Beijing Shougang Co. Ltd Annual Report 2021
Beijing Shougang Company Limited
2021 Annual Report
27 April 2022
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Beijing Shougang Co. Ltd Annual Report 2021
Section I. Important notice, Content, Definitions
The board of directors (the “Board”), the supervisory committee, all directors, supervisors and senior executives
of the Company warrant that there are no false representations, misleading statements or material omissions in this
annual report; and are jointly and individually responsible for the truthfulness, accuracy and completeness of the
information contained in this annual report.
Mr. Zhao Minge, representative of the Company, Mr. Liu Jianhui, general manager, Mr. Li Baizheng, person
overseeing the accounting operations, and Ms. Gong Juanjuan, head of Accounting Department, made
representations in respect of the truthfulness, accuracy and completeness of the financial report contained in the
annual report.
All directors have attended the board meeting to review of and deliberate on this report.
Forward-looking statements contained in this annual report do not constitute any substantive commitments to
investors by the Company. Investors should be aware of the relevant investment risks.
Certain risks that may exist have been elaborated by the Company in this report. Please refer to Discussion and
Analysis of Business Operations for details.
Notes to the profit distribution plan or the plan for converting capital reserve into share capital during the
report period:
On 18 March 2022, the Company has received the“Approval for Beijing Shougang Co., Ltd. to Issue Shares to
Shougang Group Co., Ltd. to Purchase Assets and Raise Supporting Funds” (zjxk [2022] No. 553) from China
Securities Regulatory Commission.
The Company is proceeding with this transaction in accordance with the regulations of Measures for the
Administration of Securities Issuance and Underwriting issued by the China Securities Regulatory Commission.
The Company neither distributes cash nor convert capital reserve into share capital this year.
The Company intends to review and arrange relatedprofit distribution plan in accordance with the provisions of
relevant laws, regulations, rules, normative documents and Articles of Association as soon as this transaction is
completed.
This report is prepared based on Chinese text and is prepared in both Chinese and English versions. In the event of
any discrepancy between Chinese and English versions, please subject to the Chinese text.
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Beijing Shougang Co. Ltd Annual Report 2021
CONTENTS
SECTION I. IMPORTANT NOTICE, CONTENT, DEFINITIONS ........................................................................... 2
SECTION II. COMPANY PROFILE AND MAJOR FINANCIAL INDICATORS ......................................................... 6
SECTION III. MANAGEMENT DISCUSSION AND ANALYSIS......................................................................... 10
SECTION IV. CORPORATE GOVERNANCE .................................................................................................. 32
SECTION V. ENVIRONMENT AND SOCIAL RESPONSIBILITY ....................................................................... 54
SECTION VI. SIGNIFICANT EVENTS ......................................................................................................... 63
SECTION VII. MOVEMENTS IN SHARE CAPITAL AND SHAREHOLDERS ........................................................ 71
SECTION VIII. PREFERRED SHARES ........................................................................................................ 80
SECTION IX. BONDS RELATED INFORMATION .......................................................................................... 81
SECTION X. FINANCIAL REPORT ............................................................................................................. 85
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Beijing Shougang Co. Ltd Annual Report 2021
File directory for reference
1.Accounting statements with signatures and seals of Chairman, general manager, chief accountant and person in charge of
accounting institution.
2. Original audit report with seals of accounting firm and signature and seals of CPA.
3. All the original documents and announcements publicly disclosed in newspapers designated by China Securities Regulatory
Commission during the reporting period.
4. The Articles of Association of the Company, etc.
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Beijing Shougang Co. Ltd Annual Report 2021
INTERPRETATION
Items Refers to Contents
CSRC Refers to China Securities Regulatory Commission
SZSE Refers to Shenzhen Stock Exchange
Company, the Company or Shougang Co. Refers to Beijing Shougang Company Limited
Shougang Group (Reforming from an enterprise owned by the whole
people to exclusively state-owned companies, name of Shougang Group
Shougang or Shougang Group Refers to
is changed from Shougang Corporation. The specific content is detailed
in 15 June 2017 public announcement.)
Listing Rules of SZSE Refers to Listing Rules of Shenzhen Stock Exchange
The Articles of Association Refers to The Articles of Association of Beijing Shougang Company Limited
Board of Directors or the Board Refers to The board of directors of Beijing Shougang Company Limited
Supervisory Committee Refers to The supervisory committee of Beijing Shougang Company Limited
The Shareholders’ General Meeting of Beijing Shougang Company
Shareholders’ General Meeting Refers to
Limited
Qiangang Co. Refers to Shougang Qian'an Iron&Steel Co., Ltd. (Branch of the Company)
Beijing Shougang Cold Rolling Co., Ltd. (Holding subsidiary of the
Cold-R Co. Refers to
Company, holds 70.2806%)
Shougang Zhixin Qian'an Electromagnetic Materials Co., Ltd.
Zhixin Co. Refers to
(Holding subsidiary of the Company, holds 82.7688%)
Beijing Shougang New Energy Automobile Material Technology Co.,
New-E Co. Refers to
Ltd. (Holding subsidiary of the Company, holds 45.9184%)
Beijing Shougang Steel Trading Investment Management Co., Ltd.
Steel Trading Refers to
(Holding subsidiary of the Company, holds 51%)
Qiangang Co, Zhixin Co., located in Qian-an, Hebei province, and
Cold-R Co., located in Shunyi District, Beijing, establishing an upstream
Qianshun production line Refers to
and downstream integrate production management system and research
and development system.
Shougang Jingtang United Iron&Steel Co., Ltd. (Holding subsidiary of
Jingtang Co. Refers to the Company, the Company holds 70.1823%, Steel Trading Co. holds
29.8177%)
Since the shut down of the main process of iron and steel manufacturing
in late 2010, which was operated in Shijingshan District, Beijing, a
transaction between the Company and Shougang carried out. The
transaction event was announced as "Related Party Transactions
between Beijing Shougang Co., Ltd. and Shougang Corporation - Major
Assets Swap and Asset Purchase through Issue of Shares". The event
First Reorganization, and Previous Major was unconditional approved by China Securities Regulatory
Refers to
Assets Reorganization Commission Restructuring Committee on 16 January 2013. On 29
January 2014, the Company received the approval document, named
"The Approval of Related Party Transactions between Beijing Shougang
Co., Ltd. and Shougang Corporation - Major Assets Reorganization and
Asset Purchase through Issue of Shares", which was issued by China
Securities Regulatory Commission. On 25 April 2014, the reorganization
was accomplished.
On 23 April 2015, trading in the shares of the Company was suspended
and the major assets swap launched. Main content of the swap is: 100%
shareholding of Guizhou Investment Co., Ltd. was replaced with 51%
shareholding of Jingtang Co., any insufficiency was paid in cash. This
Second Reorganization Refers to major assets swap was accomplished at the end of 2015. On 27 April
2016, re-election of the board of directors and amendment of Articles of
Association of Jingtang Co. was accomplished and the Company was
qualified to consolidate the financial statements of Jingtang Co. The
second swap was then accomplished.
Early Vendor Involvement means involving the downstream users at
early stage of product development process and fully understanding
EVI Refers to
clients’ requirements for raw material so that high-performance
materials and personalized services could be offered to users.
Reporting Period Refers to From 1 January 2021 to 31 December 2021
Thousand, Million, Billion Refers to RMB Thousand, RMB Million, RMB Billion
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Beijing Shougang Co. Ltd Annual Report 2021
Section II. Company Profile and Major Financial Indicators
I. Company information
Short name of stock Shougang Stock Stock code 000959
Stock exchange for listing of shares The Shenzhen Stock Exchange
Statutory Chinese name of the Company 北京首钢股份有限公司
Statutory Chinese name of the Company 首钢股份
Statutory English name of the Company (if any) Beijing Shougang Co., Ltd.
Legal representative of the Company Zhao Minge
Registered address Shijingshan Road, Shijingshan District, Beijing, PRC
Postal code of the registered address 100041
Historical changes of the company's registered
N/A
address
Office address No. 99 Shijingshan Road, Shijingshan District, Beijing, PRC
Postal code of the office address 100041
The Company’s website www.sggf.com.cn
Email address sggf@sgqg.com
II. Contact information
Secretary of the board
Name Chen Yi
Correspondence address No. 99 Shijingshan Road, Shijingshan District, Beijing, PRC
Telephone 010-88293727
Fax 010-88292055
Email address Chenyi@shougang.com.cn
III. Information disclosure and place for inspection
The website of the stock exchange for disclosing the annual China Securities Journal, Securities Times, Shanghai Securities News,
report of the Company Securities Daily
The media name and website for disclosing the annual
http://www.cninfo.com.cn
report of the Company
Secretary office of the board of the Company, The Shenzhen Stock
Place for inspection of the annual report
Exchange
IV. Changes of registration
Organization code 911100007002343182
Changes of the core business since listing
No changes
(if any)
Changes of controlling shareholder (if any) No changes
V. Other relevant information
Accounting firm engaged by the company
Name of accounting firm Grant Thornton LLP
Address of accounting firm 5th Floor of Scitech Plaza, No. 22 Jianguomenwai Avenue, Chaoyang District, Beijing
Signed CPA Qian Bin, LiuYiwei
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Beijing Shougang Co. Ltd Annual Report 2021
Sponsor engaged by the Company for performing continuous supervision duties in reporting period
√ Applicable □ Not applicable
Name Office address Representatives Supervision period
Room 401, Building B7, Qianhai
Shenzhen-Hong Kong Fund Town,
Chai Qizhi,Zhang 1 May 2021- 31 December
Huatai United Securities Co., Ltd. No.128 guiwan Fifth Road, Nanshan
Zhanpei 2022
Street, Qianhai Shenzhen-Hong Kong
Joint Development Zone, Shenzhen
Building 4, 66 Anli Road, Chaoyang 1 May 2021- 31 December
China Securities Co., Ltd. Wang Bo, Lv Jia
District, Beijing 2022
Financial consultant engaged by the Company for performing continuous supervision duties in reporting period
√ Applicable □ Not applicable
Name Office address Representatives Supervision period
Room 401, Building B7, Qianhai
Shenzhen-Hong Kong Fund Town,
Chai Qizhi,Zhang 1 May 2021- 31 December
Huatai United Securities Co., Ltd. No.128 guiwan Fifth Road, Nanshan
Zhanpei 2022
Street, Qianhai Shenzhen-Hong Kong
Joint Development Zone, Shenzhen
Building 4, 66 Anli Road, Chaoyang 1 May 2021- 31 December
China Securities Co., Ltd. Wang Bo, Lv Jia
District, Beijing 2022
VI. Major accounting data and financial indicators
Whether the Company has retroactive adjustment or re-statement on previous accounting data or not
□ YES √ NO
Reasons for retroactive adjustment or restatement
Business combination under common control
Changes over
2021 2020 2019
last year
Operating revenue 134,034,486,136.13 79,951,181,948.10 67.65% 68,841,307,821.91
Net profit attributable to shareholders of the
7,014,335,009.45 1,786,452,832.06 292.64% 1,185,589,702.44
listed company
Net profit attributable to shareholders of the
listed company after deducting non-recurring 7,014,226,910.72 1,714,439,720.83 309.13% 1,237,189,576.69
profit and loss
Net cash flows from operating activities 15,043,727,257.76 10,274,678,796.19 46.42% 3,415,002,015.35
Basic earnings per share 1.1291 0.3377 234.35% 0.2241
Diluted earnings per share 1.1291 0.3377 234.35% 0.2241
Weighted average return on net assets 19.07% 6.40% Increase 12.67% 4.52%
Changes over end
31 December 2021 31 December 2020 31 December 2019
of last year
Total assets 147,211,560,696.41 144,367,221,971.10 1.97% 146,872,471,898.20
Net assets attributable toshareholders of the
41,827,745,395.60 28,959,395,268.02 44.44% 26,881,935,733.01
listed company
Thelower of the net profit before and after deducting non-recurring profit and loss of the Company in the last three fiscal years is
negative, and the audit profit of the latest year presents that the Company’s ability of continuing operations is uncertain.
□ YES √ NO
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Beijing Shougang Co. Ltd Annual Report 2021
The lower of the net profit before and the after deducting non - recurring profit and loss is negative.
□ YES √ NO
VII. Difference of accounting data under accounting rules in and out of China
1. Differences of net profit and net assets in financial statements disclosed according to International Financial Reporting
Standards and Chinese Accounting Standards
□ Applicable √ Not applicable
There is no difference between the net profit and net assets in the financial statements disclosed in accordance with International
Financial Reporting Standards and Chinese Accounting Standards during the reporting period of the Company.
2. Difference of net profit and net assets in financial statements disclosed according to foreign accounting standards and
Chinese Accounting Standards
□ Applicable √ Not applicable
There is no difference between the net profit and net assets in the financial statements disclosed in accordance with foreign
accounting standards and Chinese Accounting Standards during the reporting period of the Company.
VIII. Major financial indicators by quarter in 2021
Unit: RMB Yuan
Q1 Q2 Q3 Q4
Total revenue 29,273,170,720.26 34,104,708,653.01 36,173,744,194.09 34,482,862,568.77
Net profit attributable to
1,043,625,582.45 2,389,794,383.86 2,383,191,483.97 1,197,723,559.17
shareholders of the listed company
Net profit attributable to
shareholders of the listed company
1,037,069,586.95 2,381,580,854.14 2,370,740,330.95 1,224,836,138.68
after deducting non-recurring profit
and loss
Net cash flows from operating
1,489,334,634.79 3,340,766,089.66 5,041,958,026.41 5,171,668,506.90
activities
Whether there are significant differences between the above-mentioned financial indicators or the sum and the relevant financial
indicators disclosed in the Company’s quarterly report and semi-annual report
□ YES √ NO
IX. Items and amounts of non-recurring profit and loss
√ Applicable □ Not applicable
Unit: RMB Yuan
Item 2021 2020 2019 Note
Gains and losses on disposal of non-current assets
(including the write-off that accrued for impairment of -55,726,886.68 -633,491.79 -7,684,491.35
assets)
Government grant included in the current profit and loss
(except for the government grant which are closely
48,447,356.52 58,640,213.30 42,102,501.30
related to the business of the company and are in
accordance with the national unified standard quota)
Current net profit and loss of subsidiaries from the
beginning of the period to the date of business 61,522,051.81 5,124,466.43
combination under the common control
Profit and loss from external entrusted loans 10,518,170.49 10,361,268.74 8,187,426.69
Other non-operating income and expenses except the
1,941,256.62 -289,865.40 -18,673,930.68
above items
Other profit and loss items conforming to the definition
-6,922,580.64 -66,820,816.33
of non-recurring profit and loss
Less: The impact of income tax -950,188.41 7,022,263.80 4,039,236.83
The impact on non-controlling interests(post-tax) 6,021,986.63 43,642,220.99 9,795,793.48
Total 108,098.73 72,013,111.23 -51,599,874.25 --
Details of other profit and loss items that meet the definition of non recurring profit and loss:
□ Applicable √ Not applicable
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Beijing Shougang Co. Ltd Annual Report 2021
The Company has no other profit and loss items that meet the definition of non recurring profit and loss.
Explanation of reclassifying the non-recurring profit and loss items listed in the Explanatory Announcement No. 1 on Information
Disclosure for Companies Offering Their Securities to the Public—Exceptional Gain/Loss Items as recurring items:
□ Applicable √ Not applicable
During the reporting period, no non-recurring profit and loss item listed in the Explanatory Announcement No. 1 on Information
Disclosure for Companies Offering Their Securities to the Public—Exceptional Gain/Loss Items is reclassied as recurring item.
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Beijing Shougang Co. Ltd Annual Report 2021
Section III. Management Discussion and Analysis
I. The industry situation of the Company during the reporting period
In 2021, the development of electrical steel industry is healthy and stable, the output of oriented and non-oriented electrical steel
achieves double growth, including in which, the output of orientedelectrical steel is about 1.83 million and the output of non-oriented
electrical steel is about 11.46 million, which indicates that China is the world's first producer of electrical steel. Significant growth of
high-grade materials such as energy-saving transformers and driving motors of new energy automotive is achieved. High-end
electrical steel products provide strong support for the national "dual carbon" policy landing, manufacturing upgrade and power
industry development.
In 2021, the overall performance of the steel industry in the first three quarters was in good situation and a dynamic balance between
supply and demand was achieved. Through tapping potential for efficiency and overcoming the impact of high crude fuel prices, the
industry benefits created the historic best level.Entering the fourth quarter, affected by the shrinking demand, steel prices generally
fell and the reduction rate is greater than the decline of raw fuel.
During the reporting period, major adjustments have taken place in national industrial policies. First, the control of production
capacity and output is implemented, steel export tax rebate policy is cancelled, and carbon peak, carbon neutral target are launched;
Second, ultra-low emission transformation and strict assessment of double control of energy consumption put an impact on the
guarantee of production factors; Third, the domestic and foreign markets fluctuate greatly, the commodity prices rise and fall sharply,
and the market environment is complicated; Fourth, the industrial efficiency improved significantly and the structure of assets and
liabilities was further optimized.
Affected by the capacity and output policies, the cumulative production of iron in China is 869 million tons, decreases of 43% year
on year; the cumulative production of crude steel is 1.033 billion tons, decreases of 3.0% year on year; the cumulative production of
steel 1.337 billion tons, increases of 0.6% year-on-year.
II.Main business of the Company during the reporting period
The main business of the Company is the production and sales of steel products and metal soft magnetic materials (electrical steel)
1. Zhixin Co.
Electric steel is an indispensable electromagnetic material in the fields of power, electronics and military industry. It is the core soft
magnetic functional material applied in the power industry and serves the generation, transmission and use of electric energy.Electric
steel is divided into oriented electric steel and non-oriented electric steel. Oriented electric steel is mainly used in the field of
ultra-high voltage, ultra-high voltage and high energy efficiency distribution transformers. It is used to manufacture transformer
cores.Non-oriented electric steel is mainly used in new energy vehicles, household appliances, industrial motors, small and
medium-sized motors and other industries or fields, used to manufacture motors, frequency conversion compressors and other
products.
Zhixin Co. is a research and development, manufacturing and sales base of metallic soft magnetic materials (electric steel), and has
become the world's leading manufacturer and service provider of electric steel. Products include oriented and non-oriented electrical
steel. The orientedelectric steel includs high magnetic induction, magnetic domain refinement, low noise, low excitation, no
underlying, intermediate frequency six products. Independent researching and developing of low temperature slab reheating technics
producing high magnetic induction orientation technology of electric steel and becoming the world's fourth all cryogenic technology
industrialization enterprises. Non-oriented electric steel includes four categories of products including new energy vehicles, stress
relief annealing, high efficiency and general, with stable batch production capacity of all grades.
2.Jingtang Co.
Jingtang Co. is a large steel base with advanced international level designed and constructed in full accordance with the concept of
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Beijing Shougang Co. Ltd Annual Report 2021
circular economy. It has the obvious advantages of being near the sea and near the harbor, large equipments, high production
efficiency and low cost.
Iron and steel products of Jingtang Co. include hot and cold plates. The hot plates mainly contain hot-rolled products, i.e., hot-rolled
pickling sheet, weather-resistant steel, automobile structure steel, high-performance construction steel, pipeline steel, etc.; and also
contain medium and thick plates products, such as bridge steel,energy steel, pipeline steel, etc. The cold plates mainly contain
automobile sheet, tin sheet, cold-rolled special-use plate, color-coated sheet, etc. four main products series.
3. Qianshun production line
Qianshun production line is an important high-end plate production base in China, with world-class equipment and industry-leading
clean steel manufacturing technology, and has full range supply capacity of high-end auto plate and high-end household appliance
board.
Products of Qianshun production line include hot and cold plates. The hot plates mainly contain hot-rolled pickle sheet,
weather-resistant steel, automobile structure steel, high-strengthconstruction machinery steel, pipeline steel, etc. The cold plates
mainly contain automobile sheet, cold-rolled special-use plate, etc.
III.Analysis of core competitiveness
1. Market-leading technology
The Company, Jingtang Co., Zhixin Co., Cold-R Co. are high-tech enterprises, the R&D investment of RMB 5.3 billion in 2021
accounts for 3.97% of the operating revenue. Technological innovation is guided by benefit and demand, making technical research
projects, expert workstations and platforms for external cooperation rely on the research and development system of "one institute
and multiple centers". The cultivation of new products, new technologies and new technological processes is accelerating.
New Product development: Six new products represented by CR290Y490T-DP-GI dual-phase high-strength outer panel for
automobiles has launched in China; 29 high-end materials represented by DP500 of automobile exterior panel have been replaced by
domestic products; High grade non-oriented electric steel represented by high strength and low iron loss product 15SW1100H has
completed 12 new product development projects.
Key technological breakthroughs: Nine complete sets of technologies have been completed, including "technology for smooth
stability and longevity of blast furnaces", the No. 1 blast furnace of Jingtang Co. have reached the first place in China by using the
coefficient and coke ratio, "Large proportion pelletizing iron making technology" is in the leading place in China, the pelletizing ore
ratio is up to 60%, and the carbon reduction effect is obvious.
Patents：The Company has obtained 450 patents, including 182 invention patents and 268 utility model patents.75 projects won the
"National Invention Exhibition Invention Entrepreneurship Award and Project Award".
Standards：The Company has set up standard industry benchmark, presided over the formulation of 24 standards at all levels,
including "Evaluation Standard of Green Production Management in Iron and Steel Industry" and "Technical Specifications for High
Precision Filtration of Converter Flue Gas Emission", and participated in the formulation and revision of 44 standards at all levels.
Science and technology awards：The project of "Carbon dioxide green and Clean steelmaking Technology and Application" and
"Low-carbon clean and efficient iron-making process and Technology integration" won the special prize and the first prize of
metallurgical science and technology respectively, and the second prize and the third prize of metallurgical Science and technology
were respectively awarded for "High grade non-oriented silicon Steel ultra-low Identical Plate Difference Control Technology" and
"Ultra-thin tinplate Efficient green Manufacturing Technology and Application".
2. High-end products
The Company continues to optimize the product structure, production line structure and customer structure, so as to achieve both
product quality and efficiency improvement, to achieve three development strategies, including adhere to the continuous leadership
of electric steel, automotive board to do more refined and stronger, breakthrough into the tin plate high-end market. During the
reporting period, the total output of the three strategic products was 5.68 million tons, accounting for 26% of steel output and
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Beijing Shougang Co. Ltd Annual Report 2021
contributes about 40% to profit.The total output of eight key products of the Company (cold-rolled special steel, hot-rolled pickling
plate, weather-resistant steel, energy steel, automotive structural steel, high-strength construction machinery steel, pipeline steel,
bridge steel) was 9.47 million tons. The total output of key and strategic products accounts for 68% of steel output and contributes
about 85% to profit.
Production 1.5 million tons of electric steel, and the dimensional accuracy and composition control have reached the
world-class level. With the promotion of the national "dual carbon" strategy, the electrification level of the whole society has been
further improved, the demand for high-end electric steel products continues to grow, and the company's high-end electric steel
products account for 48%.
In terms of high magnetic orientation electric steel, the output of 0.20mm and below ultra-thin high magnetic orientation electric steel
products reached 54,000 tons, increasing 74% year-on-year, and the market share reached 60%, achieving the first domestic sales
volume for four consecutive years. Manufacturing 983 new standard level Ⅰ energy efficiency transformers; The Baihetan-Jiangsu
±800kV UHVDC transmission project has 4 rheological converters, realizing full coverage of AC and DC transformers.Continuous
optimization of non oriented electrical steel product structure, the output of high-grade non-oriented electric steel products reached
547,000 tons, increasing 28% year on year, among which, the output of high-grade non-oriented electric steel products for new
energy vehicles increased 231% year on year; 5 of the top 10 global sales companies of new energy vehicles are stably supplied, and
nine of the top 10 domestic sales companies are stably supplied.
Production 3.55 million tons of automobile plate, increasing 5% year on year, and the products cover all types of automobiles.
The product structure was further optimized, and the output of galvanized sheet, high-strength sheet, outer sheet increases by 18%,
20% and 14% year-on-year respectively. Zinc aluminum magnesium coating products were the first to successfully replace electro
galvanized products, which catching up with competitors and the annual order quantity exceeded 120,000 tons, with a year-on-year
growth of 93%. The customer structure was further upgraded. OEM orders accounts for 43% and the share of core OEM is stable and
rising. The supply of Japanese cars increased by 58% year on year; Joint venture car brand customer supply increased by 3% year on
year;Shougang BMW Brilliance Alliance Innovation Studio has been jointly established by the Company to achieve
cross-professional, cross-field and cross-enterprise in-depth cooperation.
Production 630,000 tons of tinned (chrome) plate, increasing 8% year on year, capacity utilization rate reached 120%.
Tinplate deep drawing cupping DI material to achieve the widest specification coverage (width up to 1202mm), exporting to the
North American market in batches; Developing 0.19mmt5 Red Bull iron products with customers, and the replacement of 0.2mmt4
product was realized for the first time; The 0.12mm "Cicanyi steel" was first used to make postcards and became the cultural and
creative product of the Beijing Winter Olympics. The market share of high-extension easy-open lid and high-surface milk powder
cans is in leading place, and the output of easy-open lid, iron milk powder and two-can products has increased by more than 50%
year on year, and the advantageous products continue to increase.
3.Safety supply chain
The Company is the only platform for Shougang Group, the controlling shareholder, to develop and integrate the iron and steel and
upstream iron ore resource industry in China. Shougang Group owns Shuichang Iron Mine and Xingshan Iron Mine with an annual
production capacity of 4 million tons of iron powderin domestic and owns Peruvian Iron Mine with an annual production capacity of
20 million tons of iron powder overseas.Macheng Iron Mine under construction has high reserves, low cost, environmentally friendly
and efficient transportation, with an annual production capacity of 7 million tons of iron powder, which is expected to be put into
operation by the end of 2023, and the iron ore resource guarantee capacity of the Company will be further improved.Coke resources
supply is guaranteed because the coke of Qiangang Co. is mainly supplied by Qian'an Sinochem Coal Chemical Industrial Co., Ltd.,
a joint venture of the Company and Kailuan Energy Chemical Co., Ltd, and the coke of Jingtang Co. is supplied by Tangshan
Shougang Jingtang Xishan Coking Co., Ltd., a joint venture ofJingtang Co. and Shanxi Xishan Coal and Electricity Power Co.,
Ltd.The Company has signed long-term agreements with large state-owned coal groups, among which Shougang Fushan Resources
Group Co. Ltd., a joint venture of Shougang Group, provides part of high-quality coking coal resources to the Company that ensuring
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Beijing Shougang Co. Ltd Annual Report 2021
sufficient coal supply.
4. Green and low-carbon
According to the policy requirements, Qiangang Co. and Jingtang Co. take independent emission reduction measures to continuly
maintaine the "A level" enterprises under Hebei Province environmental performance evaluation.Through the sharing of ultra-low
emission advanced technology and management experience, Qiangang Co. has served more than 30 steel enterprises.CCTV news
Broadcast, Xinhua News Agency and Phoenix TV praised Shougang's green and low-carbon transformation development
respectively.
Through the establishment of green manufacturing committee, the Company carries out energy-saving and carbon reduction
technology research and establishes LCA data acquisition system, and provides product life cycle evaluation reports according to
customer requirements.Jingtang Co. is the first demonstration iron and steel enterprise in China that applies carbon dioxide to
converter top and bottom double blowing system. Meanwhile, its large proportion pellet iron-making technology replaces sinter with
pellet, which realizes high efficiency, low energy consumption, low emissions, carbon reduction and environmental protection
advantages.
The "burning - heat - electricity - water - salt" five-effect integrated high efficiency recycling system of Jingtang Co. won the first
prize of China Energy Conservation Association energy-saving and Emission Reduction Science and Technology progress, and also,
Jingtang Co. won a number of awards such as green and low-carbon excellent brand enterprise, green manufacturing standardization
support unit, green development benchmark enterprise in the steel industry. The "cold rolling high strength steel plate and strip for
automobile" of Cold-R Co. has been recognized as national "green design product" by the Ministry of Industry and Information
Technology.
5. "Technology + Service" marketing
The Company takes customers as the center to deepen the marketing strategy of "technology + service" and create service to enhance
the brand value ofShougang.By improving the three-level service system and improving service efficiency, the Company meets
customers' requirements for quality, delivery time, research and development, and service. The Company has improved EVI service
capacity year by year, and the EVI supply increased by 26.1% year on year. By establishing product advantage analysis model,
strengthening product research and development, and improving manufacturing capacity, the Company has promoted key products to
maintain competitive advantages and expanded the leading edge of strategic products.
The Company has established a centralized, unified, fast response and efficient marketing management network with marketing
center as the core, 5 regional steel trading subsidiaries and 11 processing centers, to further consolidate and enhance the channel
structure of the combination of leading enterprises in the industrial chain and high-quality small and medium-sized customers.In
order to stabilize the market-share and improve the comparative advantage of industrial chain cooperation, enhance the depth of
cooperation and enhance the viscosity of cooperation, the company carries out all-round, multi-level and high-quality cooperation
with key customers in the industry.
6.Talent thriving enterprise
The Company has further promoted the strategy of strengthening enterprises with talents and built a multi-level training system for
all staff.Iron and steel products of Qianshun production line and Zhixin Co. has established the career development system of the
whole life cycle of high potential talents, and held deep Blue special training camp and Blue green training camp to strengthen the
ability of talents. Jingtang Co. has established the "four horizontal and three vertical" training system for all staff, and implemented
the "Blue Project" to build a platform for cadres to improve quality and talent growth. In 2021, two employees of the Company won
the "National May 1 Labor Medal", one won the "Capital Labor Certificate", one won the second "Beijing Grand Craftsman", and
one won the "Nominated person of Beijing Great craftsman".
The Company perfects talent promotion evaluation mechanism, smoothes talent career development path.The Company attaches
great importance to performance-oriented and result-oriented, refining the performance evaluation mechanism for vertical
development of three talent teams of operation management, professional technology and skill operation, opening up the channel for
13
Beijing Shougang Co. Ltd Annual Report 2021
horizontal flow of talents from different sequences, strengthening the training and development of high-level personnel, and steadily
increasing the proportion of high-tech and high-skilled personnel.
II. Analysis of principal business
1. Overview
The Company has precisely implemented COVID-19 prevention and control measures to achieve the "3-zero" elimination target.
Qiangang Co. and Jingtang Co. are stable and orderly in their production and operation under the condition of keeping the
environmental performance evaluation of class A. The Company adheres to the innovation-driven and "manufacturing + service"
strategy, seizes the market opportunity, efficiently coordinates the production line with the market, and continuously optimizes the
product mix, thus continuously enhancing the profitability of the company. The Company takes benefit as the center, deepens the
potential to explore the standard, increases the cost control, digs the impact of the material price rise of suppliers, and continuously
improves the management efficiency. The Company through capital operation for enterprises to empower, optimize the quality of the
company's assets, to achieve a substantial year-on-year growth in operating performance in 2021.
The achievement of major accounting data and financial indicators:
Operating revenue is RMB 134.034 billion (67.65% year on year increase); total profit is RMB 9.799 billion (252.76% year on year
increase); net profit attributable to shareholders of the listed company is RMB 7.014 billion (year on year increase 292.64%); EPS is
RMB 1.1291(234.35% year on year increase); total asset is RMB 147.212 billion; equity attributable to shareholders of the listed
company is RMB 41.828 billion.
The achievement of major products:
(1) Metallic soft magnetic material (Electric steel)
Zhixin Co.：Electric steel1.501 million tons，2.7% year on year decrease, of which the output of oriented electric steel is 0.193 million
tons, 0.2% year on year increase, and the output of non-oriented electric steel is 1.308 million tons,3.1% year on year decrease. The
output of thin specification oriented steel is 163,000 tons, 26% year on year increase, and the output of high grade non-oriented steel
is 547,000 tons, 28% year on year increase. Sales revenue of metal soft magnetic materials is RMB 13.307 billion, accounts for 9.93%
of operating income of the Company.
(2) Iron and steel products
Qiangang Co.: iron 8.001 million tons, (0.3% year on year decrease); steel 8.490 million tons (flat year-on-year);Hot-rolled steel
8.213 million tons (including raw materials supplied), flat year-on-year.
Jingtang Co.: iron 13.909 million tons (8.1% year on year increase);steel 15.229 million ton (35% year on year increase); material
14.333 million ton (41.6% year on year increase).
Cold-R Co.: Cold-rolled plate 2.028 million tons (10% year on year increase). Sales revenue of iron and steel products is RMB
116.113 billion, accounts for 86.63% of operating revenue of the Company.
Highlights of Operating indicators
Net profit attributable to shareholders of listed companies is RMB 7.014 billion, 292.64% year on year increase;
Net cash flow from operating activities is RMB 15.044 billion, 46.42% year on year increase;
The weighted average return on net assets is 19.07%, 12.67 percentage points year on year increase;
The leverage ratio is 66.59%, 6.51 percentage pointsyear on year decrease;
The profit margin of cost and expense is 7.90%, 4.32 percentage pointsyear on year increase;
Inventory turnover rate is 10.42 times, 39.49% year on year increase;
Financial cost per ton of steel is RMB 95.18, 12.97%year on year decrease;
Depreciation expense per ton of steel is RMB 307.23, 5.14% year on year decrease;
Strategic products are 5.68 million tons, 2.90% year on year increase.
14
Beijing Shougang Co. Ltd Annual Report 2021
2. Revenue and cost
(1) Composition of operating revenue
Unit：RMB Yuan
2021 2020
Year-on-year
Proportion in Proportion in
Amount Amount Changes
operating revenue operatingrevenue
Total operating revenue 134,034,486,136.13 100% 79,951,181,948.10 100% 67.65%
According to industries
Metallurgy 134,034,486,136.13 100.00% 79,951,181,948.10 100.00% 67.65%
According to products
Billet 577,251,931.16 0.43% 265,307,282.20 0.33% 117.58%
Hot-rolled steel 55,678,740,307.61 41.54% 32,142,438,742.64 40.20% 73.23%
Cold-rolled steel 56,592,919,705.57 42.22% 32,788,063,652.98 41.01% 72.60%
Metallic soft magnetic
13,307,346,567.78 9.93% 8,967,862,684.34 11.22% 48.39%
material
Other steels 3,268,139,872.13 2.44% 2,040,682,356.91 2.55% 60.15%
Other businesses 4,610,087,751.88 3.44% 3,746,827,229.03 4.69% 23.04%
According to regions
North China 49,852,422,793.89 37.19% 31,963,143,971.62 39.98% 55.97%
Northeast China 4,123,150,971.76 3.08% 2,018,512,234.99 2.52% 104.27%
East China 49,632,951,146.49 37.03% 26,099,070,246.72 32.64% 90.17%
Mid-South China 2,623,070,863.28 1.96% 1,723,422,495.05 2.16% 52.20%
South China 19,205,674,818.92 14.33% 12,862,722,449.82 16.09% 49.31%
Southwest China 1,608,695,620.53 1.20% 1,147,368,135.20 1.44% 40.21%
Northwest China 786,965,070.05 0.59% 310,725,864.94 0.39% 153.27%
Export 6,201,554,851.21 4.63% 3,826,216,549.76 4.79% 62.08%
Distribution model
Direct selling 127,832,931,284.92 95.37% 76,124,965,398.34 95.21% 67.93%
Sales by agents 6,201,554,851.21 4.63% 3,826,216,549.76 4.79% 62.08%
(2) Industries, products, or regions that generated operating revenue or operating profit over 10% of the total operating
revenue or operating profit of the Company
√ Applicable □ Not applicable
Unit: RMB Yuan
Year-on-year Year-on-year
Gross Year-on-year changes
Operating revenue Costs of sales changes of costs changes of
margin of operating revenue
of sales gross margin
According to industries
Metallurgy 129,424,398,384.25 114,806,306,669.92 11.29% 69.84% 63.95% 3.18%
According to products
Billet 577,251,931.16 529,612,988.15 8.25% 117.58% 120.92% -1.39%
Hot-rolled steel 55,678,740,307.61 49,137,279,925.26 11.75% 73.23% 65.54% 4.10%
Cold-rolled steel 56,592,919,705.57 50,648,101,932.66 10.50% 72.60% 68.43% 2.22%
Metallic soft
13,307,346,567.78 11,615,160,638.80 12.72% 48.39% 40.83% 4.69%
magnetic material
Other steels 3,268,139,872.13 2,876,151,185.05 11.99% 60.15% 61.37% -0.67%
According to regions
North China 45,242,335,042.01 41,186,401,259.65 8.96% 60.34% 55.73% 2.69%
Northeast China 4,123,150,971.76 3,470,176,637.61 15.84% 104.27% 100.35% 1.65%
East China 49,632,951,146.49 43,421,918,754.68 12.51% 90.17% 83.51% 3.17%
Mid-South China 2,623,070,863.28 2,326,790,746.73 11.30% 52.20% 46.17% 3.67%
15
Beijing Shougang Co. Ltd Annual Report 2021
South China 19,205,674,818.92 16,666,254,350.73 13.22% 49.31% 43.05% 3.80%
Southwest China 1,608,695,620.53 1,415,904,770.64 11.98% 40.21% 40.13% 0.05%
Northwest China 786,965,070.05 714,624,354.70 9.19% 153.27% 157.11% -1.36%
Export 6,201,554,851.21 5,604,235,795.18 9.63% 62.08% 53.43% 5.09%
Distribution model
Direct selling 123,222,843,533.04 109,202,070,874.74 11.38% 70.25% 64.53% 3.08%
Sales by agents 6,201,554,851.21 5,604,235,795.18 9.63% 62.08% 53.43% 5.09%
The adjusted principal business data according to the financial report of the Company under the circumstances that the statistical
ranges of the Company’s principal business data changed during the reporting period.
□Applicable √ Not applicable
(3) Whether revenue from sales of goods is greater than it from render of services
√ Yes □ No
Year-on-year
Industry Item Unit 2021 2020
changes
Sales Ton 22,288,362 18,031,678 23.61%
Metallurgy Output Ton 22,316,080 18,063,304 23.54%
Storage Ton 817,590 789,872 3.51%
Explanation in the year-on-year changes over 30% based on aboved data
□ Applicable √ Not applicable
(4) Fulfillment of the singed significant sales contracts and purchase contracts during the reporting period
□ Applicable √ Not applicable
(5) Composition of costs of sales
Presented as industries
Unit: RMB Yuan
2021 2020
Proportion Year-on-ye
Industry Item Proportion in
Amount Amount in costs of ar changes
costs of sales
sales
Metallurgy Raw materials 66,559,199,438.35 57.98% 37,771,414,049.42 53.94% 4.04%
Metallurgy Fuels 25,364,248,318.11 22.09% 16,254,776,211.68 23.21% -1.12%
Metallurgy Power cost 1,840,911,083.84 1.60% 1,124,364,629.16 1.61% -0.01%
Metallurgy Staff cost 3,271,961,950.60 2.85% 2,130,681,593.97 3.04% -0.19%
Metallurgy Depreciation 7,057,100,771.85 6.15% 5,093,233,457.87 7.27% -1.12%
Metallurgy Manufacturing cost 10,712,885,107.17 9.33% 7,650,707,122.66 10.93% -1.60%
Total 114,806,306,669.92 100.00% 70,025,177,064.76 100.00% 0.00%
(6) Whether the scope of consolidation changes during the reporting period
□ Yes √ No
(7) Significant adjustments or changes in businesses, products, or services during the reporting period
□ Applicable √ Not applicable
16
Beijing Shougang Co. Ltd Annual Report 2021
(8) Major clients and suppliers
Major clients of the Company
Total sales of the top 5 clients (RMB) 14,704,089,556.15
Proportion of total sales for the top 5 clients in total annual sales 10.97%
Proportion of sales from related parties in total sales among the top 5 clients 5.21%
Information for top 5 clients of the Company
Serial Name Sales (RMB Yuan) Proportion in total annual sales
1 Client A 4,346,619,581.89 3.24%
2 Client B 4,133,903,346.48 3.08%
3 Client C 2,635,744,920.56 1.97%
4 Client D 2,038,332,494.68 1.52%
5 Client E 1,549,489,212.54 1.16%
Total -- 14,704,089,556.15 10.97%
Other information for the major clients of the Company
□ Applicable √ Not applicable
Major suppliers
Total purchase amount from top 5 suppliers (RMB) 87,083,467,022.55
Proportion of total purchase amount for top 5 suppliers in total annual purchases 70.24%
Proportion of purchase from related parties in total purchases among the top 5 suppliers 67.20%
Information for the top five suppliers of the Company
Serial Name Procurement (RMB Yuan) Proportion of total annual procurement
1 Shougang Group Co., Ltd. 63,205,704,037.14 50.98%
2 Supplier B 14,376,752,955.19 11.60%
3 Supplier C 5,732,766,394.84 4.62%
4 Supplier D 2,641,469,541.30 2.13%
5 Supplier E 1,126,774,094.08 0.91%
Total -- 87,083,467,022.55 70.24%
Other information for the major suppliers of the Company
□ Applicable √ Not applicable
3. Expenses
Unit: RMB Yuan
Year-on-year
2021 2020 Notes of material changes
changes
The year-on-year increase in selling
Selling expenses 213,309,534.38 167,040,690.13 27.70% expenses is mainly caused by the
increase in staff compensation
The year-on-year increase in
administrative expenses is mainly
Administrativeexpenses 1,299,881,734.32 976,426,260.85 33.13%
caused by the increase in staff
compensation.
Finance expenses 2,257,586,032.80 2,163,091,932.82 4.37%
Mainly due to the increase in labor
Research and development
652,926,385.56 480,487,074.39 35.89% costs of research and development
expenses
personnel
4. Research and development investment
√ Applicable □ Not applicable
17
Beijing Shougang Co. Ltd Annual Report 2021
Name of main R&D Progress of Goals to be The expected impact on the company's
Project objective
project the project achieved future development
It is beneficial to the establishment of
Inhibitor
inhibitor, texture and organization
strengthening and Optimizing process parameters
evaluation mechanism for each process
high reduction rate and establishing database for Develop new
of new cu-containing oriented silicon
control of low cold rolling reduction rate of Finished technology, new
products, and provides theoretical
temperature thin specification oriented process
support for the realization process of thin
oriented silicon silicon steel.
specification oriented silicon steel
steel containing Cu
products.
Isolation additive
technology for high
Improving the surface quality of
temperature It is beneficial to improve product
products and studying the Develop new
annealing of low quality, quality and efficiency, and
mechanism of different additives Pilot stage technology, new
temperature high enhance market competitiveness of
in the process of high process
magnetic oriented silicon steel.
temperature annealing.
orientation silicon
steel
It is helpful to make up the deficiency of
Effect of
Shougang electric steel in application
application Understanding the influence of
technology, narrow the gap with
conditions on application conditions such as Develop new
advanced enterprises in the field of
properties of stress and temperature on Pilot stage technology, new
application technology of electric steel,
non-oriented silicon magnetic and mechanical process
and improve the ability of application
steel for new energy properties.
technology service of Shougang electric
vehicles
steel.
It is helpful to make up the deficiency of
Research on
Determine the best parameters of precipitate detection statistical
comprehensive
equipment and instruments in technology of Shougang electric steel
characterization
sample preparation process, Develop new and narrow the gap with advanced
technology of Bench-scale
develop a set of scientific and technology, new enterprises in the field of microscopic
inclusions and test
reasonable testing methods, process detection of electrical steel. It is of great
precipitates in non
avoid repetitive testing work, significance to meet the increasing
oriented electrical
and improve testing efficiency. requirements of high quality scientific
steel
research of non-oriented electrical steels.
Development and
mechanism research
Increase production capacity of It is beneficial to adjust the product
of low cost and
the machine and reduce structure, improve the leading edge of
high efficiency Bench-scale Develop new
consumption of medium energy technology, expand the market share and
non-oriented test product
resourseby promoting the high improve the brand image of Shougang
electrical steel for
grade of acid rolling. products.
high-end
compressor
It is conducive to stable and smooth
Research on oxygen
Reduce the oxygen activity of production of automobile inner plate,
activity control
automobile inner plate before improve the quality of automobile inner
technology of Develop new
adding aluminum, and stabilize Finished plate, reduce the alloy cost, meet the
automobile plate technology
in a certain range, improve the needs of more customers, and help to
before aluminum
internal quality of automobile. expand the market and improve the
addition
visibility of enterprises.
Explore the market of special
steel industry, improve the core
Technological
technology level of smelting and It is beneficial to accelerate the
development of Develop new
rolling in the field of special Batch trial adjustment of variety structure, reduce
medium and high technology, new
steel, and improve the production production cost and enhance product
carbon alloy tool process
comprehensive competitiveness profitability
steel
of shougang special steel
products.
Optimization of
continuous casting It is beneficial to improve the quality
Reduce the incidence of steel
process for control level of exterior panel surface of
genetic defects, improve the Develop new
automobile outer the company, reduce quality loss,
surface quality of automobile Finished technology, new
plate and improve customer recognition, and
exterior panels, meet the needs process
development of increase the market competitiveness of
of high-end customers.
steel defect exterior panel of the company.
reduction
18
Beijing Shougang Co. Ltd Annual Report 2021
technology
Solve the low number of
continuous casting furnace in
steelmaking process, high cost,
Research and
the problems of sheet color
application of
difference and flat roll in hot
integrated control Batch trial Develop new Reduce production cost and improve
rolling process, surface numbing
technology of production technology product profitability
problem in galvanizing process,
forming reinforced
etc., ensure the stable batch
dual phase steel
system of the whole process and
stable production. Product
competitiveness is in improving.
Determining the formation
mechanism of macro/micro
segregation of advanced high
strength steel continuous casting
Development and
billet and forming the
application of
corresponding control It is beneficial to speed up the variety
advanced high Develop new
technology. Clarifying the Batch trial structure adjustment, increase enterprise
strength steel technology, new
genetic evolution of production sales income and improve enterprise
structure and process
solidification structure and economic benefit.
segregation control
segregation of slab during
technology
reheating and the formation
mechanism and quantitative
evaluation method of banded
structure.
The operation
Intelligent efficiency and
Solve the problems of low
closed-loop control stability of
energy efficiency, high energy
technology for iron material flow and Promote the production efficiency and
consumption and heavy
- steel - making Finished energy flow at the energy utilization efficiency of the whole
pollution, and realize the high
interface with iron-steelmaking process.
integration of green and
multi-objective interface are
intelligent steel process.
optimization significantly
improved
A new method
Research on was developed to
temperature control reduce the
deformation fluctuation of
coupling Solve the problem that the mechanical Realize the intelligent control of the
performance surface quality of hot rolled flat properties of hot whole process of flat material, reduce
Finished
matching and material is difficult to control in rolled products production cost and improve production
intelligent surface the preparation process. and improve the efficiency.
quality control accuracy of
technology in hot thickness
rolling process prediction error
≤±2μm
Establish a 5500m
3 high proportion
pellet application
Aiming at the problems of high demonstration
Multi-objective
energy consumption and project, the The steel industry to achieve low-carbon
optimization of
pollutant emission in sintering proportion of green development has a leading
clean and low
and ironmaking processes in the Finished pellet ore into the demonstration role, reduce carbon
carbon integrated
iron and steel process, furnace ≥50%, the emissions, to achieve efficient
iron making
promoting the development of energy production.
technology
green iron and steel process. consumption per
ton of iron
reduced by over
5kgce
The invention Reduce the defect of edge
relates to a folding printing, improve the Curing
Effectively solve strip edge printing
treatment method surface quality of strip steel, process, batch Develop new
defects, greatly improve strip surface
for edge folding which is conducive to the trial process
quality, reduce quality loss.
defect of cold rolled subsequent processes such as production
strip steel stamping, phosphating, painting
19
Beijing Shougang Co. Ltd Annual Report 2021
etc.
The invention
relates to a control Reduce emulsion trace on strip Curing
Develop new Reduce emulsion trace on strip surface,
method for surface, improve product grade process, batch
technology, new improve strip surface quality and
emulsion trace on and avoid loss of economic trial
process improve production efficiency.
the surface of cold benefit of the company. production
rolled strip steel
The invention
Improve the mechanical
relates to a Follow up and
properties of products, so as to Reduce unqualified products, improve
production method verify DP steel
meet the needs of collision Develop new production efficiency, increase enterprise
of DP steel for process and
resistance and achieve the process sales income, improve enterprise
drum washing quality
successful manufacturing of economic benefits.
machine and stability
automotive structural parts.
automobile
Produce materials with high
Automobile Curing
strength, high elongation and Develop new Accelerate product structure adjustment,
structural steel and process, batch
good weldability, improve technology, new improve product performance, increase
its production trial
impact safety while meeting the process sales revenue.
method production
needs of lightweight.
Dual-phase steel has the
Development of a characteristics of high strength Follow up and
Develop new Accelerate product structure adjustment,
method for and light weight, which can be verify
technology, new increase market share, increase sales
manufacturing dual used in the automobile industry production
process revenue.
phase steel to reduce the weight of cars and process
improve the impact safety.
A continuous Curing Improve response speed, easy to operate,
Design humidification system in Develop new
annealing furnace process, batch greatly improve production efficiency
furnace area, control dew point technology, new
dew point control trial and surface quality, with good
in furnace area. process
device production application value.
Information of R&D personnel of the Company
2021 2020 Proportion of changes
Number of R&D staff 2,295 2,454 -6.48%
Proportion of R&D staff 12.86% 13.51% -0.65%
Educational background of R&D personnel —— —— ——
Bachelor’s degree 1,179 1,059 11.33%
Master’s degree 662 578 14.53%
Age structure of R&D personnel —— —— ——
Below 30 111 93 19.35%
30~40 1,348 1,260 6.98%
Details about R&D investments:
2021 2020 Proportion of changes
R&D investments (RMB) 5,321,486,664.95 3,271,192,781.46 62.68%
R&D investments as % in operating
3.97% 4.09% -0.12%
revenue
Capitalized R&D investments (RMB) 0.00 0.00 0.00%
Capitalized R&D investments as % in
0.00% 0.00% 0.00%
total R&D investments
Reasons for any significant change in the composition of R&D personnel and the impact:
□ Applicable √ Not applicable
Reasons for any significant year-to-year change in the percentage of R&D expense in operating revenue:
□ Applicable √ Not applicable
20
Beijing Shougang Co. Ltd Annual Report 2021
Reasons for any sharp variation in the percentage of capitalized R&D expense and rationale:
□ Applicable √ Not applicable
5. Cash flow analysis
Unit: RMB Yuan
Item 2021 2020 Year-on-year changes
Cash inflow from operating activities 78,330,821,588.46 46,210,312,179.99 69.51%
Cash outflow from operating activities 63,287,094,330.70 35,935,633,383.80 76.11%
Net cash flow from operating activities 15,043,727,257.76 10,274,678,796.19 46.42%
Cash inflow from investing activities 599,102,178.51 796,378,617.06 -24.77%
Cash outflow from investing activities 3,429,497,677.12 3,561,628,500.42 -3.71%
Net cash flow from investing activities -2,830,395,498.61 -2,765,249,883.36 -2.36%
Cash inflow from financing activities 33,854,046,954.17 38,819,178,840.00 -12.79%
Cash outflow from financing activities 42,491,421,256.60 45,772,207,230.67 -7.17%
Net cash flow from financing activities -8,637,374,302.43 -6,953,028,390.67 -24.22%
Net increase in cash and cash equivalents 3,575,957,456.72 556,400,522.16 542.69%
Main reasons for significant year-on-year changes in relevant data
√Applicable □ Not applicable
The increase in cash inflow and cash outflow from operating activities is mainly due to:1. the incrase in stell price and upstream raw
fuel price; 2. The sales volume of stell increased after the Jingtang phase II was put into operation and the increasing in operating
revenue and purchase volume leads to the corresponding increase in cash inflow and outflow.
Explanation of the significant difference between thenet cash flow from operating activities and the annual net profit during the
reporting period:
√Applicable □ Not applicable
During the reporting period, the net cash flow from operating activities of the Company is RMB 15.043 billion, the annual net profit
of the Company is RMB 8.327 billion, the difference is RMB 6.716 billion. The main factors causing the difference are: depreciation
and amortization of RMB 7.442 billion, finance cost of 2.258 billion, increase in payables from operating activities of RMB 1.528
billion, increase in receivables from operating activities of RMB -2.80 billion, incease in inventory of RMB -1.458 billion.
V. Non-principal business analysis
□ Applicable √ Not applicable
VI. Assets and liabilities analysis
1. Significant changes in the composition of assets
Unit: RMB Yuan
End of the year 2021 Beginning of the year 2021
Proportion
Proportion in Proportion in Notes
Amount Amount changes
total assets total assets
Cash and Cash
10,284,988,713.99 6.99% 6,292,499,840.73 4.36% 2.63%
equivalents
Accounts
1,678,608,393.71 1.14% 1,424,092,844.92 0.99% 0.15%
receivable
Inventories 11,900,618,235.51 8.08% 10,599,731,052.28 7.34% 0.74%
Long-term equity
3,065,928,898.28 2.08% 3,341,208,164.76 2.31% -0.23%
investments
Fixed assets 95,632,825,411.62 64.96% 96,220,769,301.39 66.65% -1.69%
Construction in
7,136,983,761.07 4.85% 8,297,181,948.62 5.75% -0.90%
progress
21
Beijing Shougang Co. Ltd Annual Report 2021
Right-of-use
100,279,997.64 0.07% 62,492,294.21 0.04% 0.03%
assets
Short-term
25,278,373,316.25 17.17% 23,712,391,440.25 16.43% 0.74%
borrowings
Contract liabilities 5,230,456,327.37 3.55% 4,659,444,741.25 3.23% 0.32%
Long-term
11,692,710,000.00 7.94% 20,639,300,000.00 14.30% -6.36%
borrowings
Lease liabilities 86,123,210.35 0.06% 56,687,860.68 0.04% 0.02%
Foreign assets account for a relatively high proportion:
□Applicable √ Not applicable
2. Assets and liabilities measured at fair value
√ Applicable □ Not applicable
Unit: RMB Yuan
Profit and
loss from
Cumulative changes in Impairment Amount of
changes in Sales amount in Other
Item Opening balance fair value included in accrual in purchase in Closing balance
fair value in current period changes
equity the period the period
the current
period
Financial assets
4. Other equity
instruments 276,246,686.56 -11,345,922.59 264,900,763.97
investments
Financing
4,532,592,689.43 4,015,188,495.05
receivables
Other
non-current 0 80,000,000.00
financial assets
Total 4,808,839,375.99 -11,345,922.59 4,360,089,259.02
Financial
0.00 0.00
liabilities
Whether the main asset measurement attributes of the Company changed significantly during the reporting period
□ YES √ NO
3. Major restricted assets at the end of the reporting period
Items Carrying amount at 31.12.2021(RMB) Restriction reason
Cash and Cash equivalents 1,748,307,781.74 Various deposits and frozen by court
Notes receivable 1,030,885,929.77 Pledgednotes
Total 2,779,193,711.51
(1) As of 31 December 2021, the cash and cash equivalents include various cash deposits of RMB1,637,798,719.24, fixed term
deposit of RMB 10,000,000.00, court attachment of RMB 100,509,062.50.
(2) As of 31 December 2021, the restricted note receivables include pledged notes amounting to RMB1,030,885,929.77.
VII. Investment analysis
1. Overall situation
√ Applicable □ Not applicable
Invested amount during the reporting period Investment amount during the previous reporting period
Change
(RMB Yuan) (RMB Yuan)
3,400,636,748.78 5,650,066,189.27 -39.81%
2. Significant equity investment during the reporting period
□ Applicable √ Not applicable
3. Significant non-equity investment during the reporting period
√ Applicable □ Not applicable
22
Beijing Shougang Co. Ltd Annual Report 2021
Unit: RMB Yuan
Fixed Reasons for
Actual investment
asset Investment amount Realized income non-achievement
Investmen Related amount up to the Project Anticipated Disclosure Disclosure
Project name investmen during the Capital source up to the end of of planned
t method industries end of reporting schedule benefits date (if any) reference (if any)
t or not reporting period reporting period schedule and
period
(Y/N) anticipated income
New energy
The devices of the
vehicle Iron and
Self-built Y 897,109,488.20 1,523,115,164.43 Self-raised 86.97% 437,370,000.00 0.00 project are being
electrician steel
installed
steel project
Shougang The project has
Iron and
Jingtang-Phase Self-built Y 492,352,675.34 23,278,773,190.34 Self-raised 98.00% 1,361,360,000.00 2,146,299,539.88 been transferred to
steel
II fixed assets
Total -- -- -- 1,389,462,163.54 24,801,888,354.77 -- -- 1,798,730,000.00 2,146,299,539.88 --
4. Financial assets investment
(1) Securities investment
□ Applicable √ Not applicable
The Company has no securities investment during the reporting period.
(2) Derivatives investment
□ Applicable √ Not applicable
The Company has no derivatives investment during the reporting period.
5. Use of raised funds
√ Applicable □ Not applicable
(1) Overall use of raised funds
√ Applicable □ Not applicable
Unit: RMB’0,000
Total
Total Total amount of Accumula Proportion Amount
amount of accumulat raised ted total of total Total of raised
Purpose and
Fund-rai Total raised ed used funds with amount of raised amount of funds
Fund-rai destination
sing raised funds used raised changed raised funds with unused idle for
sing year of unused
method funds in the funds in purposes funds with accumulat raised more
raised funds
current current during the changed ive change funds than two
period period reporting purposes of purpose years
period
Non-publi
2021 82,340.00 82,340.00 82,340.00 0 0 0.00% 0 Non 0
c offering
Total -- 82,340.00
82,340.00 82,340.00 0 0 0.00% 0 -- 0
Explanation of the overall use of raised funds
During the reporting period, the total amount of supporting funds raised by the Company's non-public issuance of RMB common shares (A shares) was RMB
823,399,977.75. After deducting the underwriting expenses of the lead underwriter, the subscription amount received by the company's special account for
raised funds was RMB 812,927,978.08. After deducting the independent financial adviser and other relevant expenses of this restructuring, the net amount of
raised funds was RMB 794,365,426.24.
Up to 31 December 2021, the total interest income generated from the raised funds is RMB 277,802.62. The total amount of raised funds and interest income
of RMB 794,643,228.86 have been used to supplement working capital, and the balance of the raised funds special account isRMB 0.
(2) Committed projects of raised funds
√ Applicable □ Not applicable
Unit: RMB’0,000
Whether Accumul
Investment Is there any
projects Total Investment ative Date when Benefits
Adjusted progressup Whether the significant
have been committed amount investment the projects realized
Committed investment projects and total to the end of expected change in
altered investment during the amount up are ready for during the
investment of excessive raised funds investment the current benefits are the
(including with raised reporting to the end of their intend reporting
amount (1) period (3) = achieved feasibility of
partial funds period the current ed use period
(2)/(1) the project
alternation) period (2)
Committed investment projects
Not
Supplementary liquidity No 125,000.00 79,464.32 79,464.32 79,464.32 100.00% 0 applic No
able
Subtotal of committed investment
-- 125,000.00 79,464.32 79,464.32 79,464.32 -- -- 0 -- --
projects
Investment of excessive raised funds
None
23
Beijing Shougang Co. Ltd Annual Report 2021
Total -- 125,000.00 79,464.32 79,464.32 79,464.32 -- -- 0 -- --
Circumstances and reasons for not
reaching the planned progress or expected Not applicable
income (by specific projects)
Description of major changes in project
Not applicable
feasibility
Amount, purpose and use progress of over
Not applicable
raised funds
Changes in the implementation location of
Not applicable
the project invested by raised funds
Adjustment of implementation mode of
Not applicable
investment projects with raised funds
Advance investment and replacement of
Not applicable
investment projects with raised funds
Temporary replenishment of working
Not applicable
capital with idle raised funds
Amount and reasons for the balance of
raised funds in the implementation of the Not applicable
project
Purpose and destination of unused raised
None
funds
Problems or other situations in the use and
None
disclosure of raised funds
(3) Altered projects of taised funds
□ Applicable √ Not applicable
The Company has no altered projects of raised funds in the reporting period.
VIII. Material disposal of assets and equity
1. Material disposal of assets
□ Applicable √ Not applicable
The Company has no disposal of assets during the reporting period.
2. Material disposal of equity
□ Applicable √ Not applicable
IX. Analysis of main holding companies and stock-jointly companies
√ Applicable □ Not applicable
Main subsidiaries and stock-jointly companies that have an impact on the company's net profit of over 10%.
Unit: RMB Yuan
Company Name Type Main business Registered capital Total assets Net assets Operating revenue Operating profits Net profits
Steel smelting, steel rolling, other metal smelting
and rolling processing and sales; Production and
Shougang Jingtang
sales of sinter, pellet, coke and chemical
United Iron & Steel Subsidiary 35,821,676,294.00 84,207,686,148.29 34,308,190,211.85 82,544,910,369.15 7,446,461,231.47 6,283,543,011.04
products; Power generation and power supply;
Co., Ltd.
Production and sales of secondary and multiple
energy and resource reuse products, etc.
Manufacture of cold rolled electrical steel sheet
and strip; Manufacturing of special metallurgical
equipment; Motor manufacturing; Manufacturing
of power transmission and distribution and
control equipment; Energy saving technology
Shougang Zhixin
promotion services; New material technology
Qian'an
Subsidiary promotion services; Enterprise management 9,042,054,084.39 18,689,847,269.86 10,387,195,130.39 13,857,367,585.59 1,274,862,927.11 1,082,906,520.97
Electromagnetic
consulting services; Industrial design services;
Materials Co., Ltd.
Product quality inspection service; Wholesale
and retail of building materials, non-metallic
minerals and products, metal materials, metal
products and chemical products (excluding
hazardous chemicals).
Production of cold-rolled sheet and hot-dip
Beijing Shougang galvanized steel coil; General freight; Design
Cold Rolling Co., Subsidiary and sell cold-rolled sheet and hot-dip galvanized 2,600,000,000.00 6,275,179,212.13 -1,287,343,612.38 12,553,753,097.50 166,764,077.72 164,435,553.57
Ltd. steel coil; Warehousing services; Technical
development and consultation.
Beijing Shougang
Investment management; Project investment;
Steel Trading
Asset management; Warehousing services;
Investment Subsidiary 1,136,798,235.00 19,647,690,465.71 11,708,267,014.47 968,858,246.21 1,945,467,564.08 1,924,919,227.71
Market Research; Technology development;
Management Co.,
Selling steel.
Ltd.
Technology development, technical consultation,
Beijing Shougang technology transfer and technical services;
New Energy Enterprise management consulting; Economic
Automobile information consultation; Sales of mechanical
Subsidiary 980,000,000.00 1,757,620,456.12 978,064,081.10 0.00 -757,900.08 -853,605.04
Material equipment and steel; Machinery and equipment
Technology Co., leasing (excluding automobiles); Import and
Ltd. export of goods; Technology import and export;
Acting import and export.
Metallurgical technology development and
consulting services; Environmental protection
Qian'an Shougang technology promotion services; Enterprise
Metallurgical management consulting services; Safety
Subsidiary consulting services; Computer application 1,900,000.00 215,927,482.12 -95,933,853.51 32,147,582.35 3,635,863.70 3,636,263.70
Technology Co.,
Ltd. software development; Wholesale and retail of
special equipment for environmental protection,
steel slag, water slag, slag, dust removal ash,
desulfurization ash, steel and chemical products
24
Beijing Shougang Co. Ltd Annual Report 2021
(excluding hazardous chemicals); Domestic
advertising design, production, agency and
release; Non self owned house leasing services,
etc. (within the scope of authorization of the
house owner).
Metallurgical technology development and
consulting services; Environmental protection
technology promotion services; Enterprise
management consulting services; Safety
consulting services; Computer application
software development; Wholesale and retail of
special equipment for environmental protection,
steel slag, water slag, slag, dust removal ash,
desulfurization ash, steel and chemical products
(excluding hazardous chemicals); Domestic
advertising design, production, agency and
release; Coking of non owned house leasing
Qian'an Sinochem services (within the scope of authorization of the
Coal Chemical Joint stock house owner); Manufacture of coke oven gas, 992,400,000.00 4,221,005,209.00 2,195,597,347.39 6,295,880,462.27 409,971,879.87 292,507,527.36
Industrial Co., Ltd. tar, crude benzene, sulfur, ammonium sulfate,
ammonium thiocyanate and primary coal
chemical products; Waste heat utilization;
Hardware products, building materials, special
mining equipment and spare parts, construction
machinery spare parts, rubber products, plastic
products, lubricating grease, pig iron, ferroalloy,
iron concentrate powder, pelletized iron ore,
sintered iron ore, iron ore, limestone, quartz,
dolomite, charge, bentonite, coke, coke powder,
billet, chemical products (excluding licensed
chemical products), coal wholesale and retail;
Coking technology consultation and service
Coke, coal tar, benzene, sulfuric acid,
Tangshan Shougang ammonium sulfate, gas, CDQ waste heat power
Jingtang Xishan Joint stock generation, steam production and sales; 2,000,000,000.00 4,746,955,771.56 2,228,088,412.66 10,931,089,729.11 80,177,449.92 58,527,067.07
Coking Co., Ltd. Technical advisory services; Labor services
(excluding labor dispatch).
Acquisition and disposal of subsidiaries during the reporting period
□ Applicable √ Not applicable
Notesof major holding and joint stock companies
None
X. Structured entity controlled by the Company
□ Applicable √ Not applicable
XI. Future development prospects
1. Industry competition pattern and development trend
In 2022, the recovery of the global economy slowed down due to COVID-19 and uncertainties in the international environment.At
present, China's economy is under the triple pressure of shrinking demand, delayed supply, and weakening expectations. However,
the Chinese economy has given top priority to ensuring stability and making progress while maintaining stability. We have kept the
economy operating within a reasonable range, and the fundamentals of strong resilience, full potential, and long-term sound growth
will not change.As the "double control" policy of energy consumption will shift to the "double control" policy of total carbon
emission and intensity, the incentive and constraint mechanism of pollution reduction and carbon reduction will accelerate the
formation, resulting in the continuous constraint of steel supply. Energy prices such as electricity and coal and ferrous resource prices
such as iron ore, scrap steel and ferroalloy keep stable, which forming a multi-dimensional challenge to steel production costs.
However, under the influence of the domestic policy of steady growth, the demand for steel driven by infrastructure development and
the trend growth of manufacturing industry may accelerate the release, which will effectively support the domestic steel consumption
to remain high. It is expected that the steel demand of electric power, automobile, shipbuilding, infrastructure and other industries
will maintain growth.
2. Corporate development strategy
The strategic focus of the Company is to promote and implement the "two strong and three excellent" project (the development goal
of the iron and steel industry with strong profitability, strong innovation ability, excellent asset quality, excellent operation efficiency
and excellent energy conservation and environmental protection) to promote the enterprise to deepen reform and high-quality
development.Adhering to the development direction of "quality + service", the company continues to promote the development of
high-end products focusing on electrical steel, automobile board and tin (chrome) plate, and constantly improve the service level and
operation efficiency of steel material manufacturing, forming a group of strategic product customer clusters with international
competitiveness.Strive to build the Company into a large, comprehensive and diversified steel listed company with international
25
Beijing Shougang Co. Ltd Annual Report 2021
competitiveness and influence.
3. Operating plans of 2022
(1) Capacity of main products
①Qiangang Co.: 7.95 million tons of iron, year-on-year decrease of 0.6%; 8.49 million tons of steel, basically equal on a
year-on-year basis; 8.20 million tons of steel products, year-on-year decrease of 0.2%.
②Jingtang Co.: 13.80 million tons of iron, year-on-yeardecrease of 0.8%; 15.00 million tons of steel, year-on-year decrease of 1.5%;
14.00 million tons of steel products, year-on-yeardecrease of 2.3%.
③Zhixin Co.: 1.64 million tons of electric steel, year-on-year rise of 9.3%. Including: 1.45 million tons of non-oriented electric steel,
year-on-year rise of 14.9% and 0.19 million tons of oriented electric steel, year-on-year decrease of 1.6%.
④Cold-R Co.: 1.95 million tons of cold-rolled steel sheets, year-on-year decrease of 3.8%. Including: 0.93 million tons of
continuous annealing line for cold-rolled steel sheets, year-on-year decrease of 9.2%; 0.92 million tons of galvanized sheet,
year-on-year decrease of 0.1%, 0.1 million tons of Cold rolled sheet, year-on-yearrise of 2.1%.
(2) Budget arrangement of financial indicators
RMB 121.4 billion for operating revenue,year-on-year decrease of 12.6 billion (in proportion of 9.4%). Including in which, RMB
42.8 billion for operating revenue of parent company, year-on-year decrease of 5.1%; RMB 73.0 billion for operating revenue of
Jingtang Co., year-on-year decrease of 11.6%; RMB 14.5 billion for operating revenue of Zhixin Co., year-on-year rise of 4.6%;
RMB 11.5billion for operating revenue of Cold-R Co., year-on-year decrease of 8.4%; RMB 820 million for operating revenue of
Steel Trading Co., year-on-year decrease of 15.4%.
(3) Budget arrangement of capital income and expenditure
RMB 173.264 billion for capital inflows, including RMB 139.078 billion capital inflows from operating activities, RMB 93 million
capital inflows from investing activities, RMB 34.093 billion capital inflows from financing activities.
RMB 171.531 billion for capital outflows, including RMB 124.97 billion capital outflows for production activities, RMB 5.014
billion capital outflows for investing activities, RMB 41.547 billion capital outflows for financing activities.
(4) Budget arrangement of fixed-assets project capital expenditure
Arrangement of fixed assets is RMB 4.364 billion, including: RMB 698 million for Qiangang Co., RMB 2.389 billion for Jingtang
Co., RMB 874 million for Zhixin Co., RMB 58 million for Cold-R Co., RMB 195 million for New-E Co. and RMB 150million for
Steel Trading.
4. Potential risks
(1) Policy and industry risk
Due to the implementation of the iron and steel industry output "double control" policy, the capacity utilization rate of some
enterprises has been affected, and the market shows a strong supply and weak demand pattern, resulting in iron ore and other raw fuel
prices remain high and promote the cost of steel production, which will further increase the difficulty of enterprise operation.
To deal with the above risk, first, strengthen market prediction and analysis, optimize resource allocation, and take active actions to
deal with uncertainties by strengthening the construction of supply chains and industrial chains; Second, continuing to promote cost
reform, strengthen the "overall scheduling" of cost control, adhere to the dual control of "material consumption" and "price", and
spare no effort to achieve the target of cost control; Third, giving full play to the advantages of production lines and products,
improves the ability of "manufacturing + service", promotes the in-depth optimization and adjustment of product structure and
channel structure, strengthens the organization of the project of initial products, marketing of new products and substitute imported
products, and expands the cluster of high-end products.
(2) Low carbon environmental risk
As "the implementation of ultra-low emissions in the iron and steel industry" has become the norm, "carbon neutrality, carbon peak"
policy, concept of "lucid waters and lush mountains are invaluable assets" deeply rooted in the hearts of the people, all these put
forward higher requirements for the implementation of green and sustainable iron and steel enterprises, resulting in unprecedented
26
Beijing Shougang Co. Ltd Annual Report 2021
pressure on environmental protection costs.
To address the above risk, first, further building a solid foundation for sustainable development, continuing to maintain healthy
development, practicing responsibility as a "pacesetter", carrying out the green action plan, and making green the underpinning of
high-quality development of enterprises.Second, actively driving on the work of "dual carbon" and "dual control", refining the
assessment indicators, improving the LCA online data collection platform, promoting the steel low-carbon technology verification
project, and continuing to standardize the way and content of "carbon management" activities. Third, continuing to build a green
supply chain system, pushing on the selection of green materials, and promoting green procurement, production, transportation and
other processes.
(3) Horizontal competition risk
Shougang Group and its affiliates have a certain degree of horizontal competition with the Company.
In order to solve the horizontal competition, during the first restructuring, Shougang Group issued “the commitment on the settlement
measures and avoidance of horizontal competition after the assets restructuring”. According to the iron and steel industry
development plan of Shougang Group, Shougang Co. will be the only platform for the development and integration of the iron and
steel and upstream iron ore resources industry of Shougang Group in China, and eventually achieve the overall listing of Shougang
Group's iron and steel and upstream iron ore resources business in China. Since then, Shougang Group has made further
commitments on the basis of the above-mentioned commitments of horizontal competition. These commitments are fulfilled on
schedule and for details, please refer to “Corporate Governance” in the annual report.
(4) Marketing risk
From the perspective of market environment, China's economic development is facing triple pressure of demand contraction, supply
delay and weakening expectation, and the market volatility is intensified. Therefore, the domestic and foreign competition
environment is becoming more and more severe. In the industrial environment, overcapacity is still serious, leading to intensified
product homogenization competition and product structure adjustment direction convergence.
In order to cope with the above risk, first, strengthen the awareness of market players, pay close attention to and timely studying
macro policies and the development and changes of upstream and downstream industrial chains and industries, which can improve
the rapid response capacity of enterprises. Second, paying more attention to customer needs and appeals, give full play to the
synergistic advantages of the system to improve the strength and level of customer service, and mobilizing production lines and R&D
resources to quickly solve product quality problems, so as to improve user experience. At the same time, improving supporting
supply capacity, improve delivery cycle, reducing logistics costs, enhancing user stickiness and the core competitiveness of
Shougang service. Third, transforming the marketing management business of standard advanced steel mills, and promote the
construction of information system, system application and promotion and application innovation centering on improving
management efficiency. Fourth, actively adapting to the requirements of the new development pattern, promoted the export of
competitive products, strengthened cooperation with multinational enterprises and joint ventures, and increased the international
influence of products.
(5) Related transactions risk
Related transactions exit among Shougang Co., Shougang Group and the affiliated companies, Shougang Co. and Shougang Group
signed the framework agreement of related transactions in accordance with the stock listing rules and other provisions for regular
related transactions. If the agreement cannot be strictly executed in the future, interests of the company will be damaged and also the
risks of related transactions will emerge.
The above-mentioned regular related transactions are the continuous related transactions in the ordinary operation and production
process of the Company, all of which are signed agreements in accordance with regulations and approved legally, and the
transactions will not affect the independence of the Company. The Company will strictly implement the provisions of related
transactions, perform the obligation of information disclosure in accordance with the requirements of the stock listing rules and the
Articles of Association, ensure the openness, fairness and justice of related transactions, and protect the legitimate rights and interests
of the Company and all shareholders.
27
Beijing Shougang Co. Ltd Annual Report 2021
XII. Reception of research, communication and interview
√ Applicable □ Not applicable
Main contents and Reference for basic
Time Location Method Type Counterparty
provided material information
More than 10 institutional Mainly explains thethe
analysts include: Huatai Company's operation and Hold a telephone
Securities Co., Ltd.,Haitong production, variety communication session
Securities Co., Ltd.,Huabao structure optimization, for institutional
Conference Telephone
1 Feb. 2021 Institution Securities Co., Ltd.,Nanhua cost reduction and investors, and the details
room Communication
Futures Co., Ltd., Foresight efficiency increaseand were disclosed on the
Fund Co., Ltd.,Icbc Credit answers questions that interactive platform on 2
Suisse Asset Management investors are concerned Feb. 2021.
Co., Ltd. about.
More than 10 institutional
analysts include: GF
Securities Co., Ltd.,Orient
Securities Company Communicates about the
Receiving investors for
Limited,Qianhe Capital Company's basic
on-site investigation,
Conference On-site Management Co., Ltd.,Bank operating conditions, and
17 Mar. 2021 Institution details were disclosed on
room investigation of China Investment answers questions that
the interactive platform
Management, China investors are concerned
on 19 Mar. 2021.
Merchants Fund about.
Management Co., Ltd.,
National Council of Social
Security Fund
Hold the company
Mainly explains the
Panorama performance
performance of the
Network presentation for 2020
Company in 2020 and
broadcast and the first quarter of
29 Apr. 2021 Other Other All investors the first quarter of 2021
room 2021, and the details
and answers questions
(http://ir.p5w. were disclosed on the
that investors are
net) interactive platform on
concerned about.
30 Apr. 2021.
24 institutional investors
include: China Securities
Co., Ltd., Zheshang
Securities Co., Ltd., GF
Securities Co., Ltd.,
Changjiang Securities
Company Limited, China
Merchants Securities Co.,
Ltd., Ping An Securities Ltd.,
The Pacific Securities Co.,
Ltd., Haitong Securities Co.,
Ltd., Pingan Asset
Management Co., Ltd.,
Wanjia Asset Management
Co., Ltd., The China Orient
Asset Management Co., Ltd., Introduces the operation Receiving investors for
PICC Funds, Icbc Credit of the Company and on-site investigation,
Jingtang Co., On-site
8 Jul. 2021 Institution Suisse Asset Management answers questions that details were disclosed on
Qiangang Co. investigation
Co., Ltd., Zhongjin Asset investors are concerned the interactive platform
Management Co., Ltd., about. on 12 Jul. 2021.
Italian Asset Management
Co., Ltd., Gome Finance
Technology Co., Ltd.,
Shenzhen Kaifeng
Investment Management Co.,
Ltd., Shenzhen Hongchou
Investment Co., Ltd.,
Shanghai Yinsheng Asset
Management Co., Ltd.,
Changsheng Fund
Management Co., Ltd.,
Xiandai Resource Co. Ltd.,
Beijing Siyi Aier Intelligent
Technology Co., Ltd.,
Beijing Bull Riding Swallow
28
Beijing Shougang Co. Ltd Annual Report 2021
Investment Management Co.,
Ltd., Hebei Donghong
Investment Management Co.,
Ltd. etc.
17 institutional investors
include: Comein Finance
Co., Ltd., Zheshang
Securities Co., Ltd., Xiniu
Investment Co., Ltd., ABC
Huili Asset Management
Co., Ltd., PICC Health
Pension Co., Ltd., Taiping
Hold a telephone
Pension Co., Ltd., HSBC
Explains the equity communication session
Jintrust Fund Management
incentive plan of the for institutional
Corporate Telephone Co. Ltd.,HFT, Wanjia Asset
3 Aug. 2021 Institution Companyand answers investors, and the details
office Communication Management Co., Ltd.,
questions that investors were disclosed on the
CMS, Guotai Yuanxin Asset
are concerned about. interactive platform on 5
Management Co., Ltd.,
Aug. 2021
Panjing Investment, Morgan
Stanley Huaxin Fund
Management Co., Ltd.,
Lingze Investment, Donghai
Funds Co., Ltd., Ping An
Credit Evaluation, Galaxy
Asset Management Co., Ltd.
etc.
More than 10 institutional
investors include: GF
Securities Co., Ltd.,
Everbright Securities Co.
Ltd., Zheshang Securities
Co., Ltd., Foresight Fund
Hold the 2021
Co., Ltd., PICC Asset
Explains the Company's semi-annual
Management Co., Ltd., PICC
half-year performance in performance
Conference Telephone Health Pension Co., Ltd.,
20 Aug. 2021 Institution 2021and answers presentation and details
room Communication CCB Pension Management
questions that investors were disclosed on the
Co., Ltd., China Southern
are concerned about. interactive platform on
Asset Management Co., Ltd.,
23 Aug. 2021
Ping An Annuity Insurance
Company of China, Ltd.,
Qianhai Kaiyuan Fund
Management Co., Ltd.,
Invesco Great Wall Fund
Management Co. Ltd. etc.
More than 10 institutional
investors include: Zheshang
Securities Co., Ltd., Taikang
Pension Insurance Co., Ltd.,
Zhongjin Asset Management
Co., Ltd., China Southern Hold a telephone
Explains the situation of
Asset Management Co., Ltd., communication session
the Company's purchase
Xingyin Fund Management for institutional
Conference Telephone of assets by issuing
13 Sep. 2021 Institution Co., Ltd., Ruihua Holding investors, and the details
room Communication shares and answers the
Co., Ltd., Pingan Asset were disclosed on the
questions investors are
Management Co., Ltd., interactive platform on
concerned about.
Taiping Pension, Shanghai 14 Sep. 2021.
Yinsheng Asset Management
Co., Ltd., Beijing Kaidu
Investment Management Co.,
Ltd., Comein Finance
Technology Co., Ltd. etc.
More than 10 institutional
investors include: Zheshang
Securities Co., Ltd., Guotai
The performance
Junan, Kaiyuan Securities
presentation for the first
Co., Ltd., Huatai Securities Explains the Company's
three quarters of 2021
Co., Ltd., Everbright performance for the first
will be held in the
Conference Securities Co. Ltd., Guosen three quarters of 2021
1 Nov. 2021 Other Institution manner of Tencent
room Securities Co., Ltd., GF and answers questions
conference, and details
Securities Co., Ltd., Orient investors are concerned
were disclosed on the
Securities Co., Ltd., Loyal about.
interactive platform on 2
Valley Capital, Beijing
Nov. 2021
Taozhu Capital Management
Co., Ltd., Orient Securities
Asset Management Co., Ltd.,
29
Beijing Shougang Co. Ltd Annual Report 2021
Kaifeng Investment
Management Co., Ltd.,
CICC Assets Management
Co., Ltd., Shanghai Tongan
Investment Management Co.,
Ltd.,E Fund
Management,Guotai Asset
Management Co., Ltd.,
Qianhai Kaiyuan Fund
Management Co., Ltd.,
Invesco Great Wall Fund
Management Co., Ltd.,
Zhejiang Shaoxia Investment
Management Co., Ltd., etc.
More than 40 analysts and
institutional investors
include: GF Securities Co.,
Ltd.,Zheshang Securities
Co., Ltd., Haitong
Securities Co., Ltd.,
Changxin Fund Management
Co., Ltd., Huaan Fund
Management Co. Ltd.,
Dacheng Fund Management
Co., Ltd., Zhong Ou Asset
Management Co., Ltd.,
Zhonghai Fund Management
Co., Ltd., Minsheng Royal
Fund Management Co., Ltd.,
ABC-CA Fund Management
Co., Ltd., XA SPDB
Investment Managers Co.,
Ltd., China Life Insurance
Security Fund Management
Co., Ltd., HongNuo Fund
Management Co., Ltd.,
Guangdong Yuancheng
Private Equity Investment
Fund Management Co., Ltd., Hold a telephone
Picc Asset Management Co. communication session
Ltd., China Life Pension Co. Answers the questions for institutional
Conference Telephone
8 Dec. 2021 Institution Ltd., Changjiang Pension investors are concerned investors, and the details
room Communication
Insurance Co., Ltd., about. were disclosed on the
Cathay Insurance Co. interactive platform on
Ltd., Guang Dong Silver 13 Dec. 2021
Stone Investment Co., Ltd.,
Shanghai Silver Leaf
Investment Co., Ltd., Beijing
Huixin Juying Private Fund
Management Co., Ltd., Citic
Capital Investment Co. Ltd.,
Beijing Greatfund Asset
Management Co., Ltd.,
Guangzhou Zhujiang Asset
Management Co., Ltd.,
Beijing Jiangyi Capital
Management Co., Ltd.,
Shanghai Tuling Asset
Management Co., Ltd.,
Shenzhen Fengling Capital
Management Co., Ltd.,
Weixing Asset Management
(Shanghai) Co., Ltd.,
Guangzhou Zhujiang Asset
Management Co., Ltd., Fuge
Investment Co., Ltd., Cephei
Capital Management Co.,
Ltd.,Shenzhen Shanshi Fund
Management Co., Ltd. etc.
Hold a telephone
Bank of Communications communication session
Conference Telephone Schroder Fund Management Answers questions that for institutional
15 Dec. 2021 Institution investors are concerned
room Communication Co., Ltd.:Xu Senzhou、Tan investors, and the details
about.
Xingxing were disclosed on the
interactive platform on
30
Beijing Shougang Co. Ltd Annual Report 2021
16 Dec. 2021.
31
Beijing Shougang Co. Ltd Annual Report 2021
Section IV. Corporate Governance
I. Information of corporate governance
In accordance with the Company Law of People’s Republic of China, the Securities Law of People’s Republic of China, the Code of
Corporate Governance for Listed Companies,Self-regulatory Guide for Listed Companies of Shenzhen Stock Exchange No. 1 -
Business Management, the Articles of Association and other applicable regulations and laws, the Company has established a perfect
internal control system, actively promoted and improved the corporate governance structure and continued to deepen and standardize
the operation, Improve the quality of corporate governance and maintain good communication with all shareholders.
According to the Articles of Association and Rules of Procedures of the General Shareholders Meeting, the Board of Directors, the
Supervisory Committee, the company organizes the General Shareholders Meeting, the meeting of director board, and the meeting of
supervisory committee. Directors and supervisors are assiduous and dutiful, complying with the applicable rules and regulations,
diligently safeguarding the lawful rights and interests of the company and its all shareholders. The management regularly operates
the company, and faithfully abide by the rules of internal system. In accordance with the relevant regulations such as the Listing
Rules of Shenzhen Stock Exchange, the Company perform the duty of information disclosure, and guarantee the truthiness, accuracy
and completeness of the prepared information, without any false record, misleading or material omission.
During the reporting period, the Company did its corporate governance work weill in the following aspects:first, the articles of
Association is amended according to the fact that issuance of shares to purchase assets leads to an increase in the total share
capital.Second, according to operational needs, the Company has formulated 51 systems such as the Economic Responsibility Audit
Management System and revised 66 systems such as the Scientific and Technological Achievements Management System.Thirdly, in
response to business adjustments and system updates, the Company organised internal control self-evaluation in conjunction with the
Risk Control Process Manual and the Risk Control Evaluation Manual. Fourthly, in accordance with the Articles of Association, the
Rules of Procedure for General Meetings and relevant regulations, the General Meetings were held by way of "on-site + online
voting" to ensure that the matters submitted to the General Meetings for consideration and approval were in compliance with the law.
As of the end of the reporting period, the Company has a total of 504 internal control systems, of which 491 systems are formulated
and implemented by the Company and 13 systems are forwarded to the government and regulatory authorities.
Whether there are material differences between the actual state of corporate governance and the regulatory documents issued by the
CSRC on the governance of listed companies.
□ Yes √ No
There is no material difference between the fact of corporate governance and the regulations for listing companies required by the
CSRC.
II. Independence of the Company from the controlling shareholder and actual controller in
terms of assets, personnel, finance, organization, business
The Company plans and operates in strict accordance with the law and maintains complete independence from the controlling
shareholders in terms of business, personnel, assets, institutions and finance. The Company has a complete procurement, production,
marketing and operation management system, perfect product R & D institutions and personnel, and the ability of independent
production and operation.
1.Business: The Company has a complete raw fuel procurement, product manufacturing, product marketing and management system,
an independent business system, conducts its business independently, operates independently and bears its own risks.
2. Personnel: The Company has a complete human resources management system, which operates independently and has a sound and
effective system. The directors and supervisors of the Company are elected in accordance with the statutory approval procedures
such as shareholders' meetings or corresponding democratic elections; senior management personnel are appointed or dismissed by
32
Beijing Shougang Co. Ltd Annual Report 2021
the Board of Directors, and there are no irregularities in their concurrent positions with controlling shareholders and related parties.
3. Assets:The Company has a production system and its supporting facilities that are independent of the controlling shareholder and
its related parties. The Company's assets are independent and complete, with clear ownership.
4. Institutions:The Company has a general meeting of shareholders, the board of directors, the board of supervisors, managers and
other corporate governance structure, a complete organizational system, independent operation, independent exercise of power. And
there is no subordinate relationship with the controlling shareholder and its related parties.
5. Financial:The Company has an independent financial management department, equipped with full-time financial personnel, with a
complete internal financial accounting and management system and perfect financial management system, whichis sound and capable
of making independent financial decisions, and the Company is independently and legally subject to taxation.
III. Horizontal competition
√ Applicable □ Not applicable
Type of
Name of Nature of
association Work progress and
Type controlling controlling Causes Solutions
with the follow-up plan
shareholder shareholder
Company
1. Shougang Group undertakes in
respect of measures to resolve inter-sector
competition and avoid inter-sector
competition after the First Reorganisation
(1) Except for the situation of
inter-sector competition existing prior to the
date of this Letter of Undertaking, if the
Company obtains opportunities for
acquisition, development and investment in
the same or similar business as Shougang
Co, the Company will immediately notify
Shougang Co and offer them to Shougang
Co for selection on a priority basis and make
its best efforts to make such business
opportunities available for transfer to
Shougang Co. In December
(2) In integrating and operating 2021,Shougang Co., Ltd.
existing steel assets not yet transferred to and Shougang Group
Shougang Co., the Company will select the signed the "Management
appropriate platform and means to achieve Service Agreement
resource integration in a manner that is between Shougang Group
Since the listing conducive to the future transfer to Shougang Co., Ltd. And Beijing
of the Company, Co. and will not include provisions in the Shougang Co., Ltd. On
there has been relevant agreements or arrangements with The Affiliated Enterprises
inter-sector partners or third parties that restrict or of Shougang Group Co.,
The Shougang competition and prohibit the injection of such assets or Ltd. ".Shougang Co., Ltd.
Competition in the businesses into Shougang Co.
controlling Group Co., Local SASAC connected provides management
same industry
shareholder Ltd. transactions (3) The Company will, as far as services for a total of 14
resulting from possible, safeguard the normal operation and target enterprises in the
the partial profitability of the existing steel assets not steel sector of Shougang
conversion to injected into Shougang Co. and ensure that Group. Shougang shares
listing. the aforesaid assets and businesses do not will continue to negotiate
fall into operational difficulties due to the with Shougang Group and
Company or other circumstances that actively promote the
prevent the ultimate injection into Shougang follow-up work in
Co. or render such injection legally impeded. accordance with the
(4) Each commitment made by the commitment to resolve
Company in eliminating or avoiding horizontal competition.
competition in the same line of business
shall also apply to other enterprises under
the direct or indirect control of the Company
other than Shougang Co. and its subsidiaries,
and the Company is obliged to supervise and
ensure that the other subsidiaries of the
Company implement the arrangements for
each of the matters described in this
document and strictly comply with all the
commitments.
2. As approved by the second
extraordinary general meeting of the
Company for 2018 on 27 December 2018,
Shougang Group undertakes to:
(1) According to the development
33
Beijing Shougang Co. Ltd Annual Report 2021
Type of
Name of Nature of
association Work progress and
Type controlling controlling Causes Solutions
with the follow-up plan
shareholder shareholder
Company
plan of Shougang's steel industry, Shougang
shares will serve as the sole platform for the
development and integration of Shougang
Group's steel and upstream iron ore
resources industries in the PRC, and
ultimately realise the overall listing of
Shougang Group's steel and upstream iron
ore resources businesses in the PRC.
(2) In the event that Shougang
Group's other companies engaged in steel
operations and production further optimise
and adjust their product structure through
active implementation of national industrial
policies and environmental protection
requirements, and achieve profits for three
consecutive years, and that the overall
situation of the industry does not fluctuate
significantly, Shougang Group will, in
accordance with the requirements of
securities laws and regulations and industry
policies, initiate a process including but not
limited to acquisition, merger, restructuring
and other means in the interests of
shareholders of the listed company The
injection of relevant high-quality assets into
Shougang will be completed within 36
months after the commencement of the
relevant matters.
IV. General shareholders’ meetings and extraordinary shareholders’ general meeting during
the reporting period
1. Information on the general shareholders’ meeting
Investor
Sessions Type Date Date of Disclosure Meeting resolution
participation ratio
Annual General Refers to the company's announcement on
2020 Annual General
Shareholders 77.05% 29 June 2021 30 June 2021 the disclosure date of the resolution of the
Meeting
Meeting meeting for details
Extraordinary
Refers to the company's announcement on
2021 First Extraordinary General 29 November 30 November
75.19% the disclosure date of the resolution of the
General Meeting Shareholders 2021 2021
meeting for details
Meeting
Extraordinary
2021 Second Refers to the company's announcement on
General
Extraordinary General 81.93% 20 December 2021 21 February 2022 the disclosure date of the resolution of the
Shareholders
Meeting meeting for details
Meeting
2. Request for extraordinary general meeting by preferred stockholders whose voting rights restore
□ Applicable √ Not applicable
V.Directors, Supervisors, Senior Management
I. General information
Number Reasons
Number
Number of Number for
of shares
of shares shares of shares changes
held at
Status of Start date of End date of increased reduced Other held at in the
Name Post Gender Age the
employment term term in the in the changes the end increase
beginning
current current of the or
of the
period period period decrease
period
(shares) of shares
Zhao Minge Chairman Incumbent Male 55 2013/05/16 2022/12/22 0 0 0 0 0
Restricted
Liu Jianhui Director Incumbent Male 57 2014/09/19 2022/12/22 0 0 0 0 290,000 stocks
granted
Restricted
Qiu Yinfu Director Incumbent Male 54 2014/09/19 2022/12/22 0 0 0 0 290,000 stocks
granted
34
Beijing Shougang Co. Ltd Annual Report 2021
Number Reasons
Number
Number of Number for
of shares
of shares shares of shares changes
held at
Status of Start date of End date of increased reduced Other held at in the
Name Post Gender Age the
employment term term in the in the changes the end increase
beginning
current current of the or
of the
period period period decrease
period
(shares) of shares
Wu
Director Incumbent Male 58 2019/12/23 2022/12/22 0 0 0 0 0
Dongying
Independent
Yin Tian Incumbent Male 67 2016/01/07 2022/1/6 0 0 0 0 0
director
Independent
Ye Lin Incumbent Male 58 2017/12/26 2022/12/22 0 0 0 0 0
director
Independent
Gu Wenxian Incumbent Male 60 2021/12/20 2022/12/22 0 0 0 0 0
director
Independent
Liu Shen Incumbent Male 46 2020/6/23 2022/12/22 0 0 0 0 0
director
Independent
Peng Feng Incumbent Male 42 2020/6/23 2022/12/22 0 0 0 0 0
director
Supervisory
Sun Yi Incumbent Male 56 2021/11/29 2022/12/22 0 0 0 0 0
board chairman
Guo Liyan Supervisory Incumbent Female 46 2016/1/7 2022/12/22 0 0 0 0 0
Yang Mulin Supervisory Incumbent Male 50 2019/12/23 2022/12/22 0 0 0 0 0
Liang
Supervisory Incumbent Male 47 2021/6/29 2022/12/22 0 0 0 0 0
Wangnan
Employee
Cui Aimin representative Incumbent Female 53 2021/7/7 2022/12/22 0 0 0 0 0
supervisor
Employee
Qu Erlong representative Incumbent Male 40 2021/7/7 2022/12/22 0 0 0 0 0
supervisor
General
Liu Jianhui Incumbent Male 57 2014/8/29 2022/12/22 0 0 0 0 0
manager
Restricted
Vice general
Peng Kaiyu Incumbent Male 41 2019/4/24 2022/12/22 0 0 0 0 261,000 stocks
manager
granted
Restricted
Vice general
Li Ming Incumbent Male 47 2015/1/27 2022/12/22 0 0 0 0 261,000 stocks
manager
granted
Restricted
Li Baizheng Chief accountant Incumbent Male 56 2015/10/28 2022/12/22 0 0 0 0 261,000 stocks
granted
Restricted
Vice general
Sun Maolin Incumbent Male 45 2017/10/25 2022/12/22 0 0 0 0 261,000 stocks
manager
granted
Restricted
Vice general
Li Jingchao Incumbent Male 55 2017/10/25 2022/12/22 0 0 0 0 261,000 stocks
manager
granted
Ma Jiaji Chief engineer Incumbent Male 58 2019/12/23 2022/12/22 0 0 0 0 0
Restricted
Vice general
Incumbent Male 54 2019/4/24 2022/12/22 0 0 0 0 261,000 stocks
manager
granted
Chen yi
Secretary of the
board of Incumbent Male 54 2015/8/26 2022/12/22 0 0 0 0 0
directors
Yang Independent
Retired Male 49 2016/1/7 2021/12/30 0 0 0 0 0
Guipeng director
Supervisory
Shao Wence Retired Male 58 2019/12/23 2021/8/17 0 0 0 0 0
board chairman
Employee
Chen
representative Retired Female 48 2019/12/23 2021/7/7 0 0 0 0 0
Xiaowei
supervisor
35
Beijing Shougang Co. Ltd Annual Report 2021
Number Reasons
Number
Number of Number for
of shares
of shares shares of shares changes
held at
Status of Start date of End date of increased reduced Other held at in the
Name Post Gender Age the
employment term term in the in the changes the end increase
beginning
current current of the or
of the
period period period decrease
period
(shares) of shares
Employee
Guo Yuming representative Retired Male 54 2019/12/23 2021/7/7 0 0 0 0 0
supervisor
Total -- -- -- -- -- -- 0 0 0 0 2,146,000 --
During the reporting period, whether there was any resignation of directors and supervisors and dismissal of senior managers during
their term of office
√ Yes □ No
Please refer to "Changes in directors, supervisors and senior manager" for details.
Yin Tian has completed his six-year term as an independent director of the Company from 7 January 2016 to 6 January 2022.
According to the regulations on the tenure of independent directors of listed companies, Yin Tian resigned as an independent director
on 6 January 2022.
Changes in directors, supervisors and senior manager
√Applicable □Not applicable
Name Post Type Date Reason of changes
Yang Guipeng Independent director Retired 2021/12/20 Resigned for personal reasons.
Supervisory board
Shao Wence Retired 2021/08/17 Resigned due to job changes.
chairman
Employee representative
Chen Xiaowei Retired 2021/07/07 Resigned for personal reasons.
supervisor
Employee representative
Guo Yuming Retired 2021/07/07 Resigned for personal reasons.
supervisor
II. Current position
Professional background, main work experience and main responsibilities of the current board members, supervisors, and senior
manager of the Company
A. Board members
1. Zhao Minge: Chairman, professor-level senior engineer, doctoral education, PhD of Engineering. The major employment history
of Mr. Zhao is as follows: a teacher of mining and metallurgy department of Beijing Iron and Steel College; a deputy director of
teaching section of educational division, a deputy director (in charge of daily routine) of educational division, the vice president of
the college; a deputy director of Shougang Training Centre; a deputy director of Shougang Ironmaking Factory; a deputy director of
the No.2 Ironmaking Plant of Shougang Co.; the secretary of CPC Committee of Beijing Shougang Oxygen Factory; a director of
Shougang Training Center (Training Department); the head (first vice president of the Institute) of Technical Quality Department
(Technical Research Institute, Xingang Technical Quality Department); a deputy secretary of CPC Committee and deputy general
manager of Xingang Co.; a member of the board and general manager of Shougang Changzhi Steel&Iron Co., Ltd.; a director and
general manager of Shougang Changzhi Steel&Iron Co., Ltd. (assistant level of the headquarter); the assistant of general manager of
Shougang Corporation, the deputy chief engineer and president of Shougang Technology Research Institute; later, concurrently, the
deputy secretary of the CPC Committee and executive deputy general manager of Shougang Jingtang United Iron&Steel Co., Ltd.; a
standing member of CPC Committee, director, vice general manager of Shougang Co., at the same time, appointed as the director of
Beijing Shougang Co., Ltd. and Shougang Jingtang United Iron & Steel Co., Ltd. In addition, Mr. Zhao also is a standing member of
36
Beijing Shougang Co. Ltd Annual Report 2021
CPC Committee, director, vice general manager of Shougang Group. Mr. Zhao served as Chairman of Beijing Shougang Co., Ltd.
Also, Mr. Zhao is the deputy secretary of the Party, the director and the general manager of Shougang Group.
2.Liu Jianhui: director and general manager, professor-level senior engineer, postgraduate education, master of engineering. The
major employment history of Mr. Liu is as follows: a professional in the steel-making section of Beigang Technology Office and
deputy director of the steel-making inspection station; a student of Lugou Engineering School of Shougang; a deputy director of the
No.1 Steel-making Plant of Shougang and director of the Shougang’ Research Institute; the chief engineer, technical assistant of
factory manager and technical section director of the No.2 Steelmaking Plant of Shougang and director of the Research Institute; a
technical assistant of the factory manager and director of the technical section and technical deputy director of the No.2 Steel-making
Plant of Shougang Corporation; a deputy director of the No.2 Steelmaking Plant of Beijing Shougang Co., Ltd.; the assistant of
general manager and head of steelmaking department of Shouqin Co.; the assistant of general manager and deputy general manager
of Qiangang Co.; the deputy general manager (acting general manager) and general manager of sales company of Shougang
Corporation; the deputy secretary of CPC Committee, general manager and director of marketing management department of
Shougang Co.; the deputy secretary of CPC Committee of Shougang Co., director, general manager and director of marketing
management department; the deputy secretary of CPC Committee, director and general manager of Shougang Co., concurrently
served as secretary of CPC Committee and director for Jingtang Co. At present, he is the secretary of CPC Committee, director and
general manager of Beijing Shougang Co., Ltd.
3. Qiu Yinfu: director, university education. The major employment history of Mr. Qiu is as follows: a professional and person in
charge of the mobile section of Shougang’ Medium and Heavy Plate Plant; the deputy director, director, or director and secretary of
CPC Branch of mobile division of the Shougang’s No.2 Steelmaking Plant; a director and secretary of CPC Committee of the No.2
Steelmaking Plant of Beijing Shougang Co., Ltd.; the deputy director to director of Shougang Oxygen Factory; the director and
secretary of CPC Branch of Oxygen Production Division and director of the Oxygen Factory of Shougang; the director of the Oxygen
Factory of Shougang and head of Jingtang Integration Project; the director of the Oxygen Factory of Shougang and head of Jingtang
Integration Project, director of Oxygen Production Branch of Tangshan Shougang Baoye Steel & Iron Co., Ltd.; the director of cold
rolling operation department and assistant to general manager in Qiangang Co.; director and secretary of CPC Committee of cold
rolling operation department, and assistant to general manager of Qiangang Co.; the director and secretary of CPC Committee of cold
rolling operation department, and deputy general manager of Qiangang Co.; the deputy secretary of CPC Committee, director of the
board and general manager of Cold-R Co.; deputy secretary of CPC Committee, chairman and general manager of Cold-R Co.,;
deputy secretary of CPC Committee, chairman and general manager of Cold-R Co., and deputy general manager of Shougang Co.;
the deputy secretary of the CPC Committee, chairman of labor union, deputy general manager of Shougang Co., and secretary of
CPC Committee of Qiangang Co.; the deputy secretary of the CPC Committee, chairman of labor union, deputy general manager of
Shougang Co., secretary of CPC Committee of Qiangang Co., director of BAIC Motor Corporation., Ltd., director of Beijing
Automobile Investment Co., Ltd.; At present, he is the secretary of CPC Committee and chairman of Jingtang Co., director of
Shougang Co., and director of BAIC Motor Co., Ltd.
4. Wu Dongying: director, PhD candidate. The major employment history of Mr. Wu is as follows: a teacher of Hefei University of
Technology; a researcher, person in charge and deputy director of strategic research agency of Baosteel; the director of strategic
section under planning & development department of Baosteel Group; the director of strategic development department of Baosteel
Group; the director of economy and management institute ofBaosteel Group; the general manager of planning & development
department and director of economy & planning institute of Baosteel Group; the general manager of planning & development
department and director of economy & planning institute of Baowu Group. At present, he is the general manager (president) of
strategic planning department (economic & planning institute) of Baowu Group and director of Shougang Co.
5. Yin Tian: independent director, university education, professor, PhD supervisor. Once served as assistant professor, lecturer and
associate professor of Southwest University of political science and law, and visiting scholar sent by the State Education Commission
to Toulouse University of Social Sciences, director and professor of French law research center of Southwest University of political
science and law, and director, professor and doctoral supervisor of Law Department of Southwest University of political science and
37
Beijing Shougang Co. Ltd Annual Report 2021
law. Now Mr. Yin is a professor, doctoral supervisor and director of the civil law research center of Peking University, and also
serves as the director of China law society, vice president of China Civil Law Research Association, President of China Insurance
Law Research Association, special supervisor of the Supreme People's court, consulting expert of the Supreme People's Procuratorate,
and independent director of Skyworth Digital Co., Ltd. On 7 January 2016, Mr. Yin served as an independent director of Beijing
Shougang Co., Ltd.
6. Ye Lin: independent director, professor and doctoral supervisor, doctor in law, Ye Lin was serving Law School of Renmin
University of China (hereinafter “RUC”) as an assistant, lecturer, associate professor and professor, successively. At present, he is the
director, professor and doctoral supervisor of Civil & Commercial Law Teaching and Research Agency of RUC Law School. He is
also an independent director of China Life Asset Management Co., Ltd., an independent director of Founder Securities Co., Ltd., and
a part-time lawyer of Beijing Shengang Law Firm. Major part-time jobs include: the vice president of China Commercial Law
Society under China Law Society, the vice president of Civil and Commercial Law Society under Beijing Law Society, the president
of Beijing Consumer Rights Protection Law Society; a legislative consultant of Financial and Economic Affairs Committee of the
National People's Congress of PRC, a consultant of drafting group to Futures Law, a consultant of Administrative Punishment
Committee of CSRC, a consumer rights protection social supervisor of China Insurance Regulatory Commission, a consultant of the
Legal Professional Committee of the Insurance Society of China, a member of the Advisory Committee of Beijing High People’s
Court, a consultant of the Company Law Committee of China Lawyers Association, a consultant of the Company Law Committee of
Beijing Lawyers Association, a member of the Professional Committee of Shanghai Stock Exchange and China Financial Futures
Exchange, a arbitrator and expert of the Advisory Committee of China International Economic and Trade Arbitration Commission.
Ye Lin serves Shougang Co. as an independent director from 26 December, 2017.
7. Gu Wenxian:independent director, university education, senior accountant, Certified public Accountant in China. He used to be a
teacher of Shanghai Railway Medical College, a teacher of Shanghai Fisheries University, a senior manager of Dahua Certified
Public Accountants LLP, a senior manager of Ernst & Young Da Hua Certified Public Accountants, and a member of the first,
second and third mergers and acquisitions Committee of China Securities Regulatory Commission. Mr. Gu is now a senior partner
and director of BDO China Shu Lun Pan Certified Public Accountants LLP. Gu Wenxian serves Shougang Co. as an independent
director from 20 December, 2021.
8. Liu Shen: independent director, Ph.D. Once served as an employee of the real estate credit department of Shanghai Branch of
China Construction Bank, assistant manager, manager and senior manager of the listed company Department of Shanghai Stock
Exchange, executive manager and assistant director of the office of Shanghai Stock Exchange, assistant director of the second
Supervision Department of listed company of Shanghai Stock Exchange, deputy director of the issuance and listing business center
of Shanghai Stock Exchange and member Department of Shanghai Stock Exchange Deputy director. During the period, Mr. Liu
worked in the issuance Supervision Department of China Securities Regulatory Commission (CSRC), and is a member of the 16th
main board stock issuance examination committee of CSRC. At present, Mr. Liu is the vice general manager of Shanghai Xinfugang
Real Estate Development Co., Ltd., an independent director of Shanghai Kangheng environment Co., Ltd. (unlisted company) and an
independent director of Guizhou Guotai Liquor Co., Ltd. (unlisted company). Mr. Liu serves as an independent director of Beijing
Shougang Co., Ltd. since 23 June 2020.
9. Peng Feng: independent director, master degree, professor level senior engineer. Mr. Peng once served as assistant engineer,
engineer and deputy director of Smelting raw materials department of Metallurgical Industry Planning and Research Institute, chief
designer and vice director of smelting raw materials department of Metallurgical Industry Planning and Research Institute, chief
designer and director of smelting raw materials department of Metallurgical Industry Planning and Research Institute. At present, Mr.
Peng is vice chief engineer and chief designer of Metallurgical Industry Planning and Research Institute, director of smelting raw
materials department, vice chairman of ferroalloy branch of China Society for metals, and executive deputy secretary of
Zhongguancun Stainless Steel and Special Alloy New Material Industry Technology Innovation Alliance. Mr. Peng serves as an
independent director of Beijing Shougang Co., Ltd. since 23 June 2020.
38
Beijing Shougang Co. Ltd Annual Report 2021
B. Supervisors
1. Sun Yi: Chairman of Supervisory Board,doctor degree, doctor of Economics, senior economist. The major employment history of
Mr. Sun is as follows: A cadre of machinery workshop of Changchun Bus Factory in Jilin Province, a research secretary in the
factory director's office, a staff member, section member, deputy director section member of Jilin Provincial Labor Department labor
Management Office, a deputy director of the First General Affairs Department, a director of the first General Affairs Department,
chief secretary of the secretariat and deputy secretary of the Secretariat of jilin Provincial Government general Office, Director,
deputy general manager, chairman of the trade union, standing member of the Party Committee, secretary of the Discipline
inspection Commission and Secretary of the Party Committee of Tonghua Iron & Steel Co., Ltd. Mr. Sun is currently the Director of
the Work Office of the Supervisory Board of Shougang Group Co., Ltd., and the Chairman of the Supervisory Board of Beijing
Shougang Co., Ltd.
2. Guo Liyan: Supervisor, university education, MBA, senior accountant.The major employment history of Mrs. Guo is as follows: a
member of the financial section of the Mechanical Factory of Beijing Shougang Machinery& Electric Co., Ltd.; an auditor of the
audit administration of Beijing Shougang Machinery& Electric Co., Ltd., the director of the accounting section under the Hydraulic
Center of Beijing Shougang Machinery& Electric Co., Ltd., the deputy director of the finance division under Shougang Corporation
finance & accounting department; the deputy director of the cost division under Shougang Corporation finance & accounting
department; the deputy director of the financial station of the Technical Research Institute under Shougang Corporation finance &
accounting department; the executive deputy director of the first division under audit department of Shougang Corporation; an
assistant to the director and deputy director of Shougang Corporation audit department; the director of Shougang Corporation audit
department and supervisor of Shougang Co. Mrs. Guo is the current director of audit department of Shougang Group and the current
supervisor of Shougang Co.,.
3. Yang Mulin: Supervisor, university education, master of engineering, senior economist. The major employment history of Mr.
Yang is as follows: the dispatcher and production planner of production department of Qinhuangdao Shougang Plate Mill Co., Ltd.
(hereinafter “Qinhuangdao Plate Co.”) the production manager of comprehensive department of Qinhuangdao Branch of Zhongshou,
the secretary and deputy director of factory affairs office of Qinhuangdao Plate Co.; the executive deputy director of human resources
department and the deputy director of factory affairs office of Qinhuangdao Plate Co.; the director of human resources department
and the director of factory affairs office of Qinhuangdao Plate Co.; assistant to the general manager of Qinhuangdao Plate Co.; the
director ofhuman resources department of Qinhuangdao Plate Co.; assistant to the director and duty director of human resources
department of Jingtang Co.; the secretary of CPC Committee, secretary of CDI and chairman of labor union of cold-rolled operation
department of Jingtang Co.; the director of organization department and human resources department under CPC Committee of
Jingtang Co.; the deputy director of labor & salary department of Shougang Corporation; the deputy director of labor & salary
department of Shougang Corporation; the director of system optimization department of Shougang Corporation. Besides serving
Shougang Co. as a supervisor, Yang Mulin is the head of system optimization department of Shougang Group Co., Ltd
4. Liang Wangnan:Supervisor,university education,an engineer. Mr. Liang used to be a cadre of the Labor and Finance Department
and Organization Department of the West Suburb Grain Depot of Beijing Grain Group Co., Ltd., a cadre of Beijing Municipal
Committee of Commerce and Trade, a section member, a deputy director member, a director member of Enterprise Leadership
Management Office of Beijing State-owned Assets Supervision and Administration Commission, a deputy General Manager of
General Management Department, Deputy General Manager of Human Resources Department, General Manager of Human
Resources Department, Deputy General Manager of Fund Investment Department, Minister of Organization Department, Deputy
General Manager of Fund Investment Department, General Manager of Fund Investment Department, General manager of The
Second Fund Investment Department, Secretary of the Sixth Party Branch Beijing State-owned Capital Operation and Management
Center, a member of investment decision-making committee Department of Beijing State-owned Capital Operation and Management
Center.Beijing Jing Guorui Soe Reform and Development Fund(L.P.), a director of Jingtang Co.Currently, Mr. Liang is the secretary
of the Sixth Party Branch of the Headquarters and the general manager of the Second Fund Investment Department, of Beijing
39
Beijing Shougang Co. Ltd Annual Report 2021
State-owned Capital Operation and Management Center, a member of the Investment decision-making Committee of Beijing Jing
Guorui Soe Reform and Development Fund(L.P.), and a supervisor of Beijing Shougang Co., Ltd.
5. Cui Aimin: Employee representative supervisor, university education,master degree,senior engineer. Mr. Cui used to be a
professional in the Technology Department of the Second Steelmaking Plant of Shougang Co., a director of the Production
Technology Room of the Steelmaking Operation Department of Qiangang Co., a deputy Section chief of the Management
Department of the Technical Quality Department. Beijing Shougang Co., Ltd., a deputy director of Hot-Rolled Product Room of
Technical Quality Department, a director of Management Innovation Room of Operation Improvement Department, a director of
Operation Management Room of Operation Planning Department, a deputy Secretary of party Committee, a secretary of Discipline
Inspection Commission, the chairman of labor Union, the director of office research Office, an inspector of Party Committee
Inspection Office of Shougang Group Co., Ltd. Mr. Cui is the director of research Office of Beijing Shougang Co., Ltd., and the
supervisor of employee representative of Beijing Shougang Co., Ltd.
6. Qu Erlong:Employee representative supervisor, university education, senior technician,engineer. Mr. Qu worked as a worker in
Shougang High-speed Wire Mill, Shougang Equipment Maintenance Center, Qiangang Co. Equipment Maintenance Center, Qian
Steel Company Equipment Maintenance Center, Beijing Shougang Co., Ltd. Equipment Department, hot-rolling Operation
Department.
C. Senior manager
1.Liu Jianhui: director and general manager, professor-level senior engineer, postgraduate education, master of engineering. The
major employment history of Mr. Liu is as follows: a professional in the steel-making section of Beigang Technology Office and
deputy director of the steel-making inspection station; a student of Lugou Engineering School of Shougang; a deputy director of the
No.1 Steel-making Plant of Shougang and director of the Shougang’ Research Institute; the chief engineer, technical assistant of
factory manager and technical section director of the No.2 Steelmaking Plant of Shougang and director of the Research Institute; a
technical assistant of the factory manager and director of the technical section and technical deputy director of the No.2 Steel-making
Plant of Shougang Corporation; a deputy director of the No.2 Steelmaking Plant of Beijing Shougang Co., Ltd.; the assistant of
general manager and head of steelmaking department of Shouqin Co.; the assistant of general manager and deputy general manager
of Qiangang Co.; the deputy general manager (acting general manager) and general manager of sales company of Shougang
Corporation; the deputy secretary of CPC Committee, general manager and director of marketing management department of
Shougang Co.; the deputy secretary of CPC Committee of Shougang Co., director, general manager and director of marketing
management department; the deputy secretary of CPC Committee, director and general manager of Shougang Co., concurrently
served as secretary of CPC Committee and director for Jingtang Co. At present, he is the secretary of CPC Committee, director and
general manager of Beijing Shougang Co., Ltd.
2. Peng Kaiyu: vice general manager, postgraduate education, master of engineering, MBA, senior engineer. The major employment
history of Mr. Peng is as follows: a technician in the production technology office of the Qiangang Co. Steelmaking Branch; the chief
deputy operator (training on duty), the chief deputy operator and the chief operator, in No.1 steelmaking refining operation area
under steelmaking operation department of Shougang Co.; the assistant to the director under the steelmaking operation department of
Qiangang Co.; the assistant to the director and the deputy director of steelmaking operation department of Qiangang Co.; the deputy
director (presiding over work) and director of steelmaking operation department of Shougang Co.; the secretary of CPC Committee,
the ecretary of CDI, chairman in labor union and director of steelmaking operation department of Shougang Co.; the secretary of
CPC Committee, the secretary of CDI and the chairman in labor union, under steelmaking operation department of Shougang Co.;
the deputy secretary of CPC Committee of Shougang Co. Mr. Peng is the current deputy secretary of CPC Committee and the deputy
general manager of Shougang Co.
3. Li Ming: vice general manager, university education, doctoral candidate, professor level senior engineer. The major employment
history of Mr. Li is as follows: a technician, person in charge of refining workshop, the deputy director of refining workshop, the
executive deputy director of refining workshop, the director of refining workshop, the deputy director (leading roles of sections or
40
Beijing Shougang Co. Ltd Annual Report 2021
equivalents) of technical research section; an assistant to the director of the technical quality division and the director of the technical
section under technical quality division, the deputy director of technical quality division, in Qiangang Co.; an assistant to the
manager and then the deputy manager of Qiangang Co.; the deputy manager of Qiangang Co.; the deputy secretary of CPC
Committee and director of marketing management department of Shougang Co.; the deputy secretary of CPC Committee and director
of Marketing Management Department, and the deputy general manager of Shougang Co.; the deputy secretary of CPC Committee
and director of marketing management department, and the deputy general manager and director of Shougang Co. At present, he is
the deputy secretary of CPC Committee and director of marketing management department, and the deputy general manager and
director of Shougang Co. Executive director and general manager of Beijing Shougang Steel Trading Investment Management Co.,
Ltd.
4. Li Baizheng: Chief accountant, university education, chief accountant, accountant, economist. The major employment history of
Mr. Li is as follows: the planning controller of No.1 Steelmaking Factory; the dispatcher of production setion, the planning controller
of steelmaking workshop, the planning controller of production section, the chief controller of production section, the planner of
production section, the director of billet area, the deputy director of production section, the director of finance and accounting section,
planning person in charge of production and planning section, in No. 2 Steelmaking Factory; the deputy director and then director of
finance and accounting department of Qiangang Co.; the director of finance and accounting department of Qiangang Co.; the chief
accountant of Shougang Co. Li Baizheng is the current chief accountant of Shougang Co., the board member of Beijing Shougang
Cold Rolling Co., Ltd. and Shougang Jingtang United Iron & Steel Co., Ltd.
5. Sun Maolin: university education, MBA, engineer. The major employment history of Mr. Sun is as follows: when serving
Shougang Medium and Heavy Plate Factory, a professional in the technical section, the deputy secretary of CPC Branch and deputy
director of hot rolling section, the secretary of CPC Branch of operation zone B, the deputy director of technical research section; the
deputy director of technical section under technical quality division, an assistant to the director of technical quality division, the
executive deputy director of silicon steel department, the standing deputy director of silicon steel department in Qiangang Co.; the
executive deputy director and then director of silicon steel business department of Shougang Co.; the director of Silicon Steel
Engineering Research Center; the secretary of CPC Committee and director of silicon steel business department, and an assistant to
the general manager of Shougang Co.; the director of silicon steel business department. Sun is the current deputy general manager of
Shougang Co. and director of Silicon Steel Engineering Research Center. He also servesZhixin Co. as the executive director,
Minmetals Special Steel (Dongguan) Co., Ltd. as the vice chairman of the board, and Minmetals Tianwei Steel Co., Ltd. as a
director.
6. Li Jingchao: vice general manager, university education, engineer. The major employment history of Mr. Li is as follows: a
milling worker of rail workshop in Shougang Middle-sized Factory; an electrician of electrical apparatus workshop in Shougang
Power Factory; the person in charge of the Youth League Committee of Shougang Testing Branch; in Shougang No. 3 Steel Mill, the
worker of steelmaking workshop, the administrative person in charge of the billet cast machine workshop, the production deputy
director of power workshop, the director (leading roles of sections or equivalents) of power workshop, the director (leading roles of
sections or equivalents) of spare parts section, the deputy director (leading roles of sections or equivalents) of mobile section, the
deputy director (leading roles of sections or equivalents) of equipment section, the deputy director (leading roles of sections or
equivalents) of equipment section and director (leading roles of sections or equivalents) of power workshop, the deputy director
(leading roles of sections or equivalents) of equipment section; an assistant to the director, the deputy director, the director of
equipment division and the director of equipment department of Qiangang Co.; an assistant to the general manager and the director of
equipment department of Qiangang Co.; an assistant to the general manager of Qiangang Co.; an assistant to the general manager of
Qiangang Co., and the secretary of CPC Committee and the director of equipment department of Shougang Co.; an assistant to the
general manager of Qiangang Co.; an assistant to the general manager of Qiangang Co., and the secretary of CPC Committee and the
director of equipment department of Shougang Co., the director of intelligent application department of Shougang Co.; an assistant to
the general manager of Qiangang Co., and secretary of CPC Committee and the director of equipment department of Shougang Co.
At present, Li Jingchao is the deputy general manager of Shougang Co., and concurrently vice chairman of Qian'an Sinochem Coal
41
Beijing Shougang Co. Ltd Annual Report 2021
Chemical Industrial Co., Ltd. and the director of Qian'an China Petroleum Kunlun Gas Co., Ltd.
7. Ma Jiaji: Chief engineer, master degree, professor level senior engineer. The major employment history of Mr. Ma is as follows: a
professional in the technical section of Shougang No.2 Wire Rod Coil Factory; a professional in the steel rolling section under the
technical division of Shougang Beigang Co., a designer in the rolling process section of Shougang Design Institute, a deputy group
leader and group leader of the first group of the rolling section under steel rolling division of Shougang Design Institute; the deputy
director of the steel rolling section under steel rolling department of Shougang Design Institute; a deputy chief in the steel rolling
design office of Beijing Shougang Design Institute; a production deputy director in Shougang Small-sized Factory; the production
deputy director of No. 1 Plate Factory of Shougang Corporation. The director of Shougang No.2 Wire Rod Coil Factory; the director
of Beijing Shougang Fulu Shicai Coated Plate Co., Ltd.; the leader of cold-rolled preparation group, the general manager of Beijing
Shougang Fulu Shicai Coated Plate Co., Ltd.; the leader of cold-rolled preparation group, the director and general manager of Beijing
Shougang Fulu Shicai Coated Plate Co., Ltd., and the deputy general manager of Shougang Co.; leader of cold-rolled preparation
group, the director and general manager of Beijing Shougang Fulu Shicai Coated Plate Co., Ltd., and the director of Cold Rolled
Sheet Steel Department and the deputy general manager of Shougang Co.; the manager of Shunyi Cold Rolled Branch and the deputy
general manager of Shougang Co.; the manager and board member of Cold-R Co. and the deputy general manager of Shougang Co.;
the deputy general manager of Shougang Co.; the deputy chief engineer of Qiangang Co. Ma is the current deputy chief engineer of
Shougang Co.
8. Chen Yi: vice general manager, board secretary, postgraduate education, doctor of management, senior economist. The major
employment history of Mr. Chen is as follows: a professional in the mobile section, an assistant to the director of the maintenance
workshop, the deputy director of the mobile section of Shougang Medium-sized Rolling Mill; the secretary of the CPC Committee
office; a trainee of the overseas training course of Shougang University; the deputy director of the engineering division of the Jichai
technical transformation leading group of Shougang; the deputy director of the Office (CPC Office) under the Shougang Economy &
Trade Department; the deputy director of the board secretary office ofBeijing Shougang Xinganglian Technology&Trade Co., Ltd.;
the deputy manager of Shougang Marketing Co.; the deputy director of marketing management department, the deputy director of
marketing management department and the person in charge of the board secretary office, in Shougang Co.; the board secretary and
the director of the board secretary office of Shougang Co.; the general counsel, board secretary and director of the board secretary
office of Shougang Co., and director of Cold-R Co. and Jingtang Co. At the end of the reporting report, Chen Yi was the deputy
general manager, board secretary, general counsel of Shougang Co., and director of Cold-R Co. and Jingtang Co.
Position in the shareholders’ company
√Applicable □Not applicable
Start date of End date Received remuneration
Name Entity Position in shareholder company
term of term from other entity (Y/N)
vice secretary of the Party
Zhao Minge Shougang Group Co., Ltd. Committee, Director and General 2020/07 Y
Manager
Director of the office of the board of
Sun Yi Shougang Group Co., Ltd. 2021/01 Y
supervisors
Guo Liyan Shougang Group Co., Ltd. Director of audit department 2017/06 Y
Director of system optimization
Yang Mulin Shougang Group Co., Ltd. 2017/06 Y
department
General manager (president) of
China Baowu Steel Group
Wu Dongying strategic planning department 2019/12 Y
Corporation Ltd.
(Institute of economics and planning)
Notes to the position
in the shareholders’ None
company
Position in other entity
□ Applicable √ Not applicable
42
Beijing Shougang Co. Ltd Annual Report 2021
Notes for any punishment from securities review and management authorities, on resigned or current directors, supervisors, and
senior managers within the three years
□ Applicable √ Not applicable
IIⅠ. Remuneration of directors, supervisors and senior management
Decision making procedure, determination basis and actual payment of remuneration for directors, supervisors and senior managers：
Remuneration for directors: the independent directors of the Company collect the allowance of independent directors, and the
allowance standard of independent directors is determined by the general meeting of shareholders; the director who concurrently
serves as the general manager does not collect the director remuneration; director Qiu Yinfu collects remuneration in Jingtang Co.,
which is not the director remuneration; other directors do not collect remuneration from the Company.
Remuneration for supervisors: employee representative supervisors collect remuneration from the Company, while other supervisors
do not collect remuneration from the Company. The employee representative supervisor shall be remunerated according to the
position of non-supervisor in the Company.
Remuneration for senior management: the remuneration committee under the board of directors is responsible for organizing the
performance assessment to the general manager and proposes remuneration, in terms of the Annual Measures for Assessment and
Distribution of General Manager Salary, and reports the performance and deserved remuneration of general manger to the board.
After the consideration and approval from the board of directors, the company actually affords the remuneration. Other senior
management remuneration is afforded monthly, in accordance with performing duties assessed by the general manager and director
under the Board’s authorization.
Remuneration of directors, supervisors and senior management during the reporting period
Unit：RMB 0,000
Total pretax Whether to get remuneration
Name Position Gender Age Status of employment remuneration received from related parties of the
from the company company
Zhao Minge Chairman Male 55 Incumbent 0 Yes
Liu Jianhui Director Male 57 Incumbent 0 No
Qiu Yinfu Director Male 54 Incumbent 128.01 No
Wu Dongying Director Male 58 Incumbent 0 Yes
Yin Tian Independent director Male 67 Incumbent 12 No
Ye Lin Independent director Male 58 Incumbent 12 No
Gu Wenxian Independent director Male 60 Incumbent 0 No
Liu Shen Independent director Male 46 Incumbent 12 No
Peng Feng Independent director Male 42 Incumbent 0 No
Supervisory board
Sun Yi Male 56 Incumbent 0 Yes
chairman
Guo Liyan Supervisory Female 46 Incumbent 0 Yes
Yang Mulin Supervisory Male 50 Incumbent 0 Yes
Liang Wangnan Supervisory Male 47 Incumbent 0 Yes
Employee representative
Cui Aimin Female 53 Incumbent 14.64 No
supervisor
Employee representative
Qu Erlong Male 40 Incumbent 12.32 No
supervisor
Liu Jianhui General manager Male 57 Incumbent 129.98 No
43
Beijing Shougang Co. Ltd Annual Report 2021
Total pretax Whether to get remuneration
Name Position Gender Age Status of employment remuneration received from related parties of the
from the company company
Peng Kaiyu Vice general manager Male 41 Incumbent 113.17 No
Li Ming Vice general manager Male 47 Incumbent 118.58 No
Li Baizheng Chief accountant Male 56 Incumbent 114.79 No
Sun Maolin Vice general manager Male 45 Incumbent 116.36 No
Li Jingchao Vice general manager Male 55 Incumbent 117.85 No
Ma Jiaji Chief engineer Male 58 Incumbent 119.72 No
Vice general manager,
Chen yi Secretary of the board of Male 54 Incumbent 112.77 No
directors
Yang Guipeng Independent director Male 49 Retired 12 No
Supervisory board
Shao Wence Male 58 Retired 0 Yes
chairman
Employee representative
Chen Xiaowei Female 48 Retired 67.6 No
supervisor
Employee representative
Guo Yuming Male 54 Retired 25.34 No
supervisor
Total -- -- -- -- 1,239.13 --
VI. Performance of Directors during the reporting period
1. Board meetings during the reporting period
Meeting Convening date Disclosure date Resolutions of meeting
Refers to the company's announcement on the
The first Extraordinary General
2021/3/31 2021/4/1 disclosure date of the resolution of the meeting
Meeting of the year 2021
for details
Refers to the company's announcement on the
The seventh meeting of the seventh
2021/4/28 2021/4/29 disclosure date of the resolution of the meeting
session of the Board
for details
Refers to the company's announcement on the
The second Extraordinary General
2021/6/1 2021/6/2 disclosure date of the resolution of the meeting
Meeting of 2021
for details
Refers to the company's announcement on the
The eighth meeting of the seventh
2021/8/2 2021/8/3 disclosure date of the resolution of the meeting
session of the Board
for details
Refers to the company's announcement on the
The ninth meeting of the seventh
2021/8/18 2021/8/19 disclosure date of the resolution of the meeting
session of the Board
for details
Refers to the company's announcement on the
The tenth meeting of the seventh
2021/9/10 2021/9/11 disclosure date of the resolution of the meeting
session of the Board
for details
Refers to the company's announcement on the
The third Extraordinary General
2021/9/17 2021/9/18 disclosure date of the resolution of the meeting
Meeting of shareholders in 2021
for details
Refers to the company's announcement on the
The fourth Extraordinary General
2021/10/29 2021/10/30 disclosure date of the resolution of the meeting
Meeting of shareholders in 2021
for details
Refers to the company's announcement on the
The fifth Extraordinary General
2021/11/12 2021/11/13 disclosure date of the resolution of the meeting
Meeting of shareholders of 2021
for details
44
Beijing Shougang Co. Ltd Annual Report 2021
Meeting Convening date Disclosure date Resolutions of meeting
Refers to the company's announcement on the
The eleventh meeting of the seventh
2021/11/29 2021/12/1 disclosure date of the resolution of the meeting
session of the Board
for details
Refers to the company's announcement on the
The sixth Extraordinary General
2021/12/9 2021/12/10 disclosure date of the resolution of the meeting
Meeting of shareholders of 2021
for details
Refers to the company's announcement on the
The seventh Extraordinary General
2021/12/17 2021/12/18 disclosure date of the resolution of the meeting
Meeting of shareholders of 2021
for details
2. Attendance of Directors at Board meetings and general meetings
Attendance of Directors at Board meetings and general meetings
Number of
attendance Attendance at Absent from
Attendance at Attendance at
required for Board meetings Absence from Board meetings in Attendance at
Name of Directors Board meetings in Board meetings
Board meetings by Board meetings person for two general meetings
person by proxy
during the communication consecutive times
reporting period
Zhao Minge 12 5 7 0 0 No 3
Liu Jianhui 12 5 7 0 0 No 3
Qiu Yinfu 12 5 7 0 0 No 3
Wu Dongying 12 0 12 0 0 No 0
Yin Tian 12 2 10 0 0 No 0
Ye Lin 12 3 9 0 0 No 1
Yang Guipeng 12 4 8 0 0 No 3
Liu Shen 12 0 12 0 0 No 0
Peng Feng 12 4 8 0 0 No 1
Gu Wenxian 0 0 0 0 0 No 1
Explanation for the absent from board meetings in person for two consecutive times
Not applicable
3. Objections from Directors on related issues of the Company
Whether the directors raise any objection to the relevant matters of the Company
□ Yes √ No
During the reporting period, the directors did not raise any objection to the relevant matters of the Company
4. Other instructions for directors to perform their duties
Whether the directors' suggestions on the Company have been adopted
√Yes □No
Explanation of the directors on the adoption or non adoption of relevant suggestions of the Company
Not applicable
VII. Special committees under the board of directors during the reporting period
Important Other
Name of the Number of Convening Details of
Member Details of the meeting opinion and performance of
committee meeting convened date objection (if any)
advice duty
45
Beijing Shougang Co. Ltd Annual Report 2021
Important Other
Name of the Number of Convening Details of
Member Details of the meeting opinion and performance of
committee meeting convened date objection (if any)
advice duty
Independent
It is composed of
Strategic and directors express
5 directors,
Risk independent
including 2 0
Management opinions in
independent
Committee accordance with
directors.
regulations
Independent
Summary of
directors express
communication Agreed to submit
independent
2021/2/25 between CPA and audit to the Board for
opinions in
committee (independent review
accordance with
director) before audit
regulations
Annual audit:
communication letter
It is composed of with independent
Audit Committee 3 independent 2 directors and the audit
directors. Independent
committee of the board
directors express
of directors after the Agreed to submit
independent
2021/4/9 certified public to the Board for
opinions in
accountant issued review
accordance with
preliminary audit
regulations
opinions on the
company's 2020 annual
financial statement
report
Proposal on the general Independent
manager's salary directors express
Agreed to submit
cashing in 2020 and the independent
2021/4/9 to the Board for
salary and assessment opinions in
review
distribution method in accordance with
Remuneration It is composed of 2021 regulations
and Assessment 3 independent 2
Committee directors. Independent
Report on Beijing
directors express
Shougang Co., Agreed to submit
independent
2021/7/23 Ltd.2021 Restricted to the Board for
opinions in
Stock Incentive Plan review
accordance with
(Draft) and its abstract
regulations
Independent
It is composed of
directors express
3 directors,
Nomination independent
including 2 0
Committee opinions in
independent
accordance with
directors.
regulations
VIII. Performance of duties by the Supervisory Committee
Whether the board of supervisors found any risks in the company during the supervision activities during the reporting period?
□Yes √No
The board of supervisors has no objection to the supervision matters during the reporting period.
IX. Company employees
1. Number of employees, professional composition and education background
Number of active employees in the parent company 5,646
Number of active employees in the main subsidiary 12,203
Total number of active employees at the end of the reporting
17,846
period
Total number of employees receiving salary in the current period 17,846
Number of retired employees to be borne by the parent company
446
and major subsidiaries
Professional composition
46
Beijing Shougang Co. Ltd Annual Report 2021
Professional composition category Number of professional composition
Production 12,126
Salesman 671
Technician 2,034
Finance 283
Administrative 2,343
Services and others 389
Total 17,846
Education background
Type Quantity
Master degree or above 1,549
Bachelor's degree 7,165
College 5,821
Vocational secondary and below 3,311
Total 17,846
2. Remuneration policies
The middle-level employees of the company implement the annual salary system, and the annual salary structure includes three parts:
basic annual salary, performance annual salary and term incentive. The basic salary is paid monthly. The performance bonus links to
the performing duty monthly or annually, and is distributed monthly and annually in terms of the Responsible Agreement of Business
Objectives. After performance appraisal at the end of employment term according to the Responsible Agreement of Objective during
The Employment Term, the incentives bonuses to employment term will be afforded flowing the assessment results.
The salary system of front-line and blow staff is composed of occupation salary and benefit salary. The occupation salary is
influenced by the attendance, and the benefit salary is distributed as the monthly performance on the duty.
3. Training program
According to the national and Beijing municipal vocational skills improve action plan and the needs of the Company to the worker
team, Qianshun production line and Zhixin Co., establish a whole life cycle of high potential talent "sail" career development system.
The system emphasizes pertinence, practicability and value to theory and practice, study and summary, which improves the quality of
the company's talents, exercises the ability of the company's talents, so that the company's talents quickly accumulated.According to
the company's talent needs at different levels such as reserve, backbone, core, key and strategy, the company designs five levels of
talent development and cultivation projects of "wave, sail, set sail, pilot and pilot", which creates a continuous and advanced map of
talent cultivation and development with high potential. This project divides talents into different stages and levels, and formulates
different systematic talent training plans according to the ability characteristics and growth factors of talents at different stages, which
effectively realizes the cultivation and guidance of talents and accelerates the growth of talents.The company organized and
completed more than 150 kinds of training projects throughout the year, which fully covered the three talent teams of operation
management, professional technology and skill operation. The training projects enhanced the cohesion of the enterprise and the staff
and provided strong support for the high-quality development of the company.
Jingtang Co. constructs "four horizontal and three vertical" training system for all staff, which smoothen the path of talent career
development. The lecture hall for leaders, the rotation training class for middle-level leaders and the training class for young
backbone also accelerate the improvement of the comprehensive quality of leaders and backup backbone.In the training plan of
47
Beijing Shougang Co. Ltd Annual Report 2021
"Qinglan Project" (a platform for the growth of technical skills and talents), 148 teachers are selected to teach and cultivate 148
employees, which gives full play to the role of staff innovation studio. Systematic training was carried out for team leaders at
different levels, and 21 "gold medal team leaders" were awarded.The company adheres to the principle of "internal training as the
main, external employment as the auxiliary" to build a teaching staff, the establishment of internal trainer selection, training,
incentive closed-loop management mechanism, mining and training professional internal trainer team.Through continuous
improvement of the competition system, the company has established an independent identification mechanism of vocational skills,
which has been completed by 1635 employees. The long-term mechanism of rapid growth of the company's employees is more
perfect.
4. Outsourcing of labor source
□ Applicable √ Not applicable
X. Porposal for profit distribution and transfer of capital reserve to share capital
Formulation, Implementation and Adjustment of common stock Profit Distribution Policy Especially Cash Dividend policy duringthe
reporting period
√Applicable □Not applicable
1. The Company since its inception, highly valued the investment return for shareholders, the protection for legitimate rights and
interests of all shareholders, especially for the small and medium shareholders. According to various regulations and relevant
requirements issued by the regulatory authority, the Company timely revised and improved the provisions of the profit distribution
policy in the Articles of Association of the Company, and the standard and proportion of cash dividends shall be explicit and clarity.
2. During the reporting period, profit distribution proposal complied with the provision of profit distribution in the Articles of
Association of the Company, complied with the provisions of normative documents issued by CSRC and other regulatory agencies
and fulfilled the procedures for independent directors to issue independent opinions and legal approval.
Special description on cash dividend policy
Whether it meets the requirements of the Article of Association or the Resolution of the General Meeting (Y/N): Y
Whether the bonus standards and proportion is clear and well-defined (Y/N): Y
Whether has a completed relevant decision-making procedures and mechanism (Y/N): Y
Whether independent directors fulfill duties and play their due role (Y/N): Y
Minority shareholders whether has opportunity of full expression and appeals, the legal interest of the minorityare being
Y
protected adequately (Y/N):
Whether the conditions and procedures of cash dividend adjustment are transparent or compliant (Y/N): Y
The Company was profitable during the reporting period and the profit available to shareholders of the parent company was positive,
but no cash dividend distribution plan was proposed
√Applicable □Not applicable
Explanation on why it was profitable during the reporting period and the
Purpose and use plan of undistributed profits of the
profit available to shareholders of the parent company was positive, but
Company
no cash dividend distribution plan was proposed
Audited by Grant Thornton LLP, in 2021, the net profit of parent
company is RMB 802,053,622.97, withdraw 10% of legal surplus reserve
RMB 80,205,362.30, the profit available for distribution for the year is The Company intends to review and arrange matters
RMB 721,848,260.67. related to profit distribution of the Company in
accordance with relevant laws, regulations, rules,
In view of the fact that the Company is currently promoting the issue of normative documents and the articles of association
"issuing shares to purchase assets, raising supporting funds and related as soon as possible after the implementation of
party transactions", according to the relevant provisions of the "Purchasing Assets through Issuing Shares, Raising
Administrative Measures on Securities Issuance and Underwriting issued Supporting Funds and Related transactions".
by China Securities Regulatory Commission, the Company is not going
to distribute cash this time, nor convert capital reserve into share capital.
48
Beijing Shougang Co. Ltd Annual Report 2021
Profit distribution and conversion of capital reserves into share capital during the reporting period
□ Applicable √ Not applicable
The Company plans not to distribute cash dividends, bonus shares or increase share capital with provident fund.
XI. Implementation of the equity incentive plan, employee shareholding plan or other
employee incentive measures of the Company.
√Applicable □Not applicable
1. Equity incentive
According to the "Reply on The Implementation of Equity Incentive Plan for Beijing Shougang Co., Ltd." issued by State-owned
Assets Supervision and Administration Commission of Beijing Municipal People's Government (Jingguozi [2021] No. 140) and the
resolution of the Company's first extraordinary general meeting of shareholders in 2021, the Company implemented the 2021
restricted stock incentive plan. 64,901,800 shares were issued to 386 directors, senior management personnel, core technical
personnel and management backbones. The grant date of the restricted stock is 9 December 2021. The restricted stock was registered
as of 23 December 2021.
49
Beijing Shougang Co. Ltd Annual Report 2021
Equity incentives obtained by directors and senior managers of the Company
√Applicable □Not applicable
Unit: share
Market
Number Number Number of
Exercise price price at
Number of Number of Number of Number of of newly
Number of of the shares the end of Grant price Number of
new share shares shares of share restricted unlocke granted
share options exercised the of restricted restricted
options exercisable exercised options shares d shares restricted
Name Position held at the during the reporting shares shares held
during the during the during the held at the held at the during shares
beginning of the reporting period (RMB at the end of
reporting reporting reporting end of the beginning the during the
period period (RMB (RMB yuan/ share) the period
period d period period period of the current reporting
yuan/ share) yuan/
period period period
share)
Director, General
Liu Jianhui 0 0 0 0 0 0 5.73 0 0 290,000 3.25 290,000
manager
Qiu Yinfu Director 0 0 0 0 0 0 5.73 0 0 290,000 3.25 290,000
Vice General
Peng Kaiyu 0 0 0 0 0 0 5.73 0 0 261,000 3.25 261,000
Manager
Vice General
Li Ming 0 0 0 0 0 0 5.73 0 0 261,000 3.25 261,000
Manager
Li Baizheng Chief accountant 0 0 0 0 0 0 5.73 0 0 261,000 3.25 261,000
Vice General
Sun Maolin 0 0 0 0 0 0 5.73 0 0 261,000 3.25 261,000
Manager
Vice General
Li Jingchao 0 0 0 0 0 0 5.73 0 0 261,000 3.25 261,000
Manager
Vice General
Manager,
Chen Yi 0 0 0 0 0 0 5.73 0 0 261,000 3.25 261,000
Secretary of the
board of directors
Total -- 0 0 0 0 -- 0 -- 0 0 2,146,000 -- 2,146,000
50
Beijing Shougang Co. Ltd Annual Report 2021
Evaluation mechanism and incentive of senior managers
In order to condense and stimulate the enthusiasm of core talents and effectively combine the interests of shareholders, the Company
and core employees, restricted stock incentives are implemented for directors, senior managers, core technicians and management
backbones of the Company (including holding subsidiaries) with the approval of Beijing SASAC and the deliberation and approval
of the Company's general meeting of shareholders. In order to give full play to the role of equity incentive, strictly standardize the
qualification conditions of personnel within the scope during the implementation, clarify the company performance conditions and
individual performance standards for granting restricted shares, and determine the conditions for lifting the restrictions on the sale of
restricted shares with the return on net assets, growth rate of operating profit, asset liability ratio, growth rate of strategic product
output, proportion of science and technology investment in operating income as evaluation indicators. It is closely linked with the
interests of the Company and the incentive object. The implementation of equity incentive policy has played a great positive role in
attracting and retaining talents, supporting the long-term development of the Company and maintaining and increasing the value of
state-owned capital.
2. Implementation of employee stock ownership plan
□ Applicable √ Not applicable
3. Other employee incentive measures
□ Applicable √ Not applicable
XII. Construction and implementation of internal control system during the reporting period
1. Construction and implementation of internal control system
The Company has established a sound internal control system, and combined with the actual operation of timely revision and
improvement, which gives full play to its guarantee role. During the reporting period, according to operational needs, the Company
has formulated 51 systems such as the Economic Responsibility Audit Management System and revised 66 systems such as the
Scientific and Technological Achievements Management System. As of the end of the reporting period, the Company has a total of
504 internal control systems, of which 491 systems are formulated and implemented by the Company and 13 systems are forwarded
to the government and regulatory authorities.
2.Particulars of material deficiencies in internal control detected during the reporting period
□Yes √ No
XIII. The Company’s management and control of subsidiaries during the reporting period
Not applicable
XIV. Self-assessment report on internal control or auditor’s report on internal control
1. Appraisal Report of Internal Control
Disclosure date of full internal control
29 April 2022
evaluation report
Disclosure index of full internal control Beijing Shougang Co., Ltd. 2021 Internal Control Self-Assessment Report, disclosed on
evaluation report CNINFO Website (http://www.cninfo.com.cn/).
Proportion of total assets included in
internal control evaluation report
99.85%
accounting for the total assets in the
consolidated financial statements
Proportion of operating revenue
included in internal control evaluation
99.94%
report accounting for operating revenue
in the consolidated financial statements
Defect identification criteria
Type Financial Reports Non-financial reporting
51
Beijing Shougang Co. Ltd Annual Report 2021
1. General deficiency: it may or has temporarily affected
the health of employees or the public; the negative news
may or has caused slight impact on the company,
1. General deficiency: it may
spreading within the company or locally, and will not
or has caused slight impact on
attract the attention of stakeholders; violation of the
business activities, which is
company or relevant rules and regulations or conflict with
not an objective reason and
self-made rules and regulations may have caused slight
has exceeded the budget by
social impact, basically will not lead to the attention of
1% - 5% in terms of time,
regulators.
manpower or cost without
proper approval; 2. Significant deficiency: it may or has had a negative
impact; it may or has seriously affected the health of many
2. Significant deficiency: it
employees or the public, or caused general environmental
may or has slowed down the
damage, and the situation needs external support to be
business operation, or unable
controlled; the negative news may or has caused a greater
to achieve some business
impact on the company, and disseminates in a certain
objectives, or not exceeding
region It has attracted the attention of relevant
the budget by 6% - 20% in
stakeholders, such as the suspension of cooperation by
terms of time, manpower or
partners, low efficiency of employees, reduction of
cost for non-objective reasons
Qualitative criteria customer loyalty, etc.; it has violated national and regional
and without proper approval;
laws and regulations or industry norms, faced with legal
3. Material deficiency: (1) it proceedings, economic compensation, which may or has
may or has made the company caused general social impact, attracted the attention of
unable to achieve all operating regulatory agencies, and required regular rectification.
objectives, resulting in
3. Material deficiency: there is causing casualties of many
business suspension. It is not
employees and local residents, causing serious damage to
an objective reason and has
the environment and out of control of the situation; the
exceeded the budget by more
negative information may or has caused significant impact
than 20% in terms of time,
on the company, which is widely spread, causing
manpower or cost without
significant damage to the reputation of the enterprise. The
proper approval, and has
government or regulatory authorities conduct
exceeded the level of
investigation, causing public concern and irreparable
importance; (2) The Company
damage to the reputation of the enterprise; violating laws
has financial related fraud,
and regulations, in the face of business suspension, legal
which affects the accuracy of
proceedings or economic compensation,; it may or has
financial statements.
caused serious social impact; it has been notified or
publicly condemned by regulatory authorities, or even
ordered to suspend business for rectification.
1. General misstatement:
amount of misstatement <
0.5% of total assets 1. General misstatement: RMB 100,000≤amount of direct
2. Significant misstatement: property loss < RMB 5,000,000
0.5% of total assets≤amount 2. Significant misstatement: RMB 5,000,000≤amount of
Quantitative criteria of misstatement < 1% of total direct property loss < RMB 10,000,000
assets 3. Material misstatement: amount of direct property
3. Material misstatement: loss≥RMB10,000,000
amount of misstatement≥
1% of total assets
Number of material defects in financial
0
reports
Number of material defects in
0
non-financial reports
Number of significant defects in
0
financial reports
Number of significant defects in
0
non-financial reports
2.Audit report for internal control
√ Applicable □ Not applicable
Audit opinion on internal control
Shougang Co. has kept the effective internal control over financial reporting in all material matters on 31 December 2021, in
accordance with the “Basic Standards for Internal Control of Enterprises” and other relevant regulations.
52
Beijing Shougang Co. Ltd Annual Report 2021
Disclosure of internal control audit
Disclosed
report
Date of disclosure of the full internal
29 April 2022
control audit report
Source for the full internal control audit
Searching for: http://www.cninfo.com.cn/.
report
Audit opinion on internal control Standard unqualified opinion
Whether material deficiency over
No
non-financial reporting
Whether the accounting firm has issued an internal control audit report with unqualified opinion
□ Yes √ No
Is the internal control audit report issued by the accounting firm consistent with the self-evaluation report of the board of directors
√ Yes □ No
XV. Rectification of problems found in self-inspection under the special initiative on
corporate governance of the listed company
The Company has no problems found in self-inspection under the special initiative on corporate governance of the listed company.
53
Beijing Shougang Co. Ltd Annual Report 2021
Section V. Environment and Social Responsibility
I. Major environmental protection matters
Whether the listed company and its subsidiaries belong to the key pollutant discharge units announced by the environmental protection department
√ Yes □ No
Names of major Total Exceed
Name of the Total
pollutants and Number of Distribution of emission Implemented pollutant emission approved the
company or Emissionmethod Emission concentration emissions
characteristic drains drains standards emissions standard
subsidiary (tons)
contaminants (tons) or not
COD (Chemical Discharge to Total wastewater
QiangangCo
Oxygen rivers and lakes 1 discharge port of the 1-5mg/L 50mg/L 0.6 648.99 No
.
Demand) after treatment Company
Discharge to Total wastewater
QiangangCo Ammonia
rivers and lakes 1 discharge port of the 0.05-1mg/L 5mg/L 0.02 64.899 No
. Nitrogen
after treatment Company
Energy, Ironmaking, Energy、Ironmaking、Steelmaking、
QiangangCo
.
Sulfur Dioxide Organized 69 Steelmaking, Hot Roll, 0-20mg/m3 Hot Roll 35mg/m3 ， Cold Roll 849.2 926.402 No
Roll. 50mg/m3
Energy, Ironmaking, Energy、Ironmaking、Steelmaking、
QiangangCo
.
Nitrogen Oxides Organized 69 Steelmaking, Hot Roll, 5~35mg/m3 Hot Roll 50mg/m3 ， Cold Roll 1129.1 2220.565 No
Roll. 150mg/m3
Energy, Ironmaking, Energy 、 Ironmaking5mg/m3
QiangangCo Particulate
Organized 153 Steelmaking, Hot Roll, 1-3mg/m3 Steelmaking、Hot Roll, Cold Roll 1356.7 1414.607 No
. Matter
Roll. 10mg/m3
54
Beijing Shougang Co. Ltd Annual Report 2021
Names of major Total Exceed
Name of the Total
pollutants and Number of Distribution of emission Implemented pollutant emission approved the
company or Emissionmethod Emission concentration emissions
characteristic drains drains standards emissions standard
subsidiary (tons)
contaminants (tons) or not
Coke oven chimney :<10
Coke oven chimney, coke Coke oven chimney:30
mg/m3; Coke
pushing、coke outlet, CDQ pushing :<30 mg/m3 、 mg/m3;Coke pushing: 30 mg/m3、
outlet, outlet of baghouse Coke outlet:70 mg/m3; CDQ outlet:
Coke outlet :<70 mg/m3;
system after 80 mg/m3; Sintering
CDQ outlet :<80 mg/m3;
desulphurization of desulfurization: 35 mg/m3; Hot
Sintering
sintering machine, outlet desulfurization:<30 blast stove: 50mg/m3; Lime kiln
Jingtang Co. Sulfur Dioxide Organized 42 of hot blast stove of no.1 roasting: 35 mg/m3; Cold rolled 1140.70 2965.74 No
mg/m3; Lime kiln
and no.2 bf, lime kiln furnace: 50 mg/m3; Annealing
roasting: ＜ 50 mg/m3;
roasting, heat treatment furnace for continuous annealing
Heat treatment
furnace, 2 × 300mw unit and hot-dip galvanizing unit: 50
furnace:<50 mg/m3;
generating units chimney mg/m3; Coal-fired and gas-fired
exit, gas boiler chimney Coal-fired and gas-fired generating units: 35mg/m3; Gas
exit. generating units:<20 boiler: 50 mg/m3
mg/m3.
Coke oven chimney :<100
mg/m3; Sintering Coke oven chimney :130mg/m3;
Coke oven chimney, outlet
desulfurization :<50mg/m Sintering desulfurization :50
of baghouse system after 3; Outlet of hot blast stove mg/m3; Outlet of hot blast stove of
desulphurization of
of No.1 and No.2 No.1 and No.2 BF、heating furnace
sintering machine, outlet
BF :<150mg/m3; of hot rolling mill 、 continuous
of hot blast stove of no.1 Continuous annealing line
Jingtang Co. Nitrogen Oxides Organized 38 and no.2 bf, lime kiln of cold rolling mill and annealing line、annealing furnace of 3533.23 6379.92 No
roasting, heat treatment HDG line、Roasting device of waste
hot rolling mill、annealing acid regeneration
furnace, 2 × 300mw
furnace of HDG station:150mg/m3; Lime kiln
generating units chimney
line :<150 mg/m3; roasting: 150 mg/m3; Coal-fired
exit, gas boiler chimney
exit. Coal-fired and gas-fired and gas-fired generating units:50
generating units :<40 mg/m3; Gas boiler:150 mg/m3
mg/m3.
55
Beijing Shougang Co. Ltd Annual Report 2021
Names of major Total Exceed
Name of the Total
pollutants and Number of Distribution of emission Implemented pollutant emission approved the
company or Emissionmethod Emission concentration emissions
characteristic drains drains standards emissions standard
subsidiary (tons)
contaminants (tons) or not
Coke pushing、coke outlet,
CDQ outlet, coke oven
chimney, dust removal
Coke pushing 、 Coke
outlet of stock ground
transfer station, dust outlet、CDQ outlet、Coke
removal outlet of sintering oven chimney:<10
machine batching, mg/m3; The transfer point
crushing, finished of stock ground:<10
Coke pushing、Coke outlet、CDQ
products screening, dust mg/m3; Sintering machine
removal outlet of sintering batching, crushing, outlet 、 Coke oven chimney:10
machine tail and ring finished products mg/m3; The transfer point of stock
cooler, dust removal outlet screening 、 sintering ground:10mg/m3; Sintering
machine batching, crushing,
of primary flue gas of bf machine tail and ring
tapping field, secondary cooler:<10 mg/m3; finished products screening 、
flue gas of bf tapping primary flue gas and sintering machine tail and ring
cooler :10mg/m3; Primary flue gas
field、dust removal outlet Secondary flue gas of BF
below the blast furnace tapping field:<10 mg/m3; and Secondary flue gas of BF
tapping field:10 mg/m3; Below the
bunker, dust removal Below the blast furnace
outlet of cast iron bunker 、 cast iron blast furnace bunker 、 cast iron
machine, dust removal machine 、 blast furnace machine、blast furnace pulverized
Particulate
Jingtang Co. Organized 176 outlet of blast furnace pulverized coal coal production 、： 10mg/m3; Hot 4320.49 4330.44 No
Matter
pulverized coal production、hot blast stove blast stove of BF:10mg/m3;
production, dust removal of BF:<10mg/m3; Steelmaking electric dust
outlet of hot blast stove of Steelmaking electric dust removal :50 mg/m3; Steelmaking
bf, steelmaking electric removal: <20mg/m3; secondary dedusting :10mg/m3;
dust removal、steelmaking Steelmaking secondary Dust removal of Lime kiln top and
secondary dedusting dedusting 、 flame flame descaling: 10mg/m3; Heat
outlet, dust removal outlet descaling、Lime kiln top treatment furnace:10mg/m3;
of flame descaling, lime dust collector:<10mg/m3; Finishing mill 10mg/m3; Tension
kiln top dust collector Heat treatment furnace、 leveler and welder of
outlet, heat treatment PLTCM :10mg/m3; Iron powder
finishing mill 、 tension
furnace、dust removal of leveler and welder of warehouse: 10mg/m3; Coal-fired
finishing mill, dust PLTCM:<10 mg/m3; Iron and gas-fired generating units:
removal exit of tension powder 10mg/m3; Gas boiler: 10mg/m3
leveler and welder of warehouse:<10mg/m3;
PLTCM, dust removal exit Coal-fired and gas-fired
of iron powder generating units:<10
warehouse, 2 × 300mw mg/m3.
generating units chimney
exit, gas boiler chimney
exit. 56
Beijing Shougang Co. Ltd Annual Report 2021
Names of major Total Exceed
Name of the Total
pollutants and Number of Distribution of emission Implemented pollutant emission approved the
company or Emissionmethod Emission concentration emissions
characteristic drains drains standards emissions standard
subsidiary (tons)
contaminants (tons) or not
Acid regeneration,
continuous annealing
furnace, normalizing Acid Heat treatment furnace, tension
annealing furnace, regeneration<=30mg/m3, leveler, finishing and shot blasting
Zhixin Co. PM Organized 69 18.005 27.793 No
decarburization annealing heat treatment furnace and 10 mg/m3, acid regeneration 30
furnace, annular furnace, scoring <=10mg/m3 mg/m3
hot drawing furnace,
scoring
Continuous annealing
furnace, normalizing
annealing furnace,
Zhixin Co. Sulfur Dioxide Organized 50 <=30mg/m3 30mg/m3 5.685 81 No
decarburization annealing
furnace, annular furnace
and hot drawing furnace
Continuous annealing
furnace, normalizing
annealing furnace,
Zhixin Co. Nitrogen Oxide Organized 50 <=100mg/m3 100mg/m3 37.512 131.649 No
decarburization annealing
furnace, annular furnace
and hot drawing furnace
COD (Chemical
Cold-R Co. Oxygen Organized 1 Wastewater stations 10-24.2 mg/m3 30mg/m3 21.4511 67.5 No
Demand)
Ammonia
Cold-R Co. Organized 1 Wastewater stations 0.002-2.46 mg/m3 1.5(2.5) mg/m3 0.42035 3.937 No
Nitrogen
Continuous annealing
furnace, annealing furnace
Continuous annealing furnace,
of 1# HDG line, annealing
annealing furnace of 1# HDG line,
furnace of 2# HDG line,
annealing furnace of 2# HDG line,
roaster of acid
Cold-R Co. Sulfur Dioxide Organized 8 3-5mg/m3 Roaster of acid regeneration station, 4.0452 18 No
regeneration station,
Hydrogen production generator:20
hydrogen production
mg/m3; 1# boiler room, 2# boiler
generator, 1# boiler room,
room, 3# boiler room:10 mg/m3
2# boiler room, 3# boiler
room.
57
Beijing Shougang Co. Ltd Annual Report 2021
Names of major Total Exceed
Name of the Total
pollutants and Number of Distribution of emission Implemented pollutant emission approved the
company or Emissionmethod Emission concentration emissions
characteristic drains drains standards emissions standard
subsidiary (tons)
contaminants (tons) or not
Continuous annealing
Continuous annealing
furnace, annealing furnace
furnace, annealing furnace
of 1# HDG line, annealing Continuous annealing furnace,
of 1# HDG line, annealing
furnace of 2# HDG annealing furnace of 1# HDG line,
furnace of 2# HDG line,
line:7-50mg/m3; Roaster annealing furnace of 2# HDG line,
roaster of acid
Cold-R Co. Nitrogen oxides Organized 8 of acid regeneration Roaster of acid regeneration station, 53.0158 148.184 No
regeneration station,
station :12-59 mg/m3; 2# Hydrogen production generator :100
hydrogen production
boiler room :23 mg/m3; mg/m3; 1# boiler room, 2# boiler
generator,1# boiler room,
1# boiler room, Hydrogen room, 3# boiler room :80 mg/m3
2# boiler room, 3# boiler
production generator, 3#
room.
boiler room :14-56 mg/m3
Exhaust gas of tension
Exhaust gas of tension
leveler :3.7-4.1 mg/m3;
leveler, continuous
continuous annealing
annealing furnace, Exhaust gas of tension leveler,
furnace, annealing furnace
annealing furnace of 1# continuous annealing furnace,
of 1# HDG line, annealing
HDG line, annealing annealing furnace of 1# HDG line,
furnace of 2# HDG line,
furnace of 2# HDG line, annealing furnace of 2# HDG line,
roaster of acid
Particulate roaster of acid Roaster of acid regeneration station,
Cold-R Co. Organized 10 regeneration station, 18.6915 18.75 No
matter regeneration station, Hydrogen production generator,
hydrogen production
hydrogen production iron powder warehouse at acid
generator :1.3-5.6 mg/m3;
generator, iron powder regeneration station :10 mg/m3; 1#
iron powder warehouse at
warehouse at acid boiler room, 2# boiler room, 3#
acid regeneration station,
regeneration station, 1# boiler room:5 mg/m3
1# boiler room, 2# boiler
boiler room, 2# boiler
room, 3# boiler
room, 3# boiler room.
room:1.5-2.8 mg/m3
58
Beijing Shougang Co. Ltd Annual Report 2021
Construction and operation of pollution prevention facilities
Qiangang Co., strengthened the level of environmental protection governance, led the industry, maintained the sustainability of
environmental governance, and continued to promote the green action plan for the iron and steel sector based on the ultra-low
emission and performance class A basic platform. In 2021, Qiangang Co., started 52 environmental protection special treatment
projects, established a project leading group, held regular project promotion meetings regularly, coordinated and solved existing
problems and promoted the progress of green projects. By the end of the reporting period, 48 items had been completed, and the
remaining 4 items continued to be implemented.
Through a series of measures such as improving the environmental protection management system, adhering to daily inspection and
implementing problem rectification, the Company has continuously strengthened the control of environmental protection facilities
and daily production operation, and the environmental protection facilities and production facilities operate synchronously and stably.
Strengthen the maintenance management of environmental protection facilities, and conduct simultaneous maintenance of
environmental protection facilities such as desulfurization and denitration, dust removal and wastewater treatment with the main
production facilities. Through self-monitoring and supervision and monitoring by the environmental protection department, 100% of
all pollutants are discharged up to the standard.
Jingtang Co., has built 225 sets of waste gas treatment facilities such as dust removal, desulfurization and denitration to effectively
treat all kinds of waste gas. The dust adopts bag dust removal, plastic burning plate dust removal, electric dust removal and other
methods; Coke oven flue gas adopts ammonia desulfurization + medium and low temperature SCR denitration process; Sintering and
pelletizing adopt circulating fluidized bed desulfurization + medium and low temperature SCR denitration process; Seawater
desulfurization + SCR denitration process is adopted for desulfurization of self-owned power plant. A total of 12 sets of main
wastewater treatment facilities is built. It includes coking phenol cyanogen wastewater treatment system, continuous casting
wastewater treatment system, hot rolling, cold rolling, medium and heavy plate, steel rolling wastewater treatment system and
comprehensive wastewater treatment station. After treatment, the clean water is mixed with rich seawater desalination water for reuse
to realize coupled zero discharge of wastewater. A total of five types of solid waste treatment facilities, briquette comprehensive
utilization facilities and 6 ×600000 ton / p.a. slag fine grinding cement production line is build, converting the blast furnace slag of
iron and steel plant into high-quality cement raw materials by adopting new processing technology; Dust removal ash and iron oxide
scale from raw materials, ironmaking, hot rolling and other processes are returned to sintering ingredients for utilization. At present,
all environmental protection facilities of Jingtang Co., operate well, and all processes in the whole process meet ultra-low emission
standards.
The Cold-R Co., builds annealing furnace and gas-fired boiler with natural gas as fuel to reduce waste gas pollution from the source.
11 sets of waste gas treatment facilities including oil mist purification system, acid mist purification system, bag dust removal system
and alkali mist treatment system is built, and all waste gas was discharged up to standard; 1 wastewater station was built to discharge
all wastewater up to standard after treatment through four systems: acid containing wastewater treatment, dilute alkali wastewater
treatment, oil-bearing and finishing liquid wastewater treatment. By selecting low-noise equipment and taking vibration reduction
measures, effectively do a good job in noise prevention and control, and install silencers at the discharge of iron oxide powder bin;
The air compressor, booster, nitrogen compressor and other equipment were set in the plant, and the sound insulation cover was set.
The silencing tower was built at the outlet of the nitrogen generating unit. The above environmental protection facilities operate well,
and all pollutants are discharged up to the standard.
By upgrading the oil mist removal system of acid rolling, Zhixin Co., has solved the problem of oil mist overflow and insufficient
flue height; The construction of high-efficiency car washing station has effectively reduced the atmospheric dust pollution in the
plant; In order to avoid the problems such as the open-air stacking of bagged iron red, the displacement of iron red and the scattering
of iron red caused by the damage of iron red bag during hoisting, a rain proof shed for iron red storage under closed storage and
hoisting and loading conditions has been built. All the existing environmental protection facilities of the Company operate stably, and
the pollutants are discharged up to the standard.
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Beijing Shougang Co. Ltd Annual Report 2021
Construction of environmental impact assessment of projects and other environmental protection administrative permits
In order to further implement energy conservation and emission reduction as well as enhance the corporate environmental image, the
Company invested various projects such as Qiangang Co. Dust-removing Environmental Management Project and Qiangang Co.
Whitening Water and Exhausted Steam for Blast Furnace Slag Project, which have been registered on the registration form of
construction project environmental impacts. In September 2017, the Company obtained a new version of the sewage permit issued by
the Tangshan Environmental Protection Bureau. In August 2020, the extension of the pollution discharge permit was completed, and
the validity period was extended to 2025.
Jingtang Co. adheres to the equally importance principle of production development and environmental protection, evaluates the
environmental impact assessment project strictly in accordance with the Environment Impact Assessment Act of China, constructs
strictly in accordance with the EIA approval during the implementation of the project. All construction projects are supported by
construction of environmental protection facilities, to meet the “Three Simultaneous” management requirements for environmental
protection. In April 2006, the Company obtained the environmental impact assessment approval from the Ministry of Environmental
Protection (formerly the State Environmental Protection Administration (State Environmental Assessment [2006] No. 181). In May
2010, it obtained the approval of the Ministry of Environmental Protection to change the environmental impact assessment (State
Environmental Assessment [2010] No. 11). In January 2012, it obtained the trial production approval from Hebei Provincial
Environmental Protection Department (Hubei Environmental Assessment [2012] No. 17). In January 2014, it obtained the
environmental protection acceptance approval for the completion of the first phase of the Ministry of Environmental Protection (State
Environmental Assessment [2014] No. 4). In December 2014, it obtained a pollutant emission permit issued by the Hebei Provincial
Environmental Protection Department. In October 2015, it obtained the environmental impact assessment approval for the second
phase of the Hebei Provincial Department of Environmental Protection (Hebei Environmental Assessment [2015] No. 359). In
August 2017, the Company obtained a new version of the pollution discharge permit issued by the Tangshan Environmental
Protection Bureau; it combined with the second-stage one-step construction project, the pollutant discharge permit was changed in
April 2019, and the sewage outlet of the second-stage one-step project was included in standardized management.In April 2019, the
Reply Letter on the Opinions on the Changes of the One Step of the Second Phase of Jingtang Co. (Hebei Environmental Assessment
Letter [2019] No.465) was obtained from Hebei Provincial Department of Ecology and Environment. In April 2019, the certificate of
pollutant discharge permit change was completed, and the sewage outlets of phase II one-step project was included in standardized
management. The environmental protection acceptance of phase II one-step project was completed in October 2020. The extension of
the pollutant discharge permit has been completed in August 2020, and the validity period was extended to 2025.
In October 2017, Cold-R Co. is the first company that obtained the pollution discharge permit in Shunyi District, Beijing. In
September 2020, it submitted an application for renewal of the pollution discharge permit in accordance with relevant regulations. It
passed the government review at the end of October and the validity period was extended to 2025.
Zhixin Co. completed the environmental impact assessment of the High Performance Oriented-steel Project of Shougang Zhixin
Qian'an Electromagnetic Material Co., Ltd. in 2021. The pollutant discharge permit was obtained according to law in July 2018, and
the modification and extension of the pollutant discharge permit were completed in July 2021.
Emergency plans for environmental emergencies
In accordance with the Environmental Protection Law of the People's Republic of China and other laws and regulations and
normative documents, Qiangang Co. has formulated the Emergency Plan for Environmental Emergencies. The plan focuses on
strengthening the daily management and safety prevention of production, strictly prevents all kinds of sudden environmental events,
regulates and strengthens the abilities to deal with environmental emergencies, focuses on preventing the occurrence of sudden
environmental events, gradually improves the mechanism of early warning, disposal and rehabilitation of environmental emergencies,
and establishes the Company's emergency disposal system, which would be strong, orderly, efficient, unified and coordinated, for
60
Beijing Shougang Co. Ltd Annual Report 2021
emergency environmental emergencies. On this basis,Qiangang Co. also formulated three special plans, namelySudden
Environmental Event Emergency Plan Special for Atmospheric, Sudden Environmental Event Emergency Plan Special for Water and
Sudden Emergency Plan for Hazardous Wastes in Environmental Incidents, to further improve the air pollution and water pollution
emergency response capacities.
According to the requirements of the Emergency Treatment Plan for Environmental Emergencies (Third Edition), Jingtang Co.
identifies gas storage tanks, pipelines and benzene tanks, acid storage tanks, liquid ammonia storage tanks and other dangerous
chemicals and toxic and harmful substances production, storage areas as dangerous target for emergency rescue. In accordance with
the requirements of the Emergency Response Plan for Environmental Emergencies of Shougang Jingtang United Iron & Steel Co.,
Ltd. (Third Edition), 24 emergency drills were carried out in 2021, including waste oil leakage, radioactive source leakage
emergency drills, waste water exceeding the standard, waste acid leakage, wharf ship offshore oil spill emergency drills, so as to
ensure the effective implementation of rescue in accordance with the requirements of the Plan and improve the skills of preventing
and dealing with sudden environmental pollution accidents and the actual combat capability.
According to relevant laws and regulations, Cold-R Co., formulated a new version of Emergency Plan for Environmental
Emergencies and put it on record. According to the requirements of the Plan, Cold-R Co., organized and carried out the plan drill,
timely rectify the problems found in the drill, and enhanced the emergency response ability of environmental emergencies.
Zhixin Co. organized the preparation of Emergency Plan for Environmental Emergencies (version 2021) and complete the filing. In
addition, organized all units to carry out 12 emergency drills for environmental emergencies throughout the year, covering water, gas,
sound, slag, radiation and other projects.
Environmental self-monitoring program
In accordance with the relevant provisions of the National Key Monitoring Enterprises Self-Monitoring and Information Disclosure
Measures (Trial) and National Key Monitoring Enterprises Pollution Source Supervision and Information Disclosure Measures (Trial)
and other relevant regulations, Qiangang Co. establishes and improves the pollution source monitoring and information disclosure
system, formulates the Pollutant Emission Monitoring Plan 2021 and strictly implements it. In 2021, 1380 monitoring of PM, flue
gas, air quality, plant boundary noise, etc. are organized and completed as planned. The monitoring results showed that 100% of the
pollutants are up to the standard.
The environmental monitoring system of Jingtang Co. consists of two parts: automatic monitoring and manual monitoring. The
manual monitoring system entrusts a qualified third-party testing organization to regularly monitor the environment of waste gas,
waste water, noise, radioactive sources and other items of pollution sources in the plant according to the Annual Self-monitoring Plan
for Key Monitoring Enterprises, so as to form monitoring data and reports. The annual monitoring plan for 2021 has been completed,
and all environmental protection control indicators have reached the standard normally.
Cold-R Co., formulated self-monitoring plan according to the requirements of pollutant discharge permit, and supervise and test each
discharge point on a daily, monthly and quarterly basis. In 2021, the company's emission indicators of pollution sources will all meet
the standards.
In accordance with the requirements of relevant national regulations, Zhixin Co., formulated the Self-Monitoring Plan for 2021,
strengthen internal control, and entrust a qualified third-party monitoring organization to monitor according to the monitoring plan
and plan every week, month and quarter. Through the development of intelligent application software, locate the monitoring points,
achieve real-time monitoring and real-time data management, and ensure the discharge of pollutants up to the standard.
Administrative penalties for environmental problems during the reporting period
There is no administrative penalty for environmental problems during the reporting period.
61
Beijing Shougang Co. Ltd Annual Report 2021
Other environmental information that should be disclosed
On the basis of adhering to the environmental protection work, Qiangang Co., Jingtang Co., Cold-R Co., and Zhixin Co. use the
national key monitoring enterprises’ self-monitoring information disclosure platform, website of government environmental
protection department and self-established information disclosure platform, to publicize and display the environmental protection
projects, operation of environmental protection facilities, names and emissions of major pollution sources, monitoring methods,
monitoring indicator names, solid waste comprehensive utilization, etc. and actively accepts social supervision.
Measures and effects taken to reduce carbon emissions during the reporting period
□ Applicable √ Not applicable
Other environmental related information
In order to develop circular economy and low-carbon economy, build resource-saving, environment-friendly and low-carbon oriented
company, and also achieve a good and rapid development of the Company, Shougang Co. launched the preparation of environmental
responsibility report at the end of 2016. The scope of the environmental responsibility report includes Qiangang Co., Jingtang Co.,
Cold-R Co., and other subsidiaries. In April 2020, the 2020 Environmental Responsibility Report of Beijing Shougang Co., Ltd. was
released on the website of Shougang Co. (http://www.sggf.com.cn).
During the reporting period, the Company and its subsidiaries have not been punished by any regulator in aspect of environmental
protection. Meanwhile, the Company supervising and urging related shareholding companies to operates in an environmentally
friendly way and in compliance with the Law of the People's Republic of China on Environmental Protection and other related laws,
regulations, rules and normative documents.
II.Social responsibility
The Company independently prepared the 2021 annual social responsibility report and submit it to the thirteenth board meeting of the
seventh session for deliberation. Please refer to the company announcement on 29 April 2022 for details.
III.Consolidate and expand the achievements of poverty alleviation and rural revitalization
The Company has actively fulfilled social responsibilities, expand the achievements of poverty alleviation, implement consumption
poverty alleviation, and help rural revitalization. Purchase agricultural products such as potatoes in Yangyuan County, Zhangjiakou
City, Hebei Province, and sets of jujube, raisins and other poverty alleviation products in Xinjiang, with a total amount of RMB
1.3768 million.
62
Beijing Shougang Co. Ltd Annual Report 2021
Section VI. Significant Events
I. Implementation of commitment
1.Commitments made by the company's actual controller, shareholders, related parties, acquirers, companies and other committed
related parties have been fulfilled during the reporting period and have not been fulfilled by the end of the reporting period
√ Applicable □ Not applicable
Commitment Commitment Commitment Commitment
Commitment Commitment contents Implementation
party type date term
Commitments to share
reform
Commitments made in a
statement of acquisition
or equity change
Implementing.
1.According to the iron and steel industry development plan of
Shougang Group, Shougang Co. will be the only platform for the In December 2021,
development and integration of the iron and steel and upstream iron Shougang Co., Ltd. and
ore resources industry of Shougang Group in China, and eventually Shougang Group signed
achieve the overall listing of Shougang Group's iron and steel and the "Management
upstream iron ore resources business in China Service Agreement
between Shougang
2. As for the other companies of Shougang Group engaged in iron
Group Co., Ltd. And
Shougang and steel production business, if the profits could be achieved for Refer to Beijing Shougang Co.,
Group Co., three consecutive years through optimizing and adjusting the product 27 Dec. 2018 contents of Ltd. On The Affiliated
Ltd. structure and actively implementing national industrial policies and commitment Enterprises of
environmental protection requirements, and the overall situation of
Shougang Group Co.,
the industry does not appear large fluctuation, Shougang Group will
Ltd. ". Shougang Co.,
activate the manners in line with the interests of shareholders of listed
Ltd. provides
companies, including but not limited to acquisition, merger,
management services
reorganization, etc. to invest relevant high-quality assets in Shougang
for a total of 14 target
Co. in accordance with the requirements of securities laws,
enterprises in the steel
regulations and industrial policies, and will complete the investment
sector of Shougang
within 36 months after start-up.
Group.
When the market improves in the future, Shougang Mining
Commitment in assets Corporation achieves stable profits for two consecutive years, and the
restructuring overall situation of the industry is not fluctuated greatly, Shougang
Corporation will start the injection of Shougang Mining Corporation
in Shougang Co. and complete it within 36 months. Before Shougang
Mining Corporation joined in Shougang Co., Shougang Group will
Shougang Refer to
urge Shougang Mining Corporation to conduct necessary related
Group Co., 20 Apr. 2017 contents of Implementing.
party transactions with Shougang Co. in accordance with fair and
Ltd. commitment
reasonable market price, strictly conform to the requirements of laws
and regulations, normative documents, the articles of association of
Shougang Co. and related transaction management system, and
perform the corresponding review, approval and information
disclosure procedures for the necessary related transactions between
Shougang Co. and Shougang Mining Corporation.
The company will not damage the independence of Shougang Co.
due to the increase of the proportion of shares held by Shougang Co.
After the
after the completion of the reorganization. The company will
completion of
maintain "the five-aspect separation principle", which means assets,
Shougang assets Normal implementing
personnel, financial affairs, institution and business should be
Group Co., 20 Jul. 2012 reorganization of the long-term
independent of Shougang Co., strictly conform to relevant provisions
Ltd. (completion commitment.
of the CSRC on the independence of listed companies, not illegally
date: 25 April
utilize Shougang Co. to provide guarantees, not illegally occupy the
2014)
assets of Shougang Co. and keep and maintain the independence of
Shougang Co.
63
Beijing Shougang Co. Ltd Annual Report 2021
Shougang Group is the largest shareholder and controlling
shareholder of Shougang.
On July 17, 2012, Shougang Group issued the "Letter of
Commitment of Shougang Corporation on Reducing and
Standardizing Related Party Transactions" (i.e. the commitments
listed above, hereinafter referred to as the "original letter of
commitment"), and promised that after the completion of major asset
replacement purchase of assets by issuing shares between Shougang
Co., and Shougang Group [hereinafter referred to as "the previous
major asset restructuring (completed on April 25, 2014)", Shougang
Group will take relevant measures including joining Shougang
Mining Company into Shougang Co., to reduce and standardize
related party transactions with Shougang Co. In order to reduce and
standardize the related party transactions after the major asset
replacement and related party transactions of Shougang Co. and
safeguard the legitimate rights and interests of Shougang Co. and its
public shareholders, the company promises to continue to fulfill the
contents of the original commitment letter after the major asset
replacement, and further promises as follows:
1. The company will perform its obligations as the controlling
During and
Shougang shareholder of Shougang Co. in good faith, try to avoid and reduce
after the
Group Co., the related transactions with Shougang Co. (including the enterprises 29 Sep. 2015 Implementing
assets
Ltd. it controls); as for the related transactions, which are unavoidable or
replacement
occur for reasonable reasons between the company and other
enterprises under the control of the company, and Shougang Co. and
the enterprises it controls, the company will not require or accept the
more favorable conditions provided by Shougang Co. than the
conditions to an independent third party in any fair market
transaction. The company and other enterprises under the control of
the company will sign a standardized related party transaction
agreement with Shougang Co. in accordance with the law, follow the
market principles of openness, fairness and justice, in accordance
with fair and reasonable market price, conform to relevant provisions
of laws, regulations and normative documents in the decision-making
procedures of related transactions and disclose information in
accordance with the law.
2. The company and other enterprises controlled by the company will
not obtain any improper benefits or make Shougang Co. bear any
improper obligations through related party transactions with
Shougang Co. or the enterprises controlled by Shougang Co.
3. The company will be liable for the losses to Shougang Co. and the
enterprise controlled by Shougang Co. due to the related party
transactions with them in violation of the above commitments.
In respect of the purchase of 51% equity of Jingtang Co. by
Shougang Co., Shougang Group made the following commitments in
urging Jingtang Co. and its holding subsidiary, Tangshan Shougang
Jingtang Caofeidian Port Co., Ltd. (hereinafter referred to as Port
Co.) to complete relevant matters:
Shougang 1. The company promises to urge Jingtang Co. not to actually carry Refer to
Group Co., out port operation business of general bulk cargo berth project 29 Sep. 2015 contents of Implementing
Ltd. (552-meter shoreline wharf project) without obtaining formal or commitment
temporary port operation license.
2. The company promises to urge Port Co. not to actually carry out
port operation business of general wharf project (1600-meter
shoreline wharf project) without obtaining formal or temporary port
operation license.
In respect of the purchase of 51% equity of Jingtang Co. by
Shougang Co., Shougang Group made the following commitments in
urging Jingtang Co. and its holding subsidiary, Tangshan Shougang
Jingtang Caofeidian Port Co., Ltd. (hereinafter referred to as Port
Co.) to complete relevant matters:
1. Shougang Group promises to urge Jingtang Co. to complete the
Shougang
overall acceptance procedures of supporting wharf project
Group Co., 18 Dec. 2020 31 Dec. 2022 Implementing
(1240-meter shoreline wharf project) and obtain the formal port
Ltd.
operation license before 31 December 2022, and carry out port
operation business in accordance with the requirements of relevant
competent departments.
2. Shougang Group promises to urge Jingtang Co. to complete the
application of ownership certificate of all self-built houses of
Jingtang Co. before 31 December 2022.
In respect of the purchase of 51% equity of Jingtang Co. by
Shougang Co., Shougang Group made commitments in urging
Jingtang Co. and its holding subsidiary, Port Co., Ltd., to complete
the relevant matters of obtaining land use right certificate: Shougang
Shougang
Group promises to urge Jingtang Co. to obtain state-owned land use
Group Co., 18 Dec. 2020 31 Dec. 2022 Implementing
right certificate of all the land used before 31 December 2022,
Ltd.
including but not limited to the land used by Jingtang Co. Phase I
project, Jingtang Co. supporting wharf project (1240-meter shoreline
wharf project), general bulk cargo berth project (552-meter shoreline
wharf project) and relatd land used by Jingtang Co. Phase II project.
64
Beijing Shougang Co. Ltd Annual Report 2021
1. When the company obtains the shares of the listed company
through the issuance of shares to purchase assets, if the equity
interests of Jingtang Co. held by the company have reached 12
months, the shares of the listed company acquired by the company in
this transaction shall not be traded or transferred in any way within
12 months from the end of the issuance of shares; If the equity
interests of Jingtang Co. held by the company are less than 12
Beijing months, the shares of the listed company acquired by the company in
Jingtou this transaction shall not be transferred within 36 months from the
Investment date of the end of share issuance. If such shares are increased due to 21 May. 2021 20 May. 2022 Implementing
Holding Co., the listed company's granting of bonus shares, conversion of capital
Ltd. stock and other reasons, the additional shares of the listed company
shall be locked in accordance with the above lockup period.
2. If the aforementioned commitment to lock up shares is inconsistent
with the latest regulatory opinions of the securities regulatory
authorities, the company will adjust the aforementioned commitment
according to the regulatory opinions of the relevant securities
regulatory authorities.
The shares of the listed company acquired by the Fund as a result of
Beijing Jing the purchase of assets through the issuance of shares shall not be
Guorui Soe transferred within 36 months from the date of the completion of the
Reform and issuance of shares. If such shares are increased due to the listed 21 May. 2021 20 May. 2024 Implementing
Development company's granting of bonus shares, conversion of capital stock and
Fund(L.P.) other reasons, the additional shares of the listed company shall be
locked in accordance with the above lockup period.
1. The shares of the listed company acquired by the company in this
transaction shall not be transferred within 36 months from the date
when the shares are issued. However, transfers permitted by
applicable law are not subject to this restriction. Within six months
after completion of the transaction, if the closing price of the shares
of the listed company for 20 consecutive trading days is lower than
the issuing price of the shares, or the closing price at the end of six
months after the completion of this transaction is lower than the issue
price of this share, the locking period of shares obtained by the
Shougang company through this transaction will be automatically extended for
Group Co., six months on the basis of the above locking period. If such shares 20 Dec.2021 19 Apr. 2025 Implementing
Ltd. are increased due to the listed company's granting of bonus shares,
conversion of capital stock and other reasons, the additional shares of
the listed company shall be locked in accordance with the above
lockup period.
2. If the aforementioned commitment to lock up shares is inconsistent
with the latest regulatory opinions of the securities regulatory
authority, the company shall adjust the aforementioned commitment
according to the regulatory opinions of the relevant securities
regulatory authority.
The Asset Appraisal Report evaluates partial of intellectual property
rights of Jingtang Co. and Shanxi Coking Co., Ltd. (hereinafter
referred to as "performance commitment assets") based on future
earnings expectations. The appraisal value of 1,346 patent rights, 190
proprietary technologies, 32 software copyrights and other assets of
Jingtang Co. is RMB 242.8 million, and the appraisal value of 57
patent rights assets of Shanxi Coking Co., Ltd. is RMB 40 million.
In accordance with the forecast income sharing of the performance
committed assets, if the purchase of assets by issuing shares is
Shougang
completed before 31 December 2022, Shougang Group commitments
Group Co., 20 Dec.2021 31 Dec. 2024 Implementing
that, in 2022, 2023 and 2024, the total income sharing of performance
Ltd.
commitment assets in the current period shall be no less than RMB
90.9182 million, RMB 79.414 million and RMB 61.5618 million
respectively.
If the above performance commitments are not met, please refer to
"Performance Commitments and Impairment Compensation
Arrangements" in Beijing Shougang Co., Ltd. 's Report on Issuing
Shares to Purchase Assets and Raising Supporting Funds and Related
Party Transactions issued by the Company for detailed compensation
methods and arrangements.
Commitments made in
IPO or refinancing
Equity incentive
commitment
Other commitments to
small and medium
shareholders of the
Company
Whether the
commitment is fulfilled Yes
on time
2. Assets or projects of the Company which has profit forecast and reporting period still in forecasting period,explain reasons
of reaching the original profit forecast
□ Applicable √ Not applicable
65
Beijing Shougang Co. Ltd Annual Report 2021
II. Non-operational fund occupation from controlling shareholders and its related party
□ Applicable √ Not applicable
No non-operational fund occupation from controlling shareholders and its related party during the reporting period.
III. External guarantees against the rules and regulations
□ Applicable √ Not applicable
There was no external guarantee provided by the Company which was against the rules and regulations during the reportingperiod.
IV. Description of the board of directors on the latest audit report with qualified opinion
□ Applicable √ Not applicable
V. Description of the board of directors, the board of supervisors and independent directors
(if any) on the audit report with qualified opinion in the reporting period
□ Applicable √ Not applicable
VI. Changes in accounting policies, accounting estimates or correction of materiaal
accounting errors as compared to the financial report for prior year
√ Applicable □ Not applicable
Refer to Section X. V. 34, changes in significant accounting policies and accounting estimates for details.
VII. Explanation on the change in the scope of consolidated financial statements during the
reporting period as compared to financial report of previous year
□ Applicable √ Not applicable
There was no change in the scope of consolidated statements during the reporting period.
VIII. Appointment and non-reappointment (dismissal) of accounting firms
Current accounting firms
Name of domestic accounting firm Grant Thornton LLP.
Remuneration for domestic accounting firm (RMB 0,000) 180
Continuous life of auditing service for domestic accounting firm (year) 22
Name of domestic CPAs Qian Bin, Liu Yiwei
Continuous life of auditing service for domestic CPAs (year) 4
Whether to change the accounting firm during the audit period
□ Yes √ No
Appointment of internal control auditing accounting firm, financial consultant or sponsor
√ Applicable □ Not applicable
During the reporting period, the Company engaged Grant Thornton LLP. as the auditor for internal control of the Company.
IX. Suspension and termination of listing after disclosure of annual report
□ Applicable √ Not applicable
X. Insolvency or restructuring related matters
□ Applicable √ Not applicable
No insolvency or restructuring related matters during the reporting period
XI. Material litigation or arbitration cases
□ Applicable √ Not applicable
No material litigation or arbitration cases during the reporting period.
66
Beijing Shougang Co. Ltd Annual Report 2021
XII. Punishment or rectification
□ Applicable √ Not applicable
No punishment or rectification during the reporting period.
XIII. Integrity of the Company and its controlling shareholders and actual controllers during
the reporting period
□ Applicable √ Not applicable
XIV. Material related party transactions
1. Related transaction with routine operation concerned
√ Applicable □ Not applicable
Amount of Whether it Available
Pricing Approved Related
related Proportion exceeds market
principle transaction transactio Date of
Related Relationshi Transactio Transactio Transactio transaction in similar the prices for
of quota n disclosur Disclosure index
parties p n type n content n price price transaction approved similar
transactio (RMB’0,000 settlement e
(RMB’0,000 s quota(Y/N transaction
n ) methods
) ) s
Raw fuel,
power
"China Securities
energy,
Shougang Journal" ,"Securities
production Monetary
Group and Times" ,"Shanghai
Parent Related services, Market Market Fund Market 1 March
its 6,320,571 6,391,108 N Securities News",
company purchase daily life price price Settlemen price 2022
subsidiarie CNINFO
services, t
s (http://www.cninfo.com.c
engineerin
n)
g services,
etc
"China Securities
Shougang Steel, Journal" ,"Securities
Monetary
Group and solid Times" ,"Shanghai
Parent Related Market Market Fund Market 1 March
its waste, 434,662 446,260 N Securities News",
company sales price price Settlemen price 2022
subsidiarie power CNINFO
t
s energy, etc (http://www.cninfo.com.c
n)
"China Securities
Raw fuel,
Journal" ,"Securities
power Monetary
Other Joint Times" ,"Shanghai
Related energy, Market Market Fund Market 1 March
related venture and 2,080,084 2,100,707 N Securities News",
purchase production price price Settlemen price 2022
parties associates CNINFO
services, t
(http://www.cninfo.com.c
etc
n)
"China Securities
Journal" ,"Securities
Monetary
Other Joint Steel, Times" ,"Shanghai
Related Market Market Fund Market 1 March
related venture and power 503,629 553,740 N Securities News",
sales price price Settlemen price 2022
parties associates energy, etc CNINFO
t
(http://www.cninfo.com.c
n)
Total -- -- 9,338,946 -- 9,491,815 -- -- -- -- --
Details of large sales returns No
The Company estimates the total amount of routine related party transactions.
The Proposal on Adjusting the Estimated Amount of Routine Related Party Transactions in 2021 was deliberated and approved by the
If the total amount of routine related party
twelfth session of the seventh board of directors of the Company on 28 February 2022 and submitted to the 2022 first extraordinary
transactions to occur in the current period is
general meeting of shareholders of the Company on 18 March 2022 for deliberation and approval.
estimated by category, the actual performance
in the reporting period (if any) The total amount of transactions approved by the general meeting of shareholders in the current period was RMB 94,918.15 million,
and the actual occurrence was RMB 93,389.46 million, which did not exceed the approved limit. For details of the related parties and
related party transactions, please refer to Section X.
The reason for the material difference between
the transaction price and the market reference Not Applicable
price (if applicable)
2. Related party transactions arising from the acquisition and sale of assets or equity
√ Applicable □ Not applicable
Evaluation
Carry value Related Profit or loss
Pricing value of
Related Transaction Transaction of transferred Tranfer price transaction of the Date of
Relationship principle of transferred Disclosure index
parties type content assets (RMB’0,000) settlement transaction disclosure
transaction assets
(RMB’0,000) methods (RMB’0,000)
(RMB’0,000)
Beijing Shareholders Purchase Issue "China Securities
19
Jingtou holding Asset 11.5094% Evaluation shares to
306,982.27 334,164.25 334,164.25 0 December Journal" ,"Securities
Investment more than purchase equity of price purchase Times" ,"Shanghai
2020
Holding Co., 5% Jingtang Co. assets Securities News", CNINFO
67
Beijing Shougang Co. Ltd Annual Report 2021
Ltd. held by (http://www.cninfo.com.cn)
Beijing
Jingtou
Investment
Holding Co.,
Ltd. through
issuing of
shares
Purchase
7.6729%
equity of
Jingtang Co.
Beijing Jing held by "China Securities
Shareholders Issue
Guorui Soe Beijing Jing 19 Journal" ,"Securities
holding Asset Evaluation shares to
Reform and Guorui Soe 204,653.96 222,775.2 222,775.2 0 December Times" ,"Shanghai
more than purchase price purchase
Development Reform and 2020 Securities News", CNINFO
5% assets
Fund(L.P.) Development (http://www.cninfo.com.cn)
Fund(L.P.)
through
issuing of
shares
The reason for the material difference between the
transfer price and the carrying value or evluation value Not applicable
(if applicable)
This transaction related to the acquisition of minority interests of Jingtang Co. (the holding subsidiary) by Shougang Co.,
Impact on the operation results and financial position of
Ltd. After the completion of this transaction, Shougang Co., Ltd. controls 100% of the equity of Jingtang Co.,directly and
the Company
indirectly, which will further consolidate and strengthen the main business.
Performance achievement during the reporting period if
there is any performance agreement attached in related Not applicable
transaction
3. Related transactions of jointoutward investment
□ Applicable √ Not applicable
The Company has no related party transactions in respect of joint outward investment during the reporting period.
4. Related creditor's rights and debtstransactions
□ Applicable √ Not applicable
The Company has no related creditor's rights and debts transactions during the reporting period
5. Transactions with related financial companies
√ Applicable □ Not applicable
Deposit
Current amount
Relationship Maximum daily Beginning Closing
Range of deposit balance balance
Related party with the deposit limit Total deposit amount Total withdrawal
interest rate
Company (RMB’0,000) (RMB’0,000) for current period amount for current (RMB’0,000)
(RMB’0,000) period (RMB’0,000)
Under the
Shougang
control of the
Group Finance 1,600,000 1.41%-2.05% 584,005.35 19,121,242.29 18,705,887.66 999,359.98
same final
Co., Ltd.
controller
Loan
Current amount
Relationship Beginning Closing
Loan limit Range of loan balance balance
Related party with the Total loan amount Total repayment
(RMB’0,000) interest rate
Company (RMB’0,000) for current period amount for current (RMB’0,000)
(RMB’0,000) period (RMB’0,000)
Under the
Shougang
control of the
Group Finance 3,200,000 2.8%-4.05% 1,465,485.77 2,359,168.93 2,226,234.8 1,598,419.9
same parent
Co., Ltd.
company
Credit granting or other financial services
Related party Relationship with the Company Business types Total amount(RMB’0,000) Actual amount(RMB’0,000)
Shougang Group Finance Co., Under the control of the same
Credit 3,200,000 1,598,419.9
Ltd. final controller
68
Beijing Shougang Co. Ltd Annual Report 2021
6. Transactions between financial companies controlled by the Company and related parties
□ Applicable √ Not applicable
The Company has no deposits, loans, credits, or other financial services between the financial companies controlled by the Company
and the related parties
7. Other significant related party transactions
□ Applicable √ Not applicable
The Company has no other significant related party transaction of the Company during the reporting period.
XV. Material contract and its implementation
1. Entrustment, contract and leasing
(1) Entrustment
□ Applicable √ Not applicable
The Company has no entrustment during the reporting period.
(2) Contract
□ Applicable √ Not applicable
The Company has no contract during the reporting period.
(3) Leasing
□ Applicable √ Not applicable
The Company has no leasing during the reporting period.
2. Material guarantees
□ Applicable √ Not applicable
The Company has no guarantees during the reporting period.
3. Cash assets management entrusted to others
(1) Entrusted financing
□ Applicable √ Not applicable
The Company has no entrusted financing during the reporting period.
(2) Entrusted loans
□ Applicable √ Not applicable
The Company has no entrusted loan during the reporting period.
4. Other material contracts
□ Applicable √ Not applicable
The Company has no other material contractsduring the reporting period.
XVI. Other material events
√ Applicable □ Not applicable
On 18 March 2022, the Company received “Approval for Beijing Shougang Co., Ltd. to Issue Shares to Shougang Group Co., Ltd. to
Purchase Assets and Raise Supporting Funds” (zjxk [2022] No. 553) from China Securities Regulatory Commission.
On 20 April 2022, the Company completed the work of issuing 1,015,417,369 shares to Shougang Group Co., Ltd. to purchase 49%
of the remaining equity of Beijing Shougang Steel Trading Investment Management Co., Ltd. On 25 April 2022, Huatai United
Securities Co., Ltd., the co-lead underwriter of the Company's raised funds, have received the subscription for 54,126,391 shares of
the Company's non-public offering of new shares by investors, and the subsequent share listing registration is in progress.
69
Beijing Shougang Co. Ltd Annual Report 2021
XVII. Material events of subsidiaries of the Company
√ Applicable □ Not applicable
In September 2021, The Company signed "The Capital Increase Agreement of Shougang Zhixin Qian'an Electromagnetic Materials
Co., Ltd. " with 6 enterprises, which were ICBC Financial Assets Investment Co., Ltd., Beijing Chengtong ICBC Equity Investment
Fund(L.P.), Guokai Manufacturing Transformation and Upgrading Fund (L.P.), Beijing - Tianjin - Hebei Industrial Cooperative
Development Investment Fund (L.P.), Central Enterprises Poor Regions Industry Investment Fund Co., Ltd., and Beijing Shougang
Fund Co., Ltd. The above 6 enterprises jointly invested RMB 1.7 billion in Zhixin Co., and became the strategic investor of Zhixin
Co. The Company holds 82.7688% shares of Zhixin Co., which means that the wholly-owned subsidiary of Zhixin Co. became the
holding subsidiary of the Company.
70
Beijing Shougang Co. Ltd Annual Report 2021
Section VII. Movements in share capital and shareholders
I. Share movement
1. Share movement
Unit: share
Before the movement Increase (/decrease) during the year After the movement
Converted
New shares Bonus
Amount Proportion from Others Subtotal Amount Proportion
issued issue
reserves
I. Restricted shares 232,286,354 4.39% 1,460,935,810 1,460,935,810 1,693,222,164 25.08%
1. State ownership
2. State-owned
232,286,354 1,234,898,985 1,234,898,985 1,467,185,339
corporation shares
3. Shares held by
other 190,420,387 190,420,387 190,420,387
domestic investors
Of which: Shares
held by domestic legal 125,518,587 125,518,587 125,518,587
persons
Shares held
by domestic natural 64,901,800 64,901,800 64,901,800
persons
4.Foreign
35,616,438 35,616,438 35,616,438
ownership
Of which: Shares
held by overseas legal 35,616,438 35,616,438 35,616,438
persons
Shares held
by overseas natural
persons
II. Non-restricted
5,057,103,246 95.61% 5,057,103,246 74.92%
shares
1. RMB ordinary
5,057,103,246 5,057,103,246
shares
2. Domestic listed
foreign shares
3. Overseas listed
foreign shares
4.Others
III. Total number of
5,289,389,600 100.00% 1,460,935,810 1,460,935,810 6,750,325,410 100.00%
shares
Reasons of shares movements
√Applicable □ Not applicable
(1)Beijing Shougang Co., Ltd. actively promoted the event of issuing shares to purchase assets and raised supporting funds according
to the "Reply on Approving Beijing Shougang Co., Ltd. to Issue Shares to Beijing Jingtou Investment Holding Co., Ltd. to Purchase
Assets and Raise Supporting Funds" issued by China Securities Regulatory Commission (zjxk [2021] No. 1400). As of the close of
market on 20 May 2021, the Company had purchased 11.5094% equity of Jingtang Co. held by Beijing Jingtou Investment Holding
Co., Ltd. and 7.6729% equity of Jingtang Co. held by Beijing Jing Guorui Soe Reform and Development Fund(L.P.). The issued
1,234,898,985 shares were registered in the account as of 20 May 2021, and became effective on 21 May 2021. As of the close of the
market on 2 July 2021, 161,135,025 non-publicly offering shares with matching raised funds of the Company's were registered in the
71
Beijing Shougang Co. Ltd Annual Report 2021
account, and became effective on 5 July 2021.
(2) According to the "Reply on The Implementation of Equity Incentive Plan for Beijing Shougang Co., Ltd." issued by State-owned
Assets Supervision and Administration Commission of Beijing Municipal People's Government (Jingguozi [2021] No. 140) and the
resolution of the first extraordinary general meeting of shareholders in 2021, the Company implemented the 2021 restricted stock
incentive plan. 64,901,800 shares were issued to 386 directors, senior management personnel, core technical personnel and
management backbones. The restricted stock grant date is 9 December 2021, and the restricted stock is registered as of 23 December
2021.
Approval of share movements
√ Applicable □ Not applicable
(1) On 21 April 2021, the Company received the "Reply on Approving Beijing Shougang Co., Ltd. to Issue Shares to Beijing Jingtou
Investment Holding Co., Ltd. to Purchase Assets and Raise Supporting Funds" (zjxk [2021] No. 1400) issued by China Securities
Regulatory Commission, and the Company completed the work of purchasing assets by issuing shares and raising supporting funds
accordingly.
(2) On 4 November 2021, the Company received the "Reply on the Implementation of the Equity Incentive Plan of Beijing Shougang
Co., Ltd. " (Jingguozi [2021] No. 140) from State-owned Assets Supervision and Administration Commission of Beijing Municipal
People's Government. According to the reply, the Company implemented the 2021 restricted stock incentive plan by the approval of
the first extraordinary general meeting of shareholders in 2021.
Transfer of shares arising from changes in shareholding
□ Applicable √ Not applicable
Influences of shares movements on basic EPS, diluted EPS, net assets per share attributable to common shareholders ofthe company
and other financial indicators for both the latest year and the latest period
√ Applicable □ Not applicable
After the completion of the above issuing shares to purchase assets and raising supporting funds, and the implementation of equity
incentive plan, although the profitability of the Company is further enhanced, the EPS and Net Assets Per Share of the Company in
2020 and 2021 was diluted due to the expansion of the total share capital of the Company.
Other contents deemed necessary by the Company or required to be disclosed by the securities regulatory authority
□ Applicable √ Not applicable
2. Movements of restricted shares
√ Applicable □ Not applicable
Unit: share
Restricted
Restricted Restricted
shares Restricted
Name of shares at the shares increased Date of release
released shares at the Reason for restriction
shareholders beginning of during the from restriction
during the end of period
period period
period
The commitment made by Shougang
Group when the Company was first
restructured. For details, please refer to
After the
Shougang Group the company's announcements in "China
232,286,354 0 0 232,286,354 completion of the
Co., Ltd. Securities Journal" ,"Securities
commitment
Times" ,"Shanghai Securities News",
CNINFO (http://www.cninfo.com.cn)on
28 September 2019.
A commitment made by transaction
Beijing Jingtou party on the event of issuing shares to
Investment 0 740,940,679 0 740,940,679 purchase assets. For details, please refer 20 May 2022
Holding Co., Ltd. to the relevant announcement issued by
the Company on 20 May 2021.
72
Beijing Shougang Co. Ltd Annual Report 2021
Restricted
Restricted Restricted
shares Restricted
Name of shares at the shares increased Date of release
released shares at the Reason for restriction
shareholders beginning of during the from restriction
during the end of period
period period
period
Beijing Jing A commitment made by transaction
Guorui Soe party on the event of issuing shares to
Reform and 0 493,958,306 0 493,958,306 purchase assets. For details, please refer 20 May 2024
Development to the relevant announcement issued by
Fund(L.P.) the Company on 20 May 2021.
As the subscriber of the non-public
offering of shares issued by the company
to purchase assets and raise supporting
Shanxi Coking funds, the shares shall not be transferred
Coal Group 0 39,138,943 0 39,138,943 within 6 months after the completion of 5 January 2022
Finance Co., Ltd. the issue according to relevant
regulations. For details, please refer to
the relevant announcement issued by the
Company on 2 July 2021.
As the subscriber of the non-public
offering of shares issued by the company
to purchase assets and raise supporting
Qingdao
funds, the shares shall not be transferred
Haidayuan
0 39,138,943 0 39,138,943 within 6 months after the completion of 5 January 2022
Procurement
the issue according to relevant
Service Co., Ltd.
regulations. For details, please refer to
the relevant announcement issued by the
Company on 2 July 2021.
As the subscriber of the non-public
offering of shares issued by the company
to purchase assets and raise supporting
funds, the shares shall not be transferred
UBS AG 0 35,616,438 0 35,616,438 within 6 months after the completion of 5 January 2022
the issue according to relevant
regulations. For details, please refer to
the relevant announcement issued by the
Company on 2 July 2021.
As the subscriber of the non-public
Shanghai Blueink offering of shares issued by the company
Investment to purchase assets and raise supporting
Management Co., funds, the shares shall not be transferred
Ltd.-Blueink 0 19,569,471 0 19,569,471 within 6 months after the completion of 5 January 2022
exclusive No. 5 the issue according to relevant
private equity regulations. For details, please refer to
investment fund the relevant announcement issued by the
Company on 2 July 2021.
As the subscriber of the non-public
offering of shares issued by the company
to purchase assets and raise supporting
funds, the shares shall not be transferred
Shanghai C&D
0 9,784,735 0 9,784,735 within 6 months after the completion of 5 January 2022
Material Co., Ltd.
the issue according to relevant
regulations. For details, please refer to
the relevant announcement issued by the
Company on 2 July 2021.
As the subscriber of the non-public
offering of shares issued by the company
Qianhe Capital to purchase assets and raise supporting
Management Co., funds, the shares shall not be transferred
Ltd.-Yun Jin No. 2 0 6,007,827 0 6,007,827 within 6 months after the completion of 5 January 2022
private equity the issue according to relevant
investment fund regulations. For details, please refer to
the relevant announcement issued by the
Company on 2 July 2021.
73
Beijing Shougang Co. Ltd Annual Report 2021
Restricted
Restricted Restricted
shares Restricted
Name of shares at the shares increased Date of release
released shares at the Reason for restriction
shareholders beginning of during the from restriction
during the end of period
period period
period
As the subscriber of the non-public
offering of shares issued by the company
Qianhe Capital to purchase assets and raise supporting
Management Co., funds, the shares shall not be transferred
Ltd.-Yun Jin No. 3 0 6,007,827 0 6,007,827 within 6 months after the completion of 5 January 2022
private equity the issue according to relevant
investment fund regulations. For details, please refer to
the relevant announcement issued by the
Company on 2 July 2021.
As the subscriber of the non-public
offering of shares issued by the company
Shanghai Boshen
to purchase assets and raise supporting
Investment LP-
funds, the shares shall not be transferred
Boshen No. 21
0 5,870,841 0 5,870,841 within 6 months after the completion of 5 January 2022
securities
the issue according to relevant
investment private
regulations. For details, please refer to
equity fund
the relevant announcement issued by the
Company on 2 July 2021.
The lock-up periods
of the granted
Shougang In accordance with relevant regulations, restricted shares are
Directors, senior the Company arranged the lock-up 24, 36 and 48
executives and periods for the granted restricted shares months from the
other equity 0 64,901,800 0 64,901,800 under the 2021 restricted stock incentive date of registration
incentive targets plan. For details, please refer to the completed, i.e., 24
(386 persons in relevant announcement issued by the December 2023, 24
total) Company on 13 November 2021. December 2024 and
24 December 2025,
respectively.
Total 232,286,354 1,460,935,810 0 1,693,222,164 -- --
II. Securities issuance and listing
1. Security offering (without preferred stock) in reporting period
√ Applicable □ Not applicable
Name of Stock
Approved Termination
and derivative Issue price Disclosure
Issue date Issue amount Listing date amount for date for Disclosure index
securities (or interest) date
listing trading
thereof
Stock
For details, please refer to
"Report on the
Implementation of Issuing
Shares to Purchase Assets
and Raising Supporting
A Common RMB 4.51 21 May 20 May
18 May 2021 1,234,898,985 Funds and Related Party
stock per share 2021 2021
Transactions and Issuing
New Shares of Beijing
Shougang Co., Ltd."
disclosed by the Company on
http://www.cninfo.com.cn.
For details, please refer to
"Report on the
Implementation of Issuing
Shares to Purchase Assets
and Raising Supporting
A Common RMB 5.11 2 July
23 June 2021 161,135,025 5 July 2021 Funds and Related Party
stock per share 2021
Transactions and Issuing
New Shares of Beijing
Shougang Co., Ltd."
disclosed by the Company on
http://www.cninfo.com.cn.
74
Beijing Shougang Co. Ltd Annual Report 2021
Name of Stock
Approved Termination
and derivative Issue price Disclosure
Issue date Issue amount Listing date amount for date for Disclosure index
securities (or interest) date
listing trading
thereof
Stock
For details, please refer to the
"Announcement of Beijing
Shougang Co., Ltd. on the
Completion of Registration
for the Granted Restricted
24 23
A Common 9 December RMB 3.25 Shares under the 2021
64,901,800 December December
stock 2021 per share Restricted Stock Incentive
2021 2021
Plan" in "China Securities
Journal" ,"Securities
Times" ,"Shanghai Securities
News", and CNINFO
(http://www.cninfo.com.cn)
Description of securities issuance (excluding preferred shares) during the reporting period:
(1)Beijing Shougang Co., Ltd. actively promoted the event of issuing shares to purchase assets and raised supporting funds according
to the "Reply on Approving Beijing Shougang Co., Ltd. to Issue Shares to Beijing Jingtou Investment Holding Co., Ltd. to Purchase
Assets and Raise Supporting Funds" issued by China Securities Regulatory Commission (zjxk [2021] No. 1400). As of the close of
market on 20 May 2021, the Company had purchased 11.5094% equity of Jingtang Co. held by Beijing Jingtou Investment Holding
Co., Ltd. and 7.6729% equity of Jingtang Co. held by Beijing Jing Guorui Soe Reform and Development Fund(L.P.). The issued
1,234,898,985 shares were registered in the account as of 20 May 2021, and became effective on 21 May 2021. As of the close of the
market on 2 July 2021, 161,135,025 non-publicly offering shares with matching raised funds of the Company's were registered in the
account, and became effective on 5 July 2021.
(2) According to the "Reply on The Implementation of Equity Incentive Plan for Beijing Shougang Co., Ltd." issued by State-owned
Assets Supervision and Administration Commission of Beijing Municipal People's Government (Jingguozi [2021] No. 140) and the
resolution of the first extraordinary general meeting of shareholders in 2021, the Company implemented the 2021 restricted stock
incentive plan. 64,901,800 shares were issued to 386 directors, senior management personnel, core technical personnel and
management backbones. The restricted stock grant date is 9 December 2021, and the restricted stock is registered as of 23 December
2021.
2. Changes of total shares and shareholders structure as well as explanation on changes of assets and liability structure
√ Applicable □ Not applicable
(1) The Company issued shares to purchase assets and raise supporting funds, of which, 1,234,898,985 shares were issued to Beijing
Jingtou Investment Holding Co., Ltd. and Beijing Jing Guorui Soe Reform and Development Fund(L.P.) and became effective on 21
May 2021. The total share capital of the Company increased from 5,289,389,600 shares to 6,524,288,585 shares, which caused the
changes of shareholders’ structure; On 5 July 2021, 161,135,025 non-public offering shares with supporting funds became effective.
The total share capital of the Company changed from 6,524,288,585 shares to 6,685,423,610 shares, which caused the changes of
shareholders’ structure;
The event of issuing shares to purchase assets had no effect on the Company's assets and liabilities; the issuing additional shares to
raise supporting funds increased current assets and stockholders' equity.
(2) The Company implemented 2021 restricted stock incentive plan and issued 64,901,800 restricted shares. The total share capital of
the Company changed from 6,685,423,610 shares to 6,750,325,410 shares, which caused the changes of shareholders’ structure.
The implementation of restricted stock incentive plans and issued restricted shares increased current assets and current liabilities
3. Current internal staff shares
□ Applicable √ Not applicable
75
Beijing Shougang Co. Ltd Annual Report 2021
III. Shareholders and the actual controller
1. Amount of shareholders andshareholding
Unit: Share
Total number of
preferred
Total number of Total number of shareholders whose
Total number of ordinary preferred voting rights were
common shareholders at the shareholders with restored at the end
shareholders at the 99,240 end of the previous 106722 voting rights restored 0 of the previous 0
end of the reporting month before the at the end of the month before the
period disclosure date of reporting period (if disclosure date of
the annual report any) (refer to note 8) the annual report
(if any) (refer to
note 8)
Shareholding of shareholders holding more than 5% or top 10 shareholders
Number of Pledge, marking or
Number of Number of
Changes in shares with freezing
Nature of Shareholding shares held at shares with
Name of shareholder reporting unlimited
shareholder ratio the end of the limited sales
period sales Status Amount
reporting period conditions
conditions
State-owned
Shougang Group 50.45 3,405,352,431 0 232,286,354 3,173,066,077
corporation
State-owned
Baosteel Group Corporation 11.75 793,408,440 0 0 793,408,440
corporation
Beijing Jingtou Investment
10.98 740,940,679 740,940,679 740,940,679 0
Holding Co., Ltd.
Beijing Jing Guorui Soe
Reform and Development 7.32 493,958,306 493,958,306 493,958,306 0
Fund(L.P.)
Beijing Yizhen Technology
1.40 94,220,000 -65,570,000 0 94,220,000
Development Co., Ltd.
Hong Kong Securities Clearing
0.74 49,906,133 6,594,339 0 49,906,133
Company Ltd.
Bank of China - Guotai
Jiangyuan advantage selection
and flexible allocation of 0.70 47,196,029 47,196,029 0 47,196,029
hybrid securities investment
funds
Beijing Xiaojian Technology
0.59 39,608,700 -9,661,300 0 39,608,700
Development Co., Ltd.
Shanxi Coking Coal Group
0.58 39,138,943 39,138,943 39,138,943 0
Finance Co., Ltd.
Qingdao Haidayuan
0.58 39,138,943 39,138,943 39,138,943 0
Procurement Service Co., Ltd.
Beijing Jingtou Investment Holding Co., Ltd. and Beijing Jing Guorui Soe Reform and
Development Fund (L.P.) became the top 10 shareholders of the Company because of the
Strategic investor or general legal person acquisition of newly issued shares of the Company when the Company issued shares to purchase
become the top 10 ordinary shareholders due 19.1823% equity of Jingtang Co.
to allocation of new shares (if any) (refer to
notes 3) Shanxi Coking Coal Group Finance Co., Ltd. and Qingdao Haidayuan Procurement Service Co.,
Ltd. became the top 10 shareholders of the Company because of the acquisition of shares issued by
the Company through participating in the Company's events of raising supporting funds.
Shougang Group holds 0.68% equity of Baosteel Co. Ltd. and Baosteel Group Corporation and its
persons acting in concert hold 62.30%equity of Baosteel Co. Ltd., besides of which, Shougang
Description of the related or acting-in-concert
Group has no relationship or concerted acting relationship with other top 10 shareholders; Beijing
parties among the above shareholders
Yizhen Technology Development Co., Ltd. and Beijing Xiaojian Technology Development Co., Ltd.
are persons act in concert.
Description of the above shareholders
involved in entrusting / being entrusted with Not applicable
voting rights and giving up voting rights
Special instructions on the existence of special
repurchase account among the top 10 Not applicable
shareholders (if any) (refer to note 10)
76
Beijing Shougang Co. Ltd Annual Report 2021
Shareholding of the top 10 shareholders with unlimited sales conditions
Type of shares
Number of shares with unlimited sales conditions at the end
Name of shareholders
of the reporting period
Type Amount
Shougang Group 3,173,066,077
Baosteel Group Corporation 793,408,440
Beijing Yizhen Technology Development Co.,
94,220,000
Ltd
Hong Kong Securities Clearing Company Ltd. 49,906,133
Bank of China - Guotai Jiangyuan advantage
selection and flexible allocation of hybrid 47,196,029
securities investment funds
Beijing Xiaojian Technology Development
39,608,700
Co., Ltd.
Liu Wei 35,000,000
Bank of China - Guotai Zhiyuan advantageous
29,000,005
hybrid securities investment fund
Sun Qingjun 13,156,667
China Construction Bank - Zhejiang Feng Li
10,000,000
enhanced bond securities investment fund
Connected associated relationship or acting in
Shougang Group holds 0.68% equity of Baosteel Co. Ltd. and Baosteel Group Corporation and its
concert among the top 10 shareholders holding
persons acting in concert hold 62.30%equity of Baosteel Co. Ltd., besides of which, Shougang
tradable shares without selling restrictions, and
Group has no relationship or concerted acting relationship with other top 10 shareholders; Beijing
between the top 10 shareholders holding
Yizhen Technology Development Co., Ltd. and Beijing Xiaojian Technology Development Co., Ltd.
tradable shares without selling restrictions and
are persons act in concert.
the top 10 shareholders
Description of the top 10 ordinary Beijing Yizhen Technology Development Co., Ltd. holds 94,220,000 shares of the Company
shareholders' participation in margin trading through credit securities account; Beijing Xiaojian Technology Development Co., Ltd. holds
(if any) (refer to note 4) 39,608,700 shares of the Company through its credit securities account.
Whether top 10 common stock shareholders or top 10 common stock shareholders with unlimited sales conditions conducted agreed
repurchase transactions during the reporting period
□ Yes √ No
The top 10 common stock shareholders or top 10 common stock shareholders with unlimited sales conditions have no agreed
repurchase transactions during the reporting period.
2. Controlling shareholders
Nature of controlling shareholders: local state-owned holding
Type of controlling shareholders: corporate
Legal
Name of
representative / Date of
controlling Organization code Main businesses
person in charge of establishment
shareholders
the company
Industry, construction, geological examination,
transportation, foreign trade, post and
telecommunications, finance and insurance, scientific
research and comprehensive technical services, domestic
commerce, public catering, material supply and
Shougang
Zhang Gongyan 13 May 1981 911100001011200015 marketing, warehousing, real estate, residential services,
Group consulting services, leasing, agriculture, forestry, animal
husbandry and fishery (excluding business without special
permission); authorized operation and management of
state-owned assets; hosted Shougang Daily newspaper;
design and production of TV advertisements; use of
self-owned TV stations to publish advertisements; design
77
Beijing Shougang Co. Ltd Annual Report 2021
and production of print advertising; use of self-owned
Shougang Daily to publish advertisements; sewage
treatment and recycling; seawater desalination; literary
and artistic creation and performance: sports project
management (excluding high-risk sports projects);
stadium management; Internet information services;
Municipal solid waste treatment. (enterprises shall
independently choose business projects and carry out
business activities in accordance with the law; municipal
solid waste treatment, Internet information services and
projects subject to approval in accordance with the law
after licensing; they shall not engage in business projects
prohibited or restricted by local policies)
Change of controlling shareholder during the reporting period
□ Applicable √ Not applicable
The controlling shareholder of the Company has not changed during the reporting period
3. Actual controller of the company and persons acting in concert
Nature of actual controller: local management agency of state-owned assets
Type of actual controller:
Change of actual controller during the reporting period
□ Applicable √ Not applicable
The actual controller of the Company has not changed during the reporting period
Block diagram of property rights and controlling relations between the Companyand actual controllers
Actual controller controlling the company through trust or other asset management methods
□ Applicable √ Not applicable
4.The cumulative number of pledged shares of the company's controlling shareholder or the largest shareholder and its
concerted actors accounts for 80% of the company's shares
□ Applicable √ Not applicable
78
Beijing Shougang Co. Ltd Annual Report 2021
5. Other corporate shareholders holding more than 10%
√ Applicable □ Not applicable
Name ofcorporate Legal representative / person in Date of
Registered capital Main businesses
shareholders charge of the company establishment
State-owned assets operation within the scope
authorized by the State Council and
Baosteel Group investment and operation of state-owned
Chen Derong 1 Jan. 1992 RMB 52,791,101,000.00
Corporation capital. (if necessary, carrying out business
activities only after approval of government
agencies)
Equity investment; Project investment; Asset
management; Investment management;
Investment consulting; Business management.
(Enterprises independently choose business
projects and carry out business activities in
Beijing Jingtou
accordance with the law; For projects subject
Investment Holding Ren Yuhang 14 Nov. 2019 RMB 5,000,000,000.00
to approval according to law, business
Co., Ltd.
activities shall be carried out according to the
approved contents after approval by relevant
departments; Shall not engage in business
activities of projects prohibited or restricted
by the municipal industrial policies.)
6. Limitation on reducing the holdings of shares of controlling shareholders, actual controllers, restructuring side
andothercommitment 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 and repurchasing shares by means of centralized bidding.
□ Applicable √ Not applicable
Change of controlling shareholder during reporting period.
□ Applicable √ Not applicable
The controlling shareholder of the Company has not changed during the reporting period.
79
Beijing Shougang Co. Ltd Annual Report 2021
Section VIII. Preferred Shares
□ Applicable √ Not applicable
No preferred shares issued by the Company during the reporting period
80
Beijing Shougang Co. Ltd Annual Report 2021
Section IX. Bonds Related Information
√ Applicable □ Not applicable
Ⅰ. Enterprise bonds
□ Applicable √ Not applicable
The Company had no enterprise bonds during the reporting period.
II. Corporate Bonds
√ Applicable □ Not applicable
1. Basic information on corporate bonds
Unit: RMB
Bond Interest Trading
Name of bond Bond code Issue date Value date Maturity date Bond balance Repayment method
abbreviation rate place
Interest is calculated
on an annual basis,
Beijing not compound. The
Shougang Co., interest is paid
Ltd.2020 Public annually, and the
Shenzhen
Offering of 20 Shouqian principal is repaid at
149236 15 Sep. 2020 17 Sep. 2020 17 Sep. 2025 2,500,000,000.00 3.98% Stock
Corporate Bonds 01 maturity. The last
Exchange
to Professional installment of
Investors (Phase interest is paid
I) together with the
repayment of the
principal.
Investor eligibility arrangement (if any) Public offering to professional investors
Applicable trading mechanism Bidding, quotation, inquiry and agreement trading methods
Is there any risk of terminating listing (if
No
any) and countermeasures
Overdue and outstanding bonds
□ Applicable √ Not applicable
2. Trigger and implementation of issuer's or investor's option clauses and investor protection clauses
√ Applicable □ Not applicable
The bond term of "20 Shouqian 01" is 5 years, with the issuer's option to adjust the coupon rate and the investor's resale option at the end
of the third year. It has not yet reached the exercise period.
3.Information on intermediaries
Name of the Name of Contact person of
Bond Name intermediary Office address signing the intermediary Contact tel.
organisation accountant organisation
Beijing Shougang Co.,
5F, Saite Plaza, 22
Ltd.2020 Public Offering of
Jianguomenwai Dajie, Qian Bin, Yu Qike, Qian Bin, Yu Qike,
Corporate Bonds to Grant Thornton LLP 010-85665231
Chaoyang District, Beijing, Long Chuanxi Long Chuanxi
Professional Investors
China
(Phase I)
Change of the above intermediary organisations during the reporting period
□ Yes √ No
4. Use of raised funds
Unit: RMB
81
Beijing Shougang Co. Ltd Annual Report 2021
Whether it is
Rectification consistent with the
Utilised Unutilised Operation of special purpose, use plan
Total amount of of irregularities
Bond Name account for the and other
raised funds amount amount raised funds (if any) in the use of raised agreements
funds (if any) promised in the
prospectus
During the reporting
Beijing Shougang Co., period, the
Ltd.2020 Public operation of the
Offering of Corporate 2,500,000,000.00 2,500,000,000.00 0.00 Company's special No Yes
Bonds to Professional account for raised
Investors (Phase I) funds conforms to
the standard
Raised funds for construction projects
□ Applicable √ Not applicable
Change in the purpose of the funds raised by the above bonds during the reporting period
□ Applicable √ Not applicable
5. Adjustment of credit rating results during the reporting period
□ Applicable √ Not applicable
6. Implementation and changes of guarantee, debt repayment plan and other debt repayment guarantee measures during the
reporting period and their impact on the rights and interests of bond investors
□ Applicable √ Not applicable
III. Debt financing instruments of non-financial enterprises
√ Applicable □ Not applicable
1.Basic information of debt financing instruments of non-financial enterprises
Unit: RMB
Maturity Interest Repayment Trading
Name of bond Bond abbreviation Bond code Issue date Value date Bond balance
date rate method place
Beijing
Shougang Co., Repayment National
15 16
Ltd.2021 21 Shougang Co. 13 May of principal inter-bank
012103435.IB September September 1,000,000,000.00 2.49%
Ultra-short-term SCP002 2022 and interest bond
2021 2021
financing note at maturity market
(Phase II)
Institutional investors in the national inter-bank bond market (except purchasers
Investor eligibility arrangement (if any)
prohibited by national laws and regulations)
Applicable trading mechanism Debt financing instrument trading system of non-financial enterprise
Is there any risk of terminating listing (if any) and
No
countermeasures
Overdue and outstanding bonds
□ Applicable √ Not applicable
2. Trigger and implementation of issuer's or investor's option clauses and investor protection clauses
□ Applicable √ Not applicable
3. Information on intermediaries
Name of the Name of Contact person of
Bond Name intermediary Business address signing the intermediary Contact no.
organisation accountant organisation
Beijing Shougang 5F, Saite Plaza, 22
Co., Ltd.2021 Jianguomenwai
Qian Bin, Yu Qike, Qian Bin, Yu Qike,
Ultra-short-term Grant Thornton LLP Dajie, Chaoyang 010-85665231
Long Chuanxi Long Chuanxi
financing note (Phase District, Beijing,
II) China
82
Beijing Shougang Co. Ltd Annual Report 2021
Change of the above intermediary organisations during the reporting period
□ Yes √ No
4. Use of raised funds
Unit: RMB
Whether it is
Rectification consistent with the
Operation of special of irregularities purpose, use plan
Total amount of Utilised Unutilised
Bond Name account for raised in the use of and other
raised funds amount amount funds (if any) raised funds (if agreements
any) promised in the
prospectus
During the reporting
Beijing Shougang period, the operation
Co., Ltd.2021 of the Company's
Ultra-short-term 1,000,000,000.00 1,000,000,000.00 0.00 special account for No Yes
financing note (Phase raised funds
II) conforms to the
standard
Raised funds for construction projects
□ Applicable √ Not applicable
Change in the purpose of the funds raised by the above bonds during the reporting period
□ Applicable √ Not applicable
5. Adjustment of credit rating results during the reporting period
□ Applicable √ Not applicable
6. Implementation and changes of guarantee, debt repayment plan and other debt repayment guarantee measures during the
reporting period and their impact on the rights and interests of bond investors
□ Applicable √ Not applicable
IV. Convertible bonds
□ Applicable √ Not applicable
The Company had no convertible bonds during the reporting period.
V. The loss in the scope of the consolidated financial statements during the reporting
periodexceeding 10% of the net assets as at the end of the prior year
□ Applicable √ Not applicable
VI. Overdue interest-bearing debts other than bonds at the end of the reporting period
□ Applicable √ Not applicable
VII. Breaches of the regulations during the reporting period
□ Yes √ No
VIII. Main accounting data and financial indicators of the Company over the past two years as at
the end of the reporting period
Unit: RMB0’000
Increase/decrease as at the end of
As at the end of the reporting
Items As at the end of the prior year the reporting period as compared
period
to the end of the prior year
Current ratio 0.47 0.39 20.51%
Decreased by 6.51 percentage
Gearing ratio 66.59% 73.10%
points
Quick ratio 0.32 0.25 28.00%
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Beijing Shougang Co. Ltd Annual Report 2021
Increase/decrease of the
The corresponding period of the reporting period as compared to
The reporting period
prior year corresponding period of the prior
year
Net profit after extraordinary
701,422.69 171,443.97 309.13%
gains or losses
EBITDA total debt ratio 19.97% 11.11% 8.86%
Interest cover ratio 5.15 1.8 186.11%
Cash interest coverage ratio 8 4.87 64.27%
EBITDA interest coverage ratio 8.29 4.1 102.20%
Loans payment ratio 100.00% 100.00% 0.00%
Interest payment ratio 100.00% 100.00% 0.00%
84
Beijing Shougang Co. Ltd Annual Report 2021
Section X. Financial Report
(This section is translated based on the Chinese version of the full audit report of the Company. Immaterial difference may exist
beween this section in Chinese version annual report and English version annual report. The difference is due to the specific template
required by the Shenzhen Stock Exchange in Chinese version which is not applied in English version.)
I. Auditor’s Report
Type of audit opinion Standard unqualified opinion
Date of signing of audit report 27 April 2022
Name of audit institution Grant Thornton LLP
Number of audit report GTSZ (2022)No.110A013808
Chinese Certified Public Accountant Qian Bin, Liu Yiwei
Main Body of Audit Report
To the Shareholders of Beijing Shougang Company Limited：
I. Opinion
We have audited the financial statements of Beijing Shougang Company Limited (the
Company), which are comprised of the consolidated and company statements of
financial position as of 31 December 2021, and the consolidated and company
income statements, statements of changes in equity and statements of cash flows for
the year then ended, and notes to the financial statements.
In our opinion, the accompanying financial statements present fairly, in all material
respects, the consolidated and company financial position of the Company as of 31
December 2021, and the consolidated and company’s financial performance and cash
flows for the year then ended in accordance with Accounting Standards for Business
Enterprises.
II. Basis for Opinion
We conducted our audit in accordance with China Standards on Auditing. Our
responsibilities under those standards are further described in the Auditor’s
Responsibilities for the Audit of the financial statements section of our report. We are
independent of the Company in accordance with the Code of Ethics for Chinese
Certified Public Accountants, and we fulfilled our other ethical responsibilities. We
believe that the audit evidence we have obtained is sufficient and appropriate to
provide a basis for our audit opinion.
III. Key Audit Matters
Key audit matters are those matters that, in our professional judgment, were of most
significance in our audit of the financial statements of the current period. These
matters were addressed in the context of our audit of the financial statements as a
whole, and in forming our opinion thereon, and we do not provide a separate opinion
85
Beijing Shougang Co. Ltd Annual Report 2021
on these matters.
(I) The provision for inventory impairments
The disclosures related to the impairment of inventories are disclosed in Notes III.11
and V.7 to the financial statements.
1. Description of the matter
As of 31 December 2021, the carry value of inventory of the Company amounted to
RMB 12.047 billion with an impairment of RMB 147 million in the consolidated
financial statements. Inventory had been regarded as the material part of the current
assets of the Company at the end of the period, and the provision for inventory
impairment referred to the application of management’s accounting estimates. Hence,
we have identified the provision for inventory impairments as a key audit matter.
According to the accounting policy of the Company, if the cost is in excess of the net
realizable value, impairment of inventories is recognized on the date of balance sheet.
Net realizable value is determined based on the estimated selling price on normal
business terms deducted by the estimated costs to completion and the related
expenses.
2. How our audit addressed the Key Audit Matter
Our main procedures in relation to provision for inventory impairment includes:
(1) Understanding and assessing the management’s internal controls related to
impairment testing of inventories, and testing the effectiveness of key control
executions.
(2) Testing, on a sample basis during the inventory monitoring procedure, observing
the inventory status and checking the inventory age
(3) Recalculating the impairment of inventories at the end of the reporting period
(4) Implementing the analysis procedure to determine whether there is a significant
difference between the estimated selling price and the market price, and examining
whether there is a significant difference between the post-period selling price and the
estimated price in conjunction with a subsequent-event audit.
(5) Evaluating the reasonableness of carrying value of the inventory as at 31
December 2021 by analyzing manufacturing costs of current inventories.
(6) Inspecting whether the related information of inventory impairments provision is
properly, appropriately and adequately presented and disclosed in the financial
statements.
(II) Recognition of Revenue
The disclosures related to the recognition of revenue are disclosed in Notes III.25 and
86
Beijing Shougang Co. Ltd Annual Report 2021
V.41 to the financial statements.
1. Descriptions of the matter
In 2021, the revenue was RMB 134.034 billion in the consolidated financial
statements. Considering that the revenue has a significant impacted on the financial
statements of the Company and steel price could exert a great influence on the profits
of the Company since the steel industry is a pro-cyclical industry, we regarded the
recognition of revenue as a key audit matter.
2. How our audit addressed the Key Audit Matter
Our main procedures in relation to recognition of revenue includes:
(1) Understanding and assessing the management’s internal controls related to
recognition of revenue, and testing the effectiveness of key control executions.
(2) Assessing whether the revenue recognition conditions, methods and time
complied with the related standards in Accounting Standards for Business
Enterprises.
(3) Selecting revenue transaction samples, checking the supporting documents of
revenue recognition such as sales contracts, orders, delivery records, etc. to evaluate
the authenticity of revenue recognition.
(4) Selecting major customers to perform the confirmation procedures on annual sales
to evaluate the completeness of revenue recognition.
(5) Implementing cut-off tests to the sales transactions before and after balance sheet
date.
(6) Checking the adequacy and appropriateness of disclosures in relation to revenue
in the financial statements.
IV. Other Information
The management of the Company is responsible for the other information. The other
information comprises the information included in the Annual Report of 2021, other
than the financial statements and our auditor’s report thereon.
Our opinion on the financial statements does not cover the other information and we
do not express any form of assurance conclusion thereon.
In connection with our audit of the financial statements, our responsibility is to read
the other information and, in doing so, consider whether the other information is
materially inconsistent with the financial statements or our knowledge obtained in the
audit or otherwise appears to be materially misstated.
If, based on the work we have performed, we conclude that there is material
misstatement of this other information, we are required to report that fact. We have
87
Beijing Shougang Co. Ltd Annual Report 2021
nothing to report in this regard.
V. Responsibilities of the Management and Those Charged with Governance for
the Financial Statements
Management of the Company is responsible for the preparation and fair presentation
of the financial statements in accordance with Accounting Standards for Business
Enterprises, and designing, implementing and maintaining internal control as
management determines is necessary to enable the preparation of financial statements
that are free from material misstatement, whether due to fraud or error.
In preparing the financial statements, the management is responsible for assessing the
Company’s ability to continue as a going concern, disclosing, as applicable, matters
related to going concern and using the going concern basis of accounting unless the
management either intends to liquidate the Company or to cease operations, or has no
realistic alternative but to do so.
Those charged with governance are responsible for overseeing the Company’s
financial reporting process.
VI. Auditor’s Responsibilities for the Audit of the Financial Statements
Our objectives are to obtain reasonable assurance about whether the financial
statements as a whole are free from material misstatement, whether due to fraud or
error, and to issue an auditor’s report that includes our opinion. Reasonable assurance
is a high level of assurance, but is not a guarantee that an audit conducted in
accordance with China Standards on Auditing will 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 of users taken on the
basis of these financial statements.
As part of an audit in accordance with China Standards on Auditing, we exercise
professional judgment and maintain professional skepticism throughout the audit. We
also:
(1) Identify and assess the risks of material misstatement of the financial statements,
whether due to fraud or error, design and perform audit procedures responsive to
those risks, and obtain audit evidence that is sufficient and appropriate to provide a
basis for our opinion. The risk of not detecting a material misstatement resulting from
fraud is higher than for one resulting from error, as fraud may involve collusion,
forgery, intentional omissions, misrepresentations, or the override of internal control.
(2) Obtain an understanding of internal control relevant to the audit in order to design
audit procedures that are appropriate in the circumstances.
(3) Evaluate the appropriateness of accounting policies used and the reasonableness
of accounting estimates and related disclosures made by the management.
88
Beijing Shougang Co. Ltd Annual Report 2021
(4) Conclude on the appropriateness of management’s use of the going concern basis
of accounting and, based on the audit evidence obtained, whether a material
uncertainty exists related to events or conditions that may cast significant doubt on
the Company’s ability to continue as a going concern. If we conclude that a material
uncertainty exists, we are required to draw attention in our auditor’s report to the
related disclosures in the financial statements or, if such disclosures are inadequate, to
modify our opinion. Our conclusions are based on the audit evidence obtained up to
the date of our auditor’s report. However, further events or conditions may cause the
Company to cease to continue as a going concern.
(5) Evaluate the overall presentation, structure and content of the financial statements,
and whether the financial statements represent the underlying transactions and events
in a manner that achieves fair presentation.
(6) Obtain sufficient appropriate audit evidence regarding the financial information of
the entities or business activities within the Company to express an opinion on the
financial statements. We are responsible for the direction, supervision and
performance of the group audit. We remain solely responsible for our audit opinion.
We communicate with those charged with governance regarding, among other matters,
the planned scope and timing of the audit and significant audit findings, including
any significant deficiencies in internal control that we identify during our audit.
We also provide the governance with a statement that we have complied with 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 where applicable, related safeguards.
From the matters communicated with the governance, we determine those matters
that were of most significance in the audit of the financial statements of the current
period and are therefore the key audit matters. We describe these matters in our
auditor’s report unless law or regulation precludes public disclosure about the matter
or when, in extremely rare circumstances, we determine that a matter should not be
communicated in our report because the adverse consequences of doing so would
reasonably be expected to outweigh the public interest benefits of such
communication.
89
Beijing Shougang Co. Ltd Annual Report 2021
Consolidated and Parent Company Statement of Financial Position
Beijing Shougang Co., Ltd. as at 31 December 2021
Unit: RMB Yuan
31 December 2021 31 December 2020
Item Notes
Consolidated Company Consolidated Company
Current assets:
Cash and Cash equivalents V. 1 10,284,988,713.99 1,426,549,662.05 6,292,499,840.73 1,087,088,671.35
Notes receivable V. 2 6,830,376,685.96 1,311,383,591.78 6,119,547,878.33 2,837,221,424.75
Accounts receivable V. 3 1,678,608,393.71 1,917,892,195.00 1,424,092,844.92 1,615,425,644.29
Financing receivables V. 4 4,015,188,495.05 1,285,597,772.66 4,532,592,689.43 1,199,574,277.29
Prepayments V. 5 1,192,569,996.90 789,330,458.38 352,355,542.50 195,404,837.38
Other receivables V. 6 16,992,715.92 1,017,482,945.07 21,895,246.57 1,618,249,934.67
Including: Interest receivable
Dividends receivable 4,892,288.48 600,000,000.00
Inventories V. 7 11,900,618,235.51 1,932,537,429.64 10,599,731,052.28 1,538,862,616.03
Other current assets V. 8 864,665,729.52 397,054,514.15 719,079,065.59 1,812,574,287.01
Total current assets 36,784,008,966.56 10,077,828,568.73 30,061,794,160.35 11,904,401,692.77
Non-current assets:
Long-term equity investments V. 9 3,065,928,898.28 31,996,332,940.16 3,341,208,164.76 26,337,249,446.06
Other equity instruments investments V. 10 264,900,763.97 264,900,763.97 276,246,686.56 276,246,686.56
Other non-current financial assets V. 11 80,000,000.00 80,000,000.00
Investment properties
Fixed assets V. 12 95,632,825,411.62 18,530,296,850.83 96,220,769,301.39 18,771,870,988.72
Construction in progress V. 13 7,136,983,761.07 1,459,332,553.48 8,297,181,948.62 1,976,744,021.21
Right-of-use assets V. 14 100,279,997.64 36,019,259.06 —— ——
Intangible assets V. 15 3,955,685,010.41 1,685,403,346.74 4,055,279,867.49 1,743,860,610.95
Development expenditures
Goodwill
Long-term prepaid expenses V. 16 1,226,463.57 1,122,060.45
Deferred tax assets V. 17 189,721,423.29 26,622,171.77 147,902,371.10 27,925,001.56
Other non-current assets V. 18 1,965,717,410.38 1,130,014,156.73
Total non-current assets 110,427,551,729.85 54,078,907,886.01 114,305,427,810.75 50,263,910,911.79
Total assets 147,211,560,696.41 64,156,736,454.74 144,367,221,971.10 62,168,312,604.56
90
Beijing Shougang Co. Ltd
Notes to the Financial Statements
FY21 (Unit: RMB, unless otherwise specified)
Consolidated and Parent Company Statement of Financial Position(Continued)
Beijing Shougang Co., Ltd. as at 31 December 2021
Unit: RMB Yuan
31 December 2021 31 December 2020
Item Notes
Consolidated Consolidated Consolidated Company
Current liabilities:
Short-term borrowings V. 19 25,278,373,316.25 11,063,960,704.04 23,712,391,440.25 11,100,674,376.49
Notes payable V. 20 7,488,930,793.77 987,600,000.00 6,804,810,000.00 784,260,000.00
Accounts payable V. 21 26,265,590,773.10 10,294,070,284.28 26,539,354,380.68 11,218,645,086.80
Receipts in advance
Contract liabilities V. 22 5,230,456,327.37 756,726,439.51 4,659,444,741.25 1,049,617,570.23
Payroll and employee benefits V. 23 501,147,141.34 146,002,088.12 466,319,382.02 140,481,468.09
Taxes payable V. 24 425,210,314.30 19,217,188.00 572,640,856.00 115,612,678.08
Other payables V. 25 1,015,941,625.80 304,218,526.51 2,104,822,314.59 1,010,689,017.67
Including: Interest payable
Dividend payable
Liabilities classified as held for sale
Current portion of non-current liabilities V. 26 10,451,293,628.20 61,012,464.36 11,273,123,385.05 4,075,978,467.70
Other current liabilities V. 27 1,908,511,727.48 1,105,673,889.14 1,106,922,816.36 637,645,284.13
Total current liabilities 78,565,455,647.61 24,738,481,583.96 77,239,829,316.20 30,133,603,949.19
Non-current liabilities:
Long-term borrowings V. 28 11,692,710,000.00 1,792,710,000.00 20,639,300,000.00 883,210,000.00
Bonds payable V. 29 2,500,000,000.00 2,500,000,000.00 2,500,000,000.00 2,500,000,000.00
Lease liabilities V. 30 86,123,210.35 28,263,649.37 —— ——
Long-term payable V. 31 14,659,657.85 14,659,657.85 8,941,452.29 8,941,452.29
Provisions
Deferred income V. 32 404,010,785.39 79,906,503.16 398,098,805.65 85,344,005.30
Deferred tax liabilities V. 17 208,958,292.75 208,958,292.75 258,248,672.58 258,248,672.58
Other non-current liabilities V. 33 4,563,283,607.60 4,491,623,817.41
Total non-current liabilities 19,469,745,553.94 4,624,498,103.13 28,296,212,747.93 3,735,744,130.17
Total liabilities 98,035,201,201.55 29,362,979,687.09 105,536,042,064.13 33,869,348,079.36
Shareholders’equity：
Share capital V. 34 6,750,325,410.00 6,750,325,410.00 5,289,389,600.00 5,289,389,600.00
Capital reserve V. 35 24,924,487,245.09 17,250,483,548.60 19,759,259,120.40 12,129,563,493.89
Less:treasuryshares V. 36 210,930,850.00 210,930,850.00
Other comprehensive income V. 37 185,566,210.59 185,566,210.59 195,210,244.82 195,210,244.82
Special reserve V. 38 21,054,371.78 21,577,537.20
Surplus reserve V. 39 1,908,883,208.67 1,908,883,208.67 1,828,677,846.37 1,828,677,846.37
Retained earnings V. 40 8,130,868,205.38 8,909,429,239.79 1,865,280,919.23 8,856,123,340.12
Equity attributable to shareholders of the Company 41,710,253,801.51 34,793,756,767.65 28,959,395,268.02 28,298,964,525.20
Non-controlling interests 7,466,105,693.35 9,871,784,638.95
Total shareholders' equity 49,176,359,494.86 34,793,756,767.65 38,831,179,906.97 28,298,964,525.20
Total liabilities and shareholders' equity 147,211,560,696.41 64,156,736,454.74 144,367,221,971.10 62,168,312,604.56
－91－
Beijing Shougang Co. Ltd
Notes to the Financial Statements
FY21 (Unit: RMB, unless otherwise specified)
Consolidated and Parent Company Income Statement
Beijing Shougang Co., Ltd. for the year ended 31 December 2021
Unit: RMB Yuan
Item 2021 2020
Notes
Consolidated Company Consolidated Company
I. Operating revenue V. 41 134,034,486,136.13 45,087,337,029.02 79,951,181,948.10 30,977,295,936.58
Less: Cost of sales V. 41 118,578,217,304.05 42,509,065,238.89 73,072,708,322.14 29,451,902,404.58
Taxes and surcharges V. 42 1,043,631,975.73 274,324,263.09 774,074,513.76 292,475,174.88
Selling expenses V. 43 213,309,534.38 129,253,892.82 167,040,690.13 117,875,525.89
General and administrative expenses V. 44 1,299,881,734.32 564,432,571.31 976,426,260.85 398,756,799.72
R&D expenses V. 45 652,926,385.56 242,853,866.40 480,487,074.39 148,097,166.55
Financial expenses V. 46 2,257,586,032.80 589,815,561.68 2,163,091,932.82 775,191,836.71
Including: Interest expense 2,353,346,784.74 625,241,774.26 2,361,047,341.52 845,716,781.33
Interest income 131,307,065.33 31,270,904.41 133,289,009.17 47,733,269.34
Add: Other income V. 47 54,544,488.92 9,859,440.42 61,194,281.43 6,705,258.54
Investment income/ (loss) V. 48 106,379,717.79 240,889,493.89 567,720,738.87 1,226,651,114.41
Including: Share of profits or loss of associates and joint ventures 93,142,769.92 203,181,607.90 379,578,180.14 339,539,916.15
Gain/ (loss) on the changes in fair value
Credit impairment losses V. 49 -127,539,908.64 -1,593,807.77 -11,350,686.26 5,222,959.55
Assets impairment losses V. 50 -167,567,546.04 -66,598,535.40 -156,492,924.46 -22,707,758.30
Gain/ (loss) from disposal of assets V. 51 3,716,485.22 3,820,932.50 75,385.37 1,165,254.29
II. Operating profit/ (loss) 9,858,466,406.54 963,969,158.47 2,778,499,948.96 1,010,033,856.74
Add: Non-operating income V. 52 6,554,194.97 2,854,654.64 1,999,362.24 397,904.00
Less: Non-operating expenses V. 53 65,521,293.40 37,535,685.19 2,546,940.80 282,294.54
III. Profit/ (loss) before tax 9,799,499,308.11 929,288,127.92 2,777,952,370.40 1,010,149,466.20
Less: Income tax expense V. 54 1,472,968,221.53 127,234,504.95 366,809,564.93 18,461,559.09
IV. Net profit / (loss) 8,326,531,086.58 802,053,622.97 2,411,142,805.47 991,687,907.11
(1) Categorized by operation continuity:
Including: Net profit/ (loss) from continuing operations 8,326,531,086.58 802,053,622.97 2,411,142,805.47 991,687,907.11
Net profit/ (loss) from discontinuing operations
(2) Categorized by ownership:
Including: Net profit/ (loss) attributable to shareholders of the Company 7,014,335,009.45 1,786,452,832.06
Net profit/ (loss) attributable to non-controlling interests 1,312,196,077.13 624,689,973.41
V. Other comprehensive income, net of tax -9,644,034.23 -9,644,034.23 247,100,524.21 247,100,524.21
Other comprehensive income, net of tax, attributable to shareholders of
-9,644,034.23 -9,644,034.23 247,100,524.21 247,100,524.21
the company
(1) Other comprehensive income that will not be reclassified to profit or
-9,644,034.23 -9,644,034.23 247,100,524.21 247,100,524.21
loss
Changes in fair value of other equity instrument investments -9,644,034.23 -9,644,034.23 247,100,524.21 247,100,524.21
(2) Other comprehensive income to be reclassified to profit or loss
Other comprehensive income, net of tax, attributable to non-controlling interests
VI. Total comprehensive income 8,316,887,052.35 792,409,588.74 2,658,243,329.68 1,238,788,431.32
Total comprehensive income attributable to shareholders of the company 7,004,690,975.22 2,033,553,356.27
Total comprehensive income attributable to non-controlling interests 1,312,196,077.13 624,689,973.41
VII. Earnings per share
(1) Basic earnings per share 1.1291 0.3377
(2) Diluted earnings per share
－92－
Beijing Shougang Co. Ltd
Notes to the Financial Statements
FY21 (Unit: RMB, unless otherwise specified)
Consolidated and Parent Company Statement of Cash Flows
Beijing Shougang Co., Ltd. for the year ended 31 December 2021
Unit: RMB Yuan
2021 2020
Items Note
Consolidated Company Consolidated Company
I. Cash flows from operating activities
Cash receipts from the sale of goods and the rendering of services 78,204,394,163.17 18,990,463,340.31 45,987,505,850.26 14,409,246,784.43
Tax refunds received 63,091,299.47 90,640,776.86 14,213,134.10
Cash received relating to other operating activities V. 55 63,336,125.82 144,818,152.82 132,165,552.87 152,964,143.22
Sub-total of cash inflows 78,330,821,588.46 19,135,281,493.13 46,210,312,179.99 14,576,424,061.75
Cash paid for purchase of goods and services 52,461,118,824.55 14,112,964,782.20 29,466,850,532.83 9,739,289,081.03
Cash paid to and on behalf of employee 4,519,419,087.34 1,427,492,943.58 3,528,273,379.46 1,094,840,587.78
Cash paid for taxes 5,453,721,028.53 1,168,681,864.76 2,333,221,933.94 866,247,125.28
Cash paid relating to other operating activities V. 55 852,835,390.28 382,575,353.81 607,287,537.57 241,961,081.41
Sub-total of cash outflows 63,287,094,330.70 17,091,714,944.35 35,935,633,383.80 11,942,337,875.50
Net cash flows from operating activities 15,043,727,257.76 2,043,566,548.78 10,274,678,796.19 2,634,086,186.25
II. Cash flows from investing activities
Cash received from disposal of investments 212,000,000.00 2,700,000,000.00 500,000,000.00
Cash received from investment income 210,139,106.61 814,127,544.38 362,658,569.01 433,865,503.86
Net proceeds from disposal of property, plant and equipment, intangible assets and other
46,031,802.86 39,106,972.93 339,801.76 180,825.40
long-term assets
Cash received from disposal of subsidiaries and other business units
Cash received relating to other investing activities V. 55 130,931,269.04 31,252,743.28 433,380,246.29 47,624,492.20
Sub-total of cash inflows 599,102,178.51 3,584,487,260.59 796,378,617.06 981,670,821.46
Purchase of property, plant and equipment, intangible assets and other non-current assets 3,015,839,391.12 1,330,119,313.91 3,032,549,847.59 733,618,776.68
Cash paid for investments 113,658,286.00 306,616,735.00 16,145,000.00 315,000,000.00
Net cash paid for acquisition of a subsidiary and other operating units 512,933,652.83 521,656,810.78
Cash paid relating to other investing activities V. 55 300,000,000.00
Sub-total of cash outflows 3,429,497,677.12 1,636,736,048.91 3,561,628,500.42 1,570,275,587.46
Net cash flows from investing activities -2,830,395,498.61 1,947,751,211.68 -2,765,249,883.36 -588,604,766.00
III. Cash flows from financing activities
Cash received from investment 3,003,858,828.08 1,023,858,828.08 100,000,000.00
Including: Cash receipts from capital contributions from non-controlling interests of
subsidiaries
Proceeds from borrowings 28,850,188,126.09 13,447,283,452.18 35,570,540,000.00 12,589,030,000.00
Proceeds from issuing bonds 2,000,000,000.00 2,000,000,000.00 3,000,000,000.00 3,000,000,000.00
Cash receipts relating to other financing activities V. 55 148,638,840.00 148,638,840.00
Sub-total of cash inflows 33,854,046,954.17 16,471,142,280.26 38,819,178,840.00 15,737,668,840.00
Repayments for debts 38,534,214,910.91 18,072,850,237.00 42,806,970,000.00 16,857,920,000.00
Cash payments for distribution of dividends or profit and interest expenses 2,993,123,739.13 1,306,654,103.09 2,654,054,934.85 783,654,392.12
Including: Dividends or profits paid to non-controlling shareholders of subsidiaries
Cash payments relating to other financing activities V. 55 964,082,606.56 946,843,330.04 311,182,295.82 1,009,464,211.36
Sub-total of cash outflows 42,491,421,256.60 20,326,347,670.13 45,772,207,230.67 18,651,038,603.48
Net cash flows from financing activities -8,637,374,302.43 -3,855,205,389.87 -6,953,028,390.67 -2,913,369,763.48
IV. Effect of exchange rate changes on cash and cash equivalents
V. Net increase in cash and cash equivalents 3,575,957,456.72 136,112,370.59 556,400,522.16 -867,888,343.23
Add: Cash and cash equivalents as at the beginning of year 4,959,913,916.36 886,754,170.41 4,403,513,394.20 1,754,642,513.64
VI. Cash and cash equivalent as at the end of year 8,535,871,373.08 1,022,866,541.00 4,959,913,916.36 886,754,170.41
－93－
Beijing Shougang Co. Ltd
Notes to the Financial Statements
FY21 (Unit: RMB, unless otherwise specified)
Consolidated Statement of Changes in Equity
Beijing Shougang Co., Ltd. for the year ended 31 December 2021
Unit: RMB Yuan
Item 2021
Equity attributable to shareholders of the parent
Total
Non-controlling shareholders’
Other interests
Capital Less: treasury Special Surplus Retained equity
Share capital comprehensive
reserve shares reserve reserve earnings
income
I. Balance at the end of previous 5,289,389,600.00 19,759,259,120.40 195,210,244.82 21,577,537.20 1,828,677,846.37 1,865,280,919.23 9,871,784,638.95 38,831,179,906.97
year
Add:Changes in accounting
policies
Corrections of prior period
errors
Business combination under
common control
Others
II. Balance at the beginning of 5,289,389,600.00 19,759,259,120.40 195,210,244.82 21,577,537.20 1,828,677,846.37 1,865,280,919.23 9,871,784,638.95 38,831,179,906.97
the year
III. Increase/(decrease) during 1,460,935,810.00 5,165,228,124.69 210,930,850.00 -9,644,034.23 -523,165.42 80,205,362.30 6,265,587,286.15 -2,405,678,945.60 10,345,179,587.89
the period
(1)Total comprehensive -9,644,034.23 7,014,335,009.45 1,312,196,077.13 8,316,887,052.35
income
(2)Shareholders' contributions 1,460,935,810.00 5,166,680,399.10 210,930,850.00 -3,705,283,879.20 2,711,401,479.90
and reduction
(i) Shareholders’ 1,396,034,010.00 5,014,753,738.73 -5,618,843,879.35 791,943,869.38
contributions in ordinary share
(ii) Amount of share-based 64,901,800.00 151,926,660.37 210,930,850.00 5,897,610.37
payments recognized in equity
(iii) Others 1,913,560,000.15 1,913,560,000.15
(3) Profit distribution 80,205,362.30 -748,747,723.30 -668,542,361.00
(i) Transfer to surplus reserve 80,205,362.30 -80,205,362.30
(ii) Distribution to -668,542,361.00 -668,542,361.00
shareholders
(iii) Others
(4) Transfer within equity
(i) Capital reserves converted
to share capital
(ii) Surplus reserves
converted to share capital
(iii) Loss made up by surplus
reserves
(iv) Other comprehensive
income transferred to retained
earnings
(v) Others
(5)Special reserve -1,452,274.41 -523,165.42 -12,591,143.53 -14,566,583.36
(i) Additions -1,452,274.41 -523,165.42 -12,591,143.53 -14,566,583.36
(ii) Utilisation
(6) Others
IV. Balance at the end of theyear 6,750,325,410.00 24,924,487,245.09 210,930,850.00 185,566,210.59 21,054,371.78 1,908,883,208.67 8,130,868,205.38 7,466,105,693.35 49,176,359,494.86
－94－
Beijing Shougang Co. Ltd
Notes to the Financial Statements
FY21 (Unit: RMB, unless otherwise specified)
Consolidated Statement of Changes in Equity
Beijing Shougang Co., Ltd. for the year ended 31 December 2021
Unit: RMB Yuan
Item 2020
Equity attributable to shareholders of the parent
Total
Non-controlling shareholders’
Other interests
Capital Less: treasury Special Surplus Retained equity
Share capital comprehensive
reserve shares reserve reserve earnings
income
I. Balance at the end of previous 5,289,389,600.00 20,074,865,467.56 1,952,319,928.42 15,749,165.64 1,729,509,055.66 -2,179,897,484.27 13,284,798,671.53 40,166,734,404.54
year
Add:Changes in accounting
policies
Corrections of prior period
errors
Business combination under
common control
Others
II. Balance at the beginning of 5,289,389,600.00 20,074,865,467.56 1,952,319,928.42 15,749,165.64 1,729,509,055.66 -2,179,897,484.27 13,284,798,671.53 40,166,734,404.54
the year
III. Increase/(decrease) during -315,606,347.16 -1,757,109,683.60 5,828,371.56 99,168,790.71 4,045,178,403.50 -3,413,014,032.58 -1,335,554,497.57
the period
(1)Total comprehensive 247,100,524.21 1,786,452,832.06 624,689,973.41 2,658,243,329.68
income
(2)Shareholders' contributions -285,762,662.22 -4,038,902,019.61 -4,324,664,681.83
and reduction
(i) Shareholders’
contributions in ordinary share
(ii) Amount of share-based
payments recognized in equity
(iii) Others -285,762,662.22 -4,038,902,019.61 -4,324,664,681.83
(3) Profit distribution 99,168,790.71 -99,168,790.71
(i) Transfer to surplus reserve 99,168,790.71 -99,168,790.71
(ii) Distribution to
shareholders
(iii) Others
(4) Transfer within equity -2,004,210,207.81 2,357,894,362.15 353,684,154.34
(i) Capital reserves converted
to share capital
(ii) Surplus reserves
converted to share capital
(iii) Loss made up by surplus
reserves
(iv) Other comprehensive
income transferred to retained -2,004,210,207.81 2,357,894,362.15 353,684,154.34
earnings
(v) Others
(5) Special reserve 1,979,013.15 5,828,371.56 1,198,013.62 9,005,398.33
(i) Additions 1,979,013.15 5,828,371.56 1,198,013.62 9,005,398.33
(ii) Utilisation
(6) Others -31,822,698.09 -31,822,698.09
IV. Balance at the end of theyear 5,289,389,600.00 19,759,259,120.40 195,210,244.82 21,577,537.20 1,828,677,846.37 1,865,280,919.23 9,871,784,638.95 38,831,179,906.97
－95－
Beijing Shougang Co. Ltd
Notes to the Financial Statements
FY21 (Unit: RMB, unless otherwise specified)
Parent Company Statement of Changes in Shareholders’ Equity
Beijing Shougang Co., Ltd. for the year ended 31 December 2021
Unit: RMB Yuan
2021
Item
Other Total shareholders’
Less: treasury Retained
Share capital Capital reserve comprehensive Special reserve Surplus reserve
shares earnings equity
income
I. Balance at the end of previous year 5,289,389,600.00 12,129,563,493.89 195,210,244.82 1,828,677,846.37 8,856,123,340.12 28,298,964,525.20
Add:Changes in accounting policies
Corrections of prior period errors
Others
II. Balance at the beginning of the year 5,289,389,600.00 12,129,563,493.89 195,210,244.82 1,828,677,846.37 8,856,123,340.12 28,298,964,525.20
III. Increase/(decrease) during the period 1,460,935,810.00 5,120,920,054.71 210,930,850.00 -9,644,034.23 80,205,362.30 53,305,899.67 6,494,792,242.45
(1) Total comprehensive income -9,644,034.23 802,053,622.97 792,409,588.74
(2) Shareholders' contributions and 1,460,935,810.00 5,120,920,054.71 210,930,850.00 6,370,925,014.71
reduction
(i) Shareholders’ contributions in ordinary 1,396,034,010.00 5,113,754,895.99 6,509,788,905.99
share
(ii) Amount of share-based payments 64,901,800.00 7,165,158.72 210,930,850.00 -138,863,891.28
recognized in equity
(iii) Others
(3) Profit distribution 80,205,362.30 -748,747,723.30 -668,542,361.00
(i) Transfer to surplus reserve 80,205,362.30 -80,205,362.30
(ii) Distribution to shareholders -668,542,361.00 -668,542,361.00
(iii) Others
(4) Transfer within equity
(i) Capital reserves converted to share
capital
(ii) Surplus reserves converted to share
capital
(iii) Loss made up by surplus reserves
(iv) Other comprehensive income
transferred to retained earnings
(v) Others
(5) Special reserve
(i) Additions
(ii) Utilisation
(6) Others
IV. Balance at the end of theyear 6,750,325,410.00 17,250,483,548.60 210,930,850.00 185,566,210.59 1,908,883,208.67 8,909,429,239.79 34,793,756,767.65
－96－
Beijing Shougang Co. Ltd
Notes to the Financial Statements
FY21 (Unit: RMB, unless otherwise specified)
Parent Company Statement of Changes in Shareholders’ Equity
Beijing Shougang Co., Ltd. for the year ended 31 December 2021
Unit: RMB Yuan
2020
Item
Other Total shareholders’
Less:treasury Retained
Share capital Capital reserve comprehensive Special reserve Surplus reserve
shares earnings equity
income
I. Balance at the end of previous year 5,289,389,600.00 12,415,326,156.11 1,952,319,928.42 1,729,509,055.66 5,605,709,861.57 26,992,254,601.76
Add:Changes in accounting policies
Corrections of prior period errors
Others
II. Balance at the beginning of the year 5,289,389,600.00 12,415,326,156.11 1,952,319,928.42 1,729,509,055.66 5,605,709,861.57 26,992,254,601.76
III. Increase/(decrease) during the period -285,762,662.22 -1,757,109,683.60 99,168,790.71 3,250,413,478.55 1,306,709,923.44
(1) Total comprehensive income 247,100,524.21 991,687,907.11 1,238,788,431.32
(2) Shareholders' contributions and -285,762,662.22 -285,762,662.22
reduction
(i) Shareholders’ contributions in ordinary
share
(ii) Amount of share-based payments
recognized in equity
(iii) Others -285,762,662.22 -285,762,662.22
(3) Profit distribution 99,168,790.71 -99,168,790.71
(i) Transfer to surplus reserve 99,168,790.71 -99,168,790.71
(ii) Distribution to shareholders
(iii) Others
(4) Transfer within equity -2,004,210,207.81 2,357,894,362.15 353,684,154.34
(i) Capital reserves converted to share
capital
(ii) Surplus reserves converted to share
capital
(iii) Loss made up by surplus reserves
(iv) Other comprehensive income -2,004,210,207.81 2,357,894,362.15 353,684,154.34
transferred to retained earnings
(v) Others
(5) Special reserve
(i) Additions
(ii) Utilisation
(6) Others
IV. Balance at the end of the year 5,289,389,600.00 12,129,563,493.89 195,210,244.82 1,828,677,846.37 8,856,123,340.12 28,298,964,525.20
－97－
Beijing Shougang Co. Ltd
Notes to the Financial Statements
FY21 (Unit: RMB, unless otherwise specified)
Notes to the Financial Statements
I. General Informantion of the Company
1. Company profile
Beijing Shougang Company Limited (hereinafter referred to as the Company) is a joint stock
limited company established by means of raising, which is approved by Beijing Municipal People's
Government Jingzhenghan [1998] No. 34 and exclusively initiated by Shougang Group Co., Ltd.
With the approval of zjxz [1999] No. 91 document issued by China Securities Regulatory
Commission, the Company was the first to issue 350,000.00 thousand ordinary shares (A shares) to
the public in Shenzhen Stock Exchange from 21 to 27 September, 1999 by the combination of legal
person placement and online issuance, with par value of RMB 1 per share and issue price of RMB
5.15 per share, with the stock code of 000959. The Company registered with approval of Beijing
Administration for Industry and Commerce on 15 October, 1999. The Company holds the business
license with unified social credit code of 1100001028663 (1-1), with the registered capital of RMB
2,310,000,000.00.
The Company issued the convertible corporate bonds worthed RMB 2,000,000 thousand on 16
December, 2003 upon the approval of zjfxz [2003] No. 107 document issued by China Securities
Regulatory Commission. On 31 December, 2003, the convertible bond was listed and traded in
Shenzhen Stock Exchange. The bond is abbreviated as “Shougang Convertible Bond” with the bond
code of “125959”. The convertible bonds were converted into shares since June 16, 2004, and met
the redemption conditions until 26 February 2007. Accordingly, the board of directors of the
company issued the redemption announcement. As of 6 April, 2007, the date of convertible bond
redemption, the total amount of Shougang convertible bonds was RMB1,950,217,500.00, which
was converted into the Company's shares, with an accumulated increase of RMB 656,526,057.00 in
share capital. The Company obtained a new business license of legal entity on November 20, 2008,
with the registration number 110000000286633 (1-1), and the registered capital changed to RMB
2,966,526,057.00.
On 16 January, 2013, the Company's material assets reorganization was reviewed by the
reorganization committee of CSRC and passed unconditionally. On 29 January, 2014, China
Securities Regulatory Commission issued “Reply on approving material assets reorganization of
Beijing Shougang Co., Ltd. and shares issuance to Shougang Group to purchase assets”. As of 25
April, 2014, the implementation of material assets reorganization of the Company has been
completed. In the material assets reorganization, the private placement to Shougang Group was
2,322,863,543 shares, with par value of RMB 1 each and issue price of RMB 4.29 each. The
Company obtained the new business license of legal entity after capital increment on 9 July, 2014,
with the registration number of 110000000286633, and the registered capital changed to RMB
5,289,389,600.
On 21 April 2021, the event of "Share Issuing to Beijing Jingtou Investment Holding Co., Ltd. etc.
for Assets Purchase and Fundraising" has been approved by the CSRC (CSRC Permit No. [2021]
1400). According to the approval, the Company issued 1,234,898,985.00 shares to Beijing Jingtou
Investment Holding Co., Ltd. and Beijing Jing Guorui Soe Reform and Development Fund(L.P.) for
acquiring 19.1823% shares of Shougang Jingtang United Iron & Steel Co., Ltd. (hereinafter referred
to as the Company Jingtang Co. or Jingtang Base) on 23 April 2021. On 17 June 2021, the
Company issued 161,135,025 shares to 8 investors at the price of RMB 5.11 per share, and RMB
823,399,977.75 were collected. After this issuing, the registered capital of the Company is RMB
－98－
Beijing Shougang Co. Ltd
Notes to the Financial Statements
FY21 (Unit: RMB, unless otherwise specified)
6,685,423,610.00.
On 9 December 2021, by the approval of 2021 First Extraordinary General Meeting and State
Owned Assets Supervision and Administration Commission (hereinafter referred to as “SASAC”),
the Company has completed the 2021 restricted stock incentive plan. There were 64,901,800.00
shares issued to 386 directors, senior management, key technicians and management backbone with
the issue price of RMB 3.25 per share. Aftere this offering, the registered capital of the Company
changes to RMB 6,750,325,410.00.
The Company obtained the new business license of legal entity on 22 December, 2016 after the
integration of five certificates, with the unified social credit code 911100007002343182.
The statutory address is Shijingshan Road, Shijingshan District, Beijing.
The Company has established the corporate governance structure of the general meeting of
shareholders, the board of directors and the board of supervisors. At present, the Company sets up
serval functional departments, for instance, secretary office of the board of directors, the planning
and financing department, the manufacturing department, the marketing center, the purchasing
center, the human resources department, the equipment department, the energy department, the
environmental protection department, the quality inspection department, the office, etc, as well as
the subordinate factories such as Shougang Qian'an Iron&Steel Co., Ltd. and auxiliary production
department, like the technical center. The Company, together with its six subsidiaries, which are
Shougang Jingtang United Iron&Steel Co., Ltd., Beijing Shougang Cold Rolling Co., Ltd., Qian'an
Shougang Metallurgical Technology Co., Ltd., Shougang Zhixin Qian'an Electromagnetic Materials
Co., Ltd., Beijing Shougang New Energy Automobile Material Technology Co., Ltd., and Beijing
Shougang Steel Trade Investment Management Co., Ltd., is principally engaged in the manufacture
and sale of iron and steel products and related by-products.
The business scope of the Company includes iron and steel smelting, steel calendering processing,
copper smelting and calendering processing and sales; manufacturing and sales of sinter, coke and
chemical products; blast furnace residual pressure power generation and production and sales of gas;
processing and sales of industrial waste; sales of metal materials, coke, chemical products,
mechanical and electrical equipment, building materials, general equipment, hardware, furniture
and decorative materials; equipment leasing (excluding automobiles); telecommunications services;
insurance agency services; insurance broker services; loading, unloading and handling services;
software delevopment; advertising design and agency; warehousing services; technology
development, technical consultation, technology transfer, technical service and technical training;
investment and investment management.
The financial statements and notes were approved by the seventh meeting of the thirteenth Board of
Directors on 27 April 2022.
2. Scope of consolidated financial statements
The scope of the consolidated financial statements is determined on the control basic, the scope
includes six subsidiaries, which are Shougang Jingtang United Iron&Steel Co., Ltd., Beijing
Shougang Cold Rolling Co., Ltd., Qian'an Shougang Metallurgical Technology Co., Ltd., Shougang
Zhixin Qian'an Electromagnetic Materials Co., Ltd., Beijing Shougang New Energy Automobile
Material Technology Co., Ltd., and Beijing Shougang Steel Trade Investment Management Co.,
Ltd.
The details refer to Note VI Change of consolidation scope and Note VII Interests in other entities.
－99－
Beijing Shougang Co. Ltd
Notes to the Financial Statements
FY21 (Unit: RMB, unless otherwise specified)
II. Basis of preparation
The financial statements are prepared in accordance with the latest “China Accounting Standards
for Business Enterprises” and other issued application guidance, interpretations and other related
regulations (collectively known as the “CASBE”) issued by the Ministry of Finance of the PRC
(MOF). Additionally, the Company discloses relevant financial information in accordance with
requirements in the “Preparation Convention of Information Disclosure by Companies Offering
Securities to the Public No.15—General Rules on Financial Reporting” (2014 revised) issued by the
China Securities Regulatory Commission.
The financial statements are prepared on a going concern basis.
The Company adopts the accrual basis of accounting. The financial statements have been prepared
under the historical cost convention, except for certain financial instruments. If the assets are
impaired, corresponding provisions for impairment shall be made in accordance with related
regulations.
III. Significant accounting policies and estimates
The Company has determined the accounting policies and accounting estimates based on the
characteristics of the operation, especially those related to depreciation of fixed assets, amortization
of intangible assets, capitalization conditions of R&D expenses and revenue recognition policies,
the detailed accounting policies refer to Note III, 14, Note III, 18, Note III, 19 and Note III, 25.
1. Statement of compliance with the CAS
The financial statements have been prepared in accordance with CAS, and present truly and
completely the financial position of the consolidated and the Company as at 31 December 2021,
and the financial performance and cash flows for the year ended 31 December 2021.
2. Accounting period
The accounting year of the Company is from 1 January to 31 Decemeber of each calendar year.
3. Operating cycle
The operating cycle of the Company is 12 months.
4. Functional currency
The Company and domestic subsidiaries use Renminbi (“RMB”) as their functional currency.
The financial statements of the Company have been prepared in RMB.
5. Accounting treatments for business combination involving entities under common control and
business combination involving entities not under common control.
(1) Business combination involving entities under common control
For the business combination involving entities under common control, the assets and liabilities that
are obtained in the business combination shall be measured at their original carrying amounts at the
combination date as recorded by the party being combined, except for the adjustments of different
accounting policies. The difference between the carrying amount of the net assets obtained and the
carrying amount of consideration paid for the combination shall be adjusted to capital reserve
－100－
Beijing Shougang Co. Ltd
Notes to the Financial Statements
FY21 (Unit: RMB, unless otherwise specified)
(equity premium), if the capital reserve (equity premium) is not sufficient to absorb the difference,
any excess shall be adjusted to retained earnings.
Business combinations involving entities under common control through multiple transactions to
achieve in stages
In the separate financial statements, the initial investment cost is calculated based on the
shareholding portion of net assets of the consolidated party in the carrying amount of the ultimate
controlling party’s consolidated financial statement at the acquisition date. The difference between
the initial investment cost and the sum of the carrying amount of the original investment cost and
the carrying amount of consideration paid for the combination is adjusted to the capital reserve
(equity premium), if the capital reserve is not sufficient to absorb the difference, the excess shall be
adjusted to retained earning.
In the consolidated financial statements, the assets and liabilities obtained at the combination shall
be measured at the carrying value as recorded by the ultimate controlling party at the acquisition
date, except for adjustments of different accounting policies. The difference between the sum of the
carrying value from original shareholding portion and the new consideration incurred at the
acquisition date and the carrying value of net assets obtained at acquisition date shall be adjusted to
capital reserve (equity premium), if the balance of capital reserve is not sufficient to absorb the
differences, any excess is adjusted to retained earnings. The long-term investment held by
combining party before acquisition of control, the profit or loss,comprehensive income and other
change of shareholder’s equity recongnized at the closer date of the acquisition date and
combination date under common control shall separately offset the opening balance of retained
earnings and profit or loss during comparative statements.
(2) Business combinations involving entities not under common control
For business combinations involving entities not under common control, the consideration costs
include acquisition-date fair value of assets transferred, liabilities incurred or assumed and equity
securities issued by the acquirer in exchange for control of the acquiree. The acquirer shall
recognize the acquiree’s identifiable asset, liabilities and contingent liabilities that satisfy the
recognition criteria at their fair values at the date of acquisition.
The excess of combination costs and the acquirer’s interest in the fair value of the acquiree’s
identifiable net assets is recognized as goodwill, which is measured at cost less any accumulated
impairment losses subsequently. If the acquirer’s interest in the net fair value of the acquiree’s
identifiable net assets exceeds the combination costs, the acquirer shall reassess the measurement
and recognize any excess remaining in profit or loss after reassessment.
Business combinations involving entities not under common control through multiple transactions
to achieve in stages
In the separate financial statements, the initial investment cost is the sum of the carrying amount of
the equity investment held by the entity prior to the acquisition date and the additional investment
cost at the acquisition date. The disposal accounting policy of other comprehensive income related
with equity investment prior to the purchase date recognized under equity method shall be
compliance with the method when the acquire disposes the related assets or liabilities.
Shareholder’s equity due to the changes of other shareholder’s equity other than the changes of net
profit, other comprehensive income and profit distribution shall be transferred to profit or lose for
current period when disposed. If the equity investment held by the entity prior to the acquisition
date is measured at fair value, the cumulative change in fair value recognized in other
－101－
Beijing Shougang Co. Ltd
Notes to the Financial Statements
FY21 (Unit: RMB, unless otherwise specified)
comprehensive income shall be transferred to retained earnings for current period under cost
accounting method.
In the consolidated financial statements, the combination cost is the sum of consideration paid at
acquisition date and fair value of the acquiree’s equity held prior to acquisition date; the equity of
the acquiree held prior to acquisition date shall be re-measured at the fair value at acquisition date,
the difference between the fair value and book value shall be recognized as profit or loss for the
current period. Other comprehensive income and changes of other shareholder’s equity related with
acquiree’s equity held prior to acquisition date shall be transferred to profit or loss for current
period at acquisition date, besides the other comprehensive income incurred by the changes of net
assets or net liabilities due to the re-measurement of defined benefit plan.
(3) Transaction costs for business combination
The overheads for the business combination, including the expenses of audit, legal services,
valuation advisory, and other related administrative expenses, are recorded in profit or loss for the
current period when expenditure incurred. The transaction costs of equity or debt securities issued
as the considerations of business combination are included in the initial recognition amount of the
equity or debt securities.
6. Consolidated financial statements
(1) Scope of consolidated financial statements
The scope of consolidated financial statements is determined on the control basis. Control exists
when the Company has power over the investee, rights to variable returns from involvement with
related activities of investee and has the ability to affect its returns through its power over the
investee. A subsidiary is an entity that is controlled by the Company (including separable parts of an
enterprise or investee and structured entities controlled by the Company, etc).
(2) Method of preparing consolidated financial statements
The consolidated financial statements are based on the financial statements of the Company and its
subsidiaries, and are prepared by the Company in accordance with other relevant information. In
preparing the consolidated financial statements, the Company and its subsidiaries are required to
apply consistent accounting policy and accounting period, intra-group transactions and balances
shall be offset.
The subsidiary acquired through a business combination involving entities under common control
in the reporting period shall be included in the scope of the consolidation from the beginning of the
combination date, the subsidiary’s income, expenses and profits should be included in the
consolidated results of operations and cash flows from the acquisition date respectively.
The subsidiary acquired through a business combination involving entities not under common
control in the reporting period, the subsidiary’s income, expenses and profits are included in the
consolidated results of operations, and cash flows are included in the consolidated cash flow
statement from the acquisition date to the end of the reporting date.
The portion of the subsidiary’s equity that is not attributable to the Company is treated as
－102－
Beijing Shougang Co. Ltd
Notes to the Financial Statements
FY21 (Unit: RMB, unless otherwise specified)
non-controlling interests and separately presented in the consolidated balance sheet within
shareholders’ equity. The portion of a subsidiary’s profit or loss that is attributable to
non-controlling interests presented in the consolidated income statement of net profit or loss as “net
profit attributable to non-controlling interests”. Where the amout of losses of a subsidiary
attributable to the non-controlling shareholders in the current period exceeds their share of the
opening balance of owner’s equity of the subsidiary, the excess shall offset non-controlling
interests.
(3) Purchase of the minority equity in the subsidiary
The difference between the long-term equity investments costs acquired by the purchase of minority
equity and the share of the net assets that the subsidiaries have to continue to calculate from the date
of purchase or the date of consolidation in proportion to the new shareholding ratio is adjusted to
the capital reserve (equity premium), if the capital reserve is not sufficient, any excess is adjusted to
retained earning. The difference between disposal of partial equity investment without losing
control over its subsidiary and the disposal of long-term equity investment corresponding to the
share of the net assets of the subsidiaries from the date of purchase or the date of consolidation is as
well.
(4) Loss of control of subsidiaries
If the control right is lost due to disposal of partial equity investment or other reasons, the
remaining equity shall be re-measured according to its fair value on the date of losing control. The
difference between the summary of consideration obtained from the disposal of the equity and the
fair value of the remaining equity, less the difference between the share of the original assets and
the share of the net assets that have been continuously calculated from the date of purchase from the
date of the original shareholding, is included in the current period profit or loss and; if there is a
goodwill for the subsidiary, the amount of the goodwill also shall be deducted.
The other comprehensive income related to the original subsidiary’s equity investment shall be
transferred to current period profit and loss when control is lost, except for the other comprehensive
income arising from the movement of net liabilities or assets investee’s re-measurement of defined
benefit plan.
(5) Treatment of step disposal until the loss of control of subsidiaries
By stepping through multiple transactions to dispose of the equity investment in the subsidiary until
it loses control, if the clauses, conditions and economic impacts of the transaction satisfy one or
more of the following criteria, the Company will considerthe transactions as a package transaction
for the accounting treatment:
①The transactionsare entered simultaneously or in consideration of the mutual influence;
②Only the transactions as a whole can achieve one complete business outcome;
③The occurrence of a transaction is depending on the occurance of at least one of other
transactions;
④The transaction alone is not economical, however, it becomes economical to consider the other
transactions together.
In the separate financial statements, by stepping through multiple transactions to dispose of the
－103－
Beijing Shougang Co. Ltd
Notes to the Financial Statements
FY21 (Unit: RMB, unless otherwise specified)
equity investment in the subsidiary until it loses control, when it is not a package transaction,
carrying forward the book value of each disposal of equity relative to the corresponding long-term
equity investment, and the difference between the considerations and the book value of the disposal
of long-term equity investment is recognized in the current period investment income or loss. When
it is a package transaction, the price difference between the disposal price and the disposal
investment before the loss of control is recognized as other comprehensive income in the
consolidated financial statements, and is transferred to the current period profit or loss of control
when the control is lost。
In the consolidated financial statements, the measurement of the remaining equity and treatment of
the loss of disposal is in accordance to “Treatment of loss of control of subsidiaries” as described
above. The difference between the disposal consideration and the related share of net assets of the
subsidiaries, which has been continuously calculated since the purchase date corresponding to the
equity disposal should be treated as follows:
①When it is a package transaction, the difference shall be recognized as the other comprehensive
income and transferred to the current period profit or loss of control when the control is lost
②When it is not a package transaction, the difference shall be recorded to capital reserve (share
premium) as equity transaction and could not be transferred to the current period profit or loss of
control when the control is lost.
7. Joint arrangement and joint operations
Joint arrangement refers to an arrangement under the joint control of two or more entities. The joint
arrangement of the Company is classified as either a joint operation or a joint venture.
(1) Joint operation
Joint operation is a joint arrangement whereby the Company have rights to the assets, and
obligations for the liabilities, relating to the arrangement.
The Company recognizes the following items in relation to its interest in a joint operation in
accordance with CAS:
A. its solely-held assets, and its share of any assets held jointly;
B. its solely-assumed liabilities, and its share of any liabilities incurred jointly;
C. its revenue from the sale of its share of the output arising from the joint operation;
D. its share of the revenue from the sale of the output by the joint operation;
E. its solely-incurred expenses, and its share of any expenses incurred jointly.
(2) Joint venture
A joint venture is a type of joint arrangement whereby the Company that has joint control of the
arrangement has rights to the net assets of the joint venture.
The Company conducts accounting treatment for the investment of joint ventures in accordance
with the provisions of equity method accounting related to long-term equity investment.
－104－
Beijing Shougang Co. Ltd
Notes to the Financial Statements
FY21 (Unit: RMB, unless otherwise specified)
8. Cash and cash equivalents
Cash represents the cash on hand and deposits which are readily available for payment. Cash
equivalents represent the Company’s short-term highly liquid investments which are readily
convertible into known amounts of cash and subject to an insignificant risk of changes in value.
9. Financial instruments
A financial instrument is any contract that gives rise to a financial asset of one entity and a financial
liability or equity instrument of another entity.
(1) Recognition and derecognition of financial instruments
The Company recognises a financial asset or a financial liability when, and only when, it becomes a
party to the contractual provisions of the instrument.
A financial asset will be derecognized when it satisfies one or more of the following conditions:
① The contractual rights to receive cash flows from the financial asset expire;
② The financial asset has been transferred, and it satisfies the following conditions for
derecognition.
The financial liability (or part of it) is derecognized when its contractual rights (or part of it) expire.
If the Company (as a debtor) makes an agreement with the creditor to replace the current financial
liability with assuming a new financial liability, and contractual provisions are different in
substance, the current financial liability shall be derecognized and a new financial liability shall be
recognized.
All financial assets purchased or sold in regular way are recognised or derecognised on the trading
date when the Company commits to purchase or sell the asset.
(2) Classification and measurement of financial assets
The Company classifies its financial assets, based on the entity's business model for managing the
financial assets and the contractual cash flow characteristics of the financial assets, as financial
assets at amortized cost, financial assets at fair value through other comprehensive income and
financial assets at fair value through profit or loss.
Financial assets measured at amortized cost
The Company shall classify financial assets that meet the following conditions and are not
designated as financial assets at fair value through profit or loss as financial assets measured at
amortized cost:
The financial asset is held whose objective is to collect contractual cash flows;
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.
After initialrecognition, this type of financial asset using effective interest rate method to be
measured at amortized cost. The gain or loss generated by the financial assets measured at
amortized cost and not part of any hedging relationshipshall be accounted in the profit or loss for
－105－
Beijing Shougang Co. Ltd
Notes to the Financial Statements
FY21 (Unit: RMB, unless otherwise specified)
the year when the financial assets are derecognized, amortized by effective interest method or
recognized impairment.
Financial assets measured at fair value through other comprehensive income
The Company shall classify financial assets that meet the following conditions and are not
designated as financial assets at fair value through profit or loss as financial assets measured at fair
value through other comprehensive income:
The financial asset is held within a business model whose objective will be achieved by both
collecting contractual cash flows and trading financial assets;
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.
After initial recognition, the financial assets are subsequently measured at fair value. Interest,
impairment loss/gain and exchange loss/gain calculated by the effective interest rate method are
recognised in profit or loss, while other profit or loss shall be recognised in other comprehensive
income. When derecognized, the accumulated profit or loss previously recognised in other
comprehensive gains shall be transferred to current profit or loss.
Financial assets measured at fair value through profit or loss
In addition to the aboving financial assets which are measured at amortized cost or at fair value
through other comprehensive income, the Company classifies all other financial assets as financial
assets measured at fair value through profit or loss. In order to eliminate and significantly reduce
accounting mismatches, the Company irrevocably designates some financial assets that should be
measured at amortized cost or at fair value through other comprehensive income as financial assets
at fair value through profit or loss during the initial recognition.
After initial recognition, the financial assets are subsequently measured at fair value, and the profit
or loss (including interest and dividend income) generated shall be recognised in current profit or
loss, unless the financial assets are part of the hedging relationship.
The business model of managing financial assets refers to how the Company manages financial
assets to generate cash flow. The business model determines if the source of cash flow for financial
assets managed by the Company is collecting contract cash flow, selling financial assets or both of
them. The Company determines the business model of financial assets management on the basis of
objective facts and the specific business goals of financial assets management decided by key
managers.
The Company evaluates the characteristics of the contract cash flow of financial assets to determine
whether the contract cash flow generated by the relevant financial assets on a specific date is only to
pay principal and the interest, which is based on the amount of unpaid principal. Among them,
principal refers to the fair value of financial assets at initial recognition; interest includes the
consideration of time value of money, credit risk related to the unpaid principal in a specific period,
and other basic credit risks, costs and profits. Additionally, the Company evaluates the terms and
conditions of the contracts that may alter time distribution or amount of cash flow in financial asset
contracts to determine whether they satisfy the requirements of the aboving contract cash flow’s
characteristics.
Only when the Company changes its business model of managing financial assets, all the financial
－106－
Beijing Shougang Co. Ltd
Notes to the Financial Statements
FY21 (Unit: RMB, unless otherwise specified)
assets affected shall be reclassified on the first day of the first reporting period after the business
modelalteration, otherwise, financial assets shall not be reclassified after initial recognition.
A financial asset is measured at its fair value at initial recognition. For financial assets measured at
fair value thorugh profit or loss, the relevant transaction costs are charged to profit or loss; for other
financial assets, the relevant transaction costs are recognized as initial investment costs. For the
trade receivables arising from the sale of goods or services provided do not contain or take into
account significant financing components, the initial investment costs shall be the consideration,
which the Company is entitled to receive with the expectation.
(3) Classification and measurement of financial liabilities
The Company classifies its financial liabilities at initial recognition as financial liabilities measured
at fair value through profit or loss and financial liabilities at amortized cost. With respect to
financial liabilities not classified as at fair value through profit or loss, transactions costs are
charged to initial recognition cost.
Financial liabilities measured at fair value through profit or loss
Financial liabilities at fair value through profit or loss, including financial liabilities held for trading
and those are designated as at fair value through profit or loss at initial recognition. For these
financial liabilities, they are subsequently measured at fair value and gains or lossess from the
change of fair value and related dividend and interest expense are recognized in profit or loss for the
year.
Financial liabilities measured at amortized cost
Other financial liabilities are subsequently measured at amortized cost using the effective interest
method, the gains and losses arising from derecognition or amortization is recognised in profit or
loss for the year.
Distinction between financial liabilities and equity instruments
The financial liability is the liability that satisfies one of following cateria:
① Contractual obligation to deliver cash or other financial instruments to another entity.
② Under potential adverse conditions, contractual obligation to exchange financial assets or
financial liabilities with other entity.
③ The contract that will or may be settled in the entity’s own equity instruments and is a
non-derivative for which the entity is or may be obliged to deliver a variable number of the entity’s
own equity instruments.
④The derivative contract that will or may be settled in the entity’s own equity instruments other
than by the exchange of a fixed number of the entity’s own equity instruments for a fixed amount of
cash or other financial assets.
Equity instrument is the contract that evidences the residual equity in the assets of an entity after
deducting all of its liabilities.
If the Company cannot unconditionally avoid fulfilling a contractual obligation by delivering cash
or other financial assets, the contractual obligation satisfies the definition of financial liability.
－107－
Beijing Shougang Co. Ltd
Notes to the Financial Statements
FY21 (Unit: RMB, unless otherwise specified)
If the financial instrument must or could be settled by the Company’s own equity instrument, the
Company should consider whether the Company’s equity instrument as the settlement instrument is
a substitute of cash or other financial assets or the residual equity in the assets of an entity after
deducting all of its liabilities. If it is the former one, the financial instrument is the Company’s
financial liability; if it is the latter one, the tool is the equity instrument of the Company.
(4) Fair value of financial instruments
Recognization of fair value of financial assets and financial liabilities please refers to Note III, 10.
(5) Impairment of financial assets
The Company performs impairment assessment and recognizes loss allowance for the following
financial assets based on their expected credit losses.
Financial assets measured at amortized cost;
Debt investment and trade receivables measured at fair value through other comprehensive
income;
Contract assets as defined in Accounting Standards for Enterprises No.14- Revenues;
Lease receivables;
Financial guarantee contracts (expect for the contracts measured at fair value through profit or
loss, financial assets transformation not qualify for derecognition and continuing involvement
of transferred financial assets).
Measurement of expected credit loss
The expected credit loss refers to the weighted average of the credit loss of financial instruments
that are weighted by the risk of default. Credit loss refers to the difference between all contractual
cash flows receivable from the contracts and all cash flows expected to be received, that is, the
present value of all cash shortages.
The Company considers the reasonable and basis information about past events, current situation
and forecast of future economic situation, calculatesthe probability weighted amount of the present
value of the difference between the receivable cash flow of the contract and the expected cash flow
with the risk of default as the weight, and confirms the expected credit loss.
The Company separately measures the expected credit losses of financial instruments at different
stages. The credit risk on a financial instrument has not increased significantly since initial
recognition, which is in Stage I. The Company measures the loss provision in accordance with
expected credit losses for the next 12 months. If the credit risk of financial instruments has
increased significantly since the initial recognition, but no credit impairment has occurred, which is
in Stage II. The Company measures the loss provision in accordance with the expected credit losses
for the whole lifetime of the financial instrument. If the financial instrument has occurred credit
impairment since initial recognition, which is in Stage III, and the Company measures the loss
provision in accordance with the expected credit losses for the whole lifetime of the financial
instrument.
For the financial instruments with lower credit risk at the balance sheet date, the Company assumes
that their credit risk has not increased significantly since the initial recognition, and measures the
－108－
Beijing Shougang Co. Ltd
Notes to the Financial Statements
FY21 (Unit: RMB, unless otherwise specified)
loss provision in accordance with expected credit losses for the next 12 months.
The whole lifetime expected credit loss, refers to the expected credit loss caused by all possible
defaults during the whole expected lifetime. The 12-month expected credit losses, refer to the
expected credit loss caused by all possible defaults during the next 12 months after balance sheet
date (if the expected duration of financial instrument is less than 12 months, then for the expected
duration), which is part of the whole lifetime expected credit losses.
When measuring the expected credit loss, the maximum maturity period that the Company needs to
consider is the maximum contract maturity period (including the consideration of option of renewal)
the enterprise facing credit risk.
For financial instruments in Stage I, Stage II and with lower credit risk, the Company calculates
interest income on the basis of the book balances without deduction of impairment provisions and
with effective interest rates. For financial instruments in Stage III, the Company calculates interest
income on the basis of the book balances minus the impairment provision and with effective interest
rate.
Notes receivable and Accounts receivable
For notes receivable and accounts receivable, whether or not there are significant financing
elements, the Company always measures the loss provision in accordance with the whole lifetime
expected credit losses.
If the expected credit loss information of the the independent financial asset cannot be evaluated by
a reasonable cost, the Company divides and combines notes receivable and accounts receivable
according to the characteristics of credit risk. On the basis of the combination, the Company
calculates the expected credit losses. The basis of determining combination is as follows:
A. Notes receivable
Combination 1:Bank acceptances
Combination 2: Bank acceptances with lower credit rating and Commercial acceptances
B. Accounts receivable: Accounts of receivable-trade
Other receivables
According to the characteristics of credit risk, the Company divides other receivables into serval
combinations. On the basis of the combination, the Company calculates the expected credit losses.
The basis of determining the combination is as follows:
Other receivables Combination 1: Imprest anddeposit, etc.
Other receivables Combination 2: Other current account
For the other receivables combination, the Company calculates the expected credit losses through
the exposure on default and the next 12-month or the whole lifetime expected credit loss rate.
Debt investments and other debt investments
For debt investments and other debt investments, the Company calculates the expected credit losses
through the exposure on default and the next 12-month or the whole lifetime expected credit loss
－109－
Beijing Shougang Co. Ltd
Notes to the Financial Statements
FY21 (Unit: RMB, unless otherwise specified)
rate, according to the nature of the investment, the types of counterparty and risk exposure.
Assessment of Significant Increase in Credit Risk
By comparing the default risk of financial instruments on balance sheet date with the default risk on
initial recognition date, the Company determines the relative change of default risk of financial
instruments during the expected lifetime of financial instruments to evaluate whether the credit risk
of financial instruments has increased significantly since the initial recognition.
When determining whether credit risk has increased significantly since the initial recognition, the
Company considers reasonable and valid information, including forward-looking information,
which can be obtained without unnecessary additional costs or efforts. Information considered by
the Company includes:
The debtor cannot pay principal and interest on the expiration date of the contract;
Serious deterioration of external or internal credit ratings (if any) of financial instruments that
have occurred or are expected to occur;
Serious deterioration of the debtor’s operating results that have occurred or are expected to
occur;
Changes in the existing or anticipated technological, market, economic or legal environment
will have the significant negative impact on the debtor’s repayment capacity.
According to the nature of financial instruments, the Company evaluates whether credit risk has
increased significantly on the basis of an independent financial instrument or a combination of
financial instruments. When assessing on the basis of the combination of financial instruments, the
Company can classify financial instruments based on common credit risk characteristics, such as
overdue information and credit risk rating.
If the delay exceeds 30 days, the Company determines that the credit risk of financial instruments
has increased significantly.
Financial assets that have occured credit impairment
On the balance sheet date, the Company assesses whether credit impairment has occurred in
financial assets measured at amortized cost and debt investments measured at fair value through
other comprehensive income. When one or more events adversely affect the expected future cash
flow of the financial assets occur, the financial assets transfer to the financial assets with credit
impairment. Evidence of credit impairment of financial assets includes the following observable
information:
Issuer or debtor suffer from significant financial difficulties;
Debtor breaches any of the contractual stipulations, for example, fails to pay or delays the
payment of interests or the principal, etc.;
In consideration of economic situationand contract related to the financial difficulties of the
debtor, the Company grants concessions to the debtor that will not be made under any other
circumstances.
Debtor is probable to go bankrupt or undergo other financial restructuring.
－110－
Beijing Shougang Co. Ltd
Notes to the Financial Statements
FY21 (Unit: RMB, unless otherwise specified)
Financial difficulties of issuer or debtor lead to the disappearance of financial assets active
market.
Presentation of expected credit loss reserve
In order to reflect the changes happened to the credit risk of financial instruments since the initial
recognition, the Company recalculates the expected credit loss on each balance sheet date. The
increase or reversal of the loss provision resulting therefrom is recognised as an impairment loss or
gain in the current profit or loss.For financial assets measured at amortized cost, loss provision
offsets the carrying amount of the financial assets presentated on the balance sheet; for debt
investments measured at fair value through other comprehensive income, the Company recognizes
its loss provision through other comprehensive income and does not offset the financial assets’
carrying amount.
Write off
If the Company no longer reasonably expects that the financial assets contract cash flow can be
recovered fully or partially, the financial assets book balance will be reduced directly. Such
reduction constitutes derecognition of the financial assets. The situation usually occurswhen the
Company determines that the debtor has no assets or income to generate sufficient cash flows to
pay the amount to be reduced. However, in accordance with the Company’s procedures for
recovering due payment, the financial assets reduced may still be affected by enforcement activities.
If the reduced financial assets can be recovered later, the returns as impairment losses shall be
recorded in the profit or loss.
(6) Transfer of financial assets
Transfer of financial assets is the transfer or delivery of financial assets to another entity (the
transferee) other than the issuer of financial assets.
A financial asset is derecognised when the Company has transferred substantially all the risks and
rewards of the asset to the transferee. A financial asset is not derecognised when the Company
retains substantially all the risks and rewards of the financial asset.
When the Company has neither transferred nor retained substantially all the risks and rewards of the
financial asset, it either (i) derecognises the financial asset and recognises the assets and liabilities
created in the transfer when it has not retained control of the asset; or (ii) continues to recognise the
transferred asset to the extent of the Company’s continuing involvement, in which case, the
Company also recognises an associated liability.
(7) Offsetting of financial assets and financial liabilities
When the Company has currently enforceable legal rights to offset the recognized financial assets
and financial liabilities, and there is an intention to settle on a net basis or to realize the financial
assets and settle the financial liabilities, the financial assets and financial liabilities shall be
presented in balance sheet with the amount after offsets. Besides, the financial assets and financial
liabilities shall be presented separately in balance sheet and are not allowed to be offset.
10. Fair value measurement
Fair value is the price that would be received to sell an asset or paid to transfer a liability in an
orderly transaction between market participants at the measurement date.
－111－
Beijing Shougang Co. Ltd
Notes to the Financial Statements
FY21 (Unit: RMB, unless otherwise specified)
The Company measures related assets or liabilities at fair value and assumes that selling assets or
transferring liabilities in an orderly transaction in the principal market of related assets or liabilities;
in the absence of a principal market, the Company assumes the transaction in the most
advantageous market. Principal market (or the most advantageous market) is the market that the
Company can enter into on measurement date. The Company adopts the presumptions used by
market participants in achieving the maximum economic value of pricing the assets or liabilities.
For financial assets or financial liabilities in the active market, the Company uses the quoted price
in active market as their fair value. Otherwise, the Company uses valuation technique to determine
the fair value.
Fair value measurement of non-financial assets considers market participants’ ability to generate
economic benefits by using the assets in its highest and best use or by selling it to another market
participant that would use the asset in its highest and best use.
The Company adopts the valuation techniques that are appropriate under current circumstances and
for which sufficient data and other supporting information are available to measure fair value,
giving priority to the use of relevant observable inputs, and using unobservable inputs only if the
observable inputs are unavailable or not feasible to obtain.
All assets and liabilities for which fair value is measured or disclosed in the financial statements are
categorized within the fair value hierarchy, described as follows, based on the lowest level input
that is significant to the fair value measurement as a whole: Level 1 inputs are quoted (unadjusted)
market prices in active markets for identical assets or liabilities; Level 2 inputs are observable
inputs for related assets or liabilities, either directly or indirectly other than the inputs within Level
1; Level 3 inputs are unobservable inputs for related assets or liabilities.
For assets and liabilities that are recognized in the financial statements on a recurring basis, the
Company determines whether transfers have occurred between levels in the hierarchy by
reassessing categorization at the end of each reporting period.
11. Inventories
(1) Classification
Inventories of the Company include raw materials, finished goods, lower-valued consumables and
self-made semi-finished goods
(2) Mesurement method of cost of delivered inventories
Inventories are quoted at actual costs when acquired. Raw materials, finished goods and self-made
semi-finished goods are determined on the weighted average basis.
(3) Basis for determining the net realisable value and method for inventories provision
Net realisable value is the estimated selling price deducted by the estimated costs to completion, the
estimated selling expenses and related taxes. The net realisable value is measured on the basis of
obtained verified evidences and considerations for the purpose of holding inventories and the effect
of post balance sheet events.
At the end of each reporting period, if the cost is in excess of net realisable value, provision for
inventories is recognized in profit or loss. The Company usually recognizes provision according to
the independent inventory item. When the circumstances that previously caused inventories to be
－112－
Beijing Shougang Co. Ltd
Notes to the Financial Statements
FY21 (Unit: RMB, unless otherwise specified)
written down below cost no longer exist, the original amount of the write-down is reversed.
(4) Inventory system
Inventories are accounted for using the perpetual inventory system.
(5) Amortization method for consumables
Low-valued consumables are charged with the one-off amortization method and multi-stage
amortization method at consumption.
12. Assets classified as held for sale and discontinued operations
(1) Classification and measurement of non-current assets or disposal groups held for sale
The Company classifies the non-current asset or disposal group as held for sale when the carrying
amount of the non-current asset or disposal group will be recovered through sale (including
exchange transactions of non-monetary assets with commercial substance) rather than through
continuing use.
Above mentioned non-current assets not include investment properties subsequently measured with
the fair value model, biological assets measured at fair value less cost of sales, assets arising from
employee benefits, financial assets, deferred tax assets and contractual rights under insurance
contracts.
The disposal group is the group of assets to be disposed of, by sale or otherwise, together as a whole
in a single transaction, and liabilities directly associated with those assets that will be transferred in
the transaction. Under certain circumstances, disposal group included goodwill acquired in the
business combination.
The non-current asset or disposal group is classified as held for sale when all the following criteria
are satisfied: According to the trading routine of selling such asset or disposal group in similar
transactions, the non-current asset or disposal group is available for immediate sale in current
circumstance; the sale is highly probable to occur, that is, the Company has made a resolution on a
sale plan and obtained the assured purchase agreement. The sale is expected to be completed within
one year. If the control of the subsidiary is lost due to the sale of investment on the subsidiary and
the investment intended to be sold satisfies all conditions for the classification of assets held for sale,
the Company classifies all the investment in that subsidiary as held for sale in separate financial
statements, andclassifies all the assets and liabilities of that subsidiary as held for sale in
consolidated financial statements no matter whether the Company will keep part of the equity
investment.
Excess of the carrying amount over the fair value less costs to sellis recognized as assets
impairment losses in the initial recognition or remeasurement on balance sheet date of non-current
asset or disposal group. The carrying amount of goodwill allocated to the disposal group shall be
deducted firstly by the impairment loss recognized for the disposal group, and then the carrying
－113－
Beijing Shougang Co. Ltd
Notes to the Financial Statements
FY21 (Unit: RMB, unless otherwise specified)
amount of each non-current asset in the disposal group shall be proportionately deducted in
accordance with the proportion of the carrying value of the non-current assets in the disposal group.
If net amount of fair value of the non-current asset or disposal group less costs to sell increases, the
amount of the write-down will be recovered but not in excess of the cumulative impairment loss
that has been recognised after classified as held for sale. Thereverse amount is recorded in the
current profit or loss. Additionally, the reduced carrying amount of goodwill could not be recovered.
The Company does not depreciate (or amortise) the non-current assets classified as held for sale or
assets of the disposal group classified as held for sale. Interest and other expenses attributable to the
liabilities of the disposal group classified as held for sale continue to be recognised. If an
investment or a part of the investment in an associate or a joint venture is classified as held for sale,
equity method is not used for the part classified as held for sale, while equity method is used for the
rest part (the part not classified as held for sale) continuely. When the Company does not have
material impact on an associate or a joint venture due to the sale transaction, equity method will be
discontinued.
Where a non-current asset or disposal group is classified as held for sale but no longer meets the
conditions for holding for sale classification, the Company discontinues its classification as held for
sale and counts it according to the lower of:
① The carrying amount of the asset and disposal group before classification as held for sale,
adjusted for any depreciation, amortisation or impairment recognised under the assumption that the
asset or disposal group has not been classified as held for sale;
② Recoverable amount
(2) Discontinued operations
Discontinued operation refers to the separately identifiable component that has been disposed or
been classified as held for sale and satisfies one of the follwing conditions:
①It represents am independent major business line or a separate geographical area of operations;
② It is part of a single co-ordinated plan to dispose of an independent major business or a separate
geographical area of operations;
③ It is a subsidiary acquired exclusively with a view to resale.
(3) Presentation
The Comapany presents the non-current assets classified as held for sale and the assets of disposal
group classified as held for sale as “Assets classified as held for sale” in balance sheet. The
liabilities of disposal group classified as held for sale is presented as “Liabilities classified as held
for sale” in balance sheet.
The Company presents profit or loss from discontinued operations separately from profit or loss
from continuing operations in income statement. Impairment loss and reversal amount and any
－114－
Beijing Shougang Co. Ltd
Notes to the Financial Statements
FY21 (Unit: RMB, unless otherwise specified)
disposal gain or loss of the non-current asset or disposal group classified as held for sale that does
not satisfy the definition of a discontinued operation is presented in profit or loss from continuing
operations. Any impairment loss and reversal amount belongs to discontinued operations, and
disposal gain or loss is presented in profit or loss from discontinued operations.
The disposal group which is planned to cease use rather than for sale, and satisfies the conditions of
components of discontinued operation, the Company presents it as discontinued operation from the
date of cessation.
For the discontinued operation presented in the current period, former profit or loss of continuing
operations will be presented as discontinued operations for comparative accounting period in the
current financial statements. If the discontinued operations no longer satisfy the conditions to be
classified as held for sale, former profit or loss of discontinued operations will be presented as
continuing operationsfor comparative accounting period in the current financial statements.
13. Long-term equity investments
Long-term equity investments consist of equity investments in subsidiaries, joint ventures and
associates. An associate is an enterprise over which the Company has significant influence.
(1) Recognition of initial investment cost
Long-term equity investment from the business combination: For a long-term equity investment
acquired through a business combination under common control, the initial investment cost of the
long-term equity investment shall be the absorbing party’s share of the carrying amount of the
owners’ equity of the party being absorbed in the consolidated financial statements of the ultimate
controlling party at combination date. For business combination involving entities not under
common control, the initial investment cost of long-term equity should be the cost of acquisition.
Long-term equity investment from other methods：for a long-term equity investment acquired by
paying cash, the initial investment cost shall be the actual purchase price paid; for those acquired by
the issue of equity securities, the initial investment cost shall be the fair value of the equity
securities issued.
(2) Subsequent measurement and recognition of profit or loss
The cost method is applied for the investment of subsidiaries unless the investment satisfies the
conditions of held for sale; the equity method is applied for the investment of joint ventures and
associates.
When the cost method is adopted in long-term equity investments, except for cash dividends or
profit distributions declared but not yet distributed in the purchase priceor consideration of
obtaining the investment, profits or cash dividends declared to be distributed by the investee should
be recognised as investment income in the current period.
When the equity method is adopted in long-term equity investments, the initial cost of an
investment in excess of the share of investee’s fair value on identifiable net assets remains
unchanged; the initial cost of the investment that falls short of the share of investee’s fair value on
identifiable net assets shall be adjusted, for the difference which had been charged to current profit
or loss.
When the equity method is adopted, the Company recognises its share of the investee’s profit or
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Beijing Shougang Co. Ltd
Notes to the Financial Statements
FY21 (Unit: RMB, unless otherwise specified)
loss, as well as its share of the investee’s other comprehensive income, as investment income or loss
and other comprehensive income, and adjusts the carrying amount of the investment accordingly;
the investor’s share of profit distributions or cash dividends declared by the investee is deducted
from the carrying amount of the investment. For the changes of equity in an investee other than
profit or loss, the investor adjusts the carrying amount of the investment and recognised it in capital
reserve (other capital reserves).The recognition of the investee’s results should be based on the fair
values of the individual identifiable assets of the investee according to the Company’s accounting
policies and accounting period. Additionally, the recognition should be based on the adjusted net profit
of the investee.
If the Company has significant influences or can implement joint control over investees due to
additional investment, the initial investment cost is recognized as the sum of the fair value of the
original portion of equity investment and the additional investment cost under equity method on the
transformation date. The accumulated fair value changes accounted in other comprehensive income
of non tradable equity instrument investment which is initially classified as fair value through other
comprehensive income are transferred to retained earnings while accounting by equity method
instead.
If the Company loses control of an investee with joint control or significant influence retained after
partial disposal of its shares, the remaining equity after disposal should be accounted in accordance
with the rules “CASBE 22-Recognition and Measurement of Financial Instruments” and the
difference between the fair value on the day of losing control and the book value is recognised in
profit or loss. For the other comprehensive income recognized by equity investment under the
equity method, the basis of the accounting treatment is the same as that on disposal of related assets
or liabilities by the investee, the amount recognised in the equity on the changes in other equity
movementsshould be all charged to the profit or loss for the year.
If the Company loses control of an investee after partial disposal of its shares, the remaining equity
after disposal has joint control or significant influence over the investee, the equity method shall be
adopted and the remaining equity shall be deemed to be recognized under equity method since the
acquisition date; if the remaining equity has no joint control or significant influence over the
investee, the remaining equity after disposal should be accounted in accordance with the
rules“CASBE 22-Recognition and Measurement of Financial Instruments” and the difference
between the fair value on the day of losing control and the book value is recognised in profit or loss.
If the shareholding ratio of the Company is reduced due to the increase of investments of other
investors and thus the control is lost, but the joint control or significant influence can be exerted on
the investee, the Company should recognize the incremental shares of net assets according to the
new investments. The difference between the original book value of the long-term equity
investment corresponding to the decrease in the shareholding ratio should be included in the current
profit or loss; then, the equity shall be deemed to be recognized under equity method since the
investment date and adjusted according to the new shareholding ratio.
Unrealised profit or loss resulting from transactions between the Company and its associates or
joint ventures shall be calculated according to the proportion of its shareholding, which is
attributable to the Company, and then to be recognized in investment income after offset. While
unrealised profit or loss resulting from transactions between the Company and investee belongs to
impairment loss of transferred assets cannot be offset.
(3) Basis of determining the existence of joint control or significant influence over an investee
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Beijing Shougang Co. Ltd
Notes to the Financial Statements
FY21 (Unit: RMB, unless otherwise specified)
Joint control is the agreed sharing of control of an arrangement, which exists only when decisions
about the relevant activities require unanimous consent of the parties sharing control. In
determining whether there is a joint control, the first judge is determining whether the relevant
arrangement is controlled collectively by all the participants involved or the group of the
participants involved and then to determine whether the decisions related to the basic operating
activities should require the unanimous consent of the participants involved. If all participants or the
group of the participants involved must act consistently to determine the relevant arrangement, it is
considered that all participants or the group of the participants control the arrangement. If two or
more participants in the collectively control of certain arrangement, it shall not be considered as
joint control. Protection of rights shall not be considered in determining whether there is joint
control.
Significant influence is the power to participate in the financial and operating policy decisions of
the investee but is not control or joint control over those policies. When determining whether there
is the significant influence over the investee, the voting rights held by the investors or the other
entites and the effect of potential voting rights if it can be converted into the equity of investee,
including the effect of current convertible warrants,security option and convertible bonds.
When the Company, directly or indirectly through subsidiaries, owns 20% of the investee (including
20% ) or more but less than 50% of the voting shares, it has significant impact on the investee
unless there is clear evidence to show that in this case the Company cannot participate in the
production and business decisions of the investee, and has no significant influence; when the
Company owns 20% (excluding) or less of the voting shares, it is not considered to have significant
impacts on the investee in general, unless there is clear evidence to show that in this case the
Company can participate in the production and business decisions of the investee so as to have the
significant influence.
(4) Held-for-sale equity investments
Accounting treatment for the entity investment, or a portion of an equity investment, in associates
or joint ventures that is classified as held for sale refers to Note III, 12.
Any remaining equity investment that has not been classified as held for sale shall be accounted
under the equity method.
When the equity investment in associates or joint ventures previously classified as held for sale and
no longer satisfies the conditions to be classified as held for sale, it will be adjusted under equity
method retrospectively as from the date of classification as held for sale.
(5) Method of impairment testing and impairment provision
For investment in subsidiaries, associates and joint ventures, refers to Note III, 20 for the method of
asset impairment provision.
14. Fixed assets
(1) Recognition of fixed assets
Fixed assets represent the tangible assets held by the Company for use in production of goods, use
in supply of services, rental or for administrative purposes with useful lives over one accounting
year.
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Beijing Shougang Co. Ltd
Notes to the Financial Statements
FY21 (Unit: RMB, unless otherwise specified)
Fixed assets are recognised when it is probable that their related future economic benefits will flow
into the company, and their cost can be measured reliably.
Fixed assets of the Company are initially measured at actual costs in acquisition.
The subsequent expenditure related to fixed assets is included in cost of the fixed assets when the
relevant economic benefits are likely to flow into the Company and its cost can be measured
reliably; routine repair expenditure of fixed assets that do not meet the conditions for capitalization
is included in the profit and loss or the cost of relevant assets according to the beneficiaries when it
occurs. The book value of the replaced part shall be derecognized.
(2) Depreciation of fixed assets
Depreciation of the fixed assets is calculated on the straight-line basis. The fixed asset is
depreciated since the state of intended use and no longer depreciated when recognition is terminated
or being classified as non-current assets held for sale. Without considering impairment provision,the
estimated useful lifetime, estimated residual values, and the annual depreciation rates of each
category of fixed assets are as follows:
Estimated Estimated Annual
Category
useful life residual value depreciation rate
Pant and buildings 25-43 years 5% 3.80-2.21%
Machinery and equipment 12-28 years 5% 7.92-3.39%
Vehicles 10 years 5% 9.50%
Electronic equipment 10 years 5% 9.50%
Industrial furnace 13 years 5% 7.31%
Metallurgical equipment 19 years 5% 5.00%
Others 14-22 years 5% 6.79-4.32%
The fixed assets that have been withdrawn for impairment provision shall also be deducted from the
accumulative amount of impairment provision to recognize depreciation rate.
(3) Impaitment test and impairment provision of fixed assets refer to Note III, 20.
(4) Useful lives, residual values and the depreciation method are reviewed by the Company at least at
each financial year end.
Useful lives are adjusted if the expected useful lives are different from the original estimates; the
estimated net residual values are adjusted if they are different from the original estimates.
(5) Disposal of fixed assets
The fixed assets are derecognied when the fixed assets are diposed or when it is not expected to
generate economic benefits through use or disposal of the fixed assets.The amount of the disposal
income from the sale, transfer, scrapping or damage of fixed assets after deducting its book value
and relevant taxes shall be included in the current profit and loss.
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Beijing Shougang Co. Ltd
Notes to the Financial Statements
FY21 (Unit: RMB, unless otherwise specified)
15. Construction in progress
Cost comprises the direct costs of construction and capitalised borrowing costs on related borrowed
funds during the period of construction.
Construction in progress is reclassified to the appropriate category of fixed assets when completed
and ready for use.
Impairment provision of construction in progressrefers to Note III, 20.
16. Materials for construction of fixed assets
The materials for construction of fixed assets of the Company refers to the material prepared for
construction in progress, including engineering materials, equipments not yet installed and tools
prepared for production, etc.
Purchase measured at cost, the recipients transfer to construction in progree, and the remaining
transfer to inventory after the completion of construction.
Impairment provision of materials for construction of fixed assets refers to Note III, 20.
Closing balance of materials for construction of fixed assets is presented in “Construction in
progress” in balance sheet.
17. Borrowing costs
(1) Principles of capitalising borrowing costs
All the borrowing costs that are directly attributable to construction or production of all qualifying
assets are capitalized and recorded in relevant assets costs. Other borrowing costs are treated as an
expense and recorded in the profit or loss. The capitalization of borrowing costs commences when:
① Expenditures for the assets are incurred, including paying cash, transferring non-cash assets or
undertaking interest-bearing debt for acquisition or construction of the assets, which could be
capitalized;
② Borrowing costs are incurred; or
③The acquisition and construction activities that are necessary to bring the assets to get ready for
their intended use or sale have commenced.
(2) Capitalization period of borrowing costs
The capitalization of borrowing costs ceases when the asset being acquired or constructed is
substantially ready for its intended use or sale and borrowing costs incurred thereafter are treated as
an expense to be recorded in the profit or loss.
Capitalization of borrowing costs is suspended during extended periods in which the acquisition or
construction of a fixed asset is interrupted abnormally and the interruption lasts for more than three
months until the acquisition or construction is resumed; borrowing costs in normal interruption
period continue to be capitalized.
(3) Calculation of capitalization rate and amount of borrowing costs.
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Beijing Shougang Co. Ltd
Notes to the Financial Statements
FY21 (Unit: RMB, unless otherwise specified)
For specific borrowings, the borrowing costs eligible for capitalization are the actual borrowing
costs incurred during the current period deducted by any temporary interest or investment income;
for general borrowings, the borrowing costs eligible for capitalization are determined by applying a
capitalization rate to the weighted average of capital expenditure that exceeds the specific
borrowings.The capitalization rate is calculated based on the weighted average interest rate of
general borrowings.
During the capitalization period, exchange differences on foreign currency specific borrowings shall
be capitalized; exchange differences on foreign currency general borrowings shall be recognized as
current profit or loss.
18. Intangible assets
Intangible assets include software and land use rights.
Intangible assets are measured at cost initially and its useful lifetime shall be analyzed and
recognized when obtained. An intangible asset with finite useful lifetime shall be amortized over the
expected useful life using method which can reflect the expected recognition of economic benefits
related to the assets when the intangible asset is available for use; an intangible asset whose
expected recognition cannot be reliably determined is amortized at straight-line amortization
method; an intangible asset with indefinite useful lifetime shall not be amortized.
The amortization method of intangible assets with limited service life is as follows:
Intangible assets with finite useful lives are amortized over the useful lives on the straight-line basis
according to the category, expected useful lifetime and estimated residual value.The annual
amortization rates of each category of intangible assets are as follows:
Annual
Category Useful lifetime Residuals rate
amortization rate
Software 5-10 years -- 10.00-20.00%
Land use rights 40-50 years -- 2.00-2.50%
The Company reviews the useful lives and amortization method of intangible assets with finite
useful lifetime, adjusts original estimated amount and processes according to the accounting
estimate change if there are any differences with original estimated, at least at the end of each
reporting period.
The Company estimates an intangible asset can no longer bring future economic benefits at the
balance sheet date, and then the carrying amount of the intangible asset should be reversed to the
current profit or loss.
For the impairment provision of intangible assets, refers to Note III, 20.
19. Development expenditures
Expenditure on internal research and development projects is classified into expenditure on the
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Beijing Shougang Co. Ltd
Notes to the Financial Statements
FY21 (Unit: RMB, unless otherwise specified)
research stage and expenditure on the development stage.
Expenditure on the research stage is recognised in the profit or loss when incurred.
Expenditure on the development stage is capitalized only when: the technical feasibility of
completing the intangible asset so that it is available for use or sale; the intention to complete the
intangible asset is to use or sell it; the method of generating economic benefits by the intangible
assets, including that the intangible asset can be proved that the output or the intangible asset itself
has market or,if it is to be used internally, the usefulness of the intangible asset also need to be
proved; the availability of adequate technical, financial and other resources to complete the
development and the ability to use or sell the intangible asset; the expenditure attributable to the
development stage can be measured reliably. Otherwise, it shall be presented in the profit or loss.
The research and development projects of the Company will enter into the development stage after
meeting the above conditions and passing through the studies of technical feasibility and economic
feasibility, and the projects approval.
Capitalized expenditure on the development stage is presented as “Development expenditures” in
the balance sheet and shall be transferred to intangible assets when the project is completed to its
intended use state.
20. Impairment of assets
The impairment for the long-term equity investments, fixed assets, construction in progress,
right-of-use asset, intangible assets, etc. (excluding inventories, deferred income tax assets and
financial assets) of subsidiaries, associates and joint ventures are determined as follows:
The Company assesses whether any indicator of impairment exists as of the end of each reporting
period, and, if yes, performs impairment test by estimation of the asset’s recoverable amount. For
goodwill acquired in business combinations, intangible assets with indefinite lives and intangible
assets without intended use state, an annual impairment test is performed no matter whether there is
any indicator of impairment.
An asset’s recoverable amount is calculated as the higher of the asset’s fair value less costs to sell
and the present value of estimated future cash flows generated from the use of assets. The
recoverable amount is calculated on individual basis unless it is not applicable, in which case the
recoverable amount is determined for the asset group to which the asset belongs. An asset group is
recognized based on whether the cash inflows generated by the asset group are largely independent
to those of other assets or asset groups.
When the recoverable amount of an asset or an asset group is less than its carrying amount, the
carrying amount is reduced to its recoverable amount. The reduction amount is charged to profit or
loss and an impairment allowance is provided.
In terms of impairment test of the goodwill, the carrying amount of the goodwill arising from
business combination shall be allocated to the related asset group in accordance with a reasonable
basis at acquisition date. Those that are difficult to be allocated to relevant assets shall be allocated
to relevant assets groups. Relevant assets or assets groups refer to those that can benefit from the
synergies of business combination and are not larger than the Company’s recognized reporting
segment.
When there is an indication that the goodwill related asset and asset group are prone to impair, the
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Beijing Shougang Co. Ltd
Notes to the Financial Statements
FY21 (Unit: RMB, unless otherwise specified)
Company should execute impairment test for the asset and asset group excluding goodwill,
calculate the recoverable amount and recognize the corresponding impairment loss. The Company
should execute impairment test for the asset or asset group including goodwill and compare the
recoverable amount with carrying amount, provision for impairment of assets shall be recognized
when the recoverable amount of assets is lower than its carrying amount.
Impairment losses cannot be reversed in subsequent accounting periods after recognition.
21. Long-term prepaid expenses
The long-term prepaid expenses of the Company are recorded as the actual cost and evenly
amortized on straight-line basis over the expected beneficial period. For the long-term prepaid
expense items that cannot benefit the later accounting period, the amortized value is recognized in
the profit or loss.
22. Payroll and employee benefits payable
(1) Scope of payroll and employee benefits payable
Payroll and employee benefits payable are all forms of consideration given by an entity in exchange
for service rendered by employees or the termination of employment, including short-term
employee benefits, post-employment benefits, termination benefits and other long-term employee
benefits. The benefits that the Company provides to the spouses, children and dependents of
employees, the late employees’ family and other beneficiaries also shall be deemed aspayroll and
employee benefits payable.
According to liquidity, employment benefits are presented separately as “Payroll and employee
benefits payable” and “Long-term payroll and employee benefits payable” in the balance sheet.
(2) Short-term employee benefits payable
A liability when an employee has provided service in exchange for employee benefits, such as
wages, bonuses, social security contributions (including medical insurance, injury insurance,
maternity insurance, etc.) and house funding to be paid is recognized as the current profit or loss or
costs of related assets. If the short-term employee benefits are expected to be settled wholly before
twelve months after the end of the annual reporting period in which the employees render the
related service and have significant financial impact, the liability shall be measured as the
discounted amounts.
(3) Post-employment benefits
Post-employment benefit plan includes defined contribution plan and defined benefit plan. Defined
contribution plan is the post-employment benefit plan under which the Company pays fixed
contributions into a separate fund and will have no future obligations to pay the contributions.
Defined benefit plan is the post-employment benefit plan other than defined contribution plan.
Defined contribution plan
Defined contribution plan includes basic pension insurance, unemployment insurance, etc.
During the accounting period of service provided by the employee, the Company shall recognise the
contribution payable according to the defined contribution plan as the liability and record the
corresponding amount in the current profit or loss or the cost of the relevant asset.
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Beijing Shougang Co. Ltd
Notes to the Financial Statements
FY21 (Unit: RMB, unless otherwise specified)
(4) Termination benefits
The Company is required to recognize termination benefits with a corresponding charge to profit or
loss at the earlier of when the entity can no longer withdraw an offer of those benefits and when it
recognizes any related restructuring costs.
For implementing the internal retirement plan, the economic compensation before the official
retirement date belongs to termination benefits. From the date of ceasing service to the normal
retirement date, the wages of the internally retired employees and the social insurance premiums to
be paid are included in the current profit or loss one time. Economic compensation after the official
retirement date (such as normal pension) should be treated as post-employment benefits.
23. Provisions
If the contingent considerations or contingent liabilities satisfy the following conditions
simultaneously, a provision will be recognized by the Company:
(1) The obligation is a present obligation assumed by the Company; and
(2) It is probable that an outflow of resources embodying economic benefits will be required to
settle the obligation; and
(3) A reliable estimate can be made of the amount of the obligation.
Provisions are initially measured at the best estimate of the expenditure required to settle the present
obligation, after considering risks, uncertainties, present value, etc. If the impact of time value of
money is significant, the best estimate is determined as its present value of future cash outflow.
Provisions shall be reviewed at the end of each reporting period and adjusted to reflect the current
best estimate.
If the settlement of provision is fully or partially compensated by a third party or the others, and the
compensated amount can be definitely received, then the provision can be recognised as asset
separately. The compensated amount shall not be greater than the carrying amount of the recognized
liability.
24.Share-based payments and equity instruments
(1) Category of share-based payments
The Company’s share-based payment is either equity-settled share-based payment or cash-settled
share-based payment.
(2) Determination of fair value of equity instruments
For the existence of an active market for options and other equity instruments granted by the
Company, the fair value is determined at the quoted price in the active market. For options and
other equity instruments with no active market, option pricing model shall be used to estimate the
fair value of the equity instruments. The following factors shall be taken into account using option
pricing models: A. the exercise price of the option; B. the validity period of the option; C. the
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Beijing Shougang Co. Ltd
Notes to the Financial Statements
FY21 (Unit: RMB, unless otherwise specified)
current market price of the share; D. the expected volatility of the share price; E. predicted dividend
of the share; and F. risk-free rate of the option within the validity period.
(3) Recognition of vesting of equity instruments based on the best estimate
On each balance sheet date within the vesting period, the estimated number of equity instruments
expected to vest is revised based on the best estimate made by the Company according to the latest
available subsequent information as to changes in the number of employees with exercisable rights.
On the vesting date, the final estimated number of equity instruments expected to vest should equal
the actual number of equity instruments expected to vest.
(4) Accounting treatment of implementation, modification and termination of share-based payment
Equity-settled share-based payment shall be measured at the fair value of the equity instruments
granted to employees. If the right may be exercised immediately after the grant, the fair value of
equity instrument shall, on the date of the grant, be included in the relevant costs or expenses, and
the capital reserve shall be increased accordingly.If the right can not be exercised until the vesting
period comes to an end or until the specified performance conditions are met, then on each balance
sheet date within the vesting period, the services obtained in the current period shall, based on the
best estimate of the number of vested equity instruments, be included in the relevant costs or
expenses and the capital reserve at the fair value of the equity instrument on the date of the grant.
After the vesting date, the Company make no adjustment to the relevant costs or expenses as well as
the total amount of the owner’s equities which have been confirmed.
Cash-settled share-based payment shall be measured in accordance with the fair value of liability
calculated and recognised based on the shares or other equity instruments undertaken by the
Company. If the right may be exercised immediately after the grant, the fair value of the liability
undertaken by the Company shall, on the date of the grant, be included in the relevant costs or
expenses, and the liabilities shall be increased accordingly.If the right may not be exercised until the
vesting period comes to an end or until the specified performance conditions are met, on each
balance sheet date within the vesting period, the services obtained in the current period shall, based
on the best estimate of the information about the exercisable right, be included in the relevant costs
or expenses and the corresponding liabilities at the fair value of the liability undertaken by the
Company. On each balance sheet date and on each account date prior to the settlement of the
relevant liabilities, the Company re-measures the fair value of the liabilities and include the changes
in the current profits and losses.
When there are changes in Company’s share-based payment plans, if the modification increases the
fair value of the equity instruments granted, corresponding recognition of service increase in
accordance with the increase in the fair value of the equity instruments; if the modification
increases the number of equity instruments granted, the increase in fair value of the equity
instruments is recognised as a corresponding increase in service achieved. Increase in the fair value
of equity instruments refer to the difference between the fair values of the modified date. If the
modification reduces the total fair value of shares paid or not conductive to the use of other
employees share-based payment plans to modify the terms and conditions of service, it will
continue to be accounted for in the accounting treatment as if the change had not occurred, unless
the Company cancelled some or all of the equity instruments granted.
During the vesting period, if the cancelled equity instruments (except for failure to meet the
conditions of the non-market vesting conditions) granted by the Company to cancel the equity
instruments granted amount treated as accelerated vesting of the remaining period should be
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Beijing Shougang Co. Ltd
Notes to the Financial Statements
FY21 (Unit: RMB, unless otherwise specified)
recognised immediately in profit or loss, while recognising capital reserves. If employees or other
parties can choose to meet non-vesting conditions but they are not met in the vesting period, the
Company will treat them as cancelled equity instruments granted.
25. Revenue
(1) General principle
Revenue is recognized when the Company has satisfied its performance obligations in the contract,
that is, when the customer obtains control of the relevant goods or services.
Where a contract has two or more performance obligations, the Company determines the
stand-alone selling price at contract inception of the distinct good or service underlying each
performance obligation in the contract and allocates the transaction price in proportion to those
stand-alone selling prices. The Company recognises as revenue the amount of the transaction price
that is allocated to each performance obligation.
The Company satisfies a performance obligation over time if one of the following criteria is met; or
otherwise, a performance obligation is satisfied at a point in time:
① The customer simultaneously receives and consumes the benefits provided by the Company’s
performance as the Company performs;
② The customer can control the asset created or enhanced during the Company’s performance;
③ The Company’s performance does not create an asset with an alternative use to it and the
Company has an enforceable right to payment for performance completed to date.
For performance obligation satisfied over time, the Company recognises revenue over time by
measuring the progress towards complete satisfaction of that performance obligation. When the
outcome of that performance obligation cannot be measured reasonably, but the Company expects
to recover the costs incurred in satisfying the performance obligation, the Company recognises
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 obligation satisfied at a point in time, the Company recognises revenue at the point
in time at which the customer obtains control of relevant goods or services. To determine whether a
customer has obtained control of goods or services, the Company considers the following
indicators:
① The Company has a present right to payment for the goods or services, as the customer obtains
the current payment obligation for the goods.
② The Company has transferred the legal title of the goods, as the customer has obtained the legal
title of the goods.
③ The Company has transferred physical possession of the goods to the customer, as the customer
has obtained the physical possession of the goods.
④ The Company has transferred the significant risks and rewards of legal title of the goods to the
customer, as the customer has obtained the significant risks and rewards of legal title of the goods.
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Beijing Shougang Co. Ltd
Notes to the Financial Statements
FY21 (Unit: RMB, unless otherwise specified)
⑤ The customer has accepted the goods or services.
⑥ Other indications that the customer has obtained control of goods.
A contract asset is the Company’s right to consideration in exchange for goods or services that it has
transferred to a customer when that right is conditional on factors other than the passage of time.
The Company recognises loss allowances for expected credit loss on contract assets. The
Company’s right to consideration that is unconditional (only the passage of time is required) shall
be presented as accounts receivable. The Company’s obligation to transfer goods or services to a
customer for which the Company has received consideration (or an amount of consideration is due)
from the customer shall be presented as the contract liability.
The Company offsets the contract assets and contract liabilities under the same contract and
presents the net amount. If the net amount is the debit balance, it is presented under “contract assets”
or “other non-current assets” according to its liquidity; if the net amount is the credit balance, it is
presented under “contract liabilities” or “other non-current liabilities” according to its liquidity.
(2) Specific recognition methods
The specific revenue recognition methods of the company are as follows:
Contracts for the sale of goods
Contracts for the sale of goods between the Company and its customers usually only involves the
performance obligations of the transferring of the goods. The Company generally recognizes
revenue based on the following considerations, taking into account the timing of control transfer.
This includes obtaining the current collection rights of the goods, the transfer of the main risks and
rewards of the ownership of the goods, the transfer of the legal ownership of the goods, the transfer
of the physical assets of the goods, and the acceptance of the goods by the customer.
Contracts for rendering of services
The service contract between the Company and its customers usually includes performance
obligations for labor services, technical consulting or technical services. As a result of the
satisfaction of the performance obligation the Company, the customers obtain and consume the
economic benefits of the service while the Company provides the service simultaneously. The
Company is entitled to recover from the accumulative performance of the contract that has been
completed to date, except when progress of the performance cannot be reasonably determined. The
Company determines the progress of the performance of the services provided in accordance with
the input method. When the progress of the performance cannot be reasonably determined, and the
costs incurred by the Company are expected to be compensated, the revenue will be recognized
based on the amount of costs incurred, until the progress of the performance can be reasonably
determined.
26. Contract cost
Contract costs are either the incremental costs of obtaining a contract with a customer or the costs to
fulfil a contract with a customer.
Incremental costs of obtaining a contract are those costs that the Company incurs to obtain a
contract with a customer that it would not have incurred if the contract had not been obtained e.g.
an incremental sales commission. The Company recognises as an asset the incremental costs of
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Beijing Shougang Co. Ltd
Notes to the Financial Statements
FY21 (Unit: RMB, unless otherwise specified)
obtaining a contract with a customer if it expects to recover those costs. Other costs of obtaining a
contract are expensed when incurred.
If the costs to fulfil a contract with a customer are not within the scope of inventories or other
accounting standards, the Company recognises an asset from the costs incurred to fulfil a contract
only if those costs meet all of the following criteria:
① The costs relate directly to an existing contract or to a specifically identifiable anticipated
contract, including direct labour, direct materials, allocations of overheads (or similar costs), costs
that are explicitly chargeable to the customer and other costs that are incurred only because the
Company entered into the contract;
② The costs generate or enhance resources of the Company that will be used in satisfying (or in
continuing to satisfy) performance obligations in the future;
③The costs are expected to be recovered.
Assets recognised for the incremental costs of obtaining a contract and assets recognised for the
costs to fulfill a contract (the “assets related to contract costs”) are amortised on a systematic basis
that is consistent with the transfer to the customer of the goods or services to which the assets relate
and recognised in profit or loss for the current period.
The Company recognises an impairment loss in profit or loss to the extent that the carrying amount
of an asset related to contract costs exceeds:
①Remaining amount of consideration that the Company expects to receive in exchange for the
goods or services to which the asset relates; less
② The costs that relate directly to providing those goods or services that have not yet been
recognised as expenses.
The contract performance cost recognized as an asset shall be shown in the "Inventories" item with
an amortization period of no more than one year or one normal operating cycle at the time of initial
recognition, while the amortization period exceeding one year or one normal operating cycle at the
time of initial recognition shall be shown in the item of "Other non-current assets".
The contract acquisition cost recognized as an asset shall be listed in the item of "Other current
assets" when the amortization period does not exceed one year or one normal operating cycle at the
time of initial recognition, and listed in the item of "other non-current assets" when the amortization
period exceeds one year or one normal operating cycle at the time of initial recognition.
27. Government grants
Government grants are recognized in profit or loss, when they are highly probable to be received
and all conditions are fulfilled.
If a government grant is in form of monetary asset, it is measured at the amount received or
receivable. If a government grant is in form of nonmonetary asset, it is measured at fair value of the
asset. If the fair value cannot be reliably determined, it is measured at the nominal amount as RMB
1.
Asset-related government grants are recognized when the government document designates that the
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Beijing Shougang Co. Ltd
Notes to the Financial Statements
FY21 (Unit: RMB, unless otherwise specified)
government grants are used for constructing or forming long-term assets.Otherwise, the government
grants should be income-related.
If the government document is inexplicit, the Company should recognize the part corresponding to
assets value of government grants as asset-related government grants if the conditions are to form
long-term assets and the remaining part as income-related grants. As for indistinguishable
government grants, the whole should be recognized as income-related grants.
Asset-related government grants can be accounted by offsetting the carrying amout of related assets
or being recognized as deferred income, and amortized systematically and reasonably to profit or
loss over the useful life of the related asset. If the income-related grant is a compensation for related
incurred expenses or losses, the grant shall be recognized in the current pofit or loss or offset related
costs immediately; if the grant is a compensation for related expensesor losses in future period, the
grant is recognized as deferred income and should be recognized in profit or loss for the period
when the expenses or losses are incurred. For the government grant measured at the nominal
amount, it should be recognized in profit or loss immediately for the period.The Company adopts a
consistent approach to the same or similar government grants.
The government grants related to daily activities shall be recognized in other income or offset
related expenses. Otherwise, it shall be recognized innon-operating income and expenses.
When the recognized government grants need to be returned, the carrying amount of the assets shall
be adjusted if the carrying amount of related assets is written down during the initial recognition; if
there is the balance of related deferred income, the book balance of related deferred income shall be
written off, and the excess part shall be recognized in the current profit or loss; for the other
circumstances, the government grants shall be recognized in the current profit or loss directly.
28. Deferred tax assets and deferred tax liabilities
Income tax comprises current tax and deferred tax, and is normally recognized as income tax
expense in profit or loss, except for goodwill generated in a business combination or related
deferred tax items that have been recognized directly in equity.
Based on the differences between the carrying amount of an asset or liability in the statement of
financial position and its tax base, the Company adopts the liability method for the provision of
deferred tax.
A deferred tax liability is recognized in respect of all taxable temporary differences except those
arising from the following transactions:
(1) The initial recognition of goodwill; or the initial recognition of an asset or liability in a
transaction which is not a business combination, and at the time of the transaction, affects neither
accounting profit nor taxable profit; and
(2) As for the temporary differences associated with subsidiaries, joint ventures and associates: the
Company is able to control the timing of the reversal of the temporary difference and it is probable
that the temporary difference will not reverse in the foreseeable future.
A deferred tax asset is recognized in respect of all deductible temporary differences to the extent
that it is probable that taxable profit will be available against which the deductible temporary
difference will be utilized except those arising from the initial recognition of an asset or liability in
a transaction which:
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Beijing Shougang Co. Ltd
Notes to the Financial Statements
FY21 (Unit: RMB, unless otherwise specified)
(1) The transaction is not a business combination, and at the time of the transaction, affects neither
accounting profit nor taxable profit; and
(2) As for deductible temporary differences associated with subsidiaries, joint ventures and
associates: a deferred tax asset is recognized to the extent that it is probable that the temporary
difference will reverse in the foreseeable future, and taxable profit will be available against which
the temporary difference can be utilized.
At the end of each reporting period, deferred tax assets and liabilities are measured at the tax rates
that are expected to apply to the period when the asset is realized or the liability is settled, taking
into account the income tax effect of expected asset realization or liability settlement at the end of
each reporting period.
The carrying amount of a deferred tax asset is reviewed at the end of each reporting period and is
reduced to the extent that it is no longer probable that sufficient taxable profits will be available to
allow the related tax benefit to be utilized. Any such reduction is reversed to the extent that it
becomes probable that sufficient taxable profits will be available.
29. Lease
(1) Identification of lease
On the commencement date of the contract, as the lessee or lessor, the Company evaluates whether
the customer in the contract has the right to obtain almost all the economic benefits arising from the
use of the identified assets during the use period, and has the right to dominate the use of the
identified assets during the use period. 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
Company recognizes the contract as lease or includes lease.
(2) The Company as lessee
On the beginning date of the lease, the Company recognises right-of-use assets and lease liabilities
for all leases, except for short-term lease and low-value asset lease with simplified approach.
For the right-of-use assets, refers to Note Ⅲ. 30.
Lease liabilities are initially measured according to the present value of the unpaid lease payments
at the beginning of the lease term calculated by the embedded interest rate of the lease. Where the
embedded interest rate cannot be determined, the incremental loan interest rate shall be used as the
discount rate. Lease payments includes: fixed payments and in-substance fixed payments, and
where the lease incentives exists, the lease payment is the payment amount less any lease incentives
receivable; variable lease payments depending on index or ratio; the exercise price of a purchase
option if the lessee is reasonably certain to exercise that option; payments for terminating the lease,
if the lease term reflects the lessee exercising that option of terminating; and amounts expected to
be payable by the lessee under residual value guarantees. Subsequently, the interest expense on the
lease liability for each period during the lease term is calculated using a constant periodic rate of
interest and is recognised in current profit or loss. The variable lease payments that are not included
in the measurement of the lease liability are recognised in profit or loss when actually incurred.
Short-term lease
Short-term leases refer to leases with a lease term of less than 12 months from the commencement
－129－
Beijing Shougang Co. Ltd
Notes to the Financial Statements
FY21 (Unit: RMB, unless otherwise specified)
date, except for those with a purchase option.
Lease payments of short-term leases are recognised in the cost of related assets or current profit or
loss on a straight-line basis over the lease term.
Low-value asset lease
Low-value asset lease refers to the lease with lower value when the single leased asset is a
brand-new asset.
Lease payments of low-value asset lease are recognised in the cost of related assets or current profit
or loss on a straight-line basis over the lease term.
For a low-value asset lease, the Company chooses to adopt the above simplified approach according
to the specific conditions of each lease.
Lease modification
The Company accounts for a lease modification as a separate lease when the modification occurs
and the following conditions are met: ① the lease modification expands the scope of lease by
adding the right to useone or more of the leased assets; and ② the increased consideration is
equivalent to the amount of the separate price for the expansion of the lease scope adjusted
according to the conditions of the contract.
With the exception of the simplified approach to contract modificates directly arising from
COVID-19,where a lease modification is not accounted for as a separate lease, at the effective date
of the lease modification, the Company reallocates the consideration of the modified contract,
redetermines the lease term and remeasures the lease liability based on the present value of the lease
payments after the modification and the revised discount rate.
If a lease modification results in reduction in the scope of the lease or a shortening of the lease term,
the Company reduces the carrying amount of the right-of-use asset accordingly and includes the
profit or loss related to the partial or complete termination of the lease is included in the current
profits and losses.
Other lease modifications result in a remeasurement of the lease liability, the Company adjusts the
carrying amount of the right-of-use asset accordingly.
(3) The Company as lessor
When the Company is a lessor, a lease is classified as a finance lease when the terms of the lease
transfer substantially all the risks and rewards of asset ownership to the lessee. All leases other than
financial leases are classified as operating leases.
Finance lease
Under finance lease, the Company accounts for finance lease receivables at the beginning of the
lease term at the net lease investment, which is the sum of the unsecured residual value and the
present value of the lease receipts outstanding at the commencement date of the lease, discounted at
the interest rate implicit in the lease. The Company as lessor calculates and recognises interest
income for each period of the lease term based on a fixed periodic interest rate. Variable lease
payments acquired by the Company as lessor that are not included in the net measurement of lease
investments are included in profit or loss for the period when actually incurred.
－130－
Beijing Shougang Co. Ltd
Notes to the Financial Statements
FY21 (Unit: RMB, unless otherwise specified)
Derecognition and impairment of finance lease receivables are accounted for in accordance with the
requirements under the Accounting Standard for Business Enterprises No. 22 – Recognition and
Measurement of Financial Instruments and the Accounting Standards for Business Enterprises No.
23 – Transfer of Financial Assets.
Operating lease
Lease payments under operating lease are recognised in profit or loss on a straight-line basis over
the lease term. Initial direct costs incurred in relation to operating leases are capitalised and
amortised over the lease term on the same basis as rental income and recognised in profit or loss for
the according period. The variable lease payments obtained in relation to operating leases that are
not included in the lease payments are recognised in profit or loss in the period when actually
incurred.
Lease modification
Except for contract modificates directly caused by COVID-19 where a simplified approach is
adopted, when the operating lease is modified, the Company accounts for a modification as a new
lease from the effective date of the modification. The amount of lease receipts received in advance
or receivable in respect of the lease prior to the modification is treated as a receipt under the new
lease.
Except for contract modificates directly caused by COVID-19, the Company accounts for a
modification in a finance lease as a separate lease when the modification occurs and the following
conditions are met: ① the lease modification expands the scope of lease by adding the right to use
one or more of the leased assets; and ② the increased consideration is equivalent to the amount of
the separate price for the expansion of the lease scope adjusted according to the conditions of the
contract.
Where a finance lease is modified and not accounted for as a separate lease, the Company accounts
for the modified lease in the following circumstances: ① If the modification effectives on the
lease commencement date, the lease will be classified as an operating lease, the Company accounts
as a new lease from the effective date of the lease modification, and the net amount of the lease
investment before the effective date of the lease modification shall be taken as the book value of the
leased asset; ②If the modification effectives on the lease commencement date, the lease will be
classified as a finance lease, and the Company conducts accounting treatment in accordance with
the Accounting Standards for Business Enterprises No. 22 – Recognition and Measurement of
Financial Instruments on modifying or renegotiating contracts.
30. Right-of-use assets
(1) Conditions for recognition of right-of-use assets.
Right-of-use assets refers to the right of the Company as the lessee to use the leased assets during
the lease term.
Right-of-use assets are initially measured at cost at the commencement date of the lease. The cost
includes: the amount of the initial measurement of lease liability; lease payments made at or before
the inception of the lease less any lease incentives enjoyed; initial direct costs incurred by the
Company as lessee; costs to be incurred in dismantling and removing the underlying assets,
restoring the site on which it is located or restoring the underlying asset to the condition required by
－131－
Beijing Shougang Co. Ltd
Notes to the Financial Statements
FY21 (Unit: RMB, unless otherwise specified)
the terms and conditions of the lease incurred by the Company as lessee. As a lessee, the Company
recognises and measures the costs of dismantling and restoration in accordance with the Accounting
Standard for Business Enterprises No. 13 – Contingencies. Subsequently, the lease liability is
adjusted for any remeasurement of the lease liability.
(2) Depreciation method of right-of-use assets
The Company uses the straight-line method for depreciation. Where the Company, as a lessee, is
reasonably certain to obtain ownership of the leased asset at the end of the lease term, such asset is
depreciated over the remaining useful life of the leased asset. Where ownership of the lease assets
during the lease term cannot be reasonably determined, right-of-use assets are depreciated over the
lease term or the remainder of useful lives of the lease assets, whichever is shorter.
(3) For the methods of impairment test and impairment provision of right-of-use assets, refer to Note
Ⅲ. 20.
31. Safety fund and maintenance fee
According to the relevant provisions of CQ [2012] No. 16 document issued by Ministry of Finance,
National Development and Reform Commission, State Administration of Work Safety, the actual
operating income of metallurgical and transportation enterprises in the preceding year is the basis
for the provision of safety fund and maintenance fee of the Company, and the method of excess
retirement shall be adopted for the provision.
Safety funds and maintenance fees are included in the cost of relevant products or recognized in the
current profit or loss for the related products, and credited to the special reserve at the same time.
When safety funds and maintenance fees are utilized in compliance with relevant regulations, if the
costs incurred can be categorized as expenditure, the costs incurred should be charged against the
special reserve; if the reserve is used to build up fixed assets, the costs should be charged to
construction in progress, and reclassified to fixed assets when the projects reach the status ready for
intended use. Meantime, expenditures in building up fixed assets are directly charged against the
special reserve with the accumulated depreciation recognized at the same amount and the fixed
assets will not be depreciated in the future.
32. Restricted stock
In the equity incentive plan, the Company grants restricted stock to the incentivied. The incentivied
first subscribe for the stock. If the unlocking conditions specified in the equity incentive plan are
not met, the Company repurchases the stock at the price agreed in advance. Where the restricted
stock issued to the employees has gone through registration and other capital increase procedures in
accordance with relevant provisions, the Company shall, on the grant date, confirm the share capital
and capital reserve (capital premium) according to the subscription payment received from the
employees, also recognize treasury shares and other payables with respect to repurchase
obligations.
33. Significant accounting judgments and estimates
The Company provides continuous assessment of the reasonable expectations of future events, the
critical accounting estimates and key assumptions based on the historical experience and other
factors. The critical accounting estimates and key assumptions that are likely to lead to significant
adjustment risks of the carrying amount of assets and liabilities for the next accounting period are
－132－
Beijing Shougang Co. Ltd
Notes to the Financial Statements
FY21 (Unit: RMB, unless otherwise specified)
listed as follows:
Classification of financial assets
The major judgments of the Company involved in determining the classification of financial assets
includes the analysis of business models and the characteristics of contract cash flows, etc.
At the level of financial assetsportfolio, the Company determines the business model for managing
financial assets, taking into account factors such as methods of evaluating and reporting financial
assets performance to key managers, the risks of affecting financial assets performance and risk
management methods, and the way in which relevant business managers are paid.
In assessing whether the contract cash flow of financial assets is consistent with the basic lending
arrangements, the Company has the following judgments: whether the principal’s time distribution
or amount may change during the lifetime for early repayment and other reasons; whether the
interest only includes the time value of money, credit risk, other basic lending risks and the
consideration with cost and profit. For example, whether the advance payment only reflects the
unpaid principals and interests based on the unpaid principal, and reasonable compensation paid for
the early termination of the contract.
Measurement of expected credit loss of account receivables
The Company calculates the expected credit losses of accounts receivable through default risk
exposure and expected credit losses rate, and determines the expected credit losses rate on the basis
of default probability and default loss rate. In determining the expected credit losses rate, the
Company uses the experience of internal historical credit loss, and adjusts the historical data with
current situation and forward-looking information. In considering forward-looking information, the
indicators include the risks of economic downturn, external market environment, technological
environment and changes of customer conditions. The Company monitors and reviews regularly the
assumptions related to the calculation of expected credit losses.
Deferred tax assets
Deferred tax assets are recognized to the extent that it is probable that taxable profit will be
available against which the deductible temporary difference and unused tax credit can be utilized.
Significant management judgement is required to determine the amount of deferred tax assets that
can be recognized, based upon the likely timing and level of future taxable profits together with tax
planning strategies.
Determination of unlisted equity investment fair value
The fair value of unlisted equity investment is the estimated future cash flow discounted by the
current discount rate of the project with similar terms and risk characteristics. The valuation
requires the Company to estimate the expected future cash flow and discount rate and is therefore
uncertain. Under limited circumstances, if the information used to determine the fair value is
insufficient, or the possible estimates of the fair value are widely distributed, and the cost represents
the best estimate of the fair value within the range, the cost could represent the appropriate estimate
of the fair value within the distribution range.
34. Changes in significant accounting policies and estimates
(1) Changes in significant accounting policies
－133－
Beijing Shougang Co. Ltd
Notes to the Financial Statements
FY21 (Unit: RMB, unless otherwise specified)
① New Lease Standard
In 2018, the Ministry of Finance published the Accounting Standard for Business Enterprises No.
21 – Leases (Revised), which requires the enterprises that listed on both domestic and overseas
markets and the enterprises listed on overseas markets and adopt the International Financial
Reporting Standards or Accounting Standards for Business Enterprises to implemente this new
lease standard since 1 January 2019. Other enterprises implement this new lease standard since 1
January 2021. The Company implementes this new lease standard since 1 January 2021 and revises
the relevant accounting policies. Details of the revised accounting policies refer to Note V. 29.
For contracts that existed before the date of initial application, the Company chose not to reassess
whether it is, or contains, a lease at the date of initial application.For contracts signed or modified
aftethe date of initial application,the Company evaluates whether the contract is a lease or includes
a lease in accordance with the definition of new lease standard.
No significant impact is imposed on the scope of the Company’s contracts that meet the definition
of lease under the new lease standard.
As lessee
The new lease standard requires a lessee to recognise right-of-use assets and lease liabilities and
recognizes depreciation and interest expense respectively for all leases, except for short-term lease
and low-value asset lease with simplified approach.
The new lease standard allows lessees to choose one of the following methods for the transitional
accounting of leases:
The retroactive adjustment method shall be adopted in accordance with the provisions of the
Accounting Standard for Business Enterprises No. 28 – Changes in Accounting Policies and
Accounting Estimates and Correction of Errors.
The amount of retained earnings and other relevant items in the financial statements at the
beginning of the year in which the standards are first implemented shall be adjusted according
to the cumulative impact of the first implementation of the standards, and the information of
comparable periods shall not be adjusted.
As for the finance leases before the date of initial application, the Company measured the
right-of-use assets and lease liabilities according to the carrying amount of the finance lease
assets and finance lease payments payable respectively.
For operating leases before the date of initial application, the Company measured the lease
liabilities based on the present value of the remaining lease payments discounted using the
incremental loan rate at the date of initial application, and measured the right-of-use assets for
all leases at an amount equal to the lease liabilities, adjusted by the prepaid lease payments
where necessary.
At the date of initial application, the Company performed impairment test on the right-of-use
assets and carried out corresponding accounting treatment in accordance with Note Ⅲ. 14.
For operating leases of low-value assets and short-term leases within 12 months before the date of
initial application, the Company implements the simplified approach and unrecognizes the
right-of-use assets and lease liabilities.
－134－
Beijing Shougang Co. Ltd
Notes to the Financial Statements
FY21 (Unit: RMB, unless otherwise specified)
The Company adopted the following simplified approach for operating leases before the date of
initial application:
While measuring lease liabilities, the same discount rate adopts to leases with similar characteristics
which uses the weighted average of incremental borrowing interest rate at 4.65%. The measurement
of right-of-use assets may exclude initial direct costs.
When there is an option to renew or terminate the lease, theCompany determined the lease term
based on the actual exercise of the option before the date of initial application and other latest
conditions.
As an alternative to the impairment test for right-of-use assets, the Company assessed whether a
contract contains lease is a loss contract before the date of initial application and adjusts the value
of right-of-use asset based on the amount of loss allowance included in the balance sheet before the
date of initial application;
As for the lease modification before the date of initial date, the Company carried out accounting
treatment based on the final arrangement of lease modification.
The impacts of the implementation of the new lease standard on items in the consolidated financial
position as at 1 January 2021 are as follows:
Carrying amount Carrying amount
Item before adjustment Reclassification Remeasurement after adjustment
(31 Dec. 2020) (1 Jan. 2021)
Prepayments 352,355,542.50 -3,372,602.73 -- 348,982,939.77
Right-of-use assets -- 62,492,294.21 -- 62,492,294.21
Accounts payable 26,539,354,380.68 -530,425.05 -- 26,538,823,955.63
Other payables 2,104,822,314.59 -579,100.00 -- 2,104,243,214.59
Lease liabilities -- 56,687,860.68 -- 56,687,860.68
Current portion of
11,273,123,385.05 3,541,355.85 -- 11,276,664,740.90
non-current liabilities
For the minimum lease payments under significant operating leases disclosed in the 2020 financial
statements, the Company adjusted the outstanding minimum lease payments disclosed under the
original lease standard to the lease liabilities recognised under the new lease standard based on the
incremental borrowing rate as the lessee on 1 January 2021 as follows:
Minimum lease payments under significant operating leases as at 31 December 2020 A 85,502,862.91
Present value of minimum operating lease payments as at 1 January 2021 I 60,229,216.53
Add：accrued outstanding financial lease as at 31 December 2020 J --
Lease liabilities as at 1 January 2021 K=I+J 60,229,216.53
Including：Current portion of non-current liabilities 3,541,355.85
The carrying value of the use-right assets on 1 January 2021 are as follows:
Item 2021.01.01
Right-of-use assets:
The right-of-use assets recognised before the date of initial application by operating leases 62,492,294.21
－135－
Beijing Shougang Co. Ltd
Notes to the Financial Statements
FY21 (Unit: RMB, unless otherwise specified)
Item 2021.01.01
Finance leased assets recognized under the original lease standard --
Total: 62,492,294.21
The impacts of the implementation of the new lease standard on items in the financial statements
for 2021 are as follows:
Assume based on the
Item in consolidated balance sheet 2021.12.31 Increase/ decrease (-)
original lease standard
Right-of-use assets 100,279,997.64 -- 100,279,997.64
Lease liabilities 86,123,210.35 -- 86,123,210.35
Current portion of non-current liabilities 10,451,293,628.20 10,436,456,370.29 14,837,257.91
Deferred income tax assets 189,721,423.29 189,283,489.69 437,933.60
Assume based on the
Item in consolidated income statement As for 2021 Increase/ decrease (-)
original lease standard
Operating costs 118,578,217,304.05 118,575,688,255.75 2,529,048.30
Finance expenses 2,257,586,032.80 2,252,690,523.82 4,895,508.98
Income tax expenses 1,472,968,221.53 1,473,406,155.13 -437,933.60
As lessor
According to the new lease standard, the Company does not need to adjust its lease as a lessor in
accordance with the transitional provisions, but subjects to accounting treatment in accordance with
the new lease standard since the date of the first implementation.
(2) Changes in significant accounting estimates
The Company has no significant changes in accounting estimates during the reporting period.
(3) The adjustment of related items in financial statements at the beginning of the first implementation
year due to the first implementation of new lease standard.
Consolidated Statement of Financial Position
Item 2020.12.31 2021.01.01 Adjustment
Current assets：
Cash and Cash equivalents 6,292,499,840.73 6,292,499,840.73 --
Notes receivable 6,119,547,878.33 6,119,547,878.33 --
Accounts receivable 1,424,092,844.92 1,424,092,844.92 --
Financing receivables 4,532,592,689.43 4,532,592,689.43 --
Prepayments 352,355,542.50 348,982,939.77 -3,372,602.73
Other receivables 21,895,246.57 21,895,246.57 --
Including: Interest receivable -- -- --
Dividends receivable 4,892,288.48 4,892,288.48 --
Inventories 10,599,731,052.28 10,599,731,052.28 --
－136－
Beijing Shougang Co. Ltd
Notes to the Financial Statements
FY21 (Unit: RMB, unless otherwise specified)
Item 2020.12.31 2021.01.01 Adjustment
Contract assets -- -- --
Other current assets 719,079,065.59 719,079,065.59 --
Total current assets 30,061,794,160.35 30,058,421,557.62 -3,372,602.73
Non-current assets：
Debt investment -- -- --
Long-term equity investments 3,341,208,164.76 3,341,208,164.76 --
Other equity instruments investments 276,246,686.56 276,246,686.56 --
Other non-current financial assets -- -- --
Investment properties -- -- --
Fixed assets 96,220,769,301.39 96,220,769,301.39 --
Construction in progress 8,297,181,948.62 8,297,181,948.62 --
Right-of-use assets -- 62,492,294.21 62,492,294.21
Intangible assets 4,055,279,867.49 4,055,279,867.49 --
Development expenditures -- -- --
Goodwill -- -- --
Long-term prepaid expenses 1,122,060.45 1,122,060.45 --
Deferred tax assets 147,902,371.10 147,902,371.10 --
Other non-current assets 1,965,717,410.38 1,965,717,410.38 --
Total non-current assets 114,305,427,810.75 114,367,920,104.96 62,492,294.21
Total assets 144,367,221,971.10 144,426,341,662.58 59,119,691.48
Current liabilities:
Short-term borrowings 23,712,391,440.25 23,712,391,440.25 --
Financial liabilities held for trading -- -- --
Notes payable 6,804,810,000.00 6,804,810,000.00
Accounts payable 26,539,354,380.68 26,538,823,955.63 -530,425.05
Receipts in advance -- -- --
Contract liabilities 4,659,444,741.25 4,659,444,741.25 --
Payroll and employee benefits 466,319,382.02 466,319,382.02 --
Taxes payable 572,640,856.00 572,640,856.00 --
Other payables 2,104,822,314.59 2,104,243,214.59 -579,100.00
Including: Interest payable -- -- --
Dividend payable -- -- --
Liabilities classified as held for sale -- -- --
Current portion of non-current liabilities 11,273,123,385.05 11,276,664,740.90 3,541,355.85
Other current liabilities 1,106,922,816.36 1,106,922,816.36 --
Total current liabilities 77,239,829,316.20 77,242,261,147.00 2,431,830.80
Non-current liabilities:
Long-term borrowings 20,639,300,000.00 20,639,300,000.00 --
Bonds payable 2,500,000,000.00 2,500,000,000.00 --
－137－
Beijing Shougang Co. Ltd
Notes to the Financial Statements
FY21 (Unit: RMB, unless otherwise specified)
Item 2020.12.31 2021.01.01 Adjustment
Lease liabilities -- 56,687,860.68 56,687,860.68
Long-term payable 8,941,452.29 8,941,452.29 --
Provisions -- -- --
Deferred income 398,098,805.65 398,098,805.65 --
Deferred tax liabilities 258,248,672.58 258,248,672.58 --
Other non-current liabilities 4,491,623,817.41 4,491,623,817.41 --
Total non-current liabilities 28,296,212,747.93 28,352,900,608.61 56,687,860.68
Total liabilities 105,536,042,064.13 105,595,161,755.61 59,119,691.48
Shareholders’ equity:
Share capital 5,289,389,600.00 5,289,389,600.00 --
Capital reserve 19,759,259,120.40 19,759,259,120.40 --
Less:treasury shares -- -- --
Other comprehensive income 195,210,244.82 195,210,244.82 --
Special reserve 21,577,537.20 21,577,537.20 --
Surplus reserve 1,828,677,846.37 1,828,677,846.37 --
Retained earnings 1,865,280,919.23 1,865,280,919.23 --
Equity attributable to shareholders of the Company 28,959,395,268.02 28,959,395,268.02 --
Non-controlling interests 9,871,784,638.95 9,871,784,638.95 --
Total shareholders’ equity 38,831,179,906.97 38,831,179,906.97 --
Total liabilities and shareholders’ equity 144,367,221,971.10 144,426,341,662.58 59,119,691.48
Company Statement of Financial Position
Item 2020.12.31 2021.01.01 Adjustment
Current assets:
Cash and Cash equivalents 1,087,088,671.35 1,087,088,671.35 --
Notes receivable 2,837,221,424.75 2,837,221,424.75 --
Accounts receivable 1,615,425,644.29 1,615,425,644.29 --
Financing receivables 1,199,574,277.29 1,199,574,277.29 --
Prepayments 195,404,837.38 195,404,837.38 --
Other receivables 1,618,249,934.67 1,618,249,934.67 --
Including: Interest receivable -- -- --
Dividends receivable 600,000,000.00 600,000,000.00 --
Inventories 1,538,862,616.03 1,538,862,616.03 --
Contract assets -- -- --
Other current assets 1,812,574,287.01 1,812,574,287.01 --
Total current assets 11,904,401,692.77 11,904,401,692.77 --
Non-current assets:
Long-term equity investments 26,337,249,446.06 26,337,249,446.06 --
Other equity instruments investments 276,246,686.56 276,246,686.56 --
－138－
Beijing Shougang Co. Ltd
Notes to the Financial Statements
FY21 (Unit: RMB, unless otherwise specified)
Item 2020.12.31 2021.01.01 Adjustment
Other non-current financial assets -- -- --
Investment properties -- -- --
Fixed assets 18,771,870,988.72 18,771,870,988.72 --
Construction in progress 1,976,744,021.21 1,976,744,021.21 --
Right-of-use assets -- -- --
Intangible assets 1,743,860,610.95 1,743,860,610.95 --
Development expenditures -- -- --
Goodwill -- -- --
Long-term prepaid expenses -- -- --
Deferred tax assets 27,925,001.56 27,925,001.56 --
Other non-current assets 1,130,014,156.73 1,130,014,156.73 --
Total non-current assets 50,263,910,911.79 50,263,910,911.79 --
Total assets 62,168,312,604.56 62,168,312,604.56 --
Current liabilities:
Short-term borrowings 11,100,674,376.49 11,100,674,376.49 --
Financial liabilities held for trading -- -- --
Notes payable 784,260,000.00 784,260,000.00 --
Accounts payable 11,218,645,086.80 11,218,645,086.80 --
Receipts in advance -- -- --
Contract liabilities 1,049,617,570.23 1,049,617,570.23 --
Payroll and employee benefits payable 140,481,468.09 140,481,468.09 --
Taxes payable 115,612,678.08 115,612,678.08 --
Other payables 1,010,689,017.67 1,010,689,017.67 --
Including: Interest payable -- -- --
Dividend payable -- -- --
Liabilities classified as held for sale -- -- --
Current portion of non-current liabilities 4,075,978,467.70 4,075,978,467.70 --
Other current liabilities 637,645,284.13 637,645,284.13 --
Total current liabilities 30,133,603,949.19 30,133,603,949.19 --
Non-current liabilities:
Long-term borrowings 883,210,000.00 883,210,000.00 --
Bonds payable 2,500,000,000.00 2,500,000,000.00 --
Lease liabilities -- -- --
Long-term payable 8,941,452.29 8,941,452.29 --
Provisions -- -- --
Deferred income 85,344,005.30 85,344,005.30 --
Deferred tax liabilities 258,248,672.58 258,248,672.58 --
Other non-current liabilities -- -- --
Total non-current liabilities 3,735,744,130.17 3,735,744,130.17 --
－139－
Beijing Shougang Co. Ltd
Notes to the Financial Statements
FY21 (Unit: RMB, unless otherwise specified)
Item 2020.12.31 2021.01.01 Adjustment
Total liabilities 33,869,348,079.36 33,869,348,079.36 --
Shareholders’ equity:
Share capital 5,289,389,600.00 5,289,389,600.00 --
Capital reserve 12,129,563,493.89 12,129,563,493.89 --
Less:treasury shares -- -- --
Other comprehensive income 195,210,244.82 195,210,244.82 --
Special reserve -- -- --
Surplus reserve 1,828,677,846.37 1,828,677,846.37 --
Retained earnings 8,856,123,340.12 8,856,123,340.12 --
Total shareholders’ equity 28,298,964,525.20 28,298,964,525.20 --
Total liabilities and shareholders’ equity 62,168,312,604.56 62,168,312,604.56 --
IV. Tax
1. Main types of taxes and corresponding tax rates
Tax type Tax basis Tax rate%
Value-added tax Taxable Revenue 13/9/6/5
City construction
Turnover tax payable 7/5
and maintenance tax
Education surcharge Turnover tax payable 3
Local education surcharge Turnover tax payable 2
Income tax Taxable Income 25
2. Tax preferential benefits and approvals
On 25 October 2021, the Company obtained the high-tech enterprise certificate issued by Beijing
Municipal Science and Technology Commission with the certificate number of GR202111003103
and the certificate is valid for three years.
On 14 September 2021, Beijing Shougang Cold Rolling Co., Ltd., a subsidiary of the Company
obtained the high-tech enterprise certificate issued by Beijing Municipal Science and Technology
Commission with the certificate number of GR202111000699 and the certificate is valid for three
years.
On 18 September 2021, Shougang Jingtang United Iron & Steel Co., Ltd., a subsidiary of the
Company, obtained the high-tech enterprise certificate issued by Hebei Science and Technology
Commission with the certificate number of GR202113000808 and the certificate is valid for three
years.
On 30 October 2019, Shougang Zhixin Qian'an Electromagnetic Materials Co., Ltd., a subsidiary of
the Company, obtained the high-tech enterprise certificate issued by Hebei Science and Technology
Commission with the certificate number of GR201913001665 and the certificate is valid for three
years.
In accordance to relevant regulations, above companies enjoy a preferential income tax rate at 15%
－140－
Beijing Shougang Co. Ltd
Notes to the Financial Statements
FY21 (Unit: RMB, unless otherwise specified)
in 2021.
Since 1 January 2019, according to Cai Shui [2019] No.13 “Notice of the State Administration of
Taxation on implementing policy of tax reduction for small and low-profit enterprises”, for the part
of annual taxable income less than RMB 1 million of small and low-profit enterprises, tax reduction
of 25% shall be included, and then income tax shall be paid at 20%. Since 1 January 2021 to 31
December 2022, according to Cai Shui [2021] No.12 “Announcement on the implementation of
preferential income tax policies for small and micro enterprises and individual industrial and
commercial households”, for the part of annual taxable income less than RMB 1 million of small
and low-profit enterprises, the enterprise income tax is reduced by half on the base of the
preferential policies of Cai Shui [2019] No.13.Wuhan Shougang Automobile Material Co., Ltd., the
sub-subsidiary of the Company, satisfies the requirements of small and low-profit enterprise
declaration and its income taxes have been declared as the policy of small and low-profit enterprise.
－141－
Beijing Shougang Co. Ltd
Notes to the Financial Statements
FY21 (Unit: RMB, unless otherwise specified)
V. Notes to the consolidated financial statements
1. Cash and cash equivalents
Items 2021.12.31 2020.12.31
Cash on hand 53,404.48 35,022.81
Bank deposits 8,536,627,515.03 4,960,312,643.69
Includes: financial company deposits 8,496,270,996.46 4,951,388,949.60
Other monetary funds 1,748,307,794.48 1,332,152,174.23
Includes: financial company deposits 1,497,328,783.36 888,664,589.42
Total 10,284,988,713.99 6,292,499,840.73
(1) At year ended 2021, except for RMB 1,637,798,719.24 of security deposits, RMB
10,000,000.00 of fixed term deposits, RMB 100,509,062.50 court frozen funds, the Company has
no balance of cash and cash equivalents that are pledged, guaranteed or blocked frozen or overseas
balances that restricted to remittance back.
(2) Bank deposits include interest receivable from deposits of RMB 809,559.17. This part of
interest does not belong to "cash and cash equivalents."
2. Notes receivable
2021.12.31
Items
Book balance Bad debt provision Carrying value
Bank acceptance notes 606,890,114.70 606,890.11 606,283,224.59
Commercial acceptance notes 6,230,323,785.17 6,230,323.80 6,224,093,461.37
Total 6,837,213,899.87 6,837,213.91 6,830,376,685.96
Continued:
2020.12.31
Items
Book balance Bad debt provision Carrying value
Bank acceptance notes 475,034,038.19 475,034.04 474,559,004.15
Commercial acceptance notes 5,650,637,578.99 5,648,704.81 5,644,988,874.18
Total 6,125,671,617.18 6,123,738.85 6,119,547,878.33
(1) The pledged notes receivable of the Company at the end of the year
Items Pledged amount at the end of the year
Bank acceptance notes 99,819,667.90
Commercial acceptance notes 19,753,215.18
Total 119,572,883.08
－142－
Beijing Shougang Co. Ltd
Notes to the Financial Statements
FY21 (Unit: RMB, unless otherwise specified)
(2) Outstanding endorsed or discounted notes that have not matured at the end of the year
Items Amount derecognized at year end Amount not-derecognized at year end
Bank acceptance notes -- 293,906,654.27
Commercial acceptance notes -- 6,039,342,370.06
Total -- 6,333,249,024.33
(3) Notes transferred to accounts receivable due to non-performance of the issuers at the end of the year
Items Amount transferred to accounts receivable at the end of the year
Commercial acceptance notes 9,451,694.85
(4) Classified by bad debt provision method
2021.12.31
Book balance Bad debt provision
Category
Carrying value
Proportion Expected credit loss
Amount Amount
(%) (%)
Bad debt provision
-- -- -- -- --
assessed individually
Assessed bad debt
6,837,213,899.87 100.00 6,837,213.91 0.10 6,830,376,685.96
provision in portfolios
Portfolio 1 -- -- -- -- --
Portfolio 2 6,837,213,899.87 100.00 6,837,213.91 0.10 6,830,376,685.96
Total 6,837,213,899.87 100.00 6,837,213.91 0.10 6,830,376,685.96
Continued:
2020.12.31
Category Book balance Bad debt provision
Carrying value
Proportion Expected credit loss
Amount Amount
(%) (%)
Bad debt provision assessed
-- -- -- -- --
individually
Bad debt provision assessed
6,125,671,617.18 100.00 6,123,738.85 0.10 6,119,547,878.33
in portfolios
Portfolio 1 -- -- -- -- --
Portfolio 2 6,125,671,617.18 100.00 6,123,738.85 0.10 6,119,547,878.33
Total 6,125,671,617.18 100.00 6,123,738.85 0.10 6,119,547,878.33
－143－
Beijing Shougang Co. Ltd
Notes to the Financial Statements
FY21 (Unit: RMB, unless otherwise specified)
(5) Provision, recovery or reversal of bad debt
Items Bad debt provision
As at 31 December 2020 6,123,738.85
Provision 713,475.06
Recovery or reversal --
Written-off --
As at 31 December 2021 6,837,213.91
(6) There is no notes receivable written off during the reporting period.
3. Accounts receivable
(1) Disclosed by the ageing
Ageing 2021.12.31 2020.12.31
Within 1 year 1,734,897,859.01 1,468,820,426.92
1 – 2 years 5,469,120.72 7,459,500.63
2 – 3 years 7,533,727.52 11,835,039.58
3 – 4 years 5,897,009.66 --
4 – 5 years -- --
Over 5 years 3,003,921.82 5,092,031.82
Subtotal 1,756,801,638.73 1,493,206,998.95
Less: provision for bad debts 78,193,245.02 69,114,154.03
Total 1,678,608,393.71 1,424,092,844.92
(2) Disclosed by bad debt provision
2021.12.31
Book balance Bad debt provision
Category
Expected Carrying value
Amount Proportion (%) Amount credit loss
(%)
Bad debt provision
12,828,816.67 0.73 12,828,816.67 100.00 --
assessed individually
Bad debt provision
1,743,972,822.06 99.27 65,364,428.35 3.75 1,678,608,393.71
assessed in portfolios
Total 1,756,801,638.73 100.00 78,193,245.02 4.45 1,678,608,393.71
－144－
Beijing Shougang Co. Ltd
Notes to the Financial Statements
FY21 (Unit: RMB, unless otherwise specified)
Disclosed by bad debt provision (continued)：
2020.12.31
Book balance Bad debt provision
Category
Expected Carrying value
Proportion
Amount Amount credit loss
(%)
(%)
Bad debt provision
16,317,534.36 1.09 16,317,534.36 100.00 --
assessed individually
Bad debt provision
1,476,889,464.59 98.91 52,796,619.67 3.57 1,424,092,844.92
assessed in portfolios
Total 1,493,206,998.95 100.00 69,114,154.03 4.63 1,424,092,844.92
Bad debt provision assessed individually:
2021.12.31
Accounts receivable (by
debtor) Expected credit Reason for
Book balance Bad debt provision
loss (%) bad debts
Accounts receivable over
3,377,121.82 3,377,121.82 100.00 Long aging
3 years
Overdue recourse notes 9,451,694.85 9,451,694.85 100.00 Overdue recourse notes
Total 12,828,816.67 12,828,816.67 100.00
Continued:
2020.12.31
Accounts receivable (by
debtor) Expected credit Reason for
Book balance Bad debt provision
loss (%) bad debts
Accounts receivable over
5,092,031.82 5,092,031.82 100.00 Long aging
3 years
Overdue recourse
Overdue recourse notes 11,225,502.54 11,225,502.54 100.00
notes
Total 16,317,534.36 16,317,534.36 100.00
Bad debt provision assessed in portfolios:
2021.12.31
Items
Accounts receivable Bad debt provision Expected credit loss (%)
Within 1 year 1,734,897,859.01 60,842,691.31 3.51
1 – 2 years 4,469,120.72 1,253,706.63 28.05
2 – 3 years 4,605,842.33 3,268,030.41 70.95
Over 3 years -- -- --
Total 1,743,972,822.06 65,364,428.35 3.75
－145－
Beijing Shougang Co. Ltd
Notes to the Financial Statements
FY21 (Unit: RMB, unless otherwise specified)
Continued:
2020.12.31
Items
Accounts receivable Bad debt provision Expected credit loss (%)
Within 1 year 1,468,820,426.92 49,938,177.48 3.40
1 – 2 years 6,459,500.63 1,750,200.39 27.09
2 – 3 years 1,609,537.04 1,108,241.80 68.85
Over 3 years -- -- --
Total 1,476,889,464.59 52,796,619.67 3.57
(3) Provision, recovery or reversal of bad debt
Items Bad debt provision
As at 31 December 2020 69,114,154.03
Provision 9,079,090.99
Recovery or reversal --
Written-off --
As at 31 December 2021 78,193,245.02
(4) There is no accounts receivable write-off during reporting period.
(5) The top five accounts receivable classified by debtors are as follows:
During the year, the total amount of the top five accounts receivable collected by debtors at the end
of the period is RMB 807,834,330.52, accounts for 45.99% of the total amount of accounts
receivable at the end of the period, and the total amount of the corresponding bad debt provision at
the end of the period is RMB 28,327,363.38.
Percentage of total Closing balance
Company Name Closing balance accounts of bad
receivable % debt provision
Shougang Casey Steel Co., Ltd. 259,971,350.16 14.80 9,116,105.40
Chongqing Yongchuan Great Wall Automotive 209,035,450.77 11.90 7,329,996.95
Parts Company Limited
China First Automobile Co., Ltd. 142,976,470.66 8.14 5,013,585.44
Shanghai Zhenhua Heavy Industries Co., Ltd. 117,233,721.35 6.67 4,110,895.14
Dongguan Southern Cimc Logistics Equipment
78,617,337.58 4.48 2,756,780.45
Manufacture Co., Ltd.
Total 807,834,330.52 45.99 28,327,363.38
－146－
Beijing Shougang Co. Ltd
Notes to the Financial Statements
FY21 (Unit: RMB, unless otherwise specified)
4. Financing receivable
Items 2021.12.31 2020.12.31
Notes receivable 4,015,188,495.05 4,532,592,689.43
Less：Other comprehensive income - fair value changes -- --
Closing balance of fair value 4,015,188,495.05 4,532,592,689.43
The Company discounts and endorses most bank acceptance notes in accordance with routine fund
management, therefore the bank acceptance notes are classified as financial assets at fair value
through other comprehensive income.
(1) Classified by bad debt provision method
2021.12.31
Book balance Bad debt provision
Category
Expected Carrying value
Proportion
Amount Amount credit loss
(%)
(%)
Bad debt provision
-- -- -- -- --
assessed individually
Bad debt provision
assessed in 4,015,991,400.14 100.00 802,905.09 0.02 4,015,188,495.05
portfolios
Portfolio 1 4,015,991,400.14 100.00 802,905.09 0.02 4,015,188,495.05
Portfolio 2 -- -- -- -- --
Total 4,015,991,400.14 100.00 802,905.09 0.02 4,015,188,495.05
Continued:
2020.12.31
Book balance Bad debt provision
Category
Expected Carrying value
Proportion
Amount Amount credit loss
(%)
(%)
Bad debt provision
-- -- -- -- --
assessed individually
Bad debt provision
assessed in 4,533,499,199.26 100.00 906,509.83 0.02 4,532,592,689.43
portfolios
Portfolio 1 4,533,499,199.26 100.00 906,509.83 0.02 4,532,592,689.43
Portfolio 2 -- -- -- -- --
Total 4,533,499,199.26 100.00 906,509.83 0.02 4,532,592,689.43
－147－
Beijing Shougang Co. Ltd
Notes to the Financial Statements
FY21 (Unit: RMB, unless otherwise specified)
(2) Provision, recovery or reversal of bad debt
Items Bad debt provision
As at 31 December 2020 906,509.83
Provision --
Recovery or reversal 103,604.74
Written-off --
As at 31 December 2021 802,905.09
(3) The pledged notes receivable of the Company at the end of the year
Items Pledged amount at the end of the year
Bank acceptance notes 911,313,046.69
Commercial acceptance notes --
Total 911,313,046.69
(4) Outstanding endorsed or discounted notes that have not matured at the end of the year
Items Amount derecognized at year end Amount not-derecognized at year end
Bank acceptance notes 29,470,084,885.55 --
Commercial acceptance notes -- --
Total 29,470,084,885.55 --
5. Prepayments
(1) Disclosed by ageing of prepayments
2021.12.31 2020.12.31
Ageing
Amount Proportion (%) Amount Proportion (%)
Within 1 year 1,187,511,241.63 99.58 334,913,340.57 95.05
1 – 2 years 2,390,257.98 0.20 14,309,245.03 4.06
2 – 3 years 1,787,907.90 0.15 90,350.00 0.03
Over 3 years 880,589.39 0.07 3,042,606.90 0.86
Total 1,192,569,996.90 100.00 352,355,542.50 100.00
(2)As of 31 December 2021, there is no important prepayment with an account age of over 1 year.
(3) The top five prepayments classified by debtors are as follows:
During the year, the total amount of the top five prepayments classified by debtors at the end of the
period is RMB 797,806,692.63, accounts for 66.89% of the total amount of prepayments at the end
of the period.
－148－
Beijing Shougang Co. Ltd
Notes to the Financial Statements
FY21 (Unit: RMB, unless otherwise specified)
Percentage of total
Company name Closing balance
prepayments %
Tangshan Caofeidian Ganglian Logistics Co., Ltd. 262,876,222.88 22.04
Shanxi Coking Co., Ltd. 237,955,206.32 19.95
Coal and Coke Sales Co., Ltd. of Shanxi Coking Coal Group
174,959,347.15 14.67
Co., Ltd.
Tianjin Jintie Xincheng Freight Forwarding Co., Ltd. 73,040,095.45 6.12
Tangshan Zhongrun Coal Chemical Co., Ltd. 48,975,820.83 4.11
Total 797,806,692.63 66.89
6. Other receivables
Items 2021.12.31 2020.12.31
Dividends receivable -- 4,892,288.48
Other receivables 16,992,715.92 17,002,958.09
Total 16,992,715.92 21,895,246.57
(1) Dividends receivable
Items 2021.12.31 2020.12.31
Hebei Jingji Industry & Trading Co., Ltd. -- 4,892,288.48
Less:bad debt provision -- --
Total -- 4,892,288.48
(2) Other receivables
①Disclosed by ageing of other receivables
Ageing 2021.12.31 2020.12.31
Within 1 year 9,257,052.78 12,915,931.37
1 – 2 years 7,918,680.72 1,922,905.13
2 – 3 years 649,678.57 2,883,929.31
3 – 4 years 587,104.55 722,708.47
4 – 5 years 503,460.47 2,705,793.91
Over 5 years 5,859,075.32 3,916,737.20
Subtotal 24,775,052.41 25,068,005.39
Less: provision for bad
7,782,336.49 8,065,047.30
debts
Total 16,992,715.92 17,002,958.09
－149－
Beijing Shougang Co. Ltd
Notes to the Financial Statements
FY21 (Unit: RMB, unless otherwise specified)
②Disclosed by nature of other receivables
2021.12.31 2020.12.31
Items Carrying Carrying
Provision for Closing Provision for
Closing balance
bad debts value balance bad debts value
Petty cash 2,928,009.49 423,868.66 2,504,140.83 4,090,770.93 1,118,251.50 2,972,519.43
Deposits 12,643,770.00 812,188.50 11,831,581.50 12,043,324.63 760,547.45 11,282,777.18
Due from
other 6,381,935.32 3,724,941.73 2,656,993.59 6,112,572.23 3,364,910.75 2,747,661.48
companies
Court debit 2,821,337.60 2,821,337.60 -- 2,821,337.60 2,821,337.60 --
Total 24,775,052.41 7,782,336.49 16,992,715.92 25,068,005.39 8,065,047.30 17,002,958.09
③Provision for bad debts
As at 31 December 2021, Phase I bad debts provision:
Expected credit loss
Provision for Reason for
Category Book balance within 12 months Carrying value
bad debts bad debts
(%)
Bad debt provision assessed
individually
-- -- -- --
Bad debt provision assessed in
portfolios
9,237,576.78 5.00 461,878.85 8,775,697.93
Petty cash and deposits 7,797,303.58 5.00 389,865.18 7,407,438.40
Due from other companies 1,440,273.20 5.00 72,013.67 1,368,259.53
Total 9,237,576.78 5.00 461,878.85 8,775,697.93
As at 31 December 2021, Phase II bad debts provision:
Expected credit loss
Provision for Reason for
Category Book balance within the lifetime Carrying value
bad debts bad debts
(%)
Bad debt provision assessed
individually
-- -- -- --
Bad debt provision assessed in
portfolios
9,142,636.31 10.12 925,618.32 8,217,017.99
Petty cash and deposits 7,603,755.91 8.88 675,471.97 6,928,283.94
Due from other companies 1,538,880.40 16.26 250,146.35 1,288,734.05
Total 9,142,636.31 10.12 925,618.32 8,217,017.99
－150－
Beijing Shougang Co. Ltd
Notes to the Financial Statements
FY21 (Unit: RMB, unless otherwise specified)
As at 31 December 2021, Phase III bad debts provision:
Expected credit los
Provision for bad Reason for
Category Book balance s over the lifetime Carrying value
debts bad debts
(%)
Bad debt provision assessed
individually
Yinchuan Intermediate People's Court 516,288.00 100.00 516,288.00 --
People's Court of Muye District,
Xinxiang City, Henan Province
2,305,049.60 100.00 2,305,049.60 --
Petty cash over 5 years 170,720.00 100.00 170,720.00 --
Due from other companiesover 5 years 3,402,781.72 100.00 3,402,781.72 --
Total 6,394,839.32 100.00 6,394,839.32 --
As at 31 December 2020, Phase I bad debts provision:
Expected credit los
Provision for Reason for
Category Book balance s within 12 months Carrying value
bad debts bad debts
(%)
Bad debt provision assessed
individually
-- -- -- --
Bad debt provision assessed in
portfolios
12,399,643.37 5.00 619,982.18 11,779,661.19
Petty cash and deposits 11,001,515.86 5.00 550,075.80 10,451,440.06
Due from other companies 1,398,127.51 5.00 69,906.38 1,328,221.13
Total 12,399,643.37 5.00 619,982.18 11,779,661.19
As at 31 December 2020, Phase II bad debts provision:
Expected credit loss
Provision for Reason for
Category Book balance within the lifetime Carrying value
bad debts bad debts
(%)
Bad debt provision assessed
individually
-- -- -- --
Bad debt provision assessed in
portfolios
5,930,287.22 11.92 706,990.32 5,223,296.90
Petty cash and deposits 4,261,523.91 10.74 457,667.37 3,803,856.54
Due from other companies 1,668,763.31 14.94 249,322.95 1,419,440.36
Total 5,930,287.22 11.92 706,990.32 5,223,296.90
－151－
Beijing Shougang Co. Ltd
Notes to the Financial Statements
FY21 (Unit: RMB, unless otherwise specified)
As at 31 December 2020, Phase III bad debts provision:
Expected credit los
Provision for bad Reason for
Category Book balance s over the lifetime Carrying value
debts bad debts
(%)
Bad debt provision assessed
-- -- -- --
individually
Yinchuan Intermediate People's Court 516,288.00 100.00 516,288.00 --
People's Court of Muye District,
Xinxiang City, Henan Province
2,305,049.60 100.00 2,305,049.60 --
Petty cash over 5 years 871,055.79 100.00 871,055.79 --
Due from other companiesover 5 years 3,045,681.41 100.00 3,045,681.41 --
Total 6,738,074.80 100.00 6,738,074.80 --
④Provision, recovery or reversal of bad debt
Phase I Phase II Phase III
Expected credit loss
Provision for bad debts Expected credit Expected credit loss Total
over the lifetime
loss within 12 over the lifetime (no
(credit impairment
months credit impairment)
occurred)
As at 31 December 2020 619,982.18 706,990.32 6,738,074.80 8,065,047.30
Changes during the year
--Shift to Phase II -- -- -- --
--Shift to Phase III -- -- -- --
--Back to Phase II -- -- -- --
--Back to Phase I -- -- -- --
Provision -- 218,628.00 -- 218,628.00
Reversal 158,103.33 -- 343,235.48 501,338.81
Converse -- -- -- --
Written-off -- -- -- --
Other movements -- -- -- --
As at 31 December 2021 461,878.85 925,618.32 6,394,839.32 7,782,336.49
⑤There is no write-off of provision for bad debts during reporting period.
－152－
Beijing Shougang Co. Ltd
Notes to the Financial Statements
FY21 (Unit: RMB, unless otherwise specified)
⑥The top five other receivables classified by debtors are as follows:
Percentage of Closing balance
Company Name Nature Closing balance Ageing total other of bad
receivable (%) debt provision
Bmw Brilliance Automotive Security
6,000,000.00 1-2 year 24.22 480,000.00
Ltd. fund
Petty cash Petty cash 2,928,009.49 1-5 years 11.82 423,868.66
Henan Taihang Vibrating Court
2,305,049.60 over 5 years 9.30 2,305,049.60
Machinery Co., Ltd. debit
Due from other companies Due from
2,000,000.00 over 5 years 8.07 2,000,000.00
over 5 years trading
China Railway Major Bridge Security Within 1
1,400,000.00 5.65 70,000.00
Engineering Group Co., Ltd. fund years
Total 14,633,059.09 59.06 5,278,918.26
7. Inventories
(1) Classification of inventories
2021.12.31 2020.12.31
Items Provision for Carrying Provision for Carrying
Book balance Book balance
impairment value impairment value
Raw
3,337,802,209.73 44,544,258.60 3,293,257,951.13 3,086,100,265.11 61,148,560.44 3,024,951,704.67
materials
Finished
4,372,913,179.13 102,584,159.77 4,270,329,019.36 3,697,587,429.50 47,273,967.29 3,650,313,462.21
goods
Consumables 528,353,704.73 -- 528,353,704.73 792,185,183.43 -- 792,185,183.43
Self-made
semi-finished 3,808,677,560.29 -- 3,808,677,560.29 3,132,280,701.97 -- 3,132,280,701.97
goods
Total 12,047,746,653.88 147,128,418.37 11,900,618,235.51 10,708,153,580.01 108,422,527.73 10,599,731,052.28
(2) Provision for impairment
Increase Decrease
Items 2021.01.01 2021.12.31
Reversal or
Provision Others Others
Write-off
Raw materials 61,148,560.44 -- -- 16,604,301.84 -- 44,544,258.60
Finished goods 47,273,967.29 167,567,546.04 -- 112,257,353.56 -- 102,584,159.77
Total 108,422,527.73 167,567,546.04 -- 128,861,655.40 -- 147,128,418.37
－153－
Beijing Shougang Co. Ltd
Notes to the Financial Statements
FY21 (Unit: RMB, unless otherwise specified)
8. Other current assets
Items 2021.12.31 2020.12.31
Input value added tax 267,822,797.14 128,761,143.08
Input value added tax to be certified 429,476,806.82 329,157,513.74
Prepaid income tax 20,063,782.91 15,705,110.79
Entrusted Loans 147,227,500.00 245,455,297.98
Carbon emission rights assets 74,842.65 --
Total 864,665,729.52 719,079,065.59
－154－
Beijing Shougang Co. Ltd
Notes to the Financial Statements
FY21 (Unit: RMB, unless otherwise specified)
9. Long-term equity investments
Movements during the year
Investment
Adjustment Impairment
gains and Cash
Company Nmae 2020.12.31 of other Other Provision 2021.12.31 at the end
Additional Reduce losses dividend
comprehensi equity for Others of the year
investment investment confirmed or profit
ve movement impairment
under the declared
income
equity method
①Joint ventures
Tangshan Guoxing
32,911,004.94 -- -- 5,376,570.92 -- -- 2,000,000.00 -- -- 36,287,575.86 --
Industrial Co., Ltd.
Tangshan Zhonghong
Carbon Chemical 108,750,931.30 -- -- -87,214,701.86 -- -- -- -- -- 21,536,229.44 --
Co., Ltd.
Tangshan Shougang
Jingtang Xishan 1,087,536,364.97 -- -- 28,387,430.23 -- -2,755,692.16 -- -- -- 1,113,168,103.04 --
Coking Co., Ltd.
Subtotal 1,229,198,301.21 -- -- -53,450,700.71 -- -2,755,692.16 2,000,000.00 -- -- 1,170,991,908.34 --
②Associates
Tangshan Tangcao
450,000,000.00 -- -- -67,696,004.52 -- 106,991.64 -- -- -- 382,410,987.12 --
Railway Co., Ltd.
Tangshan Caofeidian
Dunshi New
83,495,502.41 -- -- 8,046,389.32 -- -- 12,500,000.00 -- -- 79,041,891.73 --
Construction
Material Co., Ltd.
Qian'an Sinochem
Coal Chemical 952,347,397.55 -- -- 145,737,955.36 -- -- -- -- -- 1,098,085,352.91 --
Industrial Co., Ltd.
Beijing Shouxin
Jinyuan Management
431,802,688.92 -- 200,000,000.00 54,630,078.50 -- -- 173,716,946.85 -- -- 112,715,820.57 --
Consulting Center
(Limited Partnership)
Beijing
Dingshengcheng
11,380,505.05 -- -- 2,606,585.31 -- -- -- -- -- 13,987,090.36 --
Packaging Materials
Co., Ltd.
－155－
Beijing Shougang Co. Ltd
Notes to the Financial Statements
FY21 (Unit: RMB, unless otherwise specified)
Ningbo Shougang
20,636,741.37 -- -- 525,032.30 -- -- 484,615.99 -- -- 20,677,157.68 --
Zhejin Steel Co., Ltd.
Guangzhou Jinghai
30,554,980.75 -- -- 634,241.83 -- -98.58 600,000.00 -- -- 30,589,124.00 --
Shipping Co., Ltd.
Shougang (Qingdao)
Steel Industry Co., 46,275,722.81 8,750,000.00 -- 1,577,638.95 -- -- -- -- -- 56,603,361.76 --
Ltd.
Guangdong
Shougang Zhongshan
Metal Steel 17,098,875.96 -- 12,000,000.00 656,416.90 -- -- 5,755,292.86 -- -- -- --
Processing&Distribut
ion Co., Ltd.
Ordos Baotou Steel
Shourui Material 39,011,380.97 -- -- 17,618.77 -- -- -- -- -- 39,028,999.74 --
Technology Co., Ltd.
Tianjin Shougang
Steel
23,029,268.50 -- -- -2,682,116.64 -- -- -- -- -- 20,347,151.86 --
Processing&Distribut
ion Co., Ltd.
Hebei Jingji Industry
6,376,799.26 -- -- 2,332,645.82 -- -- 1,258,306.84 -- -- 7,451,138.24 --
& Trading Co., Ltd.
Qian'an Jinyu
Shougang
Environmental -- 33,791,925.24 -- 206,988.73 -- -- -- -- -- 33,998,913.97 --
Protection
Technology Co., Ltd.
Subtotal 2,112,009,863.55 42,541,925.24 212,000,000.00 146,593,470.63 -- 106,893.06 194,315,162.54 -- -- 1,894,936,989.94 --
Total 3,341,208,164.76 42,541,925.24 212,000,000.00 93,142,769.92 -- -2,648,799.10 196,315,162.54 -- -- 3,065,928,898.28 --
－156－
Beijing Shougang Co. Ltd
Notes to the Financial Statements
FY21 (Unit: RMB, unless otherwise specified)
10. Other equity instrument investments
Items 2021.12.31 2020.12.31
Beijing TIEKE Shougang RAILWAY-TECH Co., Ltd. 226,566,944.00 245,378,470.24
Minmetals Special Steel (Dongguan) Co., Ltd. 3,608,571.79 3,442,862.75
Qian'an Shoujia Construction Material Co., Ltd. 13,765,068.94 10,923,584.79
Qian'an PetroChina Kunlun Gas Co., Ltd 14,937,088.81 10,550,949.94
Minmetals Tianwei Steel Co., Ltd. 6,023,090.43 5,950,818.84
Total 264,900,763.97 276,246,686.56
Other
comprehensive
Dividend recognized Accumulated Accumulated income
Items
during the year gain loss transferred Reasons
to retained
earnings
Beijing TIEKE
Shougang
1,349,952.00 216,865,744.00 -- --
RAILWAY-TECH
Co., Ltd.
Minmetals Special
Steel (Dongguan) -- -- 1,391,428.21 --
Co., Ltd.
Qian'an Shoujia
Construction Material -- -- 9,101,306.06 --
Co., Ltd.
Qian'an PetroChina
1,218,825.38 13,137,088.81 1,196,909.57 --
Kunlun Gas Co., Ltd
Minmetals Tianwei
150,000.00 -- -- --
Steel Co., Ltd.
Total 2,718,777.38 230,002,832.81 11,689,643.84 --
11. Other non-current financial assets
Items 2021.12.31 2020.12.31
Financial assets measured at fair value
80,000,000.00 --
through profit and loss
Continued:
Items 2021.12.31 2020.12.31
Beijing Shouxin Jin'an Equity Investment
80,000,000.00 --
Partnership (Limited Partnership)
Note: The fair value and investment of Beijing Shouxin Jin'an Equity Investment Partnership
(Limited Partnership) are detailed in Notes Ⅶ, 3 and Notes Ⅸ.
157
Beijing Shougang Co. Ltd
Notes to the Financial Statements
FY21 (Unit: RMB, unless otherwise specified)
12. Fixed assets
Items 2021.12.31 2020.12.31
Fixed assets 95,632,825,411.62 96,220,769,301.39
Fixed assets to be disposed -- --
Total 95,632,825,411.62 96,220,769,301.39
158
Beijing Shougang Co. Ltd
Notes to the Financial Statements
FY21 (Unit: RMB, unless otherwise specified)
Fixed assets
①Details of fixed assets
Machinery and Metallurgical
Items Plant and buildings Motor vechiles Electronic equipment Industrial furnace Other tools Total
equipment equipment
I. Cost：
1. At 31 December 2020 35,291,731,605.92 38,576,931,300.72 2,279,000,791.65 8,492,855,841.26 600,671,077.96 65,404,520,847.03 1,103,207,965.29 151,748,919,429.83
2.Increase 1,664,827,205.55 2,889,108,127.62 130,606,904.28 987,994,414.07 639,571,906.22 516,130,834.76 -48,645,654.12 6,779,593,738.38
(1) Purchase 3,388,588.55 98,367,040.85 17,731,314.89 91,586,687.52 92,120.00 54,615,638.95 8,710,836.50 274,492,227.26
(2) Transferred from
1,661,438,617.00 2,790,741,086.77 112,875,589.39 896,407,726.55 639,479,786.22 461,515,195.81 -57,356,490.62 6,505,101,511.12
construction in progress
3.Decrease 63,861,337.42 27,770,421.27 46,732,042.28 26,358,873.48 -- 61,749,450.30 3,861,200.10 230,333,324.85
Disposal or retirement 63,861,337.42 27,770,421.27 46,732,042.28 26,358,873.48 -- 61,749,450.30 3,861,200.10 230,333,324.85
4. At 31 December 2021 36,892,697,474.05 41,438,269,007.07 2,362,875,653.65 9,454,491,381.85 1,240,242,984.18 65,858,902,231.49 1,050,701,111.07 158,298,179,843.36
II. Accumulated depreciation:
1. At 31 December 2020 8,531,130,927.72 12,715,228,911.58 1,427,849,690.13 4,450,314,324.34 331,675,314.84 27,778,520,951.93 293,430,007.90 55,528,150,128.44
2.Increase 1,354,047,663.36 1,996,355,251.83 129,257,883.50 893,891,223.20 242,974,717.32 2,600,164,437.64 70,868,074.34 7,287,559,251.19
Depreciation 1,354,047,663.36 1,996,355,251.83 129,257,883.50 893,891,223.20 242,974,717.32 2,600,164,437.64 70,868,074.34 7,287,559,251.19
3.Decrease 19,060,021.41 19,660,860.68 42,799,687.21 23,793,641.40 -- 42,257,856.77 2,782,880.42 150,354,947.89
Disposal or retirement 19,060,021.41 19,660,860.68 42,799,687.21 23,793,641.40 -- 42,257,856.77 2,782,880.42 150,354,947.89
4.At 31 December 2021 9,866,118,569.67 14,691,923,302.73 1,514,307,886.42 5,320,411,906.14 574,650,032.16 30,336,427,532.80 361,515,201.82 62,665,354,431.74
III. Impaiment
159
Beijing Shougang Co. Ltd
Notes to the Financial Statements
FY21 (Unit: RMB, unless otherwise specified)
Machinery and Metallurgical
Items Plant and buildings Motor vechiles Electronic equipment Industrial furnace Other tools Total
equipment equipment
1.At 31 December 2020 -- -- -- -- -- -- -- --
2.Increase -- -- -- -- -- -- -- --
3.Decrease -- -- -- -- -- -- -- --
4.At 31 December 2021 -- -- -- -- -- -- -- --
IV. Carrying value
1.31 December 2021 27,026,578,904.38 26,746,345,704.34 848,567,767.23 4,134,079,475.71 665,592,952.02 35,522,474,698.69 689,185,909.25 95,632,825,411.62
2.31 December 2020 26,760,600,678.20 25,861,702,389.14 851,151,101.52 4,042,541,516.92 268,995,763.12 37,625,999,895.10 809,777,957.39 96,220,769,301.39
Notes: As of 31 December 2021, there is no mortgaged or guaranteed fixed assets.
160
Beijing Shougang Co. Ltd
Notes to the Financial Statements
FY21 (Unit: RMB, unless otherwise specified)
②As of 31 December 2021, there is no temporarily idle fixed asset.
③As of 31 December 2021,fixed assets leased through operating leases are as follows:
Items Carrying value
Plant and buildings 104,985,239.21
④Fixed assets pending certificates of ownership
Items Carrying value Reasons for pending certificates
Building of Beijing Shougang Cold Rolling Co.,
34,888,371.00 Property certificate is in the process
Ltd.
Building of Shougang Jingtang United Iron & To be handled after completing the relevant procedures
10,929,553,956.19
Steel Co., Ltd. of the occupied phase I project land
Building of Beijing Shougang Steel Trading
139,752,085.12 Property certificate is in the process
Investment Management Co., Ltd.
13. Construction in progress
Items 2021.12.31 2020.12.31
Construction in progress 6,517,089,845.13 7,895,623,444.81
Construction materials 619,893,915.94 401,558,503.81
Total 7,136,983,761.07 8,297,181,948.62
(1) Construction in progress
①Details of construction in progress
2021.12.31 2020.12.31
Items Provision for Provision for
Book balance Carrying value Book balance Carrying value
impairment impairment
Jingtang Co.
Phase-I and
technical 2,042,734,311.07 -- 2,042,734,311.07 2,408,662,882.37 -- 2,408,662,882.37
transformation
project
Jingtang Co.
21,094,822.03 21,094,822.03 1,366,399,728.62 -- 1,366,399,728.62
Phase-II project
Other projects 4,453,260,712.03 -- 4,453,260,712.03 4,120,560,833.82 -- 4,120,560,833.82
Total 6,517,089,845.13 -- 6,517,089,845.13 7,895,623,444.81 -- 7,895,623,444.81
161
Beijing Shougang Co. Ltd
Notes to the Financial Statements
FY21 (Unit: RMB, unless otherwise specified)
②The movements of major construction projects in progress:
Capitalized
Accumulated Interest
Transferred to Other % of interest
Project name 2020.12.31 Additions interest during 2021.12.31
fixed assets deduction capitalization
capitalization reporting
year
New energy
vehicle
626,005,676.23 371,379,405.96 -- -- 7,647,750.00 7,647,750.00 4.05 997,385,082.19
electrician
steel project
Jingtang Co.
Phase-II 1,366,399,728.62 255,039,979.40 1,600,344,885.99 -- -- -- -- 21,094,822.03
project
Total 1,992,405,404.85 626,419,385.36 1,600,344,885.99 -- 7,647,750.00 7,647,750.00 -- 1,018,479,904.22
The movements of major construction projects in progress (continued): (Unit: RMB hundred
million)
The propotion of projects invest Source of
Project name Budget Progress (%)
ment account for budget % fund
New energy The devicesof the project are
vehicle electrician 19.79 86.97 Selfraised
being installed
steel project
The project has been
Jingtang Co. 238.77 98.00 Selfraised
Phase-II project transferred to fixed assets
③As of 31 December 2021, there is no provision for impairment of construction in progress.
(2) Construction materials
Items 2021.12.31 2020.12.31
Specific materials 17,081,983.66 45,008,729.80
Specific equipments 602,811,932.28 356,549,774.01
Subtotal 619,893,915.94 401,558,503.81
Provision for impairment of construction
-- --
materials
Total 619,893,915.94 401,558,503.81
162
Beijing Shougang Co. Ltd
Notes to the Financial Statements
FY21 (Unit: RMB, unless otherwise specified)
14. Right-of-use assets
Plant and
Items Land use rights Motor vechiles Total
buildings
I. Cost：
At 31 December 2020 -- -- -- --
Add: accounting policy alternative 62,180,405.95 311,888.26 -- 62,492,294.21
1. At 1 January 2021 62,180,405.95 311,888.26 -- 62,492,294.21
2.Increase during the period 53,921,180.55 -- 474,802.94 54,395,983.49
Lease 53,921,180.55 -- 474,802.94 54,395,983.49
3.Decrease during the period -- -- -- --
4. At 31 December 2021 116,101,586.50 311,888.26 474,802.94 116,888,277.70
II. Accumulated depreciation
At 31 December 2020 -- -- -- --
Add: accounting policy alternative -- -- -- --
1. At 1 January 2021 -- -- -- --
2.Increase during the period 16,440,339.87 55,860.60 112,079.59 16,608,280.06
Provision 16,440,339.87 55,860.60 112,079.59 16,608,280.06
3.Decrease during the period -- -- -- --
4. At 31 December 2021 16,440,339.87 55,860.60 112,079.59 16,608,280.06
III. Impaiment
1. At 1 January 2021 -- -- -- --
2.Increase during the period -- -- -- --
3.Decrease during the period -- -- -- --
4. At 31 December 2021 -- -- -- --
IV. Carrying value
1.31 December 2021 99,661,246.63 256,027.66 362,723.35 100,279,997.64
2.1 January 2021 62,180,405.95 311,888.26 -- 62,492,294.21
Note: As of 31 December 2021, lease fees related to short-term leases and leases of low value
assets as detailed in Note XIV, 2.
15. Intangible assets
Details of intangible assets
Items Software Land use rights Total
I. Cost
1.At 31 December 2020 376,144,847.17 4,556,828,461.46 4,932,973,308.63
2.Increase 59,459,544.63 -- 59,459,544.63
Purchase 59,459,544.63 -- 59,459,544.63
3.Decrease 125,270.06 29,302,793.50 29,428,063.56
Disposal 125,270.06 29,302,793.50 29,428,063.56
163
Beijing Shougang Co. Ltd
Notes to the Financial Statements
FY21 (Unit: RMB, unless otherwise specified)
Items Software Land use rights Total
4.At 31 December 2021 435,479,121.74 4,527,525,667.96 4,963,004,789.70
II. Accumulated amortization
1.At 31 December 2020 79,627,203.85 798,066,237.29 877,693,441.14
2.Increase 42,748,017.94 95,324,159.29 138,072,177.23
Provision 42,748,017.94 95,324,159.29 138,072,177.23
3.Decrease 125,270.06 8,320,569.02 8,445,839.08
Disposal 125,270.06 8,320,569.02 8,445,839.08
4.At 31 December 2021 122,249,951.73 885,069,827.56 1,007,319,779.29
III. Impairment
1.At 31 December 2020 -- -- --
2.Increase -- -- --
3.Decrease -- -- --
4.At 31 December 2021 -- -- --
IV. Carrying value
1.31 December 2021 313,229,170.01 3,642,455,840.40 3,955,685,010.41
2.31 December 2020 296,517,643.32 3,758,762,224.17 4,055,279,867.49
16. Long-term prepaid expenses
Decrease
Items 2020.12.31 Increase 2021.12.31
Amortization Others
Renovation costs 1,122,060.45 449,433.95 345,030.83 -- 1,226,463.57
17. Deferred income tax assets and deferred income tax liabilities
(1) Deferred income tax assets and deferred income tax liabilities before offsetting
2021.12.31 2020.12.31
Items Deductible/taxable
Deductible/taxable Deferred tax Deferred tax
temporary
temporary differences assets/liabilities assets/liabilities
differences
Deferred tax assets：
Asset impairment provision 337,661,843.04 54,026,814.61 180,255,923.00 29,932,810.24
The actual payment amount of
payroll payable less than the 11,854,543.71 1,778,181.56 11,860,973.73 1,779,146.06
accrued amount
Defferred income 222,651,867.20 33,808,482.45 231,572,159.49 35,170,511.45
Asset amortization difference 6,443,561.93 966,534.25 8,225,748.90 1,233,862.32
Unrealized internal transaction 323,189,435.59 48,478,415.34 244,850,723.70 36,727,608.55
164
Beijing Shougang Co. Ltd
Notes to the Financial Statements
FY21 (Unit: RMB, unless otherwise specified)
Joint commissioning cost 330,082,990.71 49,512,448.61 287,056,216.51 43,058,432.48
Differences in amortization of 2,078,979.09 437,933.60 -- --
right-of-use assets
Equity incentive 4,643,140.32 712,612.87 -- --
Subtotal 1,238,606,361.59 189,721,423.29 963,821,745.33 147,902,371.10
Deferred tax liabilities：
Joint commissioning cost 1,174,742,095.80 176,211,314.37 1,264,022,611.00 189,603,391.65
Changes in fair value of other
equity instrument investments
218,313,188.97 32,746,978.38 229,659,111.56 34,448,866.74
included in other
comprehensive income
Return on investment realized
-- -- 227,976,094.59 34,196,414.19
by the partnership
Subtotal 1,393,055,284.77 208,958,292.75 1,721,657,817.15 258,248,672.58
(2) Details of unrecognized deferred tax assets from deductible temporary differences and
deductible tax losses:
Items 2021.12.31 2020.12.31
Deductible temporary differences 111,280,769.32 82,690,128.78
Deductible tax losses 136,319,094.41 655,600,345.27
Total 247,599,863.73 738,290,474.05
(3) Unrecognized deferred tax liabilities from deductible tax losses will expire in the following
years:
Year 2021.12.31 2020.12.31 Note
2021 —— 522,048,520.82
2022 32,710,500.17 34,487,825.76
2023 33,894,110.96 35,278,200.93
2024 34,359,166.04 34,995,102.07
2025 20,479,539.98 28,790,695.69
2026 14,875,777.26 ——
Total 136,319,094.41 655,600,345.27
18. Other non-current assets
Items 2021.12.31 2020.12.31
Phase II coking project -- 1,965,717,410.38
165
Beijing Shougang Co. Ltd
Notes to the Financial Statements
FY21 (Unit: RMB, unless otherwise specified)
19. Short-term loans
Classification of short-term loans
Items 2021.12.31 2020.12.31
Pledged loans 19,753,215.18 59,260,000.00
Guaranteed loans 8,787,335,054.82 7,736,984,828.91
Credit loans 16,471,285,046.25 15,916,146,611.34
Total 25,278,373,316.25 23,712,391,440.25
Note: The loan of RMB 19,753,215.18 ispledged by a discounted but unmatured and
non-terminatingly recognized note with a carrying value of RMB 19,753,215.18.
20. Notes payable
Items 2021.12.31 2020.12.31
Commercial acceptance notes 6,915,076,896.08 6,648,310,000.00
Bank acceptances 573,853,897.69 156,500,000.00
Total 7,488,930,793.77 6,804,810,000.00
21. Accounts payable
Items 2021.12.31 2020.12.31
Payables for goods 22,841,312,053.50 21,105,550,686.36
Payables for construction 3,424,278,719.60 5,433,803,694.32
Total 26,265,590,773.10 26,539,354,380.68
Among which, the material payables aged over 1 year are as follows:
Reason for
Company name Closing balance
non-settlement
Beijing Shougang Mining Investment Co., Ltd 175,708,332.43 In the execution
Tangshan Shoukuang Cleaning Iron Co., Ltd. 137,489,080.84 In the execution
Beijing Shougang Special Steel Co., Ltd. 101,949,940.33 In the execution
Beijing Teyu Plate Co., Ltd. 85,095,430.63 In the execution
Beijing Shougang Resources Comprehensive Utilization
57,690,426.64 In the execution
Technology Development Co., Ltd.
Total 557,933,210.87
166
Beijing Shougang Co. Ltd
Notes to the Financial Statements
FY21 (Unit: RMB, unless otherwise specified)
22. Contract liabilities
Items 2021.12.31 2020.12.31
Advance from product sales 5,230,456,327.37 4,659,444,741.25
Less: contractual liabilities included in other non-current liabilities -- --
Total 5,230,456,327.37 4,659,444,741.25
23. Payroll and employee benefits
Items 2020.12.31 Increase Decrease 2021.12.31
Short-term employee benefits 453,649,083.86 4,248,456,762.30 4,222,414,870.02 479,690,976.14
Post-employment benefits (defined
12,670,298.16 418,193,499.23 409,407,632.19 21,456,165.20
contribution plans)
Termination benefits -- 34,298,223.48 34,298,223.48 --
Other retirement benefits due within
-- -- -- --
one year
Total 466,319,382.02 4,700,948,485.01 4,666,120,725.69 501,147,141.34
(1) Short-term employee benefits
Increase Decrease
Items 2020.12.31 2021.12.31
during the year during the year
Salaries, bonuses and subsidies 120,236,346.19 3,288,180,387.33 3,311,295,268.59 97,121,464.93
Welfare -- 254,962,365.35 254,962,365.35 --
Social insurance 123,230,711.43 290,276,896.28 267,037,535.88 146,470,071.83
Including:
123,118,996.23 258,526,134.78 235,522,712.92 146,122,418.09
1.Medical insurance
2.Work-related injury insurance 81,461.20 31,574,108.15 31,309,474.71 346,094.64
3.Maternity insurance 30,254.00 176,653.35 205,348.25 1,559.10
Housing fund 45,687.00 293,079,907.38 293,075,027.38 50,567.00
Labor union fee and employee
210,111,184.77 113,524,726.15 87,587,038.54 236,048,872.38
education fee
Equity incentive -- 7,165,158.72 7,165,158.72 --
Short-term profit-sharing plan -- -- -- --
Non-monetary benefits -- -- -- --
Other short-term employee benefits 25,154.47 1,267,321.09 1,292,475.56 --
Total 453,649,083.86 4,248,456,762.30 4,222,414,870.02 479,690,976.14
167
Beijing Shougang Co. Ltd
Notes to the Financial Statements
FY21 (Unit: RMB, unless otherwise specified)
(2) Defined contribution plans
Items 2020.12.31 Increase Decrease 2021.12.31
Post-employment benefits
Including:
754,477.10 402,053,111.10 393,481,918.10 9,325,670.10
1.Pension insurance
2.Unemployment insurance 11,915,821.06 16,140,388.13 15,925,714.09 12,130,495.10
Total 12,670,298.16 418,193,499.23 409,407,632.19 21,456,165.20
(3) Termination benefits
Item 2020.12.31 Increase Decrease 2021.12.31
Compensation for employee
resettlement
-- 34,298,223.48 34,298,223.48 --
24. Taxes payable
Items 2021.12.31 2020.12.31
Value-added tax 62,122,718.96 328,419,753.24
City construction and maintenance tax 8,001,876.62 8,219,107.89
Corporate income tax 317,223,625.65 204,377,308.95
Land use tax 440,536.03 440,536.03
Real estate tax 869,141.45 662,892.50
Education surcharge 6,022,083.47 6,378,667.56
Resouorce tax 7,531,618.50 8,728,760.60
Stamp duty 8,864,862.42 4,264,130.68
Individual income tax 3,797,661.67 2,817,099.40
Environment protection tax 10,336,189.53 8,226,691.30
Other taxes -- 105,907.85
Total 425,210,314.30 572,640,856.00
25. Other payables
Items 2021.12.31 2020.12.31
Other payables 1,015,941,625.80 2,104,822,314.59
Other payables
Items 2021.12.31 2020.12.31
Deposits 6,242,141.60 6,832,124.47
168
Beijing Shougang Co. Ltd
Notes to the Financial Statements
FY21 (Unit: RMB, unless otherwise specified)
Guarantee 35,537,715.10 342,057,412.19
Due from other companies 706,076,631.73 568,204,855.05
Due from companies of Shougang Group 57,154,287.37 1,187,727,922.88
Repurchase obligation of restricted stock 210,930,850.00 --
Total 1,015,941,625.80 2,104,822,314.59
26. Current portion of non-current liabilities
Items 2021.12.31 2020.12.31
Long-term borrowings due within 1 year 10,404,580,520.24 7,216,108,822.29
Bonds payable due within 1 year 28,468,055.61 4,055,334,722.33
Long-term payables due within 1 year 3,407,794.44 1,679,840.43
Lease liabilities due within 1 year 14,837,257.91 --
Total 10,451,293,628.20 11,273,123,385.05
(1) Long-term borrowings due within 1 year
Items 2021.12.31 2020.12.31
Guaranteed loans 413,924,166.67 2,216,958,333.34
Credit loans 9,990,656,353.57 4,999,150,488.95
Total 10,404,580,520.24 7,216,108,822.29
(2) Bonds payable due within 1 year
Bond name 2021.12.31 2020.12.31
20 Shouqian 01 (accrued interest) 28,468,055.61 28,468,055.57
Zhongshixiezhu No.[2015] MTN688 -- 2,013,366,666.76
Zhongshixiezhu No.[2015] MTN692 -- 2,013,500,000.00
Total 28,468,055.61 4,055,334,722.33
(3) Long-term payables due within 1 year
Items 2021.12.31 2020.12.31
Finance lease payables 3,407,794.44 1,679,840.43
27. Other current liabilities
Items 2021.12.31 2020.12.31
Short-term bonds payable 1,007,299,452.05 501,195,000.00
Tax to be exported 901,212,275.43 605,727,816.36
Total 1,908,511,727.48 1,106,922,816.36
169
Beijing Shougang Co. Ltd
Notes to the Financial Statements
FY21 (Unit: RMB, unless otherwise specified)
Short-term bonds payable:
Bond name Nominal value Issue date Maturity of bond Issue amount
SCP1 500,000,000.00 2020/11/27 110 days 500,000,000.00
SCP2 500,000,000.00 2021/4/2 180 days 500,000,000.00
SCP3 1,000,000,000.00 2021/9/16 239 days 1,000,000,000.00
Subtotal 2,000,000,000.00 2,000,000,000.00
Short-term Bonds Payable (Continued)
Amortization
Interest
of
Bond Issued during accrued per Repaid in the
2020.12.31 premium 2021.12.31
name current period nominal current period
and
value
discount
SCP1 501,195,000.00 -- 2,406,369.86 -- 503,601,369.86 --
SCP2 -- 500,000,000.00 7,101,369.85 -- 507,101,369.85 --
SCP3 -- 1,000,000,000.00 7,299,452.05 -- -- 1,007,299,452.05
Total 501,195,000.00 1,500,000,000.00 16,807,191.76 -- 1,010,702,739.71 1,007,299,452.05
28. Long-term borrowings
Range of Range of interest
Items 2021.12.31 2020.12.31
interest rate rate
Guaranteed loans 9,813,924,166.67 4.75%-4.90% 12,016,958,333.34 4.75%-4.90%
Credit loans 12,283,366,353.57 3.5%-4.90% 15,838,450,488.95 3.5%-4.90%
Subtotal 22,097,290,520.24 27,855,408,822.29
Less: Long-term borrowings
10,404,580,520.24 3.5%-4.90% 7,216,108,822.29 3.5%-4.90%
due within one year
Total 11,692,710,000.00 20,639,300,000.00
29. Bonds payable
Items 2021.12.31 2020.12.31
Common bond 2,500,000,000.00 2,500,000,000.00
Movements in bonds payable
Term to Amount
Bond name Par value Issue date
maturity on offer
Zhongshixiezhu No.[2015] MTN688 2,000,000,000.00 2016/11/3 5 years 2,000,000,000.00
170
Beijing Shougang Co. Ltd
Notes to the Financial Statements
FY21 (Unit: RMB, unless otherwise specified)
Zhongshixiezhu No.[2015] MTN692 2,000,000,000.00 2016/11/3 5 years 2,000,000,000.00
20 Shouqian 01 2,500,000,000.00 2020/9/15 5 years 2,500,000,000.00
Subtotal 6,500,000,000.00 6,500,000,000.00
Bonds payable (Continued)
Current Accrued Amortisation
Current year
Bond name 2020.12.31 year interest by par of premium 2021.12.31
value repayment
issuance or discount
Zhongshixiezhu
2,013,433,333.42 -- 66,766,666.58 -- 2,080,200,000.00 --
No.[2015] MTN688
Zhongshixiezhu
2,013,433,333.34 -- 67,566,666.66 -- 2,081,000,000.00 --
No.[2015] MTN692
20 Shouqian 01 2,528,468,055.57 -- 99,500,000.04 -- 99,500,000.00 2,528,468,055.61
Subtotal 6,555,334,722.33 -- 233,833,333.28 -- 4,260,700,000.00 2,528,468,055.61
Less: Long-term
loans due within 1 4,055,334,722.33 28,468,055.61
year
Total 2,500,000,000.00 2,500,000,000.00
30. Lease liabilities
Items 2021.12.31 2021.01.01
Lease liabilities 100,960,468.26 60,229,216.53
Less: lease liabilities due within 1 year 14,837,257.91 3,541,355.85
Total 86,123,210.35 56,687,860.68
Note: The interest expense of lease liabilities in 2021 is RMB 4,895,508.98, which is
included in financial expenses – interests on lease liabilities.
31. Long-term payables
Items 2021.12.31 2020.12.31
Long-term payables 12,359,657.85 6,641,452.29
Special payables 2,300,000.00 2,300,000.00
Total 14,659,657.85 8,941,452.29
(1) Long-term payables
Items 2021.12.31 2020.12.31
Finance lease payables 15,767,452.29 8,321,292.72
Less: Long-term payables due within 1 year 3,407,794.44 1,679,840.43
Total 12,359,657.85 6,641,452.29
(2) Special payables
171
Beijing Shougang Co. Ltd
Notes to the Financial Statements
FY21 (Unit: RMB, unless otherwise specified)
Items 2020.12.31 Increase Decrease 2021.12.31 Reason
Research and development funds 2,300,000.00 -- -- 2,300,000.00
32. Deferred revenue
Increase Decrease 2021.12.31 Reason
Items 2020.12.31
During the year During the year
Government grant 398,098,805.65 29,972,100.00 24,060,120.26 404,010,785.39
Notes: The government grants which recognized as deferred revenue refer to Note V. 58
government grants.
33. Other non-current liabilities
Items 2021.12.31 2020.12.31
Shougang Group advance payment for construction 4,563,283,607.60 4,491,623,817.41
34. Share capital
Changes in current (+/-)
Shares
Items 2020.12.31 2021.12.31
Shares Bonus transferred
Others Subtotal
issued issue from
reserves
Total
5,289,389,600.00 1,460,935,810.00 -- -- -- 1,460,935,810.00 6,750,325,410.00
shares
Note: ① in 2021, the Company issued 1,396,034,010.00 new shares, Grant Thornton LLP
verified and issued capital verification reports ofGTYZ (2021) No. 110C000199 and GTYZ
(2021) No. 110C000291；② in 2021, the Company issued 64,901,800.00 restricted shares to
386 directors, senior management, key technicians and management backbone. After this
offering, the registered capital of the Company changes to RMB 6,750,325,410.00. Grant
Thornton LLP verified and issued capital verification report of GTYZ (2021) No.
110C000858.
35. Capital reserve
Items 2020.12.31 Increase Decrease 2021.12.31
Share premium 19,756,239,749.73 5,280,695,939.66 -- 25,036,935,689.39
Other capital reserve 3,019,370.67 2,023,779.12 -- 5,043,149.79
Total 19,759,259,120.40 5,282,719,718.78 -- 25,041,978,839.18
Note: the movement of other capital reserve is the changes in other equity of joint ventures
recognized by the Company in accordance with shareholding ratio and amortization of equity
incentive expenses.
36. Treasury shares
172
Beijing Shougang Co. Ltd
Notes to the Financial Statements
FY21 (Unit: RMB, unless otherwise specified)
Items 2020.12.31 Increase Decrease 2021.12.31
Restricted stock incentive plan -- 210,930,850.00 -- 210,930,850.00
173
Beijing Shougang Co. Ltd
Notes to the Financial Statements
FY21 (Unit: RMB, unless otherwise specified)
37. Other comprehensive income
The amount of the year
Less: Net-of-tax
Net-of-tax
previously amount
Items 2020.12.31 Pre-tax amount 2021.12.31
recognized Less: Income attributable to
income attributable to
amount tax expense shareholders
for the period non-controlling
transferred of
interests
to profit or loss the Company
1. Other comprehensive income that
can not be reclassified to profit 195,210,244.82 -11,345,922.59 -- -1,701,888.36 -9,644,034.23 -- 185,566,210.59
or loss
Changes in fair value of other equity
195,210,244.82 -11,345,922.59 -- -1,701,888.36 -9,644,034.23 -- 185,566,210.59
instrument investments
2. Other comprehensive income that
can be reclassified to profit or -- -- -- -- -- --
loss
Total 195,210,244.82 -11,345,922.59 -1,701,888.36 -9,644,034.23 -- 185,566,210.59
The net amount of other comprehensive income after tax for the period is RMB-9,644,034.23. The net amount of other comprehensive income
after tax for reporting period attributables to the shareholders of parent company is RMB-9,644,034.23; and net amount of other comprehensive
income after tax attributables to non-controlling interest is RMB 0.00.
174
Beijing Shougang Co. Ltd
Notes to the Financial Statements
FY21 (Unit: RMB, unless otherwise specified)
38. Special reserve
Items 2020.12.31 Increase Decrease 2021.12.31
Safety fund 21,577,537.20 79,954,336.07 80,477,501.49 21,054,371.78
Maintenance costs -- -- -- --
Total 21,577,537.20 79,954,336.07 80,477,501.49 21,054,371.78
39. Surplus reserve
Items 2020.12.31 Increase Decrease 2021.12.31
Statutory reserve 1,828,677,846.37 80,205,362.30 -- 1,908,883,208.67
Discretionary
-- -- -- --
surplus reserve
Total 1,828,677,846.37 80,205,362.30 -- 1,908,883,208.67
40. Retained earnings
Appropriation/
Items 2021 2020 Distribution
ratio
Retained earnings at previous year before adjustment 1,865,280,919.23 -2,179,897,484.27 --
Adjustment of total retained earnings at previous year
-- -- --
(Increase in “+”, decrease in “-”)
Retained earnings at previous year after adjustment 1,865,280,919.23 -2,179,897,484.27
Add: Net profit attributable to parent company 7,014,335,009.45 1,786,452,832.06 --
Add: Carry-forward retained earnings of other
-- 2,357,894,362.15
comprehensive income for current period
Less: Transfer to statutory surplus reserve 80,205,362.30 99,168,790.71
Transfer to discretionary surplus reserve -- --
Transfer to general reserve -- --
Common stock dividends payable 668,542,361.00 --
Dividends payable to other equity holders -- --
Dividends of common stock converted to share
-- --
capital
Retained earnings at current year 8,130,868,205.38 1,865,280,919.23
Includes: Surplus reserve attributable to parent company
-- --
extracted by subsidiaries
175
Beijing Shougang Co. Ltd
Notes to the Financial Statements
FY21 (Unit: RMB, unless otherwise specified)
41. Revenue and cost of sales
(1) Revenue and cost of sales
2021 2020
Items
Revenue Cost of sales Revenue Cost of sales
Main business 129,424,398,384.25 114,806,306,669.92 76,204,354,719.07 70,025,177,064.76
Other business 4,610,087,751.88 3,771,910,634.13 3,746,827,229.03 3,047,531,257.38
Total 134,034,486,136.13 118,578,217,304.05 79,951,181,948.10 73,072,708,322.14
(2)Revenue and cost of sales presented by products
2021 2020
Items
Revenue Cost of sales Revenue Cost of sales
Main business:
Billet 577,251,931.16 529,612,988.15 265,307,282.20 239,732,815.06
Hot-rolled steel 55,678,740,307.61 49,137,279,925.26 32,142,438,742.64 29,683,727,128.66
Cold-rolled steel 69,900,266,273.35 62,263,262,571.46 41,755,926,337.32 38,319,410,072.18
Other steels 3,268,139,872.13 2,876,151,185.05 2,040,682,356.91 1,782,307,048.86
subtotal 129,424,398,384.25 114,806,306,669.92 76,204,354,719.07 70,025,177,064.76
Other business
Power 1,473,362,918.84 1,412,244,075.25 1,710,794,684.40 1,595,246,088.70
Solid waste 2,024,630,753.33 1,704,155,696.47 1,184,134,242.92 1,103,220,630.68
Others 1,112,094,079.71 655,510,862.41 851,898,301.71 349,064,538.00
subtotal 4,610,087,751.88 3,771,910,634.13 3,746,827,229.03 3,047,531,257.38
Total 134,034,486,136.13 118,578,217,304.05 79,951,181,948.10 73,072,708,322.14
(3) Breakdown of revenue
Items 2021
Revenue from main business 129,424,398,384.25
Including: recognised at a certain point in time 129,424,398,384.25
recognised during a certain period of time --
Revenue from other business 4,610,087,751.88
Total 134,034,486,136.13
As of 31December 2021, the amount of revenue corresponding to the performance
obligations that the company has signed but not yet be fulfilled is RMB 5,115.7185
million. The Company expects to recognize as revenue in 2022.
176
Beijing Shougang Co. Ltd
Notes to the Financial Statements
FY21 (Unit: RMB, unless otherwise specified)
42. Taxes and surcharges
Items 2021 2020
Environmental protection tax 35,914,541.27 30,905,784.13
Urban maintenance and construction tax 237,806,006.75 96,491,361.42
Education surcharges 171,953,969.95 70,770,584.49
Resources duty 51,626,025.36 53,698,875.92
Property tax 192,496,945.58 183,284,662.68
Land usage tax 218,540,514.92 219,267,210.73
Vehicle and vessel usage tax 336,864.01 361,812.52
Stamp duty 134,607,337.64 119,173,635.91
Other taxes 349,770.25 120,585.96
Total 1,043,631,975.73 774,074,513.76
Note: The criteria of taxes and surcharges refers to Note IV. Tax.
43. Selling expenses
Items 2021 2020
Staff costs 174,833,606.06 129,607,334.56
Depreciation and amortization 131,640.69 129,921.70
Other expenses 38,344,287.63 37,303,433.87
Total 213,309,534.38 167,040,690.13
44. General and administrative expenses
Items 2021 2020
Staff costs 700,517,923.75 509,368,436.44
Depreciation and amortization 310,789,699.88 234,968,386.33
Other expenses 288,574,110.69 232,089,438.08
Total 1,299,881,734.32 976,426,260.85
45. Research and development expenses
Items 2021 2020
Staff costs 600,350,698.99 379,551,768.61
Depreciation and amortization -- --
Other expenses 52,575,686.57 100,935,305.78
Total 652,926,385.56 480,487,074.39
177
Beijing Shougang Co. Ltd
Notes to the Financial Statements
FY21 (Unit: RMB, unless otherwise specified)
46. Financial expenses
Items 2021 2020
Interest costs 2,360,994,534.74 2,860,147,718.46
Includes: interests on lease liabilities 4,895,508.99 --
Less: interest capitalized 7,647,750.00 499,100,376.94
Interest expenses 2,353,346,784.74 2,361,047,341.52
Less:interest income 131,307,065.33 133,289,009.17
Discount on notes acceptance 31,976,398.68 4,308,589.40
Exchange losses and gains 9,582,515.98 669,847.63
Bank charges and others -6,012,601.27 -69,644,836.56
Total 2,257,586,032.80 2,163,091,932.82
Note: The interest capitalization is recognized in construction in progress. The
capitalization rate used to calculate and determine the capitalization amount of borrowing
costs in the current period is 4.05% (previous period: 4.62%).
47. Other income and gains
Related to
Items (sources of other income) 2021 2020
assets/income
Engineering informationization project subsidy
99,999.96 99,999.96 Related to assets
(Qiangang Co., cold-rolled)
Government grants for energy central project from the
Ministry of Industry and Information Technology of the 1,999,999.96 1,999,999.96 Related to assets
People’s Republic of China
Government grants of hot-rolled steel strip TMCP
105,263.16 105,263.16 Related to assets
project
Government grants for dedusting system upgrading
1,631,578.92 1,631,578.92 Related to assets
project (Qiangang Co.)
Government grants for advanced sewage treatment 342,222.24 342,222.24 Related to assets
Special government grants for denitration
engineering from the Hebei Provincial Finance 245,000.00 245,000.00 Related to assets
Department
Government grants for online environmental monitoring 500,000.00 500,000.00 Related to assets
National funds for the national 863 project 278,200.00 278,200.00 Related to assets
Special government grants for circular economy
1,578,947.36 1,578,947.36 Related to assets
development from the Finance Bureau of Caofeidian
Government grants for the desulfurization of pelletizing
1,486,105.28 1,486,105.28 Related to assets
flue gas
Environmental protection government grants for closing
80,000.00 80,000.00 Related to assets
limestone yards
178
Beijing Shougang Co. Ltd
Notes to the Financial Statements
FY21 (Unit: RMB, unless otherwise specified)
Related to
Items (sources of other income) 2021 2020
assets/income
Government grants for energy-saving incentive for No.3
67,878.96 67,878.96 Related to assets
hydrogen generator
Galvanized high-strength automobile sheet special
5,263,157.88 5,263,157.88 Related to assets
production line project
Phase II thermal desalination project 1,052,631.56 1,052,631.56 Related to assets
Government grants for the specialized production line
191,578.96 191,578.96 Related to assets
project of Zinc-plated high-strengthen auto sheet
Government grants for the transformation to reduce
nitrogen oxide concentration in exhaust gas of annealing 138,157.85 -- Related to assets
furnace
Government grants for high strength steel production
temperature control deformation coupling performance 1,830,000.00 -- Related to assets
matching and oxide sheet intelligent control technology
Government grants for 10,000 tons/d seawater
468,421.05 -- Related to assets
desalination
Government grants for the low emission and high
300,000.00 -- Related to assets
efficiency and low consumption sintering key technology
Multi-objective optimization clean and low-carbon
2,940,000.00 -- Related to assets
comprehensive iron making technology project
Other government grants related to assets 3,460,977.12 5,375,648.38 Related to assets
Job stabilization subsidy 7,629,337.02 21,027,162.60 Related to income
Government grants for enterprises operat in the region 2,700,000.00 -- Related to income
Other government grants related to income 14,057,899.24 18,303,448.80 Related to income
Refund of individual
Tax refund 1,886,738.46 1,000,295.73
income tax
Value added tax deduction 4,210,393.94 565,161.68 VAT plus deduction
Total 54,544,488.92 61,194,281.43
Notes: (1) The details of government grants refer to Note V. 58 Government grants.
(2) The government subsidy for recurring gains and losses refer to Note XVI. 1 for detail
reasons.
48. Investment income
Items 2021 2020
Investment income from long-term equity investments under equity
93,142,769.92 379,578,180.14
method
Dividend from other equity instruments investments 2,718,777.38 177,781,289.99
Interest income from entrusted loans 10,518,170.49 10,361,268.74
Total 106,379,717.79 567,720,738.87
179
Beijing Shougang Co. Ltd
Notes to the Financial Statements
FY21 (Unit: RMB, unless otherwise specified)
49. Credit impairment losses (losses in “-”)
Items 2021 2020
Provision for bad debts of notes receivable -713,475.06 -772,467.65
Provision for bad debts of accounts receivable -9,079,090.99 -9,291,195.46
Provision for bad debts of financing receivable 103,604.74 -95,952.27
Provision for bad debts of other receivables 282,710.81 -1,191,070.88
Provision for bad debts of other current assets -118,133,658.14 --
Total -127,539,908.64 -11,350,686.26
50. Impairment losses on assets (loss in “-”)
Items 2021 2020
Provision for invertory impairment -167,567,546.04 -156,492,924.46
51. Gains on disposal of assets
Items 2021 2020
Gains from disposal of fixed assets (loss in “-”) 385,299.27 75,385.37
Gains from disposal of intangible assets (loss in “-”) 3,331,185.95 --
Total 3,716,485.22 75,385.37
52. Non-operating income
Included in non-recurring
Items 2021 2020
gains or losses in 2021
Gains on disposal of assets s 4,449,256.58 -- 4,449,256.58
Compensation payments 10,638.10 316,237.90 10,638.10
Others 2,094,300.29 1,683,124.34 2,094,300.29
Total 6,554,194.97 1,999,362.24 6,554,194.97
53. Non-operating expenses
Included in non-recurring
Items 2021 2020
gains or losses in 2021
Losses on disposal of assets 63,892,628.48 768,699.07 63,892,628.48
Compensation and penalty 727.98 6,907.06 727.98
Tax overdue fine -- 1,738,457.13 --
Carbon emission quota trading 1,464,983.15 -- 1,464,983.15
Others 162,953.79 32,877.54 162,953.79
Total 65,521,293.40 2,546,940.80 65,521,293.40
180
Beijing Shougang Co. Ltd
Notes to the Financial Statements
FY21 (Unit: RMB, unless otherwise specified)
54. Income tax expenses
(1) Breakdown of income tax expenses
Items 2021 2020
Current tax in accordance with tax laws and related regulations 1,562,375,765.19 459,569,391.19
Deffered income tax expenses -89,407,543.66 -92,759,826.26
Total 1,472,968,221.53 366,809,564.93
(2) Reconciliation between income tax expenses and profit before income tax is as follows:
Items 2021 2020
Profit before tax 9,799,499,308.11 2,777,952,370.40
Tax at the applicable tax rate of 15% 1,469,924,896.22 416,692,855.56
Taxation effect of different tax rates of subsidiaries 9,147,288.50 5,137,238.32
Adjustment of income tax in the prior year 10,277,388.90 -6,929,659.41
Share of profit or loss of joint ventures and associates under the equity
-5,776,903.71 -22,740,312.83
method
Income not subject to tax（expressed in“-”） -407,816.61 -26,667,193.50
Non-deductible costs, expenses and losses 3,816,854.15 888,266.93
Taxation effect of the change in the applicable tax rate on the beginning
-- --
disclosure of the deffered income tax
Taxation effect of utilizing previous unrecognized tax losses and
-28,888,868.85 -6,237,897.01
deductible temporary differences (expressed in “-”)
Taxation effect of unrecognized tax losses and deductible temporary
6,106,882.02 6,666,266.87
differences
Taxation effect of research and development expenses (expressed in
-- --
“-”)
Others 8,768,500.91 --
Income tax expenses 1,472,968,221.53 366,809,564.93
55. Notes to cash flow statement
(1) Proceeds from other operating activities
Items 2021 2020
Government grants received 54,359,336.26 130,166,631.11
Return of security deposit 3,208,000.00 --
Non-operating income 2,104,938.39 1,998,921.76
Other intercouse funds received 3,663,851.17 --
Total 63,336,125.82 132,165,552.87
181
Beijing Shougang Co. Ltd
Notes to the Financial Statements
FY21 (Unit: RMB, unless otherwise specified)
(2) Payments for other operating activities
Items 2021 2020
Expenses paid 435,051,105.11 595,391,580.99
Non-operating expenses paid 1,628,664.92 1,778,241.73
Restricted funds paid 416,155,620.25 546,622.77
Security deposit paid to BMW Brilliance -- 6,000,000.00
Other intercouse funds paid -- 3,571,092.08
Total 852,835,390.28 607,287,537.57
(3) Proceeds from other investing activities
Items 2021 2020
Interest income 130,931,269.04 132,855,246.29
Zhuzhou Geckor Group Co., Ltd. – security deposits during
-- 525,000.00
construction period
Jinshi Investment Co., Ltd.security deposits -- 300,000,000.00
Total 130,931,269.04 433,380,246.29
(4) Payment for otherinvesting activities
Items 2021 2020
Jinshi Investment Co., Ltd. 300,000,000.00 --
(5) Proceeds from other financing activities
Items 2021 2020
Borrowings from Shougang Group -- 148,638,840.00
(6) Payment for other financing activities
Items 2021 2020
Financial commissions 1,735,566.18 9,982,295.82
Return the loan to Wuhan Zhongxin 2,800,000.00 1,200,000.00
Paying back the borrowings from Shougang Group 917,013,635.51 300,000,000.00
Lease payments 18,974,740.74 --
Non-public offering fees paid 18,562,551.86 --
Return Liuzhou Shougang Automobile Co. minority
4,996,112.27 --
shareholders investment funds
Total 964,082,606.56 311,182,295.82
182
Beijing Shougang Co. Ltd
Notes to the Financial Statements
FY21 (Unit: RMB, unless otherwise specified)
56. Supplements to statement of cash flows
(1) Supplementary information
Supplementary information 2021 2020
1. Reconciliation of net profit to net cash flows from
operating activities:
Net profit 8,326,531,086.58 2,411,142,805.47
Add: Impairment losses on assets 167,567,546.04 156,492,924.46
Credit impairment losses 127,539,908.64 11,350,686.26
Depreciation of fixed assets 7,287,559,251.19 6,406,432,068.56
Depreciation ofright-of-use assets 16,608,280.06 --
Amortization of intangible assets 138,072,177.23 111,491,374.94
Amortizaiton of long-term deffered expenses 345,030.83 365,531.66
Losses on disposal of fixed assets, intangible assets and
-3,716,485.22 -75,385.37
other long-term assets (Gains as in “-”)
Losses on scrapping of fixed assets (Gains as in “-”) 59,443,371.90 768,699.07
Losses on fair value changes (Gain as in “-”) -- --
Financial expenses (Income as in “-”) 2,257,586,032.80 2,163,091,932.82
Investment losses (Income as in “-”) -106,379,717.79 -567,720,738.87
Decrease in deferred tax assets
-41,819,052.19 -60,454,804.37
(Increase as in “-”)
Increase in deferred tax liabilities
-47,588,491.47 -32,305,021.89
(Decrease as in “-”)
Decrease in inventories (Increase as in “-”) -1,457,868,559.82 -1,956,489,862.36
Decrease in receivables from
-2,799,546,738.40 -1,780,773,229.64
operating activities (Increase as in “-”)
Increase in payables from
1,528,063,419.28 3,403,848,159.38
operating activities (Decrease as in “-”)
Others -408,669,801.90 7,513,656.07
Net cash flow from operating activities 15,043,727,257.76 10,274,678,796.19
2. Significant non-cash payments for investing and financing
activities:
Conversion of debt into capital -- --
Convertible bonds due within 1 year -- --
Fixed assets acquired under finance leases —— --
Right-of-use assets leased during current period 54,395,983.49 ——
3. Net changes in cash and cash equivalents:
Closing balance of cash 8,535,871,373.08 4,959,913,916.36
183
Beijing Shougang Co. Ltd
Notes to the Financial Statements
FY21 (Unit: RMB, unless otherwise specified)
Supplementary information 2021 2020
Less: Opening balance of cash 4,959,913,916.36 4,403,513,394.20
Add: Closing balance of cash equivalents -- --
Less: Opening balance of cash equivalents -- --
Net increase in cash and cash equivalents 3,575,957,456.72 556,400,522.16
Note: The amount of endorsement and transfer of acceptance notes received from goods sales
of the company is RMB 78,910.959 million.
(2) Components of cash and cash equivalents
Items 2021.12.31 2020.12.31
1. Cash 8,535,871,373.08 4,959,913,916.36
Including: Cash on hand 53,404.48 35,022.81
Balances in banks without restriction 8,535,817,955.86 4,959,878,880.81
Other monetary funds without restriction 12.74 12.74
2. Cash equivalents -- --
Including: bonds investment due within three months -- --
3. Closing balance of cash and cash equivalents 8,535,871,373.08 4,959,913,916.36
Including: restricted cash and cash equivalents from
-- --
the parent company or its subsidiaries
57. Restricted assets
Items 2021.12.31 Restricted reasons
Cash and cash equivalents 1,748,307,781.74 Security deposits, fixed term deposits and frozen by court
Notes receivable 1,030,885,929.77 Pledge billing
Total 2,779,193,711.51
58. Government grants
(1) Government grants recognized as deferred income and subsequently measured via total-value
method.
Other Item
Recognition in
changes recognized Related to
Items Type 2020.12.31 Increase P/L during 2021.12.31
in P/L assets/income
2021
during 2021
Financial Related to
Finance grants for imported equipments 14,564,451.23 -- 1,229,110.56 -- 13,335,340.67 Other income
appropriation assets
Government grants for engineering
Financial Related to
informationization project (Qian'an Iron 475,000.20 -- 99,999.96 -- 375,000.24 Other income
appropriation assets
and Steel, cold-rolled )
Government grants for energy central
project from the Ministry of Industry and Financial Related to
6,000,000.20 -- 1,999,999.96 -- 4,000,000.24 Other income
Information Technology of the People’s appropriation assets
Republic of China
184
Beijing Shougang Co. Ltd
Notes to the Financial Statements
FY21 (Unit: RMB, unless otherwise specified)
Other Item
Recognition in
changes recognized Related to
Items Type 2020.12.31 Increase P/L during 2021.12.31
in P/L assets/income
2021
during 2021
Special government grants from the Financial Related to
4,200,000.00 -- -- -- 4,200,000.00 Other income
Finance Bureau of Qian'an appropriation assets
Government grants for hot-rolled steel Financial Related to
1,473,684.20 -- 105,263.16 -- 1,368,421.04 Other income
strip TMCP project appropriation assets
Government grants for dedusting system
Financial Related to
upgrading project (Qian'an Iron and 27,736,842.16 -- 1,631,578.92 -- 26,105,263.24 Other income
appropriation assets
Steel)
Government grants for advanced sewage Financial Related to
5,504,074.04 -- 342,222.24 -- 5,161,851.80 Other income
treatment appropriation assets
Special government grants for
Financial Related to
denitration engineering from the Hebei 980,000.00 -- 245,000.00 -- 735,000.00 Other income
appropriation assets
Provincial Finance Department
Government grants for online
Financial Related to
environmental monitoring project from 3,500,000.00 -- 500,000.00 -- 3,000,000.00 Other income
appropriation assets
the Finance Bureau of Caofeidian
The steelmaking technology and
facilities demonstration project through
Financial Related to
carbon dioxide-oxygen mixed injection, 4,000,000.00 -- 70,175.44 -- 3,929,824.56 Other income
appropriation assets
funded by University of Science and
Technology Beijing
National funds for the national 863 Financial Related to
1,112,800.00 -- 278,200.00 -- 834,600.00 Other income
project appropriation assets
Government grants for Phase II seawater Financial Related to
18,947,368.44 -- 1,052,631.56 -- 17,894,736.88 Other income
dsalination project appropriation assets
Government grants for cold-rolled Financial Related to
12,937,500.00 -- 1,350,000.00 -- 11,587,500.00 Other income
intelligent manufacturing project appropriation assets
Government grants for R & D and
demonstration projects of seawater Financial Related to
8,700,000.00 -- -- -- 8,700,000.00 Other income
dsalination based on reuse of appropriation assets
steelmaking waste heat
Government grants for the Financial Related to
23,777,684.22 -- 1,486,105.28 -- 22,291,578.94 Other income
desulfurization of pelletizing flue gas appropriation assets
Environmental protection government Financial Related to
1,760,000.00 -- 80,000.00 -- 1,680,000.00 Other income
grants for closing limestone yards appropriation assets
Government grants for improvement of
Financial Related to
deformation coupling matching in high 1,830,000.00 -- 1,830,000.00 -- -- Other income
appropriation assets
strength steel production
Government grants for intelligent
interface closed-loop control technology Financial Related to
2,400,000.00 -- -- -- 2,400,000.00 Other income
in multi-target optimize steelmaking and appropriation assets
ironmaking
Government grants for new metal,
Financial Related to
ceramic composite powder, and 838,100.00 -- -- -- 838,100.00 Other income
appropriation assets
refractory anticorrosion coating
Government grants for intelligent
collaborative allocation techonglogy Financial Related to
2,350,000.00 -- -- -- 2,350,000.00 Other income
about material flow and power flow in appropriation assets
steelmaking program
Government grants for energy-saving Financial Related to
1,086,063.13 -- 67,878.96 -- 1,018,184.17 Other income
incentive for No.3 hydrogen generator appropriation assets
Government grants for cold rolling
operation department aluminized silicon Financial Related to
3,256,842.09 -- 191,578.96 -- 3,065,263.13 Other income
high strength steel automotive plate appropriation assets
renovation project
Government grants for cold rolling
Financial Related to
operation department high strength steel 11,900,000.00 -- -- -- 11,900,000.00 Other income
appropriation assets
18 roll single stand project
Government grants for multi-targets Financial Related to
2,940,000.00 -- 2,940,000.00 -- -- Other income
optimization steelmaking appropriation assets
Government grants for the
Financial Related to
operation-control system of 20,390,000.00 -- -- -- 20,390,000.00 Other income
appropriation assets
production-marketing integration
Government grants for green and
intelligent collaborative mechanism of Financial Related to
580,000.00 -- -- -- 580,000.00 Other income
steel process and comprehensive energy appropriation assets
efficiency assessment
Government grants for key technology
Financial Related to
of low-emission efficient energy-saving 300,000.00 -- 300,000.00 -- -- Other income
appropriation assets
sintering and its utilizaiton project
Government grants for the specialized
Financial Related to
production line project of Zinc-plated 94,736,842.12 -- 5,263,157.88 -- 89,473,684.24 Other income
appropriation assets
high-strengthen auto sheet
Government grants for reforming of Financial Related to
27,368,421.06 -- 1,578,947.36 -- 25,789,473.70 Other income
sinter desulfurization and denitrification appropriation assets
185
Beijing Shougang Co. Ltd
Notes to the Financial Statements
FY21 (Unit: RMB, unless otherwise specified)
Other Item
Recognition in
changes recognized Related to
Items Type 2020.12.31 Increase P/L during 2021.12.31
in P/L assets/income
2021
during 2021
Government grants for thin slab casting Financial Related to
5,000,000.00 -- -- -- 5,000,000.00 Other income
and rolling engineering appropriation assets
Government grants for reform project of
Financial Related to
reducing oxynitride concentration in 6,300,000.00 -- 138,157.85 -- 6,161,842.15 Other income
appropriation assets
emissed flue gas from annealing furnace
Government grants for industrial Financial Related to
1,800,000.00 3,000,000.00 -- -- 4,800,000.00 Other income
mechanism model base appropriation assets
Government grants for 10,000 tons/d Financial Related to
8,900,000.00 -- 468,421.05 -- 8,431,578.95 Other income
desalination project appropriation assets
Government grants for enhancing the
Financial Related to
core competitiveness of the 58,510,000.00 20,030,000.00 -- -- 78,540,000.00 Other income
appropriation assets
manufacturing industry
Other government grants related to Financial Related to
11,653,132.56 6,842,100.00 811,691.12 -- 17,683,541.44 Other income
assets appropriation assets
Other government grants related to Financial Related to
290,000.00 100,000.00 -- -- 390,000.00 Other income
income appropriation income
Total 398,098,805.65 29,972,100.00 24,060,120.26 -- 404,010,785.39
(2) Government grants which recognized as profit or loss, measured via total-value method.
Recognition in P/L Recognition in P/L Item recognized Related to
Items Type
during 2021 during 2020 in P/L asset/income
Financial Related to
Government grants for steady post
appropriation 7,629,337.02 21,027,162.60 Other income
income
Government grants for enterprises operate Financial Related to
in the region appropriation
2,700,000.00 -- Other income
income
Financial Related to
Other government grants related to income
appropriation
14,057,899.24 18,303,448.80 Other income
income
Total 24,387,236.26 39,330,611.40
VI. Change in the scope of consolidation
There is no change of consolidated scope of the Company during the reporting period.
VII. Interests in other entities
1. Interests in subsidiaries
(1) Composition of the Company
Main Operation Shareholding ratio (%) Acquisition
Subsidiary Registration place Business nature
place Directly Indirectly method
Business
Shougang Jingtang United Production and combination
Tangshan, PRC Tangshan, PRC 70.18 29.82
Iron & Steel Co., Ltd. sales under common
control
Beijing Shougang Cold Production and Establish or
Beijing, PRC Beijing, PRC 70.28 --
Rolling Co., Ltd. sales investment, etc.
Business
Qian'an Shougang
Consulting combination
Metallurgical Technology Qian’an, PRC Qian’an, PRC 100.00 --
service under common
Co., Ltd.
control
Shougang Zhixin Qian'an
Production and Establish or
Electromagnetic Materials Qian’an, PRC Qian’an, PRC 82.77 --
sales investment, etc.
Co., Ltd.
Beijing Shougang New
Energy Automobile Production and Establish or
Beijing, PRC Beijing, PRC 49.45 --
Material Technology Co., sales investment, etc.
Ltd.
Business
Beijing Shougang Steel
Production and combination
Trading Investment Beijing, PRC Beijing, PRC 51.00 --
sales under common
Management Co., Ltd.
control
186
Beijing Shougang Co. Ltd
Notes to the Financial Statements
FY21 (Unit: RMB, unless otherwise specified)
(2) Significant non-wholly owned subsidiaries
Unit：RMB Yuan
Shareholding of Net profit/ (loss) Dividends declared
non-controlling attributable to and distributed to Non-controlling
Subsidiary interests non-controlling non-controlling interests at the end
interests in reporting interests in reporting of reporting period
(%) period period
Beijing Shougang
Cold Rolling Co., 29.72 48,870,246.52 -- -383,736,853.68
Ltd.
Beijing Shougang
Steel Trading
Investment 49.00 945,552,305.73 -- 5,849,533,818.88
Management Co.,
Ltd.
Shougang Zhixin
Qian'an
17.23 50,267,407.95 -- 1,631,920,915.79
Electromagnetic
Materials Co., Ltd.
(3) Major financial information of significant non-wholly owned subsidiaries
Unit：RMB Yuan
31/12/2021
Subsidiary Non-current Non-current
Current assets Total assets Current liabilities Total liabilities
assets liabilities
Beijing Shougang Cold Rolling Co.,
2,292,638,370.58 3,982,540,841.55 6,275,179,212.13 2,987,915,522.96 4,574,607,301.55 7,562,522,824.51
Ltd.
Beijing Shougang Steel Trading
8,452,490,520.29 11,195,199,945.42 19,647,690,465.71 7,933,294,887.53 6,128,563.71 7,939,423,451.24
Investment Management Co., Ltd.
Shougang Zhixin Qian'an
4,815,349,946.90 13,874,497,322.96 18,689,847,269.86 8,299,382,139.47 3,270,000.00 8,302,652,139.47
Electromagnetic Materials Co., Ltd.
Continued (1):
31/12/2020
Subsidiary Non-current
Current assets Non-current assets Total assets Current liabilities Total liabilities
liabilities
Beijing Shougang Cold Rolling Co.,
1,490,147,711.17 4,268,819,475.85 5,758,967,187.02 1,582,846,978.81 5,633,442,048.18 7,216,289,026.99
Ltd.
Beijing Shougang Steel Trading
7,412,249,175.07 9,256,712,881.65 16,668,962,056.72 7,300,343,767.67 5,822,605.25 7,306,166,372.92
Investment Management Co., Ltd.
Continued (2):
2021 2020
Subsidiary Total Cash flow from Total Cash flow from
Operating Operating
Net profit comprehensive operating Net profit comprehensive operating
revenue revenue
income activities income activities
Beijing
Shougang Cold 12,553,753,097.50 164,435,553.57 164,435,553.57 1,166,412,291.28 8,721,456,245.22 40,753,262.67 40,753,262.67 286,447,510.65
Rolling Co., Ltd.
Beijing
Shougang Steel
Trading
968,858,246.21 1,924,919,227.71 1,924,919,227.71 67,150,841.72 870,677,653.85 450,137,492.87 450,137,492.87 -26,937,175.44
Investment
Management
Co., Ltd.
Shougang Zhixin
Qian'an
Electromagnetic 13,857,367,585.59 1,082,906,520.97 1,082,906,520.97 2,337,657,467.37 -- -- -- --
Materials Co.,
Ltd.
187
Beijing Shougang Co. Ltd
Notes to the Financial Statements
FY21 (Unit: RMB, unless otherwise specified)
2. Interests in joint ventures and associates
(1) Significant joint ventures and associates
Shareholding
Joint ventures Main operating Place of Business proportion (%) Accounting
or associates place registration nature method
Direct Indirect
①Jiont ventures
Tangshan Guoxing Industrial Co., Ltd. Tangshan, PRC Tangshan, PRC Manufacturing 50.00 Equity method
Tangshan Zhonghong Carbon Chemical Co.,
Tangshan, PRC Tangshan, PRC Chemical 50.00 Equity method
Ltd.
Tangshan Shougang Jingtang Xishan
Tangshan, PRC Tangshan, PRC Coking 50.00 Equity method
Coking Co., Ltd.
②Associates
Tangshan Tangcao Railway Co., Ltd. Tangshan, PRC Tangshan, PRC Transportation 16.19 Equity method
Tangshan Caofeidian Dunshi New Building
Tangshan, PRC Tangshan, PRC 25.00 Equity method
Construction Material Co., Ltd. Material
Qian'an Sinochem Coal Chemical Industrial
Qian’an, PRC Qian’an, PRC Coking 49.82 Equity method
Co., Ltd.
Beijing Shouxin Jinyuan Management
Beijing, PRC Beijing, PRC Investment 20.00 Equity method
Consulting Center (Limited Partnership)
Beijing Dingshengcheng Packaging
Beijing, PRC Beijing, PRC Manufacturing 45.00 Equity method
Materials Co., Ltd.
Ningbo Shougang Zhejin Steel Co., Ltd. Ningbo, PRC Ningbo, PRC Manufacturing 40.00 Equity method
Guangzhou Jinghai Shipping Co., Ltd. Guangzhou, PRC Guangzhou, PRC Transportation 20.00 Equity method
Shougang (Qingdao) Steel Industry Co.,
Qingdao, PRC Qingdao, PRC Manufacturing 35.00 Equity method
Ltd.
Ordos Baotou Steel Shourui Material
Ordos, PRC Ordos, PRC Manufacturing 39.00 Equity method
Technology Co., Ltd.
Tianjin Shougang Steel
Tianjin, PRC Tianjin, PRC Manufacturing 35.00 Equity method
Processing&Distribution Co., Ltd.
Shijiazhuang,
Hebei Jingji Industry & Trading Co., Ltd. Shijiazhuang, PRC Manufacturing 35.71 Equity method
PRC
Qian'an Jinyu Shougang Environmental Building
Tianjin, PRC Tianjin, PRC 35.00 Equity method
Protection Technology Co., Ltd. Material
(2) Primary financial information of significant joint ventures
Tangshan Guoxing Industrial Co., Tangshan Zhonghong Carbon Tangshan Shougang Jingtang
Items Ltd. Chemical Co., Ltd. Xishan Coking Co., Ltd.
2021.12.31 2020.12.31 2021.12.31 2020.12.31 2021.12.31 2020.12.31
Current assets 68,956,595.25 60,318,069.68 1,866,851.04 6,787,445.81 3,190,992,791.00 2,530,141,759.70
Includes： Cash and
4,077,794.50 4,039,504.94 1,564,673.04 6,373,445.81 1,254,139,718.41 818,794,651.52
cash equivalents
Non-current assets 75,006,601.75 63,563,529.32 590,178,060.36 742,585,489.79 1,522,676,202.64 1,777,873,986.27
Total assets 143,963,197.00 123,881,599.00 592,044,911.40 749,372,935.60 4,713,668,993.64 4,308,015,745.97
Current liabilities 66,004,351.88 55,567,287.83 548,972,452.52 531,871,072.97 2,480,101,537.56 1,825,155,516.05
Non-current liabilities 5,383,693.40 2,492,301.31 -- -- 7,231,250.00 307,787,500.00
Total liabilities 71,388,045.28 58,059,589.14 548,972,452.52 531,871,072.97 2,487,332,787.56 2,132,943,016.05
Net assets 72,575,151.72 65,822,009.86 43,072,458.88 217,501,862.63 2,226,336,206.08 2,175,072,729.92
Includes:
Non-controlling -- -- -- -- -- --
interests
Equity attributable to
shareholders of the 72,575,151.72 65,822,009.86 43,072,458.88 217,501,862.63 2,226,336,206.08 2,175,072,729.92
company
Net assets calculated by
36,287,575.86 32,911,004.94 21,536,229.44 108,750,931.30 1,113,168,103.04 1,087,536,364.97
shareholding proportion
Adjustment
Includes: Goodwill -- -- -- -- -- --
Carrying value of 36,287,575.86 32,911,004.94 21,536,229.44 108,750,931.30 1,113,168,103.04 1,087,536,364.97
188
Beijing Shougang Co. Ltd
Notes to the Financial Statements
FY21 (Unit: RMB, unless otherwise specified)
equity investment in the
joint venture
Fair value of equity
investment with quoted -- -- -- -- -- --
market price
Continued:
Tangshan Guoxing Industrial Co., Tangshan Zhonghong Carbon Tangshan Shougang Jingtang Xishan
Ltd. Chemical Co., Ltd. Coking Co., Ltd.
Items
2021 2020 2021 2020 2021 2020
Operating revenue 72,575,151.72 80,117,784.81 -- -- 10,931,089,729.11 7,350,697,535.09
Financial expenses 277,191.32 362,993.70 22,071,333.99 21,257,882.90 59,540,904.10 91,108,328.10
Income tax expense 4,668,092.98 2,796,859.12 -- -- 23,671,445.98 63,800.99
Net profit 10,753,141.86 8,390,577.37 -174,429,403.75 -21,274,355.01 56,774,860.49 80,485,168.88
Net profit from
discontinuing -- -- -- -- -- --
operations
Other
comprehensive -- -- -- -- -- --
income
Total
comprehensive 10,753,141.86 8,390,577.37 -174,429,403.75 -21,274,355.01 56,774,860.49 80,485,168.88
income
Dividends received
2,000,000.00 -- -- -- -- 20,000,000.00
from joint venture
(3) Primary financial information of significant associates
Tangshan Caofeidian Dunshi New Qian'an Sinochem Coal Chemical
Tangshan Tangcao Railway Co., Ltd.
Items Construction Material Co., Ltd. Industrial Co., Ltd.
2021.12.31 2020.12.31 2021.12.31 2020.12.31 2021.12.31 2020.12.31
Current assets 200,714,996.01 196,664,337.03 126,804,287.51 126,778,258.13 1,965,253,903.76 2,142,096,795.97
Non-current
8,400,213,950.72 8,493,568,427.67 235,304,874.32 240,277,354.15 2,255,751,305.36 1,905,205,528.96
assets
Total assets 8,600,928,946.73 8,690,232,764.70 362,109,161.83 367,055,612.28 4,221,005,209.12 4,047,302,324.93
Current
1,189,477,610.98 746,576,333.70 45,941,594.92 33,073,602.76 2,014,924,895.69 2,133,031,958.22
liabilities
Non-current
5,049,431,650.00 5,164,162,916.48 -- -- 10,482,966.04 11,180,546.68
liabilities
Total liabilities 6,238,909,260.98 5,910,739,250.18 45,941,594.92 33,073,602.76 2,025,407,861.73 2,144,212,504.90
Net assets 2,362,019,685.75 2,779,493,514.52 316,167,566.91 333,982,009.52 2,195,597,347.39 1,903,089,820.03
Including:
Non-controlling -- -- -- -- --
interests
Equity
attributable to
2,362,019,685.75 2,779,493,514.52 316,167,566.91 333,982,009.52 2,195,597,347.39 1,903,089,820.03
shareholders of
the company
Net assets
calculated by
382,410,987.12 450,000,000.00 79,041,891.73 83,495,502.41 1,093,937,932.70 948,199,977.34
shareholding
proportion
Adjustment
Includes:
-- -- -- -- 4,147,420.21 4,147,420.21
Goodwill
Carrying value
of equity
382,410,987.12 450,000,000.00 79,041,891.73 83,495,502.41 1,098,085,352.91 952,347,397.55
investment in
the associates
189
Beijing Shougang Co. Ltd
Notes to the Financial Statements
FY21 (Unit: RMB, unless otherwise specified)
Tangshan Caofeidian Dunshi New Qian'an Sinochem Coal Chemical
Tangshan Tangcao Railway Co., Ltd.
Items Construction Material Co., Ltd. Industrial Co., Ltd.
2021.12.31 2020.12.31 2021.12.31 2020.12.31 2021.12.31 2020.12.31
Fair value of
equity
investment with -- -- -- -- -- --
quoted market
price
Continued:
Beijing Shouxin Jinyuan Qian'an Jinyu Shougang
Beijing Dingshengcheng Packaging
Management Consulting Center Environmental Protection
Items Materials Co., Ltd.
(Limited Partnership) Technology Co., Ltd.
2021.12.31 2020.12.31 2021.12.31 2020.12.31 2021.12.31 2020.12.31
Current assets 204,542,687.73 598,504,465.05 46,604,298.17 38,077,883.76 65,438,102.92 --
Non-current assets 492,971,452.05 2,044,314,439.69 560,866.81 485,332.49 34,618,324.64 --
Total assets 697,514,139.78 2,642,818,904.74 47,165,164.98 38,563,216.25 100,056,427.56 --
Current liabilities 139,570,827.95 483,805,460.10 16,181,730.58 13,372,193.62 2,916,673.38 --
Non-current liabilities -- -- -- -- --
Total liabilities 139,570,827.95 483,805,460.10 16,181,730.58 13,372,193.62 2,916,673.38 --
Net assets 557,943,311.83 2,159,013,444.64 30,983,434.40 25,191,022.63 97,139,754.18 --
Including:
Non-controlling -- -- -- -- --
interests
Equity attributable to
shareholders of the 557,943,311.83 2,159,013,444.64 30,983,434.40 25,191,022.63 97,139,754.18 --
company
Net assets calculated
by shareholding 112,715,820.57 431,802,688.93 13,942,545.49 11,335,960.18 33,998,913.97 --
proportion
Adjustment
Includes: Goodwill -- -- 44,544.87 44,544.87 -- --
Carrying value of
equity investment in 112,715,820.57 431,802,688.93 13,987,090.36 11,380,505.05 33,998,913.97 --
the associates
Fair value of equity
investment with -- -- -- -- -- --
quoted market price
Continued:
Tangshan Caofeidian Dunshi New Qian'an Sinochem Coal Chemical
Tangshan Tangcao Railway Co., Ltd.
Construction Material Co., Ltd. Industrial Co., Ltd.
Items
2021 2020 2021 2020 2021 2020
Operating revenue 104,729,545.83 -- 578,541,511.89 464,761,681.90 6,295,880,462.27 6,567,974,662.78
Net profit -418,134,678.91 -- 32,185,557.39 37,856,751.55 292,507,527.36 222,110,549.04
Net profit from
discontinuing -- -- -- -- -- --
operations
Other comprehensive
-- -- -- -- -- --
income
Total comprehensive
-418,134,678.91 -- 32,185,557.39 37,856,751.55 292,507,527.36 222,110,549.04
income
Dividend received
-- -- 12,500,000.00 3,750,000.00 -- 149,460,000.00
from associates
Continued:
Beijing Shouxin Jinyuan Qian'an Jinyu Shougang
Beijing Dingshengcheng Packaging
Management Consulting Center Environmental Protection
Materials Co., Ltd.
Items (Limited Partnership) Technology Co., Ltd.
2021 2020 2021 2020 2021 2020
Operating income 334,174,126.04 -- 128,110,940.82 126,204,932.84 16,867,497.02 --
Net profit 258,828,753.79 1,139,880,472.97 5,792,411.77 2,000,482.67 591,396.34 --
190
Beijing Shougang Co. Ltd
Notes to the Financial Statements
FY21 (Unit: RMB, unless otherwise specified)
Beijing Shouxin Jinyuan Qian'an Jinyu Shougang
Beijing Dingshengcheng Packaging
Management Consulting Center Environmental Protection
Materials Co., Ltd.
Items (Limited Partnership) Technology Co., Ltd.
2021 2020 2021 2020 2021 2020
Net profit from
discontinuing -- -- -- -- -- --
operation
Other
comprehensive -- -- -- -- -- --
income
Total comprehensive
258,828,753.79 1,139,880,472.97 5,792,411.77 2,000,482.67 591,396.34 --
income
Dividend received
173,716,946.85 -- -- -- -- --
from associates
(4) Summary financial information of no significant joint ventures and associates
Items 2021.12.31 / Current period 2020.12.31 / Pervious period
Associates
Total carrying value of investment 174,696,933.28 182,983,769.62
Items calculated according to shareholding ratio
Net profit 3,061,477.93 -3,226,619.53
Other comprehensive income -- --
Total comprehensive income 3,061,477.93 -3,226,619.53
3. Interests in unconsolidated structured entities
(1) Basic information of unconsolidated structured entities
The unconsolidated structured entities are the limited partnership initiated by the Company-
Beijing Shouxin Jinyuan Management Consulting Center (Limited Partnership) (Hereinafter
referred to as Shouxin Jinyuan Fund) and the Beijing Shouxin Jin'an Equity Investment
Partnership (Limited Partnership) (Hereinafter referred to as Shouxin Jin'an Fund). In
accordance with the provisions of the limited partnership agreement, the Company has no
control over these two partnerships.
①The purpose of establishing Shouxin Jinyuan Fund is combining the relevant policies of
Beijing on the development of sophisticated industry with the market-oriented operation of
M&A investment, actively responding to the strategic goal of Beijing to build a sophisticated
industrial structure, promoting the upgrading and development of Beijing's sophisticated
industry, contributing to the local economic development and industrial structure adjustment
of Beijing, and creating satisfactory return on investment for investors.
The total subscribed capital of all partners to Shouxin Jinyuan Fund is no less than RMB one
billion. The partners of the Fund are divided into general partner and limited partner, the
contribution agreement is as follows: Beijing Shouyuan New Energy Investment Management
Co., Ltd., the general partner, contributes RMB 10,000 thousand; and among the limited
partners, the Company agrees to contribute RMB 200,000 thousand, and the other limited
partners agrees to contribute RMB 790,000 thousand in total.
As at 31 December 2021, Shouxin Jinyuan Fund has completed fund raising and registered on
The Chinese Association of Securities Investment Funds.
As at 31 December 2021, Shouxin Jinyuan Fund has conducted investment activities and
three external investment projects has been invested with the amount of RMB 792,092.00
191
Beijing Shougang Co. Ltd
Notes to the Financial Statements
FY21 (Unit: RMB, unless otherwise specified)
thousand. No financing activity has been conducted by the Fund.
② The purpose of establishing Shouxin Jin'an Fund is to focus on investment in leading
enterprises of Shougang Group system, promoting and strengthen the new material industry
of Shougang Group, taking the advanced metal material enterprise, such as Zhixin Co., Beiye
Materials Co. etc., as platforms and making investment focus on the advanced electrical steel
materials, casting superalloys and precision alloys, as well as high performance special steel
and other metal new materials that Shougang Group has advantages in.
The total subscribed capital of all partners to Shouxin Jin'an Fund is no less than RMB 1.616
billion. The partners of Shouxin Jin'an Fund are divided into general partner and limited
partner, and the contribution agreement is as follows: Beijing Shouyuan Xinneng Investment
Management Co., Ltd., as the general partner, contributes RMB 16,160 thousand; and among
the limited partners, the Company agrees to contribute RMB 200,000 thousand and other
limited partners agrees to contribute RMB 1,399,840 thousand in total.
As at 31 December 2021, the fund raising and the filing of fund associations of Shouxin Jin'an
Fund are still in process.
(2) Carrying value and maximum loss exposure of interests related assets and liabilities
As at 31 December 2021, no assets and liabilities related to the interests in Shouxin Jinyuan
Fund recognized are recognized in the financial statements of the Company except for the
partner contribution agreed in the partner agreement. The maximum loss exposure of the
company's interests in Shouxin Jinyuan Fund is RMB 98,418.40 thousand.
(3) Support provided to unconsolidated structured entities
As at 31 December 2021, the Company has no intention to provide financial support or other
supports for Shouxin Jinyuan Fund andShouxin Jin'an Fund.
(4) Additional information disclosure of unconsolidated structured entities
As at 31 December 2021, no additional information related to Shouxin Jinyuan Fund and
Shouxin Jin'an Fund should be disclosed by the Company.
VIII. Financial instruments and risk management
The major financial instruments of the Company include cash and cash equivalents, notes
receivable, accounts receivable, financing receivables, other receivables, current portion of
non-current assets, other current assets, other equity instrument investments, other
non-current financial assets, long-term receivables, notes payable, accounts payable, other
payables, short-term borrowings, financial liabilities held for trading, current portion of
non-current liabilities, entrusted deposits, long-term borrowings and bond payables, lease
liabilities and long-term payable. The details of financial instruments are disclosed in the
respective notes. Risks relate to these financial instruments and risk management policies
used by the Company to minimize the risks are disclosed as below. Management of the
Company manages and monitors the risk exposures to ensure the risks are controlled in the
limited range.
1. Objectives and policies of risk management
The objective of the Company in risk management is to obtain an appropriate equilibrium
between risk and return, and also focuses on minimizing potential adverse effects on the
192
Beijing Shougang Co. Ltd
Notes to the Financial Statements
FY21 (Unit: RMB, unless otherwise specified)
financial performance of the Company bring by the unpredictability of financial risk. Based
on the objectives of risk management, certain policies are established to recognize and
analyze the risk. Also, in order to monitor the risk position of the Company, internal control
procedures are designed according to acceptable level of risk. Both the policies and internal
control procedures are reviewed and revised regularly to adapt the changes of the market and
business activities of the Company.
The primary risks caused by the financial instruments of the Company are credit risk and
liquidity risk.
(1) Credit risk
Credit risk refers to the risk that the counterparty to a financial instrument would fail to
discharge its obligation under the terms of the financial instrument and cause a financial loss
to the Company.
The Company manages the credit risk on combination basis. Credit risks are mainly caused
by cash and cash equivalents, notes receivable, accounts receivable, other receivables etc.
The Company mainly deposits in financial institutions with good reputation and high credit
rating therefore no significant credit risk associated with cash and cash equivalents is
expected.
In addition, policies related to limit the credit risk exposure on notes receivable, accounts
receivable and other receivables are established by the Company. The Company evaluates
credit quality and sets credit limits on customers by taking into account their financial
position, credit records and other factors such as current market conditions. The credit history
of the customers is regularly monitored by the Company. In respect of customers with a poor
credit history, the Company will use written payment reminders, or shorten or cancel credit
periods, to ensure the overall credit risk of the Company is limited to a controllable extent.
The highest credit risk exposure to the Company is limited to the carrying value of each
financial instrument illustrated in the financial statements. The Company has not provided
any guarantee that might cause credit risk to the Company.
Among the accounts receivable of the Company, the accounts receivable of the top five
customers accounted for 45.99% (2020: 42.24%); among the other receivables of the
Company, the other receivables of the top five customers accounted for 59.06% (2020:
64.41%)
(2) Liquidity risk
Liquidity risk refers to the risks that the Company will not be able to meet its obligations
associated with its financial liabilities that are settled by delivering cash or other financial
assets.
The Company maintains and monitors sufficient level of cash and cash equivalents as
considered by the management while managing liquidity risk in order to meet operational
needs of the Company and reduce the effect of floating cash flow. The usage of bank loan is
monitored by the management of the Company and the loan covenants are ensured to be
complied. Meanwhile, primary financial institution commits to provide sufficient reserve
funds to satisfy the short term and long term fund requirement of the Company.
193
Beijing Shougang Co. Ltd
Notes to the Financial Statements
FY21 (Unit: RMB, unless otherwise specified)
2. Capital management
The capital management policies are made to keep the continuous operation of the Company,
to enhance the return to shareholders, to benefit other related parties and to maintain the best
capital structure to minimize the cost of capital.
To the maintenance or adjustment of the capital structure, the Company might adjust the
amount of dividends paid to shareholders, return capital to shareholders, issue new shares or
make an asset disposal to reduce debt liabilities.
The Company monitors the capital structure on the basis of leverage ratio (total liabilities
divided total assets). As at 31 December 2021, the leverage ratio of the Company is 66.59%
(31 December 2020 is 73.10%).
IX. Fair value
Fair value hierarchies are categorized into three levels as the lowest level input that is
significant to the entire fair value measurement.
Level 1: inputs are quoted prices (unadjusted) in active markets for identical assets and
liabilities.
Level 2: inputs are inputs other than quoted prices included within Level 1 that are observable
for the asset or liability, either directly or indirectly.
Level 3: inputs are unobservable inputs for the asset or liability.
(1) Fair value of assets and liabilities measured at fair value
As at 31 December 2021, assets and liabilities measured at fair value are shown as follows:
Level 1 fair value Level 2 fair value Level 3 fair value
Items Total
measurement measurement measurement
I. Recurring fair value measurement
(1) Financing receivable -- -- 4,015,188,495.05 4,015,188,495.05
(2) Other equity instrument investment 226,566,944.00 -- 38,333,819.97 264,900,763.97
(3) Other non-current financial assets -- -- 80,000,000.00 80,000,000.00
Total assets measured at fair value
226,566,944.00 -- 4,133,522,315.02 4,360,089,259.02
on a recurring basis
(2) Fair values of items not measured at fair value
Financial assets and financial liabilities measured at amortized cost include: cash and cash
equivalents, notes receivable, accounts receivable, other receivables, short-term borrowings,
notes payable, accounts payable, other payables, long-term borrowings due within one year,
long-term borrowings and bonds payable, etc.
No additional details of financial assets and financial liabilities should be disclosed since the
difference between the fair value and carrying value of financial assets and financial liabilities
of the Company is approximately equal.
194
Beijing Shougang Co. Ltd
Notes to the Financial Statements
FY21 (Unit: RMB, unless otherwise specified)
X. Related parties and related party transactions
1. Information about the parent company of the Company
Registered Shareholding Percentage of
Registration
Parent company Business nature capital percentage voting rights
place
(RMB0,000) （%） （%）
Company with limited
Shougang Group
Beijing liability(wholly 2,875,502.50 50.45 50.45
Co., Ltd.
state-owned)
The ultimate controlling party of the Company is State-owned Assets Supervision and
Administration Commission of People’s Government of Beijing Municipality.
During the reporting period, the change of the registered capital of the parent company is as
follows:
As at 31.12.2020 Addition Reduction As at 31.12.2021
2,875,502.50 -- -- 2,875,502.50
2. Information about the subsidiaries of the Company
For information about the subsidiaries of the Company, refer to Note VII, 1.
3. Information about joint ventures and associates of the Company
For information about joint ventures and associates of the Company, refer to Note VII, 2.
Joint ventures and associates that have related transactions with the Company in this year or
the previous year are as follows:
Name of joint venture or associate Relationship with the Company
Tangshan Shougang Jingtang Xishan Coking Co., Ltd. Joint ventures of the Company
Tangshan Guoxing Industrial Co., Ltd. Joint ventures of the Company
Tangshan Zhonghong Carbon Chemical Co., Ltd. Joint ventures of the Company
Qian'an Sinochem Coal Chemical Industrial Co., Ltd. Associates of the Company
Beijing Dingshengcheng Packaging Materials Co., Ltd. Associates of the Company
Guangzhou Jinghai Shipping Co., Ltd. Associates of the Company
Tianjin Shougang Steel Processing&Distribution Co., Ltd. Associates of the Company
Ningbo Shougang Zhejin Steel Co., Ltd. Associates of the Company
Tangshan Caofeidian Dunshi New Construction Material Co., Ltd. Associates of the Company
Guangdong Shougang Zhongshan Metal Steel Processing&Distribution Co., Ltd. Associates of the Company
Ordos Baotou Steel Shourui Material Technology Co., Ltd. Associates of the Company
Hebei Jingji Industry & Trading Co., Ltd. Associates of the Company
Beijing Shouxin Jinyuan Management Consulting Center (Limited Partnership) Associates of the Company
Shougang (Qingdao) Steel Industry Co., Ltd. Associates of the Company
195
Beijing Shougang Co. Ltd
Notes to the Financial Statements
FY21 (Unit: RMB, unless otherwise specified)
Name of joint venture or associate Relationship with the Company
Qian'an Jinyu Shougang Environmental Protection Technology Co., Ltd. Associates of the Company
4. Information about other related parties
Related party Relationship with the Company
Shougang Group Finance Co., Ltd. Under the control of the same parent company
Shougang Mining Corporation Under the control of the same parent company
China Shougang International Trade&Engineering Corporation Under the control of the same parent company
Beijing Shougang Refractory& Metallurgical Burden Co., Ltd. Under the control of the same parent company
Beijing Shougang Construction Group Co., Ltd. Under the control of the same parent company
Beijing Shougang Gas Co., Ltd. Under the control of the same parent company
Beijing Shougang Automation Information Technology Co., Ltd. Under the control of the same parent company
Beijing Shougang Machinery&Electric Co., Ltd. Under the control of the same parent company
Qinhuangdao Shougang Machinery Co., Ltd. Under the control of the same parent company
Qian'an Shouxin Automation Information Technology Co., Ltd. Under the control of the same parent company
Qian'an First Real Packaging Service Co., Ltd. Under the control of the same parent company
Qian'an Shougang Equipment Structure Co., Ltd. Under the control of the same parent company
Huludao Shougang Donghua Machinery Co., Ltd. Under the control of the same parent company
Beijing Soly Technology Co., Ltd. Under the control of the same parent company
Beijing Shouye Instruments&Meters Co., Ltd. Under the control of the same parent company
Beijing Shoujian Equipment Maintenance Co., Ltd. Under the control of the same parent company
Beijing Shoujian Hengxin Labor Service Co., Ltd. Under the control of the same parent company
Beijing Shoujian Hengji Construction Engineering Co., Ltd. Under the control of the same parent company
Beijing Shougang Landscaping Co., Ltd. Under the control of the same parent company
Beijing Shougang Huaxia International Trade Co., Ltd. Under the control of the same parent company
Beijing Shougang International Engineering&Technology Co., Ltd. Under the control of the same parent company
Beijing Jinanyuan Automobile Transportation Co., Ltd. Under the control of the same parent company
Beijing Shougang Xinganglian Technology&Trade Co., Ltd. Under the control of the same parent company
Beijing Huaxia Technology Co., Ltd. Under the control of the same parent company
Beijing Shougang Catering Co., Ltd. Under the control of the same parent company
Beijing Shoujia Steel Construction Co., Ltd. Under the control of the same parent company
Beijing Shougang Ferroalloy Co., Ltd. Under the control of the same parent company
Lujiashan Limestone Mining of Shougang Beijing Co., Ltd. Under the control of the same parent company
Qinhuangdao Shougang Krosaki Refractory Co., Ltd. Under the control of the same parent company
Yantai Shougang Mining 3D Co., Ltd. Under the control of the same parent company
196
Beijing Shougang Co. Ltd
Notes to the Financial Statements
FY21 (Unit: RMB, unless otherwise specified)
Related party Relationship with the Company
Tianjin Shougang Electric Equipment Co., Ltd. Under the control of the same parent company
Beijing Chengxin Engineering Supervision Co., Ltd. Under the control of the same parent company
Beijing Shoucheng Packaging Service Co., Ltd. Under the control of the same parent company
Beijing Shougang Materials Trading Co., Ltd. Under the control of the same parent company
Beijing Shougang Futong Elevator Co., Ltd. Under the control of the same parent company
Tangshan Caofeidian Industrial District Shouhanxin Industrial Co., Ltd. Under the control of the same parent company
Tonghua Iron and Steel Co., Ltd. Under the control of the same parent company
Beijing Shougang Huaxia Engineering&Technology Co., Ltd. Under the control of the same parent company
Shougang Environmental Industry Co., Ltd. Under the control of the same parent company
Beijing Teyu Plate Co., Ltd. Under the control of the same parent company
Qinhuangdao Zhongshou Logistics Co., Ltd. Under the control of the same parent company
Beijing Shougang Mining Construction Co., Ltd. Under the control of the same parent company
Qinhuangdao Shouqin Metal Materials Co., Ltd. Under the control of the same parent company
Beijing Shougang Industrial Group Co., Ltd. Under the control of the same parent company
Beijing Shougang Cultural Development Co., Ltd. Under the control of the same parent company
Qinhuangdao Shouqin Steel Machining&Delivery Co., Ltd. Under the control of the same parent company
Shougang Casey Steel Co., Ltd. Under the control of the same parent company
Tangshan Caofeidian First Real Industrial Co., Ltd. Under the control of the same parent company
Qiangang Hotel. Under the control of the same parent company
Beijing Shougang Special Steel Co., Ltd. Under the control of the same parent company
Beijing Shougang Yunxiang Industrial Technology Co., Ltd. Under the control of the same parent company
Bohai International Conference Center Co., Ltd. Under the control of the same parent company
Qian'an Shougang Xingkuang Industrial Co., Ltd. Under the control of the same parent company
Beijing Huayue Aviation Service Co., Ltd. Under the control of the same parent company
Shougang Guiyang Special Steel Co., Ltd. Under the control of the same parent company
Tangshan Shoukuang Cleaning Iron Co., Ltd. Under the control of the same parent company
China Peace International Travel Service Co., Ltd. Under the control of the same parent company
Beijing Shougang Steel Distribution Co., Ltd Under the control of the same parent company
Beijing Shougang Park Comprehensive Service Co., Ltd. Under the control of the same parent company
Shougang Changzhi Steel&Iron Co., Ltd. Under the control of the same parent company
Beijing Beiye Functional Materials Co., Ltd. Under the control of the same parent company
Beijing Shougang Metal Co., Ltd. Under the control of the same parent company
Tangshan Caofeidian Industrial Zone Jingtang Industrial Co., Ltd. Under the control of the same parent company
197
Beijing Shougang Co. Ltd
Notes to the Financial Statements
FY21 (Unit: RMB, unless otherwise specified)
Related party Relationship with the Company
Guizhou Bohong Industrial Co., Ltd. Under the control of the same parent company
Dachang Shougang Machinery&Electric Co., Ltd. Under the control of the same parent company
Ningbo Shoude Bonded Zone Trading Co., Ltd. Under the control of the same parent company
Beijing Shougang Lanzatech New Energy Technology Co., Ltd. Under the control of the same parent company
South China International Leasing Co., Ltd Under the control of the same parent company
Beijing Shougang Equipment Technology Co., Ltd. Under the control of the same parent company
Beijing Shouxinsheng Trading Co., Ltd. Under the control of the same parent company
Shougang Hospital Co., Ltd. Under the control of the same parent company
Qinhuangdao Shougang Plate Mill Co., Ltd. Under the control of the same parent company
Beijing Shougang Fulushi Color Coated Plate Co., Ltd. Under the control of the same parent company
Beijing Shougang Industrial Group Co., Ltd. Under the control of the same parent company
Bejing Shougang International Travel Co., Ltd. Under the control of the same parent company
Hebei Shougang Jingtang Machinery Co., Ltd. Under the control of the same parent company
Ningbo Metallurgical Investigation, Design&Research Co., Ltd. Under the control of the same parent company
Huludao Shougang Donghua Pipe Industry Co., Ltd. Under the control of the same parent company
Tonggang Jilin Welded Pipe Co., Ltd Under the control of the same parent company
Beijing Shougang Mining Investment Co., Ltd Under the control of the same parent company
Qinhuangdao Shougang Racing Valley Co., Ltd Under the control of the same parent company
Beijing Shougang Property Management Co., Ltd. Under the control of the same parent company
Beijing Shouao Real Estate Co., Ltd Under the control of the same parent company
Beijing Shougang Jitaian Alloy Materials Co., Ltd. Under the control of the same parent company
Beijing Shouronghui Technology Development Co., Ltd. Under the control of the same parent company
Shougang Shuicheng Steel (Group) Saide Construction Co., Ltd. Under the control of the same parent company
Shougang Hospital Co., Ltd. Under the control of the same parent company
Beijing Shougang Environmental Engineering Technology Co., Ltd. Under the control of the same parent company
Qingdao Shouyi Free Trade Zone Logistics Service Co., Ltd. Under the control of the same parent company
Beijing Shouhua Technology Development Co., Ltd. Under the control of the same parent company
Jilin Tonggang International Trade Co., Ltd. Under the control of the same parent company
Beijing Shougang Gas Tangshan Co., Ltd. Under the control of the same parent company
Guizhou Shuigang Logistics Co., Ltd. Under the control of the same parent company
Beijing Shouke Xingye Engineering Technology Co., Ltd. Under the control of the same parent company
Beijing Shougang Construction Investment Co., Ltd. Under the control of the same parent company
Shougang Commercial Factoring Co., Ltd. Under the control of the same parent company
198
Beijing Shougang Co. Ltd
Notes to the Financial Statements
FY21 (Unit: RMB, unless otherwise specified)
Related party Relationship with the Company
Guizhou Liupanshui Shenghongda Mechanical Equipment Manufacturing
Under the control of the same parent company
Co., Ltd
Guiyang Steel Mills I/E Corp. Under the control of the same parent company
Qinhuangdao Shoufang Property Service Co., Ltd. Under the control of the same parent company
Joint ventures or associates of the Company’s
Beijing Shougang Shape Metal Co., Ltd.
parent company
Joint ventures or associates of the Company’s
Jingxi (Guizhou) Supply Chain Management Co., Ltd.
parent company
Joint ventures or associates of the Company’s
Beijing Jingxi Supply Chain Management Co., Ltd.
parent company
Joint ventures or associates of the Company’s
Beijing Thermal Zhongda Heat Exchange Equipment Co., Ltd.
parent company
Joint ventures or associates of the Company’s
PetroChina Shougang (Beijing) Petroleumsales Co., Ltd.
parent company
Joint ventures or associates of the Company’s
Beijing Shoushe Metallurgical Technology Co., Ltd.
parent company
Joint ventures or associates of the Company’s
Beijing Shouyu Industry and Trade Co., Ltd.
parent company
Joint ventures or associates of the Company’s
Beijing Xingyeda Machinery&Electric Equipment Manufacture Co., Ltd.
parent company
Joint ventures or associates of the Company’s
Chaoyang Shougang Beifang Machinery Co., Ltd.
parent company
Joint ventures or associates of the Company’s
Tangshan Caofeidian Ganglian Logistics Co., Ltd.
parent company
Joint ventures or associates of the Company’s
Tangshan Caofeidian Industry Port Co., Ltd.
parent company
Joint ventures or associates of the Company’s
Beijing Shougang Kuangshan Hospital Co., Ltd
parent company
Joint ventures or associates of the Company’s
YASKAWA Shougang Robert Co., Ltd.
parent company
Joint ventures or associates of the Company’s
Cmi Engineering (Beijing) Co., Ltd.
parent company
Joint ventures or associates of the Company’s
Qian'an Shoujia Construction Material Co., Ltd.
parent company
Joint ventures or associates of the Company’s
Sanhe Shoujia Construction Material Co., Ltd.
parent company
Joint ventures or associates of the Company’s
Hua Xia Bank Co.,Ltd.
parent company
Beijing Shougang Resources Comprehensive Utilization Technology Joint ventures or associates of the Company’s
Development Co., Ltd. parent company
Joint ventures or associates of the Company’s
Jingxi Shoutang Supply Chain Management Co., Ltd
parent company
Joint ventures or associates of the Company’s
Beijing Shoubang New Material Co., Ltd.
parent company
Joint ventures or associates of the Company’s
Jingtang Port Shougang Terminal Co., Ltd.
parent company
Joint ventures or associates of the Company’s
Beijing Shougang Zhongye Machinery & Electric Co., Ltd.
parent company
Joint ventures or associates of the Company’s
Beijing Shoutegang Yuandong Magnesium Alloy Products Co., Ltd.
parent company
Joint ventures or associates of the Company’s
Jiangsu Capital Holdings Manufacturing Technology Co., Ltd.
parent company
199
Beijing Shougang Co. Ltd
Notes to the Financial Statements
FY21 (Unit: RMB, unless otherwise specified)
Related party Relationship with the Company
Joint ventures or associates of the Company’s
Suzhou Tonggang Shunye Steel Materials Processing Distribution Co., Ltd.
parent company
Shougang Shuicheng Iron and Steel (Group) Xingyuan Development Joint ventures or associates of the Company’s
Investment Co., Ltd. parent company
Joint ventures or associates of the Company’s
Chengde Xintong Shoucheng Mining Co., Ltd.
parent company
Joint ventures or associates of the Company’s
Gansu Province, Wenxian Million Litie Alloy Co., Ltd.
parent company
Joint ventures or associates of the Company’s
Beijing Shoutaizhongxin Science & Technology Co., Ltd
parent company
Directors, Supervisors, CFO and Board Secretary Key management personnel
5. Information about related party transactions
(1) Details of related purchase and sales
①Purchase of goods and receiving of services from related parties
Nature of
Related party 2021 2020
transaction
Shougang Group Co., Ltd. Raw material 38,213,705,218.31 22,475,432,877.92
Shougang Group Co., Ltd. Fuel material 1,436,079,743.96 839,111,830.96
Engineering
Shougang Group Co., Ltd. 107,886,266.97 184,224,527.54
equipment
Shougang Group Co., Ltd. Spare parts 61,664,063.35 8,688,006.35
Shougang Group Co., Ltd. Production service 25,846,478.94 21,908,162.53
Fund usage
Shougang Group Co., Ltd. 75,407,530.12 80,236,212.32
charges
Fund usage
Shougang Group Finance Co., Ltd. 292,800,216.58 261,805,906.55
charges
Shougang Mining Corporation Raw material 13,130,822,957.95 10,039,993,073.26
Shougang Mining Corporation Fuel material 18,970,036.44 --
Shougang Mining Corporation Power energy 36,655,834.65 46,362,132.70
Shougang Mining Corporation Spare parts 3,778,051.70 3,279,442.20
Shougang Mining Corporation Production service 122,369,996.53 101,071,134.26
Engineering
Shougang Mining Corporation 626,686.00 4,189,075.78
equipment
China Shougang International
Export cost 71,055,095.49 61,090,346.95
Trade&Engineering Corporation
China Shougang International
Raw material 123,598,167.77 245,622,956.58
Trade&Engineering Corporation
Qian'an Sinochem Coal Chemical
Fuel material 5,370,510,877.47 5,547,403,153.11
Industrial Co., Ltd.
Qian'an Sinochem Coal Chemical
Power energy 362,255,517.37 439,201,428.59
Industrial Co., Ltd.
Beijing Shougang Refractory&
Production service 3,758,115.00 26,199,618.34
Metallurgical Burden Co., Ltd.
Beijing Shougang Refractory&
Auxiliary material -- 2,926,927.87
Metallurgical Burden Co., Ltd.
Beijing Shougang Refractory& Engineering
10,770,342.75 2,070,531.19
Metallurgical Burden Co., Ltd. service
200
Beijing Shougang Co. Ltd
Notes to the Financial Statements
FY21 (Unit: RMB, unless otherwise specified)
Beijing Shougang Construction
Production service 622,581,968.30 462,954,574.43
Group Co., Ltd.
Beijing Shougang Construction
Spare parts 16,630,652.40 14,198,456.80
Group Co., Ltd.
Beijing Shougang Construction Engineering
61,946.00 6,528,973.48
Group Co., Ltd. equipment
Beijing Shougang Construction Engineering
832,585,204.04 758,031,421.11
Group Co., Ltd. service
Beijing Shougang Gas Co., Ltd. Spare parts 1,635,395.19 517,927.82
Beijing Shougang Gas Co., Ltd. Production service 57,272,804.78 48,834,170.58
Beijing Shougang Gas Co., Ltd. Power energy 109,544,662.97 88,465,933.43
Beijing Shougang Gas Co., Ltd. Auxiliary material 9,208,242.96 11,803,452.97
Beijing Shougang Automation
Production service 345,978,795.76 279,808,663.52
Information Technology Co., Ltd.
Beijing Shougang Automation
Spare parts 7,529,718.33 5,778,449.10
Information Technology Co., Ltd.
Beijing Shougang Automation Engineering
97,477,227.60 128,942,106.56
Information Technology Co., Ltd. service
Beijing Shougang Automation Engineering
76,320,731.33 120,428,074.99
Information Technology Co., Ltd. equipment
Beijing Shougang
Spare parts 113,462,788.79 104,611,424.62
Machinery&Electric Co., Ltd.
Beijing Shougang
Production service 264,618,752.90 210,197,665.05
Machinery&Electric Co., Ltd.
Beijing Shougang Engineering
26,536,094.40 4,834,316.85
Machinery&Electric Co., Ltd. equipment
Beijing Shougang Engineering
8,184,437.70 --
Machinery&Electric Co., Ltd. service
Qinhuangdao Shougang Machinery
Spare parts 52,361,597.00 48,022,099.00
Co., Ltd.
Qinhuangdao Shougang Machinery
Production service 161,443,825.72 113,037,965.98
Co., Ltd.
Qinhuangdao Shougang Machinery
Auxiliary material 181,612.00 108,800.00
Co., Ltd.
Qinhuangdao Shougang Machinery Engineering
631,639.35 2,799,784.00
Co., Ltd. equipment
Qian'an Shouxin Automation
Production service 119,293,169.06 111,609,021.92
Information Technology Co., Ltd.
Qian'an First Real Packaging Service
Production service 354,866,870.91 200,751,734.25
Co., Ltd.
Qian'an First Real Packaging Service
Raw material 288,102.67 7,369,162.70
Co., Ltd.
Qian'an Shougang Equipment
Spare parts 20,007,338.00 26,631,135.84
Structure Co., Ltd.
Qian'an Shougang Equipment
Production service 100,255,512.72 58,442,769.12
Structure Co., Ltd.
Qian'an Shougang Equipment Engineering
1,604,206.84 1,399,569.04
Structure Co., Ltd. equipment
Qian'an Shougang Equipment Engineering
825,909.00 3,013,922.79
Structure Co., Ltd. service
Qian'an Shougang Equipment
Raw material 519,943,875.16 211,923,588.96
Structure Co., Ltd.
Huludao Shougang Donghua
Spare parts 1,271,577.00 6,440,584.00
Machinery Co., Ltd.
Huludao Shougang Donghua
Production service 5,814,300.00 38,443,490.00
Machinery Co., Ltd.
Huludao Shougang Donghua Engineering
-- 7,399,092.61
Machinery Co., Ltd. equipment
Engineering
Beijing Soly Technology Co., Ltd. 830,868.00 353,801.34
equipment
Beijing Shouye Instruments&Meters
Spare parts 37,559,656.13 39,934,823.79
Co., Ltd.
201
Beijing Shougang Co. Ltd
Notes to the Financial Statements
FY21 (Unit: RMB, unless otherwise specified)
Beijing Shouye Instruments&Meters Engineering
5,208,510.00 837,828.50
Co., Ltd. equipment
Beijing Shoujian Equipment
Production service 90,492,961.45 57,321,699.12
Maintenance Co., Ltd.
Beijing Shoujian Equipment
Auxiliary material 5,659,200.00 2,138,400.00
Maintenance Co., Ltd.
Beijing Shoujian Equipment Engineering
355,200.76 --
Maintenance Co., Ltd. equipment
Beijing Shoujian Hengxin Labor
Production service 1,925,000.00 1,935,000.00
Service Co., Ltd.
Beijing Shoujian Hengji Construction
Spare parts 939,736.80 560,348.00
Engineering Co., Ltd.
Beijing Shougang Landscaping Co.,
Life service 26,567,532.41 14,216,782.92
Ltd.
Beijing Shougang Landscaping Co., Engineering
733,072.00 2,670,354.40
Ltd. service
Beijing Shougang Huaxia
Spare parts -- 4,960,000.00
International Trade Co., Ltd.
Beijing Shougang International
Spare parts 12,607,597.00 7,746,855.00
Engineering&Technology Co., Ltd.
Beijing Shougang International Engineering
72,137,555.51 267,038,760.67
Engineering&Technology Co., Ltd. equipment
Beijing Shougang International Engineering
477,002,075.75 1,387,188,083.59
Engineering&Technology Co., Ltd. service
Beijing Shougang International
Production service 17,945,708.90 645,886.79
Engineering&Technology Co., Ltd.
Beijing Jinanyuan Automobile
Production service 76,268,193.55 67,580,189.65
Transportation Co., Ltd.
Beijing Shougang Xinganglian
Production service 10,852,343.50 30,436,073.78
Technology&Trade Co., Ltd.
Beijing Huaxia Technology Co., Ltd. Spare parts 5,512,346.85 3,792,279.26
Engineering
Beijing Huaxia Technology Co., Ltd. 57,216.00 6,569,745.73
equipment
Beijing Huaxia Technology Co., Ltd. Production service 1,239,998.00 577,586.00
Beijing Shougang Catering Co., Ltd. Life service 32,281,673.78 31,571,639.79
Beijing Shoujia Steel Construction
Production service 43,447,842.27 25,231,426.92
Co., Ltd.
Shougang Hospital Co., Ltd. Life service 1,648,203.00 8,298,761.59
Beijing Shougang Ferroalloy Co.,
Raw material 448,631,993.28 279,689,952.60
Ltd.
Lujiashan Limestone Mining of
Raw material 113,014,348.70 110,828,669.76
Shougang Beijing Co., Ltd.
Lujiashan Limestone Mining of
Production service 59,356,273.21 23,047,011.45
Shougang Beijing Co., Ltd.
Lujiashan Limestone Mining of
Auxiliary material 8,208,732.96 2,952,512.20
Shougang Beijing Co., Ltd.
Qinhuangdao Shougang Krosaki
Auxiliary material 108,337,207.14 126,746,773.19
Refractory Co., Ltd.
Qinhuangdao Shougang Krosaki Engineering
2,287,610.62 --
Refractory Co., Ltd. equipment
Yantai Shougang Mining 3D Co., Ltd. Spare parts 39,600.00 10,791.62
Tianjin Shougang Electric Equipment Engineering
11,919,565.81 15,921,274.20
Co., Ltd. equipment
Tianjin Shougang Electric Equipment
Spare parts 10,249,090.00 3,439,500.00
Co., Ltd.
Beijing Chengxin Engineering Engineering
5,839,707.47 6,963,853.88
Supervision Co., Ltd. service
Beijing Chengxin Engineering
Production service 770,899.99 --
Supervision Co., Ltd.
Beijing Shoucheng Packaging Service
Production service 121,321,417.29 95,092,358.74
Co., Ltd.
202
Beijing Shougang Co. Ltd
Notes to the Financial Statements
FY21 (Unit: RMB, unless otherwise specified)
Beijing Shougang Materials Trading
Fuel material 309,682,912.34 119,602,059.49
Co., Ltd.
Beijing Shougang Materials Trading
Raw material 927,016,812.76 692,506,744.95
Co., Ltd.
Beijing Shougang Materials Trading
Production service -- 2,749,073.71
Co., Ltd.
Tangshan Shougang Jingtang Xishan
Power energy 961,379,395.21 905,225,354.25
Coking Co., Ltd.
Tangshan Shougang Jingtang Xishan
Fuel material 13,163,464,122.66 8,843,642,545.42
Coking Co., Ltd.
Tangshan Shougang Jingtang Xishan
Raw material 3,021,523.41 1,507,652.53
Coking Co., Ltd.
Tangshan Shougang Jingtang Xishan
Production service 248,887,913.91 28,235,067.39
Coking Co., Ltd.
Beijing Shougang Futong Elevator
Spare parts 91,115.00 59,440.00
Co., Ltd.
Beijing Shougang Futong Elevator
Production service 869,600.00 1,211,800.00
Co., Ltd.
Beijing Shoubao Nuclear Equipment
Production service -- 64,699,765.33
Technology Co., Ltd.
Beijing Shoubao Nuclear Equipment
Spare parts -- 10,676,027.00
Technology Co., Ltd.
Tangshan Guoxing Industrial Co.,
Production service 117,579,964.30 77,687,880.63
Ltd.
Tangshan Guoxing Industrial Co., Engineering
4,552,565.46 988,895.30
Ltd. service
Tangshan Caofeidian Industrial
District Shouhanxin Industrial Co., Production service 457,270,718.97 346,895,130.34
Ltd.
Engineering
Tonghua Iron and Steel Co., Ltd. 3,236,416.51 --
equipment
Tonghua Iron and Steel Co., Ltd. Raw material 66,026,550.32 2,247,601.84
Beijing Shougang Huaxia
Production service 94,339.62 18,833.33
Engineering&Technology Co., Ltd.
Beijing Shougang Huaxia Engineering
1,362,800.00 1,362,800.00
Engineering&Technology Co., Ltd. equipment
Shougang Environmental Industry
Production service 4,155,282.98 3,595,964.43
Co., Ltd.
Engineering
Beijing Teyu Plate Co., Ltd. -- 85,421,473.13
equipment
Qinhuangdao Zhongshou Logistics
Production service 587,690.19 1,271,692.78
Co., Ltd.
Beijing Shougang Mining Engineering
3,190,250.42 7,750,568.08
Construction Co., Ltd. service
Beijing Shougang Mining
Production service 359,497.00 429,992.00
Construction Co., Ltd.
Qinhuangdao Shouqin Metal Engineering
175,938.53 --
Materials Co., Ltd. equipment
Qinhuangdao Shouqin Metal
Raw material 1,268,839.82 14,565,774.93
Materials Co., Ltd.
Beijing Shougang Industrial Group
Life service 8,354,159.55 8,392,406.50
Co., Ltd.
Beijing Shougang Shape Metal Co.,
Raw material 1,114,889.38 1,448,649.56
Ltd.
Beijing Dingshengcheng Packaging
Production service 117,572,234.28 119,980,137.18
Materials Co., Ltd.
Beijing Dingshengcheng Packaging
Auxiliary material 2,330,402.40 1,045,368.00
Materials Co., Ltd.
Beijing Shougang Cultural
Production service 149,009.43 448,351.70
Development Co., Ltd.
Jingxi (Guizhou) Supply Chain
Raw material -- 7,894,247.79
Management Co., Ltd.
Qinhuangdao Shouqin Steel
Spare parts 261,453.00 158,382.00
Machining&Delivery Co., Ltd.
Qinhuangdao Shouqin Steel
Production service -- 2,672,600.00
Machining&Delivery Co., Ltd.
203
Beijing Shougang Co. Ltd
Notes to the Financial Statements
FY21 (Unit: RMB, unless otherwise specified)
Shougang Casey Steel Co., Ltd. Production service 102,954,696.79 85,312,691.44
Tangshan Caofeidian First Real
Life service 23,414,022.52 25,094,469.60
Industrial Co., Ltd.
Qiangang Hotel. Production service 25,876,769.55 20,242,271.63
Beijing Shougang Special Steel Co.,
Production service 426,234.71 7,257,200.37
Ltd.
Beijing Shougang Special Steel Co.,
Power energy 20,612.25 99,547.79
Ltd.
Beijing Shougang Yunxiang
Spare parts 478,270.00 4,903,800.00
Industrial Technology Co., Ltd.
Bohai International Conference
Life service 103,046.23 51,282.08
Center Co., Ltd.
Hebei Shoulang New Energy
Power energy 2,721,359.52 3,807,785.65
Technology Co., Ltd.
Qian'an Shougang Xingkuang
Auxiliary material 47,736,419.36 36,920,253.85
Industrial Co., Ltd.
Beijing Thermal Zhongda Heat
Spare parts 19,576,171.83 19,795,045.90
Exchange Equipment Co., Ltd.
Beijing Thermal Zhongda Heat
Production service 13,757,098.00 11,504,293.00
Exchange Equipment Co., Ltd.
Guangzhou Jinghai Shipping Co.,
Production service 407,924,922.93 328,058,660.14
Ltd.
PetroChina Shougang (Beijing)
Spare parts 51,088,635.32 42,519,088.05
Petroleumsales Co., Ltd.
PetroChina Shougang (Beijing)
Production service 802,443.04 789,805.94
Petroleumsales Co., Ltd.
Beijing Huayue Aviation Service Co.,
Life service -- 4,340.72
Ltd.
Beijing Shoushe Metallurgical
Life service 690,603.97 102,902.26
Technology Co., Ltd.
Beijing Shouyu Industry and Trade
Auxiliary material 10,603,136.18 10,164,440.09
Co., Ltd.
Beijing Xingyeda
Machinery&Electric Equipment Auxiliary material -- 512,301.01
Manufacture Co., Ltd.
Chaoyang Shougang Beifang
Spare parts 15,262.00 675,850.08
Machinery Co., Ltd.
Shougang Guiyang Special Steel Co.,
Auxiliary material 13,263,605.26 8,524,748.29
Ltd.
Shougang Guiyang Special Steel Co., Engineering
-- 20,788,717.99
Ltd. equipment
Tangshan Caofeidian Ganglian
Production service 63,642,873.70 758,402.74
Logistics Co., Ltd.
Tangshan Caofeidian Industry Port
Production service 400,052,453.44 401,422,352.04
Co., Ltd.
Tangshan Shoukuang Cleaning Iron
Raw material -- 109,839,833.78
Co., Ltd.
Tangshan Shoukuang Cleaning Iron
Production service -- 132,782,532.37
Co., Ltd.
Tianjin Shougang Steel
Production service 3,771,028.94 4,954,693.41
Processing&Distribution Co., Ltd.
Tianjin Shougang Steel
Raw material 2,598,673.80 35,232,137.78
Processing&Distribution Co., Ltd.
China Peace International Travel
Life service -- 8,000.00
Service Co., Ltd.
Beijing Shoutaizhongxin Science &
Spare parts 1,556,522.23 --
Technology Co., Ltd
Chengde Xintong Shoucheng Mining
Raw material 287,802,331.88 21,689,167.00
Co., Ltd.
Gansu Province, Wenxian Million
Raw material 812,062,129.47 --
Litie Alloy Co., Ltd.
Beijing Shougang Steel Distribution Engineering
-- 225,450.78
Co., Ltd equipment
Shougang (Qingdao) Steel Industry
Raw material 28,003,765.33 270,933.68
Co., Ltd.
204
Beijing Shougang Co. Ltd
Notes to the Financial Statements
FY21 (Unit: RMB, unless otherwise specified)
Beijing Shougang Park
Life service 1,458,695.68 464,322.39
Comprehensive Service Co., Ltd.
YASKAWA Shougang Robert Co.,
Production service 99,190.00 17,000.00
Ltd.
Beijing Shouxinsheng Trading Co.,
Raw material 660,000.00 60,505,643.28
Ltd.
Tonggang Jilin Welded Pipe Co., Ltd Auxiliary material -- 125,440.00
Qinhuangdao Shougang Plate Mill Engineering
-- 833,333.33
Co., Ltd. equipment
Qinhuangdao Shougang Racing
Production service 593,547.16 609,269.80
Valley Co., Ltd
Hebei Shougang Jingtang Machinery
Production service 8,612,479.50 1,092,932.10
Co., Ltd.
Beijing Shouao Real Estate Co., Ltd Life service 65,373.00 50,400.00
Engineering
Cmi Engineering (Beijing) Co., Ltd. 2,350,492.00 2,740,000.00
equipment
Jilin Tonggang International Trade
Raw material -- 2,619,614.95
Co., Ltd.
Ningbo Shougang Zhejin Steel Co.,
Production service 137,342.41 12,059.42
Ltd.
South China International Leasing Fund usage
408,154.27 317,749.91
Co., Ltd charges
Beijing Shouxin Jinyuan Management
Fund usage
Consulting Center (Limited 14,223,287.67 5,276,712.33
charges
Partnership)
Shougang Changzhi Steel&Iron Co.,
Fuel material 6,491,155.75 --
Ltd.
Qinhuangdao Shoufang Property
Life service 903,720.00 --
Service Co., Ltd.
Bejing Shougang International Travel
Life service 186,162.47 --
Co., Ltd.
Beijing Shougang Environmental
Raw material 10,514,058.58 --
Engineering Technology Co., Ltd.
Qian'an Jinyu Shougang
Environmental Protection Technology Production service 5,440,692.45 --
Co., Ltd.
Beijing Shougang Property
Production service 2,903,326.07 --
Management Co., Ltd.
Guiyang Steel Mills I/E Corp. Production service 3,371,370.88 --
Tangshan Caofeidian Dunshi New
Production service 1,554,416.90 --
Construction Material Co., Ltd.
②Sale of goods and rendering of services to related parties
Nature of
Related party 2021 2020
transaction
Shougang Group Co., Ltd. Management service 322,856,073.40 388,673,540.30
Shougang Group Co., Ltd. Interest income -- 21,582,482.08
Shougang Group Co., Ltd. Production service 16,384,180.19 16,269,090.54
Shougang Mining Corporation Steel 9,657,678.23 9,123,594.10
Shougang Mining Corporation Raw fuel material 617,528,694.26 324,518,330.13
Shougang Mining Corporation Power energy 339,888,833.31 360,465,665.25
Shougang Mining Corporation Production service 16,106,593.88 --
Shougang Group Finance Co., Ltd. Interest income 129,218,534.77 108,641,085.66
Qian'an Sinochem Coal Chemical
Power energy 277,517,105.35 181,315,533.79
Industrial Co., Ltd.
205
Beijing Shougang Co. Ltd
Notes to the Financial Statements
FY21 (Unit: RMB, unless otherwise specified)
Nature of
Related party 2021 2020
transaction
Shougang Casey Steel Co., Ltd. Steel 872,744,622.51 481,920,723.73
Shougang Casey Steel Co., Ltd. Production service 1,821,488.40 --
Beijing Shougang Xinganglian
Steel 52,568.33 259,068,925.83
Technology&Trade Co., Ltd.
Beijing Shougang Construction Group
Power energy 2,519,371.08 4,352,003.39
Co., Ltd.
Beijing Shougang Construction Group
Steel 37,736,546.55 26,296,712.93
Co., Ltd.
Beijing Shougang Construction Group
Production service 977,440.97 1,802,409.81
Co., Ltd.
Beijing Shougang Gas Co., Ltd. Power energy 151,854,252.56 137,638,625.60
Beijing Shougang Machinery&Electric
Steel 147,153,949.07 18,541,669.74
Co., Ltd.
Beijing Shougang Machinery&Electric
Power energy 3,337,782.11 2,612,156.17
Co., Ltd.
Beijing Shougang Machinery&Electric
Production service 1,513,633.98 3,627,733.33
Co., Ltd.
Beijing Shougang Machinery&Electric
Spare parts 180,310.18 --
Co., Ltd.
Beijing Shougang Ferroalloy Co., Ltd. Power energy 2,829,746.71 4,149,978.58
Beijing Shougang Ferroalloy Co., Ltd. Raw fuel material 20,619,652.70 20,863,176.66
Beijing Shougang Ferroalloy Co., Ltd. Production service 484,625.75 449,154.05
Beijing Shougang Ferroalloy Co., Ltd. Steel -- 40,223,043.89
Tangshan Shougang Jingtang Xishan
Power energy 600,722,568.59 597,223,735.88
Coking Co., Ltd.
Tangshan Shougang Jingtang Xishan
Production service 214,700,900.89 174,213,431.05
Coking Co., Ltd.
Beijing Beiye Functional Materials Co.,
Billet 14,900,608.66 9,117,278.51
Ltd.
Beijing Shougang Huaxia
Raw fuel material 56,998,443.29 6,755,827.81
Engineering&Technology Co., Ltd.
Beijing Shougang Huaxia
Production service 118,539.00 118,539.00
Engineering&Technology Co., Ltd.
Beijing Shoucheng Packaging Service
Steel 36,292,975.72 16,958,330.51
Co., Ltd.
Beijing Shoucheng Packaging Service
Power energy 296,380.80 339,453.51
Co., Ltd.
Beijing Shoucheng Packaging Service
Production service 1,868,192.00 1,712,510.00
Co., Ltd.
Qian'an First Real Packaging Service Co.,
Steel 39,934,460.63 88,324,141.23
Ltd.
Beijing Shouronghui Technology
Steel 1,966,033.60 --
Development Co., Ltd.
Tangshan Caofeidian Dunshi New
Raw fuel material 281,348,426.05 220,204,663.36
Construction Material Co., Ltd.
Tangshan Caofeidian Dunshi New
Power energy 120,645,752.67 116,463,776.95
Construction Material Co., Ltd.
Tangshan Caofeidian Dunshi New
Production service 27,043,499.52 23,682,420.06
Construction Material Co., Ltd.
Beijing Shougang International
Steel 622,011.63 --
Engineering&Technology Co., Ltd.
Beijing Shougang International
Power energy 34,249.96 171,321.90
Engineering&Technology Co., Ltd.
Beijing Shougang International
Production service 452,830.19 1,530,566.04
Engineering&Technology Co., Ltd.
Beijing Shougang Metal Co., Ltd. Steel 42,108,282.48 41,942,213.93
Beijing Shougang Metal Co., Ltd. Power energy 1,453,606.94 1,543,520.62
206
Beijing Shougang Co. Ltd
Notes to the Financial Statements
FY21 (Unit: RMB, unless otherwise specified)
Nature of
Related party 2021 2020
transaction
Beijing Shougang Metal Co., Ltd. Production service 2,756,334.23 2,521,467.89
Qinhuangdao Shouqin Metal Materials
Steel -- 507,696,108.99
Co., Ltd.
Beijing Shougang Mining Construction
Steel 1,241,277.67 3,680,894.15
Co., Ltd.
Tangshan Caofeidian Industrial District
Steel 41,892,931.70 --
Shouhanxin Industrial Co., Ltd.
Qinhuangdao Shougang Machinery Co.,
Raw fuel material 937,014,959.13 443,666,813.98
Ltd.
Qinhuangdao Shougang Machinery Co.,
Power energy 508,092.44 304,923.67
Ltd.
Qinhuangdao Shougang Machinery Co.,
Production service 1,888,757.36 --
Ltd.
Qian'an Shougang Equipment Structure
Power energy 21,000.00 20,002.50
Co., Ltd.
Qian'an Shougang Equipment Structure
Production service 164,068.27 144,000.00
Co., Ltd.
Qian'an Shougang Equipment Structure
Steel 223,401.77 3,911,445.31
Co., Ltd.
Tangshan Guoxing Industrial Co., Ltd. Power energy 812,139.20 783,910.67
Tangshan Guoxing Industrial Co., Ltd. Raw fuel material 4,072,506.20 57,837.12
Tangshan Guoxing Industrial Co., Ltd. Production service 1,962,692.75 1,259,047.62
Tangshan Caofeidian Industrial Zone
Power energy 125,248.13 119,962.50
Jingtang Industrial Co., Ltd.
Tangshan Caofeidian First Real Industrial
Power energy 873,443.01 906,346.18
Co., Ltd.
Beijing Shougang Automation
Power energy 1,305,678.06 80,430.00
Information Technology Co., Ltd.
Beijing Shougang Automation
Spare parts -- 1,443,067.62
Information Technology Co., Ltd.
Beijing Shougang Automation
Production service 237,735.85 237,735.85
Information Technology Co., Ltd.
Hebei Shoulang New Energy Technology
Power energy 93,846,906.81 124,893,707.64
Co., Ltd.
Hebei Shoulang New Energy Technology
Production service 1,714,285.71 5,142,857.14
Co., Ltd.
Beijing Jinanyuan Automobile
Production service 198,165.14 215,148.25
Transportation Co., Ltd.
Tonghua Iron and Steel Co., Ltd. Raw fuel material 778,164.50 137,737,917.92
Lujiashan Limestone Mining of Shougang
Raw fuel material 12,677,501.44 2,248,938.88
Beijing Co., Ltd.
Qinhuangdao Shouqin Steel
Steel -- 245,150.45
Machining&Delivery Co., Ltd.
Beijing Shoubao Nuclear Equipment
Power energy -- 50,400.00
Technology Co., Ltd.
Beijing Shoubao Nuclear Equipment
Production service -- 342,857.14
Technology Co., Ltd.
Beijing Shougang Materials Trading Co.,
Raw fuel material 10,752,760.18 5,226,123.89
Ltd.
Beijing Shougang Materials Trading Co.,
Production service -- 22,669.81
Ltd.
Beijing Shougang Materials Trading Co.,
Steel 31,365,842.84 14,122,416.76
Ltd.
Qinhuangdao Shougang Krosaki
Raw fuel material 46,410.02 --
Refractory Co., Ltd.
Shougang Changzhi Steel&Iron Co., Ltd. Raw fuel material -- 8,612,048.19
Shougang Changzhi Steel&Iron Co., Ltd. Production service 330,188.68 566,037.74
Tangshan Caofeidian Industry Port Co.,
Power energy 3,390,814.00 7,431,690.00
Ltd.
207
Beijing Shougang Co. Ltd
Notes to the Financial Statements
FY21 (Unit: RMB, unless otherwise specified)
Nature of
Related party 2021 2020
transaction
Tangshan Zhonghong Carbon Chemical
Interest income 10,518,170.49 10,361,268.74
Co., Ltd.
Tangshan Zhonghong Carbon Chemical
Production service 613,153.25 --
Co., Ltd.
Guangdong Shougang Zhongshan Metal
Steel -- 103,615,972.75
Steel Processing&Distribution Co., Ltd.
Ningbo Shougang Zhejin Steel Co., Ltd. Steel 733,790,833.50 387,404,125.34
Shougang (Qingdao) Steel Industry Co.,
Steel 2,635,744,920.56 2,068,145,685.62
Ltd.
Shougang (Qingdao) Steel Industry Co.,
Production service -- 1,191,850.64
Ltd.
Tianjin Shougang Steel
Steel 12,410,581.55 122,868,391.48
Processing&Distribution Co., Ltd.
Ordos Baotou Steel Shourui Material
Steel 20,147,152.24 43,172,333.19
Technology Co., Ltd.
Qian'an Shoujia Construction Material
Power energy 26,424,700.75 20,849,860.72
Co., Ltd.
Qian'an Shoujia Construction Material
Raw fuel material 78,768,061.55 72,638,182.03
Co., Ltd.
Qian'an Shoujia Construction Material
Production service 270,782.37 261,988.18
Co., Ltd.
Beijing Dingshengcheng Packaging
Power energy 72,289.19 37,950.34
Materials Co., Ltd.
Guizhou Bohong Industrial Co., Ltd. Production service 88,038.87 95,464.82
Sanhe Shoujia Construction Material Co.,
Raw fuel material -- 1,944,917.36
Ltd.
Beijing Shougang Landscaping Co., Ltd. Power energy 4,162.17 5,424.66
Dachang Shougang Machinery&Electric
Steel 2,382,335.68 9,954,118.15
Co., Ltd.
Guangzhou Jinghai Shipping Co., Ltd. Production service 46,548,850.68 30,107,927.27
Ningbo Shoude Bonded Zone Trading
Raw fuel material -- 41,366,049.77
Co., Ltd.
PetroChina Shougang (Beijing)
Power energy 25,414.27 23,415.00
Petroleumsales Co., Ltd.
PetroChina Shougang (Beijing)
Steel 125,306,810.27 76,412,124.74
Petroleumsales Co., Ltd.
Qingdao Shouyi Free Trade Zone
Raw fuel material -- 8,278,494.73
Logistics Service Co., Ltd.
Beijing Shouhua Technology
Production service -- 297,169.81
Development Co., Ltd.
Shougang Guiyang Special Steel Co., Ltd. Steel -- 2,110,641.08
Qian'an Shougang Xingkuang Industrial
Steel 50,832,468.42 18,076,509.17
Co., Ltd.
Beijing Shougang Gas Tangshan Co., Ltd. Production service 565,714.29 565,714.29
Chaoyang Shougang Beifang Machinery
Spare parts -- 88,887.10
Co., Ltd.
Beijing Shougang Catering Co., Ltd. Power energy 706,148.05 708,263.81
Beijing Jingxi Supply Chain Management
Steel -- 2,355,838.60
Co., Ltd.
Beijing Shouxinsheng Trading Co., Ltd. Steel -- 23,747,794.65
Chengde Xintong Shoucheng Mining Co.,
Production service -- 6,981.14
Ltd.
Guizhou Liupanshui Shenghongda
Mechanical Equipment Manufacturing Production service 22,871.70 28,478.78
Co., Ltd
Guizhou Shuigang Logistics Co., Ltd. Production service 9,040.57 4,491.51
Shougang Shuicheng Iron and Steel
(Group) Xingyuan Development Production service 81,484.90 43,601.42
Investment Co., Ltd.
208
Beijing Shougang Co. Ltd
Notes to the Financial Statements
FY21 (Unit: RMB, unless otherwise specified)
Nature of
Related party 2021 2020
transaction
Hebei Jingji Industry & Trading Co., Ltd. Steel 13,707,273.61 4,904,947.45
Qian'an Jinyu Shougang Environmental
Raw fuel material 5,670,282.21 --
Protection Technology Co., Ltd.
Jingtang Port Shougang Terminal Co.,
Production service 286,751.34 1,325,021.21
Ltd.
Beijing Shouke Xingye Engineering
Production service 1,681,415.93 --
Technology Co., Ltd.
Tonggang Jilin Welded Pipe Co., Ltd Steel 17,830.09 --
Shoujia Huanke (Qian'an) Co., Ltd. Raw fuel material 23,094,037.69 --
Beijing Shoujian Equipment Maintenance
Production service 19,018.87 --
Co., Ltd.
(2) Details of related party leases
① The Company as a lessor
Lease income Lease income
Lessee Type of assets leased
recognized in 2021 recognized in 2020
Qian'an Sinochem Coal Chemical Industrial Co.,
Land use right 824,536.83 824,536.83
Ltd.
Tangshan Shougang Jingtang Xishan Coking Co.,
Land use right 25,046,418.55 25,252,761.92
Ltd.
Tangshan Caofeidian Dunshi New Construction
Land use right 2,380,761.90 2,380,761.90
Material Co., Ltd.
Beijing Shougang Lanzatech New Energy
Land use right 165,333.33 165,333.33
Technology Co., Ltd.
② The Company as a lessee
Lease expenses Lease expenses
Lessor Type of assets leased
recognized in 2021 recognized in 2020
Beijing Shougang Construction Investment
Property 10,139,897.90 --
Co., Ltd.
Shougang Group Co., Ltd. Property 3,198,777.88 2,908,102.36
Beijing Shougang Special Steel Co., Ltd. Property 11,333.33 413,519.99
The Company leases right-of-use assets during the reporting period as a lessee
Lessor Type of assets leased Increase Decrease
Beijing Shougang Construction Investment
Plant and buildings 45,024,073.82 --
Co., Ltd.
The interest expenses incurred on lease liabilities as a lessee during the reporting period
Lessor Type of assets leased Increase Decrease
Shougang Group Co., Ltd. Plant and buildings 1,493,817.76 --
Beijing Shougang Construction Investment
Plant and buildings 1,953,367.31 --
Co., Ltd.
209
Beijing Shougang Co. Ltd
Notes to the Financial Statements
FY21 (Unit: RMB, unless otherwise specified)
(3) Details of related party guarantees
The Company as a guarantee
Status of
Guarantor Amount of guarantee Beginning date Maturity date
guarantee
Shougang Group Co., Ltd. 160,500,000.00 2021/9/17 2022/10/26 Incomplete
Shougang Group Co., Ltd. 8,787,335,054.82 2020/1/15 2022/6/29 Incomplete
Shougang Group Co., Ltd. 9,813,924,166.67 2019/3/29 2031/9/3 Incomplete
(4) Details of related party funding
Related party Amount of funding Beginning date Maturity date Note
Funds received:
Shougang Group Co., Ltd. 10,782,629.07 2019/3/6 2023/3/25 Entrust loans
Shougang Group Finance Co., Ltd. 9,144,620,734.38 2021/1/14 2022/12/23 Short-term borrowings
Shougang Group Finance Co., Ltd. 500,618,750.00 2021/7/15 2024/7/15 Long-term borrowings
Shougang Group Finance Co., Ltd. 6,328,176,896.08 2021/7/12 2022/6/28 Notes payable
South China International Leasing Co., Ltd 15,767,452.29 2020/1/7 2025/1/6 Long-term payable
Funds provided:
Tangshan Zhonghong Carbon Chemical
265,361,158.14 —— —— Other current assets
Co., Ltd.
(5) Details of transfer of assets and debt restructuring
Related party Nature of transaction 2021 2020
Share Transfer of Beijing Automobile
Shougang Group Co., Ltd. -- 4,371,977,739.86
Investment Co., Ltd.
Share Purchase of Beijing Shougang Steel Trade
Shougang Group Co., Ltd. -- 4,893,634,550.64
Investment Management Co., Ltd.
Beijing Shougang Equipment Share Purchase of Beijing Shoubao Nuclear
-- 3,327,900.00
Technology Co., Ltd. Equipment Technology Co., Ltd.
(6) Remuneration of key management personnel
The Company has 22 key management personnel in 2021, and 21 key management personnel
in 2020. The remuneration payment is as follows:
Items 2021 2020
Remuneration of key management personnel
12.3913 million 6.5804 million
(excluding share payment)
210
Beijing Shougang Co. Ltd
Notes to the Financial Statements
FY21 (Unit: RMB, unless otherwise specified)
6. Receivables from and payables to related parties
(1) Receivables from related parties
2021.12.31 2020.12.31
Items Related parties Provision for bad Provision for bad
Book balance Book balance
debts debts
Bank deposit Shougang Group Finance Co., Ltd. 9,993,599,779.82 -- 5,840,053,539.02 --
Bank deposit Hua Xia Bank Co.,Ltd. 92,946,504.55 -- 2,151,464.94 --
Accounts receivable Beijing Shougang Gas Co., Ltd. 3,870,237.73 135,713.01 -- --
Accounts receivable Shougang Group Co., Ltd. 57,219.54 2,006.45 -- --
Accounts receivable Shougang Casey Steel Co., Ltd. 259,971,350.16 9,116,105.40 154,836,520.71 5,264,260.70
Beijing Shougang Huaxia Engineering&Technology Co.,
Accounts receivable 1,623,946.24 56,944.99 2,382,464.89 923,413.27
Ltd.
Accounts receivable Hebei Shoulang New Energy Technology Co., Ltd. 23,052,262.12 808,346.19 47,946,382.54 1,630,120.96
Accounts receivable Qian'an Shoujia Construction Material Co., Ltd. 61,221,363.06 2,146,776.55 64,498,577.06 2,192,876.22
Accounts receivable Sanhe Shoujia Construction Material Co., Ltd. 9,275,968.24 6,437,863.04 11,275,968.24 5,998,186.89
Accounts receivable Qinhuangdao Shouqin Metal Materials Co., Ltd. 1,438,064.93 403,415.27 1,479,233.93 50,292.22
Accounts receivable Tonghua Iron and Steel Co., Ltd. 810,000.00 28,403.30 95,230,146.73 3,237,713.67
Tangshan Caofeidian Dunshi New Construction Material Co.,
Accounts receivable 4,028.00 141.25 11,199,223.84 380,760.52
Ltd.
Beijing Shougang International Engineering&Technology
Accounts receivable 412,800.00 401,297.79 1,156,700.00 318,437.01
Co., Ltd.
Accounts receivable Beijing Shougang Materials Trading Co., Ltd. -- -- 435,425.96 14,803.97
Accounts receivable Qian'an Shougang Xingkuang Industrial Co., Ltd. 9,607,053.73 336,879.10 7,222,280.17 245,549.08
Accounts receivable Beijing Shougang Mining Construction Co., Ltd. -- -- 12,987.00 441.54
Accounts receivable Beijing Shouxinsheng Trading Co., Ltd. -- -- 285,008.00 9,689.94
Accounts receivable Tianjin Shougang Steel Processing&Distribution Co., Ltd. 1,261,607.93 44,239.30 5,670,128.78 192,777.75
Accounts receivable Tangshan Shougang Jingtang Xishan Coking Co., Ltd. 734.50 25.76 -- --
211
Beijing Shougang Co. Ltd
Notes to the Financial Statements
FY21 (Unit: RMB, unless otherwise specified)
2021.12.31 2020.12.31
Items Related parties Provision for bad Provision for bad
Book balance Book balance
debts debts
Accounts receivable Beijing Shougang Machinery&Electric Co., Ltd. 42,400.00 1,486.79 -- --
Accounts receivable Beijing Shouke Xingye Engineering Technology Co., Ltd. 900,000.00 31,559.23 -- --
Prepayments Tonghua Iron and Steel Co., Ltd. 16,968,576.00 -- 87,647.33 --
Prepayments Tangshan Caofeidian Ganglian Logistics Co., Ltd. 262,876,222.88 -- 39,092,233.65 --
Prepayments Qinhuangdao Shouqin Metal Materials Co., Ltd. 763,907.90 -- 813,907.90 --
Prepayments Tangshan Caofeidian Industry Port Co., Ltd. -- -- 22,055.88 --
Prepayments Huludao Shougang Donghua Machinery Co., Ltd. -- -- 933,792.77 --
Prepayments Beijing Jinanyuan Automobile Transportation Co., Ltd. 671,424.66 -- -- --
Prepayments Chengde Xintong Shoucheng Mining Co., Ltd. 10,522,946.92 -- -- --
Other receivables Beijing Shougang Materials Trading Co., Ltd. -- -- 1,000,000.00 90,000.00
Dividend receivable Hebei Jingji Industry & Trading Co., Ltd. -- -- 4,892,288.48 --
Other current assets Tangshan Zhonghong Carbon Chemical Co., Ltd. 265,361,158.14 118,133,658.14 245,455,297.98 --
212
Beijing Shougang Co. Ltd
Notes to the Financial Statements
FY21 (Unit: RMB, unless otherwise specified)
(2) Payables to related parties
Items Related parties 2021.12.31 2020.12.31
Accounts payable Shougang Group Co., Ltd. 1,384,249,837.28 424,300,384.98
Accounts payable Shougang Mining Corporation 4,522,110,751.63 4,758,872,958.16
Accounts payable Qian'an Sinochem Coal Chemical Industrial Co., Ltd. 531,130,707.96 522,003,740.47
Accounts payable Tangshan Shougang Jingtang Xishan Coking Co., Ltd. 502,790,483.78 898,085,897.55
Accounts payable Beijing Shoucheng Packaging Service Co., Ltd. 13,987,818.77 12,194,373.08
Beijing Shougang Automation Information Technology Co.,
Accounts payable 205,271,058.27 323,142,973.59
Ltd.
Accounts payable Beijing Shougang Construction Group Co., Ltd. 782,284,524.75 1,037,734,728.65
Accounts payable Beijing Shoujian Equipment Maintenance Co., Ltd. 20,357,608.30 85,061,141.78
Accounts payable Beijing Shougang Landscaping Co., Ltd. 19,375,454.67 9,860,436.91
Accounts payable Beijing Shougang Catering Co., Ltd. 1,276,876.62 4,670,126.47
Accounts payable Beijing Huaxia Technology Co., Ltd. 5,949,926.35 5,781,199.34
Accounts payable Qinhuangdao Shougang Machinery Co., Ltd. 77,660,313.32 88,702,058.87
Accounts payable Beijing Shougang Huaxia International Trade Co., Ltd. -- 5,564.75
Accounts payable Beijing Shougang Machinery&Electric Co., Ltd. 132,222,261.77 165,812,736.46
Accounts payable Beijing Shouye Instruments&Meters Co., Ltd. 13,682,200.89 14,344,260.92
Accounts payable Huludao Shougang Donghua Machinery Co., Ltd. -- 9,207,347.77
Accounts payable Tianjin Shougang Electric Equipment Co., Ltd. 16,682,673.00 11,468,267.73
Accounts payable Beijing Shougang Gas Co., Ltd. 51,211,959.35 88,190,353.60
Beijing Shougang International Engineering&Technology Co.,
Accounts payable 500,889,049.60 681,763,620.48
Ltd.
Accounts payable Beijing Jinanyuan Automobile Transportation Co., Ltd. 10,002,976.59 14,257,362.30
Accounts payable Lujiashan Limestone Mining of Shougang Beijing Co., Ltd. 32,927,728.20 29,007,357.23
Accounts payable Beijing Shougang Huaxia Engineering&Technology Co., Ltd. 174,964.00 597,800.00
Accounts payable Beijing Shougang Xinganglian Technology&Trade Co., Ltd. -- 4,558,161.84
Accounts payable Qian'an Shougang Equipment Structure Co., Ltd. 79,254,052.59 105,856,397.86
Accounts payable Yantai Shougang Mining 3D Co., Ltd. 337,462.12 914,117.76
Accounts payable Beijing Shoujian Hengji Construction Engineering Co., Ltd. 1,355,139.65 1,346,603.21
Accounts payable Beijing Soly Technology Co., Ltd. 1,322,967.10 1,325,147.26
Accounts payable Qian'an Shouxin Automation Information Technology Co., Ltd. 18,536,805.29 23,932,561.21
Accounts payable Shougang Hospital Co., Ltd. -- 3,278,331.90
Accounts payable Qian'an First Real Packaging Service Co., Ltd. 108,038,561.30 84,336,199.76
213
Beijing Shougang Co. Ltd
Notes to the Financial Statements
FY21 (Unit: RMB, unless otherwise specified)
Items Related parties 2021.12.31 2020.12.31
Beijing Shougang Refractory& Metallurgical Burden Co.,
Accounts payable 15,421,690.84 10,707,679.21
Ltd.
Accounts payable Beijing Shoujia Steel Construction Co., Ltd. 5,451,674.96 4,070,335.14
Accounts payable Beijing Shougang Ferroalloy Co., Ltd. 56,826,692.95 49,538,592.23
Accounts payable Beijing Shougang Materials Trading Co., Ltd. 218,553,880.01 115,225,146.51
Beijing Shougang Resources Comprehensive Utilization
Accounts payable 57,690,426.64 70,690,426.64
Technology Development Co., Ltd.
Accounts payable Shougang Environmental Industry Co., Ltd. 829,080.00 692,794.10
Accounts payable China Shougang International Trade&Engineering Corporation 329,101,270.01 303,356,345.33
Accounts payable Beijing Chengxin Engineering Supervision Co., Ltd. 4,895,538.32 6,032,842.86
Accounts payable Qinhuangdao Shougang Plate Mill Co., Ltd. -- 141,274.84
Accounts payable Qinhuangdao Shougang Krosaki Refractory Co., Ltd. 53,995,540.32 72,232,078.18
Accounts payable Tangshan Shoukuang Cleaning Iron Co., Ltd. 137,489,080.84 137,489,080.84
Accounts payable Tangshan Guoxing Industrial Co., Ltd. 37,617,722.80 27,550,753.14
Tangshan Caofeidian Industrial District Shouhanxin Industrial
Accounts payable 162,441,310.98 168,050,365.63
Co., Ltd.
Accounts payable Beijing Shougang Futong Elevator Co., Ltd. 178,815.55 2,677,608.70
Accounts payable Beijing Teyu Plate Co., Ltd. 85,095,430.63 85,095,430.63
Accounts payable Jingxi Shoutang Supply Chain Management Co., Ltd 888,650.02 1,388,650.02
Accounts payable Beijing Shougang Mining Construction Co., Ltd. 5,821,388.57 8,858,144.66
Accounts payable Qinhuangdao Shouqin Metal Materials Co., Ltd. 17,970,896.72 16,537,107.72
Accounts payable Qinhuangdao Shouqin Steel Machining&Delivery Co., Ltd. 361,229.80 528,208.91
Accounts payable Beijing Shoushe Metallurgical Technology Co., Ltd. 42,036.40 26,672.40
Accounts payable Beijing Shougang Fulushi Color Coated Plate Co., Ltd. 10,950,942.80 16,666,004.85
Accounts payable Beijing Shougang Industrial Group Co., Ltd. 10,454,655.52 6,602,419.19
Accounts payable Bejing Shougang International Travel Co., Ltd. 144,566.00 178,263.50
Accounts payable Beijing Shougang Cultural Development Co., Ltd. 157,950.00 --
Accounts payable Beijing Shougang Yunxiang Industrial Technology Co., Ltd. 2,396,999.79 2,752,728.69
Accounts payable Qiangang Hotel. 12,384,514.68 5,741,588.83
Accounts payable Beijing Dingshengcheng Packaging Materials Co., Ltd. 14,641,606.12 11,814,696.28
Accounts payable Beijing Shouxinsheng Trading Co., Ltd. -- 2,458,032.74
Accounts payable Beijing Shougang Special Steel Co., Ltd. 101,949,940.33 101,949,940.33
Accounts payable Hebei Shougang Jingtang Machinery Co., Ltd. 4,208,507.88 1,525,293.86
Accounts payable Ningbo Metallurgical Investigation, Design&Research Co., Ltd. 7,313,225.55 7,253,031.40
214
Beijing Shougang Co. Ltd
Notes to the Financial Statements
FY21 (Unit: RMB, unless otherwise specified)
Items Related parties 2021.12.31 2020.12.31
Accounts payable Qian'an Shougang Xingkuang Industrial Co., Ltd. 10,413,229.91 5,935,224.42
Accounts payable Bohai International Conference Center Co., Ltd. 104,450.00 --
Accounts payable Beijing Thermal Zhongda Heat Exchange Equipment Co., Ltd. 26,612,943.68 24,662,319.86
Accounts payable Beijing Shougang Kuangshan Hospital Co., Ltd 3,630,791.00 1,949,405.50
Accounts payable Beijing Shouyu Industry and Trade Co., Ltd. 7,359,998.22 5,817,793.42
Accounts payable PetroChina Shougang (Beijing) Petroleumsales Co., Ltd. 11,432,572.79 9,581,118.29
Accounts payable YASKAWA Shougang Robert Co., Ltd. 388,207.98 634,464.46
Accounts payable Beijing Shoubang New Material Co., Ltd. 1,685,368.21 629,938.31
Beijing Xingyeda Machinery&Electric Equipment Manufacture
Accounts payable 1,056,900.10 124,606.53
Co., Ltd.
Accounts payable Chaoyang Shougang Beifang Machinery Co., Ltd. 1,019,783.85 1,051,936.50
Accounts payable Guangzhou Jinghai Shipping Co., Ltd. 113,750,687.97 95,572,579.06
Accounts payable Jingtang Port Shougang Terminal Co., Ltd. 2,927.40 2,927.40
Accounts payable Tangshan Caofeidian Industry Port Co., Ltd. 62,255,892.01 98,535,542.27
Accounts payable Beijing Shougang Zhongye Machinery & Electric Co., Ltd. -- 433,770.00
Accounts payable Shougang Guiyang Special Steel Co., Ltd. 10,488,904.44 17,565,638.66
Accounts payable Tianjin Shougang Steel Processing&Distribution Co., Ltd. 208,116.72 1,357,127.53
Accounts payable Cmi Engineering (Beijing) Co., Ltd. -- 4,096,520.00
Beijing Shoutegang Yuandong Magnesium Alloy Products Co.,
Accounts payable 200,408.00 200,408.00
Ltd.
Accounts payable Shougang (Qingdao) Steel Industry Co., Ltd. 1,673,343.05 --
Accounts payable Huludao Shougang Donghua Pipe Industry Co., Ltd. -- 176,817.81
Accounts payable Tonggang Jilin Welded Pipe Co., Ltd -- 31,747.20
Accounts payable Beijing Shougang Mining Investment Co., Ltd 175,708,332.43 175,708,332.43
Accounts payable Qinhuangdao Shougang Racing Valley Co., Ltd 229,160.00 259,520.00
Accounts payable Beijing Shougang Property Management Co., Ltd. 1,957,224.08 59,727.00
Accounts payable Beijing Shougang Park Comprehensive Service Co., Ltd. 4,700.00 9,620.00
Accounts payable Jiangsu Capital Holdings Manufacturing Technology Co., Ltd. -- 250,000.00
Accounts payable Beijing Shouao Real Estate Co., Ltd 33,960.00 16,800.00
Guangdong Shougang Zhongshan Metal Steel
Accounts payable 29,597.98 29,597.98
Processing&Distribution Co., Ltd.
Accounts payable Tonghua Iron and Steel Co., Ltd. 3,754,243.16 --
Beijing Shougang Environmental Engineering Technology Co.,
Accounts payable 1,039,146.20 --
Ltd.
215
Beijing Shougang Co. Ltd
Notes to the Financial Statements
FY21 (Unit: RMB, unless otherwise specified)
Items Related parties 2021.12.31 2020.12.31
Accounts payable Guiyang Steel Mills I/E Corp. 6,450,970.10 --
Qian'an Jinyu Shougang Environmental Protection Technology
Accounts payable 1,650,945.20 --
Co., Ltd.
Accounts payable Beijing Shougang Kuangshan Hospital Co., Ltd 411,453.00 --
Accounts payable Shougang Commercial Factoring Co., Ltd. 94,520.31 --
Tangshan Caofeidian Dunshi New Construction Material Co.,
Accounts payable 757,423.42 --
Ltd.
Contract liability Beijing Shoucheng Packaging Service Co., Ltd. 716,930.07 140,353.75
Contract liability Beijing Shougang Huaxia Engineering&Technology Co., Ltd. 5,245,386.29 1,484,689.80
Contract liability Beijing Beiye Functional Materials Co., Ltd. 1,060,401.14 129,484.80
Contract liability Beijing Shougang Gitane New Materials Co., Ltd. 45,093.66 43,809.62
Contract liability Beijing Shougang Xinganglian Technology&Trade Co., Ltd. -- 12,812,385.43
Contract liability Huludao Shougang Donghua Machinery Co., Ltd. -- 1,729,808.14
Contract liability Beijing Shouronghui Technology Development Co., Ltd. 5,659,780.67 1,359,852.64
Contract liability Beijing Shougang Machinery&Electric Co., Ltd. 9,900,333.17 308,844.95
Contract liability Beijing Shougang Construction Group Co., Ltd. 112,823.19 119,407.58
Tangshan Caofeidian Industrial District Shouhanxin Industrial
Contract liability 5,000,915.64 --
Co., Ltd.
Contract liability Beijing Shougang Jitaian Alloy Materials Co., Ltd. 24,716.74 --
Contract liability Qinhuangdao Shougang Machinery Co., Ltd. 858,701.10 847,647.78
Tangshan Caofeidian Industrial Zone Jingtang Industrial Co.,
Contract liability 31,485.93 33,744.95
Ltd.
Contract liability Tangshan Guoxing Industrial Co., Ltd. 28,189.37 40,000.00
Beijing Shougang International Engineering&Technology Co.,
Contract liability 312,038.71 113,815.14
Ltd.
Contract liability Qian'an First Real Packaging Service Co., Ltd. 781,919.64 5,000,088.04
Tangshan Caofeidian Dunshi New Construction Material Co.,
Contract liability 1,325,363.50 --
Ltd.
Contract liability Beijing Shougang Industrial Group Co., Ltd. -- 52,984.32
Contract liability Beijing Jinanyuan Automobile Transportation Co., Ltd. 50,000.00 --
Contract liability Qian'an Shougang Equipment Structure Co., Ltd. -- 6,019.15
Contract liability Qinhuangdao Shougang Plate Mill Co., Ltd. 13,028.81 13,028.81
Contract liability Qinhuangdao Shougang Krosaki Refractory Co., Ltd. 182,697.15 102,297.31
Contract liability Lujiashan Limestone Mining of Shougang Beijing Co., Ltd. 1,378,594.00 1,952,166.12
Contract liability Qian'an Shougang Xingkuang Industrial Co., Ltd. 50,000.00 50,000.00
216
Beijing Shougang Co. Ltd
Notes to the Financial Statements
FY21 (Unit: RMB, unless otherwise specified)
Items Related parties 2021.12.31 2020.12.31
Contract liability Beijing Shougang Materials Trading Co., Ltd. 188,861.00 119,506.25
Contract liability Guizhou Bohong Industrial Co., Ltd. 50,000.00 50,000.00
Contract liability Huludao Shougang Donghua Pipe Industry Co., Ltd. -- 50,000.00
Contract liability Beijing Shougang Mining Construction Co., Ltd. 52,088.04 41,153.42
Contract liability Tianjin Shougang Electric Equipment Co., Ltd. 169.19 169.19
Contract liability Qinhuangdao Shouqin Steel Machining&Delivery Co., Ltd. -- 8,180.36
Contract liability Shougang Shuicheng Steel (Group) Saide Construction Co., Ltd. 805.61 805.61
Contract liability Dachang Shougang Machinery&Electric Co., Ltd. 2,280.20 697,971.31
Contract liability Ningbo Shougang Zhejin Steel Co., Ltd. 18,370,671.65 7,713,107.90
Contract liability Guangzhou Jinghai Shipping Co., Ltd. 5,311,397.37 7,151,356.77
Suzhou Tonggang Shunye Steel Materials Processing
Contract liability 2,046.68 2,046.68
Distribution Co., Ltd.
Contract liability Beijing Shougang Shape Metal Co., Ltd. 10,095,842.56 6,729,383.91
Contract liability Ordos Baotou Steel Shourui Material Technology Co., Ltd. 3,865,016.99 1,312,200.50
Contract liability PetroChina Shougang (Beijing) Petroleumsales Co., Ltd. 12,452,455.41 11,593,447.04
Contract liability Shougang Casey Steel Co., Ltd. 645,198.15 0.05
Contract liability Shougang (Qingdao) Steel Industry Co., Ltd. 82,388,551.58 111,428,733.94
Contract liability Tianjin Shougang Steel Processing&Distribution Co., Ltd. 38,202.45 1,604,220.81
Guangdong Shougang Zhongshan Metal Steel
Contract liability -- 5,255,500.85
Processing&Distribution Co., Ltd.
Contract liability Beijing Shougang Ferroalloy Co., Ltd. -- 50,000.00
Contract liability Shougang Guiyang Special Steel Co., Ltd. -- 21,353.73
Contract liability Chaoyang Shougang Beifang Machinery Co., Ltd. 114.02 114.02
Contract liability Beijing Shouyu Industry and Trade Co., Ltd. 58,437.91 50,000.00
Contract liability Hebei Jingji Industry & Trading Co., Ltd. 572,635.52 460,409.38
Contract liability Beijing Thermal Zhongda Heat Exchange Equipment Co., Ltd. 50,000.00 --
Contract liability Beijing Shoujian Equipment Maintenance Co., Ltd. 50,000.00 --
Qian'an Jinyu Shougang Environmental Protection Technology
Contract liability 105,416.50 --
Co., Ltd.
Contract liability Shoujia Huanke (Qian'an) Co., Ltd. 200,000.00 --
Other payable Shougang Group Co., Ltd. 57,154,287.37 1,187,727,922.88
Beijing Shougang Automation Information Technology Co.,
Other payable 749,720.20 749,720.20
Ltd.
Other payable Beijing Shougang Construction Group Co., Ltd. 3,458,000.00 3,458,000.00
217
Beijing Shougang Co. Ltd
Notes to the Financial Statements
FY21 (Unit: RMB, unless otherwise specified)
Items Related parties 2021.12.31 2020.12.31
Other payable Beijing Shougang Landscaping Co., Ltd. 19,893.26 19,893.26
Other payable Beijing Chengxin Engineering Supervision Co., Ltd. 269,324.00 269,324.00
Other payable Beijing Shougang Xinganglian Technology&Trade Co., Ltd. -- 300,000.00
Other payable Beijing Shougang Industrial Group Co., Ltd. 3,865,587.23 200,000.00
Other payable Tangshan Guoxing Industrial Co., Ltd. 4,450,973.55 --
Other payable Ningbo Metallurgical Investigation, Design&Research Co., Ltd. 190,000.00 190,000.00
Other payable Guangzhou Jinghai Shipping Co., Ltd. 311,320.00 300,000.00
Other payable Beijing Shougang Gas Co., Ltd. 1,650,000.00 1,123,099.67
Other payable Hebei Shougang Jingtang Machinery Co., Ltd. 2,776,577.52 --
Beijing Shouxin Jinyuan Management Consulting Center
Other payable 319,500,000.00 95,276,712.33
(Limited Partnership)
Other non-current
Shougang Group Co., Ltd. 4,563,283,607.60 4,491,623,817.41
liability
XI. Share-based payment
1. General information of share-based payment
Items 2021
Total amount of equity instruments granted by the Company in current period 64,901,800.00
Total amount of equity instruments exercised by the Company in current period --
Total amount of invalid equity instruments of the Company in current period --
Range of exercise price and remaining term of the contract of outstanding stock options issued by the
Company at the end of the period
Range of exercise prices and remaining contractual maturity of other equity instruments issued by the
--
Company at the end of the period
2. Equity-settled share-based payment
Items 2021
Determined by the closing price of
The method of determining fair value of equity instrument on the grant date
restricted shares on the grant date
Determined by the amount of actual
Basis for determining the number of exercisable equity instruments unlocked instruments which is based on
performance assessment
Reasons of significant difference between current estimate and previous estimate None
Accumulated amount recognised in capital reserve 5,897,610.37
Total amount recognised in P/L in current period 7,165,158.72
218
Beijing Shougang Co. Ltd
Notes to the Financial Statements
FY21 (Unit: RMB, unless otherwise specified)
Note ： Proposal of Beijing Shougang Co., Ltd.2021 Restricted Stock Incentive Plan (Draft
Amendment)and its Summary, Proposal of Beijing Shougang Co., Ltd. Appraisal Management
System on 2021 Restricted Stock Incentive Plan (Revised), Proposal of Submitting the General
Meeting of Shareholders to Authorize the Board of Directors to Handle Relevant Matters of 2021
Restricted stock Incentive Plan were deliberated and approved at the 11th meeting of the 7th session
of the board of directors on 29 November 2021 and the first extraordinary general meeting of
shareholders in 2021, which was approved by Beijing State Owned Assets Supervision and
Administration Commission and confirmed and recorded by China Securities Regulatory
Commission with no objection. The grant date is 9 December 2021 and a total of 64,901,800.00
restricted stock shares are granted to 386 incentive targets. The grant price of the restricted stock is
RMB3.25 per share. After the completion of subscription of this incentive plan, the share capital
(Note Ⅴ,34) and capital reserve (Note Ⅴ,35) of the Company increase by RMB 64,901,800.00 and
RMB 146,029,050.00 respectively due to the issuance of new shares. The treasury shares increase
by RMB 210,930,850.00 and meanwhile the repurchase obligation of equity incentive is recognized
in other payables by RMB 210,930,850.00 (Note Ⅴ, 25). The cost and expense of RMB
7,165,158.72 is recognized in current vesting period, and the consolidated capital reserve is
increased by RMB 5,897,610.37 according to the shareholding ratio of the subsidiaries. The
restriction period of restricted shares granted by the incentive plan shall be 24 months, 36 months
and 48 months respectively from the registration date of the corresponding partial of equity granted.
The restricted stocks granted under this incentive plan shall not be transferred, used for security or
debt repayment during the restricted period.
The Company specified lock-in period and unlocking conditions for the stock granted to the
incentive targets through non-public offering, and the Company has fully recognized other payables
- repurchase obligation of restricted stock and treasury share in respect of the repurchase obligations
based on the subscription amounts received. If the unlocking conditions specified in the final equity
incentive plan are not satisfied, the Company will repurchase the shares at the grant price and write
down treasury share. The portion of restricted stocks that satisfy the unlocking conditions offset
from the treasury shares.
XII. Commitments and contingencies
1. Material commitments
As of 31 December 2021, there is no commitment to be disclosed.
2. Contingencies
As of 31 December 2021, there is no contingency arising from pending litigation and guarantee
provided to other entities.
XIII. Events after balance sheet date
1. Description of important non-adjustment events after balance sheet date
On 18 March 2022, the Company received “Approval for Beijing Shougang Co., Ltd. to Issue
Shares to Shougang Group Co., Ltd. to Purchase Assets and Raise Supporting Funds” (zjxk [2022]
No. 553) from China Securities Regulatory Commission.
219
Beijing Shougang Co. Ltd
Notes to the Financial Statements
FY21 (Unit: RMB, unless otherwise specified)
On 20 April 2022, the Company completed the work of issuing 1,015,417,369 shares to Shougang
Group Co., Ltd. to purchase 49% of the remaining equity of Beijing Shougang Steel Trading
Investment Management Co., Ltd. On 25 April 2022, Huatai United Securities Co., Ltd., the co-lead
underwriter of the Company's raised funds, have received the subscription for 54,126,391 shares of
the Company's non-public offering of new shares by investors, and the subsequent share listing
registration is in progress.
2. Notes to other events after the balance sheet date
As of 27 April 2022, the company has no other events shall be disclosed after the balance sheet
date.
XIV. Other significant events
1. Segment information
According to internal organizational structure, management requirement and requirement of internal
reporting system, the Company divides businesses into iron and steel segment. The segment
information is determined based on the financial information required by routine internal
management of the Company. The management periodically evaluates the operating results of the
segment to determine its allocation of resources and evaluate the performance of the segment.
The segment information of the Company includes: iron and steel segment.
The segment information is disclosed in accordance with the accounting policies and measurement
basis used in the reports of the management, which are in line with those adopted in financial
statements.
(1) Segment profit or loss, assets and liabilities
For the year ended 31 December 2021
Iron and Steel Segment Offset Total
or as at 31 December 2021
Operating revenue 134,034,486,136.13 -- 134,034,486,136.13
Including: External revenue 134,034,486,136.13 -- 134,034,486,136.13
Inter-segment revenue
Including: Main business revenue 129,424,398,384.25 -- 129,424,398,384.25
Cost of sales 118,578,217,304.05 -- 118,578,217,304.05
Including: Main business cost of sales 114,806,306,669.92 -- 114,806,306,669.92
Operating expenses 3,209,749,629.99 -- 3,209,749,629.99
Operating profit/(loss) 9,858,466,406.54 -- 9,858,466,406.54
Total assets 147,211,560,696.41 -- 147,211,560,696.41
Total liabilities 98,035,201,201.55 -- 98,035,201,201.55
220
Beijing Shougang Co. Ltd
Notes to the Financial Statements
FY21 (Unit: RMB, unless otherwise specified)
For the year ended 31 December 2021
Iron and Steel Segment Offset Total
or as at 31 December 2021
Supplementary information:
1.Capital expenditure 3,015,839,391.12 -- 3,015,839,391.12
2.Depreciation and amortisation 7,442,584,739.31 -- 7,442,584,739.31
3.Non-cash expenses other than depreciation and amortisation -- -- --
4.4.Assets impairment losses 295,107,454.68 -- 295,107,454.68
For the year ended 31 December 2020
Iron and steel Segment Offset Total
or as at 31 December 2020
Operating revenue 79,951,181,948.10 -- 79,951,181,948.10
Including: External revenue 79,951,181,948.10 -- 79,951,181,948.10
Inter-segment revenue
Including: Main business revenue 76,204,354,719.07 -- 76,204,354,719.07
Cost of sales 73,072,708,322.14 -- 73,072,708,322.14
Including: Main business cost of sales 70,025,177,064.76 -- 70,025,177,064.76
Operating expenses 2,398,028,539.13 -- 2,398,028,539.13
Operating profit/(loss) 2,778,499,948.96 -- 2,778,499,948.96
Total assets 144,367,221,971.10 -- 144,367,221,971.10
Total liabilities 105,536,042,064.13 -- 105,536,042,064.13
Supplementary information:
1.Capital expenditure 3,032,549,847.59 -- 3,032,549,847.59
2.Depreciation and amortisation 6,518,288,975.16 -- 6,518,288,975.16
3.Non-cash expenses other than depreciation and amortisation -- -- --
4.Assets impairment losses 167,843,610.72 -- 167,843,610.72
(2) Other segment information
①External revenue of goods and services
Items 2021 2020
Iron and steel 134,034,486,136.13 79,951,181,948.10
②Geographical information
221
Beijing Shougang Co. Ltd
Notes to the Financial Statements
FY21 (Unit: RMB, unless otherwise specified)
No more details of geographical information is disclosed as the production and sales of the
Company are all located in mainland China.
2. Lease
The Company as a lessee
Supplementary information on rental expenses
The Company simplifies the treatment of short-term leases and low-value leases, unrecognizing
right-of-use assets and lease liabilities. The information of recognizing short-term lease, low-value
lease and variable lease payment not included in lease liabilities in current profit and loss are as
follows:
Items 2021
Interest expense on lease liabilities 4,895,508.99
Short-term leases 1,094,075.42
Low-value leases --
Variable lease payment not included in lease liabilities --
Total cash outflows related to lease 20,068,816.16
The Company as a lessor
Supplementary information on rental expenses
Operating leases:
① Lease income,and separately disclose income related to variable lease payments that not
included in lease receipts:
Items 2021
Lease income 36,251,699.95
Income related to variable lease payments that not included in lease receipts --
②The amount of undiscounted lease receipts that will be received in each of the five consecutive
fiscal years after the balance sheet date and the total amount of undiscounted lease receipts that will
be received in the remaining fiscal years.
Items 2021.12.31
Within 1 year 37,583,455.17
1 – 2 years 3,056,273.84
2 – 3 years --
Over 3 years --
222
Beijing Shougang Co. Ltd
Notes to the Financial Statements
FY21 (Unit: RMB, unless otherwise specified)
Items 2021.12.31
Total 40,639,729.01
XV. Notes to the financial statements of parent company
1. Notes receivable
2021.12.31
Items
Book balance Bad debt provision Carrying value
Bank acceptances -- -- --
Commercial acceptances 1,312,696,288.07 1,312,696.29 1,311,383,591.78
Total 1,312,696,288.07 1,312,696.29 1,311,383,591.78
2020.12.31
Items
Book balance Bad debt provision Carrying value
Bank acceptances -- -- --
Commercial acceptances 2,840,061,486.24 2,840,061.49 2,837,221,424.75
Total 2,840,061,486.24 2,840,061.49 2,837,221,424.75
(1) The pledged notes receivable of the Company at the end of the year
Items Pledged amount at the end of the year
Bank acceptances --
Commercial acceptances 16,753,215.18
Total 16,753,215.18
(2) Outstanding endorsed or discounted notes that have not matured at the end of the year
Items Amount derecognized at year end Amount not-derecognized at year end
Bank acceptances -- --
Commercial acceptances -- 1,208,054,774.28
Total -- 1,208,054,774.28
(3) Notes transferred to accounts receivable due to non-performance of drawers at the end of the
year.
223
Beijing Shougang Co. Ltd
Notes to the Financial Statements
FY21 (Unit: RMB, unless otherwise specified)
Items Notes transferred to accounts receivable at year end
Commercial acceptances 3,000,000.00
(4) Classified by bad debt provision method
2021.12.31
Category Book balance Bad debt provision
Carrying value
Expected credit
Amount Proportion (%) Amount
loss (%)
Bad debt provision
-- -- -- -- --
assessed individually
Bad debt provision
1,312,696,288.07 100.00 1,312,696.29 0.10 1,311,383,591.78
assessed in portfolios
Portfolio 1 -- -- -- -- --
Portfolio 2 1,312,696,288.07 100.00 1,312,696.29 0.10 1,311,383,591.78
Total 1,312,696,288.07 100.00 1,312,696.29 0.10 1,311,383,591.78
Continued:
2020.12.31
Category Book balance Bad debt provision
Carrying value
Expected credit
Amount Proportion (%) Amount
loss (%)
Bad debt provision
-- -- -- -- --
assessed individually
Bad debt provision
2,840,061,486.24 100.00 2,840,061.49 0.10 2,837,221,424.75
assessed in portfolios
Portfolio 1 -- -- -- -- --
Portfolio 2 2,840,061,486.24 100.00 2,840,061.49 0.10 2,837,221,424.75
Total 2,840,061,486.24 100.00 2,840,061.49 0.10 2,837,221,424.75
(5) Provision, recovery or reversal of bad debt
Items Bad debt provision
As at 31 December 2020 2,840,061.49
Provision --
Recovery or reversal 1,527,365.20
Written-off --
224
Beijing Shougang Co. Ltd
Notes to the Financial Statements
FY21 (Unit: RMB, unless otherwise specified)
Items Bad debt provision
As at 31 December 2021 1,312,696.29
(6) The Company has no notes receivable actually written off during the reporting period.
2. Accounts receivable
(1) Disclosed by ageing of account receivables
Ageing 2021.12.31 2020.12.31
Within 1 year 1,917,663,119.14 1,615,240,518.65
1 – 2 years 3,197,756.62 4,327,199.80
2 – 3 years 6,327,199.80 --
Over 3 years 2,751,011.82 4,751,011.82
Subtotal 1,929,939,087.38 1,624,318,730.27
Less: provision for bad debts 12,046,892.38 8,893,085.98
Total 1,917,892,195.00 1,615,425,644.29
(2) Disclosed by bad debt provision
2021.12.31
Book balance Bad debt provision
Category
Expected Carrying value
Proportion
Amount Amount credit loss
(%)
(%)
Bad debt provision
5,751,011.82 0.30 5,751,011.82 100.00 --
assessed individually
Bad debt provision
1,924,188,075.56 99.70 6,295,880.56 0.33 1,917,892,195.00
assessed in portfolios
Portfolio of aging analysis 80,928,756.18 4.19 6,295,880.56 7.78 74,632,875.62
Portfolio of consolidation
1,843,259,319.38 95.51 -- -- 1,843,259,319.38
scope
Total 1,929,939,087.38 100.00 12,046,892.38 0.62 1,917,892,195.00
Continued：
2020.12.31
Category
Book balance Bad debt provision Carrying value
225
Beijing Shougang Co. Ltd
Notes to the Financial Statements
FY21 (Unit: RMB, unless otherwise specified)
Expected
Proportion
Amount Amount credit loss
(%)
(%)
Bad debt provision
4,751,011.82 0.29 4,751,011.82 100.00 --
assessed individually
Bad debt provision
1,619,567,718.45 99.71 4,142,074.16 0.26 1,615,425,644.29
assessed in portfolios
Portfolio of aging analysis 91,671,974.87 5.64 4,142,074.16 4.52 87,529,900.71
Portfolio of consolidation
1,527,895,743.58 94.07 -- -- 1,527,895,743.58
scope
Total 1,624,318,730.27 100.00 8,893,085.98 0.55 1,615,425,644.29
Bad debt provision assessed individually：
2021.12.31
Accounts receivable
(by debtor) Expected credit Reason for
Book balance Bad debt provision
loss (%) bad debts
Accounts receivable
2,751,011.82 2,751,011.82 100.00 Long aging
over 3 years
Recourse for overdue Recourse for
3,000,000.00 3,000,000.00 100.00
bills overdue bills
Total 5,751,011.82 5,751,011.82 100.00
Continued：
2020.12.31
Accounts receivable
(by debtor) Expected credit Reason for
Book balance Bad debt provision
loss (%) bad debts
Accounts receivable
4,751,011.82 4,751,011.82 100.00 Long aging
over 3 years
Recourse for overdue
-- -- --
bills
Total 4,751,011.82 4,751,011.82 100.00
Bad debt provision assessed in portfolios：
2021.12.31
Items
Accounts receivable Bad debt provision Expected credit loss (%)
Within 1 year 1,917,663,119.14 2,609,029.34 0.14
1 – 2 years 2,197,756.62 616,528.89 28.05
2 – 3 years 4,327,199.80 3,070,322.33 70.95
Over 3 years -- -- --
226
Beijing Shougang Co. Ltd
Notes to the Financial Statements
FY21 (Unit: RMB, unless otherwise specified)
2021.12.31
Items
Accounts receivable Bad debt provision Expected credit loss (%)
Total 1,924,188,075.56 6,295,880.56 0.33
Continued：
2020.12.31
Items
Accounts receivable Bad debt provision Expected credit loss (%)
Within 1 year 1,615,240,518.65 2,969,620.25 0.18
1 – 2 years 4,327,199.80 1,172,453.91 27.09
2 – 3 years -- -- --
Over 3 years -- -- --
Total 1,619,567,718.45 4,142,074.16 0.26
(3) Provision, recovery or reversal of bad debt
Items Bad debt provision
As at 31 December 2020 8,893,085.98
Provision 3,153,806.40
Recovery or reversal --
Written-off --
As at 31 December 2021 12,046,892.38
(4) The Company has no accounts receivable write-off during the reporting period.
(5) The top five accounts receivable classified by debtors are as follows:
During the reporting period, the total closing amount of the top five accounts receivable collected by
debtors is RMB 1,913,756,650.68, accounts for 99.16% of the total amount of accounts receivable at
the end of the period. The total amount of the corresponding bad debt provision at the end of the
period is RMB 8,584,639.59.
Closing balance of Closing balance of
Company Name Percentage %
accounts receivable provision
Beijing Shougang Cold Rolling Co., Ltd. 1,528,189,418.79 79.18 --
Shougang Zhixin Qian'an Electromagnetic
294,412,374.43 15.26 --
Materials Co., Ltd.
Qian'an Shoujia Construction Material Co., Ltd. 61,221,363.06 3.17 2,146,776.55
Shougang Qian'an New Energy Automobile
20,657,526.16 1.07 --
Electrical Steel Co., Ltd.
Sanhe Shoujia Construction Material Co., Ltd. 9,275,968.24 0.48 6,437,863.04
Total 1,913,756,650.68 99.16 8,584,639.59
227
Beijing Shougang Co. Ltd
Notes to the Financial Statements
FY21 (Unit: RMB, unless otherwise specified)
3. Financing receivables
Items 2021.12.31 2020.12.31
Notes receivable 1,285,597,772.66 1,199,574,277.29
Less：Other comprehensive income - fair value changes -- --
Fair value at the end of the period 1,285,597,772.66 1,199,574,277.29
(1) Classified by bad debt provision method
2021.12.31
Book balance Bad debt provision
Category
Carrying
Expected
Proportion value
Amount Amount credit loss
(%)
(%)
Bad debt provision assessed
-- -- -- -- --
individually
Bad debt provision assessed
1,285,854,943.65 100.00 257,170.99 0.02 1,285,597,772.66
in portfolios
Portfolio 1 1,285,854,943.65 100.00 257,170.99 0.02 1,285,597,772.66
Portfolio 2 -- -- -- -- --
Total 1,285,854,943.65 100.00 257,170.99 0.02 1,285,597,772.66
Continued：
2020.12.31
Book balance Bad debt provision
Category
Carrying
Expected
Proportion value
Amount Amount credit loss
(%)
(%)
Bad debt provision assessed
-- -- -- -- --
individually
Bad debt provision assessed
1,199,814,240.14 100.00 239,962.85 0.02 1,199,574,277.29
in portfolios
Portfolio 1 1,199,814,240.14 100.00 239,962.85 0.02 1,199,574,277.29
Portfolio 2 -- -- -- -- --
Total 1,199,814,240.14 100.00 239,962.85 0.02 1,199,574,277.29
(2) Provision, recovery or reversal of bad debt
228
Beijing Shougang Co. Ltd
Notes to the Financial Statements
FY21 (Unit: RMB, unless otherwise specified)
Items Bad debt provision
As at 31 December 2020 239,962.85
Provision 17,208.14
Recovery or reversal --
Written-off --
As at 31 December 2021 257,170.99
(3) The pledged notes receivable of the Company at the end of the year
Items Pledged amount at the end of the year
Bank acceptance notes 108,670,000.00
Commercial acceptance notes --
Total 108,670,000.00
(4) Outstanding endorsed or discounted notes that have not matured at the end of the year
Item Amount derecognized at year Amount not-derecognized at year end
Bank acceptance notes end
5,120,426,116.57 --
Commercial acceptance notes -- --
Total 5,120,426,116.57 --
4. Other receivables
Items 2021.12.31 2020.12.31
Dividends receivable -- 600,000,000.00
Other receivables 1,017,482,945.07 1,018,249,934.67
Total 1,017,482,945.07 1,618,249,934.67
(1) Dividends receivable
Items 2021.12.31 2020.12.31
Shougang Zhixin Qian'an Electromagnetic
-- 600,000,000.00
Materials Co., Ltd.
Less:Bad debt provision -- --
Total -- 600,000,000.00
229
Beijing Shougang Co. Ltd
Notes to the Financial Statements
FY21 (Unit: RMB, unless otherwise specified)
(2) Other receivables
①Disclosed by the ageing of other receivables
Ageing 2021.12.31 2020.12.31
Within 1 year 1,017,487,983.11 1,018,521,102.28
1 to 2 years 516,288.00 300,000.00
2 to 3 years -- --
Over 3 years -- --
Subtotal 1,018,004,271.11 1,018,821,102.28
Less: provision for bad debts 521,326.04 571,167.61
Total 1,017,482,945.07 1,018,249,934.67
②Disclosed by nature of other receivables
2021.12.31
Items
Book balance Provision for bad debts Carrying value
Petty cash 98,749.98 4,937.50 93,812.48
Security deposit -- -- --
Due from other companies 2,010.86 100.54 1,910.32
Due from inter-companies 1,017,387,222.27 -- 1,017,387,222.27
Court attachment 516,288.00 516,288.00 --
Total 1,018,004,271.11 521,326.04 1,017,482,945.07
Continued：
2020.12.31
Items
Book balance Provision for bad debts Carrying value
230
Beijing Shougang Co. Ltd
Notes to the Financial Statements
FY21 (Unit: RMB, unless otherwise specified)
2020.12.31
Items
Book balance Provision for bad debts Carrying value
Petty cash 699,503.93 43,975.20 655,528.73
Security deposit 200,000.00 10,000.00 190,000.00
Due from other companies 18,088.12 904.41 17,183.71
Due from inter-companies 1,017,387,222.23 -- 1,017,387,222.23
Court attachment 516,288.00 516,288.00 --
Total 1,018,821,102.28 571,167.61 1,018,249,934.67
③Provision for bad debts
As at 31 December 2021, bad debts provision in Phase I:
Expected credit loss
Carrying
Category Book balance within 12 months Provisions Reasons
value
(%)
Bad debt provision assessed
-- -- -- --
individually
Bad debt provision assessed in
1,017,487,983.11 0.00 5,038.04 1,017,482,945.07
portfolios
Petty cash and security deposits 98,749.98 5.00 4,937.50 93,812.48
Due from other companies 2,010.86 5.00 100.54 1,910.32
Due from inter-companies 1,017,387,222.27 -- -- 1,017,387,222.27
Total 1,017,487,983.11 0.00 5,038.04 1,017,482,945.07
As at 31 December 2021, the Company has no other receivables in Phase II:
As at 31 December 2021, bad debts provision for Phase III:
Expected credit loss
Carrying
Category Book balance within 12 months Provisions Reasons
value
(%)
Bad debt provision assessed
individually
Yinchuan Intermediate People's
516,288.00 100.00 516,288.00 --
Court
231
Beijing Shougang Co. Ltd
Notes to the Financial Statements
FY21 (Unit: RMB, unless otherwise specified)
As at 31 December 2020, bad debts provision in Phase I:
Expected credit loss
Carrying
Category Book balance within 12 months Provisions Reasons
value
(%)
Bad debt provision assessed
individually
Bad debt provision assessed in
1,018,004,814.28 -- 30,879.61 1,017,973,934.67
portfolios
Petty cash and deposits 599,503.93 5.00 29,975.20 569,528.73
Due from other companies 18,088.12 5.00 904.41 17,183.71
Due from intra-companies 1,017,387,222.23 -- -- 1,017,387,222.23
Total 1,018,004,814.28 -- 30,879.61 1,017,973,934.67
As at 31 December 2020, bad debts provision in Phase Ⅱ:
Expected credit loss
Carrying
Category Book balance within 12 months Provisions Reasons
value
(%)
Bad debt provision assessed
individually
Bad debt provision assessed in
300,000.00 8.00 24,000.00 276,000.00
portfolios
Petty cash and deposits 300,000.00 8.00 24,000.00 276,000.00
Due from other companies -- -- -- --
Total 300,000.00 8.00 24,000.00 276,000.00
As at 31 December 2020, bad debts provision in Phase III:
Expected credit loss
Carrying
Category Book balance within 12 months Provisions Reasons
value
(%)
Bad debt provision assessed
individually
Yinchuan Intermediate People's
516,288.00 100.00 516,288.00 --
Court
232
Beijing Shougang Co. Ltd
Notes to the Financial Statements
FY21 (Unit: RMB, unless otherwise specified)
④Provision, recovery or reversal of bad debt
Phase I Phase II Phase III
Expected credit loss
Provision for bad debts Expected credit Expected credit loss Total
over the lifetime
loss within 12 over the lifetime (no
(credit impairment
months credit impairment)
occurred)
As at 31 December 2020 30,879.61 24,000.00 516,288.00 571,167.61
Closing balance as at 31 December
2020 shifts to:
--Shift to Phase II -- -- -- --
--Shift to Phase III -- -- -- --
--Back to Phase II -- -- -- --
--Back to Phase I -- -- -- --
Provision -- -- -- --
Reversal 25,841.57 24,000.00 -- 49,841.57
Converse -- -- -- --
Written-off -- -- -- --
Other movements -- -- -- --
As at 31 December 2021 5,038.04 -- 516,288.00 521,326.04
⑤No write-off of other receivables during the reporting period.
⑥The top five other receivables classified by debtors are as follows:
233
Beijing Shougang Co. Ltd
Notes to the Financial Statements
FY21 (Unit: RMB, unless otherwise specified)
Closing
Percentage
Company Name Nature of transaction Closing balance Ageing balance
(%)
of provisions
Shougang Jingtang United Iron & Due from Within 1
1,011,387,222.27 99.35 --
Steel Co., Ltd. intra-companies year
Shenyang Shougang steel processing Due from Within 1
6,000,000.00 0.59 --
and Distribution Co., Ltd. intra-companies year
Court attachment Court attachment 516,288.00 1～2年 0.05 516,288.00
Within 1
Petty cash Petty cash 98,749.98 0.01 4,937.50
year
Total 1,018,002,260.25 100.00 521,225.50
5. Long-term equity investments
2021.12.31 2020.12.31
Items Provision for Provision for
Book balance Carrying value Book balance Carrying value
impairment impairment
Investments in
30,737,545,762.35 -- 30,737,545,762.35 24,941,718,854.54 -- 24,941,718,854.54
subsidiaries
Investment in
1,258,787,177.81 -- 1,258,787,177.81 1,395,530,591.52 -- 1,395,530,591.52
associates
Total 31,996,332,940.16 -- 31,996,332,940.16 26,337,249,446.06 -- 26,337,249,446.06
(1) Investments in subsidiaries
Impairment
Provision for
Subsidiaries 2020.12.31 Increase Decrease 2021.12.31 at the end of
impairment
the year
Shougang Jingtang
United Iron & Steel Co., 10,715,504,383.43 5,572,736,977.45 -- 16,288,241,360.88 -- --
Ltd.
Beijing Shougang Cold
1,831,075,900.00 176,088.00 -- 1,831,251,988.00 -- --
Rolling Co., Ltd.
Qian'an Shougang
Metallurgical 1,900,000.00 -- -- 1,900,000.00 -- --
Technology Co., Ltd.
Shougang Zhixin
Qian'an Electromagnetic 7,484,005,522.69 298,333.92 -- 7,484,303,856.61 -- --
materials Co., Ltd.
Beijing Shougang New
Energy Automobile
450,000,000.00 22,411.20 -- 450,022,411.20 -- --
Material Technology
Co., Ltd.
Beijing Shougang Steel
Trading Investment 4,459,233,048.42 222,593,097.24 -- 4,681,826,145.66 -- --
Management Co., Ltd.
Total 24,941,718,854.54 5,795,826,907.81 -- 30,737,545,762.35 -- --
Note: due to the equity incentive, the investment in subsidiaries increases by RMB 4,155,743.04
during the reporting period.
234
Beijing Shougang Co. Ltd
Notes to the Financial Statements
FY21 (Unit: RMB, unless otherwise specified)
(2) Investments in associates
Changes during the year
Impairment
Investment at the end
Associates 2020.12.31 Other Other 2021.12.31
Provision of
income under Dividend
Increase Decrease comprehensive equity for Others the year
the equity declared
income movement impairment
method
Associates
Qian'an
Sinochem Coal
Chemical 952,347,397.55 -- -- 145,737,955.36 -- -- -- -- -- 1,098,085,352.91 --
Industrial Co.,
Ltd.
Beijing Shouxin
Jinyuan
Management
431,802,688.92 -- 200,000,000.00 54,630,078.50 -- -- 173,716,946.85 -- -- 112,715,820.57 --
Consulting
Center (Limited
Partnership)
Beijing
Dingshengcheng
Packaging 11,380,505.05 -- -- 2,606,585.31 -- -- -- -- -- 13,987,090.36 --
Materials Co.,
Ltd.
Qian'an Jinyu
Shougang
Environmental
-- 33,791,925.24 -- 206,988.73 -- -- -- -- -- 33,998,913.97 --
Protection
Technology Co.,
Ltd.
Total 1,395,530,591.52 33,791,925.24 200,000,000.00 203,181,607.90 -- -- 173,716,946.85 -- -- 1,258,787,177.81 --
6. Operating revenue and costs of sales
(1) Operating revenue and costs of sale
2021 2020
Items
Revenue Cost of sales Revenue Cost of sales
Main business 43,086,794,075.78 40,794,742,050.52 29,175,440,421.27 28,079,198,768.30
Other business 2,000,542,953.24 1,714,323,188.37 1,801,855,515.31 1,372,703,636.28
Total 45,087,337,029.02 42,509,065,238.89 30,977,295,936.58 29,451,902,404.58
(1) Operating revenue and operating costs of sale by products
235
Beijing Shougang Co. Ltd
Notes to the Financial Statements
FY21 (Unit: RMB, unless otherwise specified)
2021 2020
Product type
Revenue Cost of sales Revenue Cost of sales
Main business:
Billet 576,652,349.47 524,683,887.65 244,422,016.30 219,026,618.16
Hot rolled 41,398,472,411.41 39,093,488,700.61 28,356,414,900.52 27,280,962,500.45
Cold rolled -- -- -- --
Other steel products 1,111,669,314.90 1,176,569,462.26 574,603,504.45 579,209,649.69
Subtotal 43,086,794,075.78 40,794,742,050.52 29,175,440,421.27 28,079,198,768.30
Other business:
power 836,137,591.69 886,687,802.30 836,991,211.41 838,261,326.64
Solid waste 355,754,303.85 351,863,075.85 220,388,929.41 198,806,089.16
Others 808,651,057.70 475,772,310.22 744,475,374.49 335,636,220.48
Subtotal 2,000,542,953.24 1,714,323,188.37 1,801,855,515.31 1,372,703,636.28
Total 45,087,337,029.02 42,509,065,238.89 30,977,295,936.58 29,451,902,404.58
(3) Breakdown of operating revenue
Items 2021
Main businessrevenue 43,086,794,075.78
Including: recognized at a certain point 43,086,794,075.78
recognized during a certain period of time --
Other business revenue 2,000,542,953.24
Total 45,087,337,029.02
7. Investment income
Items 2021 2020
Investment income from long-term investment under cost method -- 600,000,000.00
Investment income from long-term investment under equity method 203,181,607.90 339,539,916.15
Dividend from other equity instruments investments 2,718,777.38 177,781,289.99
Interest income from entrusted loans 34,989,108.61 109,329,908.27
Total 240,889,493.89 1,226,651,114.41
XV. Supplementary information
1. Non-recurring gains or losses
Items 2021 Note
236
Beijing Shougang Co. Ltd
Notes to the Financial Statements
FY21 (Unit: RMB, unless otherwise specified)
Items 2021 Note
Gains or losses on disposal of non-current assets -55,726,886.68
Government grants recognized in profit or loss during reporting period (excluding
those close related to the Company’s normal business, conforming to the national
48,447,356.52
policies and regulations and enjoying ongoing fixed amount or quantity according
to certain standard)
Gains or losses from external entrusted loans 10,518,170.49
Non-operating income/(expenses) except the above 1,941,256.62
Total non-recurring gains or losses 5,179,896.95
Less: income tax effect on non-recurring gains or losses -950,188.41
Net non-recurring gains or losses 6,130,085.36
Less: non-recurring gains or losses attributable to non-controlling interests of the
6,021,986.63
Company (after tax)
Non-recurring gains or losses attributable to common shareholders of the Company 108,098.73
2. Return on net assets and earnings per share
Earnings per share
Weighted average
Profit of reporting period
return on net assets % Basic Diluted
Net profit/ (loss) attributable to common shareholders of
19.07 1.1291 --
the company
Net profit/ (loss) attributable to common shareholders of
19.07 1.1291 --
the Company excluding non-recurring gains or losses
3. Differences of accounting data under domestic and foreign accounting standards
(1) The differences of net profit and net assets in financial statements disclosed according to
International Financial Reporting Standards and Chinese Accounting Standards
□ Applicable √ Non Applicable
(2) The difference of net profit and net assets in financial statements disclosed according to foreign
accounting standards and Chinese Accounting Standards
□ Applicable √ Non Applicable
(3)The description on the difference between the domestic and foreign accounting standards, the
overseas audit firms shall be indicated if you have adjusted the overseas audited financial data
4. Others
None
237
Beijing Shougang Co. Ltd
Notes to the Financial Statements
FY21 (Unit: RMB, unless otherwise specified)
Board of Directors of Beijing Shougang Company Limited
27 April 2022
238
