disposable income
of fixed assets raised from sale, 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 by 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 their intended use or for sale.
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(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:
1) The asset disbursements have already been incurred, which shall include cash, transferred noncash
assets or interest-bearing debts paid for the acquisition and construction or production activities for
preparing assets eligible for capitalization;
2) The borrowing costs have already been 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 are 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
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conditions. Exchange differences arising from the principal and interest of 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 includes 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 periods 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.
Estimated useful lives of intangible assets with limited useful lives:
Item Estimated useful life Criteria
Land use right 50 years Land use right certificate
(2) Accounting policies for internal research and development expenditures
Classification criteria for the internal research phase and development phase:
The expenditures for the 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 the research phase or other knowledge
is applied to certain projects or designs for the manufacturing of new or substantially improved materials,
devices and products before commercial manufacturing and use.
Specific conditions for capitalization of development phase expenditures:
Research expenditures are recognized in profit or loss as incurred. Expenditures in the development
phase are recognized as intangible assets if the following conditions are met, and expenditures in the
development phase that do not meet the following conditions are recognized in profit or loss:
1) It is technically feasible to complete the intangible asset so that it can be used or sold;
2) There is an intent to complete the intangible asset and use or sell it;
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3) The manner in which an intangible asset generates economic benefits, including being able to
demonstrate that there is a market for the product produced from the intangible asset or that there is a
market for the intangible asset itself and that the intangible asset will be used internally, should prove its
usefulness;
4) There are sufficient technical, financial and other resources to support the completion of the
development of the intangible asset and is capable of using or selling the intangible asset;
5) The expenditure attributable to the development phase of the intangible asset can be measured
reliably.
If it is not possible to distinguish between research phase expenditures and development phase
expenditures, all research and development expenditures incurred are charged to current profit or loss.
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19. Impairment of long-term assets
Long-term equity investments, fixed assets, construction in progress, right-of-use assets, intangible assets
with limited useful lives and other long-term assets shall be tested for impairment if there is an indication
of impairment at the balance sheet date. If the result of the impairment test indicates that the
recoverable amount of an asset is less than its book value, the difference shall be recognized as a
provision for impairment and included in impairment loss. The recoverable amount is the higher of the
fair value of assets, less costs of disposal, and the present value of estimated future cash flows from the
assets. The provision for impairment of assets shall be calculated and recognized on an individual basis,
and if it is difficult to estimate the recoverable amount of an individual asset, the Company shall recognize
the recoverable amount of 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
Goodwill arising from business combinations, intangible assets with an indefinite useful life, and
intangible assets that have not yet reached their intended useable state shall be tested for impairment at
least at the end of each year, regardless of whether there is an indication of impairment.
In performing an impairment test on goodwill, the Company shall apportion the book value of goodwill
arising from business combinations to the relevant asset group from the date of purchase in accordance
with a reasonable method; for those that it is difficult to be apportioned to the relevant asset group, they
shall be apportioned to the relevant portfolio of asset group. The relevant asset group or combination of
asset groups are those that can benefit from the synergistic effects of the business combination.
In performing an impairment test on the relevant asset group or portfolio of asset group that contains
goodwill, the Company shall conduct the impairment test first on the asset group or portfolio of asset
group that does not contain goodwill if there is an indication of impairment on the asset group or
portfolio of asset group relating to goodwill, and calculate its recoverable amount as well as compare it
with the relevant book value to recognize the corresponding impairment loss. Then the impairment test
shall be performed for the asset group or portfolio of asset group that contains goodwill, comparing its
book value and its recoverable amount. If the recoverable amount is less than the book value, the amount
of impairment loss shall be offset and apportioned to the book value of goodwill contained in the asset
group or portfolio of asset group, and then offset the book value of other assets in proportion to the
proportion of book value of assets other than goodwill in the asset group or portfolio of asset group. The
impairment losses on assets mentioned above, once recognized, shall not be reversed in subsequent
accounting periods.
20. Long-term deferred expense
The long-term deferred expense refers to the expenses incurred but shall be borne by the 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 liabilities
The Company shall present contract assets or contract liabilities in the statement of financial position in
accordance with the relationship between the performance of an obligation and the payment of
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customers. The obligation of the Company to transfer goods or provide services to customers for
consideration received or receivable from customers shall be presented as contract liabilities. Contract
assets and contract liabilities under the same contract shall be shown on a net basis.
22. Employee benefits
(1) Accounting treatment for short-term employee benefits
The Company shall recognize the short-term benefits actually incurred as the liabilities, and recognize
such liabilities into the current profit and loss or the costs of the related assets in the accounting period to
which the employees render the services.
Payments made by the Company of social security contributions for employees, payments of housing
provident funds, union funds and 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 for post-employment benefits
1) Defined contribution plan
The Company shall recognize, in the accounting period in which an employee provides service, pension
fund and unemployment fund for employees as liabilities 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.
The Company contributes to the basic pension insurance and unemployment insurance for its employees
in accordance with the relevant local government regulations. The amount payable is calculated on the
basis of the contribution base and at the rate prescribed by the local regulations and is recognized as a
liability and charged to current profit and loss or the cost of related assets in the accounting period in
which the employees provide services to the Company. In addition, the Company participates in an
enterprise annuity plan/supplemental pension fund approved by the relevant state authorities. The
Company contributes a certain percentage of the employees' gross salaries to the annuity plans/local
social insurance institutions and the corresponding expenses are charged to current profit and loss or to
the cost of related assets.
2) Defined benefit plan
None.
3) Accounting treatment for termination benefits
The Company shall recognize employee benefits liabilities for termination benefits, with a corresponding
charge to the current profit and loss, at the earlier of the following dates: when the Company cannot
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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 Company;
2) It is likely to cause any economic benefit to flow out of the Company as a result of the performance of
the obligation; and
3) The amount of the obligation can be measured in a reliable way.
The estimated liabilities 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, the Company 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.
If there is a continuous range of expenses required and the likelihood of various outcomes within that
range is equal, the best estimate is determined by the mid-point of the range; in other cases, the best
estimate is treated separately as follows.
If a contingency relates to a single item, it shall be determined in the light of the most likely outcome.
If the contingencies relate to more than one item, 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 liabilities 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 liabilities.
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) Accounting policies used for 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
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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 customers, excluding amounts collected on
behalf of the 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 customers. The Company determines the transaction price that includes
variable consideration at an amount that does not exceed the amount of accumulated recognized
revenue that is unlikely to be materially reversed when the relevant uncertainty is eliminated. If there is a
significant financing component in the contract, the Company shall 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. When one of the following conditions is met, the Company is deemed to have
undertaken the performance obligation within a certain time; otherwise, it will be deemed as undertaking
the performance obligation at a certain point in time:
The customer simultaneously receives and consumes the benefits provided by the Company’s
performance as the Company performs;
The customer has control over the goods in progress during the Company's performance.
The goods produced in the course of the Company's performance are of irreplaceable use and the
Company is entitled to receive payment for the portion of the performance that has been completed
cumulatively to date during the entire term of the contract.
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 reasonably 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 promised goods or services, the Company shall consider
requirements as follows:
The Company has a present right to payment for the promised goods or services and the customer is
presently obliged to pay for that;
The Company has transferred the legal ownership of the goods to the customer, that is, the customer
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has the legal ownership to the goods;
The Company has transferred physical possession of the goods to the customer, that is, the customer
has taken possession of the goods;
The Company has transferred the main risks and rewards of ownership of the goods to the customer,
that is, the customer has the main risks and rewards of ownership of the goods;
The customer has accepted the promised goods or services.
Differences in accounting policies for revenue recognition due to different operating models for the same
type of business.
(2) Specific accounting policies for revenue recognition
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 indications:
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.
Differences in accounting policies for revenue recognition due to different operating models for the same
type of business.
25. Government grants
(1) Types
Government grants mean the monetary or non-monetary assets obtained free of charge by the Company
from the government. Government grants consist of government subsidies pertinent to assets and
government subsidies pertinent to income.
Government grants related to assets are government grants acquired by the Company for the acquisition
or other formation of long-term assets. Government grants related to income are government grants
other than those related to assets.
The specific criteria for the Company to classify government grants as asset-related are: government
grants acquired by the enterprise and used to acquire or otherwise form long-term assets.
The criteria of the Company recognizing the government grants related to income is: In addition to
government grants related to assets, government grants that have been clearly targeted for subsidies.
For government documents that do not specify the object of the grant, the Company classifies the
government grant as asset-related or income-related based on the following judgment: if it can form a
long-term asset, the portion of the government grant that corresponds to the value of the asset is treated
as an asset-related government grant and the rest as an income-related government grant; if it is difficult
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to distinguish, the government grant as a whole is treated as an income-related government grant.
(2) Recognition
Government grants related to assets are recognized when it actually received, and transferred the
deferred income to the current profit and loss according to the estimated use period of the long-term
assets from when the long-term assets are available.
Government grants 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 grants related to assets shall be used to offset the book value of the related assets or
recognized as deferred income. The government grants recognized as deferred income shall be charged to
current profit and loss (if they relate to ordinary activities, to other income; if do not, to non-operating
income) in accordance with a reasonable and systematic method over the useful life of the related assets;
Government grants related to income that is used to compensate for the related costs and expenses or
losses in subsequent periods shall be recognized as deferred income and charged to current profit and
loss (if they relate to ordinary activities, to other income; if do not, to non-operating income) in the
period in which the related costs and expense or losses are recognized, or offset the related costs and
expenses or losses; for those used to compensate for the related costs and expenses or losses that have
been incurred, they shall be directly included in current profit and loss (if they relate to ordinary activities,
to other income; if do not, to non-operating income) or offset the related costs and expenses or losses.
The policy discount loans obtained by the Company are divided into the following two situations and are
separately accounted for:
1) 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.
2) If the government directly allocates the discounted funds to the Company, the Company will write-
down the relevant borrowing costs with the corresponding discounts.
26. Deferred income tax assets/deferred income tax liabilities
Income tax includes current income tax and deferred income tax. Except for income tax arising from
business combinations 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 values.
An enterprise shall recognize the deferred income tax assets arising from a deductible temporary
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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.
Deferred income tax liabilities are recognized for taxable temporary differences, except in exceptional
circumstances.
Special circumstances in which deferred income tax assets or deferred income tax liabilities are not
recognized include:
The initial recognition of goodwill.
Transactions or events that are neither business combinations nor, when they occur, affect accounting
profit and taxable income (or deductible losses).
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 into 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 settle on a net basis and intends to settle on a net basis or
to obtain assets and pay off liabilities simultaneously, the current income tax assets and current income
tax liabilities are presented at the net amount after offsetting.
On the balance sheet date, deferred income tax assets and deferred income tax liabilities are stated at the
net of offsetting amounts when the following conditions are also met:
The taxable entity has the legal right to settle current income tax assets and current income tax
liabilities on a net basis.
Deferred income tax assets and deferred income tax liabilities relate to income taxes levied by the same
taxation authority on the same taxable entity or on different taxable entities, but in each future period in
which it is significant that the deferred income tax assets and liabilities reverse, the taxable entities
involved intend to settle the current income tax assets and liabilities on a net basis or to acquire the
assets and settle the liabilities simultaneously.
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27. Leases
(1) Accounting treatment for operating leases
A lease is a contract whereby the lessor transfers the right of usage on an asset to the lessee for
consideration within a certain period of time. 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, and does not evaluate whether there is
a lease change. Lease classification is not reassessed:
The lease consideration after the reduction is less than or substantially the same as before the reduction.
The lease consideration may be undiscounted or discounted at the discount rate before the reduction;
The reduction is only for lease payments payable before June 30th, 2022, an increase in lease
payments payable after June 30th, 2022 does not affect meeting this condition, and a decrease in lease
payments payable after June 30th, 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 a lessee
①Right-of-use assets
On the beginning date of the lease term, the Company recognizes the right-of-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:
Initial measurement amount of lease liabilities;
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;
The initial direct costs incurred by the Company;
Costs expected to be incurred by the Company to dismantle and remove the leased asset, to restore
the site on which the leased asset is located or to restore the leased asset to its agreed condition under
the terms of the lease, but do not include costs that are part of the costs incurred to produce the
inventory.
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The Company subsequently depreciates right-of-use assets using the straight-line method. If it is
reasonably certain that ownership of the leased asset will be obtained at the end of the lease term, the
Company depreciates the leased asset over its remaining useful life; otherwise, the leased asset is
depreciated over the shorter of the lease term or the remaining useful life of the leased asset.
For the principles by which the Company determines whether the right-of-use asset has been impaired,
please refer to Note “IV.19 Impairment of long-term assets”.
②Lease liabilities
At the beginning of the lease term, the Company recognizes lease liabilities for leases other than short-
term leases and leases of low-value assets. The lease liability is initially measured at the present value of
outstanding lease payments. Lease payments include:
Fixed payments (including actual fixed payments), if there is a lease incentive, deduct the relevant
amount of the lease incentive;
Variable lease payments that depend on an index or ratio;
The expected payment according to the residual value of the guarantee provided by the Company;
The exercise price of the purchase option, provided that the Company is reasonably certain that the
option will be exercised;
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 in the current profit and loss or the cost of
related assets.
Variable lease payments that are not included in the measurement of lease liabilities are included in the
current profit and loss or the cost of related assets when they 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 when 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 guaranteed residual
value changes, or the index or ratio used to determine the lease payment changes, the Company re-
measures the lease liability at the present value of the changed lease payments and the original discount
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rate. However, where changes in lease payments resulting from changes in floating interest rates, a
revised discount rate is used to calculate the present value.
③Short-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.
④Lease changes
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;
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 modification is not accounted for as a separate lease, on the effective date of the lease
modification, the Company re-allocates the consideration of the modified contract, re-determines the
lease term, and re-calculates the lease liability based on the present value of the modified lease
payments and the revised discount rate.
If the lease modification 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 assets 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 assets accordingly.
⑤Rent reductions related to COVID-19 epidemic
For those using the simplified method of rent reductions related to the COVID-19 epidemic, the Company
does not assess whether a lease change has occurred, continues to calculate interest expense on the
lease liability at the same discount rate as before the reductions and includes it in current profit and loss,
and continues to depreciate right-of-use assets on the same basis as before the reductions. If a rent
reduction occurs, the Company treats the reduced rent as a variable lease payment, and reduces the
related asset cost or expense by the amount discounted at the undiscounted or pre-reduction discount
rate when the original rent payment obligation is discharged, such as when a reduction agreement is
reached, and adjusts the lease liability accordingly; if the rent payment is deferred, the Company reduces
the lease liability recognized in prior periods when the actual payment is made.
For short-term leases and low-value asset leases, the Company continues to include the original
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contractual rentals 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 a lessor
On the lease commencement date, the Company classifies leases into financial 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 ownership is ultimately transferred.
Operating leases refer to leases other than financial 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
The Company recognizes lease receipts from operating leases as rental income using the straight-line
method for each period of the lease term. Initial direct costs capitalized in connection with operating
leases are amortized over the lease term on the same basis as rental income is recognized and are
recognized in current profit and loss. Variable lease payments not included in the amount of lease
receipts are recognized in current profit and loss when they are actually incurred. When there is a change
in operating leases, the Company accounts for it as a new lease from the effective date of the change, and
the amount of lease receipts received in advance or receivable in relation to the lease prior to the change
is treated as a receipt under the new lease.
(2) Accounting treatment of financial lease
1) Accounting treatment of financial lease
On the lease commencement date, the Company recognizes the financial lease receivables for the
financial lease and derecognizes the financial lease assets. When the Company initially measures the
financial lease receivables, the net investment in the lease is regarded as the entry value of the financial
lease receivables. The net lease investment is the sum of the unguaranteed residual value and the present
value of the lease 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 interest income over the lease term at a fixed periodic rate.
Derecognition and impairment of finance lease receivables are accounted for in accordance with Note “V.
10. Financial assets and financial liabilities".
Variable lease payments not included in the measurement of net investment in leases are charged to
current profit and loss when 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:
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The change expands the scope of the lease by increasing the right to use one or more of the leased
assets;
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 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 had been effective on the inception date of the lease and the lease would have been
classified as an operating lease, the Company shall account for it as a new lease from the effective date of
the lease change and use the net investment in the lease prior to the effective date as the book value of
the leased asset;
If the change had been effective at the inception date of the lease and the lease would have been
classified as a finance lease, the Company shall account for it in accordance with the policy on
modification or renegotiation of contracts as described in Note “V. 10. Financial assets and financial
liabilities".
2) Rent reductions related to COVID-19 epidemic
For operating leases that use the simplified method of rent reductions related to the COVID-19
epidemic, the Company continues to recognize the original contractual rentals as lease income in the
same manner as before the reductions; where rent reductions occur, the Company treats the reduced
rentals as variable lease payments and reduces lease income in the period of the reductions; where the
collection of rentals is deferred, the Company recognizes the rentals receivable in the original collection
period and reduces the receivables recognized in prior periods when they are actually received.
For financial leases using the simplified method of rent reduction related to the COVID-19 epidemic, the
Company continues to calculate interest and recognize it as lease income at a discount rate consistent
with the rate prior to the reduction. In the event of a rent reduction, the Company treats the reduced rent
as a variable lease payment and, upon waiver of the original right to receive rent, such as the conclusion
of a reduction agreement, reduces the originally recognized lease income by the amount discounted at
the undiscounted or pre-reduction discount rate, with any shortfall charged to investment income and
the financial lease receivable adjusted accordingly; in the event of deferred receipt of rent, the Company
reduces the previously recognized financial lease receivable upon actual receipt In the event of delayed
collection of rentals, the Company will reduce the financial lease receivable recognized in the previous
period upon actual receipt.
28. Other significant accounting policies and accounting estimates
Major accounting estimates and judgements
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
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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) Provision for decline in value of inventories
As mentioned in Note “V. 11. Inventory”, the Company regularly estimates the net realizable value of the
inventory, and recognizes the difference in inventory cost higher than the net realizable value. When
estimating the net realizable value of inventory, the Company considers the purpose of holding the
inventory and uses the available information as the basis for estimation, including the market price of the
inventory and the Company's past operating costs. The actual selling price, completion cost, sales
expenses and taxes of the inventory may change according to changes in market sales conditions,
production technology, or the actual use of the inventory. Therefore, the amount of inventory
depreciation reserve may change according to the above reasons. Adjustments to the inventory
impairment will affect the current profit and loss.
(3) Impairment of other assets except inventory and financial assets
As mentioned in Note “V. 19 Long-term Asset Impairment”, 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
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As described in Note “V. 15. Fixed assets” and Note “V. 18. Intangible assets”, the Company shall accrue
depreciation for the fixed assets and amortization for intangible assets within the useful life after
considering their residual values. 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 income tax assets
When it is estimated that sufficient taxable income will be available in future periods to utilize the
unrecovered tax losses and deductible temporary differences, the Company calculates and recognizes the
related deferred income tax asset to the extent that it is probable that taxable income will be available
against which the unrecovered tax losses and deductible temporary differences can be utilized, and on the
basis of the income tax rate applicable to the period in which the asset is expected to be recovered. The
Company is required to use judgment to estimate the timing and amount of future taxable income and to
make reasonable estimates and judgments about the applicable future income tax rates in accordance with
current tax policies and other relevant policies to determine the amount of deferred income tax assets to
be recognized. If the timing and amount of actual profits to be generated in future periods or the actual
applicable income tax rate differs from the Management's estimates, such differences will have an impact
on the amount of deferred income tax assets.
29. Changes in significant accounting policies and accounting estimates
(1) Changes in significant accounting policies
Applicable □Not applicable
The content and reasons for changes in accounting policies Approval procedure Note
1 Interpretation of Accounting Standards for Business Enterprises No. 15
On December 30th,2021, the Ministry of Finance issued Interpretation of Accounting Standards for Business
Enterprises No. 15 (Cai Kuai [2021] No. 35, hereinafter referred to as "Interpretation No. 15"), in which
"Accounting treatment for the external sale of products or by-products produced by an enterprise before a
fixed asset reaches its intended useable state or during the research and development process" and
"Judgment on onerous contracts" are effective from January 1st, 2022.
Interpretation No. 15 provides that an enterprise that sells to the public products or by-products produced
before a fixed asset reaches its intended useable state or during the research and development shall be
accounted for the revenue and costs related to trial sales separately in accordance with applicable
accounting standards such as Accounting Standards for Business Enterprises No. 14 - Revenue and
Accounting Standards for Business Enterprises No. 1 - Inventories, and shall be included in the current profit
and loss. The net amount of revenue related to trial sales after offsetting related costs should not be
written down against the cost of fixed assets or research and development expenditure.
Interpretation No. 15 on onerous contracts refers to contracts where the costs that would inevitably be
incurred in performing the contractual obligations exceed the expected economic benefits. The costs that
would inevitably be incurred in performing a contractual obligation should reflect the lowest net cost of
exiting that contract, i.e. the lower of the cost of performing that contract or the compensation or penalties
incurred for failure to perform that contract. The cost to the enterprise of performing the contract includes
the incremental cost of performing the contract and the apportioned amount of other costs directly related
to the performance of the contract, such as the apportioned amount of direct labour, direct materials,
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depreciation of fixed assets used to perform the contract, etc.
The implementation of the above provisions has not had a material impact on the financial position and
results of operations of the Company.
2 Interpretation of Accounting Standards for Business Enterprises No. 16
On November 30th, 2022, the Ministry of Finance issued Interpretation of Accounting Standard for Business
Enterprises No. 16 (Cai Kuai [2022] No. 31, hereinafter referred to as "Interpretation No. 16"), in which
"Accounting treatment for deferred income tax relating to assets and liabilities arising from a single
transaction for which no exemption from initial recognition applies" is effective from January 1st, 2023;
"Accounting treatment for the income tax effect of dividends related to financial instruments classified as
equity instruments by the issuer" and "Accounting treatment for an enterprise that modifies a cash-settled
share-based payment to an equity-settled share-based payment" is effective from the date of publication.
Interpretation No. 16 on single transactions (including lease transactions in which the lessee initially
recognizes a lease liability at the inception date of the lease and records it in the right-of-use asset, and
transactions in which an estimated liability is recognized and recorded in the cost of the related asset
because of the existence of an abandonment obligation, such as a fixed asset, etc., hereinafter referred to
as single transactions to which this interpretation applies) that are not business combinations, that affect
neither accounting profit nor taxable income(or deductible loss) at the time of the transaction and where
the initial recognition of assets and liabilities results in taxable temporary differences and deductible
temporary differences in equal amounts, and the provisions in Articles 11 (2) and 13 of Accounting
Standards for Business Enterprises No. 18 - Income Tax concerning the exemption of deferred income tax
liabilities and deferred income tax assets for initial recognition are not applicable. The enterprise should
recognize the corresponding deferred income tax liabilities and deferred income tax assets for the taxable
temporary differences and deductible temporary differences arising from the initial recognition of assets
and liabilities for the transaction when the transaction occurs, in accordance with the relevant provisions of
Accounting Standards for Business Enterprises No. 18 - Income Tax and other relevant regulations,
respectively.
Interpretation No. 16 regarding financial instruments classified as equity instruments (such as perpetual
bonds classified as equity instruments, etc.) by an enterprise (referring to the issuer, the same below) in
accordance with the provisions of Accounting Standards for Business Enterprises No. 37 - Presentation of
Financial Instruments, etc., and the related dividend expense is deducted before corporate income tax in
accordance with the relevant provisions of the tax policy, the enterprise shall recognize the income tax
effect related to the dividend when recognizing the dividend payable. The income tax effect of the dividend
is usually more directly related to the transaction or event in the past that gave rise to the distributable
profit, and the enterprise should recognize the income tax effect of the dividend in current profit and loss
or in an item of owners' equity (including an item of other comprehensive income) in a manner consistent
with the accounting treatment used in the past for the transaction or event that gave rise to the
distributable profit. For profits distributed from transactions or events previously giving rise to gains or
losses, the income tax effect of such dividends should be charged to current profit and loss; for profits
distributed from transactions or events previously recognized in owners' equity, the income tax effect of
such dividends should be charged to the item of owners' equity.
Interpretation No. 16 on the modification by an enterprise of the terms and conditions in a cash-settled
share-based payment agreement to make it an equity-settled share-based payment. At the date of
modification, the enterprise shall measure the equity-settled share-based payment at the fair value of the
equity instrument granted on that date, record the services acquired in capital surplus and derecognize the
liability recognized for the cash-settled share-based payment at the date of modification, with the
difference between the two charged to current profit or loss. The same applies where the modification
occurs after the end of the waiting period. If the waiting period is extended or shortened as a result of the
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modification, the enterprise should account for the above in accordance with the modified waiting period
(without regard to the relevant accounting provisions for adverse modifications). If the enterprise cancels a
cash-settled share-based payment, grants an equity-settled share-based payment and determines at the
date of grant of the equity instrument that it is intended to replace the cancelled cash-settled share-based
payment (except where it is cancelled because the conditions for exercising the right have not been met),
the above provisions of this Interpretation apply.
(2) Changes of significant accounting estimates
Applicable □Not applicable
The content and reasons for changes in Point of commencement of
Approval procedure Note
accounting estimates application
Fixed asset categories, depreciable lives Sixth Meeting of the Ninth Session
July 1st, 2022
and residual value rates of the Board of Directors
Affected statement items Amount
Accumulated depreciation 271,947,090.70
Operating costs 266,457,899.30
Administrative expenses 5,489,191.40
Total profits 271,947,090.70
Net profit 271,947,090.70
In recent years, the Company has continuously increased its investment in fixed assets, and through
technical renovation and innovation of the main equipment production line, and regular maintenance of
equipment, the performance of the equipment has been improved and the useful life of fixed assets has
been extended. In accordance with the principle of prudence in accounting, and in accordance with the
provisions of Chapter 4, Article 15 of Accounting Standards for Business Enterprises No. 4 - Fixed Assets, "An
enterprise shall reasonably recognize the useful life and estimated net residual value of fixed assets based
on the nature and use of the fixed assets". The Company has changed the accounting estimates for the
categories of fixed assets, depreciable lives and residual value rates to bring the categories of fixed assets,
depreciable lives and residual value rates closer to their actuals, based on the nature and use of fixed assets.
The Company held the Sixth Meeting of the Ninth Session of the Board of Directors on October 26th, 2022
and considered and approved the Proposal on Change in Accounting Estimates.
The Company will implement the changed accounting estimate effective July 1st, 2022. The change in
accounting estimate will have no impact on the Company's scope of principal activities and will reduce the
Company's depreciation by RMB 270 million in 2022.
30. Others
Termination of operations is a separately distinguishable component that meets one of the following
conditions and which has been disposed of by the Company or classified by the Company as held-for-sale.
1) The component stands for an independent main business or a separate major business area;
2) The component is a part of the disposal plan of an independent main business or a major business area;
The component is part of a linked plan for the proposed disposal of an independent main business or a
separate major business area;
3) This component is a subsidiary acquired specifically for resale.
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 operations reported in the current period, the Company
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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.
VI. Taxes
1. Main tax categories and tax rates
Type of tax Tax base Tax rate
Output VAT is calculated on the basis of the income from
the sale of goods and taxable services in accordance with
Value-added tax (VAT) the provisions of the tax law, and after 6%, 9%, 13%
subtracting the deductible input VAT for the current
period, the difference is VAT payable
City maintenance and construction tax Based on VAT actually paid 7%, 5%
Corporate income tax Based on taxable profit 25%
Disclosure of information if there are taxable entities with different corporate income tax rates
Name of taxable entity Income tax rates
VII. Notes to the items of the consolidated financial statements
1. Cash and cash equivalents
Unit: RMB
Item Closing balance Opening balance
Cash on hand 24,334.93
Cash in bank 1,296,662,683.20 6,299,074,728.55
Other cash and cash equivalents 164,482,958.67 2,531,996,674.37
Total 1,461,145,641.87 8,831,095,737.85
Total amount restricted in use due to
164,482,958.67 2,531,996,674.37
mortgage, pledge or freeze
Other notes:
Restricted use of cash and cash equivalents
Item Closing balance Opening balance
Margin for bank acceptance bill 163,297,958.67 1,492,236,674.37
Margin for letter of credit 125,000,000.00
Loan deposit 760,000.00
Time deposit or notice deposit for guarantee 174,000,000.00
Restricted deposit 1,185,000.00 740,000,000.00
Total 164,482,958.67 2,531,996,674.37
2. Notes receivable
(1) Presentation of notes receivable by category
Unit: RMB
Item Closing balance Opening balance
Bank acceptance bill 139,442,122.88
165
Bengang Steel Plates Co., Ltd. 2022 Annual Report
Commercial acceptance bill 290,265,051.82 1,540,482,182.07
Total 429,707,174.70 1,540,482,182.07
Unit: RMB
Closing balance Opening balance
Book balance Bad debt provision Book balance Bad debt provision
Category Book Book
Accrual Accrual
Amount Ratio Amount value Amount Ratio Amount value
ratio ratio
Including：
Including：
If the provision for bad debts on notes receivable is based on the general model of expected credit losses, please disclose
information about the provision for bad debts in the same manner as the disclosure for other receivables.
□Applicable Not applicable
(2)Notes receivable pledged by the Company at the end of the period
Unit: RMB
Item Amount pledged at the end of the period
Bank acceptance bill 139,442,122.88
Total 139,442,122.88
(3) Notes receivable endorsed or discounted by the Company at the end of the period and not yet due at the
balance sheet date
Unit: RMB
Amount derecognized at the end of the
Item Amount not derecognized at the end of the period
period
Commercial acceptance bill 216,259,842.27
Total 216,259,842.27
166
Bengang Steel Plates Co., Ltd. 2022 Annual Report
3. Accounts receivable
(1) Accounts receivable disclosure by category
Unit: RMB
Closing balance Opening balance
Book balance Bad debt provision Book balance Bad debt provision
Category
Accrual Book value Accrual Book value
Amount Percentage Amount Amount Percentage Amount
ratio ratio
Accounts receivable
for which bad debt
provision is made 353,419,325.80 25.82% 353,419,325.80 100.00% 352,985,418.30 47.20% 352,985,418.30 100.00%
on an individual
basis
Including：
Accounts receivable
for which bad debt
1,015,413,788.67 74.18% 118,182,892.61 11.64% 897,230,896.06 394,916,528.33 52.80% 138,065,745.62 34.96% 256,850,782.71
provision is made
on a portfolio basis
Including：
Portfolio 1: Aging
1,015,413,788.67 74.18% 118,182,892.61 11.64% 897,230,896.06 394,916,528.33 52.80% 138,065,745.62 34.96% 256,850,782.71
portfolio
Total 1,368,833,114.47 100.00% 471,602,218.41 897,230,896.06 747,901,946.63 100.00% 491,051,163.92 256,850,782.71
Provision for bad debts on an individual basis：353,419,325.80
Unit: RMB
Closing balance
Name
Book balance Bad debt provision Accrual ratio Reasons for accrual
Benxi Nanfen Xinhe Metallurgical Furnace Material Co., Ltd. 48,196,244.68 48,196,244.68 100.00% Production has ceased and is not expected to be recovered
Brilliance Automotive Group Holdings Co., Ltd. 305,223,081.12 305,223,081.12 100.00% Bankruptcy reorganization with no expected recovery
Total 353,419,325.80 353,419,325.80
Provision for bad debts on an individual basis：
167
Bengang Steel Plates Co., Ltd. 2022 Annual Report
Unit: RMB
Closing balance
Item
Book balance Bad debt provision Accrual ratio Reasons for accrual
Provision for bad debts on a portfolio basis：
Unit: RMB
Closing balance
Item
Book balance Bad debt provision Accrual ratio
Within 1 year (inclusive) 892,035,646.81 8,920,356.48 1.00%
1 to 2 years (inclusive) 14,717,227.92 1,471,722.79 10.00%
2 to 3 years (inclusive) 1,087,625.75 217,525.15 20.00%
Over 3 years 107,573,288.19 107,573,288.19 100.00%
Total 1,015,413,788.67 118,182,892.61
Notes for determining the basis of the portfolio:
If the provision for bad debts on accounts receivable is based on the general model of expected credit losses, please disclose
information about the provision for bad debts in the same manner as the disclosure for other receivables:
□Applicable Not applicable
Disclosure by aging
Unit: RMB
Aging Book balance
Within 1 year (inclusive) 892,035,646.81
1 to 2 years 14,717,227.92
2 to 3 years 5,931,757.76
Over 3 years 456,148,481.98
3 to 4 years 456,148,481.98
Total 1,368,833,114.47
(2) Provision for bad debts accrued, recovered or reversed in the current period
Provision for bad debts in the current period:
Unit: RMB
Amount of change in the current period
Category Opening balance Recovery or Closing balance
Accrual Write-off Others
reversal
Provision for bad debts
491,051,163.92 9,155,504.25 28,604,449.76 471,602,218.41
on accounts receivable
Total 491,051,163.92 9,155,504.25 28,604,449.76 471,602,218.41
Of which the amount of provision for bad debts recovered or reversed in the current period is material:
Unit: RMB
Name of the company Amount recovered or reversed Recovery methods
168
Bengang Steel Plates Co., Ltd. 2022 Annual Report
(3) Actual write-off of accounts receivable in the current period
Unit: RMB
Write-off
Item
amount
Changzhou Foreign Enterprise Goods & Materials General Company 9,008,967.00
Shenyang Welded Pipe Factory 3,991,372.27
Benxi Civil Affairs Hongda Metal Restructuring Plant 2,386,307.13
Yanji Rongjun Building Materials Sales Department 2,295,095.34
Zhuhai Special Economic Zone Huaxinyue Industrial Co., Ltd. 1,883,089.58
Dalian Free Trade Zone Benda Special Steel Co., Ltd. 1,464,685.47
Wafangdian Bengang Special Steel Sales Co., Ltd. 992,110.82
Dalian Free Trade Zone Maofeng International Industry and Trade Company 766,111.09
Tianjin Bengang Special Steel Sales Co., Ltd. 749,215.44
Dalian Economic and Technological Development Zone Bengang Special Steel Sales Office 650,313.34
Benxi Branch of Dalian Hardware and Mineral Import and Export Company 613,819.73
Hefei Zhongya Cement Machine Factory 435,086.35
Chengdu Bente Building Materials Management Company 345,428.35
Material Supply and Marketing Company of Shenyang Environmental Protection Equipment Industry Company 343,523.05
Lingning Linyuan Steel-tube Factory 340,167.23
Others 2,339,157.57
Total 28,604,449.76
169
Bengang Steel Plates Co., Ltd. 2022 Annual Report
Of which significant write-offs of accounts receivable:
Unit: RMB
Whether the
Nature of accounts Write-off Write-off procedures amount arises
Name of the company Reasons for write-off
receivable amount performed from related
transactions
Changzhou Foreign Enterprise A suspended company that is unreachable for a long time
Legal advice and Board
Goods & Materials General Payment for goods 9,008,967.00 without business transactions and included in the No
of Directors approval
Company management of account write-offs
A suspended company that is unreachable for a long time
Legal advice and Board
Shenyang Welded Pipe Factory Payment for goods 3,991,372.27 without business transactions and included in the No
of Directors approval
management of account write-offs
A suspended company that is unreachable for a long time
Benxi Civil Affairs Hongda Metal Legal advice and Board
Payment for goods 2,386,307.13 without business transactions and included in the No
Restructuring Plant of Directors approval
management of account write-offs
Yanji Rongjun Building Materials Legal advice and Board
Payment for goods 2,295,095.34 Cancelled No
Sales Department of Directors approval
Zhuhai Special Economic Zone Legal advice and Board
Payment for goods 1,883,089.58 Cancelled No
Huaxinyue Industrial Co., Ltd. of Directors approval
A suspended company that is unreachable for a long time
Dalian Free Trade Zone Benda Legal advice and Board
Payment for goods 1,464,685.47 without business transactions and included in the No
Special Steel Co., Ltd. of Directors approval
management of account write-offs
A suspended company that is unreachable for a long time
Wafangdian Bengang Special Steel Legal advice and Board
Payment for goods 992,110.82 without business transactions and included in the No
Sales Co., Ltd. of Directors approval
management of account write-offs
Dalian Free Trade Zone Maofeng A suspended company that is unreachable for a long time
Legal advice and Board
International Industry and Trade Payment for goods 766,111.09 without business transactions and included in the No
of Directors approval
Company management of account write-offs
A suspended company that is unreachable for a long time
Tianjin Bengang Special Steel Legal advice and Board
Payment for goods 749,215.44 without business transactions and included in the No
Sales Co., Ltd. of Directors approval
management of account write-offs
Dalian Economic and
Legal advice and Board
Technological Development Zone Payment for goods 650,313.34 Cancelled No
of Directors approval
Bengang Special Steel Sales Office
Benxi Branch of Dalian Hardware
Legal advice and Board
and Mineral Import and Export Payment for goods 613,819.73 Cancelled No
of Directors approval
Company
Hefei Zhongya Cement Machine Payment for goods 435,086.35 Cancelled Legal advice and Board No
170
Bengang Steel Plates Co., Ltd. 2022 Annual Report
Whether the
Nature of accounts Write-off Write-off procedures amount arises
Name of the company Reasons for write-off
receivable amount performed from related
transactions
Factory of Directors approval
A suspended company that is unreachable for a long time
Chengdu Bente Building Materials Legal advice and Board
Payment for goods 345,428.35 without business transactions and included in the No
Management Company of Directors approval
management of account write-offs
Material Supply and Marketing
A suspended company that is unreachable for a long time
Company of Shenyang Legal advice and Board
Payment for goods 343,523.05 without business transactions and included in the No
Environmental Protection of Directors approval
management of account write-offs
Equipment Industry Company
A suspended company that is unreachable for a long time
Lingning Linyuan Steel-tube Legal advice and Board
Payment for goods 340,167.23 without business transactions and included in the No
Factory of Directors approval
management of account write-offs
A suspended company that is unreachable for a long time
Legal advice and Board
Others Payment for goods 2,339,157.57 without business transactions and included in the No
of Directors approval
management of account write-offs
Total 28,604,449.76
Notes on write-off of accounts receivable:
171
Bengang Steel Plates Co., Ltd. 2022 Annual Report
(4) Accounts receivable of the top five closing balances collected by arrears
Unit: RMB
Percentage of total closing Closing balance of bad debt
Name of the company Closing balance
balance of accounts receivable provision
The First 663,311,074.79 48.46% 6,633,110.75
The Second 305,223,081.12 22.30% 305,223,081.12
The Third 73,094,699.54 5.34% 730,947.00
The Fourth 51,257,341.26 3.74% 1,756,550.97
The Fifth 48,196,244.68 3.52% 48,196,244.68
Total 1,141,082,441.39 83.36%
4. Receivables financing
Unit: RMB
Item Closing balance Opening balance
Notes receivable 137,591,996.02 1,530,735,647.38
Total 137,591,996.02 1,530,735,647.38
Changes in receivables financing in the current period and changes in fair value
□Applicable Not applicable
If the provision for impairment of receivables financing is based on the general model of expected credit losses, please disclose
information about the provision for impairment by referring to the disclosure for other receivables as follows:
□Applicable Not applicable
Other notes:
Notes receivable endorsed or discounted at year-end and not yet due at the balance sheet date
Item Amount derecognized at year-end Amount not derecognized at year-end
Bank acceptance bill 7,682,157,083.95
Commercial acceptance bill
Total 7,682,157,083.95
5. Prepayments
(1) Prepayments are presented by aging
Unit: RMB
Closing balance Opening balance
Aging
Amount Percentage Amount Percentage
Within 1 year 1,235,907,044.32 99.10% 977,541,107.55 98.31%
1 to 2 years 8,892,828.10 0.71% 16,681,487.73 1.68%
2 to 3 years 2,301,638.78 0.18% 147,750.36 0.01%
Over 3 years 76,237.13 0.01%
Total 1,247,177,748.33 994,370,345.64
Notes to the reasons why prepayments aged over one year and of significant amount have not been settled in a timely manner:
As at the end of the reporting period, there was no significant prepayment aged more than one year.
172
Bengang Steel Plates Co., Ltd. 2022 Annual Report
(2) Top five prepayments with closing balances, grouped by prepaid objects
Percentage of total closing
Name of the company Closing balance Aging
balance of prepayments (%)
The First 398,341,075.40 Within 1 year 31.94
The Second 102,919,025.91 Within 1 year 8.25
The Third 88,438,260.66 Within 1 year 7.09
The Fourth 75,243,235.25 Within 1 year 6.03
The Fifth 62,721,935.31 Within 1 year 5.03
Total 727,663,532.53 —— 58.34
Other notes:
6. Other receivables
Unit: RMB
Item Closing balance Opening balance
Interest receivable 2,523,993.39
Other receivables 127,198,692.92 163,413,287.02
Total 127,198,692.92 165,937,280.41
(1) Interest receivable
1) Classification of interest receivable
Unit: RMB
Item Closing balance Opening balance
Time deposit 2,523,993.39
Total 2,523,993.39
(2) Other receivables
1) Classification of other receivables by nature of payment
Unit: RMB
Nature of payment Closing book balance Opening book balance
Account current 181,771,075.61 224,540,231.45
Others 9,560,814.07 11,572,865.95
Total 191,331,889.68 236,113,097.40
2) Provision for bad debts
Unit: RMB
Stage 1 Stage 2 Stage 3
Expected credit Expected credit losses Expected credit losses
Bad debt provision Total
losses for the next over the entire life (Not over the entire life
12 months credit-impaired) (Credit-impaired)
Balance as at January 1st, 2022 526,800.70 6,305,393.56 65,867,616.12 72,699,810.38
Balance as at January 1st, 2022 in
the current period
——Transfer to stage 2 -64,969.07 64,969.07
——Transfer to stage 3 -114,780.42 114,780.42
Accrual in the current period 388,830.08 -4,901,909.83 -276,396.56 -4,789,476.31
173
Bengang Steel Plates Co., Ltd. 2022 Annual Report
Stage 1 Stage 2 Stage 3
Expected credit Expected credit losses Expected credit losses
Bad debt provision Total
losses for the next over the entire life (Not over the entire life
12 months credit-impaired) (Credit-impaired)
Write-off in the current period 3,774,307.31 3,774,307.31
Other changes -2,830.00 -2,830.00
Balance as at December 31st, 2022 850,661.71 1,353,672.38 61,928,862.67 64,133,196.76
Changes in the book balance of the provision for losses with a significant amount of change in the period
□Applicable Not applicable
Disclosure by aging
Unit: RMB
Aging Book balance
Within 1 year (inclusive) 85,596,605.22
1 to 2 years 38,267,869.02
2 to 3 years 3,519,908.21
Over 3 years 63,947,507.23
3 to 4 years 63,947,507.23
Total 191,331,889.68
3) Provision for bad debts accrued, recovered or reversed in the current period
Provision for bad debts in the current period:
Unit: RMB
Amount of change in the current period
Category Opening balance Recovery or Closing balance
Accrual Write-off Others
reversal
Bad debt provision for
72,699,810.38 -4,789,476.31 3,774,307.31 2,830.00 64,133,196.76
other receivables
Total 72,699,810.38 -4,789,476.31 3,774,307.31 2,830.00 64,133,196.76
Of which the amount of provision for bad debts reversed or recovered in the current period is material:
Unit: RMB
Name of the company Amount reversed or recovered Recovery methods
4) Actual write-off of other receivables in the current period
Unit: RMB
Item Write-off amount
Write-off of other receivables 3,774,307.31
Of which significant write-offs of other receivables:
Unit: RMB
Whether the
Nature of Write-off amount
Write-off
Name of the company other Reasons for write-off procedures arises from
amount
receivables performed related
transactions
Benxi Manchu Payment for A suspended company that is Legal advice
2,202,434.85 No
Autonomous County goods unreachable for a long time without and Board of
174
Bengang Steel Plates Co., Ltd. 2022 Annual Report
Whether the
Nature of Write-off amount
Write-off
Name of the company other Reasons for write-off procedures arises from
amount
receivables performed related
transactions
Dibang Concrete Co., Ltd. business transactions and included Directors
in the management of account approval
write-offs
Legal advice
Liming Farm of Benxi
Payment for and Board of
Forestry Department of 225,088.76 Cancelled No
goods Directors
Shenyang Mining Bureau
approval
A suspended company that is
Legal advice
unreachable for a long time without
Benxi Lifa New Building Payment for and Board of
186,772.35 business transactions and included No
Materials Co., Ltd. goods Directors
in the management of account
approval
write-offs
A suspended company that is
Legal advice
unreachable for a long time without
Benxi Iron and Steel Payment for and Board of
131,098.24 business transactions and included No
Recycling Materials Plant goods Directors
in the management of account
approval
write-offs
A suspended company that is
Legal advice
unreachable for a long time without
Benxi Xihu District Payment for and Board of
100,150.00 business transactions and included No
Huafeng Smelting Plant goods Directors
in the management of account
approval
write-offs
A suspended company that is
Legal advice
unreachable for a long time without
Benxi Fuledo Pipe Co., Payment for and Board of
39,904.04 business transactions and included No
Ltd. goods Directors
in the management of account
approval
write-offs
A suspended company that is
Legal advice
Benxi Xihu District unreachable for a long time without
Payment for and Board of
Xiujiang Paper Products 32,942.48 business transactions and included No
goods Directors
Factory in the management of account
approval
write-offs
A suspended company that is
Legal advice
Benxi Plastic Mining and unreachable for a long time without
Payment for and Board of
Metallurgy Machinery 31,257.51 business transactions and included No
goods Directors
Factory in the management of account
approval
write-offs
A suspended company that is
Legal advice
unreachable for a long time without
Payment for and Board of
Xihu Tar Chemical Plant 21,309.78 business transactions and included No
goods Directors
in the management of account
approval
write-offs
A suspended company that is
Legal advice
Benxi Iron and Steel unreachable for a long time without
Payment for and Board of
(Group) Chint Building 18,673.20 business transactions and included Yes
goods Directors
Materials Co., Ltd. in the management of account
approval
write-offs
A suspended company that is
Legal advice
Bengang Crude Fuel unreachable for a long time without
Payment for and Board of
Division Distribution 18,001.73 business transactions and included No
goods Directors
Company in the management of account
approval
write-offs
175
Bengang Steel Plates Co., Ltd. 2022 Annual Report
Whether the
Nature of Write-off amount
Write-off
Name of the company other Reasons for write-off procedures arises from
amount
receivables performed related
transactions
A suspended company that is
Legal advice
Comprehensive Plant of unreachable for a long time without
Payment for and Board of
Oxygen Plant of Benxi 18,000.00 business transactions and included No
goods Directors
Iron and Steel in the management of account
approval
write-offs
A suspended company that is
Legal advice
The Second Small Rolling unreachable for a long time without
Payment for and Board of
Mill of Benxi Iron and 17,522.80 business transactions and included No
goods Directors
Steel in the management of account
approval
write-offs
A suspended company that is
Metal Processing Plant of Legal advice
unreachable for a long time without
Material Supply Payment for and Board of
16,554.16 business transactions and included No
Department of Benxi Iron goods Directors
in the management of account
and Steel Co., Ltd. approval
write-offs
A suspended company that is
Legal advice
Auto Parts Branch of unreachable for a long time without
Payment for and Board of
Benxi Iron and Steel Co., 12,165.92 business transactions and included No
goods Directors
Ltd. in the management of account
approval
write-offs
A suspended company that is
Legal advice
unreachable for a long time without
Bengang Sheet Processing Payment for and Board of
11,093.60 business transactions and included No
Plant goods Directors
in the management of account
approval
write-offs
A suspended company that is
Legal advice
unreachable for a long time without
Bengang Primary Rolling Payment for and Board of
9,355.68 business transactions and included No
Mini Mill goods Directors
in the management of account
approval
write-offs
A suspended company that is
Legal advice
unreachable for a long time without
Bengang Primary Rolled Payment for and Board of
8,963.60 business transactions and included No
Plate Processing Plant goods Directors
in the management of account
approval
write-offs
A suspended company that is
Legal advice
unreachable for a long time without
Payment for and Board of
Benxi Shenquan Company 8,763.52 business transactions and included No
goods Directors
in the management of account
approval
write-offs
A suspended company that is
Legal advice
unreachable for a long time without
Payment for and Board of
Others 664,255.09 business transactions and included No
goods Directors
in the management of account
approval
write-offs
Total 3,774,307.31
Notes to write-off of other receivables:
176
Bengang Steel Plates Co., Ltd. 2022 Annual Report
5) Other receivables of the top five closing balances collected by arrears
Unit: RMB
Percentage of total
Name of the Closing balance of
Nature of payment Closing balance Aging closing balance of
company bad debt provision
other receivables
The First Account current 13,028,492.10 1-2 years 6.81% 433,910.93
The Second Account current 11,612,008.77 Over 1-3 years 6.07% 11,612,008.77
The Third Account current 5,176,720.00 Within 1 year 2.71% 51,767.20
The Fourth Account current 4,760,949.45 Within 1 year 2.49% 47,609.49
The Fifth Account current 4,609,686.93 Within 1 year 2.41% 46,096.87
Total 39,187,857.25 20.49% 12,191,393.26
7. Inventories
Whether the Company is required to comply with the disclosure requirements of the real estate industry
No
(1) Classification of inventories
Unit: RMB
Closing balance Opening balance
Provision for Provision for
decline in value decline in value
of inventories of inventories or
Item
Book balance or impairment Book value Book balance impairment of Book value
of contract contract
performance performance
costs costs
Raw
4,215,260,584.25 24,954,852.46 4,190,305,731.79 4,730,515,761.34 26,986,533.69 4,703,529,227.65
materials
Work-in-
2,070,182,298.44 18,271,254.09 2,051,911,044.35 2,105,832,905.07 25,390,821.52 2,080,442,083.55
process
Goods in
2,236,715,664.20 15,203,965.16 2,221,511,699.04 3,439,625,765.66 33,430,937.88 3,406,194,827.78
stock
Total 8,522,158,546.89 58,430,071.71 8,463,728,475.18 10,275,974,432.07 85,808,293.09 10,190,166,138.98
(2) Provision for the decline in value of inventories and provision for impairment of contract performance
costs
Unit: RMB
Increase in the current period Decrease in the current period
Item Opening balance Reversal or Closing balance
Accrual Others Others
carry-forward
Raw materials 26,986,533.69 2,031,681.23 24,954,852.46
Work-in-process 25,390,821.52 18,271,254.09 25,390,821.52 18,271,254.09
Goods in stock 33,430,937.88 15,203,965.16 33,430,937.88 15,203,965.16
Total 85,808,293.09 33,475,219.25 60,853,440.63 58,430,071.71
177
Bengang Steel Plates Co., Ltd. 2022 Annual Report
8. Other current assets
Unit: RMB
Item Closing balance Opening balance
Prepaid taxes 166,991,140.45 444,009,128.46
VAT input tax 228,449,995.81 310,939,065.10
Total 395,441,136.26 754,948,193.56
Other notes:
178
Bengang Steel Plates Co., Ltd. 2022 Annual Report
9. Long-term equity investments
Unit: RMB
Increase/decrease in the current period
Gains and
Closing
Opening losses on Other Cash Closing
Other balance of
Investee balance(Book Increase in Decrease in investments comprehensive dividends Impairment balance(Book
changes Others provision for
value) investment investment recognized income and profits provision value)
in equity impairment
under the adjustments declared
equity method
I. Joint ventures
II. Associates
Benxi Iron and
Steel Baojin
(Shenyang)
Automobile 48,230,077.75 -233,763.14 47,996,314.61
New Material
Technology Co.,
Ltd.
ZheJiang Ben
gang-Elite Iron
& Steel 2,981,784.07 52,678.50 3,034,462.57
Processing Co.,
Ltd.
Subtotal 2,981,784.07 48,230,077.75 -181,084.64 51,030,777.18
Total 2,981,784.07 48,230,077.75 -181,084.64 51,030,777.18
Other notes:
179
Bengang Steel Plates Co., Ltd. 2022 Annual Report
10. Other equity instrument investments
Unit: RMB
Item Closing balance Opening balance
Equity of Suzhou Longben Metal Material Co., Ltd. 3,998,216.04 3,888,980.00
Equity of Zhonggang Shanghai Steel Processing Co., Ltd.
Equity of Northeast Special Steel Group Co., Ltd. 1,016,420,266.27 1,037,735,849.00
Equity of Guangzhou Benpu Automobile Panel Sales Co., Ltd. 200,000.00
Wuhan Yuanhong Trading Co., Ltd. 200,000.00
Total 1,020,418,482.31 1,042,024,829.00
Segmental disclosure of investments in non-trading equity instruments in the current period
Unit: RMB
Reasons for Reasons for transfer
Transfer from other
Dividend designation as at fair of other
Accumulated Accumulated comprehensive
Item income value through other comprehensive
gains losses income to retained
recognized comprehensive income to retained
earnings
income earnings
Equity of
Suzhou
Longben
109,236.04
Metal
Material
Co., Ltd.
Equity of
Zhonggang
Shanghai
14,414,693.00
Steel
Processing
Co., Ltd.
Equity of
Northeast
Special
21,315,582.73
Steel
Group Co.,
Ltd.
Equity of
Guangzhou
Benpu
25,416.40 -25,416.40 Disposal
Automobile
Panel Sales
Co., Ltd.
Wuhan
Yuanhong
Disposal
Trading
Co., Ltd.
Total 134,652.44 35,730,275.73 -25,416.40
Other notes:
Note: ① The Company holds 15% equity in Zhonggang Shanghai Steel Processing Co., Ltd.
②The Company's 9.93% equity in Northeast Special Steel Group Co., Ltd. has been pledged to Bank of
Dalian Co., Ltd. Shenyang Branch and a release of pledge agreement was signed with Bank of Dalian Co., Ltd.
Shenyang Branch in February 2022, and the application for release of registration of the pledge of equity
interest is being processed.
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Bengang Steel Plates Co., Ltd. 2022 Annual Report
11. Fixed assets
Unit: RMB
Item Closing balance Opening balance
Fixed assets 24,836,556,422.90 25,480,674,048.94
Total 24,836,556,422.90 25,480,674,048.94
(1) Details of fixed assets
Unit: RMB
Houses and Machinery and Transportation and
Item Total
buildings equipment other equipment
I. Original book value：
13,244,653,376.3
1.Opening balance 49,481,748,950.04 920,958,736.87 63,647,361,063.24
3
2. Increase in the current period 220,247,656.28 1,628,388,714.05 -339,256,459.51 1,509,379,910.82
(1) Purchase 3,315,146.56 43,608,939.48 1,949,125.85 48,873,211.89
(2) Transferred from construction in
215,069,360.24 1,205,698,394.58 39,738,944.11 1,460,506,698.93
progress
(3) Increase from business combinations
(4) Others 1,863,149.48 379,081,379.99 -380,944,529.47
3. Decrease in the current period 198,389,769.71 572,892,785.47 7,055,264.92 778,337,820.10
(1) Disposal or scrapping 13,727,420.22 188,889,936.22 4,593,296.36 207,210,652.80
(2) Decrease from business combinations 184,662,349.49 384,002,849.25 2,461,968.56 571,127,167.30
13,266,511,262.9
4.Closing balance 50,537,244,878.62 574,647,012.44 64,378,403,153.96
0
II. Accumulated depreciation
1.Opening balance 6,411,622,637.46 31,016,196,563.08 645,389,717.80 38,073,208,918.34
2. Increase in the current period 266,279,988.34 1,898,941,569.41 -223,423,660.39 1,941,797,897.36
(1) Accrual 265,622,268.77 1,621,405,745.52 54,769,883.07 1,941,797,897.36
(2) Others 657,719.57 277,535,823.89 -278,193,543.46
3. Decrease in the current period 116,138,455.85 445,443,403.26 5,056,321.49 566,638,180.60
(1) Disposal or scrapping 8,981,517.95 157,477,897.86 3,579,135.16 170,038,550.97
(2) Decrease from business combinations 107,156,937.90 287,965,505.40 1,477,186.33 396,599,629.63
4.Closing balance 6,561,764,169.95 32,469,694,729.23 416,909,735.92 39,448,368,635.10
III. Provision for impairment
1.Opening balance 84,098,414.32 9,379,681.64 93,478,095.96
2. Increase in the current period
(1) Accrual
3. Decrease in the current period
(1) Disposal or scrapping
4.Closing balance 84,098,414.32 9,379,681.64 93,478,095.96
IV. Book value
1.Closing book value 6,620,648,678.63 18,058,170,467.75 157,737,276.52 24,836,556,422.90
2.Opening book value 6,748,932,324.55 18,456,172,705.32 275,569,019.07 25,480,674,048.94
(2) Temporarily idle fixed assets
Unit: RMB
Accumulated Provision for
Item Original book value Book value Notes
depreciation impairment
Houses and buildings 223,416,300.48 139,189,651.03 84,098,414.32 128,235.13
Machinery and equipment 100,086,005.34 89,198,289.39 9,379,681.64 1,508,034.31
181
Bengang Steel Plates Co., Ltd. 2022 Annual Report
Transportation 1,042,125.89 1,042,125.89
Total 324,544,431.71 229,430,066.31 93,478,095.96 1,636,269.44
(3) Fixed assets leased out through operating leases
Unit: RMB
Item Closing book value
Houses and buildings 1,239,002.14
(4) Fixed assets without proper title certificate
Unit: RMB
Item Book value Reasons for non-completion of title certificates
Houses and buildings 1,142,595,483.45 In process
Other notes:
12. Construction in progress
Unit: RMB
Item Closing balance Opening balance
Construction in progress 3,158,195,899.65 2,431,761,889.08
Construction materials 2,420,212.05
Total 3,158,195,899.65 2,434,182,101.13
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Bengang Steel Plates Co., Ltd. 2022 Annual Report
(1) Details of construction in progress
Unit: RMB
Closing balance Opening balance
Item Provision for Provision for
Book balance Book value Book balance Book value
impairment impairment
Special Steel Electric Furnace Capacity Replacement Project 1,437,078,751.92 1,437,078,751.92 975,649,876.97 975,649,876.97
CCPP Power Generation Project 662,907,316.06 662,907,316.06
Special Steel Rolling Mill Renovation Project 470,182,411.88 470,182,411.88 225,662,005.25 225,662,005.25
Environmental Protection Renovation of Sheet Raw Material Plant 165,792,014.40 165,792,014.40 10,144,284.63 10,144,284.63
Energy General Plant No. 1 Converter Gas Tank System
66,477,477.13 66,477,477.13
Transformation Project
First Cold Rolling Transformation Project 90,087,329.61 90,087,329.61
360 Square Meter Sintering Machine Waste Heat Utilization 82,730,000.00 82,730,000.00 56,547,049.50 56,547,049.50
Caixi Special Steel Feeding Station of Steel Plate Scrap Plant 51,959,719.57 51,959,719.57 38,375,436.67 38,375,436.67
Steelmaking 1#2#3#7#Converter New Three Times Dust Removal
42,834,455.31 42,834,455.31 391,744.50 391,744.50
Energy Main Plant Supporting Project
The Overall Improvement of Benxi Steel’s Manufacturing 39,756,485.12 39,756,485.12 36,748,743.10 36,748,743.10
No. 4-6 Converter Environmental Protection Renovation Project 24,470,633.70 24,470,633.70
Renovation of the Desulphurization System of the Coking Process in
23,070,618.10 23,070,618.10
the Ironmaking General Plant
Plate No.1 Dry Quenching System Boosting Modification and Unit
20,249,501.21 20,249,501.21
No.33 Relocation
Information Technology Construction in the Iron Zone of Bengang
18,023,984.15 18,023,984.15 778,685.00 778,685.00
Plates
Overall Improvement of Bengang’s Information Technology
17,745,620.12 17,745,620.12 17,108,420.12 17,108,420.12
Infrastructure Platform
Self-built Domestic Water Preparation in the Panel Plant Area 38,500,000.00 38,500,000.00
Adaptive Transformation of Steelmaking Processes to Reduce Iron
17,440,611.68 17,440,611.68 20,492,385.18 20,492,385.18
Consumption
Purification of I and II vocs Exhaust Gas Treatment 16,878,425.31 16,878,425.31 18,980,000.00 18,980,000.00
360 Square Meter Sintering Machine 92,259,450.24 92,259,450.24 88,340,997.99 88,340,997.99
Other projects 547,635,887.33 547,635,887.33 174,657,466.98 174,657,466.98
Total 3,158,195,899.65 3,158,195,899.65 2,431,761,889.08 2,431,761,889.08
183
Bengang Steel Plates Co., Ltd. 2022 Annual Report
(2) Changes in significant construction in progress projects in the current period
Unit: RMB
Other
Capitaliza
decre Percentage Including:
tion rate
Amount ases of Accumulated Amount of
Amount Pro of
transferred to in the cumulative amount of interest Source of
Name of project Budget Opening balance increased in the Closing balance gres interest in
fixed assets in the curre investment capitalized capitalized in fund
current period s the
current period nt in projects interest the current
current
perio to budget period
period(%)
d
Special Steel
Electric Furnace
Capacity 1,923,430,000.00 975,649,876.97 461,428,874.95 1,437,078,751.92 7,471.00% 89 8,077,442.20 8,077,442.20 4.35% Self- raised
Replacement
Project
CCPP Power
Generation 1,060,000,000.00 662,907,316.06 50,965,642.63 713,872,958.69 6,735.00% 100 26,401,127.09 11,903,565.01 3.12 % Self- raised
Project
Special Steel
Loans from
Rolling Mill
823,860,000.00 225,662,005.25 244,684,106.63 163,700.00 470,182,411.88 6,945.00% 72 13,164,686.38 6,394,453.47 3.12% financial
Renovation
institutions
Project
Environmental
Protection Loans from
Renovation of 677,043,263.46 10,144,284.63 155,647,729.77 165,792,014.40 2,449.00% 43 4,302,198.84 4,302,198.84 4.35 % financial
Sheet Raw institutions
Material Plant
No.1 Converter
Loans from
Gas Tank System
160,860,000.00 66,477,477.13 54,785,840.22 121,263,317.35 7,538.00% 100 644,634.60 644,634.60 4.35% financial
Modification
institutions
Project
First Cold Rolling Loans from
Transformation 973,010,000.00 90,087,329.61 90,087,329.61 1,514.00% 81 3,831,132.38 3,831,132.38 4.35% financial
Project institutions
360 Square
Meter Sintering
91,750,000.00 56,547,049.50 26,182,950.50 82,730,000.00 9,210.00% 95 Others
Machine Waste
Heat Utilization
184
Bengang Steel Plates Co., Ltd. 2022 Annual Report
Other
Capitaliza
decre Percentage Including:
tion rate
Amount ases of Accumulated Amount of
Amount Pro of
transferred to in the cumulative amount of interest Source of
Name of project Budget Opening balance increased in the Closing balance gres interest in
fixed assets in the curre investment capitalized capitalized in fund
current period s the
current period nt in projects interest the current
current
perio to budget period
period(%)
d
Newly
Constructed 8#
Single-Strand
Slab Casting 592,690,759.86 78,639,051.12 78,639,051.12 8,972.00% 100 Others
Machine
Supporting
Project
Integration of
Information
Technology Loans from
Systems in the 232,100,000.00 74,719,067.36 74,719,067.36 3,219.00% 100 1,846,067.36 1,846,067.36 4.35% financial
Reorganization of institutions
Ansteel Group
Co., Ltd.
High-Strength
6,389,880,000.00 68,002,169.36 68,002,169.36 9,326.00% 100 Others
Steel Renovation
Caixi Special
Steel Feeding
121,140,000.00 38,375,436.67 13,584,282.90 51,959,719.57 4,289.00% 47 Others
Station of Steel
Plate Scrap Plant
Steelmaking
1#2#3#7#Conver
ter New Three
Loans from
Times Dust
112,054,271.67 391,744.50 43,020,692.47 577,981.66 42,834,455.31 3,823.00% 66 959,815.54 959,815.54 4.35% financial
Removal Energy
institutions
Main Plant
Supporting
Project
The Overall
Improvement of 56,000,000.00 36,748,743.10 3,007,742.02 39,756,485.12 7,099.00% 93 Others
Benxi Steel’s
185
Bengang Steel Plates Co., Ltd. 2022 Annual Report
Other
Capitaliza
decre Percentage Including:
tion rate
Amount ases of Accumulated Amount of
Amount Pro of
transferred to in the cumulative amount of interest Source of
Name of project Budget Opening balance increased in the Closing balance gres interest in
fixed assets in the curre investment capitalized capitalized in fund
current period s the
current period nt in projects interest the current
current
perio to budget period
period(%)
d
Manufacturing
Loans from
220kV Substation
313,500,000.00 29,491,156.12 29,491,156.12 5,994.00% 100 811,868.32 811,868.32 4.35% financial
Project
institutions
No. 4-6
Converter
Environmental
243,192,029.42 24,470,633.70 24,470,633.70 8,698.00% 91 Others
Protection
Renovation
Project
Renovation of
the
Desulphurization
System of the 39,250,000.00 23,070,618.10 23,070,618.10 5,878.00% 20 Others
Coking Process in
the Ironmaking
General Plant
Support for the
Overall
Improvement of
the Management
72,630,000.00 22,370,000.00 22,370,000.00 3,080.00% 100 Others
and
Informatization
of Bengang’s
Steel Industry
Plate No.1 Dry
Quenching
System Boosting
65,400,000.00 20,249,501.21 20,249,501.21 3,096.00% 35 Others
Modification and
Unit No.33
Relocation
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Bengang Steel Plates Co., Ltd. 2022 Annual Report
Other
Capitaliza
decre Percentage Including:
tion rate
Amount ases of Accumulated Amount of
Amount Pro of
transferred to in the cumulative amount of interest Source of
Name of project Budget Opening balance increased in the Closing balance gres interest in
fixed assets in the curre investment capitalized capitalized in fund
current period s the
current period nt in projects interest the current
current
perio to budget period
period(%)
d
Information
Technology
Construction in 25,550,000.00 778,685.00 17,245,299.15 18,023,984.15 7,054.00% 87 Others
the Iron Zone of
Bengang Plates
Overall
Improvement of
Bengang’s
Information 24,300,000.00 17,108,420.12 637,200.00 17,745,620.12 7,303.00% 84 Others
Technology
Infrastructure
Platform
Self-built
Domestic Water
Preparation in 38,500,000.00 17,505,131.99 17,505,131.99 4,547.00% 100 Others
the Panel Plant
Area
Adaptive
Transformation
of Steelmaking
20,492,385.18 16,182,585.56 3,874,557.86 2,616,531.74 17,440,611.68 8,511.00% 91 Others
Processes to
Reduce Iron
Consumption
Purification of I
and II vocs
18,980,000.00 16,878,425.31 16,878,425.31 8,893.00% 94 Others
Exhaust Gas
Treatment
360 Square Loans from
Meter Sintering 1,377,230,000.00 88,340,997.99 3,918,452.25 92,259,450.24 9,382.00% 96 68,627,433.26 financial
Machine institutions
Total 15,452,842,709.59 2,195,314,622.48 1,544,466,455.23 1,129,221,065.39 2,610,560,012.32 128,666,405.97 38,771,177.72
187
Bengang Steel Plates Co., Ltd. 2022 Annual Report
(3) Construction materials
Unit: RMB
Closing balance Opening balance
Item Provision for Provision for
Book balance Book value Book balance Book value
impairment impairment
Construction materials 2,420,212.05 2,420,212.05
Total 2,420,212.05 2,420,212.05
Other notes:
13. Right-of-use assets
Unit: RMB
Item Land Houses and buildings Total
I. Original book value
1.Opening balance 1,132,274,415.17 368,465,367.56 1,500,739,782.73
2. Increase in the current period
3. Decrease in the current period
4.Closing balance 1,132,274,415.17 368,465,367.56 1,500,739,782.73
II. Accumulated depreciation
1.Opening balance 39,904,236.22 20,470,298.20 60,374,534.42
2. Increase in the current period 39,904,236.22 20,470,298.20 60,374,534.42
(1) Accrual 39,904,236.22 20,470,298.20 60,374,534.42
3. Decrease in the current period
(1) Disposal
4.Closing balance 79,808,472.44 40,940,596.40 120,749,068.84
III. Provision for impairment
1.Opening balance
2. Increase in the current period
(1) Accrual
3. Decrease in the current period
(1) Disposal
4.Closing balance
IV. Book value
1.Closing book value 1,052,465,942.73 327,524,771.16 1,379,990,713.89
2.Opening book value 1,092,370,178.95 347,995,069.36 1,440,365,248.31
Other notes:
14. Intangible assets
(1) Intangible assets
Unit: RMB
Non-patented Software and
Item Land use right Patent right Total
technology others
I. Original book value
1.Opening balance 367,668,797.84 310,401.55 367,979,199.39
188
Bengang Steel Plates Co., Ltd. 2022 Annual Report
Non-patented Software and
Item Land use right Patent right Total
technology others
2. Increase in the current period
(1) Purchase
(2) Internal research and development
(3) Increase from business combinations
3. Decrease in the current period 30,783,483.08 42,452.83 30,825,935.91
(1) Disposal 42,452.83 42,452.83
(2)Decrease from business combinations 30,783,483.08 30,783,483.08
4.Closing balance 336,885,314.76 267,948.72 337,153,263.48
II. Accumulated amortization
1.Opening balance 69,882,153.01 175,497.57 70,057,650.58
2. Increase in the current period 7,045,540.80 26,794.92 7,072,335.72
(1) Accrual 5,354,681.52 26,794.92 5,381,476.44
3. Decrease in the current period 2,719,207.40 42,452.83 2,761,660.23
(1) Disposal 42,452.83 42,452.83
(2)Decrease from business combinations 2,719,207.40 2,719,207.40
4.Closing balance 74,208,486.41 159,839.66 74,368,326.07
III. Provision for impairment
1.Opening balance
2. Increase in the current period
(1) Accrual
3. Decrease in the current period
(1) Disposal
4.Closing balance
IV. Book value
1.Closing book value 262,676,828.35 108,109.06 262,784,937.41
2.Opening book value 297,786,644.83 134,903.98 297,921,548.81
Percentage of intangible assets formed through internal research and development to the balance of intangible assets at the end
of current period.
(2) Land use right without proper title certificate
Unit: RMB
Item Book value Reasons for non-completion of title certificates
Land use right 38,743,466.68 In process
Other notes:
15. Deferred income tax assets/deferred income tax liabilities
(1) Deferred income tax assets not offset
Unit: RMB
Closing balance Opening balance
Item Deductible temporary Deferred income tax Deductible temporary Deferred income
differences assets differences tax assets
Impairment of assets 396,834,109.83 99,208,527.46 451,808,313.33 112,952,078.33
Internal unrealized profit 80,751,325.52 20,187,831.38 93,178,777.44 23,294,694.36
Depreciation or amortization
21,906,259.43 5,476,564.86
differences
189
Bengang Steel Plates Co., Ltd. 2022 Annual Report
Closing balance Opening balance
Item Deductible temporary Deferred income tax Deductible temporary Deferred income
differences assets differences tax assets
Changes in fair value of other
financial assets included in 21,315,582.73 5,328,895.68
other comprehensive income
Others 46,650,523.04 11,662,630.76 48,132,843.04 12,033,210.76
Total 545,551,541.12 136,387,885.28 615,026,193.24 153,756,548.31
(3) Deferred income tax liabilities not offset
Unit: RMB
Closing balance Opening balance
Item Taxable temporary Deferred income tax Taxable temporary Deferred income
differences liabilities differences tax liabilities
Changes in fair value of other
financial assets included in 109,236.04 27,309.01
other comprehensive income
Total 109,236.04 27,309.01
(4) Unrecognized deferred tax assets
Unit: RMB
Item Closing balance Opening balance
Deductible temporary differences 305,224,166.01 305,643,743.02
Deductible losses 1,349,817,349.12 45,093,302.90
Total 1,655,041,515.13 350,737,045.92
(3) The deductible loss of unrecognized deferred tax assets due in the following years
Unit: RMB
Item Amount at end of period Amount at beginning of period Notes
Year 2022 1,001,166.72
Year 2023 6,836,473.11 10,336,118.65
Year 2024 12,164,389.35 13,696,334.51
Year 2025 8,257,832.98 10,723,063.42
Year 2026 6,799,314.77 9,336,619.60
Year 2027 1,315,759,338.91
Total 1,349,817,349.12 45,093,302.90
Other notes:
16. Other non-current assets
Unit: RMB
Closing balance Opening balance
Item Provision for Provision for
Book balance Book value Book balance Book value
impairment impairment
Prepaid long-term
110,065,560.68 110,065,560.68 30,630,858.13 30,630,858.13
assets
Total 110,065,560.68 110,065,560.68 30,630,858.13 30,630,858.13
Other notes:
190
Bengang Steel Plates Co., Ltd. 2022 Annual Report
17. Short-term borrowings
(1) Classification of short-term borrowings
Unit: RMB
Item Closing balance Opening balance
Guaranteed borrowings 3,823,088,140.00
Credit borrowings 230,000,000.00
Discounted outstanding notes 49,200,000.00
Total 49,200,000.00 4,053,088,140.00
Notes to the classification of short-term borrowings:
18. Notes payable
Unit: RMB
Category Closing balance Opening balance
Commercial acceptance bill 1,407,117,263.33 1,724,083,376.48
Bank acceptance bill 2,242,219,356.03 2,286,000,000.00
Domestic letter of credit 740,000,000.00 625,000,000.00
Total 4,389,336,619.36 4,635,083,376.48
The total amount of notes payable due and unpaid at the end of the current period was RMB 0.
19. Accounts payable
(1) Presentation of accounts payable
Unit: RMB
Item Closing balance Opening balance
Accounts payable for goods 2,650,335,777.91 4,272,890,365.57
Accounts payable for labor services 60,238,703.49 51,392,037.81
Accounts payable for project and equipment 767,867,762.87 557,316,885.80
Repair expense and others 217,978,219.58 470,673,396.71
Total 3,696,420,463.85 5,352,272,685.89
(2) Significant accounts payable aged over 1 year
Unit: RMB
Reasons for non-reimbursement or
Item Closing balance
carry-over
Company 1 12,919,780.46 Settlement conditions not yet met
Total 12,919,780.46
Other notes:
20. Contract liabilities
Unit: RMB
Item Closing balance Opening balance
Advance for goods 3,794,115,592.29 4,708,188,093.78
Total 3,794,115,592.29 4,708,188,093.78
Amount and reasons for significant changes in the book value during the reporting period.
Unit: RMB
191
Bengang Steel Plates Co., Ltd. 2022 Annual Report
Item Amount of change Reasons for change
Advance for goods -914,072,501.49 Mainly due to lower steel prices in current year
Total -914,072,501.49 ——
21. Employee benefits payable
(1) Presentation of employee benefits
Unit: RMB
Increase in the current Decrease in the
Item Opening balance Closing balance
period current period
I. Short-term benefits 152,095,376.49 2,341,407,303.98 2,483,456,317.20 10,046,363.27
II. Post-employment benefits -
274,990,162.78 274,990,162.78
defined contribution plan
II. Termination benefits 44,535,875.82 44,535,875.82
Total 152,095,376.49 2,660,933,342.58 2,802,982,355.80 10,046,363.27
(2) Presentation of short-term benefits
Unit: RMB
Increase in the Decrease in the
Item Opening balance Closing balance
current period current period
1. Salaries, bonuses,
138,746,833.89 1,599,823,245.28 1,738,570,079.17
allowances and subsidies
2. Employee welfare 290,726,764.03 290,726,764.03
3. Social insurance 194,901,531.45 194,901,531.45
Work injury insurance 43,279,967.12 43,279,967.12
4. Housing provident fund 6,862,795.00 166,439,550.24 166,680,036.24 6,622,309.00
5. Union funds and staff
6,485,747.60 37,782,328.66 40,844,021.99 3,424,054.27
education fee
6. Other short-term benefits 51,733,884.32 51,733,884.32
Total 152,095,376.49 2,341,407,303.98 2,483,456,317.20 10,046,363.27
(3)Presentation of defined contribution plan
Unit: RMB
Increase in the current Decrease in the
Item Opening balance Closing balance
period current period
1. Basic pension fund 266,794,222.70 266,794,222.70
2. Unemployment insurance 8,195,940.08 8,195,940.08
Total 274,990,162.78 274,990,162.78
Other notes:
22. Taxes payable
Unit: RMB
Item Closing balance Opening balance
Value-added tax (VAT) 5,168,511.13 29,696,795.33
Corporate income tax 11,469,020.92 35,810,190.67
Personal income tax 2,546,699.73 4,744,348.35
City maintenance and construction tax 175,567.61 2,362,795.25
Property tax 3,785,986.96 16,819,232.89
Land use tax 1,051,651.99 2,878,545.36
192
Bengang Steel Plates Co., Ltd. 2022 Annual Report
Education surcharge (including local
125,405.40 1,710,729.40
education surcharge)
Others 20,070,077.04 20,245,351.45
Total 44,392,920.78 114,267,988.70
Other notes:
193
Bengang Steel Plates Co., Ltd. 2022 Annual Report
23. Other payables
Unit: RMB
Item Closing balance Opening balance
Other payables 1,247,722,165.47 1,348,025,731.98
Total 1,247,722,165.47 1,348,025,731.98
(1) Other payables
1)Presentation of other payables by nature of payment
Unit: RMB
Item Closing balance Opening balance
Deposit 2,303,050.00 1,556,363.89
Margin 290,353,044.56 127,642,584.79
Current money 941,440,196.32 1,133,934,695.19
Others 13,625,874.59 84,892,088.11
Total 1,247,722,165.47 1,348,025,731.98
2) Significant other payables aged over 1 year
Unit: RMB
Reasons for non-reimbursement or carry-
Item Closing balance
over
Company 1 26,293,468.88 Unsettled
Total 26,293,468.88
Other notes:
24. Non-current liabilities due within one year
Unit: RMB
Item Closing balance Opening balance
Long-term borrowings due within one year 2,501,169,854.72 246,949,595.95
Bonds payable due within one year 44,762,324.73 25,053,455.40
Lease liabilities due within one year 40,318,706.98 38,777,466.79
Total 2,586,250,886.43 310,780,518.14
Other notes:
25. Other current liabilities
Unit: RMB
Item Closing balance Opening balance
Output tax to be transferred 493,235,027.03 612,064,452.20
Total 493,235,027.03 612,064,452.20
Changes in short-term bonds payable:
Unit: RMB
Issued in Interest
Amortization of
Nominal Issue Term to Amount Opening the accrues Current period Closing
Name premium and
value date maturity issued balance current at reimbursement balance
discount
period nominal
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Bengang Steel Plates Co., Ltd. 2022 Annual Report
value
Total
Other notes:
26. Long-term borrowings
(1) Classification of long-term borrowings
Unit: RMB
Item Closing balance Opening balance
Pledged borrowings 622,600,000.00
Guaranteed borrowings 360,780,612.70 595,921,771.74
Credit borrowings 1,366,157,689.60 3,004,300,000.00
Total 1,726,938,302.30 4,222,821,771.74
Notes to the classification of long-term borrowings:
Interest rates on long-term borrowings ranged from 2.10% to 4.70% at the end of the period.
Other notes, including interest rate ranges.
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27. Bonds payable
(1) Bonds payable
Unit: RMB
Item Closing balance Opening balance
Convertible corporate bonds 5,276,502,232.78 5,054,251,668.83
Total 5,276,502,232.78 5,054,251,668.83
(2) Increase or decrease in bonds payable (Excluding other financial instruments such as preference shares and perpetual debt classified as financial liabilities)
Unit: RMB
Issued in the Interest Amortization Transfer of
Term to Current period
Name Nominal value Issue date Amount issued Opening balance current accrues at of premium shares in the Closing balance
maturity reimbursement
period nominal value and discount current year
Bengang
Convertible
6,800,000,000.00 June 29th, 2020 6 years 6,800,000,000.00 5,054,251,668.83 64,757,392.53 287,100,456.48 92,500.00 5,276,502,232.78
Bond (Bond
code:127018)
Total —— 6,800,000,000.00 5,054,251,668.83 64,757,392.53 287,100,456.48 92,500.00 5,276,502,232.78
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Bengang Steel Plates Co., Ltd. 2022 Annual Report
(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 4th, 2020, and
the abbreviation is "Bengang Convertible Bond". 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 3rd, 2020) to the maturity date of the convertible corporate bonds,
that is, from January 4th, 2021 to June 28th, 2026. The initial conversion price of the convertible bonds is
RMB 5.03 per share. During the period from January 1st, 2022 to December 31st, 2022, the Company's A-
share convertible bonds of RMB 92,500.00 were converted into the Company's A-share ordinary shares,
and the number of converted shares was 20,838.00 shares. Of which:
In the first quarter of 2022, Bengang's convertible bonds decreased by RMB 67,000 (670 bonds) due to
share conversion, the number of shares converted was 14,698 shares, and the conversion price was RMB
4.55 per share;
In the second quarter of 2022, Bengang's convertible bonds decreased by RMB 13,200 (132 bonds) due to
share conversion, the number of shares converted was 3,029 shares, and the conversion price was RMB
3.95 per share;
In the third quarter of 2022, Bengang's convertible bonds decreased by RMB 9,300.00 (93 bonds) due to
share conversion, the number of shares converted was 2,352 shares, and the conversion price was RMB
3.95 per share;
In the fourth quarter of 2022, Bengang's convertible bonds decreased by RMB 3,000.00 (30 bonds) due to
share conversion, the number of shares converted was 759 shares, and the conversion price was RMB 3.95
per share; As at December 31st, 2021, the Company's remaining balance of convertible bonds was RMB
5,631,052,100.00 (56,310,521bonds).
28. Lease liabilities
Unit: RMB
Item Closing balance Opening balance
Lease payments 2,191,946,735.27 2,285,639,451.89
Unrecognized financing expenses -767,279,566.11 -822,194,815.95
Reclassification to non-current liabilities due within one year -40,318,706.98 -38,777,466.79
Total 1,384,348,462.18 1,424,667,169.15
Other notes:
29. Deferred income
Unit: RMB
Increase in the Decrease in the
Item Opening balance Closing balance Causes of formation
current period current period
Government grants 93,106,285.89 9,720,000.00 60,449,270.38 42,377,015.51 Government grants
Total 93,106,285.89 9,720,000.00 60,449,270.38 42,377,015.51 --
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Bengang Steel Plates Co., Ltd. 2022 Annual Report
Items involving government grants:
Unit: RMB
Amount of new Amount charged to Amount charged Amount of current
Opening Other Closing Asset-related /
Liabilities items grants in the non-operating income to other gains in period's elimination of
balance changes balance income-related
current period in the current period the current period costs and expenses
Cold-rolled High-strength Steel
50,000,000.00 50,000,000.00 Asset-related
Renovation Project
7 Sets of 130 Tons Combustion
Boiler Flue Gas Desulfurization 4,800,000.00 4,800,000.00 Asset-related
Project in Power Plan
Research and Development of
High-strength Steel for the
1,740,000.00 580,000.00 1,160,000.00 Asset-related
Third Generation of
Automobiles
Advanced Treatment Project of
Carbon Fiber Wastewater in
7,600,000.00 1,900,000.00 5,700,000.00 Asset-related
Dongfeng Plant Area of Plate
Coking Plant
Desulfurization and
Denitrification Project of Coal-
fired Boiler in High-pressure 3,000,000.00 600,000.00 2,400,000.00 Asset-related
Workshop of Bengang Power
Plant
Power Plant Three Power Plant
2,000,000.00 2,000,000.00 Asset-related
Cogeneration Reform Project
Air Pollution Prevention and
Control Fund-Second Burning
Finishing Dust Removal Ultra- 1,640,000.00 410,000.00 1,230,000.00 Asset-related
Low Emission Transformation
Project
2021 Manufacturing Strong
8,100,000.00 8,100,000.00 Asset-related
Province Special Fund
2021 Benxi Talent and
Enterprise Matchmaking 10,000.00 5,000.00 5,000.00 Income-related
Project
2021 Benxi Pollution Control
and Energy Saving and Carbon 1,500,000.00 1,500,000.00 Asset-related
Reduction Special Project
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Bengang Steel Plates Co., Ltd. 2022 Annual Report
Amount of new Amount charged to Amount charged Amount of current
Opening Other Closing Asset-related /
Liabilities items grants in the non-operating income to other gains in period's elimination of
balance changes balance income-related
current period in the current period the current period costs and expenses
(Converter Gas Recovery and
Efficiency Improvement
Project)
2021 Municipal Master Skill
80,000.00 2,702.49 77,297.51 Asset-related
Workstation Fee
Liaoning Province
“BaiQianWan Talents Program” 220,000.00 220,000.00 Asset-related
Funding Project in 2018
2018 Municipal Skill Master
58,766.34 58,766.34 Asset-related
Workstation Fee
2019 Municipal Skill Master
98,084.16 28,583.97 69,500.19 Asset-related
Workstation Fee
2020 Ecological Civilization
Construction Project (Special
20,000,000.00 20,000,000.00 Asset-related
Steel Electric Furnace Upgrade
Project)
Liaoning Artisan Subsidy 21.89 18.92 2.97 Asset-related
Research on the Influence
Mechanism and Control of
457,413.50 122,965.00 334,448.50 Asset-related
Rare Earth Oxide Sulfide on
Automobile Steel Plasticity
Design of Metallurgical Slag
System for Rare Earth Steel
340,000.00 340,000.00 Income-related
and Research on Its
Physicochemical Properties
Provincial Science and
Technology Department
National Natural Science
334,000.00 334,000.00 Income-related
Foundation of China-Liaoning
Provincial Government Joint
Fund Project
2019 Provincial Skilled Master
200,000.00 200,000.00 Income-related
Workstation Fee
2020 Provincial Skilled Master
100,000.00 100,000.00 Income-related
Workstation Fee
Basic Research on New 168,000.00 168,000.00 Income-related
199
Bengang Steel Plates Co., Ltd. 2022 Annual Report
Amount of new Amount charged to Amount charged Amount of current
Opening Other Closing Asset-related /
Liabilities items grants in the non-operating income to other gains in period's elimination of
balance changes balance income-related
current period in the current period the current period costs and expenses
Technology of Composite Iron
Coke Low Carbon Ironmaking
Charge
The Second Batch of 2021
Liaoning Funds on Central
Government Guiding the 300,000.00 300,000.00 Income-related
Development of Local Science
and Technology
Liaoning Province
“BaiQianWan Talents Program” 50,000.00 50,000.00 Income-related
Funded Project in 2020
Provincial Science and
Technology Department 2022
30,000.00 30,000.00 Income-related
Liaoning Provincial Natural
Science Foundation Program
Total 93,106,285.89 9,720,000.00 60,449,270.38 42,377,015.51
Other notes:
200
Bengang Steel Plates Co., Ltd. 2022 Annual Report
30. Share capital
Unit: RMB
Increase/decrease (+, -)
Opening balance Issue of Bonus Transfer from Closing balance
Others Subtotal
new shares issue provident fund
Total shares 4,108,191,379.00 20,838.00 20,838.00 4,108,212,217.00
Other notes:
The increase in the current period is due to the conversion of the A-share convertible bonds issued by the
company into 20,838.00 A-share ordinary shares in the current period. For details, please refer to Note
“VI.27 Bonds payable”.
31. Other equity instruments
(1) Information of other financial instruments such as preferred stocks and perpetual bonds issued at the end of the period
Unit: RMB
Increase in the Decrease in the
Beginning of the period End of the period
current period current period
Items
Book Book
Number Book value Number Number Number Book value
value value
Convertible
corporate 56,311,446.00 947,882,663.63 925.00 18,829.61 56,310,521.00 947,863,834.02
bonds
Total 56,311,446.00 947,882,663.63 925.00 18,829.61 56,310,521.00 947,863,834.02
Notes to the changes in other equity instruments in the current period, the reasons for the changes, and
the basis of the related accounting treatment.
The decrease in the current period is due to the accumulative amount of RMB 92,500.00 (925 bonds) of A-
share convertible bonds issued by the Company being converted into the Company’s A-share ordinary
shares. As at December 31st, 2021, the remaining convertible bond balance of the company is RMB
5,631,052,100.00 (56,310,521 bonds). For details, please refer to Note “VI.27 Bonds payable”.
Other notes:
32. Capital reserve
Unit: RMB
Increase in the Decrease in the
Item Opening balance Closing balance
current period current period
Capital premium (share capital premium) 13,156,216,704.27 70,987.12 13,156,287,691.39
Other capital reserve 115,917,468.82 115,917,468.82
Total 13,272,134,173.09 70,987.12 13,272,205,160.21
Other notes, including notes on changes in the current period and reasons for changes:
The increase in the current period is due to the conversion of A-share convertible bonds issued by the
Company into A-share ordinary shares. For details, please refer to note “VI. 27. Bonds payable”.
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Bengang Steel Plates Co., Ltd. 2022 Annual Report
33. Other comprehensive income
Amount incurred in the current period
Less: Less:
Transfer to Transfer to
profit or retained
Amount loss in the earnings in
incurred current the current Attributabl Attributabl
Opening before period period Less: e to the e to Closing
Item
balance income tax from prior from prior Income tax parent minority balance
in the periods periods expense company shareholde
current charged to charged to after tax rs after tax
period other other
comprehen comprehen
sive sive
income income
I. Other
comprehen
sive
income - - - -
that cannot 21,206,346 5,301,586. 15,904,760 15,904,760
be .69 67 .02 .02
reclassified
to profit or
loss
Chang
es in fair
value of
- - - -
investment
21,206,346 5,301,586. 15,904,760 15,904,760
s in other
.69 67 .02 .02
equity
instrument
s
Total other
- - - -
comprehen
21,206,346 5,301,586. 15,904,760 15,904,760
sive
.69 67 .02 .02
income
Other notes, including adjustments to the effective portion of the cash flow hedge gain or loss transferred
to the amount initially recognized for the hedged item:
34. Special reserve
Unit: RMB
Increase in the current Decrease in the
Item Opening balance Closing balance
period current period
Safety production cost 337,978.57 77,018,511.80 75,138,576.60 2,217,913.77
Total 337,978.57 77,018,511.80 75,138,576.60 2,217,913.77
Other notes, including notes on changes in the current period and reasons for changes.
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Bengang Steel Plates Co., Ltd. 2022 Annual Report
35. Surplus reserve
Unit: RMB
Increase in the current Decrease in the
Item Opening balance Closing balance
period current period
Statutory surplus reserve 1,195,116,522.37 1,195,116,522.37
Total 1,195,116,522.37 1,195,116,522.37
Notes on surplus reserves, including changes in the current period and reasons for the changes:
36. Undistributed profits
Unit: RMB
Item Current period Prior period
Adjustments of the beginning distributed profits 2,977,306,297.64 2,692,018,405.40
Add: Net profit for the period attributable to owners of the parent company -1,232,976,557.37 2,500,582,902.58
Less: Withdrawal of statutory surplus reserve 234,010,992.52
Dividends payable on ordinary shares 2,464,914,827.40 1,981,284,017.82
Other factors 25,416.40
Undistributed profit at the end of the period -720,559,670.73 2,977,306,297.64
Details of adjustments to undistributed profit at the beginning of the period:
1) The retrospective adjustment due to the Accounting Standards for Business Enterprises and its related
new provisions affected the opening undistributed profit by RMB 0.00.
2) As a result of the change in accounting policy, the opening undistributed profit was affected by RMB 0.00.
3) As a result of the correction of a material accounting error, the opening undistributed profit was affected
by RMB 0.00.
4) The change in scope of consolidation due to the same control affected opening undistributed profit by
RMB 0.00.
5) The aggregate of other adjustments affected the opening undistributed profit of RMB 0.00.
37. Operating income and operating cost
Unit: RMB
Amount incurred in the current period Amount incurred in the prior period
Item
Income Cost Income Cost
Main operations 59,395,642,984.38 59,110,682,153.73 69,992,675,798.60 64,770,421,744.20
Other operations 3,220,978,643.22 3,148,652,700.99 7,919,469,182.86 7,121,176,592.76
Total 62,616,621,627.60 62,259,334,854.72 77,912,144,981.46 71,891,598,336.96
Whether the lower of audited net profit before or after extraordinary gain or loss is negative
□Yes No
203
Bengang Steel Plates Co., Ltd. 2022 Annual Report
Revenue-related information:
Unit: RMB
Income from main Income from other
Classification of contracts Division 1 Division 2 Total
operations operations
By type of commodity
Including：
By region of operation 59,395,642,984.38 3,220,978,643.22 62,616,621,627.60
Including：
Domestic 54,363,209,958.37 3,220,978,643.22 57,584,188,601.59
Abroad 5,032,433,026.01 5,032,433,026.01
By market or customer type
Including：
By type of contract
Including：
Classified by the time of commodity
59,395,642,984.38 3,220,978,643.22 62,616,621,627.60
transfer
Including：
Recognize at a certain point in time 59,395,642,984.38 3,218,410,482.41 62,614,053,466.79
Recognize within a certain time 2,568,160.81 2,568,160.81
By duration of contract
Including：
By sales channel
Including：
Total 59,395,642,984.38 3,220,978,643.22 62,616,621,627.60
Information relating to performance obligations:
None.
Information relating to the transaction price apportioned to the remaining performance obligation:
The amount of revenue corresponding to performance obligations that have been contracted for but not
yet performed or not yet completed at the end of the reporting period is RMB 0.00, of which RMB X is
expected to be recognized as revenue in the X year, RMB X is expected to be recognized as revenue in the X
year and RMB is expected to be recognized as revenue in the X year.
Other notes:
38. Taxes and surcharges
Unit: RMB
Item Amount incurred in the current period Amount incurred in the prior period
City maintenance and construction tax 8,247,520.23 123,495,868.43
Education surcharge 6,202,547.48 88,373,442.32
Property tax 81,251,574.97 81,377,911.78
Land use tax 13,148,324.89 13,696,962.53
Stamp duty 59,436,033.58 82,245,033.15
Environmental tax 37,955,614.65 41,124,449.80
Others 199,254.76 1,146,895.68
Total 206,440,870.56 431,460,563.69
Other notes:
204
Bengang Steel Plates Co., Ltd. 2022 Annual Report
39. Selling expenses
Unit: RMB
Item Amount incurred in the current period Amount incurred in the prior period
Import and export agency fee 62,722,202.78 73,807,602.10
Employee benefits 37,325,748.94 35,270,978.16
Package fee 10,634,173.84 6,901,048.55
Others 17,807,571.24 25,414,936.76
Total 128,489,696.80 141,394,565.57
Other notes:
40. Administrative expenses
Unit: RMB
Item Amount incurred in the current period Amount incurred in the prior period
Employee benefits 319,515,626.55 656,796,852.87
Repair expense 159,772,788.05 249,469,415.56
Heating fee 60,603,595.23 91,825,534.38
Depreciation 40,266,699.01 42,367,710.99
Land use charges 39,904,236.24 39,930,546.94
Sewage charges 8,639,505.26 14,522,765.23
Sewage charges 1,820,505.40 7,059,455.17
Others 32,557,698.71 85,267,160.96
Total 663,080,654.45 1,187,239,442.10
Other notes:
41. Research and development expenses
Unit: RMB
Item Amount incurred in the current period Amount incurred in the prior period
Depreciation, materials and benefits, etc. 58,088,008.14 56,401,594.44
Total 58,088,008.14 56,401,594.44
Other notes:
42. Financial expenses
Unit: RMB
Item Amount incurred in the current period Amount incurred in the prior period
Interest expenses 599,359,597.96 1,007,595,231.75
Interest income -80,619,490.18 -393,818,460.36
Exchange loss -3,956,001.44 -86,313,266.83
Other expenditure 8,286,059.01 9,130,130.50
Total 523,070,165.35 536,593,635.06
Other notes:
43. Other income
Unit: RMB
Sources of other income Amount incurred in the current period Amount incurred in the prior period
Government grants 68,613,890.38 66,345,976.64
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Bengang Steel Plates Co., Ltd. 2022 Annual Report
Sources of other income Amount incurred in the current period Amount incurred in the prior period
Tax credits 3,408,920.09
Personal tax rebates 278,020.01
Total 72,300,830.48 66,345,976.64
44. Investment income
Unit: RMB
Item Amount incurred in the current period Amount incurred in the prior period
Investment income from long-term equity
investments accounted for under the -181,084.64 520,432.46
equity method
Investment income from the disposal of
88,020,044.39 1,434,393.28
long-term equity investments
Investment income from the disposal of
-6,558,780.75 -124,911,004.89
financial assets held for trading
Gain from remeasurement of remaining
4,154,883.39
equity at fair value after loss of control
Gain from debt restructuring 1,274,270.98
Others 2,879,850.07 2,436,869.33
Total 89,589,183.44 -120,519,309.82
Other notes:
45. Credit impairment losses
Unit: RMB
Item Amount incurred in the current period Amount incurred in the prior period
Bad debt losses on other receivables 4,789,476.31 -5,336,416.67
Bad debt losses on accounts receivable -9,155,504.25 -2,417,959.10
Total -4,366,027.94 -7,754,375.77
Other notes:
46. Assets impairment losess
Unit: RMB
Item Amount incurred in the period Amount incurred in the prior period
II. Loss on decline in value of inventories
and impairment loss on contract -33,475,219.25 -58,821,759.40
performance costs
V． Impairment loss on fixed assets -54,849,575.62
Total -33,475,219.25 -113,671,335.02
Other notes:
47. Assets disposal gains
Unit: RMB
Source Amount incurred in the period Amount incurred in the prior period
Gain or loss on the disposal of fixed
3,648,546.62 130,675.05
assets not classified as held for sale
Total 3,648,546.62 130,675.05
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Bengang Steel Plates Co., Ltd. 2022 Annual Report
48. Non-operating income
Unit: RMB
Amount incurred in Amount incurred in Amount recorded in non-recurring gains
Item
the period the prior period and losses during the current period
Gains on destruction and retirement
19,686,518.10 2,606,854.39 19,686,518.10
of non-current assets
Liquidated damages 82,285.55 82,285.55
Unpayable accounts payable 17,144,884.54 17,144,884.54
Others 3,217,256.20 5,176,371.41 3,217,256.20
Total 40,130,944.39 7,783,225.80 40,130,944.39
Government grants charged to current profit or loss:
Unit: RMB
Whether the Amount
Whether it Amount Asset-
Subsidy Issuing Reason for Type of subsidy affects the incurred in
is a special incurred in related/income-
item body issuing nature profit and loss for the prior
subsidy the period related
the year period
Other notes:
49. Non-operating expenses
Unit: RMB
Amount incurred in Amount incurred in Amount recorded in non-recurring gains
Item
the period the prior period and losses during the current period
Losses on destruction and retirement
26,618,184.57 64,272,629.43 26,618,184.57
of non-current assets
Penalty expenses 4,993.20 4,993.20
Total 26,623,177.77 64,272,629.43 26,623,177.77
Other notes:
50. Income tax expenses
(1) Table of income tax expenses
Unit: RMB
Item Amount incurred in the period Amount incurred in the prior period
Current income tax expenses 108,153,891.06 853,911,187.93
Deferred income tax expenses 17,220,286.35 47,952,384.53
Total 125,374,177.41 901,863,572.46
(2) Reconciliation between income tax expense and accounting profit:
Unit: RMB
Item Amount incurred in the period
Total profit -1,080,677,542.45
Income tax expense calculated at statutory/applicable tax rate -270,169,385.61
Effect of the adjustment on prior-period income tax 42,091,927.34
Effect of non-taxable income 132,027.51
Effect of non-deductible costs, expenses and losses 102,571.04
Effect of deductible temporary differences or deductible losses
351,789,748.57
on deferred income tax assets not recognised in the year
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Bengang Steel Plates Co., Ltd. 2022 Annual Report
Item Amount incurred in the period
Others 1,427,288.56
Income tax expense 125,374,177.41
Other notes:
51. Cash flow statement items
(1) Other cash received in relation to operating activities
Unit: RMB
Item Amount incurred in the period Amount incurred in the prior period
Current accounts, advances received 5,681,740.65 4,269,927.26
Interest income 80,619,490.18 424,979,825.98
Special subsidies, grants 9,720,381.00 3,752,120.00
Non-operating income 1,853,285.67 3,029,073.33
Others 25,134,883.78 65,335,821.55
Total 123,009,781.28 501,366,768.12
Notes:
(2) Other cash paid in relation to operating activities
Unit: RMB
Item Amount incurred in the period Amount incurred in the prior period
Intercompany current accounts 15,076,408.22 19,482,383.93
Administration expenses 45,010,167.69 86,597,752.51
Selling expenses 19,555,768.39 14,638,578.99
Service charges 8,286,059.01 22,157,726.11
Others 397,007.18 299,743.97
Total 88,325,410.49 143,176,185.51
Note:
(3) Other cash received in relation to financing activities
Unit: RMB
Item Amount incurred in the period Amount incurred in the prior period
Notes, letter of guarantee, and letter of
1,845,751,595.78 2,105,252,645.77
credit margins
Recovery of time deposits 174,000,000.00
Recovery of short-term borrowing funds
740,000,000.00
used for targeted payments
Documentary credit income 41,310,294.37
Finance lease payments 214,709,267.94
Total 2,759,751,595.78 2,361,272,208.08
Note:
(4) Other cash paid in relation to financing activities
Unit: RMB
Item Amount incurred in the period Amount incurred in the prior period
Notes, letter of guarantee, and letter of
391,052,880.08
credit margins
Short-term borrowing funds used for 740,000,000.00
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Bengang Steel Plates Co., Ltd. 2022 Annual Report
Item Amount incurred in the period Amount incurred in the prior period
targeted payments
Lease payments 93,692,716.62
Restricted deposits 1,185,000.00
Total 485,930,596.70 740,000,000.00
Note:
52. Supplementary information of cash flow statement
(1) Supplementary information of cash flow statement
Unit: RMB
Current period
Supplementary information Prior period amount
amount
1. Reconciliation of net profit to cash flows from operating activities
Net profit -1,206,051,719.86 2,533,635,498.63
Add: Provision for impairment of assets 37,841,247.19 121,425,710.79
Depreciation of fixed assets, oil and gas assets, and productive biological assets 1,941,797,897.36 2,333,028,229.90
Depreciation of right-of-use assets 60,374,534.42 60,374,534.42
Amortisation of intangible assets 7,072,335.72 7,651,103.73
Amortisation of long-term deferred expenses 0.00 0.00
Loss on disposal of fixed assets, intangible assets and other long-term assets
-3,648,546.62 -130,675.05
(gain listed with “-”)
Loss on damaged and retired non-current assets (gain listed with “-”) 6,931,666.47 61,665,775.04
Loss on changes in fair value (gain listed with “-”) 0.00 0.00
Financial expenses (gain listed with “-”) 595,403,596.52 921,281,964.92
Investment losses (gain listed with “-”) -89,589,183.44 120,519,309.82
Decrease in deferred tax assets (increase listed with "-") 22,697,558.71 47,952,384.53
Increase in deferred tax liabilities (decrease listed with "-") 0.00 0.00
Decrease in inventories (increase listed with "-") 1,692,962,444.55 -1,202,351,320.94
Decrease in receivables from operating activities (increase listed with "-") 2,034,468,353.22 2,159,270,698.56
Increase in payables from operating activities (decrease listed with "-") -3,825,777,153.88 -6,750,849,760.31
Othes 1,879,935.20
Net cash flows from operating activities 1,276,362,965.56 413,473,454.04
2. Significant non-cash investing and financing activities:
Conversion of debts into capital
Convertible bonds due within 1 year
Fixed assets under financing leases
3. Changes in cash and cash equivalents:
Closing balance of cash 1,296,662,683.20 6,299,099,063.48
Less：Opening balance of cash 6,299,099,063.48 9,229,417,595.12
Add：Closing balance of cash equivalents
Less：Opening balance of cash equivalents
Net increase in cash and cash equivalents -5,002,436,380.28 -2,930,318,531.64
(2) Net cash from the disposal of subsidiaries during the period
Unit: RMB
Amount
Cash or cash equivalents received on disposal of subsidiaries during the period 137,470,560.86
Including:
Bengang Steel Liaoyang Qiutuan Co., Ltd. 137,470,560.86
Less: Cash and cash equivalents held by subsidiaries on the date of loss of control 397,304.46
Including:
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Bengang Steel Plates Co., Ltd. 2022 Annual Report
Amount
Bengang Steel Liaoyang Qiutuan Co., Ltd. 381,298.05
Bengang Baojin (Shenyang) auto new material technology Co., Ltd. 16,006.41
Including:
Net cash received on disposal of subsidiaries 137,073,256.40
Other notes:
(3) Component of cash and cash equivalents
Unit: RMB
Item Closing balance Opening balance
I. Cash 1,296,662,683.20 6,299,099,063.48
Including: Cash on hand 24,334.93
Bank deposits available for payment at any time 1,296,662,683.20 6,299,074,728.55
III. Closing balance of cash and cash equivalents 1,296,662,683.20 6,299,099,063.48
Other notes:
53. Assets with restricted ownership and use rights
Unit: RMB
Item Closing book value Reasons for restrictions
Cash and cash equivalents 164,482,958.67 Margin on bills
Notes receivable 355,701,965.15 Pledge and endorsement discount not yet due
Fixed assets 85,164,490.39 Mortgage to obtain funds for borrowing
Intangible assets 35,260,567.22 Mortgage to obtain funds for borrowing
Release of pledge agreement was signed and
Investments in other equity
1,016,420,266.27 application for release of registration of equity
instruments
pledge was in process
Total 1,657,030,247.70
Other notes:
54. Foreign currency monetary items
(1) Foreign currency monetary items
Unit: RMB
Item Closing balance in foreign currencies Exchange rate Equivalent RMB amount
Cash and cash equivalents 49,235,465.27
Including: USD 6,358,482.45 6.9646 44,284,286.87
EUR 2,866.74 7.4229 21,279.52
HKD 5,518,749.45 0.8933 4,929,898.88
Accounts receivable
Including: USD
EUR
HKD
Long-term borrowings 265,008,157.01
Including: USD 2,450,000.00 6.9646 17,063,270.00
EUR 18,714,699.47 7.4229 138,917,342.70
HKD 0.00 0.00
JPY 92,704,000.00 0.0524 4,857,689.60
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Bengang Steel Plates Co., Ltd. 2022 Annual Report
Non-current liabilities due
104,169,854.71
within 1 year
Including: USD 4,700,000.00 6.9646 32,733,620.00
EUR 9,460,158.74 7.4229 70,221,812.31
JPY 23,176,000.00 0.0524 1,214,422.40
Other notes:
(2) Description of foreign operating entities includes discloses on the principal place of overseas
business, functional currency and the basis for its selection for significant foreign operating entities, if
there is a change in the functional currency, as well as the reasons.
□ Applicable Not applicable
55. Government grants
(1) Basic information of government grants
Unit: RMB
Amount included to
Type Amount Presentation
current profit or loss
Cold-rolled high-strength steel renovation project 50,000,000.00 Deferred income 50,000,000.00
7 sets of 130 tons combustion
boiler flue gas desulfurization 4,800,000.00 Deferred income 4,800,000.00
project in power plant
Research and development of high-strength steel for the third
1,740,000.00 Deferred income 580,000.00
generation of automobiles
Advanced Treatment Project of Carbon Fiber Wastewater in
7,600,000.00 Deferred income 1,900,000.00
Dongfeng Plant Area of Plate Coking Plant
Desulfurization and Denitrification Project of Coal-fired Boiler in
3,000,000.00 Deferred income 600,000.00
High-pressure Workshop of Bengang Power Plant
Power plant three power plant cogeneration renovation project 2,000,000.00 Deferred income 2,000,000.00
Air Pollution Prevention and Control Funds - Finishing Dust
Removal Ultra-Low Emission 1,640,000.00 Deferred income 410,000.00
Transformation Projec
2021 Manufacturing Strong Province Special Fund 8,100,000.00 Deferred income
2021 Benxi Expert Talent and Enterprise Matchmaking Project 10,000.00 Deferred income 5,000.00
2021 Benxi Pollution Control and Energy Saving and Carbon
Reduction Special Project (Converter Gas Recovery and Efficiency 1,500,000.00 Deferred income
Improvement Project)
2021 Municipal Master Skill Workstation Fee 80,000.00 Deferred income 2,702.49
Liaoning Province "Hundred,
Thousand, Thousand, Thousand Talents Project" funding project 220,000.00 Deferred income
in 2018
2018 Municipal Skill Master Workstation Fee 58,766.34 Deferred income
2019 Municipal Skill Master Workstation Fees 98,084.16 Deferred income 28,583.97
2020 Special Project for the Construction of Ecological Civilization
20,000,000.00 Deferred income
(Special Steel Electric Furnace Upgrade Project)
Liaoning Artisan Subsidy 21.89 Deferred income 18.92
Research on the Influence Mechanism and Control of Rare Earth
457,413.50 Deferred income 122,965.00
Oxide Sulfide on Automobile Steel Plasticity
Design of Metallurgical Slag Systems for rare Earth Steels and
340,000.00 Deferred income
Their Physicochemical Properties
Provincial Science and Technology Department National Natural 334,000.00 Deferred income
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Bengang Steel Plates Co., Ltd. 2022 Annual Report
Amount included to
Type Amount Presentation
current profit or loss
Science Foundation of China - Liaoning Provincial Government
Joint Fund project
2019 Provincial Skill Master Workstation Fee 200,000.00 Deferred income
2020 Provincial Skill Master Workstation Fee 100,000.00 Deferred income
Basic Research on New Technology of Low Carbon Ironmaking
168,000.00 Deferred income
Furnace Charge for Composite Iron Coke
The Second Batch of 2021 Liaoning Funds on Central Government
300,000.00 Deferred income
Guiding the Development of Local Science and Technology
Liaoning Province "Hundred,
Thousand, Thousand, Thousand Talents Project" funding project 50,000.00 Deferred income
in 2020
Provincial Science and Technology Department 2022 Liaoning
30,000.00 Deferred income
Provincial Natural Science Foundation Program
Social security and tax refund 771,262.00 Other income 771,262.00
Dalian Jinpu New District Employment and Social Insurance
Business Service Centre Skills Upgrading Special Account – Work- 4,510.00 Other income 4,510.00
for-Training Grants
Additional tax relief for retired soldiers in 2022 1,080,000.00 Other income 1,080,000.00
Benxi Human Resources Service Centre Unemployment Insurance
6,308,848.00 Other income 6,308,848.00
Fund
Total 110,990,905.89 — 68,613,890.38
(2) Return of government grants
□ Applicable Not applicable
Other notes:
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Bengang Steel Plates Co., Ltd. 2022 Annual Report
VIII.Changes in the scope of consolidation
1. Disposal of subsidiaries
Whether there is a single disposal of an investment in a subsidiary that results in a loss of control?
Yes □No
Unit: RMB
Difference
between the
Amount of other
disposal price
comprehensive
and the share of
Ratio of Book value Fair value Gain or loss on income
the subsidiary’s
Point of the of the of the the Method and key transferred to
Basis for net assets at
time at remaining remaining remaining remeasurement assumptions for determining investment
Name of Equity disposal Disposal Disposal determining the level of the
which equity at equity at equity at of the the fair value of the income that is
subsidiary price ratio way the point of consolidated
control is the date of the date of the date of remaining remaining equity interest at related to the
time financial
lost loss of loss of loss of equity interest the date of loss of control original
statements
control contro contro to fair value subsidiary’s
corresponding
equity
to the disposal
investment
of investment
Bengang
Equity
Steel
transfer
Plates September
697,980,000.00 100.00% Sold agreement 88,020,044.39
Liaoyang 30th, 2022
and notice of
Pellet Co.,
delivery
Ltd.
Other notes:
Whether there is a step-by-step disposal of investment in a subsidiary through multiple transactions and loss of control during the period?
□Yes No
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2. Changes in the scope of consolidation for other reasons
Description of other reasons resulting in the changes in the scope of consolidation (e.g., new
establishment of subsidiaries, liquidation of subsidiaries, etc.) and the related information:
Chongqing Liaoben Steel & Iron Trading Co., Ltd., Harbin Bengang Economic Trading Co., Ltd., Nanjing
Bengang Material Sales Co., Ltd. and Wuxi Bengang Steel & Iron Sales Co., Ltd. were cancelled during the
reporting period.
Bengang Baojin (Shenyang) Auto New Material Technology Co., Ltd. is no longer included in the scope of
consolidation due to the loss of control that resulted from the additional investment from Xiamen
Xianghong Investment Co., Ltd. on July 8th, 2022.
IX. Equity in other entities
1. Equity in subsidiaries
(1) Constitution of enterprise group
Main place Registration Nature of Shareholding ratio Acquiring
Name of subsidiary
of business place business Direct Indirect method
Guangzhou Bengang Steel & Iron
Guangzhou Guangzhou Sale 100.00% Establishment
Trading Co., Ltd
Shanghai Bengang Metallurgy Science
Shanghai Shanghai Sale 100.00% Establishment
and Technology Co., Ltd
Dalian Benruitong Automobile
Dalian Dalian Production 65.00% Establishment
Material Technology Co., Ltd
Business
Bengang POSCO Cold-rolled Sheet Co., combination
Benxi Benxi Production 75.00%
Ltd. under common
control
Business
Changchun Bengang Steel & Iron combination
Changchun Changchun Sale 100.00%
Trading Co., Ltd. under common
control
Business
combination
Yantai Bengang Steel Sales Co., Ltd. Yantai Yantai Sale 100.00%
under common
control
Business
combination
Tianjin Bengang Steel Trading Co., Ltd. Tianjin Tianjin Sale 100.00%
under common
control
Benxi Bengang Steel & Iron Sales Co.,
Benxi Benxi Sale 100.00% Establishment
Ltd.
Shenyang Bengang Bengang
Metallurgy Science and Technology Shenyang Shenyang Sale 100.00% Establishment
Co., Ltd
Description of the shareholding ratio in a subsidiary different from the voting power ratio:
Basis for holding half or less of the voting power but still controlling the investee, and for holding more
than half of the voting power but not controlling the investee：
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Bengang Steel Plates Co., Ltd. 2022 Annual Report
Basis for the control over the significant structured entities included in the scope of consolidation;
Basis for determining whether a company is an agent or a principal:
Other notes:
(2) Significant non-wholly owned subsidiaries
Unit: RMB
Profit or loss for the Dividends declared to Balance of minority
Minority
Name of subsidiary period attributable to minority shareholders interests at the end of
shareholding ratio
minority shareholders during the period the period
Bengang POSCO Cold-rolled
25.00% 33,922,714.35 575,839,513.58
Sheet Co., Ltd.
Description of the shareholding ratio of minority shareholders of a subsidiary different from the voting
power ratio:
Other notes:
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Bengang Steel Plates Co., Ltd. 2022 Annual Report
(3) Key financial information on significant non-wholly owned subsidiaries
Unit: RMB
Closing balance Opening balance
Name of
Non-current Non-current Non-current Non-current
subsidiary Current assets Total assets Current liabilities Total Liabilities Current assets Total assets Current liabilities Total Liabilities
assets liabilities assets liabilities
Bengang
POSCO Cold-
2,642,318,664.91 1,031,753,449.22 3,674,072,114.13 1,370,714,059.80 1,370,714,059.80 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
rolled Sheet
Co., Ltd.
Unit: RMB
Amount incurred in the period Amount incurred in the prior period
Name of Cash flows from Total
Total comprehensive Cash flows from
subsidiary Operating income Net profit operating Operating income Net profit comprehensive
income operating activities
activities income
Bengang POSCO
Cold-rolled Sheet 9,820,616,858.86 135,690,857.38 135,690,857.38 368,340,695.62 11,529,193,715.01 143,131,193.39 143,131,193.39 205,955,801.18
Co., Ltd.
Other notes:
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Bengang Steel Plates Co., Ltd. 2022 Annual Report
2. Significant joint operations
Principal place of Place of Shareholding ratio/entitled share
Name Nature of business
business registration Direct Indirect
Description of shareholding ratio or entitled share in joint operations different from voting power ratio:
The Company has no significant joint ventures or associates.
Basis for the classification of a joint operation that is a separate entity as the joint operation:
Other notes:
3. Equity in structured entities not included in the scope of the consolidated financial statements
Other notes:
Closing balance / Amount Opening balance / Amount
Item
incurred in the year incurred in the prior year
Joint ventures — —
Total book value of investments
Total amount of the followings calculated based on
— —
shareholding ratio
--Net profit
--Other comprehensive income
--Total comprehensive income
Associates — —
Total book value of investments 51,030,777.18 2,981,784.07
Total amount of the followings calculated based on
-181,084.64 520,432.46
shareholding ratio
--Net profit -1,444,809.15 2,602,162.30
--Other comprehensive income
--Total comprehensive income -1,444,809.15 2,602,162.30
X. Risks associated with financial instruments
The Company's principal financial instruments include investments in other equity instruments,
borrowings, receivables and payables, and a detailed description of each financial instrument is set out in
Note VI. The risks associated with these financial instruments, and the risk management policies adopted
by the Company to mitigate these risks, are described below. These risk exposures are managed and
monitored by the Company’s management to ensure that the above risks are kept within limits.
1. Risk management objectives and policies
The Company's objectives in engaging in risk management are to strike an appropriate balance between
risk and return, to minimise the negative impact of risk on the Company's operating performance and to
maximise the interests of shareholders and other equity investors. Based on these risk management
objectives, the Company's basic strategy for risk management is to identify and analyse the various risks
to which the Company is exposed, establish appropriate risk tolerance limits and manage the risks, as
well as monitor the various risks in a timely and reliable manner to keep the risks within the limits.
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Bengang Steel Plates Co., Ltd. 2022 Annual Report
(1) Market risk
1) Exchange rate risk
The Company's exposure to exchange rate risk relates primarily to USD, HKD, JPY and EUR. Except for a
small amount of purchases of raw materials and sales of finished goods which are settled in USD, HKD,
JPY and EUR, the Company's other major business activities are settled in RMB. As at December 31st,
2022, the assets or liabilities described in the table below are the balances of items expressed in USD,
HKD, JPY and EUR.
Item December 31st, 2022 December 31st, 2021
Cash and cash equivalents - USD 6,358,482.45 2,815,562.23
Cash and cash equivalents - HKD 5,518,749.45 4,729,748.36
Cash and cash equivalents - EUR 2,866.74 15,038.78
Short-term borrowings - USD 90,200,000.00
Non-current liabilities due within one year - USD 4,700,000.00 4,700,000.00
Non-current liabilities due within one year - EUR 9,460,158.74 9,460,158.72
Non-current liabilities due within one year - JPY 23,176,000.00 23,176,000.00
Long-term borrowings - USD 2,450,000.00 11,850,000.00
Long-term borrowings - EUR 18,714,699.47 37,635,017.31
Long-term borrowings - JPY 92,704,000.00 139,056,000.00
The Company’s policy is to control the size of foreign currency denominations and settlements as far as
possible, and the management is responsible for monitoring foreign exchange risk and will consider
hedging significant foreign exchange exposures as and when required.
2) Interest rate risk
Interest rate risk refers to fluctuations of fair value or future cash flows of a financial instrument due to
market rate changes. The Company’s exposure to interest rate risk is cash flow interest risk 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 rates with variable interest rates, and short-term obligations with
long-term obligations. By using effective interest rate risk management methods, the Company closely
monitors interest rate risk, controls the size of variable-rate borrowings and will consider interest-rate
swaps to acquire an expected structure of interest rates shall the need arise.
(2) Credit risk
At December 31st, 2022, the largest exposure to credit risk that could give rise to financial losses for the
Company arises primarily from losses incurred on the Company's financial assets as a result of the failure
of the other party to the contract to perform its obligations, specifically:
The book value of financial assets is recognised in the consolidated balance sheet; for financial
instruments measured at fair value, the book value reflects the risk exposure but is not the maximum
exposure and its maximum exposure will change with future changes in fair value.
In order to mitigate credit risk, the Company has established a dedicated department to determine credit
limits, perform credit approvals and implement other monitoring procedures to ensure that the
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Bengang Steel Plates Co., Ltd. 2022 Annual Report
necessary measures are taken to collect overdue claims. In addition, the Company reviews the collection
of each individual receivable at each balance sheet date to ensure that adequate provisions for bad debts
are made for uncollectible amounts. As a result, the Company's management believes that the
Company's exposure to credit risk has been significantly reduced.
The Company's working fund is placed with financial institutions with high credit ratings and therefore it
is a low-credit risk working fund.
(3) Liquidity risk
Liquidity risk is the risk that the Company will not be able to meet its financial obligations as they fall due.
The Company manages its liquidity risk by ensuring that it has sufficient financial liquidity to meet its
obligations as they fall due without incurring unacceptable losses or causing damage to its corporate
reputation, and it regularly analyses the structure and maturity of its liabilities to ensure that sufficient
funds are available. The Company's management monitors the use of bank borrowings and ensures
compliance with borrowing agreements. At the same time, the Company negotiates financing with
financial institutions to maintain a certain credit limit and mitigate liquidity risk.
XI. Disclosure of fair value
1. Period-end fair value of assets and liabilities measured at fair value
Unit: RMB
Fair value at end of the period
Fair value
Fair value
Item measurement Fair value measurement in the
measurement in Total
in the first third level
the second level
level
I. Continuous
fair value -- -- -- --
measurement
(i) Financial
assets held for 137,591,996.02 137,591,996.02
trading
1. Financial
assets at fair
137,591,996.02 137,591,996.02
value through
profit or loss
(1) Investment
in debt 137,591,996.02 137,591,996.02
instruments
III.
Investments in
1,020,418,482.31 1,020,418,482.31
other equity
instruments
Total assets
continuously
1,158,010,478.33 1,158,010,478.33
measured at
fair value
II. Non-
continuous -- -- -- --
fair value
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Bengang Steel Plates Co., Ltd. 2022 Annual Report
Fair value at end of the period
Fair value
Fair value
Item measurement Fair value measurement in the
measurement in Total
in the first third level
the second level
level
measurements
2. Qualitative and quantitative information on valuation techniques and significant parameters used
in continuous and non-continuous third-level fair value measurement items
Investments in other equity instruments continuously measured at fair value in the third level are
unlisted equity investments held by the Company.
Receivables financing continuously measured at fair value in the third level are banker's acceptances held
by the Company, the fair value of which is recognised by reference to the face amount.
The Company has adopted valuation techniques for fair value measurement, primarily using valuation
techniques based on the listed company comparative method, with reference to share prices of similar
securities and taking into account liquidity discounts.
XII. Related Parties and Related Transactions
1. The parent company of the Company
Place of
Name Nature of business Registered capital Shareholding ratio Voting power ratio
registration
XIII. Benxi Steel &
Benxi, Liaoning Production 74.01 58.65% 58.65%
Iron (Group) Co., Ltd.
Note:
Registered capital of the controlling shareholder and its changes
Controlling shareholder Opening balance Increase Decrease Closing balance
Benxi Steel & Iron (Group) Co., Ltd. 7,401,091,400.00 7,401,091,400.00
Shareholding or equity of controlling shareholders and its changes
Amount of shareholding Shareholding ratio (%)
Controlling shareholder Ratio at the Ratio at the
Closing balance Opening balance
end of year beginning of year
Benxi Steel & Iron (Group) Co., Ltd. 2,409,628,094.00 2,409,628,094.00 58.65 58.65
The ultimate controlling party of the Company is Ansteel Group Co., Ltd.
Other notes:
2. Details of subsidiaries
For details of subsidiaries of the Company please refer to Note “IX. 1. (1) Constitution of enterprise group”.
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Bengang Steel Plates Co., Ltd. 2022 Annual Report
3. The company's joint ventures and associates
For details of significant joint ventures and associates of the Company please refer to Note “IX. 2. (1)
Significant joint ventures or associates”.
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
Bengang Baojin (Shenyang) auto new material technology Co., Ltd. Associate
ZheJiang Elite Iron & Steel Processing Co., Ltd. Associate
Other notes:
4. Details of other related parties
Name of other related parties Relationship
Bengang Group Co., Ltd. Parent company & controlling shareholder
Ansteel Electrlc Co., Ltd. Both belong to Ansteel Group
Ansteel Scrap Resources (Anshan) Co., Ltd. Both belong to Ansteel Group
Zhaoyang Branch of Ansteel Scrap Resources (Anshan) Co., Ltd. Both belong to Ansteel Group
Ansteel Steel Processing and Distribution (Dalian) Co., Ltd. Both belong to Ansteel Group
Ansteel Steel Processing and Distribution (Changchun) Co., Ltd. Both belong to Ansteel Group
Ansteel Steel Processing and Distribution (Zhenzhou) Co., Ltd. Both belong to Ansteel Group
Ansteel Steel Distribution (Hefei) Co., Ltd. Both belong to Ansteel Group
Ansteel Steel Distribution (Wuhan) Co., Ltd. Both belong to Ansteel Group
Ansteel Steel Rope Co., Ltd. Both belong to Ansteel Group
Anshan Iron and Steel Co., Ltd. Both belong to Ansteel Group
Ansteel Chemical Technology Co., Ltd. Both belong to Ansteel Group
Ansteel Group (Anshan) Railway Transportation Equipment Manufacturing
Both belong to Ansteel Group
Co., Ltd.
Ansteel Group Finance Co., Ltd. Both belong to Ansteel Group
Ansteel Group Engineering Technology Development Co., Ltd. Both belong to Ansteel Group
Ansteel Group Engineering Technology Co., Ltd. Associates of Ansteel Group
Ansteel Group International Economic and Trade Co., Ltd. Both belong to Ansteel Group
Ansteel Group Mining Gongchangling Co., Ltd. Both belong to Ansteel Group
Ansteel Group Mining Co., Ltd. Both belong to Ansteel Group
Ansteel Group Co., Ltd. Both belong to Ansteel Group
Ansteel Group Automaion Co., Ltd. Both belong to Ansteel Group
Ansteel Construction Group Co., Ltd. Both belong to Ansteel Group
Ansteel Metal Construction Co., Ltd. Both belong to Ansteel Group
Ansteel Technology and Development Co., Ltd. Both belong to Ansteel Group
Ansteel Mining Machinery Manufacturing Co., Ltd. Both belong to Ansteel Group
Ansteel Green Resources Technology Co., Ltd. Both belong to Ansteel Group
Ansteel Energy Technology Co., Ltd. Both belong to Ansteel Group
Ansteel Industry Group (Anshan) Equipment Operation and Maintenance Co.,
Both belong to Ansteel Group
Ltd.
Ansteel Industrial Group Metallurgical Machinery Co., Ltd. Both belong to Ansteel Group
Ansteel Shuangsheng (Anshan) Fan Co., Ltd. Both belong to Ansteel Group
Ansteel Modern City Service (Anshan) Co., Ltd. Both belong to Ansteel Group
Ansteel Roller Co., Ltd. Both belong to Ansteel Group
Ansteel Heavy Machinery Design and Research Institute Co., Ltd. Both belong to Ansteel Group
Ansteel Heavy Machine Co., Ltd. Both belong to Ansteel Group
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Bengang Steel Plates Co., Ltd. 2022 Annual Report
Name of other related parties Relationship
Ansteel Cast Steel Co., Ltd. Both belong to Ansteel Group
North Hengda Logistics Co., Ltd. Both belong to Bengang Group
Benxi Steel Stainless Steel Cold Rolling Dandong Co., Ltd. Same parent company
Bengang Electric Co., Ltd. Associates of the parent company
Benxi Iron and Steel Group Finance Co., Ltd. Both belong to Bengang Group
Benxi Iron and Steel Group International Economic and Trade Co., Ltd. Both belong to Bengang Group
Benxi Iron and Steel Tendering Co., Ltd. Both belong to Bengang Group
Benxi Beitai Ductile CAST Iron Pipes Co., Ltd. Both belong to Bengang Group
Benxi Beiying Iron and Steel (Group) Co., Ltd. Both belong to Bengang Group
Benxi Iron and Steel (Group) Real Estate Development Co., Ltd. Same parent company
Benxi Iron and Steel (Group) Engineering Construction Supervision Co., Ltd. Same parent company
Benxi Iron & Steel (Group) Machinery Manufacture Co., Ltd. Same parent company
Benxi Iron and Steel (Group) Construction Co., Ltd. Same parent company
Benxi Iron & Steel Mining Co., Ltd. Same parent company
Benxi Iron and Steel (Group) Thermal Development Co., Ltd. Same parent company
Benxi Iron and Steel (Group) Construction Co., Ltd. Same parent company
Benxi Iron and Steel (Group) Design and Research Institute Same parent company
Benxi Iron and Steel (Group) Industrial Development Co., Ltd. Same parent company
Benxi Iron and Steel (Group) Information Automation Co., Ltd. Same parent company
Benxi Iron and Steel (Group) Construction Co., Ltd. Same parent company
Benxi Iron & Steel (Group) Metallurgical Slag Co., Ltd. Same parent company
Benxi Steel & Iron (Group) Co., Ltd. Parent company
Benxi Iron and Steel (Group) Chint Building Materials Co., Ltd. Same parent company
Benxi High-tech Drilling Tools Manufacturing Co., Ltd. Both belong to Bengang Group
Benxi New Business Development Co., Ltd. Same parent company
Chengdu Pansteel Hotel Co., Ltd. Both belong to Ansteel Group
Dalian Boroller Steel Pipe Co., Ltd. Same parent company
Delin Industrial Products Co., Ltd. Both belong to Ansteel Group
Delin Land Port Supply Chain Service Co., Ltd. Both belong to Ansteel Group
Guangzhou Ansteel Processing Co., Ltd. Both belong to Ansteel Group
Guangzhou Free Trade Zone Benxi Steel Sales Co., Ltd. Same parent company
Liaoning Hengtai Heavy Machinery Co., Ltd. Same parent company
Liaoning Hengyi Steel Trade Co., Ltd. Both belong to Bengang Group
Liaoning Metallurgical Technical College Same parent company
Liaoning Metallurgical Vocational and Technical College Same parent company
Pansteel Group Xichang iron and vanadium Co., Ltd. Both belong to Ansteel Group
Panzhong Yihong Metal Products (Chongqing) Co., Ltd. Both belong to Ansteel Group
Suzhou Longben Metal Material Co., Ltd. Joint-stock company
Tianjin Ansteel Steel Processing and Distribution Co., Ltd. Both belong to Ansteel Group
Tianjin Ansteel International North Trade Co., Ltd. Both belong to Ansteel Group
Wuhan Yuanhong Trading Co., Ltd. Joint-stock company
Changchun FAW Ansteel Steel Processing and Distribution Co., Ltd. Both belong to Ansteel Group
ZheJiang Jingrui Steel Processing Co., Ltd. Joint-stock company
Ansteel Tendering Co., Ltd. Both belong to Ansteel Group
Other notes:
222
Bengang Steel Plates Co., Ltd. 2022 Annual Report
5. Related party transactions
(1) Related party transactions of purchasing and selling goods, and rendering and receiving services
Purchasing goods/receiving services
Unit: RMB
Over
Amount incurred Approved Amount incurred
Related party Related party transaction transaction
in the period transaction amount in the prior period
amount or not
Benxi Beiying Iron and Steel (Group) Co., Ltd. Agency fee 169,853.96 2,406,400.10
Benxi Beiying Iron and Steel (Group) Co., Ltd. Energy and power 779,110,506.13 600,000,000.00 No 574,159,764.50
Benxi Beiying Iron and Steel (Group) Co., Ltd. Repair labor 97,016,086.32 100,000,000.00 No 83,669,158.97
Benxi Beiying Iron and Steel (Group) Co., Ltd. Raw material 14,015,404,775.69 19,280,000,000.00 No 3,413,966,208.00
Benxi Beiying Iron and Steel (Group) Co., Ltd. Spare part 237,598,626.48 20,000,000.00 No 16,090,360.87
Benxi Beiying Iron and Steel (Group) Co., Ltd. Traffic expense 6,238,586.40 5,035,680.51
Benxi Beiying Iron and Steel (Group) Co., Ltd. Repair labor 33,111,773.58 50,000,000.00 No 38,823,832.46
Benxi Beiying Iron and Steel (Group) Co., Ltd. Raw material 6,526,348,389.47 8,950,000,000.00 No 7,897,911,371.00
Ansteel Scrap Resources (Anshan) Co., Ltd. Raw material 501,264,827.39 700,000,000.00 No 10,664,269.91
Ansteel Scrap Resources (Anshan) Co., Ltd. Raw material 6,052,002.21
Benxi Iron and Steel (Group) Construction Co., Ltd. Spare part 4,646,764.56 21,777,211.97
Benxi Iron and Steel (Group) Construction Co., Ltd. Engineering expense 520,498,816.97 347,084,983.80
Benxi Iron and Steel (Group) Construction Co., Ltd. Repair labor 254,504,020.71 520,000,000.00 Yes 278,104,032.80
Benxi Iron and Steel (Group) Construction Co., Ltd. Raw material and spare part 31,238,074.42 16,097,907.80
Benxi Iron and Steel (Group) Construction Co., Ltd. Traffic expense 785,478.54 4,140,887.20
Liaoning Hengyi Steel Trade Co., Ltd. Spare part 410,585,327.20
Benxi Steel & Iron (Group) Co., Ltd. Testing fee 29,476.75
Benxi Steel & Iron (Group) Co., Ltd. Repair labor 292,771,749.19 350,000,000.00 No 304,560,898.30
Benxi Steel & Iron (Group) Co., Ltd. Raw material 181,321.91
Ansteel Group Mining Gongchangling Co., Ltd. Raw material 362,137,279.01 1,600,000,000.00 No
Benxi Iron & Steel (Group) Metallurgical Slag Co., Ltd. Raw material 289,543,277.06 510,000,000.00 No 489,148,093.50
Benxi Iron & Steel (Group) Machinery Manufacture Co., Ltd. Repair labor 63,956,264.17 100,000,000.00 No 71,834,926.85
Benxi Iron & Steel (Group) Machinery Manufacture Co., Ltd. Raw material and spare part 154,332,860.09 100,000,000.00 Yes 74,302,355.66
Liaoning Hengtong Metallurgical Equipment Manufacturing Co., Ltd. Engineering expense 2,070,000.00 250,000,000.00 No
Liaoning Hengtong Metallurgical Equipment Manufacturing Co., Ltd. Repair labor 5,984,428.81 9,214,383.72
Liaoning Hengtong Metallurgical Equipment Manufacturing Co., Ltd. Raw material and spare part 135,689,377.05 67,724,736.21
Bengang Electric Co., Ltd. Repair labor 13,542,063.00 30,766,390.09
223
Bengang Steel Plates Co., Ltd. 2022 Annual Report
Over
Amount incurred Approved Amount incurred
Related party Related party transaction transaction
in the period transaction amount in the prior period
amount or not
Bengang Electric Co., Ltd. Raw material 121,219,826.14 200,000,000.00 No 144,661,193.60
Benxi Iron and Steel (Group) Construction Co., Ltd. Engineering expense 26,575,682.85 12,223,337.95
Benxi Iron and Steel (Group) Construction Co., Ltd. Repair labor 103,244,339.53 200,000,000.00 No 172,496,212.10
Benxi Iron and Steel (Group) Construction Co., Ltd. Raw material and spare part 3,258,197.53 3,141,468.85
Benxi Iron and Steel (Group) Information Automation Co., Ltd. Engineering expense 89,244,708.98 7,731,900.58
Benxi Iron and Steel (Group) Information Automation Co., Ltd. Repair labor 15,339,461.49 130,000,000.00 No 58,288,892.03
Benxi Iron and Steel (Group) Information Automation Co., Ltd. Raw material and spare part 8,171,621.28 2,382,441.39
Benxi Iron and Steel (Group) Industrial Development Co., Ltd. Spare part 46,331,491.99 300,000,000.00 Yes
Benxi Iron and Steel (Group) Industrial Development Co., Ltd. project fund 1,974,511.01 1,412,870.70
Benxi Iron and Steel (Group) Industrial Development Co., Ltd. Repair labor 3,445,388.98 14,899,040.30
Benxi Iron and Steel (Group) Industrial Development Co., Ltd. Raw material 407,371,792.39 195,317,492.00
Benxi Iron and Steel (Group) Industrial Development Co., Ltd. Traffic expense 4,953,917.35 1,184,903.02
Ansteel Group Mining Co., Ltd. Raw material 99,573,714.25
AnsteelSteel Company Limited Crude fuel 75,504,413.81 1,300,000,000.00 No
Ansteel Group Automaion Co., Ltd. Engineering expense 72,873,000.00
Ansteel Group Engineering Technology Co., Ltd. Engineering expense 63,375,792.47 2,015,000,000.00 No 4,156,465.29
Benxi Iron and Steel Group International Economic and Trade Co., Ltd. Raw material 16,836,635,147.00
Benxi Iron and Steel Group International Economic and Trade Co., Ltd. Port surcharge 843,578,220.03 500,000,000.00 Yes 401,150,627.60
Benxi Iron and Steel Group International Economic and Trade Co., Ltd. Agency fee 60,892,920.39 71,401,202.00
AnsteelGroup International Trade Co., Ltd. Raw material 58,292,035.42 1,200,000,000.00 No 158,920,329.80
North Hengda Logistics Co., Ltd. Spare part 25,720,478.21
North Hengda Logistics Co., Ltd. Storage fee 4,261,203.22
North Hengda Logistics Co., Ltd. Processing charge 1,401.77
North Hengda Logistics Co., Ltd. Freight revenue 18,595,601.60
North Hengda Logistics Co., Ltd. Traffic expense 2,671,869.60
Liaoning Hengtai Heavy Machinery Co., Ltd. Engineering expense 13,781,211.87
Liaoning Hengtai Heavy Machinery Co., Ltd. Repair labor 15,853,592.59 41,000,000.00 No 25,652,748.93
Liaoning Hengtai Heavy Machinery Co., Ltd. Raw material and spare part 18,919,911.07 1,779,712.77
Liaoning Hengtai Heavy Machinery Co., Ltd. Traffic expense 147,379.53
Ansteel Construction Group Co., Ltd. Engineering expense 34,442,304.94 30,000,000.00 Yes 1,380,000.00
Ansteel Construction Group Co., Ltd. Repair labor 2,398,546.32
AnsteelIndustry Group (Anshan) Equipment Operation and Maintenance
Repair labor 14,317,414.23
Co., Ltd.
Bengang Group Co., Ltd. Repair labor 3,804,811.13 100,000,000.00 No 103,266,123.30
Benxi New Business Development Co., Ltd. Repair labor 227,358.60
Benxi New Business Development Co., Ltd. Raw material and meal fee 12,217,302.64 5,995,558.58
224
Bengang Steel Plates Co., Ltd. 2022 Annual Report
Over
Amount incurred Approved Amount incurred
Related party Related party transaction transaction
in the period transaction amount in the prior period
amount or not
Delin Industrial Products Co., Ltd. Spare part 10,765,203.78
AnsteelHeavy Machinery Design and Research Institute Co., Ltd. Engineering expense 6,200,000.00
Delin Land Port Supply Chain Service Co., Ltd. Freight revenue 818,644.75
Delin Land Port Supply Chain Service Co., Ltd. Traffic expense 93,266.01
Liaoning Metallurgical Vocational and Technical College Training expense 239,175.22
Liaoning Metallurgical Vocational and Technical College Repair labor 14,450,747.87 20,000,000.00 No 20,848,183.42
Benxi Iron and Steel (Group) Thermal Development Co., Ltd. Heating expense 3,243,574.57 1,935,670.90
Benxi Iron and Steel (Group) Thermal Development Co., Ltd. Raw material 397,091.33 4,315,772.16
Ansteel Heavy Machine Co., Ltd. Spare part 3,000,690.00
Ansteel Industrial Group Metallurgical Machinery Co., Ltd. Repair labor 2,511,630.02 621,231.00
Benxi Iron and Steel (Group) Engineering Construction Supervision Co.,
Engineering expense 1,767,865.81
Ltd.
Tianjin Ansteel Steel Processing and Distribution Co., Ltd. Processing charge 1,448,165.59
AnsteelTechnology Development Co., Ltd. Testing fee 4,182.00
AnsteelTechnology Development Co., Ltd. Repair labor 1,328,524.96
Liaoning Metallurgical Technical College Spare part 13,181,606.66 3,180.19
Liaoning Metallurgical Technical College Training expense 1,180,127.18
Ansteel Electrlc Co., Ltd. Repair labor 985,900.00 1,090,000.00
Chengdu Pansteel Hotel Co., Ltd. Spare part 693,726.32
Ansteel Group Co., Ltd. Technical services 559,822.74
Ansteel Group (Anshan) Railway Transportation Equipment
Raw material 541,592.84
Manufacturing Co., Ltd.
Ansteel Processing&Distribution (Dalian) Co., Ltd. Processing charge 532,674.24
Ansteel Processing&Distribution (Dalian) Co., Ltd. Repair labor 12,297.35
Ansteel Group Finance Co., Ltd. Financial service 509,257.61
Ansteel Shuangsheng (Anshan) Fan Co., Ltd. Raw material 149,000.00
Ansteel Processing&Dstribution (Changchun) Co., Ltd. Processing charge 101,089.62 13,000,000.00 No
Benxi High-tech Drilling Tools Manufacturing Co., Ltd. Spare part 33,451.50 355,020.64
Ansteel Modern City Service (Anshan) Co., Ltd. Life service 871.70
Ansteel Modern City Service (Anshan) Co., Ltd. Raw material and meal fee 13,379.21
Chengdu Pansteel Hotel Co., Ltd. Raw material and meal fee 2,344.35
Benxi Iron and Steel (Group) Steel Processing and Distribution Co., Ltd. Processing charge 97,509.28
Ansteel Steel Rope Co., Ltd. Raw material 16,415.00
Benxi Iron and Steel (Group) Design and Research Institute Design fee 370,754.72
Ansteel Group Engineering Technology Development Co., Ltd. Engineering expense 66,371.68
Benxi Steel Stainless Steel Cold Rolling Dandong Co., Ltd. Goods in stock 830,980.11
225
Bengang Steel Plates Co., Ltd. 2022 Annual Report
Selling goods/rendering services
Unit: RMB
Related party Related party transaction Amount incurred in the period Amount incurred in the prior period
North Hengda Logistics Co., Ltd. Storage fee 147,942.35
North Hengda Logistics Co., Ltd. Energy and power 1,050.44
North Hengda Logistics Co., Ltd. Commodity 1,575,318,242.55
North Hengda Logistics Co., Ltd. Storage transfer fee 50,000.00
North Hengda Logistics Co., Ltd. Freight revenue 5,147.49
Benxi Beiying Iron and Steel (Group) Co., Ltd. Energy and power 59,612,037.69 190,994,041.40
Benxi Beiying Iron and Steel (Group) Co., Ltd. Commodity 15,275,523.39 32,286,695.60
Benxi Beiying Iron and Steel (Group) Co., Ltd. Raw material and spare part 892,839,309.94 5,361,496,192.00
Benxi Iron & Steel Mining Co., Ltd. Energy and power 956,298,497.17 713,763,626.60
Benxi Iron & Steel Mining Co., Ltd. Raw material and spare part 186,451,326.19 114,817,486.80
Benxi Iron & Steel Mining Co., Ltd. Freight revenue 6,375,742.64 9,635,045.20
Benxi Iron & Steel Mining Co., Ltd. Commodity 9,553,320.94
ZheJiang Jingrui Steel Processing Co., Ltd. Commodity 634,878,571.04
Benxi Iron & Steel (Group) Metallurgical Slag Co., Ltd. Energy and power 5,533,038.14 5,657,234.80
Benxi Iron & Steel (Group) Metallurgical Slag Co., Ltd. Commodity 145,986,324.82 30,477,308.13
Benxi Iron & Steel (Group) Metallurgical Slag Co., Ltd. Raw material and spare part 27,239,136.49 489,209,578.20
Ansteel Chemical Technology Co., Ltd. Commodity 142,937,378.90 10,327,963.75
Ansteel Green Resources Technology Co., Ltd. Commodity 92,587,078.07
Delin Land Port Supply Chain Service Co., Ltd. Commodity 68,534,296.17 99,872,552.22
Benxi Iron and Steel (Group) Thermal Development Co., Ltd. Energy and power 27,593,537.32 46,499,282.17
Benxi Iron and Steel (Group) Thermal Development Co., Ltd. Raw material and spare part 33,517,303.11 35,958,414.07
Wuhan Yuanhong Trading Co., Ltd. Commodity 51,854,280.95
AnsteelSteel Company Limited Commodity 61,069,908.45
Benxi Iron & Steel (Group) Machinery Manufacture Co., Ltd. Energy and power 18,448,720.59 22,129,966.93
Benxi Iron & Steel (Group) Machinery Manufacture Co., Ltd. Commodity 24,949,599.98 26,997,250.99
Benxi Iron & Steel (Group) Machinery Manufacture Co., Ltd. Raw material and spare part 1,129,457.58
Ansteel Steel Distribution (Hefei) Co., Ltd. Commodity 41,250,074.07
Liaoning Hengtong Metallurgical Equipment Manufacturing Co., Ltd. Commodity 35,333,688.31 25,919,093.49
Liaoning Hengtong Metallurgical Equipment Manufacturing Co., Ltd. Raw material and spare part 13,595.28 3,020,156.10
Liaoning Hengtong Metallurgical Equipment Manufacturing Co., Ltd. Energy and power 320.75
Benxi Iron and Steel (Group) Construction Co., Ltd. Energy and power 7,997,295.31 7,832,094.60
Benxi Iron and Steel (Group) Construction Co., Ltd. Raw material and spare part 60,250,515.33 164,513,121.80
Ansteel Processing&Distribution (Dalian) Co., Ltd. Commodity 22,445,530.77
Ansteel Steel Distribution (Wuhan) Co., Ltd. Commodity 18,120,370.66
Chengdu Pansteel Hotel Co., Ltd. Storage fee 3,396.23
226
Bengang Steel Plates Co., Ltd. 2022 Annual Report
Related party Related party transaction Amount incurred in the period Amount incurred in the prior period
Chengdu Pansteel Hotel Co., Ltd. Commodity 17,135,415.98 13,819,225.85
Ansteel Processing&Dstribution (Changchun) Co., Ltd. Commodity 15,877,239.25
Benxi Steel & Iron (Group) Co., Ltd. Energy and power 3,295,769.40 2,419,372.66
Benxi Steel & Iron (Group) Co., Ltd. Raw material and spare part 11,988,074.72 5,994,769.96
Changchun FAW Ansteel Steel Processing and Distribution Co., Ltd. Commodity 9,768,207.73
Panzhong Yihong Metal Products (Chongqing) Co., Ltd. Commodity 6,764,295.39 8,069,888.63
Ansteel Steel Processing and Distribution (Zhenzhou) Co., Ltd. Commodity 6,664,609.41
Benxi Iron and Steel (Group) Industrial Development Co., Ltd. Energy and power 8,005,174.12 9,729,798.22
Benxi Iron and Steel (Group) Industrial Development Co., Ltd. Freight revenue 524,233.20
Benxi Iron and Steel (Group) Industrial Development Co., Ltd. Commodity 31,630,297.95 25,064,326.22
Benxi Iron and Steel (Group) Industrial Development Co., Ltd. Raw material and spare part 12,069,150.04
Benxi Iron and Steel (Group) Construction Co., Ltd. Energy and power 1,066,969.43 1,239,534.34
Benxi Iron and Steel (Group) Construction Co., Ltd. Raw material and spare part 1,236,444.77 3,463,893.89
Suzhou Longben Metal Material Co., Ltd. Commodity 1,952,008.09 668,359,087.00
Panzhong Yihong Metal Products (Chongqing) Co., Ltd. Commodity 1,608,574.50
Tianjin Ansteel Steel Processing and Distribution Co., Ltd. Commodity 1,607,469.03
Bengang Electric Co., Ltd. Energy and power 875,626.86 942,198.15
Benxi Iron and Steel Tendering Co., Ltd. Raw material and spare part 108,000.74
Benxi Iron and Steel (Group) Information Automation Co., Ltd. Energy and power 153,773.87 127,347.06
Bengang Group Co., Ltd. Energy and power 135,434.69 124,535.96
Bengang Group Co., Ltd. Raw material and spare part 12,820,827.06
Bengang Group Co., Ltd. Service fee 75,423,224.98
Bengang Group Co., Ltd. Commodity 127,816,445.90
Ansteel Energy Technology Co., Ltd. Raw material and spare part 124,582.55 796,230.34
Ansteel Construction Group Co., Ltd. Energy and power 119,001.02
Benxi Iron and Steel (Group) Real Estate Development Co., Ltd. Energy and power 110,785.80 36,751.81
Ansteel Cast Steel Co., Ltd. Commodity 87,707.40
Ansteel Group Engineering Technology Co., Ltd. Energy and power 81,276.69
Benxi New Business Development Co., Ltd. Energy and power 44,469.48 224,285.83
Liaoning Metallurgical Technical College Service fee 9,072.64
Liaoning Hengtai Heavy Machinery Co., Ltd. Energy and power 8,558.44 389,676.08
Benxi Iron and Steel Group Finance Co., Ltd. Energy and power 8,362.33 13,938.60
Benxi Iron and Steel (Group) Engineering Construction Supervision Co., Ltd. Energy and power 2,229.09
Liaoning Hengyi Steel Trade Co., Ltd. Energy and power 1,266.90
Benxi Iron and Steel (Group) Steel Processing and Distribution Co., Ltd. Energy and power 4,553.41
Benxi Steel Stainless Steel Cold Rolling Dandong Co., Ltd. Commodity 2,954,071.01
Ansteel Electrlc Co., Ltd. Energy and power 109.68
227
Bengang Steel Plates Co., Ltd. 2022 Annual Report
Note:
(2) Lease information of related parties
The Company as the lessor:
Unit: RMB
Lessee Type of leased assets Lease income recognized in the period Lease income recognized in the prior period
Ansteel Tendering Co., Ltd. Warehouse and ancillary facilities 255,045.87
Benxi Iron and Steel Tendering Co., Ltd. Warehouse and ancillary facilities 250,917.43 480,000.00
The Company as the lessee:
Unit: RMB
Rental expense on short
term leases and leases of Variable lease payments not
Interest expense on lease Increase in right-of-use
low value assets with a included in the measurement Rent paid
liabilities assumed assets
simplified treatment of lease liabilities (if applicable)
Type of leased
Lessor (if applicable)
assets
Amount Amount Amount Amount Amount
Amount Amount Amount Amount Amount
incurred in incurred in incurred in incurred in incurred in
incurred in incurred in incurred in incurred in incurred in
the prior the prior the prior the prior the prior
the period the period the period the period the period
period period period period period
Land use right
7,669,068.17 square
Benxi Steel & Iron
meter, Land use 55,251,233.39 55,251,233.39 38,983,993.51 39,600,209.28
(Group) Co., Ltd.
right 42,920.00
square meter
2300 hot rolling
Benxi Steel & Iron
product line, related 16,098,161.06 16,098,161.06 7,657,901.26 7,982,648.96
(Group) Co., Ltd.
real estate
Benxi Beiying Iron 1780 hot rolling
and Steel (Group) product line, related 12,397,899.09 12,397,899.09 5,897,685.23 6,147,787.68
Co., Ltd. real estate
Land use right
Bengang Group
728,282.30 square 9,945,423.08 9,945,423.08 2,375,669.84 2,666,923.92
Co., Ltd.
meter
North Hengda Office room 120,596.33
228
Bengang Steel Plates Co., Ltd. 2022 Annual Report
Logistics Co., Ltd. property
Notes:
229
Bengang Steel Plates Co., Ltd. 2022 Annual Report
(1) According to the Land Use Right Leasing Contract and subsequent supplementary agreements signed
between the Company and Bengang Steel (Group) on April 7th, 1997, December 30, 2005, and
subsequently, the Company leases land from Benxi Steel (Group), with a monthly rent of RMB 0.594 per
square meter. The leased land is 7,669,068.17 square meters and the annual rent is RMB 54,665.10
million..
(2) On August 14th, 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 December 31st, 2038.
(3) On July 15th, 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 RMB 1.138 per square meter per month.
(3) Information of Guarantee among related parties
The Company as a guarantor:
Unit: RMB
Amount of Starting date of the Ending date of the Has the guarantee
Secured party
guarantee guarantee guarantee been fulfilled
The Company as the warranty:
Unit: RMB
Amount of Starting date of the Ending date of the Has the guarantee
Warrantor
guarantee guarantee guarantee been fulfilled
Bengang Group Co., Ltd. 、 Benxi
50,000,000.00 March 30th, 2016 March 20th, 2025 Not fulfilled
Steel & Iron (Group) Co., Ltd.
Bengang Group Co., Ltd. 、 Benxi
250,000,000.00 February 27th, 2017 February 20th, 2025 Not fulfilled
Steel & Iron (Group) Co., Ltd.
Bengang Group Co., Ltd. 40,500,000.00 December 27th, 2016 June 21st, 2024 Not fulfilled
Bengang Group Co., Ltd. 26,088,872.85 March 12th, 2015 September 30th, 2025 Not fulfilled
Bengang Group Co., Ltd. 48,242,944.41 March 12th, 2015 April 30th, 2026 Not fulfilled
Bengang Group Co., Ltd. 51,828,156.94 March 12th, 2015 October 30th, 2025 Not fulfilled
Bengang Group Co., Ltd. 42,090,659.62 March 12th, 2015 June 30th, 2025 Not fulfilled
Bengang Group Co., Ltd. 40,888,521.19 March 12th, 2015 August 29th, 2025 Not fulfilled
Bengang Group Co., Ltd. 49,796,890.00 December 27th, 2016 June 21st, 2024 Not fulfilled
Note:
(4) Remuneration of key management personnel
Unit: RMB 10,000
Item Amount incurred in the period Amount incurred in the prior period
Total remuneration 335.63 322.09
230
Bengang Steel Plates Co., Ltd. 2022 Annual Report
(5) Other related party transactions
1) The Company disposed of the former subsidiary Bengang Steel Plates Liaoyang Pellet Co., Ltd. to Benxi
Iron & Steel Mining Co., Ltd.
On September 29th, 2022, the Company and Benxi Iron & Steel Mining Co., Ltd. (hereinafter referred to as
" Benxi Iron & Steel Mining Company") entered into the Bengang Steel Plates Liaoyang Pellet Co., Ltd.
Equity Transfer Agreement to transfer 100% equity interest in Bengang Steel Plates Liaoyang Pellet Co.,
Ltd. (hereinafter referred to as " Liaoyang Pellet Company") held by the Company to Benxi Iron & Steel
Mining Company for an appraised value of RMB 697.98 million (ZLPBZ No. 2715 [2022]), and the
industrial and commercial change registration procedures were completed on October 20th, 2022,
resulting in an investment gain of RMB 88.02 million in the consolidated financial statements of the
Company.
2) 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 Benxi Iron and Steel Group Finance Co., Ltd. (hereinafter referred to
as Bengang Finance Company), the Financial Services Agreement was signed to stipulate the relevant
financial business terms and amount cap of related transactions between the Company and its
subsidiaries and Bengang Finance Company. The agreement stipulates that the maximum daily deposit
balance of the Company and its controlled subsidiaries in the next twelve months will be RMB 11 billion,
the maximum loan and other credit business will be RMB 8 billion, and the maximum credit line will be
RMB 8 billion.
In December 2021, after negotiation with Ansteel Group Finance Co., Ltd. (hereinafter referred to as
Ansteel Finance Company), the Financial Services Agreement (2022-2024) was signed to agree on the
relevant financial business terms and amount cap of related transactions between the Company and its
subsidiaries and Ansteel Finance Company in 2022, 2023, and 2024. 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 RMB 4.5 billion, the maximum credit limit of loans, bills and other forms is
RMB 5 billion, and Ansteel Finance Company provides entrusted loans to the Company. The maximum
limit is RMB 2 billion.
231
Bengang Steel Plates Co., Ltd. 2022 Annual Report
1. The Company's transactions with finance companies
Opening balance Closing balance in Interest Interest paid,
Item Increase Decrease
in 2022 2022 collected service charge
I. Deposits with finance companies
Bengang Finance Company 2,697,239.97 2,697,239.97 2,588,679.58
Ansteel Finance Company 4,429,656,296.13 160,815,520,805.89 164,170,258,570.27 1,074,918,531.75 51,183,445.79
Including: restricted margin deposits
Bengang Finance Company
Ansteel Finance Company
II. Borrowings from finance companies
Bengang Finance Company
Ansteel Finance Company
III. Notes discounted by finance companies
Bengang Finance Company
Ansteel Finance Company 875,823,519.04 875,823,519.04 3,677,270.34
IV. Acceptance bill entrusted to finance companies
Bengang Finance Company
Ansteel Finance Company 1,058,145,374.46 1,058,145,374.46 381,101.72
IV. Notes deposited with finance companies
Bengang Finance Company
Ansteel Finance Company 211,597,205.57 211,597,205.57
Note: The maximum credit limit granted by Ansteel Finance Company to Bengang Steel Plates in the form of loans, notes and other forms for the year is
RMB 5 billion, and the maximum entrusted loan provided by Ansteel Finance Company to Bengang Steel Plates is RMB 2 billion.
232
Bengang Steel Plates Co., Ltd. 2022 Annual Report
(6) Related party funds borrowing and lending
Name of related party Closing balance of the period Closing balance of the prior year
Borrowing funds
Other payable 85,617,500.00 82,081,562.50
Note: The Company's subsidiary, Dalian Benruitong Automobile Material Technology Co., Ltd, borrowed
RMB 75,000,000.00 from Benxi Steel & Iron (Group) Co. As of December 31st, 2022, the Company had an
outstanding interest of RMB 10,617,500.00 (as of December 31st, 2021, the Company had an outstanding
interest of RMB 7,081,562.50).
6. Receivables and payables of related party
(1) Receivables
Unit: RMB
Closing balance Opening balance
Item related party Bad debt Bad debt
Book balance Book balance
provision provision
Benxi Beiying Iron and Steel (Group)
Notes receivable 3,100,000.00 1,146,019,625.74
Co., Ltd.
Notes receivable Benxi Iron & Steel Mining Co., Ltd. 5,518,976.33 6,906,467.75
Notes receivable Ansteel Roller Co., Ltd. 200,000.00
Notes receivable AnsteelHeavy Machine Co., Ltd. 189,621.75
Ansteel Steel Distribution (Hefei)
Notes receivable 30,000,000.00
Co., Ltd.
Pansteel Group Panzhihua iron and
Notes receivable 5,000,000.00
vanadium Co., Ltd.
Receivable Suzhou Longben Metal Material Co.,
6,580,000.00
financing Ltd.
Receivable Benxi Beiying Iron and Steel (Group)
2,300,000.00
financing Co., Ltd.
Receivable
Benxi Steel & Iron (Group) Co., Ltd. 500,000.00
financing
Receivable
Benxi Iron & Steel Mining Co., Ltd. 500,000.00
financing
Benxi Iron and Steel Group
Accounts
International Economic and Trade 663,311,074.79 6,633,110.75 30,777,943.03 307,779.43
receivable
Co., Ltd.
Accounts Benxi Iron and Steel (Group)
840,398.67 8,403.99 7,007,076.55 70,070.77
receivable Thermal Development Co., Ltd.
Accounts Ansteel Steel Processing and
4,477,814.06 44,778.14
receivable Distribution (Zhenzhou) Co., Ltd.
Accounts Ansteel Steel Distribution (Hefei)
248,775.35 2,487.75
receivable Co., Ltd.
Accounts Ansteel Steel Distribution (Wuhan)
8,113,115.19 81,131.15
receivable Co., Ltd.
Accounts
AnsteelSteel Company Limited 30,314,005.82 303,140.06
receivable
Accounts Ansteel Green Resources Technology
4,667,550.15 46,675.50
receivable Co., Ltd.
Accounts
Benxi Iron & Steel Mining Co., Ltd. 44,914,278.63 449,142.79
receivable
Accounts Liaoning Hengtong Metallurgical
144,307.22 1,443.07
receivable Equipment Manufacturing Co., Ltd.
233
Bengang Steel Plates Co., Ltd. 2022 Annual Report
Closing balance Opening balance
Item related party Bad debt Bad debt
Book balance Book balance
provision provision
Benxi Iron and Steel Group
Prepayment International Economic and Trade 398,341,075.40 562,083,080.63
Co., Ltd.
Benxi Iron & Steel (Group)
Prepayment 49,429,296.57 46,764,418.62
Machinery Manufacture Co., Ltd.
Benxi New Business Development
Prepayment 2,324,912.22 2,525,240.41
Co., Ltd.
Liaoning Hengtong Metallurgical
Prepayment 365,010.53
Equipment Manufacturing Co., Ltd.
AnsteelGroup International Trade
Prepayment 0.01
Co., Ltd.
Liaoning Hengtai Heavy Machinery
Prepayment 13,619,388.23
Co., Ltd.
Benxi Iron and Steel (Group) Real 2,585,594.6
Other receivables 1,097,290.88 991,268.28 2,798,975.71
Estate Development Co., Ltd. 9
Other receivables Bengang Group Co., Ltd. 1,403,512.36
Benxi Iron and Steel Tendering Co.,
Other receivables 602,040.84 6,020.41
Ltd.
Other receivables AnsteelSteel Company Limited 421,142.66 421,142.66 421,142.66 421,142.66
Benxi Iron and Steel (Group) Chint
Other receivables 270,462.55 211,172.50
Building Materials Co., Ltd.
AnsteelHeavy Machinery Design and
Other receivables 5,176,720.00 51,767.20
Research Institute Co., Ltd.
Other receivables North Hengda Logistics Co., Ltd. 65,563.55
Benxi Iron and Steel Group
Other receivables International Economic and Trade 6,617.52
Co., Ltd.
Benxi Iron and Steel (Group)
Other receivables 13,028,492.10 433,910.93
Construction Co., Ltd.
Other receivables Benxi Iron & Steel Mining Co., Ltd. 1,193,997.66 11,939.98
Benxi Iron and Steel (Group)
Other receivables 4,760,949.45 47,609.49
Construction Co., Ltd.
Liaoning Hengtong Metallurgical
Other receivables 4,249,698.29 42,496.98
Equipment Manufacturing Co., Ltd.
Liaoning Metallurgical Technical
Other receivables 58,042.46 58,042.46
College
Other receivables Bengang Electric Co., Ltd. 36,455.28 364.55
Ansteel Group Engineering Technology
Other receivables 73,908.67 739.09
Co., Ltd.
Other non-current
Ansteel Construction Group Co., Ltd. 132,687.84 9,222,050.00
assets
(2) Payables
Unit: RMB
Closing book Opening book
Item Related party
balance balance
Benxi Iron and Steel Group International Economic and Trade
Notes payable 82,782,219.21 2,591,000,000.00
Co., Ltd.
Notes payable Benxi Iron and Steel (Group) Industrial Development Co., Ltd. 10,191,802.55 27,323,238.23
Notes payable Liaoning Metallurgical Vocational and Technical College 528,854.07 2,891,901.05
Notes payable Benxi Iron and Steel (Group) Construction Co., Ltd. 3,789,095.21 2,441,547.34
Notes payable Liaoning Metallurgical Technical College 1,087,201.26
234
Bengang Steel Plates Co., Ltd. 2022 Annual Report
Closing book Opening book
Item Related party
balance balance
Notes payable Ansteel Industrial Group Metallurgical Machinery Co., Ltd. 572,213.92 616,291.83
Notes payable Liaoning Hengtai Heavy Machinery Co., Ltd. 2,877,574.99 532,627.10
Notes payable Bengang Electric Co., Ltd. 25,016,176.00 371,305.57
Liaoning Hengtong Metallurgical Equipment Manufacturing
Notes payable 34,223,234.99 63,696.00
Co., Ltd.
Notes payable Benxi Iron & Steel Mining Co., Ltd. 151,930,597.68 30,916.80
Notes payable Benxi Iron & Steel (Group) Machinery Manufacture Co., Ltd. 41,781,569.75 15,544.28
Notes payable Ansteel Group Mining Co., Ltd. 79,210,057.06
Notes payable AnsteelTechnology Development Co., Ltd. 39,644.00
AnsteelHeavy Machinery Design and Research Institute Co.,
Notes payable 6,827,200.00
Ltd.
Notes payable AnsteelHeavy Machine Co., Ltd. 745,501.68
Notes payable North Hengda Logistics Co., Ltd. 11,350.04
Notes payable Benxi Beiying Iron and Steel (Group) Co., Ltd. 659,999,999.00
Notes payable Benxi Iron and Steel (Group) Construction Co., Ltd. 1,611,555.04
Notes payable Benxi Iron and Steel (Group) Information Automation Co., Ltd. 1,150,225.42
Notes payable Benxi Iron & Steel (Group) Metallurgical Slag Co., Ltd. 10,866,603.68
Notes payable Benxi Steel & Iron (Group) Co., Ltd. 361,277.52
Notes payable Liaoning Hengyi Steel Trade Co., Ltd. 8,941,086.81
Accounts payable Benxi Iron & Steel Mining Co., Ltd. 45,768,605.27 227,930,805.86
Accounts payable Liaoning Hengyi Steel Trade Co., Ltd. 243,646,365.75
Accounts payable Benxi Iron and Steel (Group) Construction Co., Ltd. 87,111,368.27 177,332,809.50
Accounts payable Benxi Iron and Steel (Group) Construction Co., Ltd. 240,928,491.19 127,382,098.50
Accounts payable Benxi Beiying Iron and Steel (Group) Co., Ltd. 131,248,293.37 158,531,101.75
Accounts payable Benxi Iron & Steel (Group) Metallurgical Slag Co., Ltd. 47,468,411.05 85,112,497.52
Accounts payable Benxi Iron and Steel (Group) Industrial Development Co., Ltd. 75,043,780.30 65,505,709.65
Accounts payable Benxi Iron and Steel (Group) Information Automation Co., Ltd. 88,684,293.06 64,470,595.80
Accounts payable Bengang Electric Co., Ltd. 1,893,516.67 18,627,189.71
Accounts payable Liaoning Hengtai Heavy Machinery Co., Ltd. 17,366,942.72
Accounts payable Bengang Group Co., Ltd. 50,000.00 16,260,041.69
Benxi Iron and Steel Group International Economic and Trade
Accounts payable 51,306,166.70 11,684,948.95
Co., Ltd.
Accounts payable Liaoning Metallurgical Technical College 10,107,863.07 11,290,066.24
Accounts payable Benxi Iron & Steel (Group) Machinery Manufacture Co., Ltd. 2,874,934.49 6,869,554.14
Accounts payable Benxi Steel Stainless Steel Cold Rolling Dandong Co., Ltd. 6,108,342.90
Accounts payable Ansteel Scrap Resources (Anshan) Co., Ltd. 52,203,765.63 4,257,477.87
Accounts payable Liaoning Metallurgical Vocational and Technical College 513,779.95 3,509,300.42
Liaoning Hengtong Metallurgical Equipment Manufacturing
Accounts payable 30,626,084.39 2,527,096.00
Co., Ltd.
Accounts payable Benxi Iron and Steel (Group) Thermal Development Co., Ltd. 413,463.33 2,430,350.86
Accounts payable AnsteelHeavy Machine Co., Ltd. 2,873,047.05 1,572,500.00
Accounts payable Ansteel Electrlc Co., Ltd. 1,231,700.00
Accounts payable Ansteel Industrial Group Metallurgical Machinery Co., Ltd. 2,265,928.00 1,125,059.03
Accounts payable Ansteel Steel Rope Co., Ltd. 894,924.67 913,473.62
Accounts payable Benxi Iron and Steel (Group) Real Estate Development Co., Ltd. 372,520.06 615,214.61
Accounts payable Ansteel Mining Machinery Manufacturing Co., Ltd. 304,530.41
Accounts payable Benxi High-tech Drilling Tools Manufacturing Co., Ltd. 14,400.16 221,233.55
Accounts payable Benxi New Business Development Co., Ltd. 18,937.09 67,596.20
Benxi Iron and Steel (Group) Engineering Construction
Accounts payable 39,142.00
Supervision Co., Ltd.
Accounts payable Benxi Iron and Steel (Group) Chint Building Materials Co., Ltd. 2,362.00
Ansteel Group (Anshan) Railway Transportation Equipment
Accounts payable 577,232.81
Manufacturing Co., Ltd.
Accounts payable Ansteel Group Mining Co., Ltd. 591,193.88
Accounts payable Ansteel Shuangsheng (Anshan) Fan Co., Ltd. 168,370.00
235
Bengang Steel Plates Co., Ltd. 2022 Annual Report
Closing book Opening book
Item Related party
balance balance
Accounts payable Benxi Steel & Iron (Group) Co., Ltd. 39,872,070.78
Accounts payable Chengdu Pansteel Hotel Co., Ltd. 450,952.17
Accounts payable Delin Industrial Products Co., Ltd. 9,556,739.82
Contract liabilities/other
Suzhou Longben Metal Material Co., Ltd. 23,506,109.92
current liabilities
Contract liabilities/other
Delin Land Port Supply Chain Service Co., Ltd. 14,902,176.11 20,392,114.80
current liabilities
Contract liabilities/other
Bengang Group Co., Ltd. 15,675,115.92
current liabilities
Contract liabilities/other
Panzhong Yihong Metal Products (Chongqing) Co., Ltd. 7,227,779.60
current liabilities
Contract liabilities/other
Chengdu Pansteel Hotel Co., Ltd. 1,776,832.88 2,361,852.95
current liabilities
Contract liabilities/other
Benxi Iron & Steel (Group) Metallurgical Slag Co., Ltd. 1,044,047.73 1,123,998.85
current liabilities
Contract liabilities/other
Benxi Iron and Steel (Group) Industrial Development Co., Ltd. 535,124.96 745,498.28
current liabilities
Contract liabilities/other
Ansteel Energy Technology Co., Ltd. 12,048.13 445,249.81
current liabilities
Contract liabilities/other
Benxi Steel Stainless Steel Cold Rolling Dandong Co., Ltd. 377,261.08
current liabilities
Contract liabilities/other
Tianjin Ansteel Steel Processing and Distribution Co., Ltd. 260,000.00
current liabilities
Contract liabilities/other Liaoning Hengtong Metallurgical Equipment Manufacturing
199,879.86
current liabilities Co., Ltd.
Contract liabilities/other
Ansteel Chemical Technology Co., Ltd. 3,631,726.76 127,391.30
current liabilities
Contract liabilities/other
Ansteel Processing&Distribution (Dalian) Co., Ltd. 2,468,274.66
current liabilities
Contract liabilities/other
Ansteel Processing&Dstribution (Changchun) Co., Ltd. 695,012.13
current liabilities
Contract liabilities/other
Ansteel Steel Distribution (Hefei) Co., Ltd. 4,731,954.99
current liabilities
Contract liabilities/other
North Hengda Logistics Co., Ltd. 53,109,140.37
current liabilities
Contract liabilities/other
Panzhong Yihong Metal Products (Chongqing) Co., Ltd. 644,213.74
current liabilities
Contract liabilities/other
Tianjin Ansteel International North Trade Co., Ltd. 32,000,000.00
current liabilities
Contract liabilities/other Changchun FAW Ansteel Steel Processing and Distribution Co.,
69,561.39
current liabilities Ltd.
Contract liabilities/other
Zhejiang Jingrui Steel Processing Co., Ltd. 80,484,269.96
current liabilities
Contract liabilities/other
Wuhan Yuanhong Trading Co., Ltd. 4,736,783.67
current liabilities
Other payables Bengang Electric Co., Ltd. 9,353,903.06
Other payables Benxi Steel & Iron (Group) Co., Ltd. 81,104,935.20 249,739,175.64
Benxi Iron and Steel Group International Economic and Trade
Other payables 11,894,493.16 28,083,978.93
Co., Ltd.
Other payables Benxi Iron and Steel (Group) Construction Co., Ltd. 53,547,549.48 24,834,667.16
Other payables Benxi Iron and Steel (Group) Industrial Development Co., Ltd. 1,259,239.61 18,283,705.72
Benxi Iron and Steel (Group) Steel Processing and Distribution
Other payables 16,869,219.13
Co., Ltd.
Other payables Guangzhou Free Trade Zone Benxi Steel Sales Co., Ltd. 2,674,436.85
Other payables Benxi Iron and Steel (Group) Thermal Development Co., Ltd. 2,129,446.86 2,187,450.17
236
Bengang Steel Plates Co., Ltd. 2022 Annual Report
Closing book Opening book
Item Related party
balance balance
Other payables Benxi New Business Development Co., Ltd. 33,755,860.72 2,069,075.26
Other payables Benxi Iron and Steel (Group) Real Estate Development Co., Ltd. 510,910.37 1,435,884.63
Other payables Ansteel Scrap Resources (Anshan) Co., Ltd. 1,000,000.00 500,000.00
Other payables Liaoning Metallurgical Technical College 427,188.00 190,513.04
Other payables Bengang Group Co., Ltd. 7,716,476.47 155,733.55
Other payables Benxi Iron & Steel (Group) Machinery Manufacture Co., Ltd. 1,681,991.53 10,082.30
Other payables Ansteel Electrlc Co., Ltd. 523,642.00
Other payables Ansteel Group Automation Co., Ltd. 3,565,330.00
Other payables Ansteel Construction Group Co., Ltd. 5,389,177.00
Other payables Ansteel Metal Construction Co., Ltd. 10,000.00
Other payables AnsteelTechnology Development Co., Ltd. 345,269.90
AnsteelIndustry Group (Anshan) Equipment Operation and
Other payables 4,101,254.08
Maintenance Co., Ltd.
Other payables North Hengda Logistics Co., Ltd. 4,384,330.48
Other payables Benxi Iron & Steel Mining Co., Ltd. 543,412.47
Benxi Iron and Steel (Group) Engineering Construction
Other payables 1,523,543.12
Supervision Co., Ltd.
Other payables Benxi Iron and Steel (Group) Information Automation Co., Ltd. 2,881,047.50
Other payables Benxi Iron and Steel (Group) Construction Co., Ltd. 1,089,595.17
Other payables Chengdu Pansteel Hotel Co., Ltd. 20,000.00
Other payables Liaoning Hengtai Heavy Machinery Co., Ltd. 22,000,196.88
Liaoning Hengtong Metallurgical Equipment Manufacturing
Other payables 3,366,743.50
Co., Ltd.
Other payables Ansteel Group Engineering Technology Co., Ltd. 23,401,702.63
Other payables Liaoning Metallurgical Vocational and Technical College 6,401,530.88
XIII. Commitments and Contingencies
1. Significant commitments
Significant commitments at the balance sheet date
(1) Significant commitments
1) Lease contracts in progress or to be performed and their financial impacts
a. According to the Land Use Right Leasing Contract and subsequent supplementary agreements signed
by the Company and Benxi Steel (Group) on April 7th, 1997, and December 30th, 2005, the Company
leased land from Benxi Steel (Group). The monthly rent is RMB 0.594 per square meter, the leased land
area is 7,669,068.17 square meters, and the annual rent is RMB 54,665,100.
b. On August 14th, 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 31st, 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 RMB 20 million and RMB 18 million 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.
c. On July 15th, 2019, the Company signed Land Lease Agreement with Bengang Group and Benxi Steel
237
Bengang Steel Plates Co., Ltd. 2022 Annual Report
(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 RMB 1.138 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 31st, 2022, the amount of irrevocable letter of credit that was not fulfilled was RMB
0.074 billion.
2. Contingencies
(1) It also should be stated that the Company has no significant contingencies that are required to be
disclosed
There were no significant contingencies that are required to be disclosed.
XIV. Events after the balance sheet date
1. Profit Distribution
Unit: RMB
Profit or dividend to be distributed 0.00
Profit or dividend declared after consideration and approval 0.00
Profit distribution plan 0
2. Other events after the balance sheet date
As at the Issuance date of the statements, the Company has no significant events after the balance sheet
date to disclose
XV. Other significant events
1. Debt restructuring
Gain from debt Increase in owner's equity
Way of debt restructuring Book value of debt
restructuring such as share capital
Settlement of debts by cash the value is
11,708,653.67 1,274,270.98 ——
less than the book value of the debts
Settlement of debts with non-cash assets ——
Conversion of debts to capital
Modification of other debt conditions ——
Mixed restructuring way
Total 11,708,653.67 1,274,270.98
238
Bengang Steel Plates Co., Ltd. 2022 Annual Report
2. Segment information
(1) If the Company has no reportable segments or is unable to disclose the total assets and total
liabilities of each reportable segment, the reasons should be stated.
Since the Company's main product is steel, other products have a small proportion of sales, the main
production base is in Liaoning, and the disclosure of the segment report is not applicable.
3. Other important matters that have an impact on investor decisions
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.
On March 21st, 2023, the Company issued the Indicative Announcement of Bengang Steel Plates Co., Ltd.
on the Planning of Significant Asset Replacement and Related Party Transactions. In order to enhance the
operating efficiency and profitability of the Company and accelerate the pace of becoming a world-class
mining development enterprise, it intends to conduct an asset replacement with its controlling
shareholder, Benxi Steel & Iron (Group) Co., Ltd. (hereinafter referred to as "Benxi Steel & Iron"),
specifically, the assets to be received being mining-related assets under Benxi Steel & Iron, to be
surrendered being the assets and liabilities related to all the Company's iron and steel businesses, and the
difference between received and surrender made up in cash by one party to the other. At present, the
transaction is still in the planning stage, which means specific information such as the scope and pricing of
the underlying assets have yet to be finalized and no agreement has been signed by the two sides. The
transaction proposal still requires further demonstration, communication and consultation, and is subject
to necessary decision-making and approval procedures in accordance with relevant laws, regulations and
the Articles of Association of the Company. There are still significant uncertainties in the relevant matters.
On March 21st, 2023, the Company issued the Indicative Announcement of Bengang Steel Plates Co., Ltd.
on the Planning of Significant Asset Replacement and Related Party Transactions. In order to enhance the
operating efficiency and profitability of the Company and accelerate the pace of be a world-class mining
development enterprise, it intends to conduct an asset replacement with its controlling shareholder,
Benxi Steel & Iron (Group) Co., Ltd. (hereinafter referred to as "Benxi Steel & Iron"), specifically, the assets
to be received being mining-related assets under Benxi Steel & Iron, to be surrendered being the assets
and liabilities related to all the Company's iron and steel businesses, and the difference between received
and surrender made up in cash by one party to the other. At present, the transaction is still in the
planning stage, which means specific information such as the scope and pricing of the underlying assets
have yet to be finalized and no agreement has been signed by the two sides. The transaction proposal still
requires further demonstration, communication and consultation, and is subject to necessary decision-
making and approval procedures in accordance with relevant laws, regulations and the Articles of
Association of the Company. There are still significant uncertainties in the relevant matters.
239
Bengang Steel Plates Co., Ltd. 2022 Annual Report
XVI.Notes to the financial statements of parent company
1. Accounts receivable
(1) Accounts receivable disclosed by category
Unit: RMB
Closing balance Opening balance
Book balance Provision for bad debts Book balance Provision for bad debts
Category
Proportion Book value Proportio Book value
Amount Proportion Amount Amount Proportion Amount
accrued n accrued
Accounts
receivable with
provision for 48,196,244.68 4.41% 48,196,244.68 100.00% 47,762,337.18 8.90% 47,762,337.18 100.00%
bad debts by
individual item
Including:
Accounts
receivable with
provision for 1,045,652,547.13 95.59% 114,616,750.55 10.96% 931,035,796.58 488,701,089.91 91.10% 135,069,526.49 27.64% 353,631,563.42
bad debts by
portfolio
Including:
Portfolio1 ：
886,147,539.07 81.01% 114,616,750.55 12.93% 771,530,788.52 328,112,713.51 61.16% 135,069,526.49 41.17% 193,043,187.02
Aging portfolio
Portfolio 2 ：
Portfolio of
159,505,008.06 14.58% 159,505,008.06 160,588,376.40 29.93% 160,588,376.40
related party in
combination
Total 1,093,848,791.81 100.00% 162,812,995.23 931,035,796.58 536,463,427.09 100.00% 182,831,863.67 353,631,563.42
Provision for bad debts by individual item：48,196,244.68
240
Bengang Steel Plates Co., Ltd. 2022 Annual Report
Unit: RMB
Closing balance
Name
Book balance Provision for bad debts Proportion accrued Reason for accrual
Benxi Nanfen Xinhe
48,196,244.68 48,196,244.68 100.00% Production has ceased
Metallurgical Burden Co., Ltd.
Total 48,196,244.68 48,196,244.68
Provision for bad debts by portfolio：
Unit: RMB
Closing balance
Name
Book balance Provision for bad debts Proportion accrued
Within 1 year (including 1 year) 765,065,841.39 7,650,658.42 1.00%
1-2 years 14,717,227.92 1,471,722.79 10.00%
2-3 years 1,087,625.52 217,525.10 20.00%
Over 3 years 105,276,844.24 105,276,844.24 100.00%
Total 886,147,539.07 114,616,750.55
Basis for determining this portfolio:
If the provision for bad debts on accounts receivable is based on the general model of expected credit
losses, please refer to the disclosure on other receivables for information relating to the provision for bad
debts:
□Applicable Not applicable
Disclosure by aging
Unit: RMB
Aging Book balance
Within 1 year (including 1 year) 924,570,849.45
1-2 years 14,717,227.92
2-3 years 1,087,625.52
Over 3 years 153,473,088.92
3-4 years 153,473,088.92
Total 1,093,848,791.81
(2) Accrual, recovery or reversal of provision for bad debts in the period
Accrual of provision for bad debts:
Unit: RMB
Changes in the period
Opening
Category Recovery or Closing balance
balance Accrual Write off Others
reversal
Accounts receivableProvision
182,831,863.67 8,585,581.32 28,604,449.76 162,812,995.23
for bad debts
Total 182,831,863.67 8,585,581.32 28,604,449.76 162,812,995.23
Significant amount of recovery or reversal of provision for bad debts in the period:
Unit: RMB
Name of company Recovery or reversal amount Recovery way
(3) Actual write-off accounts receivable in the period
Unit: RMB
Item Write-off amount
Accounts receivable write off 28,604,449.76
241
Bengang Steel Plates Co., Ltd. 2022 Annual Report
Significant write-off accounts receivable:
Unit: RMB
Nature of accounts Write-off procedures Whether the amount arises
Name of company Write-off amount Reason for write-off
receivable performed from a related transaction
A suspended company that is
Changzhou Foreign Enterprise Goods unreachable for a long time without Legal advice and approval
Payment for goods 9,008,967.00 No
& Materials General Company business transactions and included in by Board of Directors
account cancellation management
A suspended company that is
unreachable for a long time without Legal advice and approval
Shenyang Welded Pipe Factory Payment for goods 3,991,372.27 No
business transactions and included in by Board of Directors
account cancellation management
A suspended company that is
Benxi Civil Affairs Hongda Metal unreachable for a long time without Legal advice and approval
Payment for goods 2,386,307.13 No
Restructuring Plant business transactions and included in by Board of Directors
account cancellation management
Yanji Rongjun Building Materials Sales Legal advice and approval
Payment for goods 2,295,095.34 Cancelled No
Department by Board of Directors
Zhuhai Special Economic Zone Legal advice and approval
Payment for goods 1,883,089.58 Cancelled No
Huaxinyue Industrial Co., Ltd. by Board of Directors
A suspended company that is
Dalian Free Trade Zone Benda Special unreachable for a long time without Legal advice and approval
Payment for goods 1,464,685.47 No
Steel Co., Ltd. business transactions and included in by Board of Directors
account cancellation management
A suspended company that is
Wafangdian Bengang Special Steel unreachable for a long time without Legal advice and approval
Payment for goods 992,110.82 No
Sales Co., Ltd. business transactions and included in by Board of Directors
account cancellation management
A suspended company that is
Dalian Free Trade Zone Maofeng
unreachable for a long time without Legal advice and approval
International Industry and Trade Payment for goods 766,111.09 No
business transactions and included in by Board of Directors
Company
account cancellation management
A suspended company that is
Tianjin Bengang Special Steel Sales unreachable for a long time without Legal advice and approval
Payment for goods 749,215.44 No
Co., Ltd. business transactions and included in by Board of Directors
account cancellation management
Dalian Economic and Technological Payment for goods 650,313.34 Cancelled Legal advice and approval No
242
Bengang Steel Plates Co., Ltd. 2022 Annual Report
Nature of accounts Write-off procedures Whether the amount arises
Name of company Write-off amount Reason for write-off
receivable performed from a related transaction
Development Zone Bengang Special by Board of Directors
Steel Sales Office
Benxi Branch of Dalian Hardware and Legal advice and approval
Payment for goods 613,819.73 Cancelled No
Mineral Import and Export Company by Board of Directors
Hefei Zhongya Cement Machine Legal advice and approval
Payment for goods 435,086.35 Cancelled No
Factory by Board of Directors
A suspended company that is
Chengdu Bente Building Materials unreachable for a long time without Legal advice and approval
Payment for goods 345,428.35 No
Management Company business transactions and included in by Board of Directors
account cancellation management
Material Supply and Marketing A suspended company that is
Company of Shenyang Environmental unreachable for a long time without Legal advice and approval
Payment for goods 343,523.05 No
Protection Equipment Industry business transactions and included in by Board of Directors
Company account cancellation management
A suspended company that is
unreachable for a long time without Legal advice and approval
Lingning Linyuan Steel-tube Factory Payment for goods 340,167.23 No
business transactions and included in by Board of Directors
account cancellation management
A suspended company that is
unreachable for a long time without Legal advice and approval
Others Payment for goods 2,339,157.57 No
business transactions and included in by Board of Directors
account cancellation management
Total 28,604,449.76
Note to write-off Accounts receivable：
243
Bengang Steel Plates Co., Ltd. 2022 Annual Report
(4) Accounts receivable of the top five closing balances collected by arrears
Unit: RMB
Closing balance of accounts Proportion to total closing balance Closing balance of
Name of company
receivable of accounts receivable provision for bad debts
Unit 1 566,960,606.92 51.83% 5,669,606.07
Unit 2 157,101,856.36 14.36%
Unit 3 73,094,699.54 6.68% 730,947.00
Unit 4 51,257,341.26 4.69% 1,756,550.97
Unit 5 48,196,244.68 4.41% 48,196,244.68
Total 896,610,748.76 81.97%
2. Other receivables
Unit: RMB
Item Closing balance Opening balance
Interest receivable 2,014,931.61
Other receivables 150,724,545.56 266,591,116.91
Total 150,724,545.56 268,606,048.52
(1) Interest receivable
1) Classification of interest receivable
Unit: RMB
Item Closing balance Opening balance
Fixed deposit 2,014,931.61
Total 2,014,931.61
(2) Other receivables
1) Other receivables classified by nature of money
Unit: RMB
Nature of money Closing book balance Opening book balance
Current accounts 205,620,987.47 327,876,947.80
Others 8,506,439.44 10,232,392.89
Total 214,127,426.91 338,109,340.69
2) Accrual of provision for bad debts
Unit: RMB
Stage 1 Stage 2 Stage 3
12-month Lifetime expected Lifetime expected credit
Provision for bad debts Total
expected credit credit losses (no losses (credit impairment
losses credit impairment) has occurred)
Balance as at January 1st, 2022 526,800.70 6,305,393.56 64,686,029.52 71,518,223.78
Balance as at January 1st, 2022 in
the period
-- Transferred to Stage 2 -64,969.07 64,969.07
-- Transferred to Stage 3 -114,780.42 114,780.42
244
Bengang Steel Plates Co., Ltd. 2022 Annual Report
Stage 1 Stage 2 Stage 3
12-month Lifetime expected Lifetime expected credit
Provision for bad debts Total
expected credit credit losses (no losses (credit impairment
losses credit impairment) has occurred)
Balance as at January 1st, 2022 526,800.70 6,305,393.56 64,686,029.52 71,518,223.78
Accrual in the period 339,228.81 -4,901,909.83 221,645.90 -4,341,035.12
Reversal in the period 0.00
Charge off in the period 0.00
Write-off in the period 3,774,307.31 3,774,307.31
Other changes 0.00
Balance as at December 31st, 2022 801,060.44 1,353,672.38 61,248,148.53 63,402,881.35
Significant changes in book balance of provision for losses in the period:
□Applicable Not Applicable
Disclose by aging
Unit: RMB
Aging Book balance
Within 1 year (including 1 year) 89,160,291.73
1-2 years 58,187,051.40
2-3 years 3,519,908.21
Over 3 years 63,260,175.57
3-4 year 63,260,175.57
Total 214,127,426.91
3) Accrual, recovery or reversal of provision for bad debts in the period
Accrual of provision for bad debts:：
Unit: RMB
Changes in the period
Closing
Category Opening balance Recovery or
Accrual Write-off Others balance
reversal
Other receivablesProvision
71,518,223.78 -4,341,035.12 3,774,307.31 63,402,881.35
for bad debts
Total 71,518,223.78 -4,341,035.12 3,774,307.31 63,402,881.35
Significant amount of recovery or reversal of provision for bad debts in the period:
Unit: RMB
Name of company recovery or reversal amount Recovery way
4) Actual write-off other receivables in the period
Unit: RMB
Item Write-off amount
Write-off other receivables 3,774,307.31
245
Bengang Steel Plates Co., Ltd. 2022 Annual Report
Significant write-off other receivables：
Unit: RMB
Whether the amount
Nature of accounts Write-off procedures
Name of company Write-off amount Reason for write-off arises from a related
receivable performed
transaction
A suspended company that is unreachable for a
Benxi Manchu Autonomous Legal advice and approval
Payment for goods 2,202,434.85 long time without business transactions and No
County Dibang Concrete Co., Ltd. by Board of Directors
included in account cancellation management
Liming Farm of Benxi Forestry
Legal advice and approval
Department of Shenyang Mining Payment for goods 225,088.76 Cancelled No
by Board of Directors
Bureau
A suspended company that is unreachable for a
Benxi Lifa New Building Materials Legal advice and approval
Payment for goods 186,772.35 long time without business transactions and No
Co., Ltd. by Board of Directors
included in account cancellation management
A suspended company that is unreachable for a
Benxi Iron and Steel Recycling Legal advice and approval
Payment for goods 131,098.24 long time without business transactions and No
Materials Plant by Board of Directors
included in account cancellation management
A suspended company that is unreachable for a
Benxi Xihu District Huafeng Legal advice and approval
Payment for goods 100,150.00 long time without business transactions and No
Smelting Plant by Board of Directors
included in account cancellation management
A suspended company that is unreachable for a
Legal advice and approval
Benxi Fuledo Pipe Co., Ltd. Payment for goods 39,904.04 long time without business transactions and No
by Board of Directors
included in account cancellation management
A suspended company that is unreachable for a
Benxi Xihu District Xiujiang Paper Legal advice and approval
Payment for goods 32,942.48 long time without business transactions and No
Products Factory by Board of Directors
included in account cancellation management
A suspended company that is unreachable for a
Benxi Plastic Mining and Legal advice and approval
Payment for goods 31,257.51 long time without business transactions and No
Metallurgy Machinery Factory by Board of Directors
included in account cancellation management
A suspended company that is unreachable for a
Legal advice and approval
Xihu Tar Chemical Plant Payment for goods 21,309.78 long time without business transactions and No
by Board of Directors
included in account cancellation management
A suspended company that is unreachable for a
Benxi Iron and Steel (Group) Chint Legal advice and approval
Payment for goods 18,673.20 long time without business transactions and Yes
Building Materials Co., Ltd. by Board of Directors
included in account cancellation management
A suspended company that is unreachable for a
Bengang Crude Fuel Division Legal advice and approval
Payment for goods 18,001.73 long time without business transactions and No
Distribution Company by Board of Directors
included in account cancellation management
246
Bengang Steel Plates Co., Ltd. 2022 Annual Report
Whether the amount
Nature of accounts Write-off procedures
Name of company Write-off amount Reason for write-off arises from a related
receivable performed
transaction
A suspended company that is unreachable for a
Comprehensive Plant of Oxygen Legal advice and approval
Payment for goods 18,000.00 long time without business transactions and No
Plant of Benxi Iron and Steel by Board of Directors
included in account cancellation management
A suspended company that is unreachable for a
The Second Small Rolling Mill of Legal advice and approval
Payment for goods 17,522.80 long time without business transactions and No
Benxi Iron and Steel by Board of Directors
included in account cancellation management
A suspended company that is unreachable for a
Supply and marketing office Legal advice and approval
Payment for goods 16,554.16 long time without business transactions and No
senior metalworking plant by Board of Directors
included in account cancellation management
A suspended company that is unreachable for a
Legal advice and approval
Bengang Auto Parts Company Payment for goods 12,165.92 long time without business transactions and No
by Board of Directors
included in account cancellation management
A suspended company that is unreachable for a
Legal advice and approval
Bengang Sheet Processing Plant Payment for goods 11,093.60 long time without business transactions and No
by Board of Directors
included in account cancellation management
A suspended company that is unreachable for a
Legal advice and approval
Bengang Primary Rolling Mini Mill Payment for goods 9,355.68 long time without business transactions and No
by Board of Directors
included in account cancellation management
A suspended company that is unreachable for a
Bengang Primary Rolled Plate Legal advice and approval
Payment for goods 8,963.60 long time without business transactions and No
Processing Plant by Board of Directors
included in account cancellation management
A suspended company that is unreachable for a
Legal advice and approval
Benxi Shenquan Company Payment for goods 8,763.52 long time without business transactions and No
by Board of Directors
included in account cancellation management
A suspended company that is unreachable for a
Legal advice and approval
Others Payment for goods 664,255.09 long time without business transactions and No
by Board of Directors
included in account cancellation management
Total 3,774,307.31
Note to write-off other receivables:
247
Bengang Steel Plates Co., Ltd. 2022 Annual Report
5) Other receivables of the top five closing balances collected by arrears
Unit: RMB
Proportion to total
Closing balanc
Name of company Nature of money Closing balance Aging closing balance of
provision for bad
other receivables
The first Current accounts 17,624,754.20 0-2 years 8.23%
The second Current accounts 13,028,492.10 1-2 years 6.08% 433,910.93
The third Current accounts 11,612,008.77 1 year- Over 3 years 5.42% 11,612,008.77
The fourth Current accounts 11,348,676.33 1-2 years 5.30%
The fifth Current accounts 8,437,188.68 Within 1year 3.94% 84,371.89
Total 62,051,120.08 28.97% 12,130,291.59
3. Long-term equity investments
Unit: RMB
Closing balance Opening balance
Item Provision for Provision for
Book balance Book value Book balance Book value
impairment impairment
Investments in
2,222,281,590.24 2,222,281,590.24 2,015,186,190.50 2,015,186,190.50
subsidiaries
Investments in
joint ventures 47,996,314.61 47,996,314.61
and associates
Total 2,270,277,904.85 2,270,277,904.85 2,015,186,190.50 2,015,186,190.50
248
Bengang Steel Plates Co., Ltd. 2022 Annual Report
(1) Investments in subsidiaries
Unit: RMB
Changes in the period
Closing balance
Opening balance Accrualof Closing balance
Investee Additional Reduced of provision for
(book value) provision for Others (book value)
investments investments impairment
impairment
Guangzhou Bengang Steel & Iron Trading Co., Ltd 30,000,000.00 170,000,000.00 200,000,000.00
Shanghai Bengang Metallurgical Technology Co., Ltd. 30,000,000.00 199,936,718.57 229,936,718.57
Dalian Benruitong Automobile Material Technology Co., Ltd 65,000,000.00 65,000,000.00
Bengang POSCO Cold-rolled Sheet Co., Ltd. 1,019,781,571.10 1,019,781,571.10
Guangzhou Bengang Steel & Iron Trading Co., Ltd. 28,144,875.36 28,144,875.36
Yantai Bengang Steel Sales Co., Ltd. 49,100,329.41 170,000,000.00 219,100,329.41
Tianjin Bengang Steel Trade Co., Ltd. 60,318,095.80 170,000,000.00 230,318,095.80
Benxi Bengang Steel & Iron Sales Co., Ltd. 30,000,000.00 30,000,000.00
Shenyang Bengang Bengang Metallurgy Science and
30,000,000.00 170,000,000.00 200,000,000.00
Technology Co., Ltd
Bengang Baojin (Shenyang) auto new material technology
51,000,000.00 51,000,000.00
Co., Ltd.
Bengang Steel Liaoyang Qiutuan Co., Ltd. 529,899,801.38 529,899,801.38
Harbin Bengang Economic Trading Co., Ltd. 29,923,398.23 29,923,398.23
Nanjing Bengang Material Sales Co., Ltd. 2,081,400.65 2,081,400.65
Wuxi Bengang Steel & Iron Sales Co., Ltd. 29,936,718.57 29,936,718.57
Chongqing Liaoben Steel & Iron Trading Co., Ltd. 30,000,000.00 30,000,000.00
Total 2,015,186,190.50 879,936,718.57 672,841,318.83 2,222,281,590.24
249
Bengang Steel Plates Co., Ltd. 2022 Annual Report
(2) Investments in joint ventures and associates
Unit: RMB
Changes in the period
Closing
Opening Investment
Adjustment to Declaration Accrual of Closing balance of
balance income Other
Investee Additional Reduced other of cash provision balance (book provision
(book recognized equity Others
investments investments comprehensive dividend or for value) for
value) under equity changes
income profit impairment impairment
method
I. Joint ventures
II. Associates
Bengang
Baojin
(Shenyang)
auto new 51,000,000.00 -580,788.56 -2,422,896.83 47,996,314.61
material
technology
Co., Ltd.
Subtotal 51,000,000.00 -580,788.56 -2,422,896.83 47,996,314.61
Total 51,000,000.00 -580,788.56 -2,422,896.83 47,996,314.61
250
Bengang Steel Plates Co., Ltd. 2022 Annual Report
4. Operating income and operating cost
Unit: RMB
Amount incurred in the period Amount incurred in the prior period
Item
Income Cost Income Cost
Main business 58,937,350,684.09 59,090,024,551.87 69,727,193,761.59 65,005,072,705.35
Other businesses 4,144,406,405.05 4,075,230,315.93 8,994,267,964.12 8,198,390,770.21
Total 63,081,757,089.14 63,165,254,867.80 78,721,461,725.71 73,203,463,475.56
Information relating to income:
Unit: RMB
Income from main Income from
Classification of contracts Segment 1 Segment 2 Total
business other business
Commodity type
Including:
Classified by operation area 58,937,350,684.09 4,144,406,405.05 63,081,757,089.14
Including:
Including: Domestic 54,451,160,983.64 4,144,406,405.05 58,595,567,388.69
Overseas 4,486,189,700.45 4,486,189,700.45
Market or customer type
Including:
Contracy type
Including:
Classified by transfer time of
58,937,350,684.09 4,144,406,405.05 63,081,757,089.14
Commodity
Including:
Including: recognized at a
58,937,350,684.09 4,141,838,244.24 63,079,188,928.33
point of time
recognized at a period of
2,568,160.81 2,568,160.81
time
Classified by contract term
Including:
Classified by sale channel
Including:
Total 58,937,350,684.09 4,144,406,405.05 63,081,757,089.14
Information relating to performance obligations:
None
Information relating to the transaction price apportioned to the remaining performance obligation:
Amount of income corresponding to performance obligations that have been contracted for but not yet
performed or not yet completed at the end of the reporting period is RMB 0.00.
Other notes:
251
Bengang Steel Plates Co., Ltd. 2022 Annual Report
5. Investment income
Unit: RMB
Item Amount incurred in the period Amount incurred in the prior period
Investment income from long-term equity
-580,788.56
investments accounted for under the equity method
Investment income from the disposal of long-term
263,652,271.12 -1,341,423.32
equity investments
Investment income from the disposal of financial
-6,558,780.75 -124,911,004.89
assets held for trading
Income from debt restructuring 1,243,883.36
Others 2,879,850.07 2,436,869.33
Total 260,636,435.24 -123,815,558.88
XVII. Supplementary information
1. Details of non-recurring profit and loss for the period
Applicable □Not applicable
Unit: RMB
Item Amount Note
Profit or loss on the disposal of non-current assets 3,648,546.62
Government grants included to current profit or loss (except those closely
related to the Company's normal business operations, which are in line with
72,300,830.48
national policies and are enjoyed on an ongoing basis at a fixed or quantitative
rate in accordance with certain standards)
Profit or loss on entrusting others with the investment or management of assets 2,879,850.07
Profit or loss on debt restructuring 1,274,270.98
Other non-operating income and expenses other than those mentioned above 13,507,766.62
Other profit or loss items that meet the definition of non-recurring profit or loss 92,174,927.78
Less: Income tax effect 1,956,581.46
Effect of minority interests 391,139.95
Total 183,438,471.14 --
Other specific profit or loss items that meet the definition of non-recurring profit or loss:
Applicable □Not applicable
Description of "Other profit or loss items that meet the definition of non-recurring profit or loss"
and non-recurring profit or loss items that are defined as recurring profit and loss items based on the
nature and characteristics of its normal business operations
Item Amount Reason
Gain arising from remeasurement of the
Other profit or loss items that meet the
4,154,883.39 remaining equity interest at fair value after loss
definition of non-recurring profit or loss
of control over Shenyang Baojin
Other profit or loss items that meet the Investment income from the disposal of long-
88,020,044.39
definition of non-recurring profit or loss term equity investment in Liaoyang Qiutuan
The description of non-recurring profit or loss items listed in the Explanatory Notice No. 1 on Disclosure of
Information by Companies Issuing Public Securities - Non-recurring profit or Loss that are defined as
252
Bengang Steel Plates Co., Ltd. 2022 Annual Report
recurring profit and loss items:
□Applicable Not applicable
2. Return on equity and earnings per share
Earnings per share
Weighted average return
Profit for the reporting period Basic earnings per share Diluted earnings per share
on equity
(RMB/share) (RMB/share)
Net profit attributable to ordinary
-0.06% -0.300 -0.300
shareholders of the Company
Net profit after non-recurring profit
and loss attributable to ordinary -0.06% -0.345 -0.345
shareholders of the Company
253
