本钢板材股份有限公司
BENGANG STEEL PLATES CO.,LTD.
Interim Report 2012
(Prepared Under Chinese Accounting Standard)
August 10, 2012
Bengang Steel Plates Co., Ltd. Interim Report 2012 Full Text
Table of Contents
I. Important Statement 3
II. Company Profile 4
III. Financial Highlights 5
IV. Changes in Share Capital and Shareholders 8
V. Directors, Supervisors and Senior Executives 10
VI. Board of Directors Report 14
VII. Significant Events 21
VIII. Financial Reports 31
IX. Documents for Reference 113
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Bengang Steel Plates Co., Ltd. Interim Report 2012 Full Text
I. Important Statement
The Board of Directors and the directors of the Company guarantee that there are no significant omissions,
fictitious or misleading statements carried in the Report and we will accept individual and joint responsibilities for
the truthfulness, accuracy and completeness of the Report.
None of the directors, supervisors, or executives holds any opinion that is against the authenticity, accuracy and
integrality of this reports content.
Independent director Li Kai was on business trip and empowered independent director Tian bingfu to vote on her
behalf.
The Semi-Annual Financial Statements were not audited.
Chairman of the Board – Zhang Xiaofang, Chief Financial Officer – Mr. Cao Aimin, and Head of Accounting
Dept. – Mr. Wang Shaoyu hereby declare: the authenticity and integrality of the report are guaranteed.
This report is prepared both in English and Chinese. Should any conflict in interpreting, the Chinese version shall
prevail.
II. Company Profile
(I) Company profiles
Code of A-stock 000761 Code of B-stock 200761
ID of A-stock Bengang Bancai ID of B-stock Bengangban B
Stock Exchange Shenzhen Stock Exchange
Legal company name 本钢板材股份有限公司
Legal abbreviation Bengang Bancai
Legal company name in
BENGGANG STEEL PLATES CO.,LTD
English
Legal aggreviation in English BSP
Legal representative Zhang Xiaofang
Reg. Add. 18th Gangtie Road, Pingshan, Benxi, Liaoning
Post Code 117000
Office address No.16, Renmin Road, Pingshan District, Benxi City, Liaoning Province
Post Code: 117000
Website None
bgbc761＠126.com
Email.
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Bengang Steel Plates Co., Ltd. Interim Report 2012 Full Text
(II) Contacts and liaisons
Secretary of the Board Representative of Stock Affairs
Name Zhang Jichen Lu Xiaoyong
No.16, Renmin Road, Pingshan District, No.16, Renmin Road, Pingshan District,
Address
Benxi City, Liaoning Province Benxi City, Liaoning Province
Tel. 0414－7828360 0414-7828010
Fax. 0414－7824158 0414-7827004
Email. bgbczjc761@126.com bgbclxy@126.com
(III) Information disclosure and inquiring
Press medias of information disclosure China Securities Journal, Securities Times, Hong Kong Commercial Daily
Website assigned by CSRC to release the
http://www.cninfo.com.cn
online reports
Place for information inquiry Secretary Office of the Board, Bengang Steel Plate Co., Ltd.
(IV) Stock Exchange: Shenzhen Stock Exchange
Short Form of A-Shares: BENGANGBANCAI Stock Code: 000761
Short Form of B-Shares: BENGANGBAN-B Stock Code: 200761
(V) Misc. Info.
Initial business registration on: June 27 1997
Business registration renewed on: June 15, 2007
Business registration renewed with: Liaoning Commerce & Industry Administration Bureau
Business license number: 210000004931633
Taxation registration number: 210502242690243
Organization code: 24269024-3
Public accountant engaged by the Company: Shulun Pan Certified Public Accountants Co., Ltd. (Special common
partnership)
Address: 4/F 61 Nanjing Rd. East, Huangpu, Shanghai
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Bengang Steel Plates Co., Ltd. Interim Report 2012 Full Text
III. Financial Highlights
(I) Main accounting data and indices
Primary accounting data
Increase/decrease over
Primary accounting data Report term (Jan-Jun) Same period last year
same period of last year(%)
Turnover (yuan) 22,841,569,834.06 24,050,256,657.14 -5.03%
Business profit (RMB) 178,318,084.54 617,632,783.04 -71.13%
Gross profit (RMB) 188,633,132.37 628,365,457.52 -69.98%
Net profit attributable to shareholders of
145,181,307.69 595,456,110.27 -75.62%
the listed company (yuan)
Net profit attributable to the shareholders
of the listed company and after deducting 137,445,021.82 587,406,604.41 -76.6%
of non-recurring gain/loss(RMB)
Net Cash flow generated by business
189,516,824.61 1,141,757,019.65 -83.4%
operation (RMB)
Ended this report term Ended previous year Changed by (%)
Gross Assets (RMB) 41,380,056,280.13 41,059,391,272 0.78%
Owners equity attributable to the
15,358,952,414.66 15,524,714,501.26 -1.07%
shareholders of the listed company (yuan)
Capital shares (shares) 3,136,000,000 3,136,000,000 0%
Major accounting indicies
Increase/decrease over
Major accounting indicies Report term (Jan-Jun) Same period last year
same period of last year(%)
Basic earnings per share (Yuan/share) 0.05 0.19 -75.62%
Diluted earnings per share (Yuan/share) 0.05 0.19 -75.62%
Basic earnings per share less non-recurring
0.04 0.19 -76.6%
gain/loss (Yuan/share)
Fully diluted net
income/asset ratio 0.95% 3.89% -75.72%
(%)
Weighted average net
0.94% 3.93% -76.08%
income/asset ratio (%)
Fully diluted net income/asset ratio less
0.89% 3.84% -76.7%
non-recurring gain/loss (%)
Weighted average net
income/asset ratio less non-recurring 0.89% 3.88% -77.04%
gain/loss(%)
Net Cash flow per share generated by
0.06 0.36 -83.4%
business operation (yuan/share)
Ended this report term Ended previous year Changed by (%)
Net asset per share attributable to the
shareholders of the listed company 4.9 4.95 -1.07%
(Yuan/share)
Liability on asset ratio (%) 62.80% 62.11% 1.12%
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Bengang Steel Plates Co., Ltd. Interim Report 2012 Full Text
(II) Differences in accounting data under domestic and international accounting standards
1. Differences in net profit and net asset under domestic and international accounting
standards
No such situation in the report period.
2. Differences in net profit and net asset under domestic and overseas accounting standards
No such situation in the report period.
3. Details of items with major differences
No such situation in the report period.
4. Statement on accounting differences under domestic and overseas accounting standards
No difference btween the domestic and international accounting standard.
(III) Non-recurring items deducted and amounts
Amount
Items Remarks
(Yuan)
Gain/loss of non-current assets 140,859.62
Tax refunding or exemption without official certification or exceeded authority
Gains and losses included in the current period of government subsidies, excluding those government grants
which are closely related to normal business and in line with national policy , or in accordance with fixed 623,565.58
standards or quantities
Capital adoption fee collected from non-financial organizations and accounted into current gain/loss
Gain/loss from differences between the cost of enterprise merger and the fair value of recognizable net asset
of the invested entities
Gain/loss from non-monetary assets
Gain/loss from commissioned investment or assets
Asset impairment provisions provided for force-majeur
Gain/loss from debt reorganization 8,117,214.61
Enterprise reorganizing expenses, such as employee placement fee and integration fee
Gain/loss from trade departing from fair value
Current net gain/loss of subsidiaries under same control from beginning of term till date of consolidation
Gain/loss generated by contingent liabilities without connection with main businesses
Gain/loss from change of fair value of transactional asset and liabilities, and investment gains from disposal
of transactional financial assets and liabilities and sellable financial assets, other than valid period value
instruments related to the Company’s common businesses
Restoring of receivable account impairment provision tested individually
Gain/loss from commissioned loans
Gain/loss from change of fair value of investment property measured at fair value in follow-up
measurement
Influence of one-time adjustment made on current gain/loss account according to the laws and regulations
regarding tax and accounting
Consigning fee received for cosigned operation
Other non-business income and expenditures other than the above 1,433,408.02
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Bengang Steel Plates Co., Ltd. Interim Report 2012 Full Text
Other gain/loss items satisfying the definition of non-recurring gain/loss account
Influenced amount of minority shareholders’ equity
Influenced amount of income tax -2,578,761.96
Total 7,736,285.87 --
Statement of the Company on “Other gain/loss items satisfying the definitions of non-recurring gain/loss
accounts” and the non-recurring items defined as recurring items according to the nature and characteristics of the
businesses.
Items Amount involved (RMB) Remarks
None
IV. Changes in Share Capital and Shareholders
(I) Movement of Capital Share
1. No change in share structure occurred in the report period.
2. No change of shares under restriction in the report period.
(II) Share issuing and listing
1. No securities issuing in the latest three years.
2. None of the total number and the composition of shares has changed, nor change of asset-liability structure.
3. No situation regarding employees shares
(III) Shareholders and the substaintial controller of the Company
1. Total of shareholders at the end of report term.
Number of shareholding accounts at the end of report term was 53,657.
2. The Top Ten Shareholders
Top Ten Shareholders
Frozen or pledged
Properties of Share Conditional
Full name of shareholder Total shares Status of
shareholder proportion % shares Amount
shares
State-owned legal
Benxi Steel (Group) Ltd. 82.07% 2,573,632,420
person
China Construction Bank – Shangtou Morgan Foundation,
1.79% 56,017,988
China Advantage Securities Investment Fund financial products
GOVERNMENT OF SINGAPORE INV. Overseas legal
0.85% 26,552,138
CORP.- A/C "C" person
NOMURA TST N BK CO.,LTD ATTF ASIA Overseas legal
0.58% 18,049,086
ATTR DIV STK FD MTH FD person
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Bengang Steel Plates Co., Ltd. Interim Report 2012 Full Text
Domestic natural
Zhou Jie 0.35% 10,895,000
person
GSIC A/C MONETARY AUTHORITY OF Overseas legal
0.33% 10,309,617
SINGAPORE person
Overseas legal
APS CHINA ALPHA FUND 0.15% 4,616,701
person
LSV EMERGING MARKETS EQUITY Overseas legal
0.11% 3,385,700
FUND,L.P. person
Domestic natural
Bao Xinfa 0.1% 3,189,700
person
Taifook Securities Company Limited-Account Overseas legal
0.1% 3,086,109
Client person
Situations of the shareholders
Top 10 holders of unconditional shares
Amount of Categories and amounts of shares
unconditional shares
Name of the shareholder
holding at the end of Categories Amount
report term
Benxi Steel (Group) Ltd. 2,573,632,420 A shares 2,573,632,420
China Construction Bank – Shangtou Morgan
56,017,988 A shares 56,017,988
China Advantage Securities Investment Fund
GOVERNMENT OF SINGAPORE INV. CORP.-
26,552,138 B shares 26,552,138
A/C "C"
NOMURA TST N BK CO.,LTD ATTF ASIA
18,049,086 B shares 18,049,086
ATTR DIV STK FD MTH FD
Zhou Jie 10,895,000 B shares 10,895,000
GSIC A/C MONETARY AUTHORITY OF
10,309,617 B shares 10,309,617
SINGAPORE
APS CHINA ALPHA FUND 4,616,701 B shares 4,616,701
LSV EMERGING MARKETS EQUITY
3,385,700 B shares 3,385,700
FUND,L.P.
Bao Xinfa 3,189,700 B shares 3,189,700
Taifook Securities Company Limited-Account
3,086,109 B shares 3,086,109
Client
Statement of relationships and (or) action-in-concert among above shareholders:
It is unknown to the Company whether there is any related connection or Action in Concert as described by
Rules of Information Disclosing Regarding Changing of Shareholding Status of Listed Companies existing among
the above shareholders.
3. Profile of the controlling shareholder
(1) Change of holding shareholder and substaintial controller
No change in holding shareholder and substaintial controller
(2) Particulars about the holding shareholder and substaintial controller
No change in controller.
(3) Chart of controlling relationships
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Bengang Steel Plates Co., Ltd. Interim Report 2012 Full Text
Liao Ning State-owned Asset Administration Committee
100%
Bengang Group Co., Ltd.
100%
Benxi Steel & Iron (Group) Co. Ltd.
82.07%
Bengang Steel Plate Co.
Ltd
(4) Controlling over the Company by the substaintial controller through trust or other asset
management
No such situation in the report period.
4. Other legal person shareholders with over 10% of total shares
No such situation in the report period.
(IV) Convertible bonds
No such situation in the report period.
V. Directors, Supervisors and Senior Executives
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Bengang Steel Plates Co., Ltd. Interim Report 2012 Full Text
(I) Change of shareholding by directors, supervisors, and executives
Shares holding at Shares Shares Shares held Incl. Amount of Share options Take remuneration
Job Job Cause of
Name Position Gender Age the beginning of increased this decreased this at the end of shares under held at the end from shareholding or
started ended change
term (shares) term (shares) term (shares) term restriction of term (shares) related parties?
Zhang Jan 20 Jun 03
Chairman F 52 0 0 0 0 0 0 Yes
Xiaofang 2011 2013
Jun 03 Jun 03
Cao Aimin Director, GM M 45 0 0 0 0 0 0 No
2010 2013
Zhang Director, Secretary Jun 03 Jun 03
M 55 0 0 0 0 0 0 No
Jichen of the Board 2010 2013
Tang May 17, Jun 03
Director M 49 0 0 0 0 0 0 Yes
Chaosheng 2011 2013
Independent Jun 03 Jun 03
Tian Binfu M 63 0 0 0 0 0 0 No
Director 2010 2013
Independent Jun 03 Jun 03
Li Kai M 55 0 0 0 0 0 0 No
Director 2010 2013
Independent Jun 03 Jun 03
Wang Yiqiu F 51 0 0 0 0 0 0 No
Director 2010 2013
Chairman of the
Jun 03 Jun 03
Liu Junyou supervisory M 59 0 0 0 0 0 0 Yes
2010 2013
committee
Jun 03 Jun 03
Zhao Wei Supervisor M 52 0 0 0 0 0 0 Yes
2010 2013
Liu Jun 03 Jun 03
Supervisor M 57 0 0 0 0 0 0 Yes
Engquan 2010 2013
Jun 03 Jun 03
Wang Pu Supervisor M 49 0 0 0 0 0 0 No
2010 2013
Zhang Jun 03 Jun 03
Supervisor M 46 0 0 0 0 0 0 No
Chuang 2010 2013
Zhang Vice General Jun 03 Jun 03
M 59 0 0 0 0 0 0 No
guohua Manager 2010 2013
Zhang Vice General Jun 03 Jun 03
M 51 0 0 0 0 0 0 No
Guiyu Manager 2010 2013
Xie Vice General May 17, Jun 03
M 52 0 0 0 0 0 0 No
Huaidang Manager 2011 2013
Total -- -- -- -- -- -- --
None of the directors, supervisors, or executives has been offered any incentive shares.
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Bengang Steel Plates Co., Ltd. Interim Report 2012 Full Text
(II) Situation of jobs
Jobs taken in shareholding parties
Job Job Take remunerations from the
Names Name of the shareholder Job taken
started ended shareholding party
Nov 01,
Zhang Xiaofang Bengang Group Co., Ltd. Chairman, GM Yes
2010
Nov 01,
Cao Aimin Bengang Group Co., Ltd. Director No
2010
Bengang Group Co., Ltd., Jan 1
Tang Chaosheng Deputy Head Yes
Financial Dept. 2011
Chief secretary of Nov 01,
Liu Junyou Bengang Group Co., Ltd. Yes
discipline commission 2010
Bengang Group Co., Ltd. Secretary of CCP Oct 1
Liu Engquan Yes
Security Guard Dept. Committee 2009
Bengang Group Beitai Steel Sept 1
Zhao Wei Chairman Yes
(Group) Co., Ltd. 2011
Particulars about
jobs taken
Jobs taken in other parties
No such situation in the report period.
(III) Annual Remunerations of the Directors, Supervisors and Senior Executives
1. Remuneration plan or arrangement made by the Remuneration & Assessment Committee of the
Decision making Board, and subject to the approval of the Board or Shareholders Meeting;
procedures for 2. The Remuneration & Assessment Committee performs assessment on the directors and executives
remunerations of the according to the scheme and procedures.
Directors, Supervisors and 3. Reward amount and terms for directors, supervisors, and executives are proposed upon the
Senior Executives assessment.
4. Executed upon approval of the Board meetings.
Basis for remunerations of Remuneration plans are produced with consideration of the directors, supervisors, and executives job
the Directors, Supervisors position, levels of responsibility, and with reference to the other similar enterprises. Rewards are
and Senior Executives distributed according to the results of assessment.
Actual payment to
directors, supervisors and Wage paid on monthly basis according to the remmuneration policies
executives
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Bengang Steel Plates Co., Ltd. Interim Report 2012 Full Text
(IV) Change of directors, supervisors, and executives in the report period
No such situation in the report period.
(V) The Employees
Number of employees in position 24,057
Retired employees on the Companys expense 18,297
Composition of professions
Categories of professions Number of persons
Production 19,975
Sales & Marketing 196
Technicians 1,435
Finance & Accounting 152
Executive 2,299
Education background
Categories of education Number of persons
High school or below 14,244
College diploma 6,206
Bachelor 3,267
Masters Degree 333
Doctorial degree 7
VI. Board of Directors’ Report
(I) Business Analysis
Overall business operation in the report period
In the report period, the Company has been facing an general downturn of the whole steel industry, however we
have been doing all efforts to expand the sales and reduce costs. Plus a number of internal management operations,
the Company remains a positive profitability in the situation of general decline.
During the period of Jan-Jun 2012, the Company realized output of iron by 4.8469 million tons, an increase of
2.57% YoY; steel by 4.8641 million tons, a decrease of 0.61% YoY; hot-rolled plates by 4.5137 million tons, an
increase of 3.72%; cool-rolled plate by 955.3 thousand tons, an increase of 2.24%; sales revenue by
RMB22,841,569,800, a decrease of 5.03%; net profit of RMB145,181,300, a decrease of 75.62%.
Whether the actual performance is exceeding or lower than the forcasting or business plan released previously by
20% or over.
No such situation in the report period.
Business performance of main subsidiaries or affiliates:
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Bengang Steel Plates Co., Ltd. Interim Report 2012 Full Text
As of June 30, 2012 the company has come to consist of 11 wholly-owned subsidiaries, 1 holding company and 3
shares of units. Beside the company Liaoyang Pelletizing Co. Ltd., Dandong Cold-rolled Stainless Steel Co. Ltd.
and Dalian Benruitong Automotive Materials Technology Co. Ltd. have the capacity of manufacturing and selling
productions, the others are all sales companies for marketing, either recently established or the company has taken
shares in.
Dandong Cold-rolled Stainless Steel Co. Ltd. and Dalian Benruitong Automotive Materials Technology Co. Ltd.
are now within the construction period thus not having contribution for the company performance within current
period.
As of the end of June, 2012, the total assets of Liaoyang Pellet Co. Ltd. amounts to 1, 223.5043 million yuan and
the ownership interest amounts to 985.3365 million yuan; in 2012 sales revenue 1, 036.283 million yuan, total
profit 141.4667 million yuan and net profit 106.10 million yuan.
Risks probably in implementing the company future development strategy and operation
management targets
Affected by the continued downturn in economic development, weak production demand and excess capacity, the
domestic steel enterprises are facing a severe challenge in such aspects listed below:
1.Hardly appearing a substantially improvement to alter the excess capacity and weak demand situation.
According to the overseas and domestic economy are running low and the demand for steel slows down, the
market will still keep in a situation of supplies over demands thus the market competition will be much more
intense and the steel price can hardly rise.
2. Continuing to run high the company business operation costs. The first is that though upstream materials price
dropped its not so optimistic for the steel products price dropped much more. The second is that the prices of
water, electricity, transportation and the labors are still rising. Thus the company revenue will be substantially
affected.
1. Main business and operation
(1) Statement of main businesse segments on industries and products
In RMB Yuan
Increase/decrease Increase/decrease
Increase/decrease
of operation cost of gross profit
On industry or Gross profit of turnover over
Turnover Operation cost over the same ratio over the
product ratio % the same period
period of last year same period of
of last year (%)
(%) last year (%)
On Industries
21,037,373,504.3 19,490,909,189.7
Industry 7.35% -4.72% -0.83% -3.63%
1 4
On Products
20,697,608,630.2 19,205,210,953.8
1. Steel plate 7.21% -4.55% -0.51% -3.77%
4 2
2. Steel billet 0 0 0% -100% -100% -17.65%
3. Others 339,764,874.07 285,698,235.92 15.91% -13.29% -17.86% 4.67%
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Bengang Steel Plates Co., Ltd. Interim Report 2012 Full Text
Statement of main businesse segments on industries and products
No change on main businesses and products.
Statement of significant change of gross profit over the same period of previous year
In the report period, although the Company has been doing all effort to adjust product composition and increase
efficiency, the decline of sales prices has caused major decrease in gross profit ratio.
(2) Business segments on territories
In RMB Yuan
Regions Turnover Change of turnover YoY (%)
North-east 6,767,176,587.51 -19.48%
North 2,597,018,437.47 -18.22%
East 6,272,275,635.2 22.55%
Northwest 90,987,276.21 -66.41%
Mid-south 2,168,503,155.29 -9.34%
Export 3,141,412,412.63 15.55%
Total 21,037,373,504.31 -4.72%
Statement of business segments on territories
The steel market was in continuous decline in the report period. The Company has been suffering from declining
of revenue. The Company will refine its marketing layout and give more priority to overseas markets.
Statement on main business composition.
No change in main business composition in the report period.
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Bengang Steel Plates Co., Ltd. Interim Report 2012 Full Text
(3) Major change in the primary business or its structure
No such situation in the report period.
(4) Statement on major change in primary business profitability (gross profit ratio)
No such situation in the report period.
(5) Analyze of major change in profit composition
No such situation in the report period.
2. Internal controlling system related to accounting of fair value
No such situation in the report period.
3. Holding of financial assets and liabilities in foreign currency
No such situation in the report period.
(II) Company investment
1. Overall application of finance raised
No such situation in the report period.
2. Situations of projects to be financed by the proceeds
No such situation in the report period.
3. Altering of projects financed by proceeds
No such situation in the report period.
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Bengang Steel Plates Co., Ltd. Interim Report 2012 Full Text
4. Major projects invested by non-financing capital
In RMB10 thousand
Date of
Amount of Turnover of
Projects primary Investment progress of the project
the project the project
disclosure
RMB16.03 million occurred in the 1st half of 2012,
April 27, accumulated to RMB237.46 million (including Under
Information system project 27,444
2010 RMB159.55 transferred to fixed asset), to be construction
completed in 2012.
Launched in 2007. RMB71.86 occurred in the 1st half
Energy saving reconstruction of
April 26, of 2012, accumulated to RMB973.55 million. Under
converter system and 180 ton 137,584
2007 (including RMB550.66 million transferred to fixed construction
dephosphurization converter project
assets), to be completed in 2012.
Launched in 2008, RMB84.86 million occurred in
Dandong stainless steel cool-rolling April 23 Under
223,000 the 1st half of 2012, accumulated to RMB1.53206
project 2008 construction
billion, to be completed in 2012.
Launched in 2009, RMB10.98 million occurred in
April 17, the 1st half of 2012, accumulated to RMB497.44 Under
Cool-rolling silicon steel project 60,335
2009 million (including RMB468.74 million transferred to construction
fixed assets), to be completed in 2012.
Launched in 2011, RMB36.03 occurred in the 1st half
2250mm skin pass mill project April 20, Under
9,688 of 2012, accumulated to RMB87.63 million, to be
2011 construction
completed in 2012.
Launched in 2011, RMB243.43 million occurred in
April 27, Under
Electrogalvanizing project 70,000 2012, accumulated to RMB485.63 million, to be
2010 construction
completed in 2012
Total -- --
Particulars about investment projects financed by non-financial capital
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Bengang Steel Plates Co., Ltd. Interim Report 2012 Full Text
(III) Business plan for the next half-year made by the Board
No change on the plan made at the beginning of year.
(IV) Prediction of business performance for Jan-Sept 2012
[] Not applicable
(V) Statement of the Board on the “non-standard auditors’ report” issued by the CPA on the
current report period
No such situation in the report period.
(VI) Statement of the Board on the variation and treatment of events that involved in the
“non-standard auditors’ report” issued by the CPA on previous fiscal year
No such situation in the report period.
(VII) Results of disccusion by the Board on the causation and impact of change in accounting
policies and estimations or correction of material accounting errors
No such situation in the report period.
(VIII) Making and implementation of cash dividend policies
I. According to On matters related to further implementation of the cash dividends of listed companies issued by
China Securities Regulatory Commission (CSRC), the board of directors has made the consideration and adoption
of Motion to amend the Company Articles of Association on the first extraordinary general meeting in June 13,
2012 to reformulate the article 162 which states as below:
The company profit distribution policy principles.
1. Profit distribution principle. The company will insist on a sustainable and steady profit distribution policy that
is to say the company shall value the payment for the reasonable investments by the shareholders and manage to
obtain a sustainable company development.
2. Profit distribution forms. Those forms can be taken such as cash, stocks, the combination of cash and stocks.
And in the conditional case, the company may conduct an interim distribution of profits.
3. Conditions and proportion of cash dividend. If the annual net profit and the accumulated undistributed profits at
the end of the year are positive, the company shall have a cash distribution and the accumulated cash distribution
in recent 3 years shall be not less than 30% of the company attributable profit achieved in recent 3 years.
4. Decision-making mechanism and procedure. The companys dividend distribution plan shall be developed and
considered by the Board and then be submitted to the general meeting of stockholders for approval; the Board
shall sufficiently consider the opinions of the independent directors, the board of supervisors and the public
investors; when not having developed the cash distribution plan, the Board shall disclose the reasons in the
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Bengang Steel Plates Co., Ltd. Interim Report 2012 Full Text
periodic report and the independent directors shall give independent opinions about that.
5. The company shall adjust its profit distribution policy when it is really necessary according to production and
business operation, investment plan, long-term development needs and external operating environment and the
adjusted policy shall be not against the relative rules issued by CSRC and stock exchange; the relative proposals
about profit distribution shall be considered within the Board and then submitted to the general meeting of
stockholders for approval which needs at least over 2/3 voting rights of the shareholders attending the meeting. It
is necessary to publicly state the opinions of the independent directors when the information of holding general
meeting of stockholders is released. The company shall deliver methods such as web site for the public investors
to take part in the general meeting according to the relative rules issued by SZSE .
6. The company shall deduct the illegal occupied funds from the relative shareholders when performing the profit
distribution.
II. In order to fully repay investors and protect the small investors, the company strictly performs its Company
Articles of Association to develop the profit distribution policy to state clearly the standards and proportion. The
company profit distribution plan for 2011 is: Taking the company existing capital of 3,136,000,000 shares as the
base and for each 10 shares, the company will send cash 1.00 yuan (tax included) to all the shareholders. And the
implementation of the distribution plan has been finished as of June 27, 2012 after the plan was passed in the
general meeting of shareholders held on May 11, 2012.
(IX) Profit distribution or capitalizing of common reserves
No such situation in the report period.
(X) Situation of positive retained profit at end of 2011 but no cash dividend was proposed
No such situation in the report period.
(XI) Establishing and performing of information insider administration scheme
1. The Insider Management System has been established within the19th meeting of the 4th term board of directors
hold on April 23, 2010. In order to further more regulate the internal information management, strengthen the
confidential work, maintenance the information disclosure principles of openness, fairness and impartiality, the
company has rectified its The Insider Management System and rebuild The Insider Registration and Management
System in the 14th meeting of the 5th term board of directors held on July 12, 2012 according to the relative rules
in Company Law, Securities Law, The listed company information disclosure management approach, Shenzhen
Stock Exchange Listing Rules, Rules about Establishing Insider Registration and Management System and its
Company Articles of Association.
2. In the report period, the company has performed strictly its insider registration and management system to
prevent information leakage and protect the fairness of information disclosure. There were no share transaction by
the directors, supervisors, higher management and other insiders with the inside information before important and
sensitive information disclosure which would infect the company stock price. And there were no supervision and
punishment added to the company by the relative regulators for the companys performance of its insider
registration and management system and any suspicion of insider trading.
17
Bengang Steel Plates Co., Ltd. Interim Report 2012 Full Text
Whether there were any self-examination and accountability for the transactions of company stock and its derived
varieties?
No such situation in the report period.
Whether there were any supervision and punishment added to the company by the relative
regulators for the company’s performance of its insider registration and management system
and any suspicion of insider trading?
No such situation in the report period.
(XII) Other issues to be disclosed
1. Construction of internal control system
The company has pushed forward to improve its organization structure and mechanism according to Basic Norms
of Enterprise Internal Control System and Internal Control Supporting Guidelines to improve its operation and
management. The company has established a set of internal control system about operation, financial management,
human resources management, investment management, related party transaction, foreign-oriented guarantee,
information communication and disclosure to cover all links of the company operation and management.
In the report period, the company has established internal control leading group and internal control project team,
combed and testified the system in order to further more push forward the implement of internal control system
according to Notification about Substantially Implementing the Internal Control Norms (N0. 5, 2012 LSRC)
issued by CRSC Liaoning SRC (securities regulatory committee). The work is planned to be finished before
March 2013.
2. Non-public issuance of stocks
The company has held on June 13, 2012 the first extraordinary shareholders meeting in 2012 and deliberated and
approved The Basic Conditions for Non-public issuance of stocks to Particular Investors. The company has
received the The China securities regulatory commission the administrative licensing application acceptance
notice (No. 121229) on July 11, 2012. The CRSC has received and examined the company Listed Company
Non-public Issuance of Stocks administrative licensing application materials.
VII. Significant Events
(I) Company Administration
The Company was following with the Company Law, Securities Law, Listed Company Administrative Criteria,
Listed Company Shareholders Meeting Criteria, Opinions on Increasing the Quality of Listed Companies, and
Guidance for Articles of Association of Listed Companies, kept establishing and improving the administrative
structure, and executed the regulations in daily operation. No behaviors violating or departure from the regulations
were conducted. The controlling shareholder was acting its rights as sponsor legally. Basically no competition
was conducted against the Companys business operation. The Company has established a long-term controlling
shareholder behaving system. The shareholders meetings have been operated with clear responsibilities and clear
meeting criteria. Regulations were established to give convenient to the public investors to participate in decision
making process. Online voting system was opened to public shareholders to vote on major issues of the Company.
Shareholders meetings were held legally according to the laws, regulations, regulatory regulations, and the
Articles of Association. The Board of Directors, Supervisory Committee, and executives were working with clear
18
Bengang Steel Plates Co., Ltd. Interim Report 2012 Full Text
responsibilities and meeting criteria. All of the directors, supervisors, and executives were fulfilling their d uties.
Administrative systems have been established regarding internal controlling, finance, decision-making over major
investment, decision-making over related transactions, and other internal criteria. The systems are reviewed and
assessed periodically, and relative information is released. The Company has also established internal
restricting mechanism and responsibility tracking mechanism. Responsibilities are clearly undertaken and invalid
decision-making is effectively restricted. Information disclosure regulations were established and executed to
ensure authentic, precise, complete, timely, and fair information disclosure.
(II) Dividend plans, reserve capitalizing plans, or share issuing plans proposed in previous
period and implemented in the current period
Execution of dividend plan for year 2011
As approved by the Shareholders Meeting 2011 held on May 11, 2012, the dividend plan for year 2011 was: upon
the total capital shares of RMB3,136,000,000 , RMB1.00 (tax included) would be distributed to each 10 shares.
After tax, the actual cash dividend for individual A-share holders, securities investment foundations, and valid
overseas investors was RMB0.90 on each 10 shares; while the cash dividend for B-share holders and
non-residential entity shareholders was RMB0.90 on each 10 shares.
According to the Articles of Association, the cash dividend for B-share holders were be paid in HKD upon the
mean rate (1 HKD=0.8118RMB) announced by Peoples Bank of China on the 1st bank day (May 14, 2012) after
the shareholders meeting on which the dividend plan was approved
The Announcment of Dividend Plan 2011 was released by the Board with China Securities Journal, Securities
Times, and Hong Kong Commercial Daily on June 14, 2012, and executed thereafter.
(III) Material lawsuits
The Company has not involved in any material lawsuit or arbitration in the report period.(IV) Bankrupcy or
capital reorganizing
No such situation in the report period.
(V) Holding other PLC’s shares or participating of financial entities
1. Securities investment
No such situation in the report period.
2. Holding of other PLC’s shares
No such situation in the report period.
3. Shareholding in non-listed financial entities
No such situation in the report period.
4. Trading of other PLC’s shares
No such situation in the report period.
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Bengang Steel Plates Co., Ltd. Interim Report 2012 Full Text
(VI) Asset trade
1. Acquisition of assets
No such situation in the report period.
2. Disposal of assets
No such situation in the report period.
3. Asset exchange
No such situation in the report period.
4. Merger of entities
No such situation in the report period.
5. Since releasing of capital reconstruction report or asset acquisition or disposal report, their
progress and influences on the business performance and financial positions.
No such situation in the report period.
(VII) Statement on share increasing proposal raised by the holding shareholder or its
action-in-concert parties in the report period
No such situation in the report period.
(VIII) Implementation and influences of share equity incentive program
No such situation in the report period.
(IX) Material related transactions
20
Bengang Steel Plates Co., Ltd. Interim Report 2012 Full Text
1. Related transactions related to daily operation
Operation-related related transactions
Sales of products or labor service to the related parties Purchasing of products or labor services from the related parties
Related parties
Amount of trade RMB0000 Percentage in similar trades % Amount of trade RMB0000 Percentage in similar trades %
Bengang Electronics Co., Ltd. 62.95 0% 7,466.99 0.33%
Benxi Beiying Steel & Iron (Group) Co., Ltd. 11,689.73 0.51% 1,845.43 0.08%
Bengang Group Dahe Industry Co., Ltd. 40.8 0%
Bengang Group Property Development Ltd. 321.55 0.01% 2,310.22 0.1%
Benxi Steel (Group) Steel Process & Logistics Ltd. 19,226.22 0.84% 125.57 0.01%
Bengang Group Machinery Ltd. 1,410.61 0.06% 13,231.49 0.58%
Benxi Steel (Group) Construction Ltd. 4,991.09 0.22% 10,764.15 0.47%
Bengang Group Mineral Co., Ltd. 68,784.86 3.01% 245,858.42 10.85%
Bengang Puxiang Cool Rolling Steel Sheet Co., Ltd. 407,083.89 17.82% 235,813.46 10.41%
Bengang Group Thermal Power Development Co., Ltd. 8,321.56 0.36% 3.66 0%
Benxi Steel (Group) Industrial Development Ltd. 1,205.95 0.05% 14,937.57 0.66%
Bengang Group New Industry Development Co., Ltd. 18.13 0% 166.05 0.01%
Benxi Steel (Group) Repairing & Building Ltd. 96.59 0% 3,791.7 0.17%
Bengang Group Metallurgy Residue Ltd. 7,560.28 0.33% 5,297.6 0.23%
Benxi Steel (Group) Ltd. 723.22 0.03% 12,520.98 0.55%
Dalian Boluole Steel Tube Ltd. 1,489.42 0.07%
Liaoning Bengang Steel & Iron Trading Co., Ltd. 13,837.5 0.61%
Bengang Group Hong Kong Ltd. 53,275.44 2.35%
21
Bengang Steel Plates Co., Ltd. Interim Report 2012 Full Text
Bengang Designing & Researching Institute Ltd. 4.92 0%
Benxi Steel (Group) Trucking Ltd. 2,061.37 0.09%
Benxi Steel (Group) Information and Automatic Tech. Ltd. 2,185.11 0.1%
Benxi Steel (Group) Drilling Tools Co., Ltd. 796 0.04%
Liaoning Metallurgy Technician College 141.95 0.01%
Total 546,864.36 23.94% 612,598.09 27.03%
Including: Related transactions of sales of goods or providing of services to the holding shareholder and its subsidiaries were amounted to
RMB11,594,624,500 in the report term.
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Bengang Steel Plates Co., Ltd. Interim Report 2012
Full Text
2. Related transactions related to asset purchasing or disposal
No such situation in the report period.
3. Material related transactions related to collaborated external investment
No such situation in the report period.
4. Debtors and credits with related parties
No such situation in the report period.
Capital appropriation and progress of clearing in report period
The Company has been strictly following with the rules and documents provided by CSRC as well as the
Articles of Association of the Company, and no non-operational capital appropriation occurred by the
holding shareholder or its related parties during the report period.
The independent directors performed diligent inspection upon the situation regarding capital appropriation
and issued the independent opinions as the followings:
No such situation occurred with the Company about capital appropriation by the holding shareholders and
other related parties.
The penalty plan proposed by the Board if the clearing of non-operational capital
appropriation is not completed till the end of report period.
No such situation in the report period.
5. Other material related transactions
Remarks on the rental with related party:
The Leasing Agreement for the 2300mm hot rolling line engaged with Bengang Group on March 18, 2009
was expired on December 31, 2011. It was decided through negotiation with Bengang Group that the
Leasing Agreement for 2300mm hot rolling line would be extended.
The renewed leasing term is January 1, 2012 to December 31, 2014. The rate was decided with
consideration of the depreciation and tax upon the production line, and the production and operation
situation of the both parties. The rate will not exceed RMB350 million per annum. As primarily calculated
for Jan-Jun 2012, RMB190 million is provided in advance for the rental.
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Bengang Steel Plates Co., Ltd. Interim Report 2012
Full Text
(X) Major contracts and execution
1. Trusteeship, contract, or leasing issues which contributes 10% or over of total profit
of the period
(1) Trusteeship
No such situation in the report period.
(2) Contracting
No such situation in the report period.
(3) Leasing
No such situation in the report period.
2. Guarantees
In recent years, the Company has been strictly following the document 证监发（2003）56 号 issued by
CSRC, and never involved in providing of any guarantee to the holding shareholder or other related parties
holding less than 50% of shares, nor any other external parties. The accumulated external guarantee is
accumulatively zero.
The independent directors performed diligent inspection upon the situation regarding capital appropriation
or providing of guarantees to external parties, and issued the independent opinions as the followings:
No such situation occurred with the Company about providing guarantee to the holding shareholders and other external
parties.
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Bengang Steel Plates Co., Ltd. Interim Report 2012
Full Text
3. Entrusted capital management
No such situation in the report period.
4. Performing of material contracts
No such situation in the report period.
5. Other material contracts
No such situation in the report period.
(XI) Statement on issuing of company bonds
No such situation in the report period.
(VII) Fulfilling of comitments
1. Commitments of shareholders with over 5% of shares made in the report term or
carried over from previous terms
No such situation in the report period.
2. Statement on the situation of predicted profit on assets or projects, and actual results
of the same
No such situation in the report period.
(XIII) Other misc income
No such situation in the report period.
(XIV) Reception of investigations, communications, or interviews in the report period
Main content involved
Time/date Place Way Type of visitors Visitors
and material provided
Office of the
Jan 12, 2012 Field research Organization Lion Securities Business operation
secretary of Board
(XV) Engaging and dismissing of CPA
In the report period, the CPA hired by the Company was not changed. Shulun Pan Certified
Public Accountants Co., Ltd. (Special common partnership) has been providing services to the Company for successively
five years.
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Bengang Steel Plates Co., Ltd. Interim Report 2012
Full Text
(XVI) Punishment on the Company and/or the directors, supervisors, executives,
shareholders, substaintial controller, and purchasers, and correcting of misbehaviours
No such situation in the report period.
(XVII) Other material events
No such situation in the report period.
(XVIII) Material change in profitability, asset, and credit situation of the guarantor of
the convertible bonds
No such situation in the report period.
(XIX) Index for information disclosure
Issues Names and pages of presses Date of releasing Web addresses
China Securities Journal,
Results of property on sale Securities Times, Hong Kong Jan 7, 2012 http://www.cninfo.com.cn
Commercial Daily
Administration Criteria of
Apr 6, 2012 http://www.cninfo.com.cn
Subsidiaries
External guarantee rules Apr 6, 2012 http://www.cninfo.com.cn
Administration rules of investor
Apr 6, 2012 http://www.cninfo.com.cn
relationship management
Administration rules of related
Apr 6, 2012 http://www.cninfo.com.cn
transactions
Internal reporting system of
Apr 6, 2012 http://www.cninfo.com.cn
major information
Administration rules of legal
Apr 6, 2012 http://www.cninfo.com.cn
representative special fund
General Manager Working
Apr 6, 2012 http://www.cninfo.com.cn
Criteria
Secretary of the Board Working
Apr 6, 2012 http://www.cninfo.com.cn
System
Independent directors working
Apr 6, 2012 http://www.cninfo.com.cn
criteria
Announcement on China Securities Journal,
implementation of internal Securities Times, Hong Kong Apr 6, 2012 http://www.cninfo.com.cn
controlling rules Commercial Daily
China Securities Journal,
Resolutionso f the 10th meeting
Securities Times, Hong Kong Apr 6, 2012 http://www.cninfo.com.cn
of the 5th term of Board
Commercial Daily
China Securities Journal,
Prediction of Routine Related
Securities Times, Hong Kong April 18, 2012 http://www.cninfo.com.cn
Transactions
Commercial Daily
Independent directors work
April 18, 2012 http://www.cninfo.com.cn
report 2011 (Tian Binfu)
Independent directors work
April 18, 2012 http://www.cninfo.com.cn
report 2011 (Wang Yiqiu)
Independent directors work
April 18, 2012 http://www.cninfo.com.cn
report 2011 (Li Kai)
Introspective Report on Internal April 18, 2012 http://www.cninfo.com.cn
25
Bengang Steel Plates Co., Ltd. Interim Report 2012
Full Text
Control 2011
Independent Opinions of the
Independent Directors on
Capital Adoption by Related April 18, 2012 http://www.cninfo.com.cn
Parties and Related
Transactions
The Independent Directors
Independent Comments on
Capital Adoption by Related April 18, 2012 http://www.cninfo.com.cn
Parties and Providing of
External Guarantees
Statement on Special Auditing
of Capital Appropriation by
April 18, 2012 http://www.cninfo.com.cn
Holding Shareholder and
Related Parties
Announcement on Providing China Securities Journal,
Provisions on Inventory Securities Times, Hong Kong April 18, 2012 http://www.cninfo.com.cn
Impairment and Bad Debts Commercial Daily
China Securities Journal,
Announcement of Investment
Securities Times, Hong Kong April 18, 2012 http://www.cninfo.com.cn
Outline 2012
Commercial Daily
Notice of Calling the China Securities Journal,
Shareholders Annual Meeting Securities Times, Hong Kong April 18, 2012 http://www.cninfo.com.cn
2011 Commercial Daily
Resolutions of the 10th China Securities Journal,
Meeting of the 5th Term of Securities Times, Hong Kong April 18, 2012 http://www.cninfo.com.cn
Supervisory Committee Commercial Daily
China Securities Journal,
Resolutions of the 11th Meeting
th Securities Times, Hong Kong April 18, 2012 http://www.cninfo.com.cn
of the 5 Term of Board
Commercial Daily
Auditors Report 2011 April 18, 2012 http://www.cninfo.com.cn
China Securities Journal,
Annual Report 2011 Summary Securities Times, Hong Kong April 18, 2012 http://www.cninfo.com.cn
Commercial Daily
Annual Report 2011 April 18, 2012 http://www.cninfo.com.cn
China Securities Journal,
The 1st Quarterly Report 2012
Securities Times, Hong Kong April 18, 2012 http://www.cninfo.com.cn
(Official Text)
Commercial Daily
The 1st Quarterly Report 2012
April 18, 2012 http://www.cninfo.com.cn
(Full Text)
China Securities Journal,
Resolutions of the 12th meeting
Securities Times, Hong Kong May 12, 2012 http://www.cninfo.com.cn
of the 5th term of Board
Commercial Daily
The Resolutions of China Securities Journal,
Shareholders Annual Meeting Securities Times, Hong Kong May 12, 2012 http://www.cninfo.com.cn
2011 Commercial Daily
China Securities Journal,
Resolutions of the 11th meeting
Securities Times, Hong Kong May 12, 2012 http://www.cninfo.com.cn
of the 5th term of Board
Commercial Daily
China Securities Journal,
Announcement of related
Securities Times, Hong Kong May 12, 2012 http://www.cninfo.com.cn
transactions
Commercial Daily
Legal Opinions on the
May 12, 2012 http://www.cninfo.com.cn
Shareholders Meeting 2011
Independent directors opinions
May 12, 2012 http://www.cninfo.com.cn
on the related transactions
Resolutionso of the 12th China Securities Journal, May 26, 2012 http://www.cninfo.com.cn
meeting of the 5th term of Securities Times, Hong Kong
26
Bengang Steel Plates Co., Ltd. Interim Report 2012
Full Text
Supervisory Committee Commercial Daily
China Securities Journal,
Resolutions of the 13th meeting
Securities Times, Hong Kong May 26, 2012 http://www.cninfo.com.cn
of the 5th term of Board
Commercial Daily
Independent directors opinions
on whether the private issuing
May 26, 2012 http://www.cninfo.com.cn
of shares will composite major
capital reconstruction
China Securities Journal,
Private share issuing preplan
Securities Times, Hong Kong May 26, 2012 http://www.cninfo.com.cn
(draft)
Commercial Daily
Independent directors opinion
on the private issuing of shares
May 26, 2012 http://www.cninfo.com.cn
which involves in major related
transaction
Minning Detection Report of
May 26, 2012 http://www.cninfo.com.cn
Xujiabaozi, Benxi, Liaoning
Independent directors opinions
on private issuing of A shares May 26, 2012 http://www.cninfo.com.cn
(draft)
Report on private issuing of A China Securities Journal,
shares which involves with Securities Times, Hong Kong May 26, 2012 http://www.cninfo.com.cn
major related transaction Commercial Daily
Independent directors opinions
on the private issuing of shares
May 26, 2012 http://www.cninfo.com.cn
involving in major asset
acquisition
China Securities Journal,
Notice for the 1st provisional
Securities Times, Hong Kong May 26, 2012 http://www.cninfo.com.cn
shareholders meeting 2012
Commercial Daily
Asset evaluation report on the
acquisition of shares of
May 26, 2012 http://www.cninfo.com.cn
Bengang Puxiang Cool Rolling
Co., Ltd.
Auditors report and financial
statements of Bengang Puxiang May 26, 2012 http://www.cninfo.com.cn
Cool Rolling Co., Ltd.
Profitability forcast of Bengang
Puxiang Cool Rolling Co., Ltd. May 26, 2012 http://www.cninfo.com.cn
for year 2012
China Securities Journal,
The feasibility report of private
Securities Times, Hong Kong May 26, 2012 http://www.cninfo.com.cn
share issuing (revised)
Commercial Daily
Prompting Notice for Holding China Securities Journal,
the 1st Provisional Securities Times, Hong Kong June 8, 2012 http://www.cninfo.com.cn
Shareholders Meeting 2012 Commercial Daily
Announcement on Approval of
China Securities Journal,
Private Issuing of Shares by
Securities Times, Hong Kong June 12, 2012 http://www.cninfo.com.cn
China Securities Regulatory
Commercial Daily
Commission
China Securities Journal,
Announcement of Dividend for
Securities Times, Hong Kong June 14, 2012 http://www.cninfo.com.cn
Year 2011
Commercial Daily
Legal opinions on the 1st
provisional shareholders June 14, 2012 http://www.cninfo.com.cn
meeting 2012
Resolutions of the 1st China Securities Journal,
Provisional Shareholders Securities Times, Hong Kong June 14, 2012 http://www.cninfo.com.cn
Meeting 2012 Commercial Daily
27
Bengang Steel Plates Co., Ltd. Interim Report 2012
Full Text
China Securities Journal,
Announcement of Performance
Securities Times, Hong Kong July 13, 2012 http://www.cninfo.com.cn
Prediction
Commercial Daily
Information Insider
July 13, 2012 http://www.cninfo.com.cn
Administration Rules
China Securities Journal,
Resolutionso f the 14th meeting
Securities Times, Hong Kong July 13, 2012 http://www.cninfo.com.cn
of the 5th term of Board
Commercial Daily
VIII. Financial Reports
Bengang Steel Plates Co., Ltd.
Balance Sheet
June 30, 2012
(In RMB Yuan except for otherwise specified)
Assets Note XI Closing balance Openning balance
Current asset:
Monetary capital 2,741,526,583.89 3,079,794,798.31
Transactional financial assets
Notes receivable 3,761,245,675.32 2,808,960,449.26
Account receivable (I) 889,853,686.04 854,060,172.22
Prepayment 528,748,675.51 455,603,803.10
Interest receivable
Dividend receivable
Other account receivable (2) 266,304,636.18 288,951,337.36
Inventories 12,037,962,379.39 12,169,648,632.27
Non-current asset due in 1 year
Other current asset 182,211,823.73 182,211,823.73
Total of current asset 20,407,853,460.06 19,839,231,016.25
Non-current assets
Available-for-sale financial asset
Expired investment in possess
Long-term receivable
Long-term share equity investment (3) 1,170,947,561.06 1,170,947,561.06
Investment real estates
Fixed assets 16,694,771,655.57 17,615,154,272.91
Construction in process 1,506,217,579.33 1,022,538,055.20
Engineering goods 21,066,501.34 27,153,422.75
Fixed asset disposal
Production physical assets
Gas & petrol
Intangible assets
R&D expense
28
Bengang Steel Plates Co., Ltd. Interim Report 2012
Full Text
Goodwill
Long-term amortizable expenses
Differed income tax asset 187,756,260.34 187,756,260.34
Other non-current asset
Total of non-current assets 19,580,759,557.64 20,023,549,572.26
Total of assets 39,988,613,017.70 39,862,780,588.51
The Notes to the Financial Statements attached hereafter are the essential parts of the Financial Statements.
Legal representive: Zhang Xiaofang, CFO: Cao Aimin, Accounting Manager: Wang Shaoyu
Bengang Steel Plates Co., Ltd.
Balance Sheet (Cont.)
June 30, 2012
(In RMB Yuan except for otherwise specified)
Liabilities and owners equity (or shareholders equity) Note XI Closing balance Openning balance
Current liabilities
Short-term loans 6,756,884,100.00 5,524,891,500.00
Trade off financial liabilities
Notes payable 1,638,690,418.99 2,108,397,418.85
Account payable 9,233,481,763.54 9,006,471,355.70
Prepayment received 2,360,548,075.68 2,464,155,947.11
Employees’ wage payable 78,535,259.09 121,895,920.05
Tax payable -58,333,376.32 -3,475,896.14
Interest payable
Dividend payable
Other account payable 597,082,361.31 554,555,276.53
Non-current liability due in 1 year 2,388,265,600.00 1,877,329,600.00
Other current liability
Total of current liability 22,995,154,202.29 21,654,221,122.10
Non-current liabilities
Long-term borrowings 2,116,954,872.82 3,060,798,190.04
Bond payable
Long-term payable
Special payable
Anticipated liabilities
Differed income tax liability
Other non-recurring liabilities 108,014,224.00 77,604,224.00
Total of non-current liabilities 2,224,969,096.82 3,138,402,414.04
Total of liability 25,220,123,299.11 24,792,623,536.14
Owners’ equity (or shareholders’ equity)
Capital paid in (or share capital) 3,136,000,000.00 3,136,000,000.00
Capital reserves 8,822,821,134.76 8,822,821,134.76
Less: Shares in stock
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Bengang Steel Plates Co., Ltd. Interim Report 2012
Full Text
Special reserves 2,656,605.71
Surplus reserves 921,277,509.22 921,277,509.22
Common risk provision
Retained profit 1,885,734,468.90 2,190,058,408.39
Total of owners’ equity (or shareholders’ equity) 14,768,489,718.59 15,070,157,052.37
Total of liability and shareholders’ equity (or owners’ equity) 39,988,613,017.70 39,862,780,588.51
The Notes to the Financial Statements attached hereafter are the essential parts of the Financial Statements.
Legal Representative: Zhang Xiaofang, CFO: Cao Aimin, Accounting Manager: Wang Shaoyu
Bengang Steel Plates Co., Ltd.
Consolidated Balance Sheet
June 30, 2012
(In RMB Yuan except for otherwise specified)
Assets Note 5 Closing balance Openning balance
Current asset:
Monetary capital (I) 2,918,534,558.70 3,242,956,479.92
Settlement provision
Outgoing call loan
Transactional financial assets
Notes receivable (2) 3,875,034,975.58 2,913,462,068.17
Account receivable (3) 400,251,531.82 412,780,417.60
Prepayment (4) 528,748,675.51 485,521,776.66
Insurance receivable
Reinsurance receivable
Provisions of Reinsurance contracts receivable
Interest receivable
Dividend receivable
Other account receivable (5) 136,092,871.84 145,298,185.06
Repurchasing of financial assets
Inventories (6) 12,775,840,660.64 12,835,213,347.52
Non-current asset due in 1 year
Other current asset (7) 182,211,823.73 182,211,823.73
Total of current asset 20,816,715,097.82 20,217,444,098.66
Non-current assets
Disburse of consigned loans
Available-for-sale financial asset
Expired investment in possess
Long-term receivable
Long-term share equity investment (8) 15,791,030.00 15,791,030.00
Investment real estates
Fixed assets (9) 17,069,791,116.47 18,006,165,365.04
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Bengang Steel Plates Co., Ltd. Interim Report 2012
Full Text
Construction in process (10) 3,149,198,252.39 2,552,473,544.78
Engineering goods (11) 21,066,501.34 27,153,422.75
Fixed asset disposal
Production physical assets
Gas & petrol
Intangible assets (XII) 112,598,045.42 45,467,574.08
R&D expense
Goodwill
Long-term amortizable expenses
Differed income tax asset (13) 194,896,236.69 194,896,236.69
Other non-current asset
Total of non-current assets 20,563,341,182.31 20,841,947,173.34
Total of assets 41,380,056,280.13 41,059,391,272.00
The Notes to the Financial Statements attached hereafter are the essential parts of the Financial Statements.
Legal Representative: Zhang Xiaofang, CFO: Cao Aimin, Accounting Manager: Wang Shaoyu
Bengang Steel Plates Co., Ltd.
Consolidated Balance Sheet (Cont.)
June 30, 2012
(In RMB Yuan except for otherwise specified)
Liabilities and owners equity (or shareholders equity) Note 5 Closing balance Openning balance
Current liabilities
Short-term loans (XV) 6,784,798,555.46 5,547,330,913.46
Loan from Central Bank
Deposit received and hold for others
Call loan received
Trade off financial liabilities
Notes payable (16) 1,639,537,018.99 2,108,397,418.85
Account payable (17) 8,947,487,393.77 8,762,873,204.10
Prepayment received (18) 2,792,177,949.13 2,849,478,230.64
Selling of repurchased financial assets
Fees and commissions receivable
Employees’ wage payable (19) 78,744,437.96 122,199,995.18
Tax payable (20) -224,729,285.68 -177,169,903.58
Interest payable
Dividend payable
Other account payable (21) 673,804,144.99 657,094,343.99
Reinsurance fee payable
Insurance contract provision
Entrusted trading of securities
Entrusted selling of securities
Non-current liability due in 1 year (XXII) 2,388,265,600.00 1,877,329,600.00
Other current liability
Total of current liability 23,080,085,814.62 21,747,533,802.64
Non-current liabilities
Long-term borrowings (23) 2,716,954,872.82 3,660,798,190.04
Bond payable
Long-term payable
31
Bengang Steel Plates Co., Ltd. Interim Report 2012
Full Text
Special payable
Anticipated liabilities
Differed income tax liability
Other non-recurring liabilities (24) 189,668,650.20 91,664,224.00
Total of non-current liabilities 2,906,623,523.02 3,752,462,414.04
Total of liability 25,986,709,337.64 25,499,996,216.68
Owners’ equity (or shareholders’ equity)
Capital paid in (or share capital) (25) 3,136,000,000.00 3,136,000,000.00
Capital reserves (26) 8,822,821,134.76 8,822,821,134.76
Less: Shares in stock
Special reserves (27) 2,656,605.71
Surplus reserves (28) 921,277,509.22 921,277,509.22
Common risk provision
Retained profit (29) 2,476,197,164.97 2,644,615,857.28
Different of foreign currency translation
Total of owner’s equity belong to the parent company 15,358,952,414.66 15,524,714,501.26
Minor shareholders’ equity 34,394,527.83 34,680,554.06
Total of owners’ equity (or shareholders’ equity) 15,393,346,942.49 15,559,395,055.32
Total of liability and shareholders’ equity (or owners’ equity) 41,380,056,280.13 41,059,391,272.00
The Notes to the Financial Statements attached hereafter are the essential parts of the Financial Statements.
Legal Representative: Zhang Xiaofang, CFO: Cao Aimin, Accounting Manager: Wang Shaoyu
Bengang Steel Plates Co., Ltd.
Income Statement
Jan-Jun 2012
(In RMB Yuan except for otherwise specified)
Items Note XI Amount of the Current Term Amount of the Previous Term
I. Turnover (4) 21,649,175,912.98 23,470,730,563.17
Less: Operation cost (4) 20,280,233,614.44 21,218,162,916.22
Business tax and surcharge 66,346,575.07 667,938.31
Sales expense 194,756,756.42 194,662,367.06
Administrative expense 835,828,008.90 1,429,428,964.65
Financial expenses 272,421,337.99 145,561,883.79
Asset impairment loss
Plus: gains from change of fair value (“-“ for loss)
Investment gains (“-“ for loss)
Incl. Investment gains from affiliates
II. Operational profit (“-“ for loss) -410,379.84 482,246,493.14
Plus: Non business income 9,822,005.06 9,812,452.88
Less: Non-business expenses 135,564.71 113,900.00
Incl. Loss from disposal of non-current assets 135,564.71
III. Total profit (“-“ for loss) 9,276,060.51 491,945,046.02
Less: Income tax expenses
IV. Net profit (“-“ for net loss) 9,276,060.51 491,945,046.02
32
Bengang Steel Plates Co., Ltd. Interim Report 2012
Full Text
V. Earnings per share
(I) Basic earnings per share 0.00 0.16
(II) Diluted earnings per share 0.00 0.16
VI. Other misc gains
VII. Total of integrated income 9,276,060.51 491,945,046.02
The Notes to the Financial Statements attached hereafter are the essential parts of the Financial Statements.
Legal Representative: Zhang Xiaofang, CFO: Cao Aimin, Accounting Manager: Wang Shaoyu
Bengang Steel Plates Co., Ltd.
Consolidated Income Statement
Jan-Jun 2012
(In RMB Yuan except for otherwise specified)
Items Note 5 Amount of the Amount of the
Current Term Previous Term
I. Total revenue 22,841,569,834.06 24,050,256,657.14
Incl. Business income (30) 22,841,569,834.06 24,050,256,657.14
Interest income
Insurance fee earned
Fee and commission received
II. Total business cost 22,663,251,749.52 23,432,623,874.10
Incl. Business cost (30) 21,194,363,935.21 21,573,460,001.27
Interest expense
Fee and commission paid
Insurance discharge payment
Net claim amount paid
Net insurance policy reserves provided
Insurance policy dividend paid
Reinsurance expenses
Business tax and surcharge (31) 68,335,473.24 3,307,222.35
Sales expense (32) 274,555,046.97 249,672,077.79
Administrative expense (33) 853,928,341.18 1,461,168,367.44
Financial expenses (34) 272,068,952.92 145,016,205.25
Asset impairment loss
Plus: Gains from fluctuation of fair value
(“-“ for loss)
Investment gains (“-“ for loss)
Incl. Investment gains from affiliates
Exchange gains (“-“ for loss)
III. Operation profit (“-“ for loss) 178,318,084.54 617,632,783.04
Plus: Non business income (35) 10,459,224.49 10,846,574.48
Less: Non-business expenses (36) 144,176.66 113,900.00
33
Bengang Steel Plates Co., Ltd. Interim Report 2012
Full Text
Incl. Loss from disposal of non-current
assets 135,564.71
IV. Gross profit (“-“ for loss) 188,633,132.37 628,365,457.52
Less: Income tax expenses (37) 43,737,850.91 33,008,831.48
V. Net profit (“-“ for net loss) 144,895,281.46 595,356,626.04
Including: Net profit realized by the entity taken
over before the takover
Net profit attributable to the owners of parent 145,181,307.69 595,456,110.27
company
Minor shareholders’ equity -286,026.23 -99,484.23
VI. Earnings per share:
(I) Basic earnings per share (38) 0.05 0.19
(II) Diluted earnings per share (38) 0.05 0.19
VII. Other misc. incomes
VIII. Total of misc. incomes 144,895,281.46 595,356,626.04
Total of misc. incomes attributable to the owners
of the parent company 145,181,307.69 595,456,110.27
Total misc gains attributable to the minor -286,026.23 -99,484.23
shareholders
The Notes to the Financial Statements attached hereafter are the essential parts of the Financial Statements.
Legal representive: Zhang Xiaofang, CFO: Cao Aimin, Accounting Manager: Wang Shaoyu
Bengang Steel Plates Co., Ltd.
Cash Flow Statement
Jan-Jun 2012
(In RMB Yuan except for otherwise specified)
Items Amount of the Current Term Amount of the Previous Term
I. Net cash flow from business operation
Cash received from sales of products and providing of
services 14,944,086,154.75 15,099,184,619.55
Tax returned 17,944,000.00 203,476,262.75
Other cash received from business operation 54,606,209.19 51,687,615.48
Sub-total of cash inflow from business activities 15,016,636,363.94 15,354,348,497.78
Cash paid for purchasing of merchandise and services 13,204,674,816.36 13,061,983,992.15
Cash paid to staffs or paid for staffs 695,267,026.97 603,756,362.61
Taxes paid 377,867,095.00 85,520,031.12
Other cash paid for business activities 665,281,271.21 583,730,813.62
Sub-total of cash outflow from business activities 14,943,090,209.54 14,334,991,199.50
Cash flow generated by business operation, net 73,546,154.40 1,019,357,298.28
II. Cash flow of investment
Cash received from investment retrieving
Cash received as investment profit
Net cash retrieved from disposal of fixed assets,
intangible assets, and other long-term assets
Net cash received from disposal of subsidiaries or
other operational units
Other investment-related cash received
Sub-total of cash inflow due to investment activities
Cash paid for construction of fixed assets, intangible 923,538,683.35 1,119,447,497.00
34
Bengang Steel Plates Co., Ltd. Interim Report 2012
Full Text
assets and other long-term assets
Cash paid as investment 130,000,000.00
Net cash received from subsidiaries and other
operational units
Other cash paid for investment activities
Sub-total of cash outflow due to investment activities 923,538,683.35 1,249,447,497.00
Net cash flow generated by investment -923,538,683.35 -1,249,447,497.00
III. Cash flow from financing activities
Cash received as investment
Cash received as loans 4,489,112,600.00 5,325,854,700.00
Cash received from bond placing
Other financing-related cash received
Subtotal of cash inflow from financing activities 4,489,112,600.00 5,325,854,700.00
Cash to repay debts 3,655,521,023.07 3,269,701,271.34
Cash paid as dividend, profit, or interests 604,812,878.14 303,609,002.32
Other cash paid for financing activities
Subtotal of cash outflow due to financing activities 4,260,333,901.21 3,573,310,273.66
Net cash flow generated by financing 228,778,698.79 1,752,544,426.34
IV. Influence of exchange rate alternation on cash and
cash equivalents -7,786,456.28 -1,344,042.32
V. Net increase of cash and cash equivalents -629,000,286.44 1,521,110,185.30
Plus: Balance of cash and cash equivalents at the 3,079,794,798.31 1,358,651,762.79
beginning of term
VI. Balance of cash and cash equivalents at the end of
term 2,450,794,511.87 2,879,761,948.09
The Notes to the Financial Statements attached hereafter are the essential parts of the Financial Statements.
Legal representive: Zhang Xiaofang, CFO: Cao Aimin, Accounting Manager: Wang Shaoyu
Bengang Steel Plates Co., Ltd.
Consolidated Cash Flow Statement
Jan-Jun 2012
(In RMB Yuan except for otherwise specified)
Items Note 5 Amount of the Current Term Amount of the Previous Term
I. Net cash flow from business operation
Cash received from sales of products and providing of services 15,181,381,842.10 15,361,368,132.67
Net increase of customer deposits and capital kept for brother company
Net increase of loans from central bank
Net increase of inter-bank loans from other financial bodies
Cash received against original insurance contract
Net cash received from reinsurance business
Net increase of client deposit and investment
Net increase of trade financial asset disposal
Cash received as interest, processing fee, and commission
Net increase of inter-bank fund received
Net increase of repurchasing business
Tax returned 19,661,917.00 204,484,229.75
Other cash received from business operation (39) 57,782,062.64 58,724,812.38
Sub-total of cash inflow from business activities 15,258,825,821.74 15,624,577,174.80
Cash paid for purchasing of merchandise and services 13,208,310,872.61 13,081,503,904.31
Net increase of client trade and advance
Net increase of savings in central bank and brother company
35
Bengang Steel Plates Co., Ltd. Interim Report 2012
Full Text
Cash paid for original contract claim
Cash paid for interest, processing fee and commission
Cash paid for policy dividend
712,166,756.49
Cash paid to staffs or paid for staffs 609,514,629.37
Taxes paid 444,662,134.67 162,626,078.15
Other cash paid for business activities (39) 704,169,233.36 629,175,543.32
Sub-total of cash outflow from business activities 15,069,308,997.13 14,482,820,155.15
Cash flow generated by business operation, net 189,516,824.61 1,141,757,019.65
II. Cash flow of investment
Cash received from investment retrieving
Cash received as investment profit
Net cash retrieved from disposal of fixed assets, intangible assets, and
other long-term assets
Net cash received from disposal of subsidiaries or other operational units
Other investment-related cash received
Sub-total of cash inflow due to investment activities
购建固定资产、无形资产和其他长期资产支付
1,010,878,237.69 1,365,888,762.43
的现金
Cash paid as investment
Net increase of loan against pledge
Net cash received from subsidiaries and other operational units
Other cash paid for investment activities
Sub-total of cash outflow due to investment activities 1,010,878,237.69 1,365,888,762.43
Net cash flow generated by investment -1,010,878,237.69 -1,365,888,762.43
III. Cash flow from financing activities
Cash received as investment
Incl. Cash received as investment from minor shareholders
Cash received as loans 4,493,540,020.00 5,415,903,248.87
Cash received from bond placing
Other financing-related cash received
Subtotal of cash inflow from financing activities 4,493,540,020.00 5,415,903,248.87
Cash to repay debts 3,655,521,023.07 3,360,701,271.34
Cash paid as dividend, profit, or interests 624,871,720.81 312,913,952.32
Incl. Dividend and profit paid by subsidiaries to minor shareholders
Other cash paid for financing activities
Subtotal of cash outflow due to financing activities 4,280,392,743.88 3,673,615,223.66
Net cash flow generated by financing 213,147,276.12 1,742,288,025.21
IV. Influence of exchange rate alternation on cash and cash equivalents -7,786,456.28 -1,344,042.32
V. Net increase of cash and cash equivalents -616,000,593.24 1,516,812,240.11
Plus: Balance of cash and cash equivalents at the beginning of term 3,242,956,479.92 1,475,045,148.55
VI. Balance of cash and cash equivalents at the end of term 2,626,955,886.68 2,991,857,388.66
The Notes to the Financial Statements attached hereafter are the essential parts of the Financial Statements.
Legal representative: Zhang Xiaofang, CFO: Cao Aimin, Accounting Manager: Wang Shaoyu
36
Bengang Steel Plates Co., Ltd.
Change in Owners’ Equities
Jan-Jun 2012
(In RMB Yuan except for otherwise specified)
Amount of the Current Term
Items
Share capital Capital reserves Less: Shares in stock Special reserves Surplus reserves Common risk provision Retained profit Total of owners’ equity
I. Balance at the end of last year 3,136,000,000.00 8,822,821,134.76 921,277,509.22 2,190,058,408.39 15,070,157,052.37
Plus: Change of accounting policy
Correcting of previous errors
Others
II. Balance at the beginning of current year 3,136,000,000.00 8,822,821,134.76 921,277,509.22 2,190,058,408.39 15,070,157,052.37
III. Changed this period (“-“ for decrease) 2,656,605.71 -304,323,939.49 -301,667,333.78
(I) Net profit 9,276,060.51 9,276,060.51
(II) Other misc. income
Total of (I) and (II) 9,276,060.51 9,276,060.51
(III) Investment or decreasing of capital by owners
1. Capital inputted by owners
2. Amount of shares paid and accounted as owners’ equity -
3. Others
(IV) Profit allotment -313,600,000.00 -313,600,000.00
1. Providing of surplus reserves
2. Common risk provision
3. Allotment to the owners (or shareholders) -313,600,000.00 -313,600,000.00
4. Others
(V) Internal transferring of owners’ equity
1. Capitalizing of capital reserves (or to capital shares)
2. Capitalizing of surplus reserves (or to capital shares)
3. Making up losses by surplus reserves
4. Others
(VI) Special reserves 2,656,605.71 2,656,605.71
1. Provided this year 19,417,931.78 19,417,931.78
2. Used this term 16,761,326.07 16,761,326.07
IV. Closing balance at end of year 3,136,000,000.00 8,822,821,134.76 2,656,605.71 921,277,509.22 1,885,734,468.90 14,768,489,718.59
37
The Notes to the Financial Statements attached hereafter are the essential parts of the Financial Statements.
Legal representative: Zhang Xiaofang, CFO: Cao Aimin, Accounting Manager: Wang Shaoyu
Bengang Steel Plates Co., Ltd.
Change in Owners’ Equities (Cont.)
Year 2011
(In RMB Yuan except for otherwise specified)
Amount of the same period of last year
Items Less: Special Common risk
Share capital Capital reserves Shares in reserves Surplus reserves provision Retained profit Total of owners’ equity
stock
I. Balance at the end of last year 3,136,000,000.00 8,790,691,134.76 921,277,509.22 1,919,278,963.80 14,767,247,607.78
Plus: Change of accounting policy
Correcting of previous errors
Others
II. Balance at the beginning of current year 3,136,000,000.00 8,790,691,134.76 921,277,509.22 1,919,278,963.80 14,767,247,607.78
III. Changed this period (“-“ for decrease) 32,130,000.00 270,779,444.59 302,909,444.59
(I) Net profit 584,379,444.59 584,379,444.59
(II) Other misc. income
Total of (I) and (II) 584,379,444.59 584,379,444.59
(III) Investment or decreasing of capital by
owners 32,130,000.00 32,130,000.00
1. Capital inputted by owners
2. Amount of shares paid and accounted as
owners’ equity
3. Others 32,130,000.00 32,130,000.00
(IV) Profit allotment -313,600,000.00 -313,600,000.00
1. Providing of surplus reserves
2. Common risk provision
3. Allotment to the owners (or shareholders) -313,600,000.00 -313,600,000.00
4. Others
(V) Internal transferring of owners’ equity
1. Capitalizing of capital reserves (or to
capital shares)
2. Capitalizing of surplus reserves (or to
38
capital shares)
3. Making up losses by surplus reserves
4. Others
(VI) Special reserves
1. Provided this year
2. Used this term
IV. Closing balance at end of year 3,136,000,000.00 8,822,821,134.76 0.00 0.00 921,277,509.22 0.00 2,190,058,408.39 15,070,157,052.37
The Notes to the Financial Statements attached hereafter are the essential parts of the Financial Statements.
Legal representative: Zhang Xiaofang, CFO: Cao Aimin, Accounting Manager: Wang Shaoyu
Bengang Steel Plates Co., Ltd.
Consolidated Statement of Change in Owners’ Equity
Jan-Jun 2012
(In RMB Yuan except for otherwise specified)
Amount of the Current Term
Items
Owners’ Equity Attributable to the Parent Company Minor Total of owners’
Share capital Capital reserves Less: Special Surplus Common risk Retained profit Others shareholders’ equity
Shares in reserves reserves provision
stock equity
I. Balance at the end of last year 3,136,000,000.00 8,822,821,134.76 921,277,509.2 2,644,615,857.28 34,680,554.06 15,559,395,055.32
Plus: Change of accounting policy 2
Correcting of previous errors
Others
II. Balance at the beginning of current year 3,136,000,000.00 8,822,821,134.76 921,277,509.2 2,644,615,857.28 34,680,554.06 15,559,395,055.32
III. Changed this period (“-“ for decrease) 2,656,605.71 2 -168,418,692.31 -286,026.23 -166,048,112.83
(I) Net profit 145,181,307.69 -286,026.23 144,895,281.46
(II) Other misc. income
Total of (I) and (II) 145,181,307.69 -286,026.23 144,895,281.46
(III) Investment or decreasing of capital by
owners
1. Capital inputted by owners
2. Amount of shares paid and accounted as
owners’ equity
3. Others
(IV) Profit allotment -313,600,000.00 -313,600,000.00
1. Providing of surplus reserves
2. Common risk provision
39
3. Allotment to the owners (or shareholders) -313,600,000.00 -313,600,000.00
4. Others
(V) Internal transferring of owners’ equity
1. Capitalizing of capital reserves (or to capital
shares)
2. Capitalizing of surplus reserves (or to
capital shares)
3. Making up losses by surplus reserves
4. Others
(VI) Special reserves 2,656,605.71 2,656,605.71
1. Provided this year 19,417,931.7 19,417,931.78
2. Used this term 8
16,761,326.0 16,761,326.07
IV. Closing balance at end of year 3,136,000,000.00 8,822,821,134.76 7
2,656,605.71 921,277,509.2 2,476,197,164.97 34,394,527.83 15,393,346,942.49
2
The Notes to the Financial Statements attached hereafter are the essential parts of the Financial Statements.
Legal representative: Zhang Xiaofang, CFO: Cao Aimin,
Accounting Manager: Wang Shaoyu
Bengang Steel Plates Co., Ltd.
Consolidated Change in Owners’ Equities (Cont.)
Year 2011
(In RMB Yuan except for otherwise specified)
Amount of the same period of last year
Items Owners’ Equity Attributable to the Parent Company Minor Total of owners’
Share capital Capital reserves Less: Shares Special Surplus reserves Common risk Retained profit Others
in stock reserves provision shareholders’ equity
I. Balance at the end of last year 3,136,000,000.00 8,790,691,134.76 921,277,509.22 2,162,390,668.07 34,955,284.09 15,045,314,596.14
equity
Plus: Change of accounting policy
Correcting of previous errors
Others
II. Balance at the beginning of current year 3,136,000,000.00 8,790,691,134.76 921,277,509.22 2,162,390,668.07 34,955,284.09 15,045,314,596.14
III. Changed this period (“-“ for decrease) 32,130,000.00 482,225,189.21 -274,730.03 514,080,459.18
(I) Net profit 795,825,189.21 -274,730.03 795,550,459.18
(II) Other misc. income
Total of (I) and (II) 795,825,189.21 -274,730.03 795,550,459.18
(III) Investment or decreasing of capital by 32,130,000.00 32,130,000.00
owners
1. Capital inputted by owners
2. Amount of shares paid and accounted as
owners’ equity
40
3. Others 32,130,000.00 32,130,000.00
(IV) Profit allotment -313,600,000.00 -313,600,000.00
1. Providing of surplus reserves
2. Common risk provision
3. Allotment to the owners (or shareholders) -313,600,000.00 -313,600,000.00
4. Others
(V) Internal transferring of owners’ equity
1. Capitalizing of capital reserves (or to capital
shares)
2. Capitalizing of surplus reserves (or to capital
shares)
3. Making up losses by surplus reserves
4. Others
(VI) Special reserves
1. Provided this year
2. Used this term
IV. Closing balance at end of year 3,136,000,000.00 8,822,821,134.76 921,277,509.22 2,644,615,857.28 34,680,554.06 15,559,395,055.32
The Notes to the Financial Statements attached hereafter are the essential parts of the Financial Statements.
Legal representative: Zhang Xiaofang, CFO: Cao Aimin, Accounting Manager: Wang Shaoyu
41
Bengang Steel Plates Co., Ltd.
Notes to Financial Statements
(January 1 – June 30 2012)
(Amount are in RMB Yuan except for stated particularly)
I. Company Profile
Bengang Steel Plates Co., Ltd. (the “Company”) was incorporated as a joint stock limited company
in the Peoples Republic of China on June 27 1997 by Benxi Iron and Steel (Group) Limited
“Bengang Group”, through reorganization of operations, assets and liabilities of its plants, namely,
Steel Smelting plant, Primary Rolling Plant and Continuous Hot Rolling Plant. Establishing of the
Company was approved by Liaoning Peoples Government on March 27 1997 with Liao-Zheng
(1997)57.
As approved by China Securities Regulatory Commission, the Company issued 400,000,000
B-shares at RMB2.38 each in Shenzhen Stock Exchange on 10 June 1997. On 3 November 1997,
the Company issued another 120,000,000 A-shares (Renminbi Common Shares) at RMB5.40 each,
and listed in Shenzhen Stock Exchange since 15 January 1998. The capital shares were totalled to
1,136,000,000 shares including 616,000,000 shares held by the promoter.
On March 14 2006, according to the resolutions of the Shareholders Meeting regarding share
equity relocation, the Share Equity Relocation Scheme, Response to Bengang Steel Plate Co., Ltd.
about Share Equity Relocation issued by Liaoning Provincial Government State-owned Asset
Administrative Committee, Bengang Group – the only holder of non-negotiable state-owned legal
person shares paid the consideration to the current shareholders to obtain the current option for the
40,800,000 shares of the total 616,000,000 shares it was holding. Shareholding positions have
been registered with China Securities Depository & Clearing Corporation Ltd. However the total of
capital shares of Bengang Steel Plate was not changed through the share equity relocation action.
China Securities Regulatory Commission issued Zheng-Jian-Gong-Si-Zi [2006] 126 on June 30th
2006 and served to the Company on July 6th 2006. The Company was approved to place 2 billion
Renminbi common shares particularly to Bengang Group and the proceeds would be used to
purchase the related assets of the Group. On the same day, Bengang Group received circular
Zheng-Jian-Gong-Si-Zi [2006] 127 issued by China Securities Regulatory Committee, and was
exempted for the liability of undertaking the purchase offer. The liability was caused by subscribing
of the 2 billion new shares and the total shareholding was thus increased to 2.5752 billion shares
(account for 82.12% of the total capital shares of the Company). On August 28 2006, as approved
by China Securities Depository & Clearing Corporation Ltd. Shenzhen Office, the registration and
conditional placing procedures of the 2 billion new shares were completed. On September 28 2006,
the privately placed shares were approved by Shenzhen Stock Exchange to be placed in the stock
market. The new shares were placed in the market on October 9th 2006, with face value of
RMB1.00 per share and the placing price was RMB4.6733 per share. The newly placed shares were
restricted to be sold in 36 months since August 28, 2006 when they were registered to the account
of Bengang Group.
Capital inputted for the newly placed shares was the main steel & iron assets of Bengang Group
amounted to RMB10,097,917,959.13 provided by the auditing report dated May 31 st 2006 (i.e. the
purchase price of the steel & iron assets). The price for each share was RMB4.6733. The balance
between the net value of inputted assets and the share capital has formed capital reserves of
RMB7,346,600,000 and liability to Bengang Group of RMB751,317,959.13.
The main steel and iron assets of Bengang Group have been appraised by Zhongzi Asset Appraisal
Co., Ltd. based on 30 June 2005. The appraisal report was filed “Zhongzi -Ping-Bao-Zi (2005)
142.”
The business registration was renewed on December 21 2006. The business license was numbered
2100001049024. As of December 31 2007, the capital shares of Bengang was amounted to
3,136,000,000 shares. The registered address is: 18th Gangtie Road, Pingshan, Benxi, Liaoning. The
registered capital is RMB3,136,000,000. The legal representative is Zhang Xiaofang.
Bengang Steel Plate Co., Ltd. is mainly involved in processing and trading of recycled metal
(including color metal), steel & iron making, rolling, and trading, oxygen making, special
pre-shaped steel material, metal process, goods and technology import & export (exclude categories
prohibited by the national government, constrained products can only be traded with special
certificates), measuring instruments, electronic & mechanical equipment, sales of steel, new
industrial products, developing of technologies, recycling of gas dust and waste oil (excluding
dangerous materials), production of dangerous chemical materials.
II. Main Accounting Policies, Accounting Estimations and Retrospective
Correcting of Previous Errors
(I) Basis for the preparation of financial statements
The Financial Statements have been prepared on the assumption of continuing operation and upon the
trades and events actually occurred in accordance with the requirements of the China Accounting
Standards for Business Enterprises(CAS(2006)) issued by the Ministry of Finance(MOF).
(II) Statement of compliance to the Enterprise Accounting Standard
The financial statements present truly and completely the financial position, operation results and cash
flow of the company.
(III) Fiscal period
A fiscal year starts from January 1 and ends at December 31 of a calendar year.
(IV) Standard currency for bookkeeping
The Company uses Renminbi (RMB) as the standard currency for book keeping.
(V) Accounding treatment of the entities under common control and different control as well
1. Merger of entities under common control
The assets and liabilities that the combining party obtains in a business combination shall be measured
on the basis of their carrying amount in the combined party on the combining date. As for the balance
between the carrying amount of the net assets obtained by the combining party and the carrying
amount of the consideration paid by it (or the total par value of the shares issued),the additional paid-in
capital shall be adjusted. If the additional paid-in capital is not sufficient to be offset, the retained
earnings shall be adjusted.
The direct cost for the business combination of the combining party shall, including the expenses for
audit, assessment and legal services, be recorded into the profits and losses at the current period.
The handling fees, commissions and other expenses for the issuance of equity securities for the
business combination shall be credited against the surplus of equity securities; if the surplus is not
sufficient, the retained earnings shall be offset.
Where the accounting policy adopted by the combined party is different from that adopted by the
combining party, the combining party shall, according to accounting policy it adopts, adjust the
relevant items in the financial statements of the combined party, and shall, pursuant to the present
Standard, recognize them on the basis of such adjustment.
2. Consolidation of entities under different control
The acquirer shall, on the acquisition date, measure the assets given and liabilities incurred or assumed
by an enterprise for a business combination in light of their fair values, and shall record the balances
between them and their carrying amounts into the profits and losses at the current period.
The acquirer shall distribute the combination costs on the acquisition date.
The acquirer shall recognize the positive balance between the combination costs and the fair value of
the identifiable net assets it obtains from the acquiree as business reputation. The acquirer shall treat
the balance between the combination costs and the fair value of the identifiable net assets it obtains
from the acquiree into the profits and losses of the current period.
As for the assets other than intangible assets acquired from the acquiree in a business combination (not
limited to the assets which have been recognized by the acquiree), if the economic benefits brought by
them are likely to flow into the enterprise and their fair values can be measured reliably, they shall be
separately recognized and measured in light of their fair values. As for any intangible asset acquired in
a combination, if its fair value can be measured reliably, it shall be separately recognized as an
intangible asset and shall measured in light of its fair value. As for the liabilities other than
contingent liabilities acquired from the acquiree, if the performance of the relevant obligations is likely
to result in any out-flow of economic benefits from the enterprise, and their fair values can be
measured reliably, they shall be separately recognized and measured in light of their fair values. As for
the contingent liabilities of the acquiree obtained in a combination, if their fair values can be measured
reliably, they shall separately be recognized as liabilities and shall be measured in light of their fair
values.
(VI) Preparation of Consolidated Financial Statements
The scope of consolidation of consolidated financial statements is determined based on control. All the
subsidies have been consolidated into the scope of consolidation for this period ended.
The accounting policy and accounting period of the subsidiaries within the consolidation scope shall
be in accordance with those of “the Company”. If not, it is necessary to make the adjustment
according to the Companys accounting policies and accounting period when preparing the
consolidated financial statements.
The consolidated financial statements shall, on the basis of the financial statements of the parent
company and its subsidiaries together with other relevant material, be prepared by the parent company
after the long term equity investments in the subsidiaries are adjusted through the equity method.
The impact of transactions between the Company and its subsidiaries and inter-subsidiaries for the
consolidated balance sheet, consolidated income statement, consolidated statement of cash flow and
consolidated statement of changes of equity are eliminated when preparing the consolidated financial
statements.
Where losses applicable to the minority exceed the minority’s interests in the beginning equity of a
subsidiary, the excess, are charged against the minoritys interests.
If the parent company has a new subsidiary due to business combination under a same control during a
reporting period, it shall adjust the beginning balance in the consolidated balance sheets when
preparing consolidated balance sheets. the sales, expenses and profits of the subsidiaries from the
acquisition date to the end of the reporting period are included in the parent companys consolidated
Profit statements The cash flow of the subsidiaries from the acquisition date to the end of the reporting
period are included in the parent companys consolidated cash flow statements.
If it is not under a same control the parent company shall not adjust the beginning balance in the
consolidated balance sheets when preparing consolidated balance sheets. the sales, expenses and
profits of the subsidiaries from the acquisition date to the end of the reporting are included in the
parent companys consolidated profit statements. the cash flow of the subsidiaries from the acquisition
date to the end of the reporting period are included in the parent companys consolidated cash flow
statements.
If the parent company disposes of a subsidiary within reporting period, the sales, expenses and
profitsof the subsidiaries from the beginning of the reporting period to the disposal date are included in
the parent companys consolidated profit statements. the cash flow of the subsidiaries from the
beginning of the reporting period to the disposal date are included in the parent s consolidated cash
flow statements.
(VII) Recognition of cash and cash equivalents
At preparing of cash flow statement, those investments, which are featured with short term (expire
within 3 months since purchased), high liquidity, easy to convert to know cash, low in risk of value
change, could be recognized as cash equivalents. Equity investment are not recognized as cash
equivalents.
(VIII) Foreign currency transaction and translation of foreign currency financial statements
1. Trade in foreign currencies
Foreign currency transactions are translated into RMB at the current rate at the day of transactions.
The foreign currency monetary items shall be translated at the spot exchange rate on the balance sheet
date. The balance of exchange arising from the difference between the spot exchange rate on the
balance sheet date and the spot exchange rate at the time of initial recognition or prior to the balance
sheet date shall be recorded into the profits and losses at the current period. The foreign currency
non-monetary items measured at the historical cost shall still be translated at the spot exchange rate on
the transaction date, of which the amount of functional currency shall not be changed. The foreign
currency non-monetary items measured at the fair value shall still be translated at the spot exchange
rate on the date of confirming the fair value and the balance of exchange arising from it shall be
recorded into profits and losses at the current period or capital reserves.
2. Translation of foreign currency financial statements
The asset and liability items in the balance sheets shall be translated at a spot exchange rate on the
balance sheet date. Among the owner's equity items, except the ones as "undistributed profits", others
shall be translated at the spot exchange rate at the time when they are incurred. The income and
expense items in the profit statements shall be translated at the spot exchange rate of the transaction
date. The balance arisen from the translation of foreign currency financial statements in compliance
with the aforesaid Items shall be presented separately under the owner's equity item of the balance
sheets.
When disposing an overseas business, an enterprise shall shift the balance, which is presented under
the items of the owner's equities in the balance sheet and arises from the translation of foreign currency
financial statements related to this oversea business, into the disposal profits and losses of the current
period. If the overseas business is disposed of partially, the enterprise shall calculate the balance
arising from the translation of foreign currency statements of the part of disposal based on the disposal
rate and shall shift them into the profits and losses of the current period.
(IX) Financial instrument
Financial instruments include financial assets, financial liabilities and equity instruments.
1、 Classification of financial instruments
According to the purpose of holding financial assets and financial liabilities, the Company classifies its
financial assets and financial liabilities as: financial assets or financial liabilities designated at fair
value through profit or loss, including: Held-to-maturity investment; loans and receivables and other
financial liabilities.
2、 Recognition and Measurement of financial instruments
(1) The financial assets(financial liabilities) at fair value through profit or loss includes:
The financial assets (financial liabilities) at fair value through profit or loss are recognized initially at
fair value (minus cash dividends declared but not received or bond interest matured but not drawn yet).
The relevant transaction cost is recognized in the income statement when occurred.
Interests or cash dividends during the period of holding are recognized as investment gains. The fair
value will be adjusted and accounted as current gain/loss.
When disposed, the differences between fair value and initial amount are recognized as investment
gains, and thus adjust the gain/loss of fair value.
(2) Held-to-maturity investment
The Held-to-maturity investments are recognized initially at fair value (minus bond interest matured
but not drawn yet). The relevant transaction cost is recognized in the income statement when occurred.
The held-to-maturity investments are measured at amortized cost using the effective interest rate. The
interest income is recognized as investment income. The effective interest will be determined at the
initial recognition and will not be changed in the holding period or within the applicable period.
When disposing the held-to-maturity investment, the difference between the investing proceeds and the
carrying value is recognized as investment income.
(3) Receivables
Receivables from selling products and rendering services or receivable of other company not including
the receivables with quoted price in the active market (Including: accounts receivable, other
receivables, bill receivables, prepayments, long-term receivables) are measured at contract price; if the
receivables is of financing nature, it shall be recognized at the present value initially.
When disposing the receivables, the difference between the proceeds and the carrying value is
recognized in the income statement.
(4) Available for sale financial assets
Available for sale financial assets are initially recorded at fair value plus any directly attributable
transaction costs on the trade date and subsequently re-measured at fair value. The price including the
declared but not received bond interest or cash dividend is recognized as a separate item.
The Company recognizes the interest or cash dividends as investment income. At each balance sheet
date, available-for-sale financial assets are measured at fair value and the fair value changes are
recognized in the capital reserve - other capital reserve.
The difference between the proceeds of the disposal and the carrying value should be recognized as
investment income. And the related fair value change in the equity should be transferred out, and
recorded as investment income.
(5) Other financial liabilities
For other financial liabilities, they are initially recognized at fair value plus any directly attributable
transaction costs. After the initial recognition, the other financial liabilities are measured at amortized
cost.
3、 Basis of recognition and accounting of financial asset transferring
Where an enterprise has transferred nearly all of the risks and rewards related to the ownership of the
financial asset to the transferee, it shall stop recognizing the financial asset. If it retained nearly all of
the risks and rewards related to the ownership of the financial asset, it shall not stop recognizing the
financial asset.
To judge whether the transfer of a financial asset can satisfy the conditions as prescribed in these
Standards for stopping the recognition of a financial asset, the enterprise shall pay more attention to the
essential of the transfer of the financial asset.
(1) Book value of the financial asset to be transposed;
(2) The sum of price received due to the transposition, and the accumulation of change in fair value
originally accounted as owners equity (when the asset to be transposed is saleable financial asset).
If the transfer of partial financial asset satisfies the conditions to stop the recognition, the entire book
value of the transferred financial asset shall, between the portion whose recognition has been stopped
and the portion whose recognition has not been stopped, be apportioned according to their respective
relative fair value, and the difference between the amounts of the following 2 items shall be included
into the profits and losses of the current period :
(1) The book value of the portion whose recognition has been stopped;
(2) The sum of consideration of the portion whose recognition has been stopped, and the portion of the
accumulative amount of the changes in the fair value originally recorded in the owner's equities which
is corresponding to the portion whose recognition has been stopped (in the event that the financial
asset involved in the transfer is a financial asset available for sale).
If the transfer of financial assets does not satisfy the conditions to stop the recognition, it shall continue
to be recognized as financial assets and the consideration received shall be recognized as financial
liabilities.
4、 Termination of recognition of financial liabilities
Only when the prevailing obligations of a financial liability are relieved in all or in part may the
recognition of the financial liability be terminated in all or partly. Where an enterprise (debtor) enters
into an agreement with a creditor so as to substitute the existing financial liabilities by way of any new
financial liability, and if the contractual stipulations regarding the new financial liability is
substantially different from that regarding the existing financial liability, it shall terminate the
recognition of the existing financial liability, and shall at the same time recognize the new financial
liability.
Where an enterprise makes substantial revisions to some or all of the contractual sti pulations of the
existing financial liability, it shall terminated the recognition of the existing financial liability or part of
it, and at the same time recognize the financial liability after revising the contractual stipulations as a
new financial liability.
Where the recognition of a financial liability is totally or partially terminated, the enterprise concerned
shall include into the profits and losses of the current period the gap between the carrying amount
which has been terminated from recognition and the considerations it has paid (including the non-cash
assets it has transferred out and the new financial liabilities it has assumed).
Where an enterprise buys back part of its financial liabilities, it shall distribute, on the repo day, the
carrying amount of the whole financial liabilities in light of the comparatively fair value of the part that
continues to be recognized and the part whose recognition has already been terminated. The gap
between the carrying amount which is distributed to the part whose recognition has terminated and the
considerations it has paid (including the noncash assets it has transferred out and the new financial
liabilities it has assumed) shall be recorded into the profits and losses of the current period.
5、 Determination of the Fair Value
The fair values of the financial assets or financial liabilities measured at fair value shall be determined
by reference to the quoted prices in the active market.
6. Impairment provision of the financial assets (not including accounts receivables)
(1) Impairment of available-for-sale financial assets
An impairment provision shall be made where the fair value of the held-to-maturity financial assets
drop significantly at the balance sheet date or the trend of decrease is expected not to be temporary
after taking various factors into consideration. The accumulative losses arising from the decrease of the
fair value of the owners equity which was directly included shall be transferred out and recorded as
impairment loss.
(2) Impairment of held-to-maturity investment
Calculating of impairment loss of investment held till expiration will be with reference to the
calculating of account receivable impairment loss.
(X) Account receivable
1、 The recognition and provision of bad debt for the individually significant receivable
The recognition standard of bad debt provision for the individually significant receivable:
Individually significant receivables refer to accounts receivable over RMB 10 million or other
receivables over RMB 5 million.
The provision of bad debt for the individually significant receivable:
The impairment test should be assessed individually for each individually significant receivable. If the
there is evidence indicating the receivables have been impaired, the difference between the present
value of the future cash flows and the book value of receivables shall be recognized as bad debt
provision and shall be recorded into the profits and losses at the current period.
2、 The recognition and provision of bad debt for the individually significant receivable with high credit risk
in group assessment:
Basis of recognition for groups
Receivable account with minor amount and tested individually and not
The portfolio:
impaired
Bad debt provision provided in groups (age group, balance percentage, or else)
The portfolio: Age analysis method
Bad debt provisions provided on age groups
Age Percentage of bad debt for Accounts Percentage of bad debt for Other
receivables (%) receivables (%)
Within 1 yr, (included)
1-2 yrs (included) 5 5
2-3 yrs (included) 20 20
Over 3 yrs 100 100
3、 Receivable accounts with minor amount but bad debt provision provided individually
upon
(1) Reason of providing bad debt individually: concrete evidence showing that the account is irretrievable
(2) Basis of providing bad debt provisions:
When concrete evidence showing that the possibility of retrieving is very little, it will be examined
individually, and bad debt provision shall be provided according to the future irretrievable amount
predicted.
(XI) Inventories
1. Categorizing of inventories
Inventories include material in transit, raw material, low-valued consumables, work in process,
finished goods, materials for consigned processing etc.
2. Pricing of inventory on delivery
The weighted average method is used to confirm the actual cost of the inventories sending out.
3. Recognition of inventory realizable value and providing of impairment provision
At the year end, complete check of the inventories shall be carried out and on the date of balance
sheet, the inventories shall be measured whichever is lower in accordance with the cost and the net
realizable value.
The net realizable value of inventories (finished products, stock commodity, material etc.) held for
direct selling in the daily business activity shall be calculated by deducting the estimated sale
expense and relevant taxes from the estimated sale price of inventories. The net realizable value of
inventories for further processing in the daily business activity shall be calculated by deducting the
estimated cost of completion, estimated sale expense and relevant taxes from the estimated sale price
of inventories. The net realizable value of inventories held for the execution of sales contracts or
labor contracts shall be calculated on the ground of the contract price. If an enterprise holds more
inventories than the quantities subscribed in the sales contract, the net realizable value of the
excessive part of theInventories shall be calculated on the ground of the general sales price.
The Company shall make provision for loss on decline in value of inventories on the ground of each
item of inventories at the year end. For inventories with large quantity and relatively low unit prices,
the provision for loss on decline in value of inventories shall be made on the ground of the categories
of inventories.
When the circumstances of deducting the inventory value have eliminated, the deducted amount
should be restored and written back within the original amount of impairment provision provided
previously.
4. Inventory basis
The Company use perpetual inventory system.
5. Amortizing of low-value consumables and packaging materials
(1)Low-valued consumables should be amortized in full amount on issuance.
(2)Packing materials should be amortized in full amount on issuance.
(XII) Long-term equity investment
1. Measurement of initial investment costs
(1) Long-term equity investment formed by merger
For the acquisition under the common control, if the consideration of the acquiring enterprise is that
it makes payment in cash, transfers non-cash assets, bear its debts, or issues equity securities, it shall,
on the date of acquisition, regard the share of the book value of the owner's equity of the acquired
enterprise as the initial cost of the long-term equity investment. The difference between the initial
cost of the long-term equity investment and the payment borne by the acquiring party shall offset
against the capital reserve. If the capital reserve is insufficient to dilute, the retained earnings shall be
adjusted. The direct cost for the business combination of the combining party shall, including the
expenses for audit, assessment and legal services, be recorded into the profits and losses at the
current period.
For the combination not under the common control, the combination costs shall be the fair values, on
the acquisition date, of the assets paid, the liabilities incurred or assumed and the equity securities
issued by the acquirer in exchange for the control on the acquiree. For a business combination
realized by two or more transactions of exchange, the combination costs shall be the summation of
the costs of all separate transactions. Where any future event that is likely to affect the combination
costs is stipulated in the combination contract or agreement, if it is likely to occur and its e ffects on
the combination costs can be measured reliably, the acquirer shall record the said amount into the
combination costs.
(2) Long-term equity investment obtained by other ways
The initial cost of a long-term equity investment obtained by making payment in cash shall be the
purchase cost which is actually paid.
Long-term equity investment obtained by placing of equity stocks is recognized for initial investment
cost at the fair value of the stock.
The initial cost of a long-term equity investment of an investor shall be the value stipulated in the
investment contract or agreement (minus cash dividend or profit declared but not paid) except the
unfair value stipulated in the contract or agreement.
If the exchange of non-monetary assets is commercial in nature and the fair values of both the assets
received and surrendered can be reliably measured, the fair value of the assets surrendered shall be
the basis for the determination of the cost of the assets received, unless there is any exact evidence
showing that the fair value of the assets received is more reliable. Where any non-monetary assets
transaction does not meet the conditions as prescribed above, the carrying value and relevant payable
taxes of the assets surrendered shall be the initial cost of the assets received.
Long-term equity investment obtained through debt reorganizing is recognized for initial investment
cost at fair value.
2、 Successive measurement and recognition of gain/loss
(1) Subsequent measurement
The Company adopts cost method for the long term investment in subsidiary company and shall
make an adjustment by employing the equity method when it prepares consolidated financial
statements.
For a long-term equity investment for which there is no quoted price in the active market and of
which the fair value cannot be reliably measured, if the investing enterprise has not joint control or
significant influence over the invested entity, the cost method shall be employed in the measurement.
A long-term equity investment of the investing enterprise that does joint control or significant
influences over the invested entity shall be measured by employing the equity method. If the i nitial
cost of a long-term equity investment is more than the investing enterprise' attributable share of the
fair value of the invested entity's identifiable net assets for the investment, the initial cost of the
long-term equity investment may not be adjusted. If the initial cost of a long-term equity investment
is less than the investing enterprise' attributable share of the fair value of the invested entity's
identifiable net assets for the investment, the difference shall be included in the current profits and
losses.
Where any change is made to the owner's equity other than the net profits and losses of the invested
entity and if the percentage of the share remains the same, the book value of the long-term equity
investment shall be adjusted in accordance with the attributable part calculated as per the proportion
of the shares and simultaneously capital reserves (other capital reserves) shall be increased or
decreased accordingly.
(2) Recognition of profit and loss
Under the cost method, an investing enterprise shall, in accordance with the attributable share of the
net profits or losses of the invested entity, recognize the investment profits or losses except the
dividend declared but unpaid, which is included in the payment when acquiring the investment.
Under the equity method, the following factors shall be taken into consideration: if the accounting
policies and accounting periods adopted by the invested entity are different from those adopted by
the investing enterprise, an adjustment shall be made to the financial statements of the invested entity
in accordance with the accounting policies and accounting periods of the investing enterprise. the
impact of the depreciation and amortization based on the fair value of fixed assets and intangible
assets aquired at the time of investment and related assets impairment for the net profit; the offset of
the unrealized intercompany transaction profis between the parent company and the jointly controlled
enterprises and associates. After considering the adjustments above, it shall, in accordance with the
attributable share of the net profits or losses of the invested entity, recognize the investment profits or
losses.
When the invested enterprise realize any net profit in the future period, the company shall reduce the
unrecognised loss first and then make the reverse accounting treatment as above , reduce the book
value of recognized contingent liabilities , recover the book value of the long-term equity investment
and other long-term right and interests which substantially form the net investment made to the
invested entity and at the same time, recognized the income on investment
3. Criteria for the determination of joint control and significant influence over invested
enterprise
If an investing enterprise has the control over an economic activity in accordance with the contracts
and agreements, which does not exist unless the investing parties of the economic activity with an
assent on sharing the control power over the relevant important financial and operating decisions, the
investing enterprise and other parties are regarded to have joint control over an invested entity If an
investing enterprise has the power to participate in making decisions on the financial and operating
policies of an enterprise, but not to control or do joint control together with other parties over the
formulation of these policies, the investing enterprise is regarded to have significant influences on the
invested entity.
4、 Impairment examination and providing of impairment provision
For a long-term equity investment for which there is no quoted price in the active market and of
which the fair value cannot be reliably measured and the investing enterprise does not have
significant influence over the invested entity, the impairment shall be determined by the balance
between its carrying value and the present value of its future cash flows discounted by the present
market rate of return of the similar financial assets.
For other long-term equity investment other than goodwill arising from the business combination, if
the net realizable value shows the net realizable value of the long term equity investment is less than
the book value, the balance shall be recognized as an impairment loss.
The Company assesses the goodwill arising from the business combination every year regardless
whether there is indication of impairment.
Once any impairment loss of long-term equity investment is recognized, it shall not be switched back
in the future accounting periods.
(XIII) Investment real estates
The term "investment real estates" refers to the real estates held for generating rent and/or capital
appreciation. The investment real estates include:(1) The right to use any land which has already
been rented;(2) The right to use any land which is held and prepared for transfer after appreciation;
and(3) The right to use any building which has already been rented.
The Investment real estates shall be measured by the cost model. For the investment real estates
measured at cost model, Building for rent shall adopt the same depreciation policy as that of fixed
assets and land use right shall adopt the same amortization policy as that of intangible assets.
Where any evidence shows that there is possible investment real estates impairment, the recoverable
amount of the investment real estates shall be estimated. If the recoverable amount of the investment
real estates is lower than the book value, the impairment loss shall be recognized accordingly.
Once any impairment loss of investment real estates is recognized, it shall not be switched back in
the future accounting periods.
(XIV) Fixed assets
1. Recognition of fixed assets
The term "fixed assets" refers to the tangible assets that simultaneously possess the features as
follows: (1) They are held for the sake of producing commodities, rendering labor service, renting or
business management; and (2) Their useful life is in excess of one fiscal year.
(1) Financial benefits attached to the fixed asset is possibly inflowing to the Company;
(2) The cost of the fixed asset can be reliably measured.
2. Fixed assets depreciation
Fixed assets are depreciated under the straight line method. The depreciation rate is determined
according to the category of assets, the useful life and the expected salvage value.
Fixed assets rented in by finance, if it is reasonably predictable that the property rights can be
acquired when the rental period is expired, depreciation will be upon the retained useful life. If it
cant be reasonably predictable that the property rights can be acquired when the rent period is
expired, depreciation will be upon the shorter one of the rental period and the retained useful life.
Depreciation ages and ratios of fixed assets:
Categories Depreciation Period Salvage Value Rate (%) Annual depreciation rate (%)
Houses & buildings 8-40 yrs 0 2.5-12.5
Equipment & machinery 4-18 years 3 5.39-24.3
Vehicle and other equipment 5-18 years 3 5.39-19.4
3. Impairment of fixed assets:
The Company shall, on the day of balance sheet, make a judgment on whether there is any sign of
possible fixed assets impairment.
Where any evidence shows that there is possible fixed assets impairment, the recoverable amount of
the fixed assets shall be estimated. The recoverable amount shall be determined in light of the higher
one of the net amount of the fair value of the fixed assets minus the disposal expenses and the current
value of the expected future cash flow of the fixed assets.
Where the measurement result of the recoverable amount indicates that an fixed asset's recoverable
amount is lower than its carrying value, the carrying value of the fixed asset shall be recorded down
to the recoverable amount, and the reduced amount shall be recognized as the loss of fixed asset
impairment and be recorded as the profit or loss for the current period. Simultaneously, a provision
for the fixed asset impairment shall be made accordingly.
After the loss of fixed asset impairment has been recognized, the depreciation or amortization
expenses of the impaired fixed asset shall be adjusted accordingly in the future periods so as to
amortize the post-adjustment carrying value of the fixed asset systematically (deducting the expected
net salvage value) within the residual service life of the fixed asset.
Once any loss of fixed asset impairment is recognized, it shall not be switched back in the future
accounting periods.
Where there is any evidence indicating a possible impairment of fixed assets, the Company shall, on
the basis of single item assets, estimate the recoverable amount. Where it is difficult to do so, it shall
determine the recoverable amount of the group assets on the basis of the asset group to which the
fixed asset belongs.
4、 Recognition and pricing basis of fixed asset from financed leasing
Where a lease satisfies one or more of the following criteria, it shall be recognized as a finance lease:
(1) The ownership of the leased asset is transferred to the lessee when the term of lease expires;
(2) The lessee has the option to buy the leased asset at a price which is expected to be far lower than
the fair value of the leased asset at the date when the option becomes exercisable.
(3) The lease term covers the major part of the use life of the leased asset;
(4) The present value of the minimum lease payments on the lease beginning date amounts to
substantially all of the fair value of the leased asset on the lease beginning date;
On the lease beginning date, the Company shall record the lower one of the fair value of the leased
asset and the present value of the minimum lease payments on the lease beginning date as the
entering value in an account, recognize the amount of the minimum lease payments as the entering
value in an account of long-term account payable, and treat the balance between the recorded amount
of the leased asset and the long-term account payable as unrecognized financing charges.
(XV) Construction in process
1. Categories of construction in process
Constructions in process are accounted at each category.
2. Standard and timing of transferring contruction in process into fixed assets
The entire expenses occurred before the construction-in-process reaches useable status are
recognized as the book value of the fixed asset. When the construction-in-process has reached the
useable status but not performed completion settlement, it is transferred into fixed asset at estimated
value according to the budget and actual costs since the day when it reaches the useable status.
Depreciation shall be provided according to the Companys policies about fixed asset depreciation.
Upon completion of the settlement process, the original estimated value should be adjusted according
to the actual costs. However the depreciations already provided are not going to be adjusted.
3. Impairment test and provision of construction in process
The Company shall, on the day of balance sheet, make a judgment on whether there is any sign of
possible Construction in progress impairment.
If there is evidence indicates that there is possible construction in progress impairment, the
recoverable amount of the construction in progress shall determined as higher of the net amount of
the fair value of the construction in progress less disposal expenses, and the current value of the
expected future cash flow of the construction in progress.
Where an fixed assets recoverable amount is lower than its carrying value, the carrying value of the
fixed asset shall be reduced to the recoverable amount, and the reduced amount shall be recognized
as fixed asset impairment loss and be recorded as the profit or loss for the current period.
Simultaneously, a provision for the fixed asset impairment shall be made accordingly.
After the impairment has been recognized, the depreciation of the impaired fixed asset shall be
adjusted accordingly in the future periods so as to depreciate the adjusted carrying value of the fixed
asset systematically (deducting the expected salvage value) over the remaining useful life of the fixed
asset.
Impairment loss on construction in progress shall not be reversed in the future accounting periods.
Where there is any evidence indicating a possible impairment of construction in progress, the
Company shall, on the basis of single item assets, estimate the recoverable amount. If the recoverable
amount of the individual asset is undeterminable, the company shall determine the recoverable
amount of the asset group to which the fixed asset belongs.
(XVI) Borrowing expenses
1. Capitalizing of loan expenses
Borrowing expenses occurred to the Company that can be accounted as purchasing or production of
asset satisfying the conditions of capitalizing, are capitalized and accounted as cost of related asset.
Other borrowing expenses are recognized as expenses according to the occurred amount, and
accounted into gain/loss of current term.
The term "assets eligible for capitalization" shall refer to the fixed assets, investment real estate,
inventories and other assets, of which the acquisition and construction or production may take quite a
long time to get ready for its intended use or for sale.
When a borrowing expense satisfies all of the following conditions, it is capitalized:
(1) Asset expense has already occurred. Asset expenses include cash payment, non-cash asset
transferring, or undertaking of debt with interest done for purchasing or producing of assets.
(2) The borrowing expense has already occurred.
(3) Purchasing or production activity, which is necessary for the asset to reach the useful status, has
already started.
2. Capitalizing period of borrowing expenses
The capitalization period shall refer to the period from the commencement to the cessation of
capitalization of the borrowing costs, excluding the period of suspension of capitalization of the
borrowing costs.
When the qualified asset under acquisition and construction or production is ready for the intended
use or sale, the capitalization of the borrowing costs shall be ceased.
Where each part of a qualified asset under acquisition and construction or production is completed
separately and is ready for use, the capitalization of the borrowing costs in relation to this part of
asset shall be ceased.
Where each part of a asset under acquisition and construction or production is completed separately
and is ready for use or sale during the continuing construction of other parts, but it can not be used or
sold until the asset is entirely completed, the capitalization of the borrowing costs shall be ceased
when the asset is completed entirely.
3. The Suspension of capitalization of borrowing costs
Where the acquisition and construction or production of a qualified asset is interrupted abnormally
and the interruption period lasts for more than 3 months, the capitalization of the borrowing costs
shall be suspended. If the interruption is a necessary step for making the qualified asset under
acquisition and construction or production ready for the intended use or sale, the capitalization of the
borrowing costs shall continue. The borrowing costs incurred during such period shall be recognized
as expenses, and shall be recorded into the profits and losses of the current period, till the acquisition
and construction or production of the asset restarts.
4. Method of calculating the capitalized amount of borrowing costs
For interest expense (minus the income of interests earned on the unused borrowing loans as a
deposit in the bank or investment income earned on the loan as a temporary investment) and the
ancillary expense incurred to a specifically borrowed loan, those incurred before a qualified asset
under acquisition, construction or production is ready for the intended use or sale shall be capitalized
at the incurred amount when they are incurred, and shall be recorded into the costs of the asset
eligible for capitalization;
The enterprise shall calculate and determine the to-be-capitalized amount of interests on the general
borrowing by multiplying the weighted average asset disbursement of the part of the accumulative
asset disbursements minus the general borrowing by the capitalization rate of the general borrowing
used. The capitalization rate shall be calculated and determined in light of the weighted average
interest rate of the general borrowing.
Where there is any discount or premium, the amount of discounts or premiums that shall be
amortized during each accounting period shall be determined by the real interest rate method, and an
adjustment shall be made to the amount of interests in each period.
(XVII) Intangible assets
1. Measurement of Intangible Assets
(1). Initial measurement is based on cost upon acquisition.
The intangible assets shall be recorded at initial cost.
The cost of an intangible asset on acquisition include the purchase price, relevant taxes and other
necessary disbursements which may be directly attributable to brining the intangible asset to the
conditions for the expected purpose. If the payment for an intangible asset is delayed beyond the
normal credit conditions and it is of the financing nature, the cost of the intangible asset shall be
determined on the basis of the current value of the purchase price.
For intangible assets obtained from debt restructuring as settlement of liabilities from debtors, initial
recognition is based on its fair value, and the difference between the debt restructured and the fair
value of the intangible assets are recognized in the current profit and loss.
For intangible assets obtained from non-monetary transactions with commercial substance, and the
fair value of the assets obtained or surrendered can be reliably measured, the initial recognition of the
asset obtained is based on the fair value of the asset surrendered, unless there is strong evidence that
the fair value of the asset obtained is more reliable. For intangible assets obtained through
non-monetary transactions which do not meet the above criteria, the initial recognition is based on
the book value of the assets surrendered and the relevant taxes payable. No gain or loss will be
recognized.
For the intangible assets are obtained in a business combination under the same control, initial
recognition is based on the book value of the party being combined. If the intangible assets are
obtained in a business combination not under the same control, initial recognition is based on the fair
value.
For self-developed intangible assets, the costs shall include the cost of material consumed in
developing the intangible assets, labor costs, registration cost, and amortization of other patents and
royalty in the developing process, the capitalized interest expense and other necessary expenditures
directly attributable to intangible assets for the expected purpose.
(2). Subsequent Measurement
The Company shall analyze and judge the beneficial period of intangible assets upon acquisiti on.
Intangible assets with finite beneficial period shall be amortized under the straight-line method
during the period when the intangible asset can bring economic benefits to the enterprise. If it is
unable to estimate the beneficial period of the intangible asset, it shall be regarded as an intangible
asset with uncertain service life and shall not be amortized.
2. Impairment of intangible Assets
For intangible assets with finite beneficial period, impairment test shall be performed at end of the
period if there is strong evidence that impairment exists.
Impairment test shall be carried out for intangible assets with uncertain beneficial period at each end
of the period.
Impairment test shall be performed for intangible assets, for which the recoverable amount of the
intangible assets shall determined as higher of the net amount of the fair value of the intangible assets
less disposal expenses, and the current value of the expected future cash flow of the intangible assets.
Where an fixed assets recoverable amount is lower than its carrying value, the carrying value of the
fixed asset shall be reduced to the recoverable amount, and the reduced amount shall be recognized
as fixed asset impairment loss and be recorded as the profit or loss for the current period.
Simultaneously, a provision for the fixed asset impairment shall be made accordingly.
After the impairment has been recognized, the depreciation of the impaired fixed asset shall be
adjusted accordingly in the future periods so as to depreciate the adjusted carrying value of the fixed
asset systematically (deducting the expected salvage value) over the remaining useful life of the fixed
asset.
Impairment loss on intangible assets shall not be reversed in the future accounting periods.
Where there is any evidence indicating a possible impairment of intangible assets, the Company shall,
on the basis of single item assets, estimate the recoverable amount. If the recoverable amount of the
individual asset is undeterminable, the company shall determine the recoverable amount of the asset
group to which the fixed asset belongs.
3. Classification criteria for internal research phase and development phase
Research phase refers to the phase of creative and planned investigation to acquire and study to
acquire and understand new scientific or technological knowledge.
Development phase refers to the phase during which the result of research phase or other knowledge
is applied into certain projects or designs for the manufacturing of new or substantially improve d
material, device and product.
The expenditure of research phase of internal research and development projects shall be recorded
into the profit or loss of the current period.
4. Criteria of capitalization of development expenditure
Expenditures during the development phase of internal research and development projects shall be
recognized as intangible assets when they meet all the following criteria:
(1) It is feasible technically to complete the intangible assets for use or sale;
(2) The intention to complete and use or sell the intangible assets is present;
(3) The method of which the intangible assets generate economic benefits shall be proved, including
being able to prove that there is a potential market for the products manufactured by applying the
intangible assets or there is a potential market for the intangible assets itself or the intangible assets
will be used internally;
(4) Sufficient technical, financial and other resources to complete the development of the intangible
assets, and ability to use or sell the intangible assets and
(5) The development expenditures of the intangible assets can be reliably measured.
(XVIII) Contingent liabilities
When the Company is involved in litigation, guarantees provided for the debts of other enterprises,
loss contract, restructuring and these events will result in future assets transfer or rendering of
services and the amount of the obligation can be measured reliably, the contingent liabilities shall be
recognized.
1. Recognition of contingent liabilities
The obligation pertinent to a Contingency shall be recognized as an estimated debt when the
following conditions are satisfied simultaneously:
(1) That obligation is a current obligation of the enterprise;
(2) It is likely to cause any economic benefit to flow out of the enterprise as a result of performance
of the obligation; and
(3) The amount of the obligation can be measured in a reliable way.
2. Measurement of contingent liabilities
The estimated debts shall be initially measured in accordance with the best estimate of the necessary
expenses for the performance of the current obligation.
To determine the best estimate, an enterprise shall take into full consideration of the risks, uncertainty,
time value of money, and other factors pertinent to the Contingencies. If the time value of money is
of great significance, the best estimate shall be determined after discounting the relevant future
outflow of cash.
The best estimate shall be conducted in accordance with the following situations, respectively:
If there is a sequent range for the necessary expenses and if all the outcomes within this range are
equally likely to occur, the best estimate shall be determined in accordance with the middle estimate
within the range.
If there is not a sequent range for the necessary expenses and if the outcomes within this range are
not equally likely to occur, the best estimate shall be determined as follows:
(1)If the Contingencies concern a single item, it shall be determined in the light of the most likely
outcome.
(2) If the Contingencies concern two or more items, the best estimate should be calculated and
determined in accordance with all possible outcomes and the relevant probabilities.
When all or some of the expenses necessary for the liquidation of an estimated debts of an enterprise
is expected to be compensated by a third party, the compensation should be separately recognized as
an asset only when it is virtually certain that the reimbursement will be obtained. The amount
recognized for the reimbursement should not exceed the book value of the estimated debts.
(XIX) Revenue
1. Recognition Criteria for the Revenue from sale of goods
The Company has transferred to the buyer the significant risks and rewards of ownership of the
goods; and retained neither continuing managerial involvement which usually relates to the
ownership nor exerts effective control over the goods sold. The relevant amount of revenue can be
measured reliably, the economic benefits related to the transaction will flow into the enterprise; and
the relevant costs incurred or to be incurred can be measured reliably. Revenue from the sale of
goods may be recognized.
2. Recognition Criteria for the Revenue from alienating of Assets Use Rights
When it is probable that economic benefits in relation to the transaction will flow into the enterprise;
and the amount of revenues can be measured reliably. The Company shall ascertain the amount of
revenues from the transfer of Assets Use Right based on the following circumstances respectively:
(1) Interest income shall be calculated based on the duration of which the Company's cash is used by
others and the actual interest rate; or
(2) Royalty revenue shall be calculated based on the period and method of charging as stipulated in
the relevant contract or agreement.
3. Recognition Criteria for the Revenue from providing Labor Services and Construction Contracts
under percentage of completion method
Revenue from providing labor services are recognized under the percentage of completion method if
the outcome of the labor service provision transaction can be reliably measured. Percentage
completed is determined by measurement of work completed.
Total revenue from providing of labor services is determined based on the received or receivable
amount stipulated in the contract or agreement, unless the received or receivable amount as stipulated
in the contract or agreement is unfair.
The Company shall, on the date of the balance sheet, ascertain the current revenue from providing
labor services by multiplying the total amount of revenues from providing labor services with the
percentage completion, less cumulative revenues recognized in the previous accounting periods. At
the same time, the enterprise shall recognize current cost of labor services by multiplying the total
estimated cost of providing of labor services with percentage completion less cumulative costs
recognized in the previous accounting periods.
If the result of a transaction concerning the providing of labor services cannot be reliably measured at
the balance sheet date, it shall be measured as follows:
(1) If the cost of labor services incurred is expected to be compensated, the revenue from the
providing of labor services shall be recognized to the extent of the cost of labor services incurred,
and the cost of labor services shall be recognized; or
(2) If the cost of labor services incurred is not expected to compensate, the cost incurred should be
recognized in the current profit and loss, and no revenue from the providing of labor services shall be
recognized.
(XX) Government Subsidies
1. Types of Government subsidies
A government subsidy means the monetary or non-monetary assets obtained free of charge by the
Company from the government. Government subsidies consist of the government subsidies pertinent
to assets and government subsidies pertinent to income.
2. Accounting treatment
The government subsidies pertinent to fixed assets and intangible assets shall be recognized as
deferred income and equally recognized over the useful lives of the relevant assets as non operating
income;
The government subsidies pertinent to incomes to subsidize future expenses shall be recognized as
deferred income and transferred to non operating income in the period during which the expenses
subsidized is recognized. Government subsidies to subsidize past expenses or losses shall be
recognized
(XXI) Deferred income tax liabilities and assets
1. Recognition of deferred income tax assets
The Company shall recognize the deferred income tax assets arising from a deductible temporary
difference to the extent that it is probable that the deductible temporary differences will be utilized to
offset taxable income.
2. Recognition of deferred income tax liabilities
The Company shall recognize the accrued income tax of the taxable temporary differences arising
from current and prior periods as a deferred income tax liability. Recognition of deferred income tax
liabilities are exclusive of goodwill and temporary differences arising from transaction not resulted
from business combinations and such transaction will affect neither accounting profit nor taxable
income of the period during which it occurs.
(XXII) Operating lease and finance lease
1. Accounting treatment of Operating lease
(1).The rents paid for operating leases shall be recorded in the profits and losses of the current period
by using the straight-line method over each period of the lease term. The initial direct costs paid by
the Company shall be recorded into the profits and losses of the current period
If the leaser has shouldered any expense related to the lease which should have been borne by the
Company, the Company shall deduct these expenses from the total rental expense and the remaining
rental expense shall be allocated to each period during the lease term
(2). The rents collected from operating leases shall be recorded in the profits and losses of the current
period by using the straight-line method over each period of the whole lease term in which free lease
period is included. The initial direct costs paid by the Company shall be recorded into the profits and
losses of the current period. The initial direct costs shall be capitalized if it is material, and be
allocated to each period as per the basis for rental revenue recognition.
If the Company has shouldered any expense related to the lease which should have been borne by the
lessee, the company shall deduct these expenses from the total rental revenue and the remaining
rental revenue shall be allocated to each period during the lease term.
2. Accounting treatment of Finance lease
(1). Leased in asset
On the lease beginning date, a lessee shall record the lower one of the fair value of the leased asset
and the present value of the minimum lease payments on the lease beginning date as the entering
value in an account, recognize the amount of the minimum lease payments as the entering value in an
account of long-term account payable, and treat the balance between the recorded amount of the
leased asset and the long-term account payable as unrecognized financing charges.
The lessee shall adopt the effective interest rate method to calculate and recognize the financing
charge in the current period. The unrecognized financing charge shall be amortized to each period
during the lease term.
(2). Leased out asset
On the beginning date of the lease term, the balance between the sums of the financing lease values
receivable and the unguaranteed residual value, and the sum of their present values shall be
recognized as unrealized financing income. The unrealized financing income shall be allocated to
each period during the lease term. The initial direct costs directly attributable to the leased item shall
be included in the initial measurement of financing lease values receivable and reduce the profit
recognized during the lease period.
(XXIII) Change of main accounting policies and estimations
1. Changes to accounting policies
No accounting policy change with the Company.
2. Change of accounting estimations
No change in accounting estimation in the report period.
(XXIV) Correction of previous accounting faults
Not any accounting error with previous period found in the report period
(XXV) Other significant accounting policies, accounting estimates and the preparation
method of financial statements
None
III. Taxation
(I) Main taxes and rates upon the Company
1. Value added tax: the taxes should be paid by taxable sales at 17% to allow the deduction of input
tax.
2. City maintenance and construction taxes: the tax should be paid at 7% of turnover tax actually
paid.
3. Enterprise income tax: the tax should be paid at 25% of taxable profit
4. Housing property tax: the tax should be paid at 1.2% of the buildings original costs after
deduction of 30% of that.
5. Other taxes: to be calculated and paid according to the relevant tax laws.
(II) Tax previlage and approval documents
None
IV. Enterprise consolidation and consolidated financial statements
The figures in the following two tables are expressed in RMB 0,000.00 unless otherwise stated .
(I) Profiles of the subsidiaries
1、 Subsidiaries acquired through incorporation or investment
Full name of the subsidiary Own Reg. Busin Registere Business Scope Actual Balance Share Votin Consoli Minor Amount for Balance of owners
ershi Add. ess d capital investment of other propor g dated? shareholde deducting equity of the parent
p of prope at year end items tion % power rs’ equity minor company after
the rty actually % shareholder deducting of the
subsi formed s equity in share of loss of
diary net the minor current term by
investmen shareholder minor shareholder
t in the s equity over the share of
subsidiari owners equity in
es the subsidiary at
beginning of term
Guangzhou Bengang Trade Co., Ltd. Fully Guan Sales 100.00 Sales of steel 100.00 100 100 Yes
-own gzho
Shanghai Bengang Metallurgy Tech. ed
Fully u
Shan Sales 500.00 Sales of steel 500.00 100 100 Yes
Ltd. -own ghai
Bengang Steel Plate Liaoyang Orel ed
Fully Liaoy Prod 1,000.00 Production and 52,989.98 100 100 Yes
Ball Co., Ltd. -own uang uctio sales of ore ball
Dalian Benruitong Automobile Material ed
Holdi Dalia n
Prod 10,000.00 Sales of steel 6,500.00 65 65 Yes 3,439.45
Technologies Co., Ltd. ng n uctio plates
Bengang Stainless Cool-rolling Fully Dand n
Prod 50,000.00 Production and 50,000.00 100 100 Yes
(Dandong) Co., Ltd. -own ong uctio sales of steel
ed n
2、 The subsidiaries acquired through business combination under common control
Full name of the subsidiary Owners Reg. Busine Registere Business Scope Actual Balance of Shar Voting Consol Minor Amount for Balance of owners
hip of Add. ss d capital investment other items e power idated?
shareholders’ deducting equity of the parent
the propert at year end actually prop % minor company after
equity
subsidi y formed net ortio shareholder deducting of the
ary investment in n% s equity in share of loss of
the the minor current term by
subsidiaries shareholder minor shareholder
s equity over the share of
owners equity in the
subsidiary at
beginning of term
Changchun Bengang Steel Fully- Changc Sales 50.00 Sales of steel -135.51 100 100 Yes
Sales Ltd. owned hun
Haerbin Bengang International Fully- Harbin Sales 50.00 Sales of steel 42.34 100 100 Yes
Trading Ltd. owned
Nanjing Bengang Steel Fully- Nanjin Sales 115.00 Sales of steel 208.14 100 100 Yes
Material Sales Ltd. owned
Wuxi Bengang Steel Sales Ltd. Fully- Wuxi Sales 100.00 Sales of steel 93.67 100 100 Yes
owned
Xiamen Bengang Steel Sales Fully- Xiamen Sales 50.00 Sales of steel 109.57 100 100 Yes
Ltd. owned
Yantai Bengang Steel Sales Ltd. Fully- Yantai Sales 50.00 Sales of steel 1,960.03 100 100 Yes
owned
Tianjin Bengang Steel Trading Fully- Tianjin Sales 300.00 Sales of steel 3,331.81 100 100 Yes
Ltd. owned
(II) Statement on change in consolidation range
No change of consolidation range occurred in the report period
(III) The business combination under the common control: None
(IV) The business combination not under the common control: None
V. Notes to the Consolidated Financial Statements
(All figures hereinafter are in RMB Yuan except for otherwise provided)
(1) Monetary capital
Closing balance Openning balance
Items Amount of
Amount of Exchang Exchang
Amount RMB foreign Amount RMB
foreign currency e rate e rate
currency
Cash
RMB 278,428.99 129,315.34
Sub-total 278,428.99 129,315.34
Bank deposit
RMB 1,973,545,505.04 2,677,619,835.11
USD 103,247,055.50 6.3249 653,027,301.33 6,718,347.27 6.3009 42,331,634.29
EURO 13,295.81 7.8710 104,651.32 13,289.05 8.1625 108,471.87
Sub-total 2,626,677,457.69 2,720,059,941.27
Other
monetary fund
RMB 291,578,672.02 522,767,223.31
Sub-total 291,578,672.02 522,767,223.31
Total 2,918,534,558.70 3,242,956,479.92
Details of monetary capital under restriction:
Items Closing balance Openning balance
Fixed deposit 94,199,406.56
Deposit of L/C 160,674,260.00 116,667,745.63
Deposit for bank accepted drafts 130,904,412.02 311,900,071.12
Total 291,578,672.02 522,767,223.31
Monetary capital decreased by RMB324,421,921.22 and 10% from the opening balance, which was
caused by disburse of payment.
(2) Notes receivable
1. Categories of notes receivable
Categories Closing balance Openning balance
Bank acceptance 3,875,034,975.58 2,913,462,068.17
Commercial acceptance
Total 3,875,034,975.58 2,913,462,068.17
2. At the end of period, the Company put RMB159,980,000 of notes receivable in pledge to
Industrial Bank Benxi Branch to issue small amount notes payable of RMB159,980,000, and
RMB101,150,000 of notes receivable in pledge to Bank of China Benxi Branch Bengang Sub-branch
to issue small amount notes payable of RMB101,150,000. The top 5 largest accounts were:
Issuer Date of issue Expired on Amount Note
Anyue Auto Material Co., Ltd. 2012-3-19 2012-9-19 40,000,000.00
Hubei Huitong Industry & Trade Group
2012-1-13 2012-7-13 22,000,000.00
Co., Ltd.
Hubei Huitong Industry & Trade Group
2012-4-24 2012-10-24 19,800,000.00
Co., Ltd.
Hubei Huitong Industry & Trade Group
2011-12-29 2012-6-29 14,000,000.00
Co., Ltd.
Zhenzhou Coal Minning Machinery
2012-1-31 2012-7-31 11,000,000.00
Group Co., Ltd.
Total 106,800,000.00
3. Notes transferred to receivable accounts due to failure of the debtor, and notes endorsed to third
parties but not expired yet
(1) There was not any notes transferred to receivable accounts due to failure of the debtor up
to June 30, 2012;
(2) As of June 30, 2012, the notes endorsed to third parties were amounted to
RMB8,714,326,447.49, with the top 5 amounts as the following:
Issuer Date of issue Expired on Amount Note
Heilongjiang Longmei Minning Group Co., Ltd. 2012-1-18 2012-7-18 50,000,000.00
Jiaozuo Guolong Logistics Co., Ltd. 2012-2-29 2012-8-31 46,000,000.00
Xiaoyi Jinxuan Coal Co., Ltd. 2012-4-30 2012-10-31 43,000,000.00
Heilongjiang Longmei Minning Group Co., Ltd. 2012-4-24 2012-10-24 38,600,000.00
Shanxi Jiaomei Group International Trading Co.,
2012-5-24 2012-11-24 38,600,000.00
Ltd.
Total 216,200,000.00
4. No notes receivable from shareholders with 5% or over of the Company’s shares at year
end.
(3) Account receivable
1、 Age analyze of receivable accounts
Closing balance Openning balance
Category Book balance Bad debt provision Book balance Bad debt provision
Ratio Ratio Ratio Ratio
Amount Amount Amount Amount
(%) (%) (%) (%)
Within 1 yr,
303,318,805.03 37.61
(included) 315,847,690.81 38.56
1-2 yrs (included) 81,324,411.24 10.08 4,066,220.57 5 81,324,411.24 9.93 4,066,220.57 5
2-3 yrs (included) 24,593,170.15 3.05 4,918,634.03 20 24,593,170.15 3 4,918,634.03 20
Over 3 yrs 397,325,643.34 49.26 397,325,643.34 100 397,325,643.34 48.51 397,325,643.34 100
Total 806,562,029.76 100.00 406,310,497.94 819,090,915.54 100.00 406,310,497.94
2、 Accounts receivable by categories
Closing balance Openning balance
Book balance Bad debt provision Book balance Bad debt provision
Categories
Ratio Ratio Ratio Ratio
Amount Amount Amount Amount
(%) (%) (%) (%)
Receivables with
major individual
amount and bad debt
provision provided
individually
Receivables
provided bad debt 806,562,029.76 100.00 406,310,497.94 50.38 819,090,915.54 100.00 406,310,497.94 49.61
provision in groups
Account receivable
with minor
individual amount
but bad debt
provision is
provided
Total 806,562,029.76 100.00 406,310,497.94 50.38 819,090,915.54 100.00 406,310,497.94 49.61
Receivable accounts on which bad debt provisions are provided on age analyze basis in the
portfolio
Closing balance Openning balance
Age Book balance Bad debt provision Book balance Bad debt provision
Amount Ratio (%) Amount Amount Ratio (%) Amount
Within 1 yr,
303,318,805.03 37.61
(included) 315,847,690.81 38.56
1-2 yrs (included) 81,324,411.24 10.08 4,066,220.57 81,324,411.24 9.93 4,066,220.57
2-3 yrs (included) 24,593,170.15 3.05 4,918,634.03 24,593,170.15 3 4,918,634.03
Over 3 yrs 397,325,643.34 49.26 397,325,643.34 397,325,643.34 48.51 397,325,643.34
Total 806,562,029.76 100.00 406,310,497.94 819,090,915.54 100.00 406,310,497.94
3. No receivable accounts written back or retrieved in the period.
4. No receivable account written off in the period.
5. Within the aforesaid balance, there is no amount due from the shareholders that hold 5% or
more of the companys voting shares.
6. The top 5 debtors of receivable accounts
Relation
Name of the companies with the Book balance Age Portion in total receivables
Company
Shenzhen Southern Zhongji
East Logistics Equipment Co., Client 71,096,597.62 within 1 yr 8.81
Ltd.
Benxi Steel (Group) Industrial Related
Development Ltd. parties
59,176,803.90 within 2 yrs 7.34
Related
Bengang Group Machinery Ltd.
parties
43,536,541.15 within 2 yrs 5.40
Dalian Zhongji Container Client 35,230,095.18 within 1 yr 4.37
Co., Ltd.
Benxi Steel (Group) Construction Related
Ltd. parties
29,760,109.90 within 1 yr 3.69
Total 238,800,147.75 29.61
7、 Accounts receivable from related parties: See Note VI(IV)6.
(4) Prepayment
1. Prepayments presented by aging
Closing balance Openning balance
Age
Book balance Book balance Proportion %
Proportion %
within 1 yr 523,633,847.31 99.03 480,150,904.74 98.89
1-2 years 5,114,828.20 0.97 5,370,871.92 1.11
2-3 years
Over 3 yrs
Total 528,748,675.51 100.00 485,521,776.66 100.00
2. Top 5 prepayment accounts
Name of the companies Relation with
Book balance Date Reason of unsettled
the Company
Shanxi Jiaomei Group International within 1
Supplier 136,290,000.00 Prepaid for goods
Trading Co., Ltd. yr
within 1
Benxi Steel (Group) Construction Ltd. Related parties 60,717,738.47
yr
Unsettled project
Northern Heavy Industry Group Co., Supplier 39,313,610.04
within 1
Prepaid for goods
Ltd. yr
Dalian Zhongtie Foreign Service Cargo within 1
Supplier 24,032,979.61 Prepaid for goods
Agency Co., Ltd. Bayuquan Branch yr
Wuxi Nanyang Chemical Machinery Co., within 1
Supplier 23,220,000.00 Prepaid for goods
Ltd. yr
Total 283,574,328.12
3. At end of term, within the aforesaid balance, there is no amount due from the shareholders
that hold 5% or more of the Company’s voting shares
4. Prepayment to related parties: see Note VI(IV)6.
5. The prepayment has increased by RMB43,226,898.85, or 8.9% over the opening balance,
which was caused by settlement of purchasing.
(5) Other account receivable
1. Age analyze of other receivable accounts
Closing balance Openning balance
Categories Book balance Bad debt provision Book balance Bad debt provision
Ratio Ratio Ratio Ratio
Amount Amount Amount Amount
(%) (%) (%) (%)
Within 1 yr,
103,185,194.29 48.46 112,390,507.51 50.59
(included)
1-2 yrs (included) 19,879,651.66 9.34 993,982.58 5 19,879,651.66 8.95 993,982.58 5
2-3 yrs (included) 15,352,510.58 7.20 3,070,502.11 20 15,352,510.58 6.91 3,070,502.11 20
Over 3 yrs 74,521,216.89 35.00 72,781,216.89 97.6 74,521,216.89 33.55 72,781,216.89 97.67
Total 212,938,573.42 100.00 76,845,701.58 222,143,886.64 100.00 76,845,701.58
2. Other receivables presented by categories:
Closing balance Openning balance
Categories Book balance Bad debt provision Book balance Bad debt provision
Ratio Ratio Ratio Ratio
Amount Amount Amount Amount
(%) (%) (%) (%)
Other receivables with
major individual
amount and bad debt
provision provided
individually
Other receivables
provided bad debt 211,198,573.42 99.18 76,845,701.58 36.39 220,403,886.64 99.22 76,845,701.58 34.87
provision in groups
Other account
receivable with minor
individual amount but 1,740,000.00 0.82 1,740,000.00 0.78
bad debt provision is
provided
Total 212,938,573.42 100.00 76,845,701.58 36.09 222,143,886.64 100.00 76,845,701.58 34.59
Other receivable accounts in the portfolio on which bad debt provisions were provided on age analyze
basis
Closing balance Openning balance
Age Book balance Bad debt Book balance Bad debt
Amount Ratio (%) provision Amount Ratio (%) provision
within 1 yr 104,925,194.29 49.27 112,390,507.51 50.99
1-2 yrs 19,879,651.66 9.34 993,982.58 19,879,651.66 9.02 993,982.58
2-3 yrs 15,352,510.58 7.21 3,070,502.11 15,352,510.58 6.97 3,070,502.11
Over 3 yrs 72,781,216.89 34.18 72,781,216.89 72,781,216.89 33.02 72,781,216.89
Total 212,938,573.42 100.00 76,845,701.58 220,403,886.64 100.00 76,845,701.58
3. Other receivable accounts written back or retrieved
No other receivables, which had been fully impaired or made a large proportion of bad debt provision last
year, has been fully recovered or taken back a large proportion, or retrieved by debt reorganizing occurred
this period.
4. No other receivable account written off in the period
5. At end of the report term, within the aforesaid balance, there is no amount due from the
shareholders who holds 5% or more the voting shares of the Company.
6. Top five debtors at the year end
Relation Portion in total
Name of the companies Book balance Age Description
with the other
Company receivables (%)
Transporta within 1 Freight paid on
Freight for main clients 24,102,914.06 11.32
tion Co. yr behalf
Benxi Xinyu metallurgy within 1
Supplier 17,441,506.50 8.19 Current account
Material Co., Ltd. yr
Benxi Juyuan Slag and within 1
Supplier 9,871,328.79 4.64 Current account
Furnance Burden Co., Ltd. yr
Issuing Within 1
Expenses of private issuing 5,728,923.03 2.69 Issuing expense
expense year
Benxi Steel (Group)
Related within 1
Information and Automatic 2,897,258.19 1.36 Current account
parties yr
Tech. Ltd.
Total 60,041,930.57 within 1 28.20
yr
7. Reivables from related parties: see Note VI (IV) 6.
(6) Inventories
1. Categories of inventories
Closing balance Openning balance
Items
Book balance Impairment provision Book value Book balance Impairment provision Book value
Raw materials
and main 8,417,918,543.97 22,659,881.77 8,395,258,662.20 8,789,804,396.32 22,659,881.77 8,767,144,514.55
materials
Semi-finished
1,671,078,884.48 73,886,572.29 1,597,192,312.19 1,669,749,424.07 73,886,572.29 1,595,862,851.78
Product
Finished 2,848,684,820.85 65,295,134.60 2,783,389,686.25 2,537,501,115.79 65,295,134.60 2,472,205,981.19
products
Total 12,937,682,249.30 161,841,588.66 12,775,840,660.64 12,997,054,936.18 161,841,588.66 12,835,213,347.52
There are no inventories used as mortgage or guarantee at the end of the year.
2. Inventory impairment provisions
Openning balance Decreased this term Closing balance of
Categories Provided this term
of book value Written back Transferred book value
Raw materials and main 22,659,881.77 22,659,881.77
materials
Semi-finished Product 73,886,572.29 73,886,572.29
Finished products 65,295,134.60 65,295,134.60
Total 161,841,588.66 161,841,588.66
3、 Inventory impairment provision
The percentage of write-back
Basis of providing impairment
Items Reason of written back against the ending balance of
provision
inventory
Raw materials and main Net realizable value is lower than
materials cost at the year end
Net realizable value is lower than
Semi-finished Product
cost at the year end
Net realizable value is lower than
Finished products
cost at the year end
(7) Other current asset
Items Amount at end of term Initial ammount
Prepaid income tax 182,211,823.73 182,211,823.73
182,211,823.73 182,211,823.73
Total
The income tax repaid previously was not transferred for the profit of the current period has not made up the loss of
2009.
(8) Long-term share equity investment
1. Categories of long-term equity investment
Items Closing balance Openning balance
Joint ventures
Affiliates
Other equity investment 15,791,030.00 15,791,030.00
Sub-total 15,791,030.00 15,791,030.00
Less: impairment provision
Total 15,791,030.00 15,791,030.00
2. Details of long-term equity investment
Impair
Statement on
ment
differences Impai
Percentage of provisio Cash dividend
Company invested in Calculati Voting power between the rment
Initial costs Openning balance Changed by Closing balance share in the n of the current
ng basis in the firm % shareholding provis
firm % provide term
and voting ion
d this
rights
term
Tianjin Bengang Longxing Steel Cost
3,888,980.00 3,888,980.00 3,888,980.00 20 20
Processing Co., Ltd. basis
China Steel Shanghai Steel Processing
Cost basis 10,058,250.00 10,058,250.00 10,058,250.00 15 15
Co., Ltd.
Zhejiang Bengang Jingrui Steel
Cost basis 1,843,800.00 1,843,800.00 1,843,800.00 20 20
Processing Ltd.
Subtotal on cost basis 15,791,030.00 15,791,030.00 15,791,030.00
Total 15,791,030.00 15,791,030.00 15,791,030.00
(9) Fixed assets
1. Particulars about the fixed assets
Openning Decreased this
Items Increased this period Closing balance
balance period
I. Total of original book value 37,278,387,891.91 1,491,796.32 1,235,570.64 37,278,644,117.59
Incl. House & Buildings 8,944,784,465.64 203,050.64 8,944,581,415.00
Equipment & machinery 27,565,679,019.14 1,491,796.32 27,567,170,815.46
Transportation facilities 767,924,407.13 1,032,520.00 766,891,887.13
Increased this Provided current
term term
II. Total of accumulative
19,263,984,837.76 937,639,953.07 1,009,478.82 20,200,615,312.01
depreciation
Incl. House & Buildings 2,740,612,888.47 245,378,263.95 67,485.93 2,985,923,666.49
Equipment & machinery 16,038,389,224.72 647,893,769.99 16,686,282,994.71
Transportation facilities 484,982,724.57 44,367,919.13 941,992.89 528,408,650.81
III. Total of net book value of
18,014,403,054.15 17,078,028,805.58
fixed assets
Incl. House & Buildings 6,204,171,577.17 5,958,657,748.51
Equipment & machinery 11,527,289,794.42 10,880,887,820.75
Transportation facilities 282,941,682.56 238,483,236.32
IV. Total of impairment
8,237,689.11 8,237,689.11
provisions
Incl. House & Buildings 8,208,087.85 8,208,087.85
Equipment & machinery 29,601.26 29,601.26
Transportation facilities
V. Total of fixed asset book value 18,006,165,365.04 17,069,791,116.47
Incl. House & Buildings 6,195,963,489.32 5,950,449,660.66
Equipment & machinery 11,527,260,193.16 10,880,858,219.49
Transportation facilities 282,941,682.56 238,483,236.32
Depreciation provided this period was RMB937,639,953.07.
2. Fixed assets leased out by operating lease
Category Original book value Accumulated depreciation:
Houses & buildings 13,274,580.30 2,304,608.17
Equipment & machinery 1,374,691.00 1,334,978.59
Total 14,649,271.30 3,639,586.76
3. Fixed asset not granted property license yet
Reason for certificate not
Items Book value Expected date of grant
granted
Houses & buildings 779,236,919.85 Newly built construction Not filed yet
Total 779,236,919.85
(10) Construction in process
1. Construction in process
Closing balance Openning balance
Items Impairme
Impairme
Book balance Book value Book balance nt Book value
nt
provision
provision
IT project of the
77,909,858.25 77,909,858.25 61,879,324.94 61,879,324.94
Company
Energy saving
reconstruction and 180t
422,893,981.13 422,893,981.13 351,032,101.97 351,032,101.97
dephosphorization
converter
Environmental
53,771,705.46 53,771,705.46 37,411,428.65 37,411,428.65
reengineering
Recycling steel plant
137,094,234.26 137,094,234.26 137,091,648.86 137,091,648.86
phase II Reforming
Other small projects 111,878,530.96 111,878,530.96 66,822,280.05 66,822,280.05
Silicon steel project 28,702,986.75 28,702,986.75 17,722,056.71 17,722,056.71
Ancillary facilities
reconstruction for
iron-making, 170,975.94 170,975.94 170,975.94 170,975.94
transportation and
logistics
New 2250 skin pass
87,633,054.20 87,633,054.20 51,602,742.37 51,602,742.37
line
electrogalvanizing 485,628,977.32 485,628,977.32 242,200,474.13 242,200,474.13
Energy control center
of manufacturing 72,802,448.06 72,802,448.06 34,915,661.30 34,915,661.30
dept.
Powerplant Nanfen
Workshop
27,730,827.00 27,730,827.00 21,689,360.28 21,689,360.28
Transformer and
66KV power line
Dalian Benruitong 110,918,336.16 110,918,336.16 82,733,702.18 82,733,702.18
Dandong Stainless 1,532,062,336.90 1,532,062,336.90 1,447,201,787.40 1,447,201,787.40
Total: 3,149,198,252.39 3,149,198,252.39 2,552,473,544.78 2,552,473,544.78
2. Change of major construction in process
Transferred into fixed Other
Name of projects Budget Openning balance Increased this period Closing balance
assets decreases
IT project of the Company 274,440,000.00 61,879,324.94 16,030,533.31 0.00 0.00 77,909,858.25
Energy saving reconstruction and 180t dephosphorization converter 1,375,840,000.00 351,032,101.97 71,861,879.16 0.00 0.00 422,893,981.13
Environmental reengineering 100,000,000.00 37,411,428.65 16,360,276.81 0.00 0.00 53,771,705.46
Recycling steel plant phase Reforming 188,340,000.00 137,091,648.86 2,585.40 0.00 0.00 137,094,234.26
Other small projects 200,000,000.00 66,822,280.05 45,056,250.91 0.00 0.00 111,878,530.96
Silicon steel project 603,350,000.00 17,722,056.71 10,980,930.04 0.00 0.00 28,702,986.75
Ancillary facilities reconstruction for iron-making, transportation
95,120,000.00 170,975.94 0.00 0.00 0.00 170,975.94
and logistics
New 2250 skin pass line 96,880,000.00 51,602,742.37 36,030,311.83 0.00 0.00 87,633,054.20
electrogalvanizing 700,000,000.00 242,200,474.13 243,428,503.19 0.00 0.00 485,628,977.32
Energy control center of manufacturing dept. 127,140,000.00 34,915,661.30 37,886,786.76 0.00 0.00 72,802,448.06
Powerplant Nanfen Workshop Transformer and 66KV power line 48,860,000.00 21,689,360.28 6,041,466.72 0.00 0.00 27,730,827.00
Dalian Benruitong 205,487,800.00 82,733,702.18 28,184,633.98 0.00 0.00 110,918,336.16
Dandong Stainless 2,230,000,000.00 1,447,201,787.40 84,860,549.50 0.00 0.00 1,532,062,336.90
Total: 6,245,457,800.00 2,552,473,544.78 596,724,707.61 0.00 0.00 3,149,198,252.39
Investment on Progress Accumulate of interest Including: interest capitalized Capitalizing rate of interest
Name of projects Fund recourse
budget (%) (%) capitalized this term of the period %
IT project of the Company 87 90 5,084,408.63 1,157,763.93 6.56 independent and borrowed
Energy saving reconstruction and 180t
71 75 39,693,645.87 2,735,551.35 6.56 independent and borrowed
dephosphorization converter
Environmental reengineering 54 65 2,491,450.89 independent and borrowed
Recycling steel plant phase Reforming 74 90 7,180,154.25 independent and borrowed
Other small projects 1,610,992.53 182,722.37 6.56 independent and borrowed
Silicon steel project 83 99 14,360,945.48 independent and borrowed
Ancillary facilities reconstruction for
88 95 1,140,607.31 independent and borrowed
iron-making, transportation and logistics
New 2250 skin pass line 90 90 2,332,992.01 1,568,916.11 6.56 自筹及借款
electrogalvanizing 69 75 21,741,513.44 15,640,908.05 6.56 自筹及借款
Energy control center of manufacturing dept. 57 70 1,817,768.01 1,355,738.80 6.56 自筹及借款
Powerplant Nanfen Workshop Transformer and
66KV power line
57 65 671,728.79 479,565.47 6.56 自筹及借款
Dalian Benruitong 54 60 1,688,175.87 1,257,367.60 6.56 自筹及借款
Dandong Stainless 69 85 68,235,675.00 19,241,737.50 6.56 自筹及借款
Total: 168,050,058.08 43,620,271.18
3、 Impairment provision on construction in process : none
(11) Engineering goods
Increased this Decreased this
Items Openning balance Closing balance
period period
Special equipment 27,153,422.75 119,192,890.81 125,279,812.22 21,066,501.34
Total 27,153,422.75 119,192,890.81 125,279,812.22 21,066,501.34
Statement on engineering goods: decreasing of RMB6,086,921.41 or 22.42% from the opening
balance was the delivery of special equipment purchased for the project.
(12) Intangible assets
1. Intangible assets
Openning Increased this Decreased Closing
Items
balance period this period balance
1. Total of original book value 46,395,483.80 67,594,426.20 113,989,910.00
(1) Land using rights 46,395,483.80 67,594,426.20 113,989,910.00
2. Total of accumulated amortizing 927,909.72 463,954.86 1,391,864.58
(1) Land using rights 927,909.72 463,954.86 1,391,864.58
3. Total of intangible asset book
45,467,574.08 67,130,471.34 112,598,045.42
value
(1) Land using rights 45,467,574.08 67,130,471.34 112,598,045.42
4. Total of impairment provision
(1) Land using rights
5. Total of intangible asset book
45,467,574.08 67,130,471.34 112,598,045.42
value
(1) Land using rights 45,467,574.08 67,130,471.34 112,598,045.42
No intangible asset on pledge or mortgage at end of the period, increasing of original value of
intangible asset as the land using rights gained by Bengang Stainless Steel Cool Rolling Dandong Co., Ltd.
(13) Deferred income tax asset and deferred income tax liability
1. Net amount of deferred income tax asset and liabilities not neutralized
(1) Defered income tax asset and differed income tax liabilities already recognized
Items End of term Beginning of term
Differed income tax assets:
(I) Temporary difference recognized basing on book value
188,503,403.30 188,503,403.30
and taxable base
Impairment provision 163,308,869.34 163,308,869.34
Welfare for retired employee 11,720,348.57 11,720,348.57
Employee wages payable 13,474,185.39 13,474,185.39
Reserved expenses
(II) Operational loss deductible
(III) Transferable tax deduction
(IV) Internal unrealized profit 6,392,833.39 6,392,833.39
Items End of term Beginning of term
Subtotal 194,896,236.69 194,896,236.69
Differed income tax liabilities:
Fluctuation of fair value
Depreciation of fixed assets
Subtotal
(2) Difference and deductible difference items
Items Amount of temporary differences
Deductible differences
(I) Temporary difference recognized basing on book value
779,584,946.69
and taxable base
Impairment provision 653,235,477.29
Welfare for retired employee 46,881,394.28
Unrealized profit in inter-company sales 25,571,333.57
Employee wages payable 53,896,741.55
Reserved expenses
(II) Operational loss deductible
(III) Transferable tax deduction
(IV) Internal unrealized profit
Sub-total 779,584,946.69
Taxable differences
Difference of depreciation or amortizing
Fluctuation of fair value
Sub-total
(14) Asset impairment provision
Openning Increased this Decreased this period
Items Closing balance
balance period Written back Written off
Bad debt provision 483,156,199.52 483,156,199.52
Inventory 161,841,588.66 161,841,588.66
impairment
provision asset 8,237,689.11 8,237,689.11
impairment
provision 653,235,477.29 653,235,477.29
(15) Short-term loans
Categories of short-term loans
Items Closing balance Openning balance
Credit loan 4,584,647,100.00 2,914,711,500.00
Guarantee loan 2,200,151,455.46 2,632,619,413.46
Total 6,784,798,555.46 5,547,330,913.46
Short-term loans increase by RMB1,237,467,642 or 22.31% over the opening balance, which was
caused by increasing of working capital by loans.
No short-term loans overdue and not returned as of the end of report period.
(16) Notes payable
1. Categories of notes payable
Category Closing balance Openning balance
Bank acceptance 1,639,537,018.99 2,108,397,418.85
Commercial acceptance
Total 1,639,537,018.99 2,108,397,418.85
2. Within the aforesaid balance, there is no amount due from the shareholders that hold 5% or more of the
companys voting shares.
3. For notes payable due to related parties please go to Note VI. (IV) 6.
(17) Account payable
1. Details of account payable
Items Closing balance Openning balance
within 1 yr 7,987,900,884.92 7,782,291,534.00
1-2 yrs 340,121,814.45 344,948,773.10
2-3 yrs 407,787,256.18 408,276,515.10
Over 3 yrs 211,677,438.22 227,356,381.90
Total 8,947,487,393.77 8,762,873,204.10
2. Within the above balance, there is no amount due to shareholders who hold 5% or more
voting shares at the end of this year.
3. For account payable to related parties as of June 30, 2012, please go to Note VI. (IV) 6.
4. Large amount payables due over one year
Name of companies Amount Balances
Benxi Steel (Group) Construction Ltd. 114,370,986.98 Not cleared yet
Project budget and settlement 83,059,935.61 Not cleared yet
Zhongye Jiaonai Engineering Technology Co., Warranty period not
31,005,134.54
Ltd. expired
Total 228,436,057.13 Not cleared yet
(18) Prepayment received
1. Prepayment received
Items Closing balance Openning balance
within 1 yr 2,711,287,471.65 2,775,223,850.42
1-2 yrs 34,665,279.83 19,040,382.60
Items Closing balance Openning balance
2-3 yrs 38,205,687.31 47,169,943.66
Over 3 yrs 8,019,510.34 8,044,053.96
Total 2,792,177,949.13 2,849,478,230.64
2. At end of term, within the aforesaid balance, there is no amount due to the
shareholders that hold 5% or more of the Company’s voting shares
3. For prepayment received from related parties as of June 30, 2012, please go to Note VI.
(IV) 6.
4. Prepayment received with age over one year
Name of the companies Amount Note
Guangshou Free Trade Zone
It was the subsidiary of Bengang Group, due to
Bengang Sales Co., Ltd.
delay of steel purchasing
23,472,727.98
Total
23,472,727.98
(19) Employees’ wage payable
Openning Increased this Decreased this Closing
Items
balance period period balance
(1)Salary, bonus, allowance and
54,200,816.68 690,451,456.89 697,605,789.23 47,046,484.34
subsidy
(2)Employee welfare 22,117,502.79 22,117,502.79
(3)Social Insurance 706,338.04 237,545,166.40 238,251,504.44
Incl. Medical insurance 6,814.15 47,781,568.41 47,788,382.56
Basic pension 136,685,703.73 136,685,703.73
Annual fee 23,550,012.20 23,550,012.20
Unemployment insurance 102.9 13,176,326.88 13,176,429.78
Labor injury insurance 699,420.99 16,351,555.18 17,050,976.17
Breeding insurance
(4) Housing fund 6,851,033.00 64,409,391.39 71,260,424.39
(5) Trade Union and Employee
10,415,570.01 14,747,431.96 22,760,988.87 2,402,013.10
Education Fee
(6) Non-monetary welfare
(7) Dismissing compensation 46,881,394.28 17,585,453.76 29,295,940.52
(8) Employee award and welfare
fund
Openning Increased this Decreased this Closing
Items
balance period period balance
(9) Others 3,144,843.17 3,144,843.17
Incl. Share payment in cash
Total 122,199,995.18 1,029,270,949.43 1,072,726,506.65 78,744,437.96
(20) Tax payable
Tax items Closing balance Openning balance
VAT -247,648,741.59 -195,028,903.62
Business tax 102,573.36 98,705.88
City construction tax 6,421,029.60 4,102,435.66
Enterprise income tax 10,988,476.96 7,219,238.22
Property tax 939,804.47 2,949,869.54
Education surtax 4,589,367.91 2,927,862.28
Others -121,796.39 560,888.46
Total -224,729,285.68 -177,169,903.58
Decreasing of tax payable was caused by increasing of income tax to be deducted at end of period.
(21) Other account payable
1. Other payable accounts:
Items Closing balance Openning balance
within 1 yr 561,316,091.63 540,173,190.78
1-2 yrs 37,524,957.44 32,942,394.29
2-3 yrs 22,299,324.73 34,883,961.98
Over 3 yrs 52,663,771.19 49,094,796.94
Total 673,804,144.99 657,094,343.99
2. There is no payable owed to shareholders who hold 5% or above voting shares at the
end of this year.
Name of the companies Closing balance Openning balance
Benxi Steel (Group) Ltd. 92,030,393.94 320,924,549.95
Total 92,030,393.94 320,924,549.95
3. For account payable to related parties as of June 30, 2012, please go to Note VI. (IV) 6.
4. Other payables with large amount
Name of the companies Closing balance Description Note
Not paid
Benxi Steel (Group) Ltd. 92,030,393.94 Current account
yet
Not paid
Benxi Steel (Group) Construction Ltd. 22,463,879.31 Project payment
yet
Benxi Steel (Group) Industrial Not paid
10,763,430.70 Current account
Development Ltd. yet
Bengang Group Thermal Power Not paid
10,469,344.00 Current account
Development Co., Ltd. yet
(22) Non-current liability due in 1 year
Items Closing balance Openning balance
Long-term borrowings 2,388,265,600.00 1,877,329,600.00
Total 2,388,265,600.00 1,877,329,600.00
1. Long-term loans due in one year
Items Closing balance Openning balance
Credit loan 507,480,000.00 700,000,000.00
Guarantee loan 1,880,785,600.00 1,177,329,600.00
Total 2,388,265,600.00 1,877,329,600.00
For guaranteed loans please go to Note VI. (IV), 5.
2. Top 5 long-term loans due in one year
Loan provided Commence date Terminate date Currency Interest rates % Amount of Amount of
by foreign original currency
Industry Bank currency
2011-3-11 2013-3-8 RMB 6.1 417,480,000.00
Bengang
Branch
Construction
2008-4-29 2013-4-15 RMB 5.76 400,000,000.00
Bank Bengang
Branch
Construction
2010-7-2 2013-6-1 RMB 5.952 300,000,000.00
Bank Bengang
Branchof China
Bank
2009-9-11 2012-8-10 USD 3.1 30,000,000.00 189,747,000.00
Bengang
Branchof China
Bank
2009-9-11 2012-9-10 USD 3.17 30,000,000.00 189,747,000.00
Bengang
Branch
Total 60,000,000.00 1,496,974,000.00
(23) Long-term borrowings
Items Closing balance Openning balance
Credit loan 2,178,370,000.00 2,320,723,900.00
Guarantee loan 538,584,872.82 1,340,074,290.04
Total 2,716,954,872.82 3,660,798,190.04
For guaranteed loans please go to Note VI. (IV), 5.
Top 5 long-erm loans
Loan provided by Commence Terminate Currency Interest rates % Amount of Amount of original
date date foreign currency currency
Downturn of
Communication Bank
2010-2-3 2021-11-5 RMB standard rate 600,000,000.00
Dandong Branch
by 10%
Industry Bank
2011-1-21 2015-7-20 RMB 5.183 290,000,000.00
Bengang Branch
National
Development Bank 2012-2-23 2014-3-19 USD 3.5065 29,000,000.00 183,422,100.00
Liaoning Branch
National
Development Bank 2011-4-26 2014-3-19 USD 3.5065 25,000,000.00 158,122,500.00
Liaoning Branch
National
Development Bank 2011-5-26 2014-3-19 USD 3.5065 21,000,000.00 132,822,900.00
Liaoning Branch
Total 75,000,000.00 1,364,367,500.00
(24) Other non-recurring liabilities
Openning Increased this Decreased
Items Closing balance Remarks
balance period this period
3 government
technology 864,224.00 864,224.00 Note 1
financing funds
Subsidiary for
industrial energy
control center 11,600,000.00 11,600,000.00 Note 2
demonstration
project
Automobile zinc
plate production 41,040,000.00 41,040,000.00 Note 3
line
Iron Factory
2*265 square
meter Sintering
5,000,000.00 5,000,000.00 Note 4
Flue Gas
Desulphurization
Project
2*265 Sewage
project of iron 3,000,000.00 3,000,000.00 Note 5
making factory
Provincial
environmental
4,000,000.00 4,000,000.00 Note 6
protection fund
project
Special fund for
introducing of
3,500,000.00 3,500,000.00 Note 7
overseas technical
teams
MES project fund 8,600,000.00 8,600,000.00 Note 8
Residue heat and
desulfuration
17,860,000.00 17,860,000.00 Note 9
project of Iron
Making Factory
Special fund for
environment 12,550,000.00 12,550,000.00 Note 10
treatment
Land using rights
of Dandong 67,594,426.20 67,594,426.20
Stainless
Infrastructure fund
from Dandong
Boarder 2,060,000.00 2,060,000.00
Cooperation Zone
Finance Bureau
Discount of
balance paid
directly by 12,000,000.00 12,000,000.00
Dandong Finance
Bureau
Total 91,664,224.00 98,004,426.20 0.00 189,668,650.20
1. The “3 government technology financing funds” was the fund granted by Liaoning Provincial Bureau of
Finance for the thin plate billet, continuous casting, and short circle continuous rolling project of the
Company. (Liao-cai-zhi-qi) (2006)341) “Circular about granting of 3 technology financing funds”.
2. According to Liao Cai Zi Qi (2009) No.868“The notice for the distribution of finance subsidy fund for
the 2009 Industrial enterprise energy management center construction demonstration project ”, 11.6
million finance subsidy fund has been received in March 2010 for the 2009 Industrial enterprise energy
management center construction demonstration project.
3. According to “The notice for key industry revitalization and first technology transformation project
contraction expansion and national debt investment budget”, 41.04 million subsidy fund has been received
in June 2010 for automobile high-class electrolytic zinc steel plate production line project.
4. According to “The notice of second environmental protection special fund project of 2009 in Liaolin
province ”, 5 million will be distributed to Bengang Steel Plates Co., Ltd. for environmental protection
project of the 2*265 Square meter Sintering machine desulfuration project of blast furnace plant
5. According to “The notice of second environmental protection special fund project of 2009 in Liaolin
province ”, 3 million will be distributed to Bengang Steel Plates Co., Ltd. for environmental protection
project of the 2*265 Square meter Sintering machine desulfuration project of blast furnace plant
6. According to “The notice of first environmental protection special fund project of 2008 in Liaolin
province” 4 million will be distributed to Bengang Steel Plates Co., Ltd. for the 220t/h boiler desulfuration
of the power plant.
7. According to “Notice on special fund for introducing of overseas R&D team for year 2010”, RMB3.5
million was received.
8. According to document (本发改发【2010】285 号) issued by the authorities of Benxi Government, the
Company received RMB8.6 million of subsidiary for MES project.
9. The Iron Making Factory received RMB17.86 million for the residue heat recycling and desulfuration
project. It was according to the notice issued by the Development and Reformation Committee of Liaoning
Province and Information Technology Committee.
10. According to the documents issued by Benxi Environment Protection Bureau and Finance Bureau, the
Company received RMB9.5 million and RMB3.05 milion of subsidy for environmental treatment projects.
(25) Share capital
The paid-in share capital of the company is as follows:
Closing balance Openning balance
Items
Amount of shares Amount Amount of shares Amount
A shares 2,736,000,000.00 2,736,000,000.00 2,736,000,000.00 2,736,000,000.00
B shares 400,000,000.00 400,000,000.00 400,000,000.00 400,000,000.00
Total 3,136,000,000.00 3,136,000,000.00 3,136,000,000.00 3,136,000,000.00
Changed this term (+,-)
Items Openning balance Issuing of new Transferred from Closing balance
Bonus shares Others Sub-total
shares reserves
1. Shares with restricted sales
condition
(1). State-owned shares
(2). National legal person shares
(3). Other domestic shares
In which:
Domestic legal person shares
Domestic natural person shares
(4). Foreign shares
In which:
Foreign legal person shares
Foreign natural person shares
Total of conditional shares
2. Shares without sales restriction
(1). RMB common shares 2,736,000,000.00 2,736,000,000.00
(2). Foreign shares listed at home 400,000,000.00 400,000,000.00
(3). Foreign shares placed abroad
(4). Others
Total of unrestricted current shares 3,136,000,000.00 3,136,000,000.00
Total 3,136,000,000.00 3,136,000,000.00
(26) Capital reserves
Increased this Decreased
Items Openning balance Closing balance
period this period
1. Additional paid-in capital
(1) Capital input by investors 8,706,903,665.94 8,706,903,665.94
Sub-total 8,706,903,665.94 8,706,903,665.94
2. Other capital reserves
(1) Government award for energy saving
115,917,468.82 115,917,468.82
tech
Sub-total 115,917,468.82 115,917,468.82
Total 8,822,821,134.76 8,822,821,134.76
(27) Special reserves
Used in the
Items Openning balance Provided this term Closing balance
period
Special reserves 19,417,931.78 16,761,326.07 2,656,605.71
Total
According to document 财企〔2012〕16 号 issued by Department of Finance and Department of Security Inspection on
February 14, 2012, the Company performed accounting on the security expenses under special accounts.
(28) Surplus reserves
Decreased this
Items Openning balance Increased this period Closing balance
period
Statutory surplus
921,277,509.22 921,277,509.22
reserves
Total 921,277,509.22 921,277,509.22
No legal surplus reserves were provided for the net profit of the period is not enough to make up previous losses.
(29) Retained profit
Percentage of drawing
Items Amount
or allocation
Profit not distributed at the beginning of term 2,644,615,857.28
Add: undistributed profit belongs to parent company 145,181,307.69
Less: Statutory surplus reserves
Optional surplus reserves
Reserves
Enterprise development fund
Providing of employees bonus and welfare fund
Common risk provisions
Common share dividend payable 313,600,000.00
Common share dividend transferred to capital share
Retained profit at the end of term 2,476,197,164.97
(30) Operational income and costs
1、 Operational turnover and costs
Amount of the Current Amount of the Previous
Items
Term Term
Major business turnover 21,037,373,504.31 22,079,613,372.50
Other business income 1,804,196,329.75 1,970,643,284.64
Total 22,841,569,834.06 24,050,256,657.14
Operation cost 21,194,363,935.21 21,573,460,001.27
2、 Main Business (Industry segment)
Amount of the Current Term Amount of the Previous Term
Name of industry
Turnover Operation cost Turnover Operation cost
(1) Industry 21,037,373,504.31 19,490,909,189.74 22,079,613,372.50 19,654,859,481.73
Total 21,037,373,504.31 19,490,909,189.74 22,079,613,372.50 19,654,859,481.73
3、 Main business segements (on products)
Amount of the Current Term Amount of the Previous Term
Products or services
Turnover Operation cost Turnover Operation cost
Steel plate 20,697,608,630.24 19,205,210,953.82 21,683,831,120.93 19,303,811,124.86
Steel billet 0.00 0.00 3,928,917.19 3,235,556.50
Others 339,764,874.07 285,698,235.92 391,853,334.38 347,812,800.37
21,037,373,504.31 19,490,909,189.74 22,079,613,372.50 19,654,859,481.73
Total
4、 Main business (geographic segment)
Amount of the Current Term Amount of the Previous Term
Products or services
Turnover Operation cost Turnover Operation cost
Northeast 6,767,176,587.51 6,269,719,188.62 8,404,449,601.30 7,481,484,079.82
North 2,597,018,437.47 2,406,110,749.44 3,175,710,110.63 2,826,957,833.28
East 6,272,275,635.20 5,811,198,569.71 5,118,029,315.56 4,555,974,116.20
Northwest 90,987,276.21 84,298,771.32 270,843,737.15 241,100,036.72
Mid-south 2,168,503,155.29 2,009,095,768.00 2,391,892,555.51 2,129,218,083.71
Export 3,141,412,412.63 2,910,486,142.65 2,718,688,052.35 2,420,125,332.00
Total 21,037,373,504.31 19,490,909,189.74 22,079,613,372.50 19,654,859,481.73
5、 Turnover from top 5 clients
Percentage in total turnover of the
Name of clients Total turnover Company %
Percentage in total turnover of the
Name of clients Total turnover Company %
Bengang Puxiang Cool Rolling Steel
4,070,838,911.69 17.82
Sheet Co., Ltd.
Hengxing International Resource Co.,
920,998,547.04 4.03
Ltd.
DUFERCO SA 466,570,875.03 2.04
Wukuang Steel & Iron Co., Ltd. 402,518,372.10 1.76
Xiamen Jianfa Meterials Co., Ltd. 298,849,338.45 1.31
Total 6,159,776,044.31 26.97
(31) Business tax and surcharge
Items Amount of the Current Term Amount of the Previous Term Rate
Business tax 787,351.77 597,152.46 5%
City construction tax 39,320,646.67 1,396,236.50 7%
Education surtax 16,924,098.85 759,182.03 3%
Local education charge 11,303,375.95 554,651.36 1%
Total 68,335,473.24 3,307,222.35
Statement on operational taxes and surcharges: increasing of RMB65,028,250.89, or 1966.25% was
caused by increasing of VAT payable for the period, and increasing of surcharge s thereon.
(32) Sales expense
Items Amount of the Current Term Amount of the Previous Term
Outsourced transportation 167,551,074.38 152,292,977.09
Port fee 31,757,989.75 24,070,088.99
Import & export agency fee 30,000,000.00 30,000,000.00
Packaging 26,681,800.21 26,035,802.26
Salary 8,573,570.94 8,330,566.49
Internal transportation 4,087,337.98 4,112,008.77
Others 5,903,273.71 4,830,634.19
Total 274,555,046.97 249,672,077.79
Sales expenses of the period was RMB274,555,046.97, which increased by RMB24,882,969.18 and 9.97% over the
same period of last year, which was caused by increase of freight and import & export agency expenses.
(33) Administrative expense
Items Amount of the Current Term Amount of the Previous Term
Maintaining 164,682,537.46 695,836,796.17
Social insurance 213,552,399.87 205,435,696.80
Wage and remuneration 105,369,098.98 86,704,145.32
Rental 172,763,119.99 150,922,531.20
Items Amount of the Current Term Amount of the Previous Term
Repairing fee 0.00 124,438,900.00
Taxes 36,632,031.36 36,322,896.79
Land using rights 28,713,000.00 28,713,000.00
Heating 2,643,868.58 7,051,377.51
Transportation 287,201.80 15,477,621.19
Sewage expense 13,113,240.00 10,474,625.00
Depreciation 28,313,313.57 24,484,378.75
Water resource fee 8,060,000.00 3,000,000.00
Business reception expenses 3,186,780.50 3,695,339.78
Housing fund 6,181,290.00 4,794,760.00
Technical development fee 1,324,585.67 2,178,727.64
Others 69,105,873.40 61,637,571.29
Total 853,928,341.18 1,461,168,367.44
Administrative expenses was RMB853,928,341.18 thie period, a decrease of RMB607,240,026.26 or 41.56% YoY,
which was caused by transferring of routine maintainance and repairing fee to manufacturing costs, and decrease of
maintainance and repairing fee in administrative expenses.
(34) Financial expenses
Categories Amount of the Current Term Amount of the Previous Term
Interest expense 268,626,264.61 206,753,289.08
Less: Incoming interests 15,212,652.22 7,357,205.07
Exchange gains/losses 14,579,224.40 -55,842,800.09
Others 4,076,116.13 1,462,921.33
Total 272,068,952.92 145,016,205.25
Financial expenses was RMB272,068,952.92 in the period, an increase of RMB127,052,747.67 or 87.61% over the
same period of last year, which was caused by increasing of loan balance and change of exchange rate led to decrease
in exchange income.
(35) Non-operational income
1. Details
Occurred in
Items Occurred current term Carried to current contingent gain/loss
previous term
1. Total of gains from disposal of 276,424.33 105,882.56 276,424.33
non-current assets
Incl. Gains from disposal of fixed 276,424.33 105,882.56 276,424.33
assets
Gains from disposal of
intangible assets
Occurred in
Items Occurred current term Carried to current contingent gain/loss
previous term
2. Gains from non-monetary
capital exchange
3. Gains from debt reorganizing 8,117,214.61 1,602,521.42 8,117,214.61
4. Government subsidies 623,565.58 5,072,967.00 623,565.58
5. Gains from inventory overage
6. Gains from donation
7. Payable account practically not 1,442,019.97 3840143.5 1,442,019.97
payable
8. Gains from penalties
9. Others 225,060.00
Total 10,459,224.49 10,846,574.48 10,459,224.49
(36) Non-operational expenditure
Items Occurred current term Occurred in Carried to current contingent gain/loss
previous term
1. Total of loss from disposal of 135,564.71 135,564.71
non-current assets
Incl. Loss from disposal of fixed 135,564.71 135,564.71
assets
Loss from disposal of
intangible assets
2. Loss from non-monetary capital
exchange
3. Loss from debt reorganizing
4. Donations paid
5. Non-recurring losses
6. Penalties paid
7. Compensation paid 113,900.00
8. Breach of faith
9. Loss from inventory shortage
10. Others 8,611.95 8,611.95
Total 144,176.66 113,900.00 144,176.66
(37) Income tax expenses
Items Occurred current term Occurred in previous term
Income tax calculated according to the law and 43,737,850.91 33,008,831.48
regulations of current term
Adjustment of differed income tax
Total 43,737,850.91 33,008,831.48
Income tax has increased by RMB10,729,019.43 and 32.5% from the previous term, which was caused by
increase of profit realized by subsidiaries.
(38) Calculation formula of basic earnings per share and diluted earnings per share
1. Formula of weighted average net income on asset:
Weighted average income on net asset ratio =P0/（E0 ＋ NP÷2 ＋ Ei×Mi÷M0 － Ej×Mj÷
M0±Ek×Mk÷M0）
P0 is respectively corresponding to the net profit attributable to the common shareholders of the
Company, and the net profit attributable to the common shareholders after deducting of
non-recurring gain/loss;
NP = net profit attributable to common shareholders
E0 = net asset at the beginning of term attributable to common share holders
Ei = newly added net asset attributable to common share holders due to placing of new shares or
transferred from debt in the report term
Ej = net asset attributable to common share holders decreased due to repurchasing or cash dividend
M0 = number of months of the report term
Mi = number of months from the next month of the newly added asset to the end of report term;
Mj = number of months from the next month of the newly deducted net asset to the end of report
term;
Ek = change of net asset due to other trade or event
Mk = number of months from the next month of other change of net asset to the end of report term.
Basic earnings per share is calculated as following:
Basic earnings per share = P0÷S S= S0＋S1＋Si×Mi÷M0– Sj×Mj÷M0-Sk, in which:
P0 = net profit attributable to common shareholders of the Company, or net profit attributable to
common shareholders after deducting of non-recurring gain/loss
S = weighted average of common shares placed in the market
S0 = Total shares at the beginning of term
S1 = increased shares due to capitalizing of common reserves or dividend
Si = shares increased due to placing of new shares or transferred from debt in the report term
Sj = shares decreased due to actions such as repurchasing in the report term
SK = the amount of shares reduced
M0 = number of months of the report term
Mi = accumulative number of months from the next month of share increasing to the end of report
term;
Mj = accumulative number of months from the next month of share decreasing to the end of report
term.
2. Diluted earning per share
Diluted earning per share=P1/（S0＋S1＋Si×Mi÷M0–Sj×Mj÷M0–Sk+ weighted average of
common shares increased by means of subscription certificates, share future options, or convertible
bonds）
P1 = net profit attributable to common shareholders of the Company, or net profit attributable to
common shareholders after deducting of non-recurring gain/loss, with considering the influences of
diluting potential common shares, and adjusted according to Enterprise Accounting Standard and
related regulations. At calculating of diluted earnings per share, the Company has considered
the influences of the entire dilute potential common shares, until the diluted earnings per share had
reached the minimum level.
(39) Notes to the Cash Flow Statement
1. Other cash inflow related to operation
Other cash inflow related to operation was RMB 57,782,062.64, with details as following:
Items Amount of the Current Term Amount of the Previous Term
1. Retrieving of current accounts, advance 12,159,410.42 4,877,607.31
money for another
2. Interest income 15,212,652.22 7,357,205.07
3. Special subsidy and allowance 30,410,000.00 46,490,000.00
Total 57,782,062.64 58,724,812.38
2. Other cash paid related to operation
Other cash paid related to operation was RMB704,169,233.36
Items Amount of the Current Term Amount of the Previous Term
1. Freight 213,122,344.21 171,882,607.05
2. Ports fee 31,757,989.75 24,070,088.99
3. Land using rights 28,713,000.00 28,713,000.00
4. Labor service 1,867,573.51 3,166,796.52
5. Processing fee 559,008.23 662,205.85
6. Packaging fee 26,681,800.21 26,035,802.26
7. Quality warranty 14,657,382.57 12,441,745.21
8. Water resource fee 8,060,000.00 3,000,000.00
9. Other current accounts 378,750,134.88 359,203,297.44
Total 704,169,233.36 629,175,543.32
(40) Appendix of Cash Flow Statement
1、 Appendix of Cash Flow Statement
Items Amount of the Current Term Amount of the Previous Term
1. Net profit adjusted to cash flow of business operation
Net profit 144,895,281.46 595,356,626.04
Plus: Asset impairment provision
Fixed asset depreciation, gas and petrol depreciation,
production goods depreciation
937,639,953.07 966,751,736.07
Amortizing of intangible assets 463,954.86 463,954.86
Amortizing of long-term expenses
Loss from disposal of fixed assets, intangible assets, and
other long-term assets (“-“ for gains)
Loss from fixed asset discard (“-“ for gains)
Loss from fair value fluctuation (“-“ for gains)
Financial expenses (“-“ for gains) 272,068,952.92 145,016,205.25
Investment losses (“-“ for gains)
Decrease of deferred income tax asset (“-“ for increase)
Increase of deferred income tax liability (“-“ for
decrease)
Decrease of inventory (“-“ for increase) 59,372,686.88 -1,515,788,069.68
Decrease of operational receivable items (“-“ for
increase)
-983,065,607.26 -499,297,855.44
Increase of operational payable items (“-“ for decrease) -241,858,397.32 1,449,254,422.55
Others
Cash flow generated by business operation, net 189,516,824.61 1,141,757,019.65
2. Payments of investment and fund-raising activities do
not involve cash：
Liabilities converted to capital
Convertible bond expire in 1 year
Fixed assets leased through financing
3. Net change of cash and cash equivalents
Balance of cash at period end 2,626,955,886.68 2,991,857,388.66
Less: Balance of cash at beginning of year 3,242,956,479.92 1,475,045,148.55
Plus: Balance of cash equivalents at the period end
Less: Balance of cash equivalents at beginning of term
Net increasing of cash and cash equivalents -616,000,593.24 1,516,812,240.11
2、 Composition of cash and cash equivalents
Items Closing balance Openning balance
I. Cash 2,626,955,886.68 2,720,189,256.61
Incl: Cash in stock 278,428.99 129,315.34
Bank savings could be used at any time 2,626,677,457.69 2,720,059,941.27
Items Closing balance Openning balance
Other monetary capital could be used at any time
Usable money in Central Bank
Money saved in associated financial bodies
Money from associated financial bodies
II. Cash equivalents
Incl. Bond investment due in 3 months
III. Balance of cash and cash equivalents at end of
term 2,626,955,886.68 2,720,189,256.61
VI. Related parties and related transactions
(All following figures are in RMB Yuan or otherwise provided)
(I) Particulars about the parent company of the Company (in RMB100 million)
Legal Regist Substantial
Name of the parent Ownership Business Shareholding of the Voting rights of the Organizati
Relationship Reg. Add. represen ered holder of the
co. type property parent co. parent co. % on code
tative capital Company
Liaoning
Zhang Provincial
Benxi Steel (Group) Fully Productio
Parent company Benxi Xiaofan 53.69 82.07 82.07 State-asset 11972626-3
state-owned n
Co., Ltd. g Administratio
n
(II) Subsidiaries of the Company:
Legal Busines
Ownership of Ownership Reg. Registered Share Voting Organization
Full name of the subsidiary representati s
the subsidiary type Add. capital proportion % power % code
ve property
Fully-owned Limited Zhang
Xiamen Bengang Steel Sales Ltd. Xiamen Sales 50.00 100.00 100.00 73788827-8
subsidiary liability Guoming
Fully-owned Limited Liu
Wuxi Bengang Steel Sales Ltd. Wuxi Sales 100.00 100.00 100.00 73654820-4
subsidiary liability Xiaodong
Fully-owned Limited
Tianjin Bengang Steel Trading Ltd. Tianjin Liu Chuang Sales 300.00 100.00 100.00 74135658-1
subsidiary liability
Nanjing Bengang Steel Material Sales Fully-owned Limited Liu
Nanjin Sales 115.00 100.00 100.00 75945466-5
Ltd. subsidiary liability Xiaodong
Fully-owned Limited
Yantai Bengang Steel Sales Ltd. Yantai Wang Lixin Sales 50.00 100.00 100.00 74451514-6
subsidiary liability
Haerbin Bengang International Trading Fully-owned Limited
Harbin Fei Jixi Sales 50.00 100.00 100.00 73137417-X
Ltd. subsidiary liability
Fully-owned Limited Changc
Changchun Bengang Steel Sales Ltd. Wang Jun Sales 50.00 100.00 100.00 74841484-4
subsidiary liability hun
Fully-owned Limited Guangz Wu
Guangzhou Bengang Trade Co., Ltd. Sales 100.00 100.00 100.00 68328959-4
subsidiary liability hou Shaogang
Fully-owned Limited Shangha
Shanghai Bengang Metallurgy Tech. Ltd. Fei Jixi Sales 500.00 100.00 100.00 68408762-8
subsidiary liability i
Bengang Steel Plate Liaoyang Orel Ball Fully-owned Limited Liaoyua Wang Producti
1,000.00 100.00 100.00 68968094-9
Co., Ltd. subsidiary liability ng Zhengzhi on
Dalian Benruitong Automobile Material Controlled Limited Producti
Dalian Wang Shu 10,000.00 65.00 65.00 55498444-3
Technologies Co., Ltd. subsidiaries liability on
Bengang Stainless Cool-rolling Fully-owned Limited Dandon Producti
Yu Tianchen 50,000.00 100.00 100.00 69941004-5
(Dandong) Co., Ltd. subsidiary liability g on
(III) Other related parties
Name of the related parties Relationship with the Company Organization code
Benxi Steel (Group) Machinery Co., Ltd. Same parent 701577718
Bengang Group International Trading Ltd. Same parent 701581055
Benxi Steel (Group) Tengda Holdings Ltd. Same parent 11968922-0
Guangshou Free Trade Zone Bengang Sales Co., Ltd. Same parent 231289622
Shanghai Bengang Steel & Iron Trading Co., Ltd. Same parent 784796085
Liaoning Bengang Steel & Iron Trading Co., Ltd. Same parent 78458403-1
Dalian Boluole Steel Tube Ltd. Same parent 60480260-2
Benxi Steel (Group) Steel Process and Logistics Co., Ltd. Same parent 752795993
Benxi Steel (Group) Construction & Repairing Co., Ltd. Same parent 701578219
Benxi Steel (Group) Metallurgy Residues Co., Ltd. Same parent 701578155
Liaoning Metallurgy Technician College Same parent 463564144
Benxi Steel (Group) Industrial Development Co., Ltd. Same parent 701578120
Benxi Steel (Group) Construction Co., Ltd. Same parent 119726538
Yinkou Bengang International Logistics Co., Ltd. Same parent 74712716-5
Benxi Steel (Group) Real-estate Development Co., Ltd. Same parent 819664921
Benxi Steel (Group) Education Center Same parent 463567636
Benxi Steel (Group) Drilling Tools Co., Ltd. Same parent 74710835-1
Benxi Steel (Group) Designing Institute Same parent 78510290-3
Benxi Steel (Group) Information and Automatic Tech. Ltd. Same parent 752798182
Benxi Steel (Group) News Center Same parent 774640431
Benxi Steel (Group) New Industrial Development Co., Ltd. Same parent 701578198
Benxi Steel (Group) Mining Co., Ltd. Same parent 701577726
Benxi Steel (Group) Electronics Co., Ltd. Same parent 781648511
Benxi Steel (Group) Thermal Power Development Co., Ltd. Same parent 701579297
Bengang Puxiang Cool Rolling Steel Sheet Co., Ltd. Same parent 717851072
Benxi Steel & Iron (Group) Inspection Co., Ltd. Same parent 736708677
Benxi Beiying Steel & Iron (Group) Co., Ltd. Same parent 736737267
(IV) Related transactions
1. Trades between the Company and the subsidiaries in the consolidation range have been
neutralized
2. Purchasing of products and services
Amount of the Current Term Amount of the Previous Term
Amount Amount Percentage in
Related parties Subjects of Percentage in similar trade
the related similar trade of the of the
transactions RMB0000 period % RMB0000 period %
Benxi Steel & Iron (Group) Ltd. Raw materials 10.13 0.00 18.92 0
Land using
2,871.30 0.13 2,871.30 0.13
Benxi Steel & Iron (Group) Ltd. rights
Benxi Steel & Iron (Group) Ltd. Maintaining 9,639.55 0.43 12,443.89 0.58
Bengang Puxiang Cool Rolling Steel Sheet
235,813.46 10.41 194,583.46 9.02
Co., Ltd. Raw materials
Repairing
94.60 0.00 94.18 0
Bengang Group Mineral Co., Ltd. services
Subjects of Amount of the Current Term Amount of the Previous Term
Related parties the related Amount Percentage in Amount Percentage in
transactions
Bengang Group Mineral Co., Ltd. Raw materials 245,746.09 trade
similar10.84 of the 244,431.62 similar trade
11.33
period % of the
Bengang Group Mineral Co., Ltd. Transportation 17.73 0.00 0 0 %
Bengang Group Hong Kong Ltd. Raw materials 53,275.44 2.35
Bengang Group Metallurgy Residue Ltd. Raw materials 5,297.60 0.23 4,247.47 0.2
Bengang Group Steel Process & Logistics
125.57 0.01 56.65 0
Ltd. Process fee
Bengang Group Property Development Ltd. Raw materials 2,256.45 0.10 2,040.83 0.09
Property
management 53.77 0.00 8.72 0
Bengang Group Property Co., Ltd. fee
Property
Bengang Group Property Management management - 61.66 0
Center fee
Bengang Group Machinery Ltd. Spare parts 12,416.53 0.55 15,785.40 0.73
Repairing
760.16 0.03 2,579.39 0.12
Bengang Group Machinery Ltd. services
Bengang Group Machinery Ltd. Raw materials 54.80 0.00 92.69 0
Bengang Group Construction Ltd. Spare parts 3,376.94 0.15 4,498.07 0.21
Repairing
7,100.91 0.31 28,081.12 1.3
Bengang Group Construction Ltd. services
Bengang Group Construction Ltd. Raw materials 56.83 0.00 139.46 0.01
Bengang Group Construction Ltd. Transportation 229.47 0.01 102.35 0
Benxi Steel (Group) Industrial
25.23 0.00 18.47 0
Development Ltd. Spare parts
Benxi Steel (Group) Industrial
13,741.45 0.61 14,189.66 0.66
Development Ltd. Raw materials
Benxi Steel (Group) Industrial Repairing
708.96 0.03 898.15 0.04
Development Ltd. services
Benxi Steel (Group) Industrial
461.94 0.02 264.2 0.01
Development Ltd. Transportation
Material and
177.12 0.01 277.03 0.01
Benxi Steel (Group) Construction Ltd. parts
Benxi Steel (Group) Construction Ltd. Maintaining 3,614.58 0.16 4,884.46 0.23
Bengang Electronics Co., Ltd. Raw materials 6,996.36 0.31 6,516.22 0.3
Repairing
470.63 0.02 447.64 0.02
Bengang Electronics Co., Ltd. services
Benxi Steel (Group) Drilling Tools Co.,
796.00 0.04 982.03 0.05
Ltd. Spare parts
Bengang Group New Industry Development Labour
166.05 0.01 59.89 0
Co., Ltd. security fee
Liaoning Metallurgy Technician College Spare parts 141.95 0.01 544.49 0.03
Benxi Steel (Group) Information and
349.27 0.02 52.97 0
Automatic Tech. Ltd. Spare parts
Benxi Steel (Group) Information and Repairing
1,835.84 0.08 3,129.27 0.15
Automatic Tech. Ltd. services
Bengang Group Thermal Power
3.66 0.00 100.16 0
Development Co., Ltd. Heating fee
Bengang Fire-resistance Material Co. Raw materials - 14,521.98 0.67
Bengang Designing & Researching Institute Repairing
4.92 0.00 204.6 0.01
Ltd. services
Benxi Steel (Group) Trucking Ltd. Freight 2,061.37 0.09 2,663.85 0.12
Benxi Beiying Steel & Iron (Group) Co., Raw materials 1,845.43 0.08
Subjects of Amount of the Current Term Amount of the Previous Term
Related parties the related Amount Percentage in Amount Percentage in
transactions
Ltd. similar trade of the similar trade
period % of the
Total 612,598.09 27.03 561,892.25 26.05
period %
3. Sales of goods and providing of services
Amount of the Current Amount of the Previous
Term Term
Related parties Subjects of Amount Portion in Amount Portion in
the related similar similar
transactions RMB0000 trade % RMB0000 trade %
Material and
Benxi Steel & Iron (Group) Ltd. 531.32 0.02 525.77 0.02
parts
Benxi Steel & Iron (Group) Ltd. Power supply 191.90 0.01 477.77 0.02
Dalian Boluole Steel Tube Ltd. Products 1,489.42 0.07 3,418.00 0.14
Liaoning Bengang Steel & Iron Trading Co.,
13,837.50 0.61 13,002.13 0.54
Ltd. Products
Benxi Steel (Group) Steel Process & Logistics
19,178.00 0.84 17,807.54 0.74
Ltd. Products
Benxi Steel (Group) Steel Process & Logistics
48.22 0.00 48.26 0
Ltd. Power supply
Bengang Group Dahe Industry Co., Ltd. Power supply 40.80 0.00 49.68 0
Benxi Steel (Group) Industrial Development Material and 1,081.56 0.05 4,244.18 0.18
Ltd. parts
Benxi Steel (Group) Industrial Development
124.39 0.01 120.79 0.01
Ltd. Power supply
Material and
Benxi Steel (Group) Construction Ltd. parts
4,342.72 0.19 5,058.73 0.21
Benxi Steel (Group) Construction Ltd. Power supply 648.37 0.03 401.68 0.02
Bengang Group Machinery Ltd. Power supply 1,410.61 0.06 1,339.91 0.06
Material and
Bengang Group Mineral Co., Ltd. parts
29,248.74 1.28 55,517.41 2.31
Bengang Group Mineral Co., Ltd. Power supply 38,899.93 1.70 39,370.62 1.64
Bengang Group Mineral Co., Ltd. Freight income 636.19 0.03 459.91 0.02
Bengang Group New Industry Development
18.13 0.00 45.51 0
Co., Ltd. Power supply
Material and
Benxi Steel (Group) Repairing & Building Ltd. 0 - 87.76 0
parts
Benxi Steel (Group) Repairing & Building Ltd. Power supply 96.59 0.00 61.3 0
Material and
Bengang Group Metallurgy Residue Ltd. parts
7,321.53 0.32 8,999.65 0.37
Bengang Group Metallurgy Residue Ltd. Power supply 238.75 0.01 280.37 0.01
Bengang Electronics Co., Ltd. Power supply 62.95 0.00 33.25 0
Bengang Puxiang Cool Rolling Steel Sheet Co.,
361,004.02 15.80 378,172.84 15.72
Ltd. Products
Bengang Puxiang Cool Rolling Steel Sheet Co., Material and 24,185.51 1.06 23,385.46 0.97
Ltd. parts
Bengang Puxiang Cool Rolling Steel Sheet Co.,
21,894.36 0.96 19,266.90 0.8
Ltd. Power supply
Bengang Group Thermal Power Development
4,950.34 0.22 4,245.53 0.18
Co., Ltd. Power supply
Bengang Group Thermal Power Development Material and 3,371.22 0.15 2,976.63 0.12
Co., Ltd. parts
Bengang Group Property Co., Ltd. Power supply 321.55 0.01 264.35 0.01
Material and
Bengang Fire-resistance Material Co. - 2,322.33 0.1
parts
Bengang Fire-resistance Material Co. Power supply - 672.6 0.03
Bengang Fire-resistance Material Co. Freight income - 68.52 0
Tianjin Bengang Steel Plate Processing and
- 112.37 0
Delivery Co., Ltd. Products
Material and
Benxi Beiying Steel & Iron (Group) Co., Ltd. parts
11,689.73 0.51
Total 546,864.36 23.94 582,837.74 24.23
Pricing policies at trading with related parties:
(1) On December 28, 2005 and June 26, 2008, and April 15, 2009, the Company entered the “Land Rent
Contract”, “Land Rent Contract Supplementary”, “Land Rent Contract Supplementary II” and
“Material and Service Providing Agreement” on April 18, 2011 with Bengang Group, which setout the
providing of raw materials, supplementary materials, supporting serves, trade mark, patent, and land
renting by the Group to the Company; as well as sales of products, supplementary materials, power, spare
parts, and waste materials to the Group.
A: The pricing of subjects purchased from Bengang Group:
Pricing of raw materials:
Price of fine iron ore will not higher than the average customs C&F price from countries like Brazil and
Australia in the last half year, plus inland freight, port fee, and quality adjustment price.
Quality adjustment on prices will be basing on the weighted average of imported fine iron ore in the first
half of year, and on the basis of 10 yuan per ton to 1% of quality difference.
The price for iron ore pellets is according to the market price at same quality.
The price for recycled steel will not be higher than the weighted average of the recycled steel the Company
purchased from the independent 3rd parties in the previous month, and to be decided upon negotiation.
The price for cool hard plate is decided at the weighted average of the hot rolled plate the Company sold to
the independent 3rd parties in the previous month plus RMB394 of processing fee, the processing fee is
revised once a year.
Cool plate and galvanized sheet are on market prices.
Pricing of auxiliary materials: limestone, fire resistance material and auxiliary materials provided by
Bengang Group will be at market price.
Pricing of spare parts: the spare parts manufactured by the Group itself will be at market price.
Rental for the 2300mm hot rolling line is decided by the “Lease Agreement”.
Trucking service: on market price.
Pricing of the heating service of the dwelling house for staff and workers: carried out according to the price
set forth by the national government.
Workshop and equipment maintaining services: maintaining services are priced upon negotiation.
Designing and engineering service will be at national government price.
Construction service: construction services provided by Bengang Group to the Company will be at market
price.
Printing, newspapers, media and other publications: on national government price.
Education facilities and services: education facilities, vocational education programs, and onsite training
courses provided by Bengang Group are at market price.
Agent service: before the Company is authorized to do import & export trade, the international business is
done by Bengang Group. All business are on normal commercial operation. Commissions are decided
through negotiation within the range of 0.5%-1.5% of the total value of the goods.
When the Company is authorized to do import & export trade, the agent service can be terminated on
beforehand notice. Bengang Group is not the sole agent of the Company, namely the Company has the
right to choose another party to do the agent.
Pricing of telephone, fax and the TV service: carried out according to the price set forth by the national
government.
Office spaces: on market price during the effective period of this agreement.
Car service: on market price during the effective period of this agreement.
Property management: on market price during the effective period of this agreement.
Packing service: on market price during the effective period of this agreement.
Labor safety services: on market price during the effective period of this agreement.
Trademark using: Bengang Group allows the Company to use “Bengang” trademark for free. Others are
not allowed to use the trademark. The Company may have its own trademark at any time.
B: Pricing of sales to Bengang Group:
Hot-rolled steel sheet: carried out according to the weighting average price of the same quality products
which our company sold to the independent third party in the previous month.
Coke and chemical products are on market prices.
Steel and iron residue is on market price.
Pricing of public service: Power supply to the Group was on the market price plus transferring cost. The
supplies from the Company to Bengang Group, i.e. oxygen, nitrogen, argon, blast furnace gas, coke
furnace gas, steam, clean water, fresh water, recycling water, and soft water, are at complete costs plus
national surplus tax and reasonable profit.
Railway transportation, quality test, measuring, weighting: at national price.
Iron and steel scrap, including the iron material: carried out according to the market price.
Raw material, supplementary material and spare parts: based on purchase price of the Company plus
0.5%-1.5% purchasing fee.
R&D service: R&D that Bengang Group cant do by itself are provided by the Company. The expenses
shall be the national price.
(2) Land rent from Bengang Group to the Company, it was agreed to carry forward the Land Using Right
Rent Agreement” which is effective at present. Namely the price is RMB0.624 /m2/month.
4. Leasing to and from related parties
Remarks on the rental with related party:
The Leasing Agreement for the 2300mm hot rolling line engaged with Bengang Group on March 18, 2009
was expired on December 31, 2011. It was decided through negotiation with Bengang Group that the
Leasing Agreement for 2300mm hot rolling line would be extended.
The renewed leasing term is January 1, 2012 to December 31, 2014. The rate was decided with
consideration of the depreciation and tax upon the production line, and the production and operation
situation of the both parties. The rate will not exceed RMB350 million per annum. As primarily calculated
for Jan-Jun 2012, RMB170 million is provided in advance for the rental.
5. Guarantees provided amongst related parties
Amount Complet
The Provider The Beneficiary Start date Due date
guaranteed ed or not
Bank loan guarantee not expired
yet
Benxi Steel (Group) Ltd. Bengang Steel Plates Co.,
70,000,000.00 2007-4-30 2014-4-29 No
Ltd.
Benxi Steel (Group) Ltd. Bengang Steel Plates Co.,
130,000,000.00 2007-4-30 2014-4-29 No
Ltd.
Benxi Steel (Group) Ltd. Bengang Steel Plates Co.,
100,000,000.00 2010-7-1 2013-6-30 No
Ltd.
Benxi Steel (Group) Ltd. Bengang Steel Plates Co.,
300,000,000.00 2010-7-2 2013-6-1 No
Ltd.
Benxi Steel (Group) Ltd. Bengang Steel Plates Co.,
310,000,000.00 2010-7-2 2013-7-1 No
Ltd.
Benxi Steel (Group) Ltd. Bengang Steel Plates Co.,
70,000,000.00 2010-4-29 2013-4-28 No
Ltd.
Benxi Steel (Group) Ltd. Bengang Steel Plates Co.,
$60,000,000.00 2009-9-11 2012-9-10 No
Ltd.
Benxi Steel (Group) Ltd. Bengang Steel Plates Co.,
$20,000,000.00 2009-9-25 2012-9-24 No
Ltd.
Benxi Steel (Group) Ltd. Bengang Steel Plates Co.,
$20,000,000.00 2009-10-12 2012-8-24 No
Ltd.
Benxi Steel (Group) Ltd. Bengang Steel Plates Co.,
$24,000,000.00 2009-10-20 2012-10-18 No
Ltd.
Benxi Steel (Group) Ltd. Bengang Steel Plates Co.,
$20,000,000.00 2009-10-21 2012-10-5 No
Ltd.
Benxi Steel (Group) Ltd. Bengang Steel Plates Co.,
JPY 359,228,000 1997-9-10 2027-9-10 No
Ltd.
Benxi Steel (Group) Ltd. Bengang Steel Plates Co.,
300,000,000.00 2011-9-9 2012-9-7 No
Ltd.
Benxi Steel (Group) Ltd. Bengang Steel Plates Co.,
200,000,000.00 2011-9-21 2012-9-20 No
Ltd.
Benxi Steel (Group) Ltd. Bengang Steel Plates Co.,
100,000,000.00 2011-11-1 2012-10-31 No
Ltd.
Benxi Steel (Group) Ltd. Bengang Steel Plates Co.,
50,000,000.00 2011-11-4 2012-11-2 No
Ltd.
Benxi Steel (Group) Ltd. Bengang Steel Plates Co.,
50,000,000.00 2011-11-4 2012-10-31 No
Ltd.
Benxi Steel (Group) Ltd. Bengang Steel Plates Co.,
150,000,000.00 2011-11-4 2012-11-2 No
Ltd.
Benxi Steel (Group) Ltd. Bengang Steel Plates Co.,
200,000,000.00 2011-11-25 2012-11-23 No
Ltd.
Benxi Steel (Group) Ltd. Bengang Steel Plates Co.,
100,000,000.00 2011-12-22 2012-12-21 No
Ltd.
Benxi Steel (Group) Ltd. Bengang Steel Plates Co.,
100,000,000.00 2011-12-30 2012-12-21 No
Ltd.
Benxi Steel (Group) Ltd. Bengang Steel Plates Co.,
$50,000,000.00 2011-9-11 2012-8-30 No
Ltd.
Benxi Steel (Group) Ltd. Bengang Steel Plates Co.,
$50,000,000.00 2011-6-28 2013-6-10 No
Ltd.
Benxi Steel (Group) Ltd. Bengang Steel Plates Co.,
$30,000,000.00 2012-6-28 2013-6-15 No
Ltd.
Amount Complet
The Provider The Beneficiary Start date Due date
guaranteed ed or not
Dalian Benruitong
Benxi Steel (Group) Ltd. Automobile Material Tech 10,000,000.00 2011-8-4 2012-8-3 No
Co., Ltd.
Dalian Benruitong
Benxi Steel (Group) Ltd. Automobile Material Tech 1,447,622.00 2012-5-6 2013-5-5 No
Co., Ltd.
Dalian Benruitong
Benxi Steel (Group) Ltd. Automobile Material Tech 4,027,420.00 2012-6-6 2013-6-5 No
Co., Ltd.
Dalian Benruitong
Benxi Steel (Group) Ltd. Automobile Material Tech 7,400,000.00 2011-11-7 2012-11-6 No
Co., Ltd.
Dalian Benruitong
Benxi Steel (Group) Ltd. Automobile Material Tech 5,039,413.46 2011-12-30 2012-12-29 No
Co., Ltd.
Notes payable guarantee not
expired yet
Bengang Steel Plates Co.,
Benxi Steel (Group) Ltd. No
Ltd. 300,470,000.00 2012-1-19 2012-7-18
Bengang Steel Plates Co., No
Benxi Steel (Group) Ltd.
Ltd. 200,000,000.00 2012-2-29 2012-8-24
Bengang Steel Plates Co., No
Benxi Steel (Group) Ltd.
Ltd. 298,000,000.00 2012-3-31 2012-9-30
Bengang Steel Plates Co.,
Benxi Steel (Group) Ltd. No
Ltd. 58,000,000.00 2012-4-25 2012-10-22
Statement on related guarantees: Benxi Steel & Iron (Group) Co., Ltd. has provided guarantee
for the long-term loans and notes payable.
6、 Receivable & payable with related parties
Account receivable from related parties:
Closing balance Openning balance
Items Related parties Book Bad debt Book Bad debt
balance provision balance provision
Account receivable
Bengang Group Machinery Ltd. 4,353.65 233.63 3,907.88 233.63
Bengang Group Thermal Power Development
1,583.26 225.68
Co., Ltd.
Benxi Steel (Group) Repairing & Building
1,649.91 70.14 1,437.15 70.14
Ltd.
Benxi Steel (Group) Construction Ltd. 2,976.01 179.45 3,074.32 179.45
Benxi Steel (Group) Industrial Development
5,917.68 200.23 7,707.67 200.23
Ltd.
Bengang Group New Industry Development
454.40 12 415.99 12
Co., Ltd.
Bengang Group Metallurgy Residue Ltd. 626.17 807.97
Benxi Steel (Group) Medical Co. Ltd. 66.13 9.59 66.13 9.59
Benxi Beiying Steel & Iron (Group) Co., Ltd. 381.57 219.17
Liaoning Metallurgy Technician College 9.82
Bengang Group Electronics Co., Ltd. 128.45 196.21
Sub-total 18,147.06 705.04 18,058.17 705.04
Notes receivable
Benxi Steel (Group) Co., Ltd. 50
Sub-total 50
Prepayments
Benxi Steel (Group) Construction Ltd. 248.51 423.89
Bengang Group Construction Ltd. 6,071.77 3,409.33
Benxi Steel (Group) Industrial Development
84.65 23.4
Ltd.
Benxi Beiying Steel & Iron (Group) Co., Ltd. - 4.28
Sub-total 6,404.94 0.00 3,860.90
Other account receivable
Bengang Group Supervisory Co., Ltd. 25.00 25.00 25.00 25.00
Benxi Steel (Group) Information and
289.73 299.00
Automatic Tech. Ltd.
Benxi Steel (Group) Real-estate Development
287.43 64.52 1,302.24 67.8
Co., Ltd.
Sub-total 602.15 89.52 1626.24 92.8
Account payable to the related parties:
Closing
Items Related parties Openning balance
balance
Account payable
Bengang Group International Trading Ltd. 333,316.22 372,148.03
Liaoning Bengang Steel & Iron Trading Co.,
242.98 589.09
Ltd.
Liaoning Metallurgy Technician College 447.11 890.24
Benxi Steel (Group) Drilling Tools Co., Ltd. 44.29 196.33
Bengang Group New Industry Development
69.68 122.37
Co., Ltd.
Bengang Group Property Co., Ltd. 381.99 376.06
Bengang Group Machinery Ltd. 3,533.47 5,829.35
Bengang Group Construction Ltd. 25,920.18 38,434.74
Bengang Group Mineral Co., Ltd. 65,032.91 28,016.78
Benxi Steel (Group) Industrial Development
11,100.61 8,491.69
Ltd.
Benxi Steel (Group) Construction Ltd. 11,574.98 18,131.05
Bengang Group Metallurgy Residue Ltd. 503.66 1,445.93
Benxi Steel (Group) Information and
4,224.54 5,522.07
Automatic Tech. Ltd.
Bengang Group Electronics Co., Ltd. 719.85 705.24
Benxi Steel (Group) Education Center 145.35 351.49
Benxi Steel (Group) Thermal Power
12.29 12.29
Development Co., Ltd.
Benxi Steel (Group) Steel Process &
0.00 105.18
Logistics Ltd.
Benxi Steel (Group) Medical Co. Ltd. 7.33 6.94
Benxi Beiying Steel & Iron (Group) Co., Ltd. 11,463.22 825.03
Sub-total 468,740.64 482,199.90
Notes payable
Benxi Steel (Group) Construction Ltd. 0 232.7
Benxi Steel (Group) Industrial Development
77.31 282.08
Ltd.
Liaoning Bengang Steel & Iron Trading Co.,
0 122.77
Ltd.
Bengang Fire-resistance Material Co., Ltd. 0 333.17
Benxi Steel (Group) Information and
107.55 77.69
Automatic Tech. Ltd.
Bengang Group Machinery Ltd. 0 135.97
Bengang Electronics Co., Ltd. 0 86.1
Bengang Group Construction and Repairing
0 12.57
Co., Ltd.
Benxi Beiying Steel & Iron (Group) Co., Ltd. 0 8
Sub-total 184.85 1,291.05
Other account
payable
Bengang Group Machinery Ltd. 304.61 295.91
Benxi Steel (Group) Construction Ltd. 31.92 42.14
Benxi Steel (Group) Industrial Development
1,076.34 624.13
Ltd.
Bengang Group Construction Ltd. 2,246.39 3820.62
Bengang Group Property Co., Ltd. 371.17 381.89
Benxi Steel (Group) Information and
421.01 246.85
Automatic Tech. Ltd.
Bengang Group New Industry Development
352.50 850.58
Co., Ltd.
Bengang Group Training Center 23.85 57.28
Benxi Steel (Group) Designing Institute 63.50 67
Liaoning Metallurgy Technician College 56.08 205.58
Bengang Group Steel Process & Logistics
75.21 1.98
Ltd.
Benxi Steel & Iron (Group) Ltd. 9,203.04 32,092.45
Benxi Steel (Group) News Center 363.87 402.46
Bengang Group Thermal Power Development
1,046.93 1,431.21
Co., Ltd.
Bengang Group Metallurgy Residue Ltd. 1.27 3.12
Benxi Steel (Group) Medical Co. Ltd. 2.95 5.28
Sub-total 15,640.64 40,528.48
Advances
received
Dalian Boluole Steel Tube Ltd. 625.60 865.69
Bengang Group Steel Process & Logistics
2,913.53 2694.43
Ltd.
Bengang Group Construction Ltd. - 18.7
Benxi Steel (Group) Industrial Development
39.22 20.74
Ltd.
Guangshou Free Trade Zone Bengang Sales
2,347.27 2,357.25
Co., Ltd.
Benxi Steel (Group) Drilling Tools Co., Ltd. - 0.31
Liaoning Bengang Steel & Iron Trading Co.,
2,186.30 3,845.97
Ltd.
Shanghai Bengang Steel & Iron Trading Co.,
1,848.13 1848.13
Ltd.
Tianjin Bengang Steel Plate Processing and
2.12 2.13
Delivery Co., Ltd.
Bengang Puxiang Cool Rolling Steel Sheet
15,883.72 22460.23
Co., Ltd.
Benxi Steel (Group) Machinery Co., Ltd. 38.19 38.19
Tianjin Bengang Longxing Steel Processing
1,725.29 1158.13
Co., Ltd.
Sub-total 27,609.39 35,309.90
VII. Contingent Events
No contingent event to be disclosed up to the date of this report.
VIII. Commitment Events
No commitment issues to be disclosed up to the date of this report.
IX. Post-balance sheet issues
No post balance sheet non-adjustment issues to be disclosed up to the date of this report.
X. Other Material Statements
(I) Non-monetary asset exchange
No such non-monetary asset exchange to be disclosed up to the date of this report.
(II) Other material issues to be disclosed
In the report period, the proposal of Basic Conditions of Private Share Issuing to particular subscribers was adopted at
the 1st provisional shareholders meeting 2012 held on June 13, 2012. The Company received the Acceptance Letter
(No.121229) from CSRC on July 11, 2012. CSRC has granted approval for the application basing on appropriate
documentations and legal procedures.
XI. Notes to the main items of the financial statements of the parent company
(All figures hereinafter are in RMB Yuan except for otherwise provided)
(I) Account receivable
1. Age analyze of receivable accounts
Closing balance Openning balance
Book balance Bad debt provision Book balance Bad debt provision
Categories
Ratio Ratio Ratio Ratio
Amount Amount Amount Amount
(%) (%) (%) (%)
Within 1 yr,
792,920,990.38 61.28 757,127,476.56 60.19
(included)
1-2 yrs
81,324,379.33 6.29 4,066,218.97 5 81,324,379.33 6.46 4,066,218.97 5
(included)
2-3 yrs 24,593,169.13 1.90 4,918,633.83 20 24,593,169.13 1.95 4,918,633.83 20
(included)
Over 3 yrs 395,029,639.14 30.53 395,029,639.14 100 395,029,639.14 31.4 395,029,639.14 100
Total 1,293,868,177.98 100.00 404,014,491.94 1,258,074,664.16 100.00 404,014,491.94
2. Accounts receivable by categories
Closing balance Openning balance
Book balance Bad debt provision Book balance Bad debt provision
Categories
Ratio Ratio Ratio Ratio
Amount Amount Amount Amount
(%) (%) (%) (%)
Receivables with
major individual
amount and bad debt
provision provided
individually
Receivables provided
bad debt provision in 1,293,868,177.98 100.00 404,014,491.94 31.23 1,258,074,664.16 100.00 404,014,491.94 32.11
groups
Account receivable
with minor individual
amount but bad debt
provision is provided
Total 1,293,868,177.98 100.00 404,014,491.94 31.23 1,258,074,664.16 100.00 404,014,491.94 32.11
Receivable accounts on which bad debt provisions are provided on age analyze basis in the
portfolio
Closing balance Openning balance
Age Book balance Bad debt Book balance Bad debt
Amount Proportion % provision Amount Proportion % provision
within 1
792,920,990.38 61.28 757,127,476.56 60.19
yr
1-2 years 81,324,379.33 6.29 4,066,218.97 81,324,379.33 6.46 4,066,218.97
2-3 years 24,593,169.13 1.90 4,918,633.83 24,593,169.13 1.95 4,918,633.83
Over 3 395,029,639.14 30.53 395,029,639.14 395,029,639.14 31.4 395,029,639.14
yrs
Total 1,293,868,177.98 100.00 404,014,491.94 1,258,074,664.16 100.00 404,014,491.94
3、 At end of the report term, within the aforesaid balance, there is no amount due from the
shareholders who holds 5% or more the voting shares of the Company.
4. The top five debtors at the year end
Relation
Portion in total
Name of the companies with the Amount Ages
receivables
Company
Bengang Stainless Cool-rolling (Dandong)
Subsidiary 628,146,892.80 within 2 yrs 48.55
Co., Ltd.
Shenzhen Southern Zhongji East Client 71,096,597.62 within 1 yr 5.49
Logistics Equipment Co., Ltd.
Benxi Steel (Group) Industrial
Same parent 59,176,803.90 within 1 yr 4.57
Development Ltd.
Bengang Group Machinery Ltd. Same parent 43,536,541.15 Within 3 yrs 3.36
Dalian Zhongji Container Co., Ltd. Client 35,230,095.18 within 1 yr 2.72
Total 837,186,930.65 64.70
5. No accounts receivable, which had been fully impaired or made a large proportion of bad debt provision last
year, has been fully recovered or taken back a huge proportion this year.
6. No accounts receivable has been written off this year
(II) Other account receivable
1. Age analyze of other account receivable
Closing balance Openning balance
Book balance Bad debt provision Book balance Bad debt provision
Categories
Ratio Ratio Ratio Ratio
Amount Amount Amount Amount
(%) (%) (%) (%)
Within 1 yr,
233,421,874.58 68.16 256,068,575.76 70.14
(included)
1-2 yrs (included) 19,858,345.80 5.80 992,917.29 5 19,858,345.80 5.44 992,917.29 5
2-3 yrs (included) 15,346,666.36 4.48 3,069,333.27 20 15,346,666.36 4.2 3,069,333.27 20
Over 3 yrs 73,830,885.23 21.56 72,090,885.23 97.64 73,830,885.23 20.22 72,090,885.23 97.64
Total 342,457,771.97 100.00 76,153,135.79 365,104,473.15 100.00 76,153,135.79
2、 Other receivables presented by categories:
Closing balance Openning balance
Category Bad debt Bad debt
Percentage Bad debt Percentage Bad debt
Book balance provision Book balance provision
in total % provision in total % provision
rate % rate %
Receivables with
major individual
amount and bad debt
provision provided
individually
Receivables provided
bad debt provision in 340,717,771.97 99.49 76,153,135.79 22.35 363,364,473.15 99.52 76,153,135.79 20.96
groups
Account receivable
with minor individual
amount but bad debt
1,740,000.00 0.51 1,740,000.00 0.48
provision is provided
Total 342,457,771.97 100.00 76,153,135.79 22.24 365,104,473.15 100.00 76,153,135.79 20.86
Other account receivable with minor individual amount but bad debt provision is provided
Bad debt
Name of the companies Book balance Providing rate % Reason
provision
Japanese Loan Sinking
Fund of Finance Bureau
of Benxi 1,740,000.00 sinking fund
Total 1,740,000.00
The Finance Bureau of Benxi Japanese Loan Sinking fund is the deposit for paying back Janapese
Yan loan. The aging is over three years and no bad debt provision has been provided.
Other receivable accounts in the portfolio on which bad debt provisions were provided on age
analyze basis
Closing balance Openning balance
Book balance Book balance
Age Bad debt
Proportio Proportio Bad debt provision
Amount provision Amount
n% n%
within 1 yr 233,421,874.58 68.51 256,068,575.76 70.47
1-2 years 19,858,345.80 5.83 992,917.29 19,858,345.80 5.47 992,917.29
2-3 years 15,346,666.36 4.50 3,069,333.27 15,346,666.36 4.22 3,069,333.27
Over 3 yrs 72,090,885.23 21.16 72,090,885.23 72,090,885.23 19.84 72,090,885.23
Total 340,717,771.97 100.00 76,153,135.79 363,364,473.15 100.00 76,153,135.79
3. No other receivable accounts written off in the period.
4. As of end of period, within the aforesaid balance, there is no amount due from the shareholders
who holds 5% or more the voting shares of the Company.
5. Top 5 other receivable accounts
Relation
Portion in total other
Name of the companies with the Description Amount Ages
receivables (%)
Company
Yantai Bengang Steel Sales Current
Subsidiary 58,127,128.68 within 1 yr 16.97
Ltd. account
Transporta Freight paid
Freight for main clients 24,102,914.06 within 1 yr 7.04
tion Co. on behalf
Benxi Xinyu metallurgy Current
Supplier 17,441,506.50 within 1 yr 5.09
Material Co., Ltd. account
Nanjing Bengang Steel Current within 2
Subsidiary 15,397,941.32 4.50
Material Sales Ltd. account yrs
Benxi Juyuan Slag and Current
Supplier 9,871,328.79 within 1 yr 2.88
Furnance Burden Co., Ltd. account
Total 124,940,819.35 36.48
(III) Long-term share equity investment
1. Detail of long-term investment
Statement
Incl. Share on
Voting Impairment Cash
of change in Percentage differences
Calculating power Impairment provision dividend of
Company invested in Investment cost Openning balance Changed by other misc Closing balance of share in between the
basis in the provision provided the current
income of the firm % shareholding
firm % this term term
affiliates and voting
rights
Subsidiaries
Haerbin Bengang
Cost
International Trading 423,398.23 423,398.23 423,398.23 100.00 100.00
basis
Ltd.
Changchun Bengang Cost
-1,355,124.64 -1,355,124.64 -1,355,124.64 100.00 100.00
Steel Sales Ltd. basis
Tianjin Bengang Cost
33,318,095.80 33,318,095.80 33,318,095.80 100.00 100.00
Steel Trading Ltd. basis
Yantai Bengang Cost
19,600,329.41 19,600,329.41 19,600,329.41 100.00 100.00
Steel Sales Ltd. basis
Nanjing Bengang
Cost
Steel Material Sales 2,081,400.65 2,081,400.65 2,081,400.65 100.00 100.00
basis
Ltd.
Wuxi Bengang Steel Cost
936,718.57 936,718.57 936,718.57 100.00 100.00
Sales Ltd. basis
Xiamen Bengang Cost
1,095,711.66 1,095,711.66 1,095,711.66 100.00 100.00
Steel Sales Ltd. basis
Guangzhou Bengang Cost
1,000,000.00 1,000,000.00 1,000,000.00 100.00 100.00
Trade Co., Ltd. basis
Shanghai Bengang
Cost
Metallurgy Tech. 5,000,000.00 5,000,000.00 5,000,000.00 100.00 100.00
basis
Ltd.
Bengang Steel Plate
Cost
Liaoyang Orel Ball 529,899,801.38 529,899,801.38 529,899,801.38 100.00 100.00
basis
Co., Ltd.
Statement
Incl. Share on
Voting Impairment Cash
of change in Percentage differences
Calculating power Impairment provision dividend of
Company invested in Investment cost Openning balance Changed by other misc Closing balance of share in between the
basis in the provision provided the current
income of the firm % shareholding
firm % this term term
affiliates and voting
rights
Bengang Stainless
Cost
Cool-rolling 500,000,000.00 500,000,000.00 500,000,000.00 100.00 100.00
basis
(Dandong) Co., Ltd.
Dalian Benruitong
Automobile Material Cost
65,000,000.00 65,000,000.00 65,000,000.00 65.00 65.00
Technologies Co., basis
Ltd.
Other invested firms
Tianjin Bengang
Cost
Longxing Steel 3,888,980.00 3,888,980.00 3,888,980.00 20.00 20.00
basis
Processing Co., Ltd.
China Steel
Cost
Shanghai Steel 10,058,250.00 10,058,250.00 10,058,250.00 15.00 15.00
basis
Processing Co., Ltd.
Subtotal on cost
1,170,947,561.06 1,170,947,561.06 1,170,947,561.06
basis
Total 1,170,947,561.06 1,170,947,561.06 1,170,947,561.06
(IV) Operational income and costs
1、 Operational turnover and costs
Items Amount of the Current Term Amount of the Previous Term
Major business turnover 19,003,107,192.07 20,722,113,757.54
Other business income 2,646,068,720.91 2,748,616,805.63
Total 21,649,175,912.98 23,470,730,563.17
Operation cost 20,280,233,614.44 21,218,162,916.22
2、 Main Business (Industry segment)
Amount of the Current Term Amount of the Previous Term
Items
Turnover Operation cost Turnover Operation cost
Industry 19,003,107,192.07 17,734,906,477.81 20,722,113,757.54 18,521,588,875.69
Total 19,003,107,192.07 17,734,906,477.81 20,722,113,757.54 18,521,588,875.69
3、 Main business segements (on products)
Occurred current term Occurred in previous term
Items
Turnover Operation cost Turnover Operation cost
Steel plate 18,663,342,318.00 17,449,208,241.89 20,326,331,505.97 18,170,540,518.82
Steel billet 0.00 0.00 3,928,917.19 3,235,556.50
Others 339,764,874.07 285,698,235.92 391,853,334.38 347,812,800.37
Total 19,003,107,192.07 17,734,906,477.81 20,722,113,757.54 18,521,588,875.69
4、 Main business (geographic segment)
Occurred current term Occurred in previous term
Items
Turnover Operation cost Turnover Operation cost
Northeast 4,732,910,275.27 4,513,716,315.97 7,046,949,986.34 6,298,619,532.82
North 2,597,018,437.47 2,406,110,778.69 3,175,710,110.63 2,838,474,768.82
East 6,272,275,635.20 5,811,198,640.35 5,118,029,315.56 4,574,535,008.62
Northwest 90,987,276.21 84,298,772.34 270,843,737.15 242,082,270.56
Mid-south 2,168,503,155.29 2,009,095,792.43 2,391,892,555.51 2,137,892,449.89
Export 3,141,412,412.63 2,910,486,178.03 2,718,688,052.35 2,429,984,844.98
Total 19,003,107,192.07 17,734,906,477.81 20,722,113,757.54 18,521,588,875.69
5、 Turnover from top 5 clients
Percentage in total turnover of the
Name of clients Total turnover
Company %
Bengang Puxiang Cool Rolling Steel Sheet
4,070,838,911.69 18.80
Co., Ltd.
Shanghai Bengang Metallurgy Tech. Ltd. 1,022,027,940.31 4.72
Hengxing International Resource Co., Ltd. 920,998,547.04 4.25
Yantai Bengang Steel Sales Ltd. 636,890,338.75 2.94
Percentage in total turnover of the
Name of clients Total turnover
Company %
Guangzhou Bengang Trade Co., Ltd. 526,463,205.09 2.43
Total 7,177,218,942.88 33.15
(V) Appendix of Cash Flow Statement
Items Amount of the Current Term Amount of the Previous Term
1. Net profit adjusted to cash flow of business operation
Net profit 9,276,060.51 491,945,046.02
Plus: Asset impairment provision
Fixed asset depreciation, gas and petrol depreciation,
921,648,321.84 950,754,929.64
production goods depreciation
Amortizing of intangible assets
Amortizing of long-term expenses
Loss from disposal of fixed assets, intangible assets, and
other long-term assets (“-“ for gains)
Loss from fixed asset discard (“-“ for gains)
Loss from fair value fluctuation (“-“ for gains)
Financial expenses (“-“ for gains) 272,421,337.99 145,561,883.79
Investment losses (“-“ for gains)
Decrease of deferred income tax asset (“-“ for increase)
Increase of deferred income tax liability (“-“ for
decrease)
Decrease of inventory (“-“ for increase) 131,686,252.88 -1,485,822,924.27
Decrease of operational receivable items (“-“ for
-1,038,576,911.11 -102,389,137.60
increase)
Increase of operational payable items (“-“ for decrease) -222,908,907.71 1,019,307,500.70
Others
Cash flow generated by business operation, net 73,546,154.40 1,019,357,298.28
2. Payments of investment and fund-raising activities do
not involve cash：
Liabilities converted to capital
Convertible bond expire in 1 year
Fixed assets leased through financing
3. Net change of cash and cash equivalents
Balance of cash at period end 2,450,794,511.87 2,879,761,948.09
Less: Balance of cash at beginning of year 3,079,794,798.31 1,358,651,762.79
Plus: Balance of cash equivalents at the period end
Less: Balance of cash equivalents at beginning of term
Net increasing of cash and cash equivalents -629,000,286.44 1,521,110,185.30
XII. Supplementary Info.
(All figures hereinafter are in RMB Yuan except for otherwise provided)
(I) Details of non-recurring gain/loss of current term
Amount of the
Items Remarks
Current Term
Gain/loss of non-current assets 140,859.62
Tax refunding or exemption without official certification or exceeded authority
Gains and losses included in the current period of government subsidies, excluding those
government grants which are closely related to normal business and in line with national 623,565.58
policy , or in accordance with fixed standards or quantities
Capital adoption fee collected from non-financial organizations and accounted into
current gain/loss
Gain/loss from differences between the cost of enterprise merger and the fair value of
recognizable net asset of the invested entities
Gain/loss from non-monetary assets
Gain/loss from commissioned investment or assets
Asset impairment provisions provided for force-majeur
Gain/loss from debt reorganization 8,117,214.61
Enterprise reorganizing expenses, such as employee placement fee and integration fee
Gain/loss from trade departing from fair value
Current net gain/loss of subsidiaries under same control from beginning of term till date
of consolidation
Gain/loss generated by contingent liabilities without connection with main businesses
Gain/loss from change of fair value of transactional asset and liabilities, and investment
gains from disposal of transactional financial assets and liabilities and sellable financial
assets, other than valid period value instruments related to the Company’s common
businesses
Restoring of receivable account impairment provision tested individually
Gain/loss from commissioned loans
Gain/loss from change of fair value of investment property measured at fair value in
follow-up measurement
Influence of one-time adjustment made on current gain/loss account according to the laws
and regulations regarding tax and accounting
Consigning fee received for cosigned operation
Other non-business income and expenditures other than the above 1,433,408.02
Other gain/loss items satisfying the definition of non-recurring gain/loss account
Influenced amount of income tax -2,578,761.96
Influence on minority shareholders quity (after tax)
Total 7,736,285.87
(II) Net asset yield and Earnings per Share
Weighted average Earnings per share
net
Profit of the report period Diluted earnings per
income/asset ratio Basic earnings per share
(%) share
Net profit attributable to common
0.94 0.05 0.05
shareholders of the Company
Net profit attributable to the common
owners of the PLC after deducting of 0.89 0.04 0.04
non-recurring gains/losses
(III) Irregular Situation and Causations of Main Accounting Items
* Items in the consolidated statements changed for over 30% comparing with the end of 2011,
and causations
Rate of
I. Balance Sheet Items change Cause of change
Increase of bank accepted drafts received in the
Notes receivable 33%
report period
Acquiring of land using rights by Bengang Stainless
Intangible assets 148%
Steel Cool Rolling Dandong Co., Ltd.
Compensation for dismissing of labour service
Employees’ wage payable -36%
contract
Acquiring of land using rights by Bengang Stainless
Other non-recurring liabilities 107%
Steel Cool Rolling Dandong Co., Ltd.
* Items in the consolidated statements which changed for over 30% comparing with Jan – Jun
2011, and causations
Rate of
II. Income Statement Items change Cause of change
Business tax and surcharge 1966% Increase of VAT payable
which was caused by transferring of routine
maintainance and repairing fee of final
Administrative expense -42% products to manufacturing costs, and decrease
of maintainance and repairing fee in
administrative expenses.
Balance of loan increased this period, change
Financial expenses 88% of exchange rate, and decrease of exchange
income
Income tax expenses 33% Increase of profit realized by subsidiaries
Rate of
III. Cash Flow Statement change Cause of change
Tax returned -90% Decrease of tax refund
Taxes paid 173% Increase of VAT payable
Cash paid as dividend, profit,
99.69%
or interests Dividend paid earlier than previous period.
IX. Documents for Reference
Index of documents for reference
1. Financial Statements signed and stamped by the legal representative, CFO, and accounting manager;
2. All of the original copies of documents and announcements that have been published on China Securities
Journal, Securities Times, and Hong Kong Commercial Daily.
The Board of Directors of Bengang Steel Plate Co., Ltd.
The Chairman:
August 8, 2012
