Bengang Steel Plates Co., Ltd. Annual Report 2016
Bengang Steel Plates Co., Ltd.
Annual Report 2016
March, 2017
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Bengang Steel Plates Co., Ltd. Annual Report 2016
I. Important Notice, Table of Contents, and Definitions
The Board of Directors, the Supervisory Committee and the Directors, members of
the Supervisory Committee and senior management of the Company guarantee that
there are no misrepresentations or misleading statements, or material omission in this
report, and individually and collectively accept full responsibility for the authenticity,
accuracy and integrity of the information contained in this report.
Wang Shu, Chairman of the Company, Han Ge, the principal in charge of the
accounting, and Wang Shaoyu, Chief of Accounting Affairs, make the pledge for the
authenticity, accuracy and integrity of the attached financial statements.
All the members of the Board of Directors attended the board meeting on which this
report was examined.
The prospective statements contained in this annual report do not constitute any
substantial commitment to the investors. Investors should pay attention to the risks
attached to investment decisions. The fourth chapter of this report “The Management
Discussion and Analysis - Prospect for future development of the Company”
describes the risks faced by the Company in its future operation, so it’s advised that
all investors should pay attention to it. This report is prepared in both of Chinese and
English. The Chinese version shall prevail when there are any controversial
statements in the two versions.
The Company planed not to distribute cash dividend or bonus shares, and not to
convert capital reserve into share capital.
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Bengang Steel Plates Co., Ltd. Annual Report 2016
Table of Contents
I.Important Notice, Table of Contents, and Definitions .................................................................... 2
II. Company Profile and Main Financial Index................................................................................. 5
III. Summary of Company Business ............................................................................................... 11
IV. Management Discussion and Analysis ...................................................................................... 15
V. Important Events......................................................................................................................... 33
VI. Status of Share Capital Changes and Shareholders................................................................... 52
VII. Status of Preferred Shares........................................................................................................ 60
VIII. Status of Directors, Supervisors, Senior Executives and Employees ..................................... 61
IX. Corporate Governance .............................................................................................................. 71
X. Relevant Information about Corporate Bonds............................................................................ 79
XI. Financial Report........................................................................................................................ 86
XII. Documents available for inspection ...................................................................................... 191
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Bengang Steel Plates Co., Ltd. Annual Report 2016
Definition
Terms to be defined Refers to Definition
Bengang Bancai, Bengang Steel, the
Refers to Bengang Steel Plates Co., Ltd.
Company, the Listed Company
Bengang Group Refers to Bengang Group Co., Ltd.
Bengang Co. Refers to Benxi Steel & Iron (Group) Co., Ltd.
Liaoning Provincial State-asset Liaoning State-owned Asset Supervisory and Management
Refers to
Administration Committee
SSE Refers to Shenzhen Stock Exchange
Bengang Puxiang Refers to Bengang Puxiang Cool Rolling Steel Sheet Co., Ltd.
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Bengang Steel Plates Co., Ltd. Annual Report 2016
II. Company Profile and Main Financial Index
I. Company Information
Stock abbreviation Bengang Bancai, Bengangban B Stock Code 000761, 200761
Stock exchange for listing Shenzhen Stock Exchange
Company name in Chinese 本钢板材股份有限公司
Abbreviation of Company
本钢板材
name in Chinese
Company name in English (If
BENGANG STEEL PLATES CO.,LTD.
any)
Abbreviation of Company
BSP
name in English (If any)
Legal representative Wang Shu
Registration Address No.16, Renmin Road, Pingshan District, Benxi City, Liaoning Province
Post Code of registration
117000
Address
Office address No.16, Renmin Road, Pingshan District, Benxi City, Liaoning Province
Post Code of office address 117000
Web Address None
Email bgbc761@126.com
II. Contact Information
Secretary of Board of Directors Representative of Securities Affairs
Name Sun Yanbin Tong Weigang
No.16, Renmin Road, Pingshan No.16, Renmin Road, Pingshan
Address District, Benxi City, Liaoning District, Benxi City, Liaoning
Province Province
Tel 024-47828860 024-47827003
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Bengang Steel Plates Co., Ltd. Annual Report 2016
Fax 024-47827004 024-47827004
Email bgbcsyb@126.com bgbc761@126.com
III. Information Disclosure and Place for Consulting
China Securities Journal, Securities Times, Hong Kong
Press media for information disclosure
Commercial Daily
Web address for the annual report as assigned
http://www.cninfo.com.cn
by CSRC
Place for inquiry of the annual report Secretary Office of the Board, Bengang Steel Plate Co., Ltd.
IV. Change of Business Registration
Organization Code 91210000242690243E
Changes of principal business activities since listing (if
No change
any)
Changes of the controlling shareholder in the past (is
No change
any)
V. Other Information
Accountants’ firm engaged by the Company:
Name of the accountants’ firm BDO China Shu Lun Pan Certified Public Accountants LLP
Address of the accountants’
Address: 4/F 61 Nanjing Rd. East, Huangpu, Shanghai
firm
Signing name of accountants Wu Xue, Zhang Huice
Sponsor engaged by the Company to conduct sustained supervision during the reporting period
□ Applicable √ Not applicable
Financial consultancy institution engaged by the Company to conduct sustained supervision during the reporting
period
□ Applicable √ Not applicable
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Bengang Steel Plates Co., Ltd. Annual Report 2016
VI. Main Accounting Data and Financial Index
Whether the Company makes retroactive adjustment or restatement of the accounting data of the last years due to
change of the accounting policy and correction of accounting errors
□ Yes √ No
Change over last
2016 2015 2014
year
Operating income 29,526,012,651.08 29,253,638,605.80 0.93% 41,422,088,025.70
Net profit attributable to the
shareholders of the listed 781,274,829.32 -3,293,624,545.17 123.72% 232,804,820.19
company
Net profit after deducting
non-recurring gain/loss
736,095,375.87 -3,452,130,239.63 121.32% 187,126,217.32
attributable to the shareholders
of listed company
Net cash flows generated by
9,557,353,906.52 -2,305,005,968.10 514.63% 2,868,140,094.86
operating activities
Basic earnings per share 0.249 -1.050 123.72% 0.074
Diluted earnings per share 0.249 -1.050 123.72% 0.074
ROE 6.34% -24.11% 30.45% 1.52%
Change over last
End of 2016 End of 2015 End of 2014
year
Total assets 54,155,710,718.91 44,461,643,345.33 21.80% 49,170,603,030.67
Net assets attributable to
shareholders of the listed 12,715,354,551.15 11,934,100,372.02 6.55% 15,384,562,323.08
company
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Bengang Steel Plates Co., Ltd. Annual Report 2016
VII. Differences between Domestic and Foreign Accounting Standards
1. Differences of net profit and net assets disclosed in financial reports prepared under IFRS and Chinese
accounting standards.
√ Applicable □ Not applicable
Unit: Yuan
Net profit attributable to the shareholders Net assets attributable to the
of the listed company shareholders of the listed company
2016 2015 Ending balance Beginning balance
According to Chinese
781,274,829.32 -3,293,624,545.17 12,715,354,551.15 11,934,100,372.02
accounting standards
Items and amounts adjusted according to IFRS
2. Differences of net profit and net assets disclosed in financial reports prepared under overseas and
Chinese accounting standards.
□ Applicable √ Not applicable
There are no differences of net profit and net assets disclosed in financial reports prepared under overseas and
Chinese accounting standards during the reporting period.
3. Reasons of differences between domestic and foreign accounting standards
□ Applicable √ Not applicable
VIII. Main Financial Index by Quarters
Unit: Yuan
First quarter Second quarter Third quarter Fourth quarter
Operation income 6,163,797,202.21 6,465,787,367.14 7,352,413,667.74 9,544,014,413.99
Net profit attributable to the
shareholders of the listed 41,106,090.36 141,432,085.96 392,077,397.20 206,659,255.80
company
Net profit after deducting 36,347,865.03 128,168,341.56 380,239,871.89 191,339,297.39
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Bengang Steel Plates Co., Ltd. Annual Report 2016
non-recurring gain/loss
attributable to the
shareholders of listed
company
Net cash flows generated by
2,598,490,197.76 -207,712,834.24 1,255,846,065.24 6,639,351,966.86
operating activities
Whether significant variances exist between the above financial index or the index with its sum and the financial
index of the quarterly report as well as semi-annual report index disclosed by the Company
□ Yes √ No
IX. Items and Amount of Non-Current Gains and Losses
√ Applicable □ Not applicable
Unit: Yuan
Item 2016 2015 2014 Notes
Gains and losses on disposal of
non-current assets (including the write
-1,854,918.03 -2,918,523.73 -3,000,928.56
off part of the provision for
impairment)
Government subsidy attributable to
profit and loss of current period (except
such government subsidy closely
related to the company's normal
business operation, meeting the 36,089,000.00 136,992,233.61 18,722,224.00
regulation of national policy and
enjoyed constantly in certain quota or
quantity according to a certain
standard)
Profit or loss from investment or
1,715,742.47 7,226,589.08 20,845,473.00
assets entrusted to others
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Bengang Steel Plates Co., Ltd. Annual Report 2016
Gains and losses of debt restructuring 8,631,844.34 12,200,032.42 5,940,400.95
Other non-operating income and
663,844.36 5,644,831.10 5,156,149.77
expenses other than above
Less: impact of income tax 66,059.69 639,468.02 710,902.39
impact of minority equity (after
1,273,813.90
tax)
Total 45,179,453.45 158,505,694.46 45,678,602.87 --
Explanation for defining non-recurring gains and losses items according to the "Public Offering of Securities
Information Disclosure Explanatory Notice No. 1 – Non-Recurring Gains and Losses", and reasons for defining
non-recurring gains and losses items listed in the document as recurring items.
□ Applicable√ Not applicable
There exists no situation of defining non-recurring gains and losses items listed in the document as recurring items.
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Bengang Steel Plates Co., Ltd. Annual Report 2016
III. Summary of Company Business
I. the Company's main business during the reporting period
Whether the Company needs to comply with the disclosure requirement for special industry
No
During the reporting period, the main businesses of the company involves iron and steel smelting, rolling
processing, electricity generation, coal chemical industry, special steel profile, railway, import and export trade,
research and development, product sales, etc. By introducing the world-advanced equipment technology, the
company upgrades the equipment for main steel business and has basically built up a high-quality steel product
base. Major products include hot-rolled plates, cold-rolled plates, zinc steel plates, special steel, silicon steel, etc.
that are widely applied in fields including automobile, household appliances, petrochemical engineering,
aerospace, machine manufacturing, energy transportation, architectural decoration, metal parts, etc. The Company
can stably manufacture productions which represent the highest level of steel and iron industry, including
high-end automobile steel sheet, pipe line, and etc. in large volume and the quality of these productions can reach
the internationally advanced quality level.
Increasing efficiency is the oriented objective of the reporting period. The Company applied different methods to
different departments to accomplish the objective. Manufacturing system reinforced production organization.
Sales system emphasizes development of direct supplied end customers and high-grade steel to increase profits.
Technology research and development system and quality supervisor system prompted product certification, key
technology breakthrough and quality control. Besides, the Company applied the following methods. Implement
comprehensively expenses elimination to strictly control three types of expenses and deeply apply standard cost.
Reduce inventory to reduce occupation of funds. Reduce processing cost by prompting key technology
breakthrough focused on reducing coal distribution and mine distribution cost. Apply comprehensively dynamic
budget management through alternative varieties replacement and structural adjustment, as well as procurement
choose and other methods to reduce purchase cost and purchase fund spending. The Company deems optimizing
corporation management as the core process, intensifies each fundamental process, and ensures that management
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Bengang Steel Plates Co., Ltd. Annual Report 2016
level employees fully take their responsibilities. The Company improves rules and regulations, and enhances
supervisor and assessment process of special project to let each process get improvement.
During the reporting period, the main performance-driving factors were: stimulating vitality through revolution,
creating motivation through innovation, boosting management innovation and increasing productivity level and
management through implement institutional reform. The Company built innovation system, established
cooperation platform that regards continuously improving techniques in manufacturing system as the core process
and the improvement in research and development, sales, and quality department as the supplementary process,
and strengthened independent innovation capability. The Company highlighted scientific and technological
innovation, improved the overall innovation and independently innovation capability through adjustment and
development of varieties, implementation of key scientific and technological special projects, and strengthening of
exchange and cooperation of technology with foreign companies. And the Company actively adjusted sales
strategy and optimized regional distribution to realize the profits increasing generated from varieties.
The reporting period is the crucial period for steel and iron industry regarding industrial structure adjustment,
transformation and upgrading. Because of the continuous policy of reducing excessive capacity, the whole market
structure is expected to be further improved and the relationship between domestic steel supply and demand will
be improved. Since domestic steel market presented stable relief rebound and market price increased, the
Company’s profits increased. However, the steel market upturns lead to company’s large amount of restoring
production and production increasing which made it more difficult for the Company to resolve the excess
manufacturing capacity. Meanwhile, steel and iron industry still faced grim situation. During the reporting period,
the Company increased profits through a serious of activities as following, formulated operation and management
policy, intensified scientific and technological innovation and variety development, stabilized sales channel and
reduced cost and the overall strength of the company maintains above the middle level in the whole industry.
II. Major Changes in Main Assets
1. Major Changes in Main Assets
Main assets Notes to major changes
Monetary fund As at 31 December 2016, balance of monetary fund is RMB 12,931,912
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Bengang Steel Plates Co., Ltd. Annual Report 2016
thousand, increased by 151.57% compared with beginning balance, mainly
due to increase of net cash flow from operating activities and increase in
reserve funds.
As at 31 December 2016, balance of accounts receivable is RMB 623,865.4
Accounts receivable thousand, increased by 27.69% compared with beginning balance, mainly
due to increase in receivables for direct end users and container customers.
As at 31 December 2016, balance of construction materials is RMB 7,783.4
Construction materials thousand, increased by 87.42% compared with beginning balance, mainly
due to increase in unclaimed construction materials.
2. Main Information of Overseas Assets
□ Applicable √ Not applicable
III. Analysis on Core Competitiveness
Whether the Company needs to comply with the disclosure requirement for special industry
No
The Company played the leading role of technology innovation in the comprehensive innovation to strengthen the
adjustment of product structure, implemented key scientific and technological special projects, built the
technological innovation platform, promoted the integration of research and innovation, application and high
efficiency and improved the capability of independent innovation and substantial development.
The Company’s National and Regional United Engineering Laboratory for Advanced Auto Steel has been
authorized by National Development and Reform Commission so that one more Company’s research and
development platform upgraded to national research and development platform. Bengang joined in National Auto
Lightweight Technology Innovation Strategic Alliance and actively integrated into national auto lightweight
technology innovation system.
In this year, the Company developed 95 new product grades, there into, three items has been approved by
provincial creative products and one item has been approved by China National Petroleum Corporation. All new
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Bengang Steel Plates Co., Ltd. Annual Report 2016
products passed the performance tests and satisfied customers’ requirements. Some new products have already
realized bulk supply. The Company has accomplished 33 product certifications. Certificated auto customer
included Guangzhou Toyota Motor Co, Ltd. and Dongfeng Nissan. The Company is applying the certification
from Volkswagen, General Motors, and SAIC Motor now. Special steel product has been certificated by OTIS.
Two zinc steel products and two cold-rolled steel products completed performance assessment by SAIC General
Motors American Laboratory. PHS1800 completed industrial trial production and got certification from domestic
famous auto customer.
In 2016, the Company developed 79 corporation level research and development projects related to new product
research and development, product quality improvement and technical progress improvement. 53 projects has
been completed at the end of 2016. And 26 projects will be continued in 2017. There into, three hot-rolled steel
products cooperation projects has reached international requirements and three cold-rolled cooperation projects
has reached domestic leading level.
In this year, 21 results received provincial, municipal science and technology improvement award and excellent
new product award. There into, Bengang Advance Auto Steel Series Products Research and Development project
received Liaoning province major research and development achievement award. High Quality Wide Thick
Pipeline Rolled Steel Manufacturing Technological Processing Research and Development project received
second prize of Liaoning province scientific and technological progress award. High Niobium Pipeline Steel
Rolling Methods received Liaoning province excellent patent award. A total of 205 patent items have been
processed by China State Intellectual Property Office, including one PCT application, 81 inventions, and 123
practical innovation application. 125 patents were authorized, including 11 inventions and 114 practical
innovation items. All realized substantial increase in this reporting period.
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Bengang Steel Plates Co., Ltd. Annual Report 2016
IV. Management Discussion and Analysis
I. General
During the reporting period, the Company faced grim operation situation and the most critical challenge through
the Company history. Under the direction led by the Company, through employees’ series of hard working, for
example, making the scientific operation and management decisions, improving the capability of scientific
research and product variety development, stabilizing the sales channel and reducing cost, the Company reached
the total production of 9691.2 thousand tons pig iron, 9496.9 thousand tons raw steel, 11,272.4 thousand tons
hot-rolled plates, 4317 thousand tons cold-rolled plates, which were increased by 2.39%, 1.71%, 1.57%, and
22.32% respectively compared to the last period and 683.6 thousand tons special steel which was decreased by
0.15%.
Looking back at the operation of 2016, the Company mainly focused on the following aspects:
1. The Company significantly improved the capability of increasing profits and enhancing efficiency of the
products through sales and marketing development. The Company insisted on the market-oriented strategy,
continuously focused on customer needs, optimized structure and increased efficiency to ensure proportion of
products sold reached 100%.
2. The Company comprehensively upgraded the operational management of all processes and the quality of
production system. The Company emphasized production plan process to ensure that contract can be delivered on
time. According to the profits increasing plan and division of production lines, the Company continuously
optimized its organization mode to arrange the weekly production plan which prioritized products with high profit
return. On the basis of stabilizing the operation of each production line, the Company increased the execution rate
of plan and contract completion rate to ensure that the contract of prior products can be completed at the due date.
3. The Company promoted technology innovation and yielded the substantial results in product research and
development and key technology breakthrough. The Company played the leading role of technology innovation in
the comprehensive innovation to strengthen the adjustment of product structure, implemented key scientific and
technological special projects, built the technological innovation platform, promoted the integration of research
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Bengang Steel Plates Co., Ltd. Annual Report 2016
and innovation, application and high efficiency and improved the capability of independent innovation and
substantial development.
4. The Company reformed the institution, innovated the management process, and further standardized and
strengthened each fundamental management process. The Company deepened comprehensive reform, boosted
management innovation and increase the productivity and level and management through implement institutional
reform and process optimization, strengthen investment in risk control, financial cost, audit supervision, human
resource, supplier, materials purchasing, equipment operation, energy utilization, product quality, transport
service, and fixed asset, and the construction of major projects.
5. The Company persisted on green development and harmonious development to realize the sharing of
corporation development results to employees and the society. While the Company strengthened its economic
performance, it insisted operation philosophy of green development and harmonious development and regarded
security, environmental protection and human development as important form parts of corporation development.
II. Main Business Analysis
1. General
For relevant information please refer to “Management Discussion and Analysis 1. General”.
2. Income and Cost
(1) Components of Operating Income
Unit: Yuan
2016 2015 Change over last
Amount Proportion Amount Proportion year
Total operating
29,526,012,651.08 100% 29,253,638,605.80 100% 0.93%
income
By industries
Industry 29,526,012,651.08 100.00% 29,253,638,605.80 100.00% 0.93%
By products
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Bengang Steel Plates Co., Ltd. Annual Report 2016
Steel plate 27,509,431,558.50 93.17% 27,063,270,882.63 92.51% 1.65%
Billet 1,083,458.75 0.00%
Others 2,015,497,633.83 6.83% 2,190,367,723.17 7.49% -7.98%
By regions
Northeast 8,437,683,126.99 28.58% 9,803,296,279.78 33.51% -13.93%
North China 3,714,568,181.20 12.58% 2,250,800,509.79 7.69% 65.03%
East China 8,610,068,280.87 29.16% 8,734,382,778.07 29.86% -1.42%
Northwest 12,684,259.06 0.04% 11,624,769.33 0.04% 9.11%
Southwest 9,035,194.69 0.03% 24,550,759.64 0.08% -63.20%
Central south 20,890,552.83 0.07% 46,760,817.03 0.16% -55.32%
Export 8,721,083,055.44 29.54% 8,382,222,692.16 28.65% 4.04%
(2) Industry, Product and Regions Occupying the Company’s Operating Income or Profit over 10%
√ Applicable □ Not applicable
Whether the Company needs to comply with the disclosure requirement for special industry
No
Unit: Yuan
Operating Operating Gross margin
Operating Operating
Gross margin income change profit change change over
Income profit
over last year over last year last year
By industries
Industry 29,526,012,651.08 25,677,665,232.12 13.03% 0.93% -13.87% 14.94%
By products
Steel plate 27,509,431,558.50 23,830,665,698.30 13.37% 1.65% -13.91% 15.66%
Billet 1,083,458.75 981,830.32 9.38% 9.38%
Others 2,015,497,633.83 1,846,017,703.50 8.41% -7.98% -13.30% 5.62%
By regions
Northeast 8,437,683,126.99 7,418,411,005.25 12.08% -13.93% -25.30% 13.38%
North China 3,714,568,181.20 3,171,273,526.74 14.63% 65.03% 33.84% 19.90%
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Bengang Steel Plates Co., Ltd. Annual Report 2016
East China 8,610,068,280.87 7,360,526,616.77 14.51% -1.42% -19.53% 19.24%
Northwest 12,684,259.06 11,059,405.47 12.81% 9.11% -10.11% 18.65%
Southwest 9,035,194.69 7,883,207.37 12.75% -63.20% -69.57% 18.26%
Central south 20,890,552.83 18,260,432.23 12.59% -55.32% -63.14% 18.53%
Export 8,721,083,055.44 7,690,251,038.29 11.82% 4.04% -7.09% 10.57%
Operating data of recent one year according to adjusted statistics caliber at the year-end in the case that the
Company's main business statistics caliber has changed during the reporting period,
□ Applicable √ Not applicable
(3) Whether the Company’s Physical Sales Income Exceeded Service Income
√ Yes □ No
Change over last
Industry classification Item Unit 2016 2015
year
Sales ton 11,472,926.69 11,610,741.31 -1.19%
Steel rolling processing
Production ton 11,406,457.32 11,597,504.49 -1.65%
industry
Inventory ton 720,373.49 786,842.86 -8.45%
The main reasons that the relevant data changed more than 30%
□ Applicable √ Not applicable
(4) Performance of Significant Sales Contract Signed-up in this Reporting Period
□ Applicable √ Not applicable
(5) Components of Operating Cost
Unit: Yuan
Industry 2016 2015 Change over
Item
classification Amount Proportion Amount Proportion last year
Steel rolling
Raw
processing 11,048,116,535.79 43.03% 12,942,748,210.39 43.41% -0.38%
material
industry
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Bengang Steel Plates Co., Ltd. Annual Report 2016
Steel rolling
Supplementa
processing 1,271,301,205.64 4.95% 1,499,459,834.85 5.03% -0.08%
ry materials
industry
Steel rolling
Spare parts
processing 378,211,917.00 1.47% 400,614,031.86 1.34% 0.13%
and tools
industry
Steel rolling
processing Fuel 6,078,925,971.55 23.67% 7,709,142,042.53 25.86% -2.19%
industry
Steel rolling
processing Energy 2,687,749,842.84 10.47% 2,729,440,767.73 9.16% 1.31%
industry
Steel rolling
Salary and
processing 1,663,003,962.99 6.48% 1,808,829,930.51 6.07% 0.41%
benefits
industry
Steel rolling
processing Depreciation 1,847,129,545.38 7.19% 1,824,882,394.51 6.12% 1.07%
industry
Steel rolling
processing Others 703,226,250.94 2.74% 896,777,804.48 3.01% -0.27%
industry
Steel rolling
processing Total 25,677,665,232.12 100.00% 29,811,895,016.85 100.00% 0.00%
industry
(6) Whether Changes Occurred in Consolidation Scope in the Reporting Period
□ Yes √ No
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Bengang Steel Plates Co., Ltd. Annual Report 2016
(7) Relevant Information of Significant Changes or Adjustment of the Business, Product or Service in the
Reporting Period
□ Applicable √ Not applicable
(8) Information of Main Customers and Main Suppliers
Information of the Company’s main customers
Total sales amount of the top five customers (Yuan) 5,315,813,388.89
Total sales amount of the top five customers
18.00%
accounted for the proportion of total annual sales
The proportion of the total sales of the related parties
2.82%
in the top five customers
Information of the top 5 customers
No Name Amount(Yuan) Proportion
1 Hangzhou Thermal Group Co., Ltd. 1,968,780,005.35 6.67%
2 Xiamen Jianfa Metals Co., Ltd. 1,003,132,401.62 3.40%
3 Hengxing International Resources Co., Ltd. 876,096,226.69 2.97%
Benxi Steel & Iron (Group) Mining Co.,
4 833,311,051.97 2.82%
Ltd.
5 Cargill Investment (China) Co., Ltd. 634,493,703.25 2.15%
Total -- 5,315,813,388.89 18.00%
Other information of principal customers
□ Applicable √ Not applicable
Information of the Company’s main suppliers
Total purchase amount of the top five suppliers
14,070,192,571.40
(Yuan)
Total purchase amount of the top five suppliers
54.80%
accounted for the proportion of total purchase
The proportion of the total purchase of the related
33.92%
parties in the top five suppliers
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Bengang Steel Plates Co., Ltd. Annual Report 2016
Information of the top 5 suppliers
序号 Name Amount(Yuan) Proportion
Benxi Beiying Steel & Iron (Group) Co.,
1 5,929,170,829.81 23.09%
Ltd.
Benxi Steel & Iron (Group) Mining Co.,
2 2,781,594,104.82 10.83%
Ltd.
Liaoning Electric Power Co., Ltd. Benxi
3 2,351,046,895.02 9.16%
Electric Power Supply Company
Heilongjiang Dragon Coal Group Co.,
4 1,998,449,098.29 7.78%
Ltd.
Shenyang Coking Coal Co., Ltd. Sales
5 1,009,931,643.47 3.93%
Branch
合计 -- 14,070,192,571.40 54.80%
Other information of principal suppliers
□ Applicable √ Not applicable
3. Expenses
Unit: Yuan
Change over last Notes to significant
2016 2015
year change
Selling and distribution expenses 903,232,507.02 919,110,499.37 -1.73%
General and administrative
700,545,090.17 733,933,299.88 -4.55%
expenses
Financial expenses 967,678,772.69 1,063,317,455.47 -8.99%
4. Research and Development Input
√ Applicable □ Not applicable
None
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Bengang Steel Plates Co., Ltd. Annual Report 2016
Information of research and development input by the company
2016 2015 Change over last year
Number of Research and
1,542 1,502 2.66%
Development personnel
Proportion of number of
Research and Development 7.44% 6.98% 0.46%
personnel
Amount of Research and
Development Investment 1,437,398,000.00 1,531,589,000.00 -6.15%
(In RMB)
Proportion of Research and
Development investment to 4.87% 5.24% -0.37%
operating income
Amount of capitalized
Research and Development 0.00% 0.00% 0.00%
investment
Proportion of capitalized
Research and Development
investment accounted to 0.00% 0.00% 0.00%
total Research and
Development investment
Illustrations of the prominent change in proportion of research and development input occupying the operating
income over same period last year
□ Applicable √ Not applicable
Illustrations of significant change in the research and development input’s capitalization rate and its
reasonableness
□ Applicable √ Not applicable
22
Bengang Steel Plates Co., Ltd. Annual Report 2016
5. Cash Flow
Unit: Yuan
Item 2016 2015 Change over last year
Subtotal of cash inflows
28,871,696,962.59 24,571,589,646.08 17.50%
from operating activities
Subtotal of cash outflows
19,314,343,056.07 26,876,595,614.18 -28.14%
from operating activities
Net cash flows from
9,557,353,906.52 -2,305,005,968.10 514.63%
operating activities
Subtotal of cash inflows
467,307,421.09 1,775,980,060.32 -73.69%
from investing activities
Subtotal of cash outflows
3,054,653,699.08 5,219,745,508.10 -41.48%
paid for investing activities
Net cash flows from
-2,587,346,277.99 -3,443,765,447.78 24.87%
investing activities
Subtotal of cash inflows
22,916,374,791.74 27,146,081,641.78 -15.58%
from financing activities
Subtotal of cash outflows
22,469,812,521.87 26,180,913,966.24 -14.17%
from financing activities
Net cash flows from
446,562,269.87 965,167,675.54 -53.73%
financing activities
Net increase in cash and
7,660,791,715.69 -4,714,251,257.09 262.50%
cash equivalents
Illustrations of key factors of significant changes over same period last year
□ Applicable √ Not applicable
(1) Net cash flows from operating activities increased by 514.63% compared to last year, mainly due to reduction
in cash paid for goods and services.
23
Bengang Steel Plates Co., Ltd. Annual Report 2016
(2) Subtotal of cash inflows from investing activities decreased by 73.69% compared to last year, mainly due to
reduction in purchase and recover of bank financial products.
(3) Subtotal of cash outflows from investing activities decreased by 41.48% compared to last year, mainly due to
reduction in purchase of bank financial products.
(4) Net cash flows from financing activities decreased by 53.73% compared to last year, mainly due to reduction
in loans.
(5) Net increase in cash and cash equivalents increased by 262.5% compared to last year, mainly due to increase
in net cash flows from operating activities.
Illustrations of significant difference between cash flow from operating activities and net profit during the
reporting period
□ Applicable √ Not applicable
III. Analysis of Non-core Business
√Applicable □ Not applicable
Whether
Amount Proportion in total profit Explanation of cause
sustainable
Investment income from
financial products and
Investment income 2,019,053.44 0.19% Yes
financial assets available for
sale
Inventory loss and bad debt
Impairment of assets 136,135,960.40 13.11% No
loss
Non-operating
58,071,429.33 5.59% No
income
Non-operating
14,541,658.66 1.40% No
expenses
24
Bengang Steel Plates Co., Ltd. Annual Report 2016
IV. Assets and Liabilities
1. Significant Change of Assets Components
Unit: Yuan
End of 2016 End of 2015
Notes to
Proportion in Proportion in Proportion
significant
Amount the total Amount the total change
change
assets (%) assets (%)
12,931,912,017.8
Monetary fund 23.88% 5,140,480,509.97 11.56% 12.32%
4
Accounts
623,865,427.25 1.15% 488,584,624.72 1.10% 0.05%
receivable
Inventories 9,782,173,936.74 18.06% 8,601,734,442.42 19.35% -1.29%
Investment
0.00% 0.00% 0.00%
property
Long-term equity
0.00% 0.00% 0.00%
investment
20,688,468,637.4 20,046,254,726.7
Fixed assets 38.20% 45.09% -6.89%
4 4
Construction in
6,210,673,674.11 11.47% 5,646,624,293.27 12.70% -1.23%
process
18,762,472,779.4 18,139,885,596.6
Short-term loans 34.65% 40.80% -6.15%
8 0
Long-term loans 3,448,931,721.62 6.37% 1,005,919,974.09 2.26% 4.11%
2. Assets and Liabilities Measured at Fair Value
□ Applicable √ Not applicable
3. Restricted Assets by the End of the Period
Items Ending balance Reason
25
Bengang Steel Plates Co., Ltd. Annual Report 2016
Monetary assets 658,337,529.17 Deposit for notes and L/C
Notes receivable 682,288,925.93 Pledged for acceptance bill
Bank short-term financing products 244,000,000.00 Pledged for letter of credit
Total 1,584,626,455.10
V. Investment
1. General
□ Applicable √ Not applicable
2. Acquiring Significant Equity Investment in the Reporting Period
□ Applicable √ Not applicable
3. Undergoing Significant Non-equity Investment in the Reporting Period
□ Applicable √ Not applicable
4. Investment of Financial Assets
(1) Investment in Securities
□ Applicable √ Not applicable
(2) Investment in Derivatives
√ Applicable □ Not applicable
Unit: 10 thousand Yuan
Derivat the The Provisi The The
The
Derivat ives purcha amount on for final actua
Relate Derivat Initial final
ives invest se of sold impair invest l
Relatio d party ives Start End invest amount
operati ment amount during ment ment profit
nship transac investm date date ment of
on the during the loss compa and
tion ent type amount invest
name initial the reporti amount ny loss
ment
invest reporti ng (if any report amou
26
Bengang Steel Plates Co., Ltd. Annual Report 2016
ment ng period the nt
amount period final durin
net g the
worth repor
ratio ting
perio
d
Hot
Benga 30 15
rolling 1,214.0 1,214.0 1,204.7 1,219.3 14.5
ng Self No June August 0 0.00%
sheet 4 4 9 5 6
Bancai 2016 2016
future
1,214.0 1,214.0 1,204.7 1,219.3 14.5
Total -- -- 0 0.00%
4 4 9 5 6
Derivatives investment funding Owned fund
Lawsuit（if any） Not applicable
Announcement date of approval
of derivatives investment by 27 May 2016
board of directors (if any)
Announcement date of approval
of derivatives investment by
shareholders (if any)
Risk analysis and control Using allocated billets and manufacture plates, using current and future sales
measures of the derivatives held and hedging as well, using spare capacity of production line, The Company
during the reporting period dilutes the rolling cost and also locks the profits of manufacturing by using gap
(including but not limited to of base price of hedging tools. The Company established “Bengang Steel Plates
market risk, liquidity risk, credit Co., Ltd. futures management approach” and” Bengang Steel Plates Co., Ltd
risk, operation risk, legal risk, futures business rules” in order to fully assess the futures investment and
etc.) holding risk and control the market.
1 business scale will be controlled within the 20% of the purchasing and sales
27
Bengang Steel Plates Co., Ltd. Annual Report 2016
targets. 2 the highest margin for hedging is RMB 200 million Yuan 3
developing the futures business trading program, the program has fully
assessed the possible legal risk, operational risk, market risk and develop
effective control measures
Changes of market price or fair
value of the invested derivatives
during the reporting period and
disclosure of the specific
methods and relevant
assumption and parameter
The fair value as determined in the active market quotation。
setting when determining the
fair value of the invested
derivatives
During the reporting period,
whether the accounting policies
and accounting principles of
No significant change
derivatives of the company has
greatly changed compared to
last reporting period
In order to carry out the futures business, the Bengang Steel Plates Co., Ltd
issued futures management methods and approach and clarified the
Special opinion of the
organization system of risk control and other related business processes and
independent director to the
business operation mode and to comply with the relevant national laws and
company’s derivatives
regulations and the relevant provisions of the company's articles of association.
investment and risk control
Carrying out futures business is beneficial to reduce business risks and to adapt
to the fierce market competition to achieve transformation spanning
28
Bengang Steel Plates Co., Ltd. Annual Report 2016
development. The Company shall determine the highest limit of the futures
margin and trades variety is reasonable and make sure that it will not affect the
normal production and operation of the company and there is no damage to the
company and the interests of all shareholders
5. Use of Raised Funds
□ Applicable √ Not applicable
There was no use of raised funds during the reporting period.
VI. Significant Assets and Equity Sold in Reporting Period
1. Significant Assets Sold
□ Applicable √ Not applicable
There was no significant asset sold during the reporting period.
2. Substantial Equity Sold
□ Applicable √ Not applicable
VII. Analysis on Main Subsidiaries and Share Participating Companies
√ Applicable □ Not applicable
Main subsidiaries and the joint-stock companies influencing over 10% net profit of the Company
Unit: Yuan
Company Company Main Registered Operating Operating
Total assets Net assets Net Profit
Name type business capital income profit
Bengang Processi
Puxiang Cool
Subsidiari ng and 1,920,000,0 4,417,626,2 2,090,053,2 5,453,347,5 221,849,215 187,050,304
Rolling Steel
Sheet Co., es sales of 00.00 92.34 94.96 61.49 .95 .77
Ltd. steel
Acquirement and disposal of subsidiaries during the reporting period
□ Applicable √ Not applicable
29
Bengang Steel Plates Co., Ltd. Annual Report 2016
Illustration of main joint-stock companies
VIII. Structure Entities controlled by the Company
□ Applicable √ Not applicable
IX. Prospect for Future Development of the Company
1. The development trend of the industry and the market competition
The year 2017 will be a crucial year of deepening reform to State-owned Enterprises, optimizing industrial
structure, and expanding the space of development. 2017 is also a key year for the Company to adjust ‘China’s
New Normal’, seize new market challenge, deepen the reform, upgrade the quality, improve the efficiency,
expand the market and innovation.
In 2017, China will step into the key stage of strengthen structural reform of the supply front. Steel industry will
face significant opportunity in deepening revolution, structural adjustment, and demand upgrading, meanwhile,
the industry will be challenged in the aspects of excess manufacturing capacity, and insufficient effective supply.
The Company will face more fierce competition from the industrial perspective. However, because of the
continuous policy of reducing excessive capacity, the whole market structure is expected to be further improved
and the relationship between domestic steel supply and demand will be improved. The Company will seize the
significant opportunity because of the bonus of national policy, for example, ‘the Belt and Road Initiatives’,
‘Made in China 2025’, ‘13th Five-Year Plan’ for reinvigorating of the Northeast, and the establishment of
Liaoning pilot free trade zone.
2. The Company’s development strategy
The overall work route of the company in 2017 was established as: comprehensively implementing the contents of
the Company’s economic working conference and work deployment, regarding improving the quality of economic
operation as the overall orientation, improving the level of fundamental management operation as the guarantee,
ensuring stable production and increasing employees’ benefits as the ultimate objective. The Company should
deepen the reformation, improve the product quality, increase the efficiency, and keep innovation to realize the
rapid development.
30
Bengang Steel Plates Co., Ltd. Annual Report 2016
3. Business plan
Production: pig iron 920 million tons, raw steel 918 million tons, hot-rolled plate 1297 million tons, cold-rolled
plates 595 thousand tons, special steel 70 thousand tons. Meanwhile, the Company plan to realize ‘three zeros’ in
safety production. The business plan does not constitute a commitment of the company, so please be aware of the
risks arising from such item, and the investors should understand the differences between a business plan and the
commitment of performance.
In order to achieve the above-said goal, the company must try best to do the following key works: the first is to
deepen the reform, and standardize the operation to provide system guarantee for the economic operation and
development of the Company; the second is to make full use of the leading role of market and sales to promote
regional customer structure adjustment and maximize the product benefits; the third is to ensure the product
quality and delivery on time to realize production coordination operate in a stable way to bring stable productivity
and higher yield; the fourth is to build highly efficient innovation system to improve the capability of individual
innovation and sustainable development; the fifth is to reinforce the investment on major project and equipment
improvement to provide guarantee to realize the quality and efficiency requirement of production; the sixth is to
reduce cost in all aspects to receive profits through management, energy saving, and cost reducing; the seventh is
to persist the principal of putting people at the first and practice corporate social responsibility to construct safe
and eco-friendly modern plant; the eighth is to strengthen Party building and concentrate employees’ capability to
promote the development of the Company in a health and harmonious way.
4. Maintaining current business and completing the required capital arrangements of invested projects under construction.
The company will use its own funds and the bank loans to meet the funds demand required by the production and
operation and the technical transformation.
5. Potential risks
(1) Operational risk
National wide structural reform of the supply front and reducing excessive capacity among steel and iron industry
implemented effectively, therefore, price of steel and iron products recovered. However, price recovery still
existed risks because demand of steel products increases slowly. Meanwhile, price of raw materials continuously
increases which will lead to the limited profit potential for the Company. Besides, international market has
31
Bengang Steel Plates Co., Ltd. Annual Report 2016
intensified the anti-dumping investigation towards China’s export steel and iron products, which leads to a
grimmer situation for exporting the iron and steel, thus further increased the burden on the domestic market and
threatened the Company’s objectives of product sales and operation profits.
Counter measures: the Company should apply multi-process management including strengthens the optimization
and management of upstream suppliers, management of purchase information and optimization pre-order system
to possibly reduce the negative effect of price fluctuation of raw materials. Reduce material and energy
consumption and manufacturing cost through intensifying manufacturing process management, improving
technology and operation and raising equipment utilization efficiency. Increase sales volume and unit item profit
by conducting market analysis, recognizing market condition in time, actively developing customers and
intensifying product research and development.
(2) Environmental risk
With the increasingly completion of environmental protection legislation, the government further raised the
requirements on environmental protection for enterprises, largely raised the pollutant emission standards for the
iron and steel industry. Meanwhile, the environmental protection continues to maintain a high pressure situation,
thus the iron and steel enterprises face great pressure on environmental protection.
Counter measures: intensify internal environmental protection management, fully implement environmental
protection reformation projects, dig the potential of reducing emission, implement the environmental-protection
management responsibility, strengthen the control on the pollution source, and strictly supervise the operation of
environmental protection facilities to realize the real-time monitoring for the company’s status on the
environmental protection and dynamic adjustment.
X. Researches, visits and interviews received in this reporting period
1. Registration form of researches, visits and interviews received in this reporting period
□ Applicable √ Not applicable
There was no research, visit or interview received in this reporting period.
32
Bengang Steel Plates Co., Ltd. Annual Report 2016
V. Important Events
I. Profit Distribution or Capital Reserve Conversion
Formulation, implementation and adjustment of profit distribution policy of common shares especially cash
dividend policy during the reporting period
□ Applicable √ Not applicable
The profit distribution plan or proposal and the plan or proposal of conversion of the capital reserve into share
capital in recent three years (including the reporting period)
1. Profit distribution proposal of 2016
As audited by BDO China Shu Lun Pan Certified Public Accountants LLP., the net profit attributable to the parent
company of the year 2016 was RMB 781,274,829.32. After adding the retained profit of RMB -1,278,244,071.93
at beginning of the year, the balance of undistributed profit was -496,969,242.61.
Profits distribution plan of 2016: due to a negative undistributed profit balance at the year-end,, according to the
relevant Chinese regulations and laws and the Company's Articles of Association, the company would not
withdraw surplus reserves. The company planed not to distribute cash dividend or bonus shares, and not to convert
capital reserve into share capital. This proposal was subject to approval of the Shareholders’ Annual Meeting
2016.
2. Profit distribution plan of 2015
As audited by BDO China Shu Lun Pan Certified Public Accountants LLP., the net profit attributable to the parent
company of the year 2015 was RMB -3,293,624,545.17. After adding the retained profit of RMB
2,172,180,473.24 at beginning of the year, and deducting RMB 156,800,000.00 of dividend distributed for the last
year, the balance of undistributed profit was -1,278,244,071.93.
Profits distribution plan of 2015: due to a loss in 2015, according to the relevant Chinese regulations and laws and
the Company's Articles of Association, the company would not withdraw surplus reserves. The company planed
not to distribute cash dividend or bonus shares, and not to convert capital reserve into share capital.
33
Bengang Steel Plates Co., Ltd. Annual Report 2016
3. Profit distribution plan of 2014
As audited by BDO China Shu Lun Pan Certified Public Accountants LLP., the net profit attributable to the parent
company of the year 2014 was RMB 232,804,820.19. After withdrawing 10% statutory surplus reserves of
RMB4,411,426.11, adding the retained profit of RMB 2,100,587,079.16 at beginning of year, and deducting
RMB156,800,000.00 of dividend distributed for the last year, the profit distributable to the shareholders is
RMB2,172,180,473.24.
Profits distribution plan of 2014: upon the total capital shares amounted to 3,136,000,000 shares as at December
31st 2014, RMB 0.5 (tax included) of dividend will be distributed upon each 10 shares to the whole shareholders.
The dividend for common shares is totaled to RMB156,800,000.00. The remaining undistributed profit of
RMB2,016,529,239.22 will be carried over to the next fiscal year.
Cash dividend distribution in recent three years
Unit: Yuan
Net profit Ratio in net profit
attributable to the attributable to the
parent company parent company Amount of cash Proportion of
Cash dividend
Year in the in the dividends in other cash dividends in
(Including Tax)
consolidated consolidated ways other ways
financial financial
statements statements
2016 0.00 781,274,829.32 0.00%
2015 0.00 -3,293,624,545.17 0.00%
2014 156,800,000.00 232,804,820.19 67.35%
Both the Company’s profit and the parent company’s retained earnings are positive however no proposal of cash
dividend distribution was proposed during the reporting period
□ Applicable √ Not applicable
II. Profit Distribution or Capital Reserve Conversion Proposal in the Reporting Period
□ Applicable √ Not applicable
34
Bengang Steel Plates Co., Ltd. Annual Report 2016
The Company planed not to distribute cash dividend or bonus shares, and not to convert capital reserve into share
capital during the reporting period.
III. Performance of Committed Issues
1. The fulfilled commitments during the reporting period and under-fulfillment commitments by the end of
the period made by actual controller, acquirer, director, supervisor, senior management personnel and
other related parties.
□ Applicable √ Not applicable
There was no fulfilled commitment during the reporting period or under-fulfillment commitment by the end of the
period made by actual controller, acquirer, director, supervisor, senior management personnel and other related
parties.
2. The Company made illustrations that there are assets or projects which meet the original profit forecast
and the reasons when there are assets or projects profit forecast of the Company and the reporting period
is still in the forecast period
□ Applicable √ Not applicable
IV. Illustrations of Non-Operating Occupation of Funds by the Controlling Shareholder and
Related Parties
□ Applicable √ Not applicable
There was no non-operating occupation of funds by the controlling shareholder and related parties
V. Illustrations of the Supervisory Committee and Independent Directors (If Applicable) on
the Qualified Audit Report Issued by the CPAs
□ Applicable √ Not applicable
VI. Illustrations of Changes in the Accounting Policy, Accounting Estimate and Measurement
Methods as Compared with the Financial Report of Last Year
√ Applicable □ Not applicable
I. Summary of accounting policy changes
35
Bengang Steel Plates Co., Ltd. Annual Report 2016
1. Date of change: from May 1, 2016
2. Reason of change:
On December 3, 2016, the Ministry of Finance issued Provisions on the accounting treatment of value added tax
([2016] no. 22). The main impacts of the implementation are as follows:
Adjust the “Business tax and surcharges” to “Tax and surcharges” in the income statement;
The business activities of the occurrence of property tax, land use tax, vehicle and vessel use tax, stamp tax from
May 1, 2016 is reclassified from “General and administrative expenses” to “Tax and surcharges”. The tax
occurred before May 1, 2016 shall not be adjusted. Comparative data stays unadjusted;
The debit balance of the sub-item under Tax payable such as VAT payable, VAT not paid, input VAT to be
deducted, input VAT to be verified, VAT overpaid will be reclassified from Tax payable to other cuurent assets or
other non-current assets. Comparative data stays unadjusted.
3. Accounting policies before change:
The income statement sets "business tax and additional" item, and business activities of the occurrence of property
tax, land use tax, vehicle and vessel use tax, stamp tax are recorded in administrative expenses.
4. Accounting policies after change:
According to the requirements document, the Company implemented above requirements from May 1, 2016, and
adjusted the “Business tax and surcharges” to “Tax and surcharges” in the income statement. Meanwhile, business
activities of the occurrence of property tax, land use tax, vehicle and vessel use tax, stamp tax from May 1, 2016
is reclassified from “General and administrative expenses” to “Tax and surcharges”. The tax occurred before May
1, 2016 shall not be adjusted. Comparative data stays unadjusted.
II. Impacts of accounting policy changes to the Company
The accounting policy change of the Company involves adjustment between profit and loss items according to the
provisions of Ministry of Finance, and thus does not affect the profit and loss, and involves no retroactive
adjustment. The main impacts of the accounting policy change are as follows:
The contents and reasons of accounting policy Financial statement
No Amount
changes items affected
Adjust the “Business tax and surcharges” to “Tax
1 Tax and surcharges Not applicable
and surcharges” in the income statement.
The business activities of the occurrence of Tax and surcharges, Tax and surcharges item
2
property tax, land use tax, vehicle and vessel use administrative have increased by RMB
36
Bengang Steel Plates Co., Ltd. Annual Report 2016
tax, stamp tax from May 1, 2016 is reclassified expenses 65,261,381.86, while
from “General and administrative expenses” to General and administrative
“Tax and surcharges”. The tax occurred before May expenses have decreased by
1, 2016 shall not be adjusted. Comparative data RMB 65,261,381.86.
stays unadjusted.
The debit balance of the sub-item under Tax
The ending balance of other
payable such as VAT payable, VAT not paid, input
current assets has increased
VAT to be deducted, input VAT to be verified, VAT Tax payable, other
3 by RMB 86,134,653.84 and
overpaid will be reclassified from Tax payable to current assets
the tax payable has increased
other cuurent assets or other non-current assets.
by RMB 86,134,653.84
Comparative data stays unadjusted.
The change in accounting policy only affected above items, and had no impact on profit and loss, total assets, and
net assets.
VI. Illustrations of Retrospective Restatement Due to Correction of Significant Accounting
Errors in the Reporting Period
□ Applicable √ Not applicable
There was no retrospective restatement due to correction of significant accounting errors during the reporting
period
VIII. Illustrations of Changes of the Consolidation Scope as Compared with the Financial
Report of Last Year
□ Applicable √ Not applicable
There was no change of the consolidation scope as compared with the financial report of last year
IX. Appointment and Dismiss of Certified Accountant’s Firm
Accountant’s firm currently appointed
Name of the domestic accountant’s firm BDO China Shu Lun Pan Certified Public Accountants LLP
Payment to the domestic accountant’s firm
280
(RMB 10 thousand)
Service life of domestic accountant’s firm
9
providing audit service
Name of CPAs from the domestic
Wu Xue, Zhang Huice
accountant’s firm
37
Bengang Steel Plates Co., Ltd. Annual Report 2016
Name of the overseas accountant’s firm (if
None
any)
Payment to overseas accountant’s firm
0
(RMB 10 thousand) (if any)
Service life of overseas accountant’s firm
None
providing audit service (if any)
Name of CPAs from the overseas
None
accountant’s firm (if any)
Whether the accountant’s firm was changed during the reporting period
□ Yes √ No
Engagement of accountant’s firms, financial consultants or sponsors for internal control auditing
√ Applicable □ Not applicable
The Company appointed BDO China Shu Lun Pan Certified Public Accountants LLP as the auditor of internal
control auditing at RMB600 thousand.
X. Risk of Suspension or Termination of Listing after the Disclosure of Annual Report
□ Applicable √ Not applicable
XI. Bankrupt and Reforming Events
□ Applicable √ Not applicable
There was no bankrupt and reforming event during the reporting period.
XII. Significant Lawsuits and Arbitrations
□ Applicable √ Not applicable
There was no significant lawsuit or arbitrations during the reporting period.
XIII. Punishment and Rectification
□ Applicable √ Not applicable
There was no punishment or rectification during the reporting period.
38
Bengang Steel Plates Co., Ltd. Annual Report 2016
XIV. Credit Status of the Company and its Controlling Shareholders and Actual Controllers
□ Applicable √ Not applicable
There was no effective judgment of a court or large amount of debt maturity that the Company, its controlling
shareholders and actual controller failed to perform or pay off during the reporting period.
XV. Implementation Situation of Stock Incentive Plan of the Company, Employee Stock
Ownership Plan or Other Employee Incentive Measures
□ Applicable √ Not applicable
XVI. Major Related Party Transactions
1. Related party transactions relevant to daily operations
√ Applicable □ Not applicable
39
Bengang Steel Plates Co., Ltd. Annual Report 2016
Pricing Amount of The approved Whether
Type of Price of Proportion of Means of payment Available market
Content of related principle of related party trading limit of exceed the Date of Index of
Related parties Relationship related party related party similar of related party price of similar
party transactions related party transactions (in transactions (in approved disclosure disclosure
transactions transactions transactions transactions transactions
transactions 10 thousand) 10 thousand) limited (Y/N)
Purchase of Related
Benxi Steel & Iron Parent Accounts payable Execute according
goods and On agreement agreement 22,377.59 0.87% 32,000 No No
(Group) Co., Ltd. Company for repair to the agreement
services price
Bengang Cold-rolled Purchase of Related
Same Execute according
Stainless Steel goods and Products On agreement agreement 19.79 0.00% 1,000 No Yes
controller to the agreement
Dandong Co., Ltd. services price
Benxi Steel & Iron Purchase of Related
Same Execute according
(Group) Mining Co., goods and Labor cost On agreement agreement 2,202.94 0.09% 500,000 No No
controller to the agreement
Ltd. services price
Benxi Steel & Iron Purchase of Raw material and Related
Same Execute according
(Group) Mining Co., goods and supplementary On agreement agreement 275,948.02 10.74% No Yes
controller to the agreement
Ltd. services material price
Benxi Steel & Iron Purchase of Related
Same Execute according
(Group) Mining Co., goods and Freight On agreement agreement 8.45 0.00% No Yes
controller to the agreement
Ltd. services price
Benxi Steel & Iron Purchase of Raw material and Related
Same Execute according
(Group) Metallurgy goods and supplementary On agreement agreement 12,193.97 0.47% 20,000 No No
controller to the agreement
Residues Co., Ltd. services material price
Benxi Steel & Iron
Purchase of Related
(Group) Steel & Iron Same Execute according
goods and Processing fee On agreement agreement 409.35 0.02% 800 No No
Process and Logistics controller to the agreement
services price
Co., Ltd.
Benxi Steel & Iron Purchase of Related
Same Execute according
(Group) Real-estate goods and Raw materials On agreement agreement 7,343.63 0.29% 8,000 No Yes
controller to the agreement
Development Co., Ltd. services price
Benxi Steel & Iron Purchase of Related
Same Execute according
(Group) Machinery goods and Spare parts On agreement agreement 19,213.76 0.75% 35,000 No Yes
controller to the agreement
Manufacture Co., Ltd. services price
Benxi Steel & Iron Purchase of Related
Same Execute according
(Group) Machinery goods and Repair services On agreement agreement 1,822.64 0.07% No No
controller to the agreement
Manufacture Co., Ltd. services price
Benxi Steel & Iron Purchase of Related
Same Execute according
(Group) Construction goods and Spare parts On agreement agreement 24.29 0.00% 80,000 No No
controller to the agreement
Co., Ltd. services price
Benxi Steel & Iron Purchase of Related
Same Execute according
(Group) Construction goods and Project fee On agreement agreement 17,318.35 0.67% No No
controller to the agreement
Co., Ltd. services price
Benxi Steel & Iron Purchase of Related
Same Execute according
(Group) Construction goods and Repair services On agreement agreement 11,396.14 0.44% No No
controller to the agreement
Co., Ltd. services price
Benxi Steel & Iron Purchase of Raw material and Related
Same Execute according
(Group) Construction goods and supplementary On agreement agreement 1,195.6 0.05% No No
controller to the agreement
Co., Ltd. services material price
Benxi Steel & Iron Purchase of Related
Same Execute according
(Group) Construction goods and Freight On agreement agreement 293.69 0.01% No No
controller to the agreement
Co., Ltd. services price
40
Bengang Steel Plates Co., Ltd. Annual Report 2016
Pricing Amount of The approved Whether
Type of Price of Proportion of Means of payment Available market
Content of related principle of related party trading limit of exceed the Date of Index of
Related parties Relationship related party related party similar of related party price of similar
party transactions related party transactions (in transactions (in approved disclosure disclosure
transactions transactions transactions transactions transactions
transactions 10 thousand) 10 thousand) limited (Y/N)
Benxi Steel & Iron Purchase of Raw material and Related
Same Execute according
(Group) Industrial goods and supplementary On agreement agreement 21,849.65 0.85% 40,000 No No
controller to the agreement
Development Co., Ltd. services material price
Benxi Steel & Iron Purchase of Related
Same Execute according
(Group) Industrial goods and Repair services On agreement agreement 1,003.8 0.04% No No
controller to the agreement
Development Co., Ltd. services price
Benxi Steel & Iron Purchase of Related
Same Execute according
(Group) Industrial goods and Freight On agreement agreement 745.85 0.03% No No
controller to the agreement
Development Co., Ltd. services price
Benxi Steel & Iron Purchase of Related
Same Execute according
(Group) Industrial goods and Project fee On agreement agreement 248.27 0.01% No No
controller to the agreement
Development Co., Ltd. services price
Benxi Steel & Iron Raw material &
Purchase of Related
(Group) Construction Same supplementary Execute according
goods and On agreement agreement 782.34 0.03% 25,000 No No
and Repairing Co., controller materials & spare to the agreement
services price
Ltd. parts
Benxi Steel & Iron
Purchase of Related
(Group) Construction Same Execute according
goods and Project fee On agreement agreement 12,773.74 0.50% No No
and Repairing Co., controller to the agreement
services price
Ltd.
Benxi Steel & Iron
Purchase of Related
(Group) Construction Same Accounts payable Execute according
goods and On agreement agreement 4,555.98 0.18% No No
and Repairing Co., controller for repair to the agreement
services price
Ltd.
Purchase of Raw material and Related
Bengang Electronics Same Execute according
goods and supplementary On agreement agreement 12,138.43 0.47% 20,000 No No
and Gas Co., Ltd. controller to the agreement
services material price
Purchase of Related
Bengang Electronics Same Execute according
goods and Project fee On agreement agreement 116.85 0.00% No No
and Gas Co., Ltd. controller to the agreement
services price
Purchase of Related
Bengang Electronics Same Execute according
goods and Repair services On agreement agreement 1,514.32 0.06% No No
and Gas Co., Ltd. controller to the agreement
services price
Benxi High-tech Purchase of Related
Same Execute according
Drilling Tools goods and Spare parts On agreement agreement 46.97 0.00% 1,000 No No
controller to the agreement
Manufacture Co., Ltd. services price
Purchase of Related
Benxi New Career Same Labor protection Execute according
goods and On agreement agreement 743 0.03% No No
Development Co., Ltd. controller fee to the agreement
services price
Purchase of Raw material and Related
Benxi New Career Same Execute according
goods and supplementary On agreement agreement 91.91 0.00% 1,200 No No
Development Co., Ltd. controller to the agreement
services material and food price
Purchase of Related
Liaoning Metallurgy Same Execute according
goods and Spare parts On agreement agreement 948.48 0.04% 1,500 No No
Technician College controller to the agreement
services price
Purchase of Related
Liaoning Metallurgy Same Execute according
goods and Project fee On agreement agreement 140.93 0.01% No No
Technician College controller to the agreement
services price
Liaoning Metallurgy Same Purchase of Repair services On agreement Related 219.08 0.01% 1,000 No Execute according No
41
Bengang Steel Plates Co., Ltd. Annual Report 2016
Pricing Amount of The approved Whether
Type of Price of Proportion of Means of payment Available market
Content of related principle of related party trading limit of exceed the Date of Index of
Related parties Relationship related party related party similar of related party price of similar
party transactions related party transactions (in transactions (in approved disclosure disclosure
transactions transactions transactions transactions transactions
transactions 10 thousand) 10 thousand) limited (Y/N)
Technician College controller goods and agreement to the agreement
services price
Bengang Group
Purchase of Related
International Same Execute according
goods and Agency fee On agreement agreement 5,727.01 0.22% No No
Economic and Trading controller to the agreement
services price
Co., Ltd.
Bengang Group
Purchase of Related
International Same Execute according
goods and Port surcharges On agreement agreement 16,060.87 0.63% 35,000 No No
Economic and Trading controller to the agreement
services price
Co., Ltd.
Benxi Steel & Iron
Purchase of Related
(Group) Information Same Execute according
goods and Spare parts On agreement agreement 1,448.52 0.06% No No
and Automatic Tech controller to the agreement
services price
Co., Ltd.
Benxi Steel & Iron
Purchase of Related
(Group) Information Same Execute according
goods and Project fee On agreement agreement 1,055.39 0.04% 7,000 No No
and Automatic Tech controller to the agreement
services price
Co., Ltd.
Benxi Steel & Iron
Purchase of Related
(Group) Information Same Execute according
goods and Repair services On agreement agreement 80 0.00% No No
and Automatic Tech controller to the agreement
services price
Co., Ltd.
Benxi Steel & Iron
Purchase of Related
(Group) Thermal Same Execute according
goods and Heating costs On agreement agreement 664.79 0.03% 2,000 No No
Power Development controller to the agreement
services price
Co., Ltd.
Benxi Steel & Iron
Purchase of Raw material and Related
(Group) Thermal Same Execute according
goods and supplementary On agreement agreement 13.35 0.00% No No
Power Development controller to the agreement
services material price
Co., Ltd.
Benxi Steel & Iron Purchase of Related
Same Execute according
(Group) Designing goods and Design fees On agreement agreement 690.52 0.03% 5,000 No No
controller to the agreement
Institute services price
Purchase of Raw material and Related
Benxi Beiying Steel & Same Execute according
goods and supplementary On agreement agreement 531,397.56 20.68% 800,000 No No
Iron (Group) Co., Ltd. controller to the agreement
services material price
Purchase of Related
Benxi Beiying Steel & Same Execute according
goods and Energy & Power On agreement agreement 56,085.19 2.18% No No
Iron (Group) Co., Ltd. controller to the agreement
services price
Purchase of Related
Benxi Beiying Steel & Same Execute according
goods and Freight On agreement agreement 572.61 0.02% No No
Iron (Group) Co., Ltd. controller to the agreement
services price
Purchase of Related
Benxi Beiying Steel & Same Execute according
goods and Labor cost On agreement agreement 3,951.3 0.15% No No
Iron (Group) Co., Ltd. controller to the agreement
services price
Purchase of Related
Benxi Beiying Steel & Same Execute according
goods and Spare parts On agreement agreement 910.42 0.04% No No
Iron (Group) Co., Ltd. controller to the agreement
services price
Liaoning Hengtong Same Purchase of Raw material and On agreement Related 10,121.19 0.39% 15,000 No Execute according No
42
Bengang Steel Plates Co., Ltd. Annual Report 2016
Pricing Amount of The approved Whether
Type of Price of Proportion of Means of payment Available market
Content of related principle of related party trading limit of exceed the Date of Index of
Related parties Relationship related party related party similar of related party price of similar
party transactions related party transactions (in transactions (in approved disclosure disclosure
transactions transactions transactions transactions transactions
transactions 10 thousand) 10 thousand) limited (Y/N)
Metallurgical controller goods and spare parts agreement to the agreement
Equipment services price
Manufacture Co., Ltd.
Liaoning Hengtai Purchase of Related
Same Raw material and Execute according
Heavy Machinery Co., goods and On agreement agreement 1,263.91 0.05% No No
controller spare parts to the agreement
Ltd. services price
Liaoning Hengtai Purchase of Related
Same Repair and labor Execute according
Heavy Machinery Co., goods and On agreement agreement 1,068.72 0.04% 6,000 No No
controller cost to the agreement
Ltd. services price
Purchase of Related
Bengang Group Co., Property Execute according
控制人 goods and On agreement agreement 84.55 0.00% 1,000 No No
Ltd. management fee to the agreement
services price
Sales of Related
Bengang Electronics Same Execute according
goods and Energy & Power On agreement agreement 94.8 0.00% 300 No No
and Gas Co., Ltd. controller to the agreement
services price
Raw material &
Sales of Related
Benxi Beiying Steel & Same supplementary Execute according
goods and On agreement agreement 11,910.03 0.40% 150,000 No No
Iron (Group) Co., Ltd. controller materials & spare to the agreement
services price
parts
Sales of Related
Benxi Beiying Steel & Same Execute according
goods and Products On agreement agreement 765.3 0.03% No Yes
Iron (Group) Co., Ltd. controller to the agreement
services price
Sales of Related
Benxi Beiying Steel & Same Execute according
goods and Energy & Power On agreement agreement 23,879.65 0.81% No No
Iron (Group) Co., Ltd. controller to the agreement
services price
Benxi Steel & Iron Sales of Related
Same Execute according
(Group) Real-estate goods and Energy & Power On agreement agreement 61.72 0.00% 1,000 No No
controller to the agreement
Development Co., Ltd. services price
Benxi Steel & Iron
Sales of Related
(Group) Steel & Iron Same Execute according
goods and Energy & Power On agreement agreement 54.71 0.00% No No
Process and Logistics controller to the agreement
services price
Co., Ltd.
Benxi Steel & Iron
Sales of Related
(Group) Steel & Iron Same Execute according
goods and Products On agreement agreement 7,329.61 0.25% 40,000 No Yes
Process and Logistics controller to the agreement
services price
Co., Ltd.
Benxi Steel & Iron Sales of Related
Same Execute according
(Group) Machinery goods and Products On agreement agreement 1,120.45 0.04% 15,000 No Yes
controller to the agreement
Manufacture Co., Ltd. services price
Benxi Steel & Iron Sales of Related
Same Execute according
(Group) Machinery goods and Energy & Power On agreement agreement 1,554.19 0.05% No No
controller to the agreement
Manufacture Co., Ltd. services price
Raw material &
Benxi Steel & Iron Sales of Related
Same supplementary Execute according
(Group) Machinery goods and On agreement agreement 136.05 0.00% No No
controller materials & spare to the agreement
Manufacture Co., Ltd. services price
parts
Benxi Steel & Iron Sales of Related
Same Execute according
(Group) Construction goods and Energy & Power On agreement agreement 392.78 0.01% No No
controller to the agreement
Co., Ltd. services price
43
Bengang Steel Plates Co., Ltd. Annual Report 2016
Pricing Amount of The approved Whether
Type of Price of Proportion of Means of payment Available market
Content of related principle of related party trading limit of exceed the Date of Index of
Related parties Relationship related party related party similar of related party price of similar
party transactions related party transactions (in transactions (in approved disclosure disclosure
transactions transactions transactions transactions transactions
transactions 10 thousand) 10 thousand) limited (Y/N)
Raw material &
Benxi Steel & Iron Sales of Related
Same supplementary Execute according
(Group) Construction goods and On agreement agreement 2,756.04 0.09% 25,000 No No
controller materials & spare to the agreement
Co., Ltd. services price
parts
Benxi Steel & Iron Sales of Related
Same Execute according
(Group) Mining Co., goods and Energy & Power On agreement agreement 74,573.08 2.53% No No
controller to the agreement
Ltd. services price
Raw material &
Benxi Steel & Iron Sales of Related
Same supplementary Execute according
(Group) Mining Co., goods and On agreement agreement 7,117.49 0.24% 100,000 No No
controller materials & spare to the agreement
Ltd. services price
parts
Benxi Steel & Iron Sales of Related
Same Execute according
(Group) Mining Co., goods and Freight revenue On agreement agreement 858.68 0.03% No No
controller to the agreement
Ltd. services price
Benxi Steel & Iron Sales of Related
Same Execute according
(Group) Mining Co., goods and Products On agreement agreement 781.85 0.03% No Yes
controller to the agreement
Ltd. services price
Benxi Steel & Iron
Sales of Related
(Group) Thermal Same Execute according
goods and Energy & Power On agreement agreement 2,819.49 0.10% No No
Power Development controller to the agreement
services price
Co., Ltd.
Benxi Steel & Iron Raw material &
Sales of Related
(Group) Thermal Same supplementary Execute according
goods and On agreement agreement 2,599.61 0.09% 15,000 No No
Power Development controller materials & spare to the agreement
services price
Co., Ltd. parts
Benxi Steel & Iron
Sales of Related
(Group) Thermal Same Execute according
goods and Freight revenue On agreement agreement 66.15 0.00% No No
Power Development controller to the agreement
services price
Co., Ltd.
Benxi Steel & Iron Sales of Related
Same Execute according
(Group) Industrial goods and Energy & Power On agreement agreement 823.58 0.03% No No
controller to the agreement
Development Co., Ltd. services price
Benxi Steel & Iron Sales of Related
Same Execute according
(Group) Industrial goods and Products On agreement agreement 22.3 0.00% No Yes
controller to the agreement
Development Co., Ltd. services price
Raw material &
Benxi Steel & Iron Sales of Related
Same supplementary Execute according
(Group) Industrial goods and On agreement agreement 11,640.04 0.39% 15,000 No No
controller materials & spare to the agreement
Development Co., Ltd. services price
parts
Benxi Steel & Iron
Sales of Related
(Group) Information Same Execute according
goods and Energy & Power On agreement agreement 18.43 0.00% 50 No No
and Automatic Tech controller to the agreement
services price
Co., Ltd.
Benxi Steel & Iron
Sales of Related
(Group) Construction Same Execute according
goods and Energy & Power On agreement agreement 97.49 0.00% No No
and Repairing Co., controller to the agreement
services price
Ltd.
Benxi Steel & Iron Same Sales of Raw material & Related Execute according
On agreement 188.5 0.01% 1,000 No No
(Group) Construction controller goods and supplementary agreement to the agreement
44
Bengang Steel Plates Co., Ltd. Annual Report 2016
Pricing Amount of The approved Whether
Type of Price of Proportion of Means of payment Available market
Content of related principle of related party trading limit of exceed the Date of Index of
Related parties Relationship related party related party similar of related party price of similar
party transactions related party transactions (in transactions (in approved disclosure disclosure
transactions transactions transactions transactions transactions
transactions 10 thousand) 10 thousand) limited (Y/N)
and Repairing Co., services materials & spare price
Ltd. parts
Benxi Steel & Iron Sales of Related
Same Execute according
(Group) Metallurgy goods and Energy & Power On agreement agreement 371.37 0.01% No No
controller to the agreement
Residues Co., Ltd. services price
Raw material &
Benxi Steel & Iron Sales of Related
Same supplementary Execute according
(Group) Metallurgy goods and On agreement agreement 1,669.59 0.06% 10,000 No No
controller materials & spare to the agreement
Residues Co., Ltd. services price
parts
Benxi Steel & Iron Sales of Related
Same Execute according
(Group) Metallurgy goods and Freight revenue On agreement agreement 0.89 0.00% No No
controller to the agreement
Residues Co., Ltd. services price
Benxi Steel & Iron Sales of Related
Same Execute according
(Group) Metallurgy goods and Products On agreement agreement 217.33 0.01% No Yes
controller to the agreement
Residues Co., Ltd. services price
Sales of Related
Benxi Steel & Iron Parent Execute according
goods and Energy & Power On agreement agreement 272.47 0.01% No No
(Group) Co., Ltd. Company to the agreement
services price
Raw material &
Sales of Related
Benxi Steel & Iron Parent supplementary Execute according
goods and On agreement agreement 923.88 0.03% 15,000 No No
(Group) Co., Ltd. Company materials & spare to the agreement
services price
parts
Sales of Related
Benxi New Career Same Execute according
goods and Energy & Power On agreement agreement 47.31 0.00% 500 No No
Development Co., Ltd. controller to the agreement
services price
Sales of Related
Dalian Boluole Steel Same Execute according
goods and Products On agreement agreement 369.82 0.01% 1,000 No Yes
Tube Co., Ltd. controller to the agreement
services price
Liaoning Bengang Sales of Related
Same Execute according
Steel & Iron Trading goods and Products On agreement agreement 6,564.11 0.22% 40,000 No Yes
controller to the agreement
Co., Ltd. services price
Benxi Steel & Iron Sales of Related
Same Execute according
(Group) General goods and Energy & Power On agreement agreement 9 0.00% 100 No No
controller to the agreement
Hospital services price
Benxi Steel & Iron
Sales of Related
(Group) Zhengtai Same Execute according
goods and Energy & Power On agreement agreement 0.14 0.00% 50 No No
Construction Materials controller to the agreement
services price
Co., Ltd.
Liaoning Hengtong
Sales of Related
Metallurgical Same Execute according
goods and Energy & Power On agreement agreement 1,565.92 0.05% No No
Equipment controller to the agreement
services price
Manufacture Co., Ltd.
Liaoning Hengtong Raw material &
Sales of Related
Metallurgical Same supplementary Execute according
goods and On agreement agreement 2,681.9 0.09% 10,000 No No
Equipment controller materials & spare to the agreement
services price
Manufacture Co., Ltd. parts
Liaoning Hengtong Sales of Related
Same Execute according
Metallurgical goods and Products On agreement agreement 226.76 0.01% No Yes
controller to the agreement
Equipment services price
45
Bengang Steel Plates Co., Ltd. Annual Report 2016
Pricing Amount of The approved Whether
Type of Price of Proportion of Means of payment Available market
Content of related principle of related party trading limit of exceed the Date of Index of
Related parties Relationship related party related party similar of related party price of similar
party transactions related party transactions (in transactions (in approved disclosure disclosure
transactions transactions transactions transactions transactions
transactions 10 thousand) 10 thousand) limited (Y/N)
Manufacture Co., Ltd.
Raw material &
Bengang Cold-rolled Sales of Related
Same supplementary Execute according
Stainless Steel goods and On agreement agreement 0.00% 1,000 No No
controller materials & spare to the agreement
Dandong Co., Ltd. services price
parts
Sales of Related
Suzhou Bengang Same Execute according
goods and Products On agreement agreement 17,469.08 0.59% 35,000 No Yes
Industrial Co., Ltd. controller to the agreement
services price
Sales of Related
Bengang Group Same Execute according
goods and Energy & Power On agreement agreement 1.58 0.00% 1,000 No No
Finance Co., Ltd. controller to the agreement
services price
Sales of Related
Bengang Group Co., Execute according
控制人 goods and Energy & Power On agreement agreement 8.3 0.00% 500 No No
Ltd. to the agreement
services price
Total -- -- 1,244,945.18 -- 2,114,000 -- -- -- -- --
Details of any sales return of a large amount None
Give the actual situation during the reporting period where a forecast
had been made for the total amounts of routine related-party None
transactions，by type to occur in the current period(if any)
Reason for any significant difference between the transaction price and
None
the Market price for reference (if applicable)
46
Bengang Steel Plates Co., Ltd. Annual Report 2016
2. Related transactions relevant to asset acquisition or sold
□ Applicable √ Not applicable
There was no related transaction relevant to asset acquisition or sold during the reporting period.
3. Related transactions relevant to joint investments
□ Applicable √ Not applicable
There was no related transaction relevant to joint investments during the reporting period.
4. Credits and liabilities with related parties
√ Applicable □ Not applicable
Whether there is any non-operating related credits and debts
□ Yes √ No
There was no non-operating related credits and debts during the reporting period.
5. Other significant related transactions
□ Applicable √ Not applicable
There was no other significant related transaction during the reporting period.
XVII. Major Contracts and Their Performance
1. Trusteeship, contracting and lease
(1) Trusteeship
□ Applicable √ Not applicable
There was no trusteeship during the reporting period.
(2) Contracting
□ Applicable √ Not applicable
There was no contracting during the reporting period.
47
Bengang Steel Plates Co., Ltd. Annual Report 2016
(3) Lease
□ Applicable √ Not applicable
There was no lease during the reporting period.
2. Guarantee
□ Applicable √ Not applicable
There was no guarantee during the reporting period.
3. Entrusting Others for Managing Cash Asset
(1) Entrusted Finance
√ Applicable □ Not applicable
Whether Princip Actual
Provisio Actual
Related al profit
Means n of Predict profit
Title of party Type of Amount Started Expired retrieve and loss
of impairm ed and loss
trustee transacti product entrusted on on d in retrieve
reward ent (if gains of the
ons or this d in this
any) period
not period period
Ping An
Bank Capital Septemb On
March
Dalian No guarante 4,100 er 23, agreem 4,100 54.9 54.9 Recover
24, 2016
Xi-gang ed 2016 ent
Branch
Ping An
Bank Capital On
April October
Dalian No guarante 7,200 agreem 7,200 96.93 96.93 Recover
21, 2016 21, 2016
Xi-gang ed ent
Branch
Ping An Capital May 26, Novemb On
No 1,300 1,300 17.41 17.41 Recover
Bank guarante 2016 er 25, agreem
48
Bengang Steel Plates Co., Ltd. Annual Report 2016
Dalian ed 2016 ent
Xi-gang
Branch
Industri
Capital Septemb Septemb On
al Bank
No guarante 30,000 er 7, er 8, agreem 30,000 2.05 2.05 Recover
Benxi
ed 2016 2016 ent
Branch
Industri
Capital Novemb Novemb On
al Bank
No guarante 4,000 er er agreem 4,000 0.28 0.28 Recover
Benxi
ed 29,2016 30,2016 ent
Branch
Total 46,600 -- -- -- 46,600 171.57 171.57 --
Resource of entrusted funds The Company’s own temporarily idle funds
Accumulated principal and
0
gains overdue
Lawsuit (if any) None
Date of announcement made
by the Board about approval April 29, 2016
of entrusted finance
Date of announcement made
by the Shareholders’
May 27, 2016
Meeting about approval of
entrusted finance
Whether there is a plan for
future trust entrusted Yes
finance
49
Bengang Steel Plates Co., Ltd. Annual Report 2016
(2) Entrusted Loans
□ Applicable √ Not applicable
There was no entrusted loan during the reporting period.
4. Other Major Contracts
□ Applicable √ Not applicable
There was no other major contract during the reporting period.
XVIII. Social Responsibilities
1. Performing corporation social responsibility of targeted poverty alleviation
□ Applicable √ Not applicable
2. Performing other corporation social responsibilities
During the reporting period, the Company conformed to the provisions stipulated by the relevant documents of
social responsibility implementation, actively protected the legitimate rights and interests of the creditors and staff,
honestly treated the suppliers, customers and consumers and actively engaged in the public welfare undertakings
such as environmental protection and community development, while pursuing the economic profits and
protecting the interests of the shareholders. In the business activities, the company consciously complied with the
principle of voluntariness, fairness, compensation of equal value and honesty and credibility, consciously abided
by social morality, professional ethics, consciously accepted the supervision from the government and the public
and actively performed the company’s social responsibility.
Whether the listed Company and its subsidiaries are among key pollution companies launched by Environmental
Protection Department
Yes
During the reporting period, five subordinate units of the Company were listed as the national key monitoring
companies, including coke plant, iron-making factory, steel-making factory, power plant and raw material plant.
The Company had 104 air pollution emissions vents and 3 sewage emission points. The Company followed
50
Bengang Steel Plates Co., Ltd. Annual Report 2016
several emission standards including ‘air pollution emission standard for thermal power plant’, ‘air pollution
emission standard for steel and iron sintering and pellet production’, ‘air pollution emission standard for
iron-making industry’, ‘air pollution emission standard for steel-making industry’, ‘air pollution emission standard
for rolling steel industry’, ‘air pollution emission standard for coking industry’, ‘air pollution emission standard
for boiler’, ‘Liaoning province sewage emission standard’, and ‘environmental noise emission standard for
industrial company’s plant area’, etc. The total amount of key pollution emission volumes are as following, 35448
tons of sulfur dioxide, 32628 tons of nitrogen oxides, 2404 tons of COD, and 153 tons of ammonia nitrogen. Each
pollution emission volumes reached counter requirement of emission concentration standard. There was no
excessive emission, significant environmental problem, or rectification situation.
In 2016, the Company completed 191 environmental protection projects, and accumulated invention was 393.79
million. Major projects included the 2*265 Square Meter Sintering Machine Desulfurization Project of Blast
Furnace Plant, Dust Removal Project of Power Plant High-pressure Workshop, Desulfurization and Denitration
Projects for Coal-fired Boiler of Power Plant High-pressure Workshop, Power Plant No 3 workshop Heat and
Power Cogeneration Renovation Project, Desulfurization Environmental Protection Renovation of Liaoyang
Pellet, and the Second Stage of Replacing Steam Heating by Water Heating Project in the Plant Area, etc. The
Company accumulatively invested 1817.1 thousand on greening and seedling replanting in 39 subordinate units.
The Company totally planted 880 thousand flowers and 3500 square meters grass. The Company accumulatively
invested 1500 thousand on plant maintenance. Overall, the Company positively took its environmental
responsibility.
Whether the Company launched Social Responsibility Report
□ Yes √ No
XIX. Other Major Issues
□ Applicable √ Not applicable
There was no need for illustrating other major issue.
XX. Major Issues of Subsidiaries
□ Applicable √ Not applicable
51
Bengang Steel Plates Co., Ltd. Annual Report 2016
VI. Status of Share Capital Changes and Shareholders
I. Share Capital Changes
1. Share capital changes
Unit: Share
Before the change Increase/decrease(+，-) After the Change
Bonu Capitalizatio
Issuing
Percenta s n of Other Subtota Percenta
Quantity of new Quantity
ge share common s l ge
share
s reserve fund
II. Non-restricted
3,136,000,000 100.00% 3,136,000,000 100.00%
Shares
1. Common shares in
2,736,000,000 87.24% 2,736,000,000 87.24%
RMB
2. Foreign shares in
400,000,000 12.76% 400,000,000 12.76%
domestic market
III. Total shares 3,136,000,000 100.00% 3,136,000,000 100.00%
Causation of share capital changes
□ Applicable √ Not applicable
Approval of share capital changes
□ Applicable √ Not applicable
Status of registration process of transferred shares
□ Applicable √ Not applicable
Influences of share capital changes on financial indices such as basic earnings per share, diluted earnings per share,
and net asset per share attributed to common shareholders
□ Applicable √ Not applicable
Other information the Company deems necessary to be disclosed or required by the authority
□ Applicable √ Not applicable
52
Bengang Steel Plates Co., Ltd. Annual Report 2016
2. Changes of Restricted Shares
□ Applicable √ Not applicable
II. Securities Issuance and Listing
1. Status of Security Issuance (Excluding Preferred Shares) in the Reporting Period
□ Applicable √ Not applicable
2. Total Share and Shareholder Change and Asset and Liability Structure Change
□ Applicable √ Not applicable
3. Employee Shareholding Status
□ Applicable √ Not applicable
III. Shareholders and Actual Controller
1. Total Number of shareholders and shareholding
In Shares
Total The total number of Total preferred
Total number
shareholders at preferred shareholde shareholders at the
of common
the end of the rs end of the month
shareholders
66,419 month from the 56,454 voting rights restore 0 from the date of 0
at the end of
date of d at the end of the disclosing the
the reporting
disclosing the reporting period (See annual report (if
period
annual report Notes 8) any) (See Notes 8)
Shareholding of shareholders holding more than 5% or top 10 shareholders
Number of Changes Number of pledged
Holding Restricte Un-restricte
Name of the Nature of shares held in or frozen shares
Percenta d shares d shares
shareholder shareholder at reporting
ge (%) held held Status Number
period-end period
53
Bengang Steel Plates Co., Ltd. Annual Report 2016
Benxi Steel & Iron State-owned 2,442,316,0
77.88% 2,442,316,069 Pledged 924,000,000
(Group) Co., Ltd. legal person 69
Domestic
Zhou Jie 0.26% 8,179,000 8,179,000
natural person
BBH A/C VANGUARD
EMERGING Overseas legal
0.26% 8,157,311 8,157,311
MARKETS STOCK person
INDEX FUND
Domestic
China Merchants
non-State-owne 0.23% 7,293,753 7,293,753
Securities Co., LTD.
d legal person
Domestic
Zhan Changcheng 0.15% 4,660,515 4,660,515
natural person
VANGUARD TOTAL
Overseas legal
INTERNATIONAL 0.15% 4,606,141 4,606,141
person
STOCK INDEX FUND
CITIGROUP GLOBAL Overseas legal
0.14% 4,235,196 4,235,196
MARKETS LIMITED person
Haitong International
Overseas legal
Securities Company 0.10% 3,286,109 3,286,109
person
Limited-Account Client
Agricultural Bank of
China－Fullgoal
State-owned Enterprise
Others 0.09% 2,750,000 2,750,000
Reform Index
Classification Securities
Investment Fund
Domestic
Ji Qinghui 0.08% 2,622,500 2,622,500
natural person
54
Bengang Steel Plates Co., Ltd. Annual Report 2016
Strategy investors or general
legal person becomes top 10
None
shareholders due to rights issued
(if any ) (See Notes 3)
It is unknown to the Company whether there is any related connection or
Notes to relationship or ‘action
‘Action in Concert’ as described by Rules of Information Disclosing Regarding
in concert’ among the top 10
Changing of Shareholding Status of Listed Companies existing among the
shareholders.
above shareholders.
Shareholding of top 10 unrestricted shareholders
Un-restricted shares held Category of shares
Name of the shareholder at the end of the reporting
Category of shares Quantity
period
Benxi Steel & Iron (Group) Co.,
2,442,316,069 Common shares in RMB 2,442,316,069
Ltd.
Foreign shares in domestic
Zhou Jie 8,179,000 8,179,000
exchange
BBH A/C Vanguard Emerging Foreign shares in domestic
8,157,311 8,157,311
Markets Stock Index Fund exchange
China Merchants Securities Co.,
7,293,753 Common shares in RMB 7,293,753
LTD.
Foreign shares in domestic
Zhan Changcheng 4,660,515 4,660,515
exchange
Vanguard Total International Stock Foreign shares in domestic
4,606,141 4,606,141
Index Fund exchange
Foreign shares in domestic
Citigroup Global Markets Limited 4,235,196 4,235,196
exchange
Haitong International Securities Foreign shares in domestic
3,286,109 3,286,109
Company Limited-Account Client exchange
Agricultural Bank of China－ 2,750,000 Common shares in RMB 2,750,000
55
Bengang Steel Plates Co., Ltd. Annual Report 2016
Fullgoal Stat-owned Enterprise
Reform Index Classification
Securities Investment Fund
Foreign shares in domestic
Ji Qinghui 2,622,500 2,622,500
exchange
Benxi Steel & Iron (Group) Co., Ltd., the holding shareholder, has no
relationship with any of the other shareholders among the top 10
Notes to relationship or ‘action in shareholders, neither being regarded as action-in-concert parties by the
concert’ among the top 10 Information Disclosure Regulations for Change of Shareholding in PLC.
non-restricted shareholders, and The Company is not aware of any relationship among the other
among the top 10 non-restricted shareholders, neither being regarded as action-in-concert parties by the
shareholders and top 10 Information Disclosure Regulations for Change of Shareholding in PLC.
shareholders The Company is not aware of any relationship among the top 10
shareholders, neither being regarded as action-in-concert parties by the
Information Disclosure Regulations for Change of Shareholding in PLC.
Shareholders among the top 10
participating in securities margin None
trading (if any) (see Note 4)
Whether top 10 common shareholders and top 10 un-restricted common shareholders have a buy-back agreement
dealing in reporting period
□ Yes √ No
Top 10 common shareholders and top 10 un-restricted common shareholders had no buy-back agreement dealing
in reporting period.
2. Controlling Shareholder
Nature of Controlling Shareholders: Local state holding
Type of Controlling Shareholders: Legal person
Name of the Legal Date of Organizatio
Principal business activities
Controlling representative / incorporatio n Code
56
Bengang Steel Plates Co., Ltd. Annual Report 2016
shareholder person in charge n
Business scope: steel smelt, mine exploitation,
panel rolling, oxygen manufacturing, pipe
manufacturing, power generating, coal industry,
special steel material manufacturing, heating,
supply of the water, electricity, wind and gas,
metal processing, electro mechanics builds, device
manufacturing, architecture installation, railway,
highway transportation, import and export trade,
traveling industry, construction material,
Benxi Steel & refractory material, measuring device instrument,
July 9121050011
Iron (Group) Han Ge goods and materials supply and marketing,
10,1996 9726263U
Co., Ltd. development of real estate, scientific research,
design , information service, property
management, telecommunication, processing of
waste iron, property leasing, exchange of steel
material, and recycling of waste oils (to the extent
of licensed to the subsidiary companies) , property
management; publishing of Bengang Daily;
designing and making of presswork and
advertisement, releasing, producing of TV
advertisements in the country and abroad.
Equity of other
domestic/foreig
n listed
company with None
share
controlling and
share
57
Bengang Steel Plates Co., Ltd. Annual Report 2016
participation by
controlling
shareholder in
reporting period
Changes of controlling shareholders during the reporting period
□ Applicable √ Not applicable
3. Actual Controller
Actual controller nature: Local state owned assets management
Actual controller type: Legal person
Legal
Name of the controlling Date of Principal business
representative Organization Code
shareholder incorporation activities
/ person in charge
91210000564625575
Bengang Group Co., Ltd. Chen Jizhuang November 25, 2010 Asset management
9
Equity of other
domestic/foreign listed
company with share
controlling and share None
participation by
controlling shareholder in
reporting period
Change of actual controller during the reporting period
□ Applicable √ Not applicable
Block diagram of the ownership and control relations between the Company and the actual controller
58
Bengang Steel Plates Co., Ltd. Annual Report 2016
Liaoning Provincial State-owned Assets
Supervision and Administration Commissi
on
Liaoning
80% Council for social security fund
20%
Bengang Group Finance Co., Ltd.
100%
Benxi Steel & Iron (Group) Co., Ltd.
100%
Bengang Steel Plates Co., Ltd.
Whether the actual controller is controlling the Company through trusteeship or other asset management service
□ Applicable √ Not applicable
4. Shareholders holding More than 10% of the Shares
□ Applicable √ Not applicable
5. Status of Share Reduction Limitation of Controlling Shareholders, Actual Controller, Restructuring
Party and Other Commitment Subjects
□ Applicable √ Not applicable
59
Bengang Steel Plates Co., Ltd. Annual Report 2016
VII. Status of Preferred Shares
□ Applicable √ Not applicable
There was no Preferred Shares during the reporting period.
60
Bengang Steel Plates Co., Ltd. Annual Report 2016
VIII. Status of Directors, Supervisors, Senior Executives and
Employees
I. Change in Shares held by Directors, Supervisors and Senior Executives
Shares
Shares Shares
increased Other Shares
held at decreased
Office Starting date of Expiry date of during increase held at
Name Position Sex Age the during the
status office term office term the / the
year-b reporting
reporting decrease year-end
egin period
period
Director,
Wang Shu In office Male 46 December 27, 2016 May 26, 2019
Chairman
Director,
Cao Aimin In office Male 50 October 26, 2009 May 26, 2019
Chairman
Director,
Han Ge General In office Male 48 February 19, 2014 May 26,2019
Manager
Tang
Director In office Male 54 December 27, 2016 May 26,2019
Chaosheng
Independent
Jin Yongli In office Male 59 May 17, 2013 May 26,2019
Director
Independent
Zhong Tianli In office Female 61 May 20, 2014 May 26,2019
Director
Independent
Zhao Xinan In office Male 57 May 21, 2015 May 26,2019
Director
Supervisor,
Dong Liju Chairman of In office Female 53 February 19, 2014 May 26,2019
Supervisory
61
Bengang Steel Plates Co., Ltd. Annual Report 2016
Committee
Han Mei Supervisor In office Female 48 February 19, 2014 May 26,2019
Li Lin Supervisor In office Female 49 February 19, 2014 May 26,2019
Li Zhengchun Supervisor In office Male 44 April 1, 2015 May 26,2019
Zhang
Supervisor In office Male 40 January 26, 2014 May 26,2019
Yanlong
Deputy
Zhang Jichen General In office Male 60 June 26, 2008 May 26,2019
Manager
Deputy
Bao Mingwei General In office Male 54 December 28, 2012 May 26,2019
Manager
Deputy
Wang
General In office Male 52 January 26, 2014 May 26,2019
Fengmin
Manager
Deputy
Hu
General In office Male 57 January 26, 2014 May 26,2019
Guangyuan
Manager
Deputy
General
Wang Shaoyu In office Male 53 October 28, 2015 May 26,2019
Manager,
CFO
Secretary of
Sun Yanbin In office Male 35 August 3, 2015 May 26,2019
the Board
Zhao Director,
Resigned Male 50 May 21, 2015 December 8, 2016
Zhongmin Chairman
Zhao Wei Director Resigned Male 50 May 21, 2015 August 23, 2016
Total -- -- -- -- -- --
62
Bengang Steel Plates Co., Ltd. Annual Report 2016
II. Change in Directors, Supervisors and Senior Executives
Name Position Type of change Date Reason
Zhao Zhongmin Director, Chairman Resigned December 8, 2016 Change of position
Zhao Wei Director Resigned August 23, 2016 Change of position
III. Posts holding
Work experience in the past five years of Directors, Supervisors and Senior Executives in current office
Profiles of the members of the Board::
Wang Shu, Male, 46, undergraduate, MBA，economist. Once General Manager Assistant of Benxi Steel & Iron
(Group) Co., Ltd.and Manager of Guo Mao; General Manager Assistant of Bengang Group Co., Ltd. and Manager
of Guo Mao; Deputy General Manager of Bengang Group Co., Ltd. He is now deputy CCP Secretary, General
Manager, Deputy Chairman of Bengang Group Co., Ltd. and Chairman of Bengang Steel Plates Co., Ltd.
Cao Aimin, Male, 50, undergraduate, senior accountant. Once Head of Capital Division of Finance Department;
Head of Planning and Finance Division; and Chief Accountant. He is now Director and Chief Accountant of
Bengang Group Co., Ltd., Vice Chairman of Bengang Steel Plates Co., Ltd.
Hen Ge, Male, 48, undergraduate, MBA, senior engineer. Once he was manager of hot-rolling factory of the
Company; vice manager of iron-making factory; assistant of general manager of Bengang Group. He is now
Chairman of Benxi Steel & Iron (Group) Co., Ltd. and General Manager of Bengang Steel Plates Co., Ltd.
Tang Chaosheng, Male, 48, postgraduate, senior accountant. Once he was Chief Accountant of Bengang Group
Dalian Fire Resistant Material Co., Head of No.1 Division of Bengang Group Audit Department; Chief
Accountant of Bengang Bei Ying; Head of Bengang Goup Co. Ltd. Finance Department. He is now Assistant
General Manager and Head of Finance Department of Bengang Group Co., Ltd. and Director of Bengang Steel
Plates Co., Ltd.
63
Bengang Steel Plates Co., Ltd. Annual Report 2016
Jin Yongli, Male, 59, postgraduate, professor. Once he was the dean of engineering school of Shenyang
University. At present he is the dean of Business School of Shenyang University. He has been Independent
Director of the Company since May 2013.
Zhong Tianli, Female, 61. Once she was Professor of Northeast Universities(Doctorial Tutor) . Once she was vice
dean of Business School of Northeast University, dean of Fundamental Study School and Head of Accounting
Institute of Northeast University. At present she is professor of Accounting Dept. of Business School of Northeast
University. She has been Independent Director of the Company since May 2014.
Zhao Xinan, Male, 57, Professor of Northeast Universities(Doctorial Tutor) . Once he was vice dean of Business
School of Northeast University, member of the national Education Dept of Management science and Engineering
Teaching steering Committee; He is now Professor of Business School of Northeast University. He has been
independent director of the Company since May 2015.
Profiles of the Supervisory Committee:
Dong Liju, Female, 53, undergraduate, senior engineer. Once she was head of auditing department of the
Company; the secondary Chairman of Supervisory Committee of the Company. She now is Supervisor, Deputy
Secretary Commission for Discipline Inspection of Bengang Group; Chairman of Supervisory Committee of
Bengang Steel Plates Co., Ltd.
Hen Mei, Female, 48, undergraduate, senior accountant. Once she was the vice head of financial department of the
Company; vice head of auditing department and head of administration department of the supervisory committee
of Bengang Group; Provincial Government Liaison in Bengang Benxi Steel & Iron (Group) Co., Ltd. Director of
Audit Dept. She now is Head of Audit Department, Head of Supervisory Committee Management of Bengang
Group; Head of Audit Department and the third Chairman of Supervisory Committee of Benxi Steel & Iron
(Group) Co. Ltd.; Supervisor of Bengang Steel Plates Co. Ltd.
Li Lin, Female, 49, postgraduate, engineer. Once she was the administrator of HR department of Bengang Group;
vice chief engineer of Transportation Department of the Company; substitute chairman of the trade union of
64
Bengang Steel Plates Co., Ltd. Annual Report 2016
Transportation Department of the Company. She now is Secretary of Commission for Discipline Inspection of
Transportation Department and Chairman of the Labour Union of Bengang Steel Plates Co. Ltd. She is Supervisor
of Bengang Steel Plates Co. Ltd.
Li Zhengchun, Male, 44, undergraduate, senior administration engineer. Once he was member of Huan Reource
Department of Bengang Group; Assistant Director, Director of Organization Managemnt Department. He now is
Deputy Director of CCP Work Department of Bengang Steel Plates Co. Ltd.; Deputy Chairman of Labour Union,
Deputy Secretary of Commission for Discipline Inspection and Supervisor of Bengang Steel Plates Co. Ltd.
Zhang Yanlong, Male, 40, undergraduate, senior engineer. He once was the workshop manager of steel-making
factory; vice chief of QC department of iron-making factory, Director of Steel-making plant, Manager of
Manufacturing Department of Bengang Steel Plates Co., Ltd.;He is now the assistant of director of production
division of steel-making plant, Supervisor of Bengang Steel Plates Co. Ltd.
Executives other than directors:
Zhang Jichen, Male, 60, postgraduate, senior engineer. Once the vice director of planning department of Benxi
Steel & Iron (Group) Co., Ltd.; Vice director of Development and Strategy Department and Director of Industrial
Policy Division; Director and Secretary of the Board of Bengang Steel Plates Co. Ltd. At present he is Vice
General Manager of Bengang Steel Plates Co., Ltd.
Bao Mingwei, Male, 54, undergraduate, senior engineer. Once he was Vice Director and Secretary of CCP of
hot-rolled steel plant of Bengang Steel Plates Co. Ltd., Director of the plant. He is now Vice General Manager of
Bengang Steel Plates Co. Ltd.
Wang Fengmin, Male, 52 , postgraduate, senior engineer. Once he was Vice Director of Iron-making plant,
Director and Secretary of CCP of Iron-making plant of Bengang Steel Plates Co. Ltd. He is now Vice General
Manager and Director of Manufacturing Department of Bengang Steel Plates CO. Ltd.
65
Bengang Steel Plates Co., Ltd. Annual Report 2016
Hu Guangyuan , Male, 57, postgraduate, senior engineer. Once he was the vice general manager and general
manager of Bengang Puxiang Cool-rolling Plate Co., Ltd.; Vice General Manager and Dean of Product Research
and Development Institution of Bengang Steel Plates Co. Ltd. He is now Vice General Manager of Bengang Steel
Plates Co. Ltd. and Director of cold-rolled plant.
Wang Shaoyu, Male, 53, undergraduate, senior accountant. Once he was Vice Director of Financial Department of
Bengang Steel Plates Co. Ltd.; Deputy director, Director of Financial Department; Assistant of General Manager.
He is now Vice General Manager and Director of Financial Department of Bengang Steel Plates Co. Ltd.
Sun Yanbin, Male, 35, undergraduate, senior accountant. Once he was the officer and deputy director of budget
finance Dept of Bengang Group; manager of Finance Dept of hot rolling factory of Finance Dept of Bengang
Steel Plates Co., Ltd.; the assistant minister of Finance Dept of Bengang Steel Plates Co., Ltd.. At present he is the
Secretary of the Board of Bengang Steel Plates Co., Ltd..
Posts holding in Shareholders
√ Applicable □ Not applicable
Does he /she
Expiry receive
Names of the
Names of the Titles engaged in the Starting date of date of remuneration
persons in
shareholders shareholders office term office or allowance
office
term from the
shareholder
Vice Secretary of CCP, General Manager,
Wang Shu Bengang Group Co., Ltd. December 1, 2013 Yes
Chairman
Cao Aimin Bengang Group Co., Ltd. Director, Chief Accountant November 1, 2010 Yes
Benxi Steel & Iron (Group)
Han Ge Chairman March 1, 2016 No
Co., Ltd.
General Manager Assistant, Director of
Tang Chaosheng Bengang Group Co., Ltd. February 1, 2013 Yes
Financial Department
66
Bengang Steel Plates Co., Ltd. Annual Report 2016
Supervisor, Deputy Secretary of
Dong Liju Bengang Group Co., Ltd. September 1, 2014 Yes
Commission for Discipline Inspection
Director of Audit Department, Director of
Han Mei Bengang Group Co., Ltd. February 1, 2016 Yes
Supervisory Committee Management
Office taking in
shareholder None
companies
Posts holding in other companies
□ Applicable √ Not applicable
Punishment by the securities regulatory authorities in last three years
□ Applicable √ Not applicable
IV. Remuneration to Directors, Supervisors and Senior Executives
Decision-making procedures, basis of recognition and actual payment of the remuneration to Directors,
Supervisors and Senior Executives
Decision making procedures
1. The Remuneration and Assessment Committee will produce a plan or proposal, which will be implemented
upon approval of the Board or the Shareholders’ Meeting;
2. According to performance assessment criteria and procedures, the Remuneration and Assessment Committee
undertakes assessment on the Directors and Senior Executives;
3. Remuneration amounts and ways of rewards will be proposed according to the assessment and remuneration
policies for Directors, Supervisors and Senior Executives, and adopted by voting;
4. To be implemented upon approval of the Board.
Basis of recognition
Remuneration scheme for a particular position is recognized basing on the range of responsibilities, duties.
Remunerations are distributed based on the assessment results and remuneration policies.
Actual payment of the remuneration
67
Bengang Steel Plates Co., Ltd. Annual Report 2016
Remuneration is paid on monthly basis according to the remuneration allocation policies.
Remuneration of Directors, Supervisors and Senior Executives during the reporting period
Unit: 10 thousand Yuan
Whether
Total receive
remuneration remuneration
Name Position Sex Age Office status
received from in the
the shareholder Company's
related parties
Wang Shu Director, Chairman Male 46 In office Yes
Cao Aimin Director, Chairman Male 50 In office Yes
Director, General
Han Ge Male 48 In office 23.52 No
Manager
Tang
Director Male 54 In office Yes
Chaosheng
Jin Yongli Independent Director Male 59 In office 5 No
Zhong Tianli Independent Director Female 61 In office 5 No
Zhao Xinan Independent Director Male 57 In office 5 No
Supervisor, Chairman of
Dong Liju Female 53 In office Yes
Supervisory Committee
Han Mei Supervisor Female 48 In office Yes
Li Lin Supervisor Female 49 In office 12.5 No
Li Zhengchun Supervisor Male 44 In office 11.84 No
Zhang Yanlong Supervisor Male 40 In office 13.97 No
Deputy General
Zhang Jichen Male 60 In office 22.75 No
Manager
Deputy General
Bao Mingwei Male 54 In office 23.19 No
Manager
Wang Fengmin Deputy General Male 52 In office 22.51 No
68
Bengang Steel Plates Co., Ltd. Annual Report 2016
Manager
Deputy General
Hu Guangyuan Male 57 In office 19.4 No
Manager
Deputy General
Wang Shaoyu Male 53 In office 22.51 No
Manager, CFO
Sun Yanbin Secretary of the Board Male 35 In office 9.92 No
Zhao
Director, Chairman Male 50 Resigned Yes
Zhongmin
Zhao Wei Director Male 50 Resigned Yes
Total -- -- -- -- 197.11 --
Incentive equity to Directors, Supervisors and Senior Executives during the reporting period
□ Applicable √ Not applicable
V. Staff Condition
1. Staff Population, Professional Structure and Education Level
Population of in-service staff in parent company 20,099
Population of in-service staff in main subsidiaries 632
Total population of in-service staff 20,731
Total population of staff receiving remuneration in the
20,731
current period
Population of retired staff whose expense was borne by
21,600
parent company and major subsidiary companies
Professional Composition
Type of Professional Composition Population
Production Staff 16,852
Sales Staff 213
Technician 1,356
Financial Staff 149
Administrative Staff 2,161
69
Bengang Steel Plates Co., Ltd. Annual Report 2016
Total 20,731
Educational Degree
Type of Educational Degree Population
Postgraduate or above 366
Undergraduate 3,504
Junior college 5,669
Secondary school ,high school, technical school 4,693
Below secondary school 6,499
Total 20,731
2. Remuneration Policies
In 2016, based on the principle of the linkage between economic benefits and employee benefits , and based on the current
corporation profits making situation, the Company lead all subsidiaries to adjust the internal distribution system that prioritize front
line employees benefits to realize the linkage between employees income level, post contribution and Company’s profits making
situation. Meanwhile, the Company researched current situation of each subsidiaries employee salary distribution system including
special awards and salary distribution for those employees who cannot complete their job to further standardize the salary distribution
system. Besides, the Company optimized the ERP employee salary distribution system, re-determined the scope to ensure the
timeliness and accuracy of approval and distribution of salary by fully utilization of the ERP system.
3. Training Plan
38 training programs were provided to 13286 employees, ensuring that 85% training plan were enforced and 70% of the whole
employees were covered.
4. Outsourcing
□ Applicable √ Not applicable
70
Bengang Steel Plates Co., Ltd. Annual Report 2016
IX. Corporate Governance
I. Basic Situation of Corporate Governance
Since listed in the stock exchange, the Company has been following the laws, regulations and documents such as
the Company Law, Securities Law, Listed Company Governance Rules, Shareholders’ Meeting Criteria of Listed
Companies, Guide of Lifting the Quality of Listed Company, and Instructions for Articles of Association of Listed
Companies. The Company has been establishing and improving governance structure to protect the interests of the
Company and the investors. The Shareholders’ Meeting was working with clear responsibilities and decision
making procedures. Arrangements were made to enable convenient participating of the public investors. Online
voting system was introduced for material decision making processes. During the reporting period, according to
the relevant laws and regulations, and combining with the actual situation of the Company, ‘Management
Measures for Futures’ was formulated.
Whether there exist any difference in compliance with corporate governance, PRC Company Law and relevant
provisions of CSRC
□ Yes √ No
There exist no difference in compliance with corporate governance, PRC Company Law and relevant provisions
of CSRC.
II. Explanation on Structural Independence of the Company on Business, Personnel, Assets,
Organization and Finance from the Controlling Shareholder
The Company is separated from the controlling shareholder in aspects of business, personnel, assets, organization and finance, etc.
and has its own independent and complete business operation.
(1) In business operation: the Company has its own production and business planning, financial affairs check and calculate, personnel,
raw material supplies and products selling business system independently and completely, .
(2) In personnel: The Company and controlling shareholder are separate in such aspects as labor, personnel and salary management.
Such senior executives as company's chairman, general manager, vice general manager, secretary of Board of Directors, etc. get
salary from the Company, and have not held the important position other than a director in shareholding party.
71
Bengang Steel Plates Co., Ltd. Annual Report 2016
(3) In Asset: The Company is separated from the controlling shareholder's clearly in asset. The Company has its own independent
purchase, production, and marketing system.
(4) In organization: The internal operations of the Company are independent; organization structuring and working function are
totally independent.
(5) In finance: The company has independent financial & accounting department, the accounting and financial management system
were are complete and operated independently, and has bank account and pay taxes independently.
III. Competition Situations of the Industry
□ Applicable √ Not applicable
IV. Annual General Meeting and Extraordinary Shareholders’ Meetings in the Reporting
Period
1. Annual General Meeting
Investor Index of
Sessions Type participation Meeting Date Date of disclosure information
ratio disclosure
Announcement
Annual General Annual General No.: 2016-030
0.07% May 26, 2016 May 27, 2016
Meeting of 2015 Meeting http://www.cninfo
.com.cn
The first
Announcement
provisional Provisional
December 27, December 28, No.: 2016-062
Shareholders’ shareholders’ 0.08%
2016 2016 http://www.cninfo
General Meeting in General Meeting
.com.cn
2016
2. Request for Extraordinary General Meeting by Preferred Stockholders Whose Voting Rights Restore
□ Applicable √ Not applicable
72
Bengang Steel Plates Co., Ltd. Annual Report 2016
V. Duty fulfillment of Independent Directors in Reporting Period
1. Attendance of Independent Directors in Board Meeting and Shareholder’s Meeting
Attendance of independent directors
Number of
Board Failure to
Number of
meetings personally
Number of meetings Number of
Independent necessary to Number of attend board
spot attended by attendances by
Directors be attended absence meetings
attendances Communicatio representative
during the successively
n
reporting twice (Yes/No)
period
Jin Yongli 6 4 2 0 0 No
Zhong Tianli 6 4 2 0 0 No
Zhao Xinan 6 4 2 0 0 No
Number of general meetings
attended by independent directors 2
as non-voting delegates
Illustration to failure to personally attend Board Meetings Twice Successively
2. Objection of Independent Directors on Relevant Issues
Objection of independent directors on some relevant issues
□ Yes √ No
Independent directors proposed no objection against the relevant matters during the reporting period.
3. Other Notes to Duty Fulfillment of Independent Directors
Whether any independent director’s advice to the Company was accepted
√ Yes □ No
Illustration of acceptance of or failure to accept an independent director’s advice to the Company
Independent directors have not made recommendations during the reporting period.
73
Bengang Steel Plates Co., Ltd. Annual Report 2016
VI. Duty Fulfillment of the Special Committees under the Board during the reporting period
The Remuneration and Assessment Committee is responsible to inspect the assessment process of the executives in year 2016.
The Development and Strategy Committee is responsible to examine the Board of Directors’ Work Report 2016 and the Proposal of
Investment Structural Planning 2016 in advance and provide suggestions on the Company’s long-term development basing on its
researches.
The Auditing Committee is responsible to inspect the operation of internal auditing system, to verify the financial information
disclosure, to examine the Financial Report 2015, and the Internal Control Introspective Evaluation Report, etc.
Nomination Committee provided opinions on the adjustment of executive positions.
VII. Duty Fulfillment of the Supervisory Committee
Whether the supervisory board made any objection against the supervision issue during the reporting period
□ Yes √ No
The Supervisory Board made no objection against the supervision issue during the reporting period.
VIII. Appraisal and Incentive System for Senior Executives
The Company’s performance assessment scheme for executives has become a regular mechanism. Annual
business plans adopted by the shareholders’ meeting and the Board were assigned and authorized to the executive
team of the Company and were used as basis of annual assessment. Operational targets were scheduled by the
Board to the executives to the executives and were reviewed from time to time in the year and annual rewards or
penalties were issued at end of year. The incentive scheme was working effectively to motivate the directors,
supervisors and executives.
IX. Internal Control
1. Significant Defects of the Internal Control Found in the Internal Control Self-Assessment Report in the
Reporting Period
√Yes □ No
Significant DEFECTS OF THE INTERNAL CONTROL FOUND IN THE REPORT PERIOD
No significant defects of the internal control were found during the reporting period
74
Bengang Steel Plates Co., Ltd. Annual Report 2016
2. Self-Evaluation Report on Internal Control
Disclosing date of internal control auditing report
March 30, 2017
full text
Index of the internal control auditing report full text http//www.cninfo.com.cn
Proportion of total assets of subsidiaries belong to
the scope of self-evaluation report in the total assets 99.00%
of the Company’s consolidated financial statements
Proportion of operation income of subsidiaries
belong to the scope of self-evaluation report in the
70.00%
operation income of the Company’s consolidated
financial statements
Standards of Defects Evaluation
Category Financial Report Non-financial Report
1. Material deficiencies: The frauds 1. Material deficiencies: Major errors caused
made by the directors, or supervisors, by decision-making procedure; the important
or senior management personnel that business lacks institutional control or has a
leads to significant losses and adverse systematic failure while lacking effective
effects to the company compensatory control; serious drain of senior
2. Significant deficiencies: Not in and middle level management personnel and
accordance with generally accepted senior technical staff; the results of internal
accounting standards selection and control evaluation, especially the significant
Qualitative criteria
application of accounting policies; Not deficiencies have not been corrected; other
established anti-fraud procedures and circumstances that have big negative impact
control measures; Not established the on the company.
corresponding control mechanism or 2. Significant deficiencies: General errors
not implemented the corresponding caused by decision-making procedure; there
compensatory control on the are defects in the important business
accounting treatment of regulations and system serious drain of
non-conventional or special deals; business personnel in key posts; the results of
75
Bengang Steel Plates Co., Ltd. Annual Report 2016
there are one or more defects in the internal control evaluation, especially the
process control of the final financial important deficiencies have not been
report and which leads to cannot corrected; other circumstances that have
reasonably guaranteeing the financial comparably big negative impact on the
report compiled to achieve the goal of company.
being true and accurate. 3. General deficiencies: low-efficiency on the
3. General deficiencies: the internal decision-making process; existed defects in
control deficiencies except those the ordinary business institution or system;
constitute the material deficiencies and serious drain of business personnel in general
the significant deficiencies. posts; general deficiencies that have not been
corrected.
1. Material deficiencies: 1) 1. Material deficiencies: 1) misstatement≥5%
misstatement≥5% of the total profits;2) of the total profits; 2) misstatement≥3% of
misstatement≥3% of the total assets;3) the total assets; 3) misstatement≥1% of the
misstatement≥1% of the total operating total operating income; 4) misstatement≥1%
income4) misstatement≥1% of the total of the total amount of the owner’s equity. 5)
amount of the owner’s equity. 5) 3% of 3% of the total profits ≤misstatement＜5% of
the total profits ≤misstatement＜5% of the total profits; 2. Significant deficiencies:
the total profits; 2. Significant 1) 0.5% of the total assets ≤misstatement＜
deficiencies: 1) 0.5% of the total assets 3% of the total assets; 2) 0.5% of the total
Quantitative criteria
≤misstatement＜3% of the total assets; operating income ≤misstatement＜1% of the
2) 0.5% of the total operating income total operating income; 3) 0.5% of the total
≤misstatement＜1% of the total amount of the owner’s equity ≤misstatement
operating income; 3) 0.5% of the total ＜1% of the total amount of the owner’s
amount of the owner’s equity equity. 3. General deficiencies: 1)
≤misstatement＜1% of the total misstatement＜3% of the total profits; 2)
amount of the owner’s equity. 3. misstatement＜0.5% of the total assets; 3)
General deficiencies: 1) misstatement misstatement＜0.5% of the total operating
＜3% of the total profits; 2) income; 4) misstatement＜0.5% of the total
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Bengang Steel Plates Co., Ltd. Annual Report 2016
misstatement＜0.5% of the total assets; amount of the owner’s equity.
3) misstatement＜0.5% of the total
operating income; 4) misstatement＜
0.5% of the total amount of the owner’s
equity.
Number of major defects
0
in financial reporting(a)
Number of major defects
in non-financial reporting 0
(a)
Number of important
defects in financial 0
reporting(a)
Number of important
defects in non-financial 0
reporting(a)
X. Internal Control Audit Report
√ Applicable □ Not applicable
Review opinions in the internal control audit report
We acknowledge that internal control of Bengang Bancai is effective in all material respects and is compliance
with ‘Fundamental Rules of Enterprise Internal Control’ up to December 31, 2016.
Internal Control Audit Report Status Disclosure
Disclosure date of audit report of internal control
March 30, 2017
(full-text)
Index of audit report of internal control (full-text) http//www.cninfo.com.cn
Internal audit report’s opinion Standard unqualified opinion
Whether there is significant defect in non-financial
No
report
77
Bengang Steel Plates Co., Ltd. Annual Report 2016
Whether the accountants’ firm issued a qualified auditor’s report of internal control
□ Yes √ No
Whether the internal control audit report issued by the accountants’ firm agree with the self-assessment report of
the Board of Directors
√ Yes □ No
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Bengang Steel Plates Co., Ltd. Annual Report 2016
X. Relevant Information about Corporate Bonds
Whether there exists any un-matured corporate bonds public issued and listed on the Stock Exchange or any
matured corporate bonds which the listed company failed to pay in full at the approval date of the annual report
Yes
I. Basic information of corporate bonds
Bond balance
Bond Servicing
Bond name Bond short name Issuance date Maturity date in 10 Interest rate
code way
thousand
Interest is
paid
Corporate
15 Benxi Steel February February annually, and
Bond 2015 112236 150,000 5.17%
01 9,2015 9,2018 principal is
(Phase I)
paid when
due.
Corporate bonds listed or
Shenzhen Stock Exchange
trading places
Investors appropriate The above bond transactions have been implemented by investors appropriate
management management
The interests of Bengang Steel Plates Co., Ltd. Corporate Bonds 2015 (Phase I)
of the period from February 5, 2016 to February 4, 2017 were paid on February
Interest payment status of the 6, 2017, as each bond would gain RMB 5.17 (tax inclusive). The date of record
Company Bond during the of interest payment was February 3, 2017, thus any investor who bought and
reporting period held the bonds before or on the date of February 3, 2017 enjoyed the right to
receive the interest payments. The investors who sold out the bonds on the date
of February 3, 2017 should not enjoy the interests.
If the corporate bonds are
Not applicable
attached to special clauses
79
Bengang Steel Plates Co., Ltd. Annual Report 2016
such as option clause and
exchangeable clause to the
issuer or investors, please
specify the implementation
status of the corresponding
clauses. (If applicable)
II. Bond Trustee and the Credit Rating Agency
Bond trustee:
ESSENC
12 F, Guo Tou Financial Building, 2 Fu
E Office Contact 010-8332119
Name Cheng Men North Street, Xi Cheng Contact Tian Zhu
Securitie address number 7
District, Beijing
s
The credit rating agency which conducted tracking rating of the corporate bond during the reporting period:
12/F, PICC Building, No.Jianguo
Name United Ratings Co., Ltd. Office address Menwai Street, Chaoyang District,
Beijing.
If during the reporting period, the
bond trustee, credit rating agency
employed by the company have
changed, reasons for the change, Not applicable
performing procedures, relevant
influence on investors, etc. (If
applicable)
III. The Usage of Raised Funds from Corporate Bonds
The usage of raised funds from After deducting issuance costs, all raised funds are used
Corporate bonds and procedures of for debt restructuring
performance and repayment. The amount of repayment of bank loans was
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Bengang Steel Plates Co., Ltd. Annual Report 2016
RMB 1.5 billion. As of December 31, 2016, all the raised funds
have been used up.
Balance (ten thousand) 0
Operation of raised funds special
Normal
account
Whether the usage of the raised
funds corresponded to the purposes
Yes
of promise, use plans, or other
agreements
IV. Corporate Bond Rating
(1) On Jun 28, 2016, United Rating Agency exercised rating towards the Corporate Bond 2015 (Phase I) and
confirmed the Company’s bond at AA+, and prospect evaluation was negative. Bengang Steel Plates Co. Ltd
conducted the disclosure about tracking rating report on http://www.cninfo.com/cn/ on June 30, 2016.
(2) Regular tracking rating report will be launched before June 31, 2017 as planned. The report will be disclosed
on http://www.cninfo.com.cn/. Investors are advised to pay attention to it.
(3) During the reporting period, United Rating Agency did not exercise irregular tracking rating about the
Company’s bonds.
(4) During the reporting period, the Company did not launch any other bonds or securities financing tools and
there was no difference of the assessment results between different rating agencies.
V. Corporate Bond Credit Increasing Mechanism, Debt Repayment Plans and Other Debt
Repayment Security Measures
1. Debt repayment plans
According to ‘Prospectus of Public Issuance of Corporate Bond 2015 (Phase I)’ launched on February 3, 2015,
debt repayment plans are as followings:
(1) The value date of the bond is February 5, 2015. In the duration of the bond, the interest will be paid once a
year, and the interest payment date is February 5 in three consecutive years, ranging from 2016 to 2018 (subject to
postponement in case of statutory public holiday and weekend, similarly hereinafter) .
(2) The maturity date is February 5, 2018. The principal and the interest thereof will be paid at the maturity date.
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Bengang Steel Plates Co., Ltd. Annual Report 2016
(3) Interest will be paid through registration agency and related agencies. The details will strictly follow related
regulations and will be disclosed on the designated public media by the issuer.
(4) According to national tax legislation and regulation, the relevant taxes emerged in investment on the bond
should be paid by investors.
2. Debt repayment security measures
According to ‘Prospectus of Public Issuance of Corporate Bond 2015 (Phase I)’ launched on February 3, 2015,
debt repayment security measures are as following:
In order to fully and effectively preserve bondholders’ benefit, the Company made a series plan towards repaying
the debt in time and in full amount, including set up a special project group, formulated ‘Meeting Rules for
bondholders’, formulated and strictly executed fund management plan, fully played the bond trustee’s roles and
strictly carried out the disclosure responsibility.
(1) Set up a special project group;
(2) Formulate ‘Meeting Rules for Bondholders’;
(3) Bengang Group Co., Ltd. acted as the company's bond guarantor;
(4) Formulate and strictly execute fund management plan;
(5) Protect bondholders’ benefits;
(6) Strictly carry out the disclosure responsibility;
(7) Issuer’s Board of Director’s commitment.
During the reporting period, the Company follows the debt repayment plan and security mechanism disclosed in
‘Prospectus of Public Issuance of Corporate Bond 2015 (Phase I) ’. The Company set up a special project group,
formulated ‘Meeting Rules for Bondholders’, applied ESSENCE Securities as trustee, and
Bengang Group Co., Ltd. as the company's bond guarantor, formulated and strictly executed fund management
plan that reasonably distribute fund to ensure the interest was paid in time. On January 28, 2016, the Company
disclosed ‘Interest Repayment Information’ and completed the first interest repayment on February 5, 2016.
During the reporting period, the Company had no significant changes that would influence the in time repayment
of bond and there is no differences situation with relevant commission.
During the reporting period, there was no change to Corporate Bond Credit Increasing Mechanism, Debt
Repayment Plans and Other Debt Repayment Security Measures. Bengang Group Co., Ltd. was the guarantor for
the Company’s bond. As of 31 December 2016, Bengang Group Co., Ltd.’s net assets is RMB 35.804 billion,
82
Bengang Steel Plates Co., Ltd. Annual Report 2016
asset-liability ratio is 74.98%, ROE is 0.03%, liquidity ratio is 0.49, quick ratio is 0.28 (above financial data is not
audited) . Bengang Group Co., Ltd. is rated AAA by China Cheng Xin International Credit Rating Co. Ltd.
VI. Bondholders’ Meeting in the Reporting Period
During the reporting period, the Company did not hold bondholders’ meeting.
VII. Duty fulfillment of Bond Trustee in the Reporting Period
During the reporting period, the bond trustee performs its responsibilities in accordance with the regulations in
Corporate Bond Issuance and Transaction Management Method and commitment in Bond Trustee Agreement:
(1) Constantly pay attention to the credit status, execution of credit enhancement measurements and credit
repayment safeguard measures of the guarantor and company;
(2) Supervise the utilization of raised funds in the company in the duration of bond;
(3) Exercise a well-rounded investigation into and pay constant attention to the company’s debt repayment ability
and credit enhancement measures, and provide at least one trustee affair report for the market each year;
(4) Constantly supervise the company’s performance of information disclosure obligation in the duration of the
bond.
The trustee hasn’t been confronted with conflict of interest in performing its responsibilities.
The trustee has announced the trustee affair report 2015 on June 30, 2016.
VIII. Major Accounting Data and Financial Indicators for Last 2 Years
Unit: 10 thousand Yuan
Items 2016 2015 Rate of change
EBITDA 361,703.32 -115,704.04 412.61%
Liquidity ratio 74.56% 61.27% 13.29%
Asset-liability ratio 75.51% 72.02% 3.49%
Quick ratio 47.04% 31.72% 15.32%
EBITDA total debt ratio 8.85% -0.05% 8.90%
Interest coverage ratio 1.71 -2.8 161.21%
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Bengang Steel Plates Co., Ltd. Annual Report 2016
Cash interest coverage ratio 14.47 -1.57 1,021.84%
EBITDA interest coverage ratio 3.51 -1.08 425.42%
Loan payment rate 100.00% 100.00% 0.00%
Rate of Interest payment 100.00% 100.00% 0.00%
The main reasons that the accounting data and financial indicators change more than 30%
√ Applicable □ Not applicable
(1) EBITDA had increased by 412.61% compared to last year, mainly due to an increase in total profit.
(2) The interest coverage ratio had increased by 161.21% compared to last year, mainly due to an increase in
EBITDA.
(3) The cash interest coverage ratio had increased by 1,021.84% compared to last year, mainly due to an increase
in net cash flow generated by operating activities.
(4) The multiple of EBIT interest safeguard had increased by 425.42% compared to last year, mainly due to an
increase in EBITDA.
IX. Interest Payment for Other Bonds and Debt Financing Tool in the Reporting Period
During the reporting period, the Company did not launch any other bonds or securities financing tools or pay
interest for other bonds and securities financing tools.
X. Usage of Bank Credit Obtained and Repayment of Bank Loans in the Reporting Period
During the reporting period, the total bank line of credit of the Company was RMB 31.85 billion, and RMB 27.29
billion was used, leaving unused line of credit of RMB 4.56 billion. The total loan amount at the beginning was
RMB 20.58 billion, and had increased RMB 25.869 billion in this period. The loan repaid in this period was RMB
21.431 billion, leaving a balance of RMB 22.649 billion.
XI. Performance of Agreements or Commitments Related to Corporate Bond Prospectus in
the Reporting Period
The Company strictly observed the Bond Trustee Agreement and regulations as described in different bond terms
and conditions. The Company fulfilled its responsibilities according to Prospectus. There was no situation that the
Company harmed investors’ benefits.
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Bengang Steel Plates Co., Ltd. Annual Report 2016
XII. Major Events Occurred in the Reporting Period
On Jun 28, 2016, United Rating Agency exercised rating towards the Corporate Bond 2015 (Phase I) and
confirmed the Company’s bond at AA+, and prospect evaluation was negative. Meanwhile, it lowered credit
rating of ’15 Bengang 01’ down to AA+.
XIII. Whether There Exist Any Guarantors of the Corporate Bond
√ Yes □ No
Whether the guarantor of the corporate bond is a legal person or other organizations
√ Yes □ No
Whether the Company disclosed the guarantor’s financial statements including statement of financial position,
statement of comprehensive income, statement of changes in equity, statement of cash flows, and notes to the
financial statements in four months since the end of each fiscal year.
√ Yes □ No
85
Bengang Steel Plates Co., Ltd. Annual Report 2016
XI. Financial Report
Type of audit opinion Standard unqualified opinion
Date of issurance of the audit report March 28,2017
Name of the accountants’ firm BDO China Shu Lun Pan Certified Public Accountants LLP
Name of the CPAs Wu Xue, Zhang Huice
AUDITORS’ REPORT
PCPAR (2017) No. ZB10428
To All Shareholders of Bengang Steel Plates Co., Ltd.:
We have audited the accompanying financial statements of Bengang Steel Plates Co., Ltd.
(hereinafter referred to as “the Company”) which comprise the consolidated statement of financial
position and statement of financial position as at 31 December 2016, the consolidated statement of
comprehensive income and statement of comprehensive income, the consolidated statement of
changes in equity and statement of changes in equity, the consolidated statement of cash flows and
statement of cash flows for the year then ended, and notes to the financial statements.
Management’s Responsibility for the Financial Statements
Management of the Company is responsible for the preparation and fair presentation of these
financial statements. This responsibility includes: (1) preparing the financial statements in
accordance with the requirements of Accounting Standards for Business Enterprises to achieve a
fair presentation; (2) designing, implementing and maintaining internal control that is necessary to
ensure that the financial statements are free from material misstatements, whether due to frauds or
errors.
Auditor’s Responsibility
Our responsibility is to express an opinion on these financial statements based on our audit. We
conducted our audit in accordance with Chinese Certified Public Accountants Auditing Standards.
Those standards require that we comply with ethical requirements and plan and perform the audit
to obtain reasonable assurance whether the financial statements are free from material
misstatement.
86
Bengang Steel Plates Co., Ltd. Annual Report 2016
An audit involves performing procedures to obtain audit evidence about the amounts and
disclosures in the financial statements. The procedures selected depend on the auditor’s judgment,
including the assessment of the risks of material misstatement of the financial statements, whether
due to fraud or error. In making those risk assessments, the auditor considers internal control
relevant to the entity’s preparation and fair presentation of the financial statements in order to
design audit procedures that are appropriate in the circumstances. An audit also includes
evaluating the appropriateness of accounting policies used and the reasonableness of accounting
estimates made by management, as well as evaluating the overall presentation of the financial
statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a
basis for our audit opinion.
Auditors’ opinion
In our opinion, the financial statements of Bengang Steel Plates Co., Ltd. present fairly, in all
material respects, the consolidated financial position and financial position of the Company as at
31 December 2016, and the consolidated results of operations and results of operations and the
consolidated cash flows and cash flows of the Company for the year then ended in accordance
with the requirements of Accounting standards for Business Enterprises.
BDO China Shu Lun Pan Certified Certified Public Accountants
Public Accountants LLP Registered in the People’s Republic
Of China
Shanghai, the People’s Republic of China
28 March 2017
87
Bengang Steel Plates Co., Ltd. Annual Report 2016
BENGANG STEEL PLATES CO., LTD.
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
As at 31 December 2016
(Expressed in Renminbi unless otherwise indicated)
Assets Notes Ending balance Beginning balance
Current assets
Cash at bank and on hand 5 (1) 12,931,912,017.84 5,140,480,509.97
Settlement provisions
Capital lent
Financial assets at fair value through profit or loss
Derivative financial assets
Notes receivable 5 (2) 2,030,681,138.03 2,449,682,561.16
Accounts receivable 5 (3) 623,865,427.25 488,584,624.72
Prepayments 5 (4) 493,839,659.44 569,851,950.69
Premium receivable
Reinsurance accounts receivable
Receivable deposit for reinsurance contract
Interests receivable 5 (5) 4,208,818.85 3,524,615.12
Dividends receivable
Other receivables 5 (6) 117,909,972.49 151,668,877.26
Redemptory financial assets for sale
Inventories 5 (7) 9,782,173,936.74 8,601,734,442.42
Assets held for sale
Non-current assets due within one year
Other current assets 5 (8) 513,398,815.83 431,360,541.21
Total current assets 26,497,989,786.47 17,836,888,122.55
Non-current assets
Loan and advances issued
Available-for-sale financial assets 5 (9) 14,856,585.63 20,271,278.63
Held-to-maturity investment
Long-term receivables
Long-term equity investments
Investment property
Fixed assets 5 (10) 20,688,468,637.44 20,046,254,726.74
Construction in progress 5 (11) 6,210,673,674.11 5,646,624,293.27
Construction materials 5 (12) 7,783,370.29 4,152,880.79
Disposal of fixed assets
Productive biological assets
Oil and gas assets
Intangible assets 5 (13) 259,837,410.93 265,520,912.57
Development expenditure
Goodwill
Long-term deferred expenses
Deferred tax assets 5 (14) 476,101,254.04 641,931,130.78
Other non-current assets
Total non-current assets 27,657,720,932.44 26,624,755,222.78
Total assets 54,155,710,718.91 44,461,643,345.33
The notes to the financial statements attached form part of these financial statements.
Legal Representative: Chief Financial Officer: Chief Accountant:
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Bengang Steel Plates Co., Ltd. Annual Report 2016
BENGANG STEEL PLATES CO., LTD.
CONSOLIDATED STATEMENT OF FINANCIAL POSITION (Continued)
As at 31 December 2016
(Expressed in Renminbi unless otherwise indicated)
Liabilities and equities Notes Ending balance Beginning balance
Current Liabilities
Short-term loans 5 (15) 18,762,472,779.48 18,139,885,596.60
Loan from central bank
Absorbed deposit and interbank deposit
Loan from other financial institutions
Financial liabilities at fair value through profit or loss
Derivative financial liabilities
Notes payable 5 (16) 6,372,173,897.13 2,110,511,950.79
Accounts payable 5 (17) 5,680,244,661.52 5,015,900,664.47
Advance from customers 5 (18) 3,679,477,129.80 1,815,443,452.05
Financial assets sold for repurchase
Handling charges and commission payable
Employee benefits payable 5 (19) 24,063,493.70 36,455,143.76
Current tax liabilities 5 (20) 45,771,585.46 45,194,528.35
Interests payable 5 (21) 75,115,265.66 70,958,686.96
Dividends payable
Other payables 5 (22) 460,009,213.78 444,734,704.90
Reinsurance accounts payable
Provision for insurance contract
Receipt from vicariously traded securities
Receipt from vicariously underwriting securities
Liabilities held for sale
Non-current liabilities due within one year 5 (23) 437,669,535.66 1,434,004,649.14
Other current liabilities
Total current liabilities 35,536,997,562.19 29,113,089,377.02
Non-current liabilities
Long-term loans 5 (24) 3,448,931,721.62 1,005,919,974.09
Bonds payable 5 (25) 1,494,825,782.32 1,490,352,572.75
Including: Preferred stock
Perpetual bond
Long-term payables
Long-term employee benefits payable
Special accounts payable
Estimated liabilities
Deferred income 5 (26) 410,399,000.00 413,188,000.00
Deferred tax liabilities
Other non-current liabilities
Total non-current liabilities 5,354,156,503.94 2,909,460,546.84
Total liabilities 40,891,154,066.13 32,022,549,923.86
Shareholders' equity:
Share capital 5 (27) 3,136,000,000.00 3,136,000,000.00
Other equity instruments
Including: Preferred stock
Perpetual bond
Capital reserves 5 (28) 9,114,845,542.05 9,114,845,542.05
Less: treasury shares
Other comprehensive income
Special reserves 5 (29) 372,721.86 393,372.05
Surplus reserves 5 (30) 961,105,529.85 961,105,529.85
General risk reserve
Undistributed profits 5 (31) -496,969,242.61 -1,278,244,071.93
Total equity attributable to equity holders of the parent company 12,715,354,551.15 11,934,100,372.02
Non-controlling interests 549,202,101.63 504,993,049.45
Total shareholder's equity 13,264,556,652.78 12,439,093,421.47
Total liabilities and shareholder’s equity 54,155,710,718.91 44,461,643,345.33
The notes to the financial statements attached form part of these financial statements.
Legal Representative: Chief Financial Officer: Chief Accountant:
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Bengang Steel Plates Co., Ltd. Annual Report 2016
BENGANG STEEL PLATES CO., LTD.
STATEMENT OF FINANCIAL POSITION
As at 31 December 2016
(Expressed in Renminbi unless otherwise indicated)
Assets Notes Ending balance Beginning balance
Current assets
Cash at bank and on hand 12,402,995,087.03 4,921,089,319.57
Financial assets at fair value through profit or loss
Derivative financial assets
Notes receivable 1,870,384,367.64 2,298,691,410.40
Accounts receivable 13 (1) 455,070,302.00 449,193,422.02
Prepayments 487,869,713.72 549,553,039.03
Interests receivable 4,208,818.85 3,524,615.12
Dividends receivable
Other receivables 13 (2) 210,089,804.88 229,428,159.94
Inventories 8,308,291,029.07 7,452,873,949.34
Assets held for sale
Non-current assets due within one year
Other current assets 431,675,085.33 387,259,423.54
Total current assets 24,170,584,208.52 16,291,613,338.96
Non-current assets
Available-for-sale financial assets 12,888,980.00 18,303,673.00
Held-to-maturity investment
Long-term receivables
Long-term equity investment 13 (3) 1,700,981,902.16 1,700,981,902.16
Investment property
Fixed assets 18,125,714,092.15 17,179,043,906.45
Construction in progress 6,196,524,880.06 5,646,077,292.11
Construction materials 4,134,139.52 4,134,138.91
Disposal of fixed assets
Productive biological assets
Oil and gas assets
Intangible assets 155,388,452.53 158,694,589.82
Development expenditure
Goodwill
Long-term deferred expenses
Deferred tax assets 378,696,605.02 562,072,018.42
Other non-current assets
Total non-current assets 26,574,329,051.44 25,269,307,520.87
Total assets 50,744,913,259.96 41,560,920,859.83
The notes to the financial statements attached form part of these financial statements.
Legal Representative: Chief Financial Officer: Chief Accountant:
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Bengang Steel Plates Co., Ltd. Annual Report 2016
BENGANG STEEL PLATES CO., LTD.
STATEMENT OF FINANCIAL POSITION (Continued)
As at 31 December 2016
(Expressed in Renminbi unless otherwise indicated)
Liabilities and shareholders' equities Notes Ending balance Beginning balance
Current liabilities
Short-term loans 17,376,963,500.00 16,798,213,600.00
Financial liabilities at fair value through profit or loss
Derivative financial liabilities
Notes payable 5,768,523,196.16 1,651,808,822.92
Accounts payable 5,939,417,729.46 5,263,012,477.37
Advance from customers 3,671,944,099.35 1,957,484,054.73
Employee benefits payable 22,386,057.59 34,194,188.88
Current tax liabilities 28,902,954.65 9,986,022.56
Interests payable 70,109,821.13 70,113,698.63
Dividends payable
Other payables 289,522,026.53 324,906,037.82
Liabilities held for sale
Non-current liabilities due within one year 437,669,535.66 1,434,004,649.14
Other current liabilities
Total current liabilities 33,605,438,920.53 27,543,723,552.05
Non-current liabilities
Long term loans 3,448,931,721.62 1,005,919,974.09
Bonds payable 1,494,825,782.32 1,490,352,572.75
Including: Preferred stock
Perpetual bond
Long-term payables
Long-term employee benefits payable
Special accounts payable
Estimated liabilities
Deferred income 410,399,000.00 413,188,000.00
Deferred tax liabilities
Other non-current liabilities
Total non-current liabilities 5,354,156,503.94 2,909,460,546.84
Total liabilities 38,959,595,424.47 30,453,184,098.89
Shareholder’s equity:
Share capital 3,136,000,000.00 3,136,000,000.00
Other equity instruments
Including: Preferred stock
Perpetual bond
Capital reserves 8,694,693,859.93 8,694,693,859.93
Less: Treasury shares
Other comprehensive income
Special reserves 230,735.89 393,372.05
Surplus reserves 961,105,529.85 961,105,529.85
Undistributed Profits -1,006,712,290.18 -1,684,456,000.89
Total shareholder's equity 11,785,317,835.49 11,107,736,760.94
Total liabilities and shareholder’s equity 50,744,913,259.96 41,560,920,859.83
The notes to the financial statements attached form part of these financial statements.
Legal Representative: Chief Financial Officer: Chief Accountant:
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Bengang Steel Plates Co., Ltd. Annual Report 2016
BENGANG STEEL PLATES CO., LTD.
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
For the year ended 31 December 2016
(Expressed in Renminbi unless otherwise indicated)
Items Notes 2016 2015
1. Total operating income 29,526,012,651.08 29,253,638,605.80
Including: Operating income 5 (32) 29,526,012,651.08 29,253,638,605.80
Interest income
Premium earned
Income from handling charges and commission
2. Total operating cost 28,532,803,997.64 33,094,102,341.68
Including: Operating cost 5 (32) 25,677,665,232.12 29,811,895,016.85
Interest cost
Expenditure for handling charges and commission
Surrender value
Net expenditure for compensation
Net provision for insurance contract appropriated
Bonus payment for policy
Reinsurance premium
Tax and surcharges 5 (33) 147,546,435.24 51,569,621.87
Selling and distribution expenses 5 (34) 903,232,507.02 919,110,499.37
General and administrative expenses 5 (35) 700,545,090.17 733,933,299.88
Financial expenses 5 (36) 967,678,772.69 1,063,317,455.47
Asset impairment loss 5 (37) 136,135,960.40 514,276,448.24
Add: Gains from the change in fair value ("-" for loss)
Income on investment 5 (38) 2,019,053.44 7,226,589.08
Including: Income from associates and joint ventures
Exchange gains ("-" for loss)
3.Operating profit ("-" for loss) 995,227,706.88 -3,833,237,146.80
Add: Non-operating income 5 (39) 58,071,429.33 176,054,356.57
Including: Gain on disposal of non-current assets 11,801,616.20 21,206,096.82
Less: Non-operating expenses 5 (40) 14,541,658.66 24,135,783.17
Including: Loss on disposal of non-current assets 13,656,534.23 24,124,620.55
4. Total profit before tax ("-" for total loss) 1,038,757,477.55 -3,681,318,573.40
Less: Income tax expenses 5 (41) 213,278,070.90 -440,390,216.16
5. Net profit ("-" for net loss) 825,479,406.65 -3,240,928,357.24
Attributable to: Owners of parent company 781,274,829.32 -3,293,624,545.17
Non-controlling shareholders 44,204,577.33 52,696,187.93
6. Other comprehensive income after tax
Other comprehensive income attributable to owners of parent company after tax
1) Other comprehensive income unable to be reclassified into profit and loss
afterwards
(1) Change of net liabilities or net assets through remeasuring defined benefit plan
(2) Share of other comprehensive income of investee not to be classified into
profit or loss afterwards under equity method
2) Other comprehensive income to be reclassified into profit and loss afterwards
(1) Share of other comprehensive income of investee to be classified into profit or
loss afterwards under equity method
(2) Gains and losses on remeasuring available-for-sale financial assets
(3) Gains and losses resulting from reclassification of held-to maturity investment
to financial assets held-for sale
(4) Effective portion of gains or losses from cash flow hedging
(5) Gains and losses resulting from translating the foreign currency
financial statements
(6) Other
Other comprehensive income attributable to non-controlling shareholders after tax
7. Total comprehensive income 825,479,406.65 -3,240,928,357.24
Total comprehensive income attributable to owners of parent company 781,274,829.32 -3,293,624,545.17
Total comprehensive income attributable to non-controlling shareholders 44,204,577.33 52,696,187.93
8. Earnings per share:
1) Basic earnings per share (RMB) 0.249 -1.050
2) Diluted earnings per share (RMB) 0.249 -1.050
The notes to the financial statements form part of these financial statements
Legal Representative: Chief Financial Officer: Chief Accountant:
92
Bengang Steel Plates Co., Ltd. Annual Report 2016
BENGANG STEEL PLATES CO., LTD.
STATEMENT OF COMPREHENSIVE INCOME
For the year ended 31 December 2016
(Expressed in Renminbi unless otherwise indicated)
Items Notes 2016 2015
1. Operating income 13 (4) 29,364,395,482.30 28,523,101,618.99
Less: Operating cost 13 (4) 26,083,359,198.14 29,769,289,938.38
Tax and surcharges 116,460,450.85 25,627,202.18
Selling and distribution expenses 670,821,345.25 730,692,018.11
General and administrative expenses 648,932,544.53 675,861,313.03
Financial expenses 904,933,228.73 986,248,046.33
Asset impairment loss 136,136,868.48 514,222,418.93
Add: Gains from the change in fair value ("-" for loss)
Income on investment 13 (5) 15,429,070.92 7,226,589.08
Including: Income from associates and joint ventures
2. Operating profit ("-" for loss) 819,180,917.24 -4,171,612,728.89
Add: Non-operating income 55,594,741.10 172,498,611.64
Including: Gain on disposal of non-current assets 11,660,376.86 19,820,758.05
Less: Non-operating expenses 13,656,534.23 24,039,513.56
Including: Loss on disposal of non-current assets 13,656,534.23 24,039,513.56
3. Total profit before tax ("-" for total loss) 861,119,124.11 -4,023,153,630.81
Less: Income tax expenses 183,375,413.40 -480,107,035.91
4. Net profit ("-" for net loss) 677,743,710.71 -3,543,046,594.90
5. Other comprehensive income after tax
1) Other comprehensive income unable to be reclassified
into profit and loss afterwards
(1) Change of net liabilities or net assets through
remeasuring defined benefit plan
(2) Share of other comprehensive income of investee
not to be classified into profit or loss afterwards under
equity method
2) Other comprehensive income to be reclassified into
profit and loss afterwards
(1) Share of other comprehensive income of investee
to be classified into profit or loss afterwards under
equity method
(2) Gains and losses on remeasuring available-for-sale
financial assets
(3) Gains and losses resulting from reclassification of
held-to-maturity investment to financial assets held
for sale
(4) Effective portion of gains or losses from cash flow
hedging
(5)Gains and losses resulting from translating the forei
gn currency financial statements
(6) Other
6. Total comprehensive income 677,743,710.71 -3,543,046,594.90
7. Earnings per share:
1) Basic earnings per share (RMB)
2) Diluted earnings per share (RMB)
The notes to the financial statements form part of these financial statements
Legal Representative: Chief Financial Officer: Chief Accountant:
93
Bengang Steel Plates Co., Ltd. Annual Report 2016
BENGANG STEEL PLATES CO., LTD.
CONSOLIDATED STATEMENT OF CASH FLOWS
For the year ended 31 December 2016
(Expressed in Renminbi unless otherwise indicated)
Items Notes 2016 2015
1.Cash flow from operating activities
Cash received from sale of goods or rendering of services 28,241,551,432.83 23,411,443,776.75
Net increase of customers' deposit and interbank deposit
Net increase of loan from central bank
Net increase of loans from other financial institutions
Cash received for premium of original insurance contract
Net cash received for reinsurance business
Net increase of deposit and investment of the insured
Net increase of Financial assets at fair value through profit or loss
Cash from receiving interest, handling charge and commission
Net increase of loans from other financial institutions
Net increase of fund for buy-back business
Tax rebate received 197,081,126.50 797,597,007.61
Other cash received relating to operating activities 5 (42) 433,064,403.26 362,548,861.72
Subtotal of cash inflows from operating activities 28,871,696,962.59 24,571,589,646.08
Cash paid for goods and services 16,785,161,764.39 24,253,340,775.32
Net increase of customer's loan and advances
Net increase of deposit in central bank and interbank deposit
Cash for payment of compensation for original insurance contract
Cash for payment of interest, handling charge and commission
Cash for payment of policy bonus
Cash paid to and on behalf of employees 1,732,720,138.71 1,927,960,219.83
Cash paid for all types of taxes 177,242,826.85 343,995,637.61
Other cash paid relating to operating activities 5 (42) 619,218,326.12 351,298,981.42
Subtotal of cash outflows from operating activities 19,314,343,056.07 26,876,595,614.18
Net cash flows from operating activities 9,557,353,906.52 -2,305,005,968.10
2. Cash flows from investing activities
Cash received from return on investments 453,000,000.00 1,747,000,000.00
Cash received from distribution of dividends or profit 2,019,053.44 7,226,589.08
Net cash received from disposal of fixed assets, intangible assets and other
12,288,367.65 21,753,471.24
long-term assets
Net cash received from disposal of subsidiary and other operating units
Other cash paid relating to investing activities
Subtotal of cash inflows from investing activities 467,307,421.09 1,775,980,060.32
Cash paid for acquisition of fixed assets, intangible assets and other
2,348,653,699.08 3,472,745,508.10
long-term assets
Cash paid for acquisition of investments 706,000,000.00 1,747,000,000.00
Net increase of mortgage loan
Net cash received from subsidiary and other operating unit
Other cash paid relating to investing activities
Subtotal of cash outflows from investing activities 3,054,653,699.08 5,219,745,508.10
Net cash flows from investing activities -2,587,346,277.99 -3,443,765,447.78
3. Cash flows from financing activities
Proceeds from investment
Including: Proceeds from investment of non-controlling shareholders of
subsidiary
Proceeds from borrowings 22,692,917,296.84 24,859,581,641.78
Cash received from bond issuance 1,486,500,000.00
Other proceeds relating to financing activities 5 (42) 223,457,494.90 800,000,000.00
Subtotal of cash inflows from financing activities 22,916,374,791.74 27,146,081,641.78
Cash repayments of borrowings 21,347,292,445.53 24,800,789,257.57
Cash payments for distribution of dividends, profit or interest expenses 939,292,589.51 980,727,660.92
Including: Cash paid to non-controlling shareholders as dividend and profit
by subsidiaries
Other cash payments relating to financing activities 5 (42) 183,227,486.83 399,397,047.75
Subtotal of cash outflows from financing activities 22,469,812,521.87 26,180,913,966.24
Net cash flows from financing activities 446,562,269.87 965,167,675.54
4. Effect of foreign exchange rate changes on cash and cash equivalents 244,221,817.29 69,352,483.25
5. Net increase in cash and cash equivalents 7,660,791,715.69 -4,714,251,257.09
Add: Cash and cash equivalents at the beginning of the period 4,612,782,772.98 9,327,034,030.07
6. Cash and cash equivalents at the ending of the period 12,273,574,488.67 4,612,782,772.98
The notes to the financial statements attached form part of these financial statements
Legal Representative: Chief Financial Officer: Chief Accountant:
94
Bengang Steel Plates Co., Ltd. Annual Report 2016
BENGANG STEEL PLATES CO., LTD.
STATEMENT OF CASH FLOWS
For the year ended 31 December 2016
(Expressed in Renminbi unless otherwise indicated)
Items 2016 2015
1. Cash flow from operating activities
Cash received from sale of goods or rendering of services 29,446,843,561.82 23,427,109,010.65
Tax rebate received 172,506,656.56 711,467,848.16
Other cash received relating to operating activities 125,792,149.08 210,299,707.85
Subtotal of cash inflows from operating activities 29,745,142,367.46 24,348,876,566.66
Cash paid for goods and services 18,729,162,875.25 25,774,210,167.57
Cash paid to and on behalf of employees 1,638,137,170.73 1,817,930,712.94
Cash paid for all types of taxes 19,559,029.42 154,610,526.07
Other cash paid relating to operating activities 131,675,505.02 60,248,461.32
Subtotal of cash outflows from operating activities 20,518,534,580.42 27,806,999,867.90
Net cash flows from operating activities 9,226,607,787.04 -3,458,123,301.24
2. Cash flows from investing activities
Cash received from return on investments 453,000,000.00 1,747,000,000.00
Cash received from distribution of dividends or profit 1,715,742.47 7,226,589.08
Net cash received from disposal of fixed assets, intangible assets
and other long-term assets 12,136,292.65 21,713,471.24
Net cash received from disposal of subsidiary and other operating
units
Other cash received relating to investing activities
Subtotal of cash inflows from investing activities 466,852,035.12 1,775,940,060.32
Cash paid for acquisition of fixed assets, intangible assets and other
long-term assets 2,330,445,853.26 3,446,420,670.56
Cash paid for acquisition of investments 706,000,000.00 1,757,000,000.00
Net cash paid for acquisition of subsidiary & other operating unit
Other cash paid relating to investing activities
Subtotal of cash outflows paid for investing activities 3,036,445,853.26 5,203,420,670.56
Net cash flows from investing activities -2,569,593,818.14 -3,427,480,610.24
3. Cash flows from financing activities
Proceeds from investment
Cash received from borrowings 21,124,677,912.68 23,419,954,378.62
Other proceeds relating to financing activities 1,486,500,000.00
Other cash received relating to financing activities 210,000,000.00 800,000,000.00
Subtotal of cash inflows from financing activities 21,334,677,912.68 25,706,454,378.62
Cash repayments of borrowings 19,837,110,764.77 22,260,440,315.08
Cash payments for distribution of dividends, profit or interest 879,486,861.85 901,348,956.26
Other cash payments relating to financing activities 132,384,026.03 329,226,064.22
Subtotal of cash outflows from financing activities 20,848,981,652.65 23,491,015,335.56
Net cash flows from financing activities 485,696,260.03 2,215,439,043.06
4. Effect of foreign exchange rate changes on cash and cash
equivalents 244,195,433.65 69,329,673.35
5. Net increase in cash and cash equivalents 7,386,905,662.58 -4,600,835,195.07
Add: Cash and cash equivalents at the beginning of the period 4,489,630,951.08 9,090,466,146.15
6. Ending balance of cash and cash equivalents 11,876,536,613.66 4,489,630,951.08
The notes to the financial statements form part of these financial statements
Legal Representative: Chief Financial Officer: Chief Accountant:
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Bengang Steel Plates Co., Ltd. Annual Report 2016
BENGANG STEEL PLATES CO., LTD.
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
For the year ended 31 December 2016
(Expressed in Renminbi unless otherwise indicated)
2016
Owner's equity attributable to parent company
Items Other equity instruments Less: Other General Non-controlling Total of owner's
Special Surplus Undistributed interest equity
Share capital Preference Perpetual Capital reserves Treasury comprehensive risk
Others reserves reserves profit
shares bond shares income reserve
1. Ending balance of last year 3,136,000,000.00 9,114,845,542.05 393,372.05 961,105,529.85 -1,278,244,071.93 504,993,049.45 12,439,093,421.47
Add: Change of accounting policies
Correction of errors for last period
Business consolidation under common control
Others
2. Beginning balance of current year 3,136,000,000.00 9,114,845,542.05 393,372.05 961,105,529.85 -1,278,244,071.93 504,993,049.45 12,439,093,421.47
3. Changes in current year (“-” for decrease ) -20,650.19 781,274,829.32 44,209,052.18 825,463,231.31
1) Total comprehensive income 781,274,829.32 44,204,577.33 825,479,406.65
2) Capital increase and decrease by shareholders
(1) Common share invested by shareholders
(2) Capital input by the holder of other equity
instruments
(3) Share-based payment attributable to owners'
equity
(4) Others
3) Profit distribution
(1) Appropriation to surplus reserves
(2) Appropriation to general risk reserve
(3) Profit distribution to shareholders
(4) Others
4) Transfers within shareholders' equity
(1) Capital reserves transferred into paid-in
capital (or stock)
(2) Surplus reserves transferred into paid-in
capital (or stock)
(3) Surplus reserves to recover loss
(4) Others
5) Special reserves -20,650.19 4,474.85 -16,175.34
(1) Provision of special reserves 39,766,855.73 4,474.85 39,771,330.58
(2) Use of special reserves 39,787,505.92 39,787,505.92
6) Others
4. Ending balance of current year 3,136,000,000.00 9,114,845,542.05 372,721.86 961,105,529.85 -496,969,242.61 549,202,101.63 13,264,556,652.78
The notes to the financial statements attached form part of these financial statements
Legal Representative: Chief Financial Officer: Chief Accountant:
96
Bengang Steel Plates Co., Ltd. Annual Report 2016
BENGANG STEEL PLATES CO., LTD.
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY (Continued)
For the year ended 31 December 2016
(Expressed in Renminbi unless otherwise indicated)
2015
Owner's equity attributable to parent company
Items Total
Other equity instruments Less: Other General Non-controlling
Special Surplus Undistributed shareholder's
Share capital Preference Perpetual Capital reserves Treasury comprehensive risk interest
Others reserves reserves profit equity
shares bond shares income reserve
1. Ending balance of last year 3,136,000,000.00 9,114,845,542.05 430,777.94 961,105,529.85 2,172,180,473.24 452,296,861.52 15,836,859,184.60
Add: Change of accounting policies
Correction of errors for last period
Business consolidation under common control
Others
2. Beginning balance of current year 3,136,000,000.00 9,114,845,542.05 430,777.94 961,105,529.85 2,172,180,473.24 452,296,861.52 15,836,859,184.60
3. Changes in current year (“-” for decrease ) -37,405.89 -3,450,424,545.17 52,696,187.93 -3,397,765,763.13
1) Total comprehensive income -3,293,624,545.17 52,696,187.93 -3,240,928,357.24
2) Capital increase and decrease by shareholders
(1) Common share invested by shareholders
(2) Capital input by the holder of other equity
instruments
(3) Share-based payment attributable to
shareholders' equity
(4) Others
3) Profit distribution -156,800,000.00 -156,800,000.00
(1) Appropriation to surplus reserves
(2) Appropriation to general risk reserves
(3) Profit distribution to shareholders -156,800,000.00 -156,800,000.00
(4) Others
4) Transfers within shareholders' equity
(1) Capital reserves transferred into paid-in
capital (or stock)
(2) Surplus reserves transferred into paid-in
capital (or stock)
(3) Surplus reserves to recover loss
(4) Others
5) Special reserves -37,405.89 -37,405.89
(1) Provision of special reserves 34,967,129.18 34,967,129.18
(2) Use of special reserves 35,004,535.07 35,004,535.07
6) Others
4. Ending balance of current year 3,136,000,000.00 9,114,845,542.05 393,372.05 961,105,529.85 -1,278,244,071.93 504,993,049.45 12,439,093,421.47
The notes to the financial statements attached form part of these financial statements
Legal Representative: Chief Financial Officer: Chief Accountant:
97
Bengang Steel Plates Co., Ltd. Annual Report 2016
BENGANG STEEL PLATES CO., LTD.
STATEMENT OF CHANGES IN EQUITY
For the year ended 31 December 2016
(Expressed in Renminbi unless otherwise indicated)
2016
Items Other equity instruments Less: Other Total
Special Surplus Undistributed
Share capital Preference Perpetual Capital reserves Treasury comprehensive shareholder’s
Others reserves reserves profits
shares bond shares income equity
1. Ending balance of last year 3,136,000,000.00 8,694,693,859.93 393,372.05 961,105,529.85 -1,684,456,000.89 11,107,736,760.94
Add: Change of accounting policies
Correction of errors for last period
Others
2. Beginning balance of current year 3,136,000,000.00 8,694,693,859.93 393,372.05 961,105,529.85 -1,684,456,000.89 11,107,736,760.94
3. Changes in current year (“-” for decrease ) -162,636.16 677,743,710.71 677,581,074.55
1) Total comprehensive income 677,743,710.71 677,743,710.71
2) Capital increase and decrease by shareholders
(1) Common share invested by shareholders
(2) Capital input by the holder of other equity
instruments
(3) Share-based payment attributable to owners'
equity
(4) Others
3) Profit distribution
(1) Appropriation to surplus reserves
(2) Profit distribution to shareholders
(3) Others
4) Transfers within shareholders' equity
(1) Capital reserves transferred into paid-in
capital (or stock)
(2) Surplus reserves transferred into paid-in
capital (or stock)
(3) Surplus reserves to recover loss
(4) Others
5) Special reserves -162,636.16 -162,636.16
(1) Provision of special reserves 34,079,630.37 34,079,630.37
(2) Use of special reserves 34,242,266.53 34,242,266.53
6) Others
4. Ending balance of current year 3,136,000,000.00 8,694,693,859.93 230,735.89 961,105,529.85 -1,006,712,290.18 11,785,317,835.49
The notes to the financial statements attached form part of these financial statements
Legal Representative: Chief Financial Officer: Chie f Accountant:
98
Bengang Steel Plates Co., Ltd. Annual Report 2016
BENGANG STEEL PLATES CO., LTD.
STATEMENT OF CHANGES IN EQUITY (Continued)
For the year ended 31 December 2016
(Expressed in Renminbi unless otherwise indicated)
2015
Items Other equity instruments Less: Other Total
Special Surplus Undistributed
Share capital Preference Perpetual Capital reserves Treasury comprehensive shareholder’s
Others reserves reserves profits
shares bond shares income equity
1. Ending balance of last year 3,136,000,000.00 8,694,693,859.93 430,777.94 961,105,529.85 2,015,390,594.01 14,807,620,761.73
Add: Change of accounting policies
Correction of errors for last period
Others
2. Beginning balance of current year 3,136,000,000.00 8,694,693,859.93 430,777.94 961,105,529.85 2,015,390,594.01 14,807,620,761.73
3. Changes in current year (“-” for decrease ) -37,405.89 -3,699,846,594.90 -3,699,884,000.79
1) Total comprehensive income -3,543,046,594.90 -3,543,046,594.90
2) Capital increase and decrease by shareholders
(1) Common share invested by shareholders
(2) Capital input by the holder of other equity
instruments
(3) Share-based payment attributable to
shareholders' equity
(4) Others
3) Profit distribution -156,800,000.00 -156,800,000.00
(1) Appropriation of surplus reserves
(2) Profit distribution to shareholders -156,800,000.00 -156,800,000.00
(3) Others
4) Transfers within shareholders' equity
(1) Capital reserves transferred into paid-in
capital (or stock)
(2) Surplus reserves transferred into paid-in
capital (or stock)
(3) Surplus reserves to recover loss
(4) Others
5) Special reserves -37,405.89 -37,405.89
(1) Provision of special reserves 34,967,129.18 34,967,129.18
(2) Use of special reserves 35,004,535.07 35,004,535.07
6) Others
4. Ending balance of current year 3,136,000,000.00 8,694,693,859.93 393,372.05 961,105,529.85 -1,684,456,000.89 11,107,736,760.94
The notes to the financial statements attached form part of these financial statements
Legal Representative: Chief Financial Officer: Chief Accountant:
99
Bengang Steel Plates Co., Ltd. Annual Report 2016
Bengang Steel Plates Co., Ltd.
Notes to the financial statements
For the year ended December 2016
(Expressed in Renminbi unless otherwise indicated)
1. Basic Information of the Company
(1) Company profile
Bengang Steel Plates Co., Ltd. (hereinafter referred to as “the Company”), as approved in
Liao-Zheng (1997) No. 57 by Liaoning People’s Government on 27 March 1997, was
incorporated as a joint stock limited company through public share offer of domestic listed foreign
currency denominated shares (B shares) in the People’s Republic of China (the “PRC”) on 27
June 1997 by Benxi Steel and Iron (Group) Co., Ltd. (“Bengang Group”), through reorganization
of operations, assets and liabilities of its plants, namely, Steel Smelting Plant, Primary Rolling
Plant and Continuous Hot Rolling Plant.
As approved by China Securities Regulatory Commission (hereinafter referred to as “the CSRC”),
the Company issued 400,000,000 B-shares at HKD2.38 each in Shenzhen Stock Exchange on 10
June 1997. On 3 November 1997, the Company issued another 120,000,000 A-shares (Renminbi
common Shares) at RMB5.40 each, and listed in Shenzhen Stock Exchange since 15 January 1998.
The capital shares were totaled to 1,136,000,000 shares including 616,000,000 shares held by the
promoter.
On 14 March 2006, according to the resolutions of the Shareholders’ Meeting regarding share
equity relocation, the Share Equity Relocation Scheme, Response to Bengang Steel Plate Co., Ltd.
about Share Equity Relocation issued by Liaoning Provincial Government State-owned Asset
Administrative Committee, Bengang Group – the only holder of non-negotiable state-owned legal
person shares paid the consideration to the current shareholders to obtain the current option for the
40,800,000 shares of the total 616,000,000 shares it was holding. Shareholding positions have
been registered with China Securities Depository & Clearing Corporation Ltd. Shenzhen Office.
However, the total amount of capital shares of Bengang Steel Plates Co., Ltd. was not changed
through the share equity relocation action.
According to the approval document “Zheng-Jian-Gong-Si-Zi [2006] No. 126” by China
Securities Regulatory Commission on 30 June 2006, the Company was approved to place 2 billion
Renminbi common shares particularly to Bengang Group and the proceeds would be used to
purchase the related assets of the Group. On the same day, Bengang Group received circular
Zheng-Jian-Gong-Si-Zi [2006] No. 127 issued by China Securities Regulatory Committee, and
were exempted for the liability of undertaking the purchase offer. The liability was caused by
100
Bengang Steel Plates Co., Ltd. Annual Report 2016
subscribing of the 2 billion new shares and the total shareholding was thus increased to 2.5752
billion shares (accounting for 82.12% of the total capital shares of the Company). On 28 August
2006, as approved by China Securities Depository & Clearing Corporation Ltd. Shenzhen Office,
the registration and conditional placing procedures of the 2 billion new shares were completed.
On 28 September 2006, the privately placed shares were approved by Shenzhen Stock Exchange
to be placed in the stock market. The new shares were placed in the market 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 when they were registered to the account of Bengang
Group.
Up to 31 December 2016, the capital shares of Bengang Steel Plates Co., Ltd were amounted to
3,136,000,000 shares. The unified social credit code was 91210000242690243E. The registered
address is 16th Renmin Road, Pingshan District, Benxi, Liaoning Province. The registered capital
is RMB 3,136,000,000. The legal representative is Wang Shu.
The parent company of Bengang Steel Plates Co., Ltd is Benxi Steel and Iron (Group) Co., Ltd.
and the actual controller is the State-owned Assets Supervision and Administration Commission
of the State Council of Liaoning province.
Bengang Steel Plates Co., Ltd. belongs to ferrous metal smelting and rolling processing industry,
and is mainly involved in producing and trading of ferrous metal products.
The financial statements have been approved for reporting by the board of directors of the
Company on 28 March 2017.
(2) Consolidation scope
As at 31 December 2016, subsidiaries included in the Company’s consolidated financial
statements are as follows:
Name of the subsidiaries
Guangzhou Bengang Steel & Iron Trading Co., Ltd.
Shanghai Bengang Metallurgy Science and Technology Co., Ltd.
Bengang Steel Plates Liaoyang Pellet Co., Ltd.
Dalian Benruitong Automobile Material Technology Co., Ltd.
Changchun Bengang Steel & Iron Sales Co., Ltd.
Harbin Bengang Economic and Trading Co., Ltd.
Nanjing Bengang Materials Sales Co., Ltd.
Wuxi Bengang Steel & Iron Sales Co., Ltd.
Xiamen Bengang Steel & Iron Sales Co., Ltd.
Yantai Bengang Steel & Iron Sales Co., Ltd.
Tianjin Bengang Steel & Iron Trading Co., Ltd.
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Bengang Steel Plates Co., Ltd. Annual Report 2016
Bengang Posco Cold-rolled Sheet Co., Ltd.
Benxi Bengang Steel Sales Co., Ltd
Shenyang Bengang Metallurgical Science and Technology Co., Ltd.
Notes: there is no change of scope of consolidation this year.
2. Basis of preparation
(1) Basis of preparation
The financial statements have been prepared on the going concern basis of actual trading and
events in accordance with “Accounting Standards for Business Enterprises – Basic Standard” and
relevant specific standards, application materials, interpretations (together hereinafter referred to
as “Accounting Standards for Business Enterprises”) issued by the Ministry of Finance, and
“Information Disclosure Rules for Companies of securities for public issuance No. 15 – General
Regulations for Financial Statements” issued by the China Securities Regulatory Commission.
(2) Going concern
The Company is operating normally and in a good condition, and thus has the capability to
continue to operate in the next twelve months from the end of reporting period.
3. Significant accounting policies and accounting estimates
(The following disclosed content covers the detailed accounting policies and accounting
estimates that are adopted by the Company according to the actual features of production or
operation.)
(1) Statement of compliance with China Accounting Standards for Business Enterprises
The financial statements present truly and completely the financial position, operation results
and cash flows of the Company during the reporting period in accordance with China
Accounting Standards for Business Enterprises.
(2) Accounting year
The Accounting year is from 1 January to 31 December.
(3) Operating period
The operating period is twelve months.
(4) Functional currency
The Company’s functional currency is RMB.
(5) The accounting treatment for Business combination under/now under common control
1. Business combination under common control
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Bengang Steel Plates Co., Ltd. Annual Report 2016
The assets and liabilities that the Company acquired in a business combination shall be
measured on the basis of their carrying amount of aquiree’s assets, liabilities (as well as the
goodwill arising from the business combination) in the consolidated financial statement of
the ultimate controller on the combining date.
As for the balance between the carrying amount of the net assets obtained by the Company
and the carrying amount of the consideration paid by it (or the total par value of the shares
issued), capital reserve needs to be adjusted. If the capital reserve is not sufficient, any excess
shall be adjusted against retained earnings.
2. Business combination involving entities now under common control
The Company shall, on the acquisition date, measure the assets given and liabilities incurred
or assumed by an enterprise for a business combination in light of their fair values, and shall
record the balances between them and their carrying amounts into the profits and losses at the
current period.
The Company shall recognize the positive balance between the combination costs and the fair
value of the identifiable net assets it obtains from the acquiree as goodwill. The Company
shall treat the negative balance between the combination costs and the fair value of the
identifiable net assets it obtains from the acquiree into the profits and losses of the current
period.
The intermediary costs and relevant management fee for the business combination now under
same control paid by the acquirer, including the expenses for audit, assessment and legal
services, shall be recorded into the profits and losses at the current period. The transaction
expenses for the issuance of equity securities for the business combination shall be recorded
into the initial recognition amount of equity securities.
(6) Consolidation of Financial Statements
1. Scope of consolidation
The scope of consolidation of consolidated financial statements is determined based on
control. All the subsidies (including separable sections of the investees controlled by the
Company) have been consolidated into the scope of consolidation for this period ended.
2. Procedure of consolidation
The consolidated financial statements shall be presented by the parent based on the financial
statements of the parent and its subsidiaries, and using other related information. When
preparing consolidated financial statements, the parent shall consider the entire group as an
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accounting entity, adopt uniform accounting policies and apply the requirements of
Accounting Standard for Business Enterprises related to recognition, measurement and
presentation. The consolidated financial statements shall reflect the overall financial position,
operating results and cash flows of the group.
The accounting policy and accounting period of the subsidiaries within the consolidation
scope shall be in accordance with those of the Company. If not, it is necessary to make the
adjustment according to the Company’s accounting policies and accounting period when
preparing the consolidated financial statements.
For subsidiaries through acquisition that are now under common control, the financial
statements are adjusted according to fair value of identifiable net assets on the acquisition
date.
For subsidiaries through acquisition that are under common control, the assets, liabilities (as
well as the goodwill arising from purchasing the subsidiary by the ultimate controller) are
adjusted according to book value of net assets in the financial statements of the ultimate
controller.
The owners’ interests, profit or loss, and comprehensive income of the subsidiary attributable
to the non-controlling shareholders shall be presented separately in the shareholders’ equity
of the consolidated balance sheet and under the item of net profit of the consolidated
statement of comprehensive income and under the item of total comprehensive income.
Where losses assumed by the minority exceed the minority’s interests in the beginning equity
of a subsidiary, the excess shall be charged against the minority’s interests.
(1) Increase of new subsidiary and business
If the Company has a new subsidiary due to business combination under common control
during a reporting period, it shall adjust the beginning balance in the consolidated
statement of financial position when preparing consolidated statement of financial
position. The revenue, expenses and profits of the subsidiaries from the acquisition date to
the end of the reporting period are included in the Company’s consolidated statement of
comprehensive income. The cash flow of the subsidiaries from the acquisition date to the
end of the reporting period is included in the Company’s consolidated statement of cash
flows. And meanwhile the Company shall adjust the relevant items of the comparative
financial statements as if the reporting entity for the purpose of consolidation has been in
existence since the date the ultimate controlling party first obtained control.
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When the Company becomes capable of exercising control over an investee under
common control due to additional investment or other reasons, Adjustment shall be made
as if the reporting entity after the combination has been in existence since the date the
ultimate controlling party first obtained control. The investment income recognized
between date of previously obtaining equity investment and the date the acquiree and
acquirer are under common control, which is later, and the combining date, other
comprehensive income and other changes of net assets arising from the equity investment
previously-held before obtaining the control the acquiree shall be adjusted against the
prior retained earnings of the comparative financial statements and the current profit or
loss respectively.
If it is now under common control, the Company shall not adjust the beginning balance in
the consolidated statement of financial position when preparing consolidated statement of
financial position. The revenue, expenses and profits of the subsidiaries from the
acquisition date to the end of the reporting period are included in the parent company’s
consolidated statement of comprehensive income. The cash flow of the subsidiaries from
the acquisition date to the end of the reporting period is included in the Company’s
consolidated statement of cash flows.
When the Company becomes capable of exercising control over an investee now under
common control due to additional investment or other reasons, the acquirer shall
remeasure its previously held equity interest in the acquiree to its fair value at the
acquisition date. The difference between the fair value and the carrying amount shall be
recognized as investment income for the period when the acquisition takes place. When
the previously-held equity investment is accounted for under the equity method, any other
comprehensive income previously recognized in relation to the acquiree’s equity changes
shall be transferred to profit or loss for the current period when the acquisition takes place.
Other comprehensive income arising from remeasurement of defined benefit plan is
excluded.
(2) Disposing subsidiary or business
1. General treatment
If the Company disposes a subsidiary during a reporting period, the revenue, expenses
and profits of the subsidiary from the beginning of the reporting period to disposal
date are included in the Company’s consolidated statement of comprehensive income.
The cash flow of the subsidiaries from the beginning of the reporting period to
disposal date is included in the Company’s consolidated statement of cash flows.
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When the Company loses control over an investee due to partial disposal or other
reasons, the acquirer shall remeasure the remaining equity interests in the acquiree to
its fair value at the acquisition date. The difference, between sums of consideration
received for disposal equity shares and fair value of the remaining shares, and sums of
share of net assets of the subsidiary calculated continuously from the acquisition date
or the combination date based on the previous shareholding proportion and goodwill,
shall be recognized as investment income for the period when the Company loses
control over acquiree. When the previously-held equity investment is accounted for
under the equity method, any other comprehensive income previously recognized in
relation to the acquiree’s equity changes, and other equity changes rather than changes
from net profit, other comprehensive income and profit distribution, shall be
transferred to investment income for the current period when the Company loses
control over acquiree. Other comprehensive income arising from remeasurement of
defined benefit plan is excluded. When the Company loses control over a subsidiary
due to the increase of capital from other investors and thus the shareholding ratio of
the Company declines, accounting treatment shall be in accordance with the
above-mentioned principles
2. Disposing the subsidiary by multiple transactions
Where the Company loses control of a subsidiary in multiple transactions in which it
disposes of its subsidiary in stages, in determining whether to account for the multiple
transactions as a single transaction, the Company shall consider all of the terms and
conditions of the transactions and their economic effects. One or more of the following
may indicate that the Company shall account for the multiple arrangements as a single
transaction:
(a) Arrangements are entered into at the same time or in contemplation of each other;
(b) Arrangements work together to achieve an overall commercial effect;
(c) The occurrence of one arrangement is dependent on the occurrence of at least one
other arrangement; and
(d) One arrangement considered on its own is not economically justified, but it is
economically justified when considered together with other arrangements.
If each of the multiple transactions forms part of a bundled transaction which
eventually results in loss of control of the subsidiary, these multiple transactions shall
be accounted for as a single transaction. In the consolidated financial statements, the
difference between the consideration received and the corresponding proportion of the
subsidiary’s net assets in each transaction prior to the loss of control shall be
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recognized in other comprehensive income and transferred to the profit or loss when
the Company eventually loses control of the subsidiary.
If each of the multiple transactions which eventually results in loss of control of the
subsidiary do not form part of a bundled transaction, apply the treatment of disposing
partial long-term equity investments in a subsidiary without loss of control prior to the
loss of control. After the loss of control, apply the treatment of disposing the
subsidiary in common cases.
(3) Acquiring the subsidiary’s equity interest held by non-controlling shareholders
Where the Company has acquired a subsidiary’s equity interest held by non-controlling
shareholders, the difference between the increase in the cost of long-term investments as a
result of acquisition of non-controlling interests and the share of net assets of the
subsidiary calculated continuously from the acquisition date or the combination date
based on the new shareholding proportion shall be adjusted to the capital reserve( capital
premium or share premium) in the consolidated financial statements. If the balance of the
capital reserve is not sufficient, any excess shall be adjusted against retained earnings.
(4) Disposing partial long-term equity investments in a subsidiary without loss of
control
When the Company disposes of a portion of the long-term equity investments in a
subsidiary without loss of control, the difference between the amount of the consideration
received and the corresponding portion of the nest assets of the subsidiary calculated
continuously from the acquisition date or the combination date related to the disposal of
the long-term equity investments shall be adjusted to the capital reserve (capital premium
or share premium) in the consolidated financial statements. If the balance of the capital
reserve is not sufficient, any excess shall be adjusted against retained earnings.
(7) Joint arrangement classification and accounting treatment
A joint arrangement is classified as either a joint operation or joint venture.
When the Company is joint operator of joint arrangement and has rights to the assets, and
obligations for the liabilities, relating to the arrangement, it is classified as joint operation.
A joint operator shall recognize the following items in relation to its interest in a joint
operation, and account for them in accordance with relevant accounting standards:
(1) Its solely-held assets, and its share of any assets held jointly;
(2) Its solely-assumed liabilities, and its share of any liabilities incurred jointly;
(3) Its revenue from sales of its share of the output arising from the joint operation;
(4) Its share of the revenue from the sale of the output by the joint operation; and
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(5) Its solely-incurred expenses and its share of any expenses incurred jointly.
(8) Recognition of cash and cash equivalents
For the purpose of preparing the statement of cash flows, the term “cash” refers to the cash
on hand and the unrestricted deposit. And the term “cash equivalents” refers to short-term
(maturing within three months from acquisition) and highly liquid investments that are
readily convertible to known amounts of cash and which are subject to an insignificant risk of
change in value.
(9) Foreign currency transaction and translation of foreign currency financial statements
1. Foreign currency transaction
Foreign currency transactions are translated into RMB at the current rate at the day of
transactions.
The foreign currency monetary items shall be translated at the spot exchange rate on the
balance sheet date. The balance of exchange arising from the difference between the spot
exchange rate on the balance sheet date and the spot exchange rate at the time of initial
recognition or prior to the balance sheet date, except those arising from the raising of special
foreign debt for the purchase or construction of capitalizable assets thus shall be capitalized
according to the borrowing costs capitalization principle, shall be recorded into the profits
and losses at the current period. 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 of disposal or capital reserves.
2. Translation of foreign currency financial statements
The asset and liability items in the statement of financial position shall be translated at a spot
exchange rate on the balance sheet date. Among the owner's equity items, except the ones as
"undistributed profits", others shall be translated at the spot exchange rate at the time when
they are incurred. The income and expense items in the statement of comprehensive income
shall be translated at the spot exchange rate of the transaction date.
When disposing an overseas business, the Company shall shift the balance, which is
presented under the items of the owner's equities in the statement of financial position and
arises from the translation of foreign currency financial statements related to this oversea
business, into the disposal profits and losses of the current period. If the overseas business is
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disposed of partially, the Company shall calculate the balance arising from the translation of
foreign currency statements of the part of disposal based on the disposal rate and shall shift
them into the profits and losses of the current period.
(10) Financial instruments
Financial instruments include financial assets, financial liabilities and equity instruments
1. Classification of financial instruments
The classification of financial assets and financial liabilities at initial recognition are as
follows: financial assets or financial liabilities designated at fair value through current profit
and loss, including: trading financial investment, held-to-maturity investment, loans and
receivables, available-for-sale investment and other financial liabilities.
2. Recognition and measurement of financial instruments
(1) The financial assets (liabilities) at fair value through profit or loss
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 current profit and
loss when occurred.
The cash dividends or interest are recognized as investment income when the Company
receives such financial assets. At the balance sheet date, the Company recognizes the fair
value changes in current profit and loss.
The Company recognizes the difference between initial recognition and fair value of the
financial assets as investment income when disposing the financial assets and at the same
time adjusts the fair value changes in current profit and loss.
(2) Held-to-maturity investment
The Held-to-maturity investments are recognized initially at fair value (minus bond interest
matured but not drawn yet) plus any related transaction cost.
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
a shorter applicable period.
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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, notes receivable, 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 current profit and loss.
(4) Available-for-sale financial assets
Available-for-sale financial assets are initially recorded at the sum of fair values (deducting
cash dividends that have been declared but not distributed and bond interests that have
matured but not been drawn) and transaction costs when acquired.
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 shall be
recognized as investment income. And the related fair value change in the shareholders’
equity shall 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. Determination and measurement of financial assets transfer
Where the Company has transferred nearly all of the risks and rewards related to the
ownership of the financial asset to the transferee, it shall stop recognizing the financial asset.
If it retained nearly all of the risks and rewards related to the ownership of the financial asset,
it shall not stop recognizing the financial asset.
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To judge whether the transfer of a financial asset can satisfy the conditions as prescribed in
these Standards for stopping the recognition of a financial asset, the Company shall follow
the principle of the substance over form. Transfer of an entire financial asset can be divided
into partial financial assets transfer and entire financial asset transfer. If the transfer of an
entire financial asset satisfies the conditions for de-recognition, the difference between the
amounts of the following 2 items shall be recorded in the profits and losses of the current
period:
(1) The book value of the transferred financial asset; and
(2) The sum of consideration received from the transfer, and the accumulative amount of the
changes of the fair value originally recorded in the owners' equities (in the event that the
financial asset involved in the transfer is a financial asset Available-for-sale).
If the transfer of partial financial asset satisfies the conditions to derecognize, the entire book
value of the transferred financial asset shall, between the portion whose recognition has been
stopped and the portion whose recognition has not been stopped (under such circumstance,
the service asset retained shall be deemed as a portion of financial asset whose recognition
has not been stopped), be apportioned according to their respective relative fair value, and the
difference between the amounts of the following 2 items shall be included into the profits and
losses of the current period :
(1) The book value of the portion whose recognition has been stopped; and
(2) The sum of consideration of the portion whose recognition has been stopped, and the
portion of the accumulative amount of the changes in the fair value originally recorded in the
owner's equities which is corresponding to the portion whose recognition has been stopped
(in the event that the financial asset involved in the transfer is a financial asset
Available-for-sale).
If the transfer of financial assets does not satisfy the conditions to stop the recognition, it
shall continue to be recognized as financial assets and the consideration received shall be
recognized as financial liabilities.
4. Recognition of termination of financial liabilities
Only when the prevailing obligations of a financial liability are relieved in all or in part may
the recognition of the financial liability be terminated in all or partly.
Where the Company (debtor) enters into an agreement with a creditor so as to substitute the
existing financial liabilities by way of any new financial liability, and if the contractual
stipulations regarding the new financial liability is substantially different from that regarding
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the existing financial liability, it shall terminate the recognition of the existing financial
liability, and shall at the same time recognize the new financial liability.
Where the Company makes substantial revisions to some or all of the contractual stipulations
of the existing financial liability, it shall terminated the recognition of the existing financial
liability or part of it, and at the same time recognize the financial liability after revising the
contractual stipulations as a new financial liability.
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 the Company buys back part of its financial liabilities, it shall distribute, on the date of
repurchase, the carrying amount of the whole financial liabilities in light of the comparatively
fair value of the part that continues to be recognized and the part whose recognition has
already been terminated. The gap between the carrying amount which is distributed to the
part whose recognition has terminated and the considerations it has paid (including the
noncash assets it has transferred out and the new financial liabilities it has assumed) shall be
recorded into the profits and losses of the current period.
5. Determination of the fair value
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)
The Company shall carry out impairment review for the financial assets at the balance sheet
date except for the financial assets at fair value through profit or loss. Where there is any
objective evidence proving that such financial asset has been impaired, an impairment
provision shall be made.
(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 drops 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.
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Where any available-for-sale debt instruments is recognized as having suffered from any
impairment loss, if there is any objective evidence proving that the value of the said debt
instruments has been restored, and it is objectively related to the events that occur after such
loss is recognized, the impairment-related losses as originally recognized shall be reversed
and be recorded into the profits and losses of the current period.
Impairment losses incurred by investment transactions of available-for-sale equity
instruments shall not be reversed through profits and losses.
The criteria for “serious” level of the decrease of fair value of available-for-sale financial
instruments are as follows: the decrease of fair value for the equity investment with the
active transaction in a market of good liquidity is normally 50%. The decrease of fair value
of the equity investment without good market liquidity is normally 30%; the criteria for
“non-temporary” decrease of fair value is continuous decrease over 12 months; the cost of
investment is based on the purchase price.
(2) Impairment of held-to-maturity investment
The impairment of the held-to-maturity investment can be measured at reference to the
measurement of the impairment of accounts receivables.
(11) Receivables
1. The recognition and provision for bad debts for the individually significant receivables
The recognition standard of bad debts provision for the individually significant receivables:
Individually significant receivables refer to accounts receivable over RMB10 million or other
receivables over RMB 5 million.
The provision for bad debts for the individually significant receivables:
The impairment test shall 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 debts provision and shall be recorded into the profits and losses at the
current period.
2. The recognition and provision for bad debts for the receivables in portfolio
Criteria for Recognition of Portfolio
Portfolio Insignificant amount of receivables and unadjusted individual receivables
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Recognition and provision for bad debts for portfolio
Portfolio 1: Aging analysis method
Aging analysis method for bad debts provision
Bad debts ratio for Bad debts ratio for
Aging
accounts receivable (%) other receivables (%)
Within 1 year (inclusive)
1-2 years (inclusive) 5.00 5.00
2-3 years (inclusive) 20.00 20.00
Over 3 years 100.00 100.00
3. Insignificant individual amounts of accounts receivable that recognize bad debts individually
(1) Reasons for individual recognition and provision of bad debts
Accounts receivable amount is proved to be unrecoverable with conclusive evidence.
(2) Method of bad debts recognition and provision
If conclusive evidence shows the possibility of recovering the amount is small, recognize
bad debts individually as if the amount is unrecoverable.
(12) Inventory
1. Inventory classification
Inventories include material in transit, raw material, low-valued consumables, work in
process, finished goods, materials for consigned processing, etc.
2. Valuation method for inventory dispatched
The weighted average method is used to confirm the actual cost of the inventories dispatched.
3. The basis for confirming the net realizable value of inventories and the methods to
make provision for the inventories impairment loss
The net realizable value of inventories (finished products, stock commodity, material, etc.)
held for direct selling in the daily business activity shall be calculated by deducting the
estimated sale expense and relevant taxes from the estimated sale price of inventories.
The net realizable value of inventories for further processing in the daily business activity
shall be calculated by deducting the estimated cost of completion, estimated sale expense and
relevant taxes from the estimated sale price of inventories.
The net realizable value of inventories held for the execution of sales contracts or labor
contracts shall be calculated on the ground of the contract price. If an enterprise holds more
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inventories than the quantities subscribed in the sales contract, the net realizable value of the
excessive part of the inventories shall be calculated on the ground of the general sales price.
The Company shall make provision for loss on decline in value of inventories on the ground
of each item of inventories at the year end. For inventories with large quantity and relatively
low unit prices, the provision for loss on decline in value of inventories shall be made on the
ground of the categories of inventories. For the inventories related to the series of products
manufactured and sold in the same area, and of which the final use or purpose is identical or
similar thereto, and if it is difficult to measure them by separating them from other items, the
provision for loss on decline in value of inventories shall be made on a combination basis.
Unless clear evidence shows that the market price is exceptionally fluctuating, the net
realizable value of inventory is based on the market price at the balance sheet date.
The net realizable value of inventory at the year-end is based on the market price at the
balance sheet date.
4. Inventory system
The Company uses perpetual inventory system.
5. Amortization of low-valued consumables and packing materials
(1) Low-valued consumables shall be amortized in full amount on issuance.
(2) Packing materials shall be amortized in full amount on issuance
(13) Assets classified as held for sale
The Company shall recognize components or non-current assets as held for sale when the
following conditions are satisfied simultaneously:
(1) This component can be sold immediately based only on usual terms of selling such
components in current situation.
(2) The Company has adopted a resolution on disposal of the component or non-current
asset, and has been approved by the general meeting of shareholders or the corresponding
authority if required to be approved by the shareholders by the regulation.
(3) The Company has signed an irrevocable transfer agreement with the transferee.
(4) The transfer will be completed within one year.
(14) Long-term equity investment
1. Criteria of join control and significant influence
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Joint control is the contractually agreed sharing of control of an arrangement, which exists
only when decisions about the relevant activities require the unanimous consent of the parties
sharing control.
Significant influence is the power to participate in the financial and operating policy
decisions of the investee but not control or join control of those policies. If the Company
could exert significant influence over the investee, the investee is the associate of the
Company.
2. The initial cost of long-term equity investment from business acquisition
(1) Long-term equity investment from business acquisition
For a business combination involving enterprises under common control, if the
consideration of the combination is satisfied by paying cash, transfer of non-cash assets or
assumption of liabilities and issue of equity securities, the initial investment cost of the
long-term equity investment shall be the absorbing party’s share of the carrying amount of
the owner’s equity of the party being absorbed in the consolidated financial statements of
the ultimate controlling party at combination date.
When an investor becomes capable of exercising control over an investee under common
control due to additional investment or other reasons, the initial investment cost shall be the
absorbing party’s share of the carrying amount of the owner’s equity of the party being
absorbed in the consolidated financial statements of the ultimate controlling party at
combination date.
The difference between the initial investment cost and the carrying amount of the
previously-held equity investment, together with the additional investment cost for new
shares at combination date, shall be adjusted to the capital reserve. If the balance of capital
reserve is not sufficient, any excess shall be adjusted to retained earnings.
When an investor becomes capable of exercising control over an investee now under
common control due to additional investment or other reasons, the investor shall change to
the cost method and use the carrying amount of the cost method and use the carrying
amount of the previously-held equity investment, together with the additional investment
cost, as the initial investment cost under the cost method.
(2) The initial cost of the long-term equity investment other than from business acquisition
The initial cost of a long-term equity investment obtained by making payment in cash shall
be the purchase cost which is actually paid.
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The initial cost of a long-term equity investment obtained on the basis of issuing equity
securities shall be the fair value of the equity securities issued.
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 used as the basis for determining the cost of the assets received, unless
there is any exact evidence showing that the fair value of the assets received is more
reliable. Where any non-monetary assets transaction does not meet the conditions as
prescribed above, the carrying value and relevant payable taxes of the assets surrendered
shall be the initial cost of the assets received.
The initial cost of a long-term equity investment obtained by debt restructuring shall be
ascertained on the basis of fair values.
3. Subsequent measurement and profit or loss recognition
(1) Cost method
The Company adopts cost method for the long term investment in subsidiary company.
Under the cost method, an investing enterprise shall, in accordance with the attributable
share of the net profits or losses of the invested entity, recognize the investment profits or
losses except the dividend declared but unpaid, which is included in the payment when
acquiring the investment.
(2) Equity method
A long-term equity investment in an associate or a joint venture shall be accounted for
using the equity method. Where the initial investment cost of a long-term equity investment
exceeds tan investor’s interest in the fair values of an investee’s identifiable net assets at the
acquisition date, no adjustment shall be made to the initial investment cost. Where the
initial cost is less than the investor’s interest in the fair values of the investee’s identifiable
net assets at the acquisition date, the difference shall be credited to profit or loss for the
current period, and the cost of the long-term equity investment shall be adjusted
accordingly.
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The Company shall recognize its share of the investee’s net profits or losses, as well as its
share of the investee’s other comprehensive income, as investment income or losses and
other comprehensive income, and adjust the carrying amount of the investment accordingly.
The carrying amount of the investment shall be reduced by the portion of any profit
distributions or cash dividends declared by the investee that is attributable to the investor.
The investor’s share of the investee’s owners’ equity changes, other than those arising from
the investee’s net profit or loss, other comprehensive income or profit distribution, and the
carrying amount of the long-term equity investment shall be adjusted accordingly.
The investor shall recognize its share of the investee’s net profits or losses after making
appropriate adjustments based on the fair values of the investee’s identifiable net assets at
the acquisition date.
The unrealized profits or losses resulting from transactions between the investor and its
associate or joint venture shall be eliminated in proportion to the investor’s equity interest
in the investee, based on which investment income or losses shall be recognized. Any losses
resulting from transactions between the investor and investee which are attributable to asset
impairment shall be recognized in full.
If the transaction of investment or sale of assets among the Company and associate and
joint venture and the assets is a business, it shall apply the treatment mentioned in Note 2 (5)
“The accounting treatment for Business combination under/now under common control”
and Note 2 (6) “Consolidation of Financial Statements”.
When the Company recognizes the losses of invested enterprise, it shall follow the
following sequence: First of all, offset the book value of long term equity investment. If the
book value of long term equity is insufficient to dilute, the investing enterprise shall
recognize the net losses of the invested enterprise until the book value of the long-term
equity investment and other long-term rights and interests which substantially form the net
investment made to the invested entity are reduced to zero. If the company still has the
obligation to undertake extra losses per contract, and then estimated liabilities shall be
recognized into current profit and loss accordingly to the estimated obligation.
(3) Disposal of long-term equity investment
On disposal of a long-term equity investment, the difference between the proceeds actually
received and the carrying amount shall be recognized in profit or loss for the current period.
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When the previously-held equity investment is accounted for under the equity method, any
other comprehensive income previously recognized shall be accounted for on the same
basis as would have been required if the investee had directly disposed of the related assets
or liabilities.
Those owner's equity recognized other than the change of net profits or loss, other
comprehensive income, profit distribution of the invested entity shall be transferred
proportionally into profit or loss of current period, other comprehensive income arising
from the remeasurement of defined benefit plan is excluded.
When an investor can no longer exercise joint control of or significant influence over an
investee due to partial disposal of equity investment or other reasons, the remaining equity
investment shall be accounted for in accordance with “Accounting Standard for Business
Enterprises No. 22-Financial instruments: recognition and measurement”. The difference
between the fair value and the carrying amount at the date of the loss of join control or
significant influence shall be charged to profit or loss for the current period. When the
previously-held equity investment is accounted for under the equity method, any other
comprehensive income previously recognized shall be accounted for on the same basis as
would have been required if the investee had directly disposed of the related assets or
liabilities for the current period upon discontinuation of the equity method.
Those owner's equity recognized other than the change of net profits or loss, other
comprehensive income, profit distribution of the invested entity shall be transferred into
profit or loss of current period in full when the Company cease to adopt the equity method.
When the Company can no longer exercise control over an investee due to partial disposal
of equity investment or other reasons, and with the retained interest, still has joint control of,
or significant influence over, the investee, when preparing the individual financial
statements, the investor shall change to the equity method and adjust the remaining equity
investment as if the equity method had been applied from the date of the first acquisition. If
the investor cannot exercise joint control of or significant influence over the investee after
partial disposal of equity investment, the remaining equity investment shall be accounted
for in accordance with “Accounting Standard for Business Enterprises No.22-Financial
instruments: Recognition and Measurement”, and the difference between the fair value and
carrying amount at the date of the loss of control shall be charged to profit or loss for the
current period.
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When the equity investment disposed is acquired through business combination due to
additional investment or other reasons, in stand-alone financial statement, the remaining
equity investment shall adopt cost method or equity method, any other comprehensive
income and other owner’s interests previously recognized of the previously-held equity
investment under the equity method shall be transferred proportionally.
For those remaining equity investment accounted for in accordance with “Accounting
Standard for Business Enterprises No.22-Financial instruments: Recognition and
Measurement” after disposal, other comprehensive income and other owner’s interests
previously recognized shall be transferred to profit or loss in full.
(15) Investment properties
The term "investment properties" refers to the real estate held for generating rent and/or
capital appreciation. The investment properties include:
(1) The land use right which has already been rented;
(2) The land use right which is held and prepared for transfer after appreciation; and
(3) The building which has already been rented (including buildings self-constructed or
developed for rent after completion or buildings being built or developed for future rent).
The investment properties shall be measured at the cost model. For the investment properties
measured at cost model and building for rent, the same depreciation policy shall be adopted
as that of fixed assets; for land use right, the same amortization policy shall be adopted as
that of intangible assets.
(16) 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.
No fixed asset may be recognized unless it simultaneously meets the conditions as follows:
(1) The economic benefits pertinent to the fixed asset are likely to flow into the enterprise;
and
(2) The cost of the fixed asset can be measured reliably.
2. Fixed assets depreciation
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Fixed assets are depreciated under the straight line method. The depreciation rate is
determined according to the category of assets, the useful life and the expected residual rate.
If the components of the fixed assets have different useful lives or provide the economic
benefits in a different way, then different depreciation rate or method shall be applied and the
depreciation of the components shall be calculated separately.
Fixed assets acquired under financial leasing is depreciated over the useful life if it is
reasonably certain that the ownership of the leased assets will be acquired upon expiry of
lease, or over the shorter of lease term and useful life if it is not reasonably certain that the
ownership of the leased assets will be acquired upon expiry of lease.
Details of classification, depreciation period, residual value rate and annual depreciation rate
are as follows:
Depreciation Residual Value Rate Depreciation Rate
Classification
Period (%) (%)
Plants and Buildings 8-40 years 0.00 2.50-12.50
Machinery 4-18 years 3.00 5.39-24.25
Transportation and other equipment 5-18 years 3.00 5.39-19.40
3. Recognition criteria for fixed asset leased in by financial leasing and its valuation
Where a lease satisfies one or more of the following criteria, it shall be recognized as a
financial leasing:
(1) The ownership of the leased asset is transferred to the lessee when the term of lease
expires;
(2) The lessee has the option to buy the leased asset at a price which is expected to be far
lower than the fair value of the leased asset at the date when the option becomes
exercisable;
(3) The lease term covers the major part of the use life of the leased asset; and
(4) The present value of the minimum lease payments on the lease beginning date amounts
to substantially all of the fair value of the leased asset on the lease beginning date.
On the lease beginning date, the Company shall record the lower one of the fair value of the
leased asset and the present value of the minimum lease payments on the lease beginning date
as the initial book value, recognize the amount of the minimum lease payments as the initial
book value of long-term account payable, and treat the difference between the recorded
amount of the leased asset and the long-term account payable as unrecognized financing
charges.
(17) Construction in progress
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The cost of fixed assets transferred from a construction in progress includes all the necessary
expenses incurred for bringing the asset to the expected conditions for use. Construction in
progress is transferred to fixed asset when it has reached its working condition for its
intended use. In case the final project accounts have not been completed or approved, the
asset shall be transferred to fixed assets at an estimated value by considering project budget,
cost or actual cost of the project and etc., and the deprecation of the said fixed assets shall be
provided in accordance with the Company’s accounting policy since it has reached its
working condition for its intended use. After the project accounts have been approved, the
estimated values shall be adjusted based on the actual cost, but those provided deprecation
shall not be adjusted.
(18) Borrowing costs
1. Principle of the recognition of capitalized borrowing costs
The borrowing costs shall include interest on borrowings, amortization of discounts or
premiums on borrowings, ancillary expenses, and exchange balance on foreign currency
borrowings.
Where the borrowing costs incurred to an enterprise can be directly attributable to the
acquisition and construction or production of assets eligible for capitalization, it shall be
capitalized and recorded into the costs of relevant assets. Other borrowing costs shall be
recognized as expenses on the basis of the actual amount incurred, and shall be recorded into
the current profits and losses.
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.
The borrowing costs shall not be capitalized unless they simultaneously meet the following
requirements:
(1) The asset disbursements have already incurred, which shall include cash, transferred
non-cash assets or interest bearing debts paid for the acquisition and construction or
production activities for preparing assets eligible for capitalization;
(2) The borrowing costs has already incurred; and
(3) The acquisition and construction or production activities which are necessary to prepare
the asset for its intended use or sale have already started.
2. The capitalization period of borrowing costs
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The capitalization period shall refer to the period from the commencement to the cessation of
capitalization of the borrowing costs, excluding the period of suspension of capitalization of
the borrowing costs.
When the qualified asset under acquisition and construction or production is ready for the
intended use or sale, the capitalization of the borrowing costs shall be ceased.
Where each part of a qualified asset under acquisition and construction or production is
completed separately and is ready for use, the capitalization of the borrowing costs in relation
to this part of asset shall be ceased.
Where each part of an asset under acquisition and construction or production is completed
separately and is ready for use or sale during the continuing construction of other parts, but it
cannot be used or sold until the asset is entirely completed, the capitalization of the
borrowing costs shall be ceased when the asset is completed entirely.
3. The suspension of capitalization of borrowing costs
Where the acquisition and construction or production of a qualified asset is interrupted
abnormally and the interruption period lasts for more than 3 months, the capitalization of the
borrowing costs shall be suspended. If the interruption is a necessary step for making the
qualified asset under acquisition and construction or production ready for the intended use or
sale, the capitalization of the borrowing costs shall continue. The borrowing costs incurred
during such period shall be recognized as expenses, and shall be recorded into the profits and
losses of the current period, till the acquisition and construction or production of the asset
restarts.
4. Method of calculating the capitalization rate and capitalized amount of borrowing costs
For interest expense (minus the income of interests earned on the unused borrowing loans as
a deposit in the bank or investment income earned on the loan as a temporary investment)
and the ancillary expense incurred to a specifically borrowed loan, those incurred before a
qualified asset under acquisition, construction or production is ready for the intended use or
sale shall be capitalized at the incurred amount when they are incurred, and shall be recorded
into the costs of the asset eligible for capitalization.
The Company shall calculate and determine the to-be-capitalized amount of interests on the
general borrowing by multiplying the weighted average asset disbursement of the part of the
accumulative asset disbursements minus the general borrowing by the capitalization rate of
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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 effective interest rate
method, and an adjustment shall be made to the amount of interests in each period.
(19) Intangible Assets
1. Measurement of Intangible Assets
(1) Initial measurement is based on cost upon acquisition
The cost of an intangible asset on acquisition include the purchase price, relevant taxes and
other necessary disbursements which may be directly attributable to bringing the intangible
asset to the conditions for the expected purpose. If the payment for an intangible asset is
delayed beyond the normal credit conditions and it is of the financing nature, the cost of the
intangible asset shall be determined on the basis of the present value of the purchase price.
For intangible assets obtained from debt restructuring as settlement of liabilities from
debtors, initial recognition is based on its fair value, and the difference between the debt
restructured and the fair value of the intangible assets are recognized in the current profit
and loss.
For intangible assets obtained from non-monetary transactions with commercial substance,
and the fair value of the assets obtained or surrendered can be reliably measured, the initial
recognition of the asset obtained is based on the fair value of the asset surrendered, unless
there is strong evidence that the fair value of the asset obtained is more reliable. For
intangible assets obtained through non-monetary transactions which do not meet the above
criteria, the initial recognition is based on the book value of the assets surrendered and the
relevant taxes payable. No gain or loss will be recognized.
(2) Subsequent Measurement
The Company shall analyze and judge the beneficial period of intangible assets upon
acquisition.
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.
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2. Estimated useful lives of intangible assets with limited useful lives
Item Estimated useful life Criteria
Land use right 50 years Land use right certificate
The Company shall review the useful lives and amortization methods of intangible assets with
limited useful lives at each year end.
Per review, the useful lives and amortization methods of intangible assets with limited useful
lives at each year-end is the same with that of last year.
3. Determination of intangible assets with uncertain useful lives
As at the balance sheet date, the Company has no intangible assets with uncertain useful
lives.
4. Classification criteria for internal research phase and development phase
The expenditures for its internal research and development projects of an enterprise shall be
classified into research expenditures and development expenditures.
Research phase refers to the phase of creative and planned investigation to acquire and study
to acquire and understand new scientific or technological knowledge.
Development phase refers to the phase during which the result of research phase or other
knowledge is applied into certain projects or designs for the manufacturing of new or
substantially improved material, device and product.
5. 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) It is able to finish the development of the intangible assets, and able to use or sell the
intangible assets, with the support of sufficient technologies, financial resources and other
resources; and
(5) The development expenditures of the intangible assets can be reliably measured.
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The development expenditures for its internal research and development projects of the
Company shall be recorded into the profit or loss for the current period if the above said
conditions are not satisfied simultaneously. The research expenditures for its internal research
and development projects of an enterprise shall be recorded into the profit or loss for the
current period when incurred.
(20) Impairment of long-term assets
For long-term assets under the cost model such as fixed assets, construction in progress, intangible
assets etc., the Company shall perform impairment tests at the period end if there is clear
indication of impairment.
If the recoverable amounts of long-term assets are less than their carrying amounts, the carrying
amounts of the assets shall be written down to their recoverable amounts. The write-downs are
recognized as impairment losses and charged to current profit and loss. The recoverable amounts
of long-term assets are the higher of their fair values less costs to sell and the present values of the
future cash flows expected to be derived from the assets. The Company shall estimate its
recoverable amount on an individual basis. Where it is difficult to do so, it shall determine the
recoverable amount of the group assets on the basis of the asset group to which the asset belongs.
The term "group assets” refers to a minimum combination of assets by which the cash flows could
be generated independently
The goodwill shall be subject to an impairment test at least at the end of each year.
When the Company makes an impairment test of assets, it shall, as of the purchasing day,
apportion the carrying value of the business reputation formed by merger of enterprises to the
relevant asset groups by a reasonable method. Where it is difficult to do so, it shall be
apportioned to the relevant combinations of asset groups.
When apportioning the carrying value of the business reputation to the relevant asset groups
or combinations of asset groups, it shall be apportioned on the basis of the proportion of the
fair value of each asset group or combination of asset groups to the total fair value of the
relevant asset groups or combinations of asset groups. Where it is difficult to measure the fair
value reliably, it shall be apportioned on the basis of the proportion of the carrying value of
each asset group or combination of asset groups to the total carrying value of the relevant
asset groups or combinations of asset groups.
When making an impairment test on the relevant asset groups or combination of asset groups
containing business reputation, if any evidence shows that the impairment of asset groups or
combinations of asset groups is possible, the Company shall first make an impairment test on
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the asset groups or combinations of asset groups not containing business reputation, calculate
the recoverable amount, compare it with the relevant carrying value and recognize the
corresponding impairment loss. Then the Company shall make an impairment test of the asset
groups or combinations of asset groups containing business reputation, and compare the
carrying value of these asset groups or combinations of asset groups (including the carrying
value of the business reputation apportioned thereto) with the recoverable amount. Where the
recoverable amount of the relevant assets or combinations of the asset groups is lower than
the carrying value thereof, it shall recognize the impairment loss of the business reputation.
Impairment losses on long-term assets shall not be reversed in subsequent accounting periods
once recognized.
(21) Long-term deferred expense
The long-term deferred expense refers to the expenses incurred but shall be borne by current and
subsequent accounting period, which is more than one year. The long-term deferred expense shall
be amortized over its beneficiary period evenly
(22) Employee benefits
1. Accounting treatment for short employee benefit
The Company shall recognized , in the accounting period in which an employee provides service,
actually occurred short-term employee benefits as a liability, with a corresponding charge to the
profit or loss or cost of an asset for the current period.
Payments made by an enterprise of social security contributions for employees, payments of
housing funds, and union running costs employee education costs provided in accordance with
relevant requirements shall, in the accounting period in which employees provide services, be
calculated according to prescribed bases and percentages in determining the amount of employee
benefits.
The employee benefits which are non-monetary benefits shall be measured at fair value if it could
be measured reliably.
2. Accounting treatment of post-employment benefits
(1) Defined contribution plan
The Company shall recognize, in the accounting period in which an employee provides service,
pension fund and unemployment fund for employees as a liability according to the local
government regulations. The amount shall be calculated according to local prescribed bases and
percentages in determining the amount of employee benefits, with a corresponding charge to the
profit or loss or cost of an asset for the current period.
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(2) Defined benefit plan
None.
3. Accounting treatment of termination benefits
The Company which provides termination benefits to employees shall recognize an employee
benefits liability for termination benefits, with a corresponding charge to the profit or loss for
the current period, at the earlier of the following dates:
(1) When the Company cannot unilaterally withdraw the offer of termination benefits
because of an employment termination plan or a curtailment proposal
(2) When the Company recognizes costs or expenses related to a restructuring that involves
the payment of termination benefits
4. Accounting treatment of other long-term employee benefits payable
None.
(23) Estimated liabilities
1. Recognition Criteria of estimated liabilities
The obligation pertinent to a Contingency (litigation, guarantees, loss contract, restructuring)
shall be recognized as an estimated liabilities when the following conditions are satisfied
simultaneously:
(1) That obligation is a current obligation of the enterprise;
(2) It is likely to cause any economic benefit to flow out of the enterprise as a result of
performance of the obligation; and
(3) The amount of the obligation can be measured in a reliable way.
2. Measurement of estimated liabilities
The estimated debts shall be initially measured in accordance with the best estimate of the
necessary expenses for the performance of the current obligation.
To determine the best estimate, an enterprise shall take into full consideration of the risks,
uncertainty, time value of money, and other factors pertinent to the Contingencies. If the time
value of money is of great significance, the best estimate shall be determined after
discounting the relevant future outflow of cash.
The best estimate shall be conducted in accordance with the following situations,
respectively:
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If there is a continuous range for the necessary expenses and if all the outcomes within this
range are equally likely to occur, the best estimate shall be determined in accordance with the
average estimate within the range, that is, the average of the upper and lower limit.
If there is not a sequent range for the necessary expenses and if the outcomes within this
range are not equally likely to occur, the best estimate shall be determined as follows:
(1) If the Contingencies concern a single item, it shall be determined in the light of the most
likely outcome.
(2) If the Contingencies concern two or more items, the best estimate shall be calculated
and determined in accordance with all possible outcomes and the relevant probabilities.
When all or some of the expenses necessary for the liquidation of an estimated debts of an
enterprise is expected to be compensated by a third party, the compensation shall be
separately recognized as an asset only when it is virtually certain that the reimbursement will
be obtained. The amount recognized for the reimbursement shall not exceed the book value
of the estimated debts.
(24) Revenue
1. Recognition Criteria for the Revenue from sale of goods
(1) The general principle of revenue recognition and measurement
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) The specific criteria of revenue recognition and measurement
The amount of sale of goods is recognized according to the contract or agreement terms.
The Company mainly sells steel and other products. Domestic sales revenue is recognized
when the following conditions are met: The Company has delivered the products to buyer
under the contract, amount of product sales revenue is determinable, received or the
certificate of the right to receive the amount has been obtained and the relevant economic
benefits are likely to flow into the entity, and related costs can be measured reliably.
Export sales revenue is recognized when the following conditions are met: the Company
has undertaken the Customs declaration and delivery has occurred under the contract, bill of
lading has been obtained, amount of product sales revenue is determinable, received or the
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certificate of the right to receive the amount has been obtained and the relevant economic
benefits are likely to flow into the entity, and related costs can be measured reliably.
2. Recognition Criteria for the Revenue from alienating of Assets Use Rights
(1) The general principle
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.
(2) The evidence of recognition of Revenue from alienating of Assets Use Rights
(1) The agreement alienating of Assets Use Rights of has been signed and provided to
users; and
(2) The timing for collecting the fee is due.
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:
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(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
shall be recognized in the current profit and loss, and no revenue from the providing of
labor services shall be recognized.
(25) 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. Recognition
If clear evidence shows that conditions for granting the finance support fund can be met and
the finance support fund is supposed to be received, the amount of receivable can be
recognized.
If no clear evidence shows that the Company is expected to receive finance support or the
conditions for granting the finance support fund can be met, recognized the government
subsidies when the conditions are met and the amount are received.
3. Accounting treatment
The government subsidies pertinent to fixed assets and intangible assets acquired and
constructed 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 in the statement of comprehensive income in the
period during which the subsidy is received.
(26) Deferred tax assets and deferred tax liabilities
An enterprise shall recognize the deferred income tax liabilities arising from a deductible
temporary difference to the extent of the amount of the taxable income which it is most likely
to obtain and which can be deducted from the deductible temporary difference.
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As for any deductible loss or tax deduction that can be carried forward to the next year, the
corresponding deferred income tax assets shall be determined to the extent that the amount of
future taxable income to be offset by the deductible loss or tax deduction to be likely
obtained.
All taxable temporary differences shall be recognized as deferred tax liabilities with certain
limited exceptions.
Exceptions when deferred tax assets and deferred tax liabilities are not recognized include:
initial recognition of goodwill; initial recognition of an asset or liability in a transaction or
event that is not a business combination and at the time of the transaction, affects neither
accounting profit nor taxable profit (tax loss)
An entity shall offset deferred tax assets and deferred tax liabilities if, and only if: (a) the
entity has a legally enforceable right to set off current tax assets against current tax liabilities;
and (b) the deferred tax assets and the deferred tax liabilities relate to income taxes levied by
the same taxation authority on either:(i) the same taxable entity; or (ii) different taxable
entities which intend either to settle current tax liabilities and assets on a net basis, or to
realize the assets and settle the liabilities simultaneously, in each future period in which
significant amounts of deferred tax liabilities or assets are expected to be settled or recovered.
(27) Leases
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 lessor has shouldered any expense related to the lease which shall 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.
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If the Company has shouldered any expense related to the lease which shall 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 financial leasing
(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 initial book value, recognize the amount of the minimum lease payments as the
initial book value 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. Initial direct costs incurred by the Company
shall be recorded in the value of the leased asset.
(2) Leased out asset
On the lease beginning date, a lessee shall record the balance between the sum of finance
lease receivables plus unguaranteed residual value and the present value of the sum as
unrealized financing income, and record rental as revenue when received for each period in
the future
Initial direct costs incurred by the Company related to the leased asset shall be recorded in
the initial measurement of the finance lease receivables, and reduce the amount of revenue
recognized during the lease term.
(28) Discontinuing operation
Discontinuing operation is a component that has been disposed or classified as held for sale
by the Company, and can be distinguished separately in operating and preparing financial
statements when one of the following conditions is met:
(1) The component stands for an independent main business or a major business area;
(2) The component is a part of disposal plan of an independent main business or a major
business area;
(3) The component is a subsidiary which is acquired only for sale again.
(29) Significant accounting policies and change of accounting estimate
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1. Significant changes in accounting policies
(1)Implementation of Provisions on the accounting treatment of value added tax.
On December 3, 2016, the Ministry of Finance issued Provisions on the accounting
treatment of value added tax ([2016] no. 22), which applies to transactions from May 1,
2016. The main impacts of the implementation are as follows:
The contents and reasons of accounting policy Financial statement items affected and
changes amount
Adjust the “Business tax and surcharges” to “Tax and
Tax and surcharges
surcharges” in the income statement.
The business activities of the occurrence of property
tax, land use tax, vehicle and vessel use tax, stamp
Tax and surcharges item have increased
tax from May 1, 2016 is reclassified from “General
by RMB 65,261,381.86, while General
and administrative expenses” to “Tax and
and administrative expenses have
surcharges”. The tax occurred before May 1, 2016
decreased by RMB 65,261,381.86.
shall not be adjusted. Comparative data stays
unadjusted.
The debit balance of the sub-item under Tax payable
such as VAT payable, VAT not paid, input VAT to be The ending balance of other current
deducted, input VAT to be verified, VAT overpaid assets has increased by RMB
will be reclassified from Tax payable to other cuurent 86,134,653.84 and the tax payable has
assets or other non-current assets. Comparative data increased by RMB 86,134,653.84
stays unadjusted.
2. Significant changes in accounting estimates
The company's accounting estimates have not changed during the reporting period.
4. Taxes
(1) Major type of taxes and corresponding tax rates
Tax Taxation Method Tax Rate
The balance of output VAT calculated based on
product sales and taxable services revenue in 17%, 11%,
Value-added Tax(VAT)
accordance with the tax laws after subtracting the 6%
deductible input VAT of the period
Based on taxable operating revenue(from 1 May
Business tax 5%
2016, the Business tax has changed into VAT)
City maintenance and construction tax Based on VAT and business tax actually paid 7%, 5%
Educational surcharges Based on VAT and business tax actually paid 3%, 2%
Enterprise income tax Based on taxable profit 25%
(2) Tax Preference
None.
134
Bengang Steel Plates Co., Ltd. Annual Report 2016
5. Notes to the consolidated financial statements
(1) Cash at bank and on hand
1. Cash at bank and on hand
Items Ending balance Beginning balance
Cash on hand 47,743.38 72,220.66
Cash at bank 12,238,841,745.29 4,612,384,032.13
Other monetary funds 693,022,529.17 528,024,257.18
Total 12,931,912,017.84 5,140,480,509.97
Notes: No funds are deposited abroad at the year-end.
The details of restricted monetary funds resulted from guarantee or pledge or freeze
accounts are as follows:
Items Ending balance Beginning balance
Margin for bank acceptance bill 483,737,529.17 508,347,736.99
Guarantee for Yield
174,600,000.00
Enhancement Products
Deposits for purchase of foreign
19,350,000.00
currency
Total 658,337,529.17 527,697,736.99
(2) Notes receivable
1. Notes receivable disclosed by category
Items Ending balance Beginning balance
Bank acceptance bill 2,003,701,859.70 2,446,693,577.16
Commercial acceptance bill 26,979,278.33 2,988,984.00
Total 2,030,681,138.03 2,449,682,561.16
2. The pledged acceptance bill at the year-end
Items The pledged acceptance bill at the year-end
Bank acceptance bill 682,288,925.93
Total 682,288,925.93
3. The amount of Notes receivable endorsed over but not yet matured at the year-end.
Items Derecognized ending balance Underecognized ending balance
Bank acceptance bill 6,791,554,837.93
Commercial acceptance bill 5,416,970.01
Total 6,791,554,837.93 5,416,970.01
135
Bengang Steel Plates Co., Ltd. Annual Report 2016
4. No Notes receivable has been transferred into accounts receivable due to inability of
drawer to meet acceptance bill at the year-end.
(3) Accounts receivable
1. Accounts receivable disclosed by category
Ending balance
Items Carrying amount Provision for bad debts
Percentage Bad debts
Book value
Amount (%)
Amount ratio (%)
Individually significant and
tested for impairment
individually
Accounts receivable tested
for impairment by portfolio 829,837,954.48 100.00 205,972,527.23 24.82 623,865,427.25
Other insignificant items
but tested for impairment
individually
Total 829,837,954.48 100.00 205,972,527.23 24.82 623,865,427.25
Beginning balance
Items Carrying amount Provision for bad debts
Percentage Bad debts
Book value
Amount (%)
Amount ratio (%)
Individually significant and
tested for impairment
individually
Accounts receivable tested
642,517,001.01 100.00 153,932,376.29 23.96 488,584,624.72
for impairment by portfolio
Other insignificant items
but tested for impairment
individually
Total 642,517,001.01 100.00 153,932,376.29 23.96 488,584,624.72
Accounts receivables tested for impairment by portfolio using the method of Aging analysis
Ending balance
Items
Carrying amount Provision for bad debts Bad debts ratio (%)
Within 1 year (inclusive) 432,858,214.27
1-2 years (inclusive) 174,803,236.45 8,740,161.81 5.00
2-3 years (inclusive) 31,180,172.93 6,236,034.59 20.00
Over 3 years 190,996,330.83 190,996,330.83 100.00
Total 829,837,954.48 205,972,527.23 24.82
2. Information of provision, reversal or recovery of bad debts of current period.
The provision of bad debts of current period is RMB 52,040,150.94.
3. No accounts receivable has been written off this year.
136
Bengang Steel Plates Co., Ltd. Annual Report 2016
4. Top five debtors at the year-end
Ending balance
Company Percentage of
Provision for
Amount total Accounts
bad debts
receivable (%)
HuaChen Auto Group Holding Co., Ltd. 158,522,168.13 19.10
Benxi Nanfen Xinhe Metallurgical Co., Ltd. 87,396,378.47 10.53 4,368,958.76
Benxi Steel & Iron (Group) Machinery
58,688,479.41 7.07 6,978,534.14
Manufacture Co., Ltd.
Ningbo CIMC Logistics Equipment Co., Ltd. 49,157,039.02 5.92
Benxi Steel & Iron (Group) Industrial
43,138,986.20 5.20 2,160,167.07
Development Co., Ltd.
Total 396,903,051.23 47.82 13,507,659.97
(4) Prepayments
1. Prepayments disclosed by aging
Ending balance Beginning balance
Aging
Amount Percentage (%) Amount Percentage (%)
Within 1 year (inclusive) 452,700,499.16 91.67 423,542,198.08 74.32
1-2 years (inclusive) 31,080,628.03 6.29 139,209,276.37 24.43
2-3 years (inclusive) 8,279,599.88 1.68 7,100,476.24 1.25
Over 3 years 1,778,932.37 0.36
Total 493,839,659.44 100.00 569,851,950.69 100.00
Notes: Significant prepayment with aging over 1 year is paid for commodity in advance and
the settlement terms agreed in the contract are not due.
2. Top five prepaid companies at the year-end
Name of the company Amount Percentage (%)
Benxi Beiying Steel & Iron (Group) Co., Ltd. 209,639,029.05 42.45
Shanxi Xishan Coal and Elect-ricity Power Co., Ltd. 98,539,077.31 19.95
Shanxi Coking Coal Group Co., Ltd. 37,127,505.53 7.52
Yangquan Coal Industry Group Co., Ltd. 28,883,959.66 5.85
MCC (Wuhan) Co., Ltd. 14,880,000.00 3.01
Total 389,069,571.55 78.78
(5) Interest receivable
1. Interest receivable disclosed by category
Items Ending balance Beginning balance
Fixed deposit interest 4,208,818.85 3,524,615.12
Total 4,208,818.85 3,524,615.12
137
Bengang Steel Plates Co., Ltd. Annual Report 2016
(6) Other receivables
1. Other receivables disclosed by category
Ending balance
Items Carrying amount Provision for bad debts
Percentage Bad debts Book value
Amount Amount
(%) ratio (%)
Individually significant and tested
for impairment individually
Accounts receivable tested for
impairment by portfolio 183,443,116.06 99.06 67,273,143.57 36.67 116,169,972.49
Other insignificant items but tested
for impairment individually 1,740,000.00 0.94 1,740,000.00
Total 185,183,116.06 100.00 67,273,143.57 36.33 117,909,972.49
Beginning balance
Items Carrying amount Provision for bad debts
Percentage Bad debts
Book value
Amount (%)
Amount ratio (%)
Individually significant and tested
for impairment individually
Accounts receivable tested for
impairment by portfolio 216,153,715.77 99.20 66,224,838.51 30.64 149,928,877.26
Other insignificant items but
tested for impairment individually 1,740,000.00 0.80 1,740,000.00
Total 217,893,715.77 100.00 66,224,838.51 30.39 151,668,877.26
Other receivables tested for impairment by portfolio using the method of Aging analysis
Ending balance
Items
Carrying amount Provision for bad debts Bad debts ratio (%)
Within 1 year (inclusive) 103,116,802.98
1-2 years (inclusive) 9,963,866.58 498,176.84 5.00
2-3 years (inclusive) 4,484,349.71 896,869.94 20.00
Over 3 years 65,878,096.79 65,878,096.79 100.00
Total 183,443,116.06 67,273,143.57 36.67
Other receivables individually insignificant but tested for impairment individually
Carrying Provision for Bad debts
Items Reason
Amount bad debts ratio (%)
Sinking Fund of Japanese yen from
1,740,000.00 Sinking fund
Finance Bureau of Benxi
Total 1,740,000.00
Notes: The Sinking Fund of Japanese yen from Finance Bureau of Benxi is the margin for JPY
loans of which the aging is over 3 years and no bad debts provision has been made for it.
2. Information of provision, reversal or recovery of bad debts of current period.
The provision of bad debts of current period is RMB 1,048,305.06.
138
Bengang Steel Plates Co., Ltd. Annual Report 2016
3. No other receivables have been written off this year.
4. Other receivables disclosed by nature
Nature Ending balance Beginning balance
Accounts 165,494,806.44 151,337,358.60
Export tax rebate 4,990,848.26 32,772,729.71
Margin and deposit 3,329,519.00 3,571,060.87
Others 11,367,942.36 8,296,700.68
Input tax to be deducted 21,915,865.91
Total 185,183,116.06 217,893,715.77
5. Top five debtors at the year-end
Percentage
Provision
Nature or of total
Company Amount Aging for bad
content other
debts
receivables
Benxi Steel Group International Within 1 year,
Trade Tenda Co., Ltd. Accounts 12,953,078.23 6.99 2,000.00
over 3 years
National Tax Bureau Bengang
Branch Export rebate 4,990,848.26 Within 1 year 2.70
Huozhou Coal and Electricity
Group Co., Ltd. Accounts 4,341,257.18 Over 3 years 2.34 4,341,257.18
State Grid Liaoning Electricity
Co., Ltd. Benxi Power Branch Accounts 3,530,637.67 Within 1 year 1.91
Benxi Steel Group Real Estate
Development Co., Ltd. Accounts 2,797,309.70 Within 3 years 1.51 173,991.52
Total 28,613,131.04 15.45 4,517,248.70
(7) Inventories
1. Inventories disclosed by category
Ending balance Beginning balance
Items Carrying
Impairment Book value Carrying amount Impairment Book value
amount
Raw material
and main material 5,524,143,499.59 4,894,918.76 5,519,248,580.83 5,527,236,707.17 4,894,918.76 5,522,341,788.41
Work in process and
self-made semi-finished 1,565,629,213.06 52,905,684.06 1,512,723,529.00 1,011,630,448.37 192,850,188.37 818,780,260.00
product
Finished products 2,755,527,232.24 5,325,405.33 2,750,201,826.91 2,566,825,937.84 306,213,543.83 2,260,612,394.01
Total 9,845,299,944.89 63,126,008.15 9,782,173,936.74 9,105,693,093.38 503,958,650.96 8,601,734,442.42
Notes: No inventories are used as mortgage or guarantee at the year-end.
2. Impairment of inventory
Increase Decrease
Beginning Ending
Category Write-back
balance Provision Others Others balance
or write-off
Raw material 4,894,918.76 4,894,918.76
139
Bengang Steel Plates Co., Ltd. Annual Report 2016
and main materials
Work in process and
self-made semi-finished 192,850,188.37 52,905,684.06 192,850,188.37 52,905,684.06
product
Finished products 306,213,543.83 5,325,405.33 306,213,543.83 5,325,405.33
Total 503,958,650.96 58,231,089.39 499,063,732.20 63,126,008.15
(8) Other current assets
Items Ending balance Beginning balance
Prepaid enterprise income tax 183,264,161.99 225,000,858.03
Input tax to be deducted 86,134,653.84 206,359,683.18
Bank Short-Term Financial Products 244,000,000.00
Total 513,398,815.83 431,360,541.21
Notes: As at 31 December 2016, an amount of RMB 244,000,000.00 bank short-term financial
products is pledged for opennng letter of credit.
140
Bengang Steel Plates Co., Ltd. Annual Report 2016
(9) Available-for-sale financial assets
1. Details of available-for-sale financial assets
Ending balance Beginning balance
Items
Carrying amount Impairment Book value Carrying amount Impairment Book value
Available-for-sale debt instruments
Available-for-sale equity instruments 29,271,278.63 14,414,693.00 14,856,585.63 20,271,278.63 20,271,278.63
Including:
Measured at fair value
Measured at cost 29,271,278.63 14,414,693.00 14,856,585.63 20,271,278.63 20,271,278.63
Total 29,271,278.63 14,414,693.00 14,856,585.63 20,271,278.63 20,271,278.63
2. Available-for-sale financial assets measured at cost
Carrying amount Impairment Percentage Cash
of share in dividend of
Company invested in Beginning Ending Beginning Ending
Increase Decrease Increase Decrease the firm the current
Balance Balance Balance Balance (%) period
Zhejiang Bengang Jingrui Steel
1,967,605.63 1,967,605.63 20.00 303,310.97
Processing Co., Ltd.
Suzhou Bengang Industrial Co.,
3,888,980.00 3,888,980.00 20.10
Ltd.
China Steel Shanghai Steel
14,414,693.00 14,414,693.00 14,414,693.00 14,414,693.00 15.00
Processing Co., Ltd.
Bengang Baojin (Shenyang) Auto
New Material Technology Co., 9,000,000.00 9,000,000.00 15.00
Ltd.
Total 20,271,278.63 9,000,000.00 29,271,278.63 14,414,693.00 14,414,693.00 303,310.97
141
Bengang Steel Plates Co., Ltd. Annual Report 2016
(10) Fixed assets
1. Details of fixed assets
Transportation
Items Buildings Machinery Total
equipment
1. Total original value
Beginning balance 10,575,548,527.75 37,145,242,250.50 836,816,572.35 48,557,607,350.60
Increase
1,237,692,734.81 1,277,222,342.59 2,544,715.34 2,517,459,792.74
in current period
Including: Purchase
10,005,323.61 47,709,264.48 2,205,615.34 59,920,203.43
Transferred
from
1,227,687,411.20 1,229,513,078.11 339,100.00 2,457,539,589.31
construction
in progress
Merging
Others
Decrease in current
30,776,758.26 284,390,898.26 6,776,663.15 321,944,319.67
period
Including: Disposal
30,776,758.26 284,390,898.26 6,776,663.15 321,944,319.67
Others
Ending balance 11,782,464,504.30 38,138,073,694.83 832,584,624.54 50,753,122,823.67
2.Total accumulated
depreciation
Beginning balance 4,699,483,576.90 23,257,690,103.38 543,419,803.08 28,500,593,483.36
Increase
325,214,225.52 1,514,696,705.68 7,218,614.18 1,847,129,545.38
in current period
Including: Provision
325,214,225.52 1,514,696,705.68 7,218,614.18 1,847,129,545.38
Others
Decrease in current
22,699,536.45 275,273,950.49 6,256,218.08 304,229,705.02
period
Including: Disposal
22,699,536.45 275,273,950.49 6,256,218.08 304,229,705.02
Others
Ending balance 5,001,998,265.97 24,497,112,858.57 544,382,199.18 30,043,493,323.72
3. Total impairment
Beginning balance 8,208,087.85 2,551,052.65 10,759,140.50
Increase
10,401,722.01 10,401,722.01
in current period
Including: Provision
10,401,722.01 10,401,722.01
Others
Decrease in current
period
142
Bengang Steel Plates Co., Ltd. Annual Report 2016
Transportation
Items Buildings Machinery Total
equipment
Including: Disposal
Others
Ending balance 8,208,087.85 12,952,774.66 21,160,862.51
4. Total net book value
of Fixed assets
Ending book value 6,772,258,150.48 13,628,008,061.60 288,202,425.36 20,688,468,637.44
Beginning book value 5,867,856,863.00 13,885,001,094.47 293,396,769.27 20,046,254,726.74
2. Fixed assets leased out by operating lease
Items Book value
Buildings 24,419,461.97
Machinery 3,788,152.66
Total 28,207,614.63
3. Fixed assets without property rights certificates at the year-end
Items Book value Reason
Buildings 996,678,256.84 To be handled
143
Bengang Steel Plates Co., Ltd. Annual Report 2016
(11) Construction in progress
1. Details of construction in progress
Ending balance Beginning balance
Items Carrying
Carrying amount Impairment Book value Impairment Book value
amount
High Strength Cold Rolling Steel Renovation Project 4,947,002,125.33 4,947,002,125.33 3,451,712,764.91 3,451,712,764.91
The Third Cold Rolling Work Hot-Dip Galvanizing Production Line
398,719,600.41 398,719,600.41 335,752,700.00 335,752,700.00
Project
Energy Saving And Environmental Protection Reconstruction Of The
160,819,316.39 160,819,316.39 153,224,111.93 153,224,111.93
Converter System And 180 Ton Dephophorization Converter Project
The 360 Square Meter Sintering Machine 973,980,424.51 973,980,424.51
Hot Rolling Process Equipment Production Transformation 4,230,929.56 4,230,929.56
Manufacturing Department Energy Control Center 4,656,735.30 4,656,735.30 226,586,153.73 226,586,153.73
Information System Engineering 27,813,512.90 27,813,512.90 223,389,048.63 223,389,048.63
Ancillary Facilities Reconstruction Of The South Line Of
47,995,690.74 47,995,690.74
Transportation Department
The Power Plant No.3 Workshop Reconstruction Project 427,626,724.92 427,626,724.92 105,385,827.26 105,385,827.26
Other Projects 244,035,658.86 244,035,658.86 124,366,642.00 124,366,642.00
Total 6,210,673,674.11 6,210,673,674.11 5,646,624,293.27 5,646,624,293.27
2. The change of major construction in progress
Budget (In 10 Beginning Other
Project Increase Transfer to FA Ending balance
Thousand Yuan) Balance decrease
High Strength Cold Rolling Steel Renovation Project 613,498.00 3,451,712,764.91 1,495,289,360.42 4,947,002,125.33
The Third Cold Rolling Work Hot-Dip Galvanizing Production Line
86,918.00 335,752,700.00 62,966,900.41 398,719,600.41
Project
Energy Saving And Environmental Protection Reconstruction Of The
177,864.40 153,224,111.93 7,595,204.46 160,819,316.39
Converter System And 180 Ton Dephophorization Converter Project
The 360 Square Meter Sintering Machine 128,403.20 973,980,424.51 97,803,645.69 1,071,784,070.20
144
Bengang Steel Plates Co., Ltd. Annual Report 2016
Budget (In 10 Beginning Other
Project Increase Transfer to FA Ending balance
Thousand Yuan) Balance decrease
Hot Rolling Process Equipment Production Transformation 33,287.00 4,230,929.56 4,230,929.56
Manufacturing Department Energy Control Center 29,450.00 226,586,153.73 20,936,397.28 242,865,815.71 4,656,735.30
Information System Engineering 42,725.00 223,389,048.63 2,991,762.15 198,567,297.88 27,813,512.90
Ancillary Facilities Reconstruction Of The South Line Of
5,598.00 47,995,690.74 47,577,664.74 418,026.00
Transportation Department
The Power Plant No.3 Workshop Reconstruction Project 61,072.00 105,385,827.26 322,240,897.66 427,626,724.92
Other Project 124,366,642.00 1,015,392,516.08 892,513,811.22 3,209,688.00 244,035,658.86
Total 1,178,815.60 5,646,624,293.27 3,025,216,684.15 2,457,539,589.31 3,627,714.00 6,210,673,674.11
Including:
Input of Accumulated
Progress capitalized Capitalization
Project Budget amount of Source of fund
(%) interest of current rate
(%) capitalized interest
period
High Strength Cold Rolling Steel Renovation Project 76 80 552,911,535.81 247,763,695.34 4.1 Self-raised fund & Loan
The Third Cold Rolling Work Hot-Dip Galvanizing Production
76 80 Self-raised fund
Line Project
Energy Saving And Environmental Protection Reconstruction Of
The Converter System And 180 Ton Dephophorization Converter 85 90 127,847,567.31 Self-raised fund & Loan
Project
The 360 Square Meter Sintering Machine 88 100 68,627,433.26 33,032,142.88 4.1 Self-raised fund & Loan
Hot Rolling Process Equipment Production Transformation 85 100 Self-raised fund
Manufacturing Department Energy Control Center 91 96 45,372,134.03 10,209,526.89 4.1 Self-raised fund & Loan
Information System Engineering 92 96 34,177,972.63 Self-raised fund & Loan
Ancillary Facilities Reconstruction Of The South Line Of
86 100 2,701,697.34 Self-raised fund & Loan
Transportation Department
The Power Plant No. 3 Workshop Reconstruction Project 72 80 17,371,278.66 12,945,315.51 4.1 Self-raised fund & Loan
Other Project Self-raised
Total 849,009,619.04 303,950,680.62
145
Bengang Steel Plates Co., Ltd. Annual Report 2016
(12) Construction materials
1. Construction materials
Items Beginning balance Increase Decrease Ending balance
Special equipment 4,152,880.79 502,318,825.94 498,688,336.44 7,783,370.29
Total 4,152,880.79 502,318,825.94 498,688,336.44 7,783,370.29
(13) Intangible assets
1. Details of intangible assets
Items Land use right Office software Total
1.Total of original value
Beginning balance 296,245,314.76 141,509.43 296,386,824.19
Increase 255,555.56 255,555.56
Including: Purchase 255,555.56 255,555.56
Decrease
Including: Disposal
Ending balance 296,245,314.76 397,064.99 296,642,379.75
2. Total of Accumulated
Amortization
Beginning balance 30,838,789.07 27,122.55 30,865,911.62
Increase 5,924,906.28 14,150.92 5,939,057.20
Including: Provision 5,924,906.28 14,150.92 5,939,057.20
Decrease
Including: Disposal
Ending balance 36,763,695.35 41,273.47 36,804,968.82
4. Total of Impairment
Beginning balance
Increase
Including: Provision
Decrease
Including: Disposal
Ending balance
5. Total of Net value
Ending book value 259,481,619.41 355,791.52 259,837,410.93
Beginning book value 265,406,525.69 114,386.88 265,520,912.57
(14) Deferred tax asset and deferred tax liability
1. Undeducted deferred tax asset
Ending balance Beginning balance
Items Deductible Deductible
Deferred tax Deferred tax
temporary temporary
asset asset
differences differences
146
Bengang Steel Plates Co., Ltd. Annual Report 2016
(1) Temporary differences between
Carrying amount and tax basis
Impairment 368,635,605.55 92,158,901.41 734,875,006.26 183,718,751.57
Differences of depreciation and
amortization 333,978,859.03 83,494,714.76 333,978,859.03 83,494,714.76
Welfare for early retirement 5,859,027.00 1,464,756.75 6,946,500.22 1,736,625.06
Unpaid employee salary 7,339,835.99 1,834,959.00 18,088,405.91 4,522,101.48
(2) Deductible operating losses 1,136,092,189.97 284,023,047.49 1,494,830,936.71 373,707,734.18
(3) Internal unrealized profit 52,499,498.52 13,124,874.63 -20,995,185.07 -5,248,796.27
Total 1,904,405,016.06 476,101,254.04 2,567,724,523.06 641,931,130.78
2. Unrecognized deferred tax assets
Items Ending balance Beginning balance
Deductible temporary differences 3,311,628.91
Deductible losses 3,041,165,564.90 2,912,363,442.38
Total 3,044,477,193.81 2,912,363,442.38
3. The deductible loss of unrecognized deferred tax assets due in the following period
Items Ending balance Beginning balance Notes
Year 2017 44,146,053.02 405,383,631.05
Year 2018 61,226,455.38 267,988,139.50
Year 2019 179,596,211.65 179,596,211.65
Year 2020 2,745,964,056.85 2,059,395,460.18
Year 2021 10,232,788.00
Total 3,041,165,564.90 2,912,363,442.38
Notes: The balance is subject to the verification and confirmation of the local tax bureau.
(15) Short-term loans
1. Short-term loans disclosed by category
Items Ending balance Beginning balance
Guaranteed loans 10,633,173,500.00 10,586,898,400.00
Credit loans 7,483,988,079.48 5,571,891,996.60
Mortgage loans 14,220,000.00
Pledge loans 645,311,200.00 1,966,875,200.00
Total 18,762,472,779.48 18,139,885,596.60
(16) Notes payable
1. Notes payable disclosed by category
Items Ending balance Beginning balance
Bank acceptance bill 1,712,218,775.03 2,110,511,950.79
147
Bengang Steel Plates Co., Ltd. Annual Report 2016
Domestic letter of credit 4,659,955,122.10
Total 6,372,173,897.13 2,110,511,950.79
(17) Accounts payable
1. Accounts payable disclosed by category
Items Ending balance Beginning balance
Accounts payable for goods 4,399,863,760.66 4,045,710,114.68
Accounts payable for labor 78,583,112.68 47,556,941.28
Accounts payable for project and equipment 818,679,528.16 455,338,318.37
Repair expense 382,273,450.21 464,461,747.57
Others 844,809.81 2,833,542.57
Total 5,680,244,661.52 5,015,900,664.47
2. Significant accounts payable aging over one year
Amount aging
Items Amount Reason
over one year
Benxi Steel & Iron (Group) Mining Co., Ltd. 875,832,744.08 66,440,173.78 Not yet settled
Bengang Group International Economic and
1,332,351,145.92 48,736,070.33 Not yet settled
Trading Co., Ltd.
Jixi Huasheng Fengyuan Coal Preparation Co., Ltd. 46,005,916.07 46,005,916.07 Not yet settled
Benxi Nanfen Xinhe Metallurgical Co., Ltd. 39,634,041.29 39,634,041.29 Not yet settled
ACRE Coking And Refractory Engineering
24,666,763.99 24,666,763.99 Not yet settled
Consulting , MCC
Total 2,318,490,611.35 225,482,965.46
(18) Advance from customers
1. Advance from customers disclosed by category
Items Ending balance Beginning balance
Advance for goods 3,679,477,129.80 1,815,443,452.05
Total 3,679,477,129.80 1,815,443,452.05
2. There is no significant advance from customers aging over one year.
(19) Employee benefits payable
1. Employee benefits payable
Beginning Ending
Items Increase Decrease
balance balance
Short-term employee benefits 29,508,643.54 1,445,632,887.09 1,456,994,794.35 18,146,736.28
Post-employment benefits -
defined contribution plans 233,643,394.98 233,585,664.56 57,730.42
Termination benefits 6,946,500.22 16,889.17 1,104,362.39 5,859,027.00
148
Bengang Steel Plates Co., Ltd. Annual Report 2016
Beginning Ending
Items Increase Decrease
balance balance
Total 36,455,143.76 1,679,293,171.24 1,691,684,821.30 24,063,493.70
2. Short-term employee benefits
Beginning Ending
Items Increase Decrease
balance balance
(1) Salary, bonus, allowance
and subsidy 20,290,491.47 1,167,836,607.53 1,179,231,518.64 8,895,580.36
(2) Employee welfare 26,730,994.68 26,730,994.68
(3) Social Insurance 653,471.94 107,049,721.78 107,047,619.52 655,574.20
Including: Medical insurance 79,768,952.93 79,768,952.93
Work injury
insurance 653,471.94 27,267,511.00 27,265,408.74 655,574.20
Maternity
insurance 13,257.85 13,257.85
(4) Housing 6,849,633.00 114,968,050.20 114,966,970.20 6,850,713.00
(5) Union funds and staff
education fee 1,712,437.87 28,528,122.90 28,495,692.05 1,744,868.72
(6) Short-term compensated
absences
(7) Short-term profit - sharing
scheme
(8) Others 2,609.26 519,390.00 521,999.26
Total 29,508,643.54 1,445,632,887.09 1,456,994,794.35 18,146,736.28
3. Defined contribution plans
Beginning Ending
Items Increase Decrease
balance balance
Basic pension fund 222,758,975.50 222,702,871.10 56,104.40
Unemployment insurance 10,884,419.48 10,882,793.46 1,626.02
Total 233,643,394.98 233,585,664.56 57,730.42
(20) Current tax liabilities
Items Ending balance Beginning balance
Value-added tax 2,173,913.92 23,631,817.37
Enterprise income tax 13,019,967.76 6,788,181.39
City maintenance and construction tax 14,026,666.46 2,015,344.46
Educational surcharges 10,029,654.63 1,475,601.50
House property tax 2,970,971.37 10,211,765.05
Others 3,550,411.32 1,071,818.58
Total 45,771,585.46 45,194,528.35
(21) Interests payable
Items Ending balance Beginning Balance
149
Bengang Steel Plates Co., Ltd. Annual Report 2016
Corporate bond interests
70,109,821.13 70,113,698.63
Loan interests
5,005,444.53 844,988.33
Total
75,115,265.66 70,958,686.96
(22) Other payables
1. Other payables disclosed by nature
Items Ending balance Beginning Balance
Deposit 2,719,618.51 3,280,020.39
Margin 130,550,329.63 128,048,589.14
Accounts 304,191,214.76 270,090,696.48
Others 22,548,050.88 43,315,398.89
Total 460,009,213.78 444,734,704.90
2. Significant other payables ageing over one year
Amount aging
Name Ending balance Reason
over one year
Benxi Steel & Iron (Group) Co., Ltd. 153,946,251.96 134,708,601.09 Not yet settled
Bengang Group International Economic and
22,209,584.96 10,632,701.94 Not yet settled
Trading Co., Ltd.
Total 176,155,836.92 145,341,303.03
(23) Non-current liabilities due within one year
1. Breakdown of Non-current liabilities due within one year
Items Ending balance Beginning balance
Long-term loans due within one year 227,669,535.66 944,004,649.14
Long-term payables due within one year 210,000,000.00 490,000,000.00
Total 437,669,535.66 1,434,004,649.14
2. Long-term loans due within one year
Items Ending balance Beginning balance
Guaranteed loans 226,789,535.66 781,754,649.14
Credit loans 880,000.00 162,250,000.00
Total 227,669,535.66 944,004,649.14
3. Long-term payables due within one year
Items Ending balance Beginning balance
Liaoning Hengyi Financial Leasing Co., Ltd. 210,000,000.00 490,000,000.00
Total 210,000,000.00 490,000,000.00
Notes: On 28 March 2016, the Company signed the “Financing leaseback after sales
contract” with Liaoning Hengyi Financial Leasing Co., Ltd. (hereafter as Liaoning Hengyi)
150
Bengang Steel Plates Co., Ltd. Annual Report 2016
The purchase price of the leased asset is RMB 210,000,000. 00. Lease period is one year
staring from 28 March 2016.
(24) Long-term loans
Long-term loans disclosed by category
Categories Ending balance Beginning balance
Guaranteed loans 3,440,691,721.62 995,919,974.09
Credit loans 8,240,000.00 10,000,000.00
Total 3,448,931,721.62 1,005,919,974.09
(25) Bonds payable
1. Details of bonds payable
Items Ending balance Beginning balance
Corporate bond 1,494,825,782.32 1,490,352,572.75
Total 1,494,825,782.32 1,490,352,572.75
2. Changes in bonds payable
Name Par value Date of issue Bond maturity Issue value
Bengang Steel Plate
Co., Ltd. Corporate 1,500,000,000.00 5 February 2015 3 years 1,500,000,000.00
Bond of 2016 (Phase I)
Amortization
Interest Repayment
Issuance in of the
Name calculated by in current Ending balance
current period Premiums and
par value period
Discounts
Bengang Steel Plate
Co., Ltd. Corporate 77,550,000.00 -4,473,209.57 1,494,825,782.32
Bond of 2016 (Phase I)
Notes: On 5 February 2015, the Company publicly issued corporate bonds worth RMB 1.5
billion, each with a face value of RMB 100 at a total of 15 million bonds. The bond is issued
at a price of RMB 100 each at par value. The term is 3 years. The interest rate is 5.17%. The
date of value is 5 February 2016, and the interest payment date is February 5 of each year
from 2016 to 2018. Interest is paid annually, and principal is paid when due.
The public issuance of corporate bonds is guaranteed by the Bengang Group Co. Ltd., who
offered full unconditional irrevocable joint and several liability guarantees. Guarantees
include the principal amount and the interest thereof, default fine, compensation for damage
and expenses for enforcing the claim. Guarantee period lasts from the first day of issuance to
12 months after the maturity date.
(26) Deferred income
Items Ending balance Beginning balance
Government subsidy 410,399,000.00 413,188,000.00
Total 410,399,000.00 413,188,000.00
151
Bengang Steel Plates Co., Ltd. Annual Report 2016
Projects of government subsidies:
Transfer to Related to
Beginning Other
Items Notes Increase non-operating Ending balance assets or
balance decrease
income income
220t/h Boiler Desulfurization Project 800,000.00 800,000.00 Assets
MES Project Special Fund 6,880,000.00 1,720,000.00 5,160,000.00 Assets
Municipal Environment Pollution Renovation Project
540,000.00 540,000.00 Assets
Special Fund
Second Batch of National Cleaned Manufacturing
1,600,000.00 800,000.00 800,000.00 Assets
Demonstration Project Fund
Industrial Enterprise Energy Management Center
11,600,000.00 11,600,000.00 Assets
Construction Demonstration Project
Environment Pollution Renovation Project 17,708,000.00 5,234,000.00 12,474,000.00 Assets
Environment Renovation Project and Regional Basin
1,680,000.00 500,000.00 1,180,000.00 Assets
Environment Protection Project
Energy-saving Technological Reform Fiscal Reward Project 5,908,000.00 2,954,000.00 2,954,000.00 Assets
High Strength Cold Rolling Steel Renovation Project 250,000,000.00 250,000,000.00 Assets
The 2*265 Square Meter Sintering Machine Desulfurization
1,000,000.00 1,000,000.00 Assets
Project of Blast Furnace Plant
The 2*265 Square Meter Sintering Machine Polluted Water
3,380,000.00 3,380,000.00 Assets
Project of Blast Furnace Plant
The 360 Cubic Meter Sintering Machine Tail Electrostatic
60,000.00 60,000.00 Assets
Precipitator Renovation Project of Blast Furnace Plant
Automobile High-class Electrolytic Zinc Steel Plate
41,040,000.00 8,208,000.00 32,832,000.00 Assets
Production Line Project
Sintering Machine Residue Heat Usage and Desulfurization
16,816,000.00 4,204,000.00 12,612,000.00 Assets
Project
Wastewater Treatment Plant Renovation Project 3,000,000.00 1,500,000.00 1,500,000.00 Assets
152
Bengang Steel Plates Co., Ltd. Annual Report 2016
Transfer to Related to
Beginning Other
Items Notes Increase non-operating Ending balance assets or
balance decrease
income income
Overseas R&D Team Introduction Special Fund 4,000,000.00 4,000,000.00 Income
7 130t Boilers Flue Gas Desulfurization Renovation Project
24,000,000.00 24,000,000.00 Assets
of Power Plant
Treatment and Salt Extraction Project of Desulfurization
300,000.00 100,000.00 200,000.00 Assets
Waste Liquid of Coke Plant
Overseas Advanced Technology Introduction Special Fund 13,536,000.00 884,000.00 12,652,000.00 Assets
Automobile Steel Sheet Engineering Laboratory Project 1,000,000.00 1,000,000.00 Assets
Third-generation High Strength Steels for Automobile R&D
2,900,000.00 2,900,000.00 Assets
Project
The 360 Cubic Meter Sintering Machine Flue Gas
800,000.00 200,000.00 600,000.00 Assets
Desulfurization Renovation Project of Blast Furnace Plant
Environment Protection Project Special Fund 4,640,000.00 1,160,000.00 3,480,000.00 Assets
Advanced Treatment of Carbon Fiber Wastewater Project of
9,500,000.00 9,500,000.00 Assets
Coke Plant Dongfeng Area
Desulfurization and Denitration Projects for Coal-fired
6,000,000.00 6,000,000.00 Assets
Boiler of Power Plant High-pressure Workshop
Power Plant No 3 workshop Heat and Power Cogeneration
10,000,000.00 10,000,000.00 Assets
Renovation Project
Sintering Machine Energy Saving and Environmental
5,800,000.00 1,160,000.00 4,640,000.00 Assets
Protection Project of Blast Furnace Plant
Air Quality Automatic Monitoring System 350,000.00 35,000.00 315,000.00 Assets
Total 413,188,000.00 31,650,000.00 34,439,000.00 410,399,000.00 /
153
Bengang Steel Plates Co., Ltd. Annual Report 2016
(27) Share capital
Increase/decrease (+ , - )
Beginning
Items Issuing of Bonus Transferred Ending balance
balance Others Subtotal
new share shares from reserves
Capital shares 3,136,000,000.00 3,136,000,000.00
(28) Capital reserves
Items Beginning balance Increase Decrease Ending balance
Capital premium over par value 8,998,928,073.23 8,998,928,073.23
Other capital reserves 115,917,468.82 115,917,468.82
Total 9,114,845,542.05 9,114,845,542.05
(29) Special Reserves
Items Beginning balance Increase Decrease Ending balance
Safety production cost
393,372.05 39,766,855.73 39,787,505.92 372,721.86
Total
393,372.05 39,766,855.73 39,787,505.92 372,721.86
(30) Surplus Reserves
Beginning Ending
Items Increase Decrease
balance balance
Statutory surplus reserves 961,105,529.85 961,105,529.85
Total 961,105,529.85 961,105,529.85
(31) Undistributed Profitsrc
Items Amount Distribution rate
Before adjustments: undistributed profits at last
-1,278,244,071.93 2,172,180,473.24
year-end
Adjustments of the beginning distributed profits
(increase + / decease -)
After adjustments: undistributed profit at this
-1,278,244,071.93 2,172,180,473.24
year-beginning
Add: undistributed profit belonging to parent company 781,274,829.32 -3,293,624,545.17
Less : Statutory surplus reserves
Discretionary reserves
General risk reserves
Common shares dividend payable 156,800,000.00
Common shares dividend transferred to paid-in capital
Ending balance of undistributed profits -496,969,242.61 -1,278,244,071.93
(32) Operating income and operating cost
1. Details of operating income and operating cost
154
Bengang Steel Plates Co., Ltd. Annual Report 2016
2016 2015
Items
Revenue Cost Revenue Cost
Principal business 27,855,007,850.33 24,211,213,258.03 27,452,962,527.12 28,154,149,434.65
Other business 1,671,004,800.75 1,466,451,974.09 1,800,676,078.68 1,657,745,582.20
Total 29,526,012,651.08 25,677,665,232.12 29,253,638,605.80 29,811,895,016.85
(33) Tax and surcharges
Items 2016 2015
Housing Property tax 14,991,980.60
Business tax 583,745.52 274,427.66
City maintenance and construction tax 47,275,478.72 29,657,164.15
Educational surcharge 34,425,829.14 21,638,030.06
Land use right tax 3,902,155.50
Others 46,367,245.76
Total 147,546,435.24 51,569,621.87
Notes: Others are mainly Stamp duty and Vehichle and Vessel tax.
(34) Selling and distribution expenses
Items 2016 2015
Freight 614,483,275.86 609,808,842.96
Port surcharges 181,534,004.18 199,336,639.67
Agency fee 57,044,559.83 54,293,066.93
Package fee 4,648,213.21 17,287,739.31
Salary and benefits 21,384,974.76 20,904,851.21
Others 24,137,479.18 17,479,359.29
Total 903,232,507.02 919,110,499.37
(35) General and administrative expenses
Items 2016 2015
Salary and benefits 223,607,159.57 233,971,706.69
Repair expense 164,806,710.59 150,013,456.13
Taxes 28,688,548.09 92,514,576.97
Land use right fee 55,602,952.40 57,426,000.00
Depreciation 30,426,572.18 24,380,562.83
Social insurance premium 41,761,746.79 45,336,211.03
Pollution discharge fee 57,503,493.13 28,607,476.00
Water resources fee 17,076,438.04 17,001,160.00
Housing fund 9,488,777.00 10,146,420.00
Heating fee 8,863,236.53 6,809,717.20
155
Bengang Steel Plates Co., Ltd. Annual Report 2016
Entertainment expense 3,302,524.50 4,226,627.81
Amortization of intangible assets 4,248,197.92 4,248,197.90
Freight 1,248,948.52 2,762,637.66
Lease expense 1,576,662.04 1,822,459.28
Others 52,343,122.87 54,666,090.38
Total 700,545,090.17 733,933,299.88
(36) Financial expenses
Items 2016 2015
Interest expenditure 725,207,081.31 693,469,408.37
Less: Interest income 29,972,291.28 34,026,570.83
Exchange loss 243,638,550.39 376,746,455.44
Others 28,805,432.27 27,128,162.49
Total 967,678,772.69 1,063,317,455.47
(37) Assets impairment loss
Items 2016 2015
Loss for bad debts 53,088,456.00 15,212,716.04
Impairment of inventories 58,231,089.39 499,063,732.20
Impairment of available-for-sale assets 14,414,693.00
Impairment of Fixed assets 10,401,722.01
Total 136,135,960.40 514,276,448.24
(38) Income on investment
Details of income on investment
Items 2016 2015
Income on available-for-sale assets during the period 303,310.97
Income on bank short-term financial products 1,715,742.47 7,226,589.08
Total 2,019,053.44 7,226,589.08
(39) Non-operating income
The amount
Items 2016 2015 recognized in
non-operating profit
Non-current assets disposal income 11,801,616.20 21,206,096.82 11,801,616.20
Including: Fixed assets disposal income 11,801,616.20 21,206,096.82 11,801,616.20
Intangible assets disposal income
Debt restructuring gain 8,631,844.34 12,200,032.42 8,631,844.34
Non-monetary assets exchange income
Donations received
156
Bengang Steel Plates Co., Ltd. Annual Report 2016
The amount
Items 2016 2015 recognized in
non-operating profit
Government subsidies 36,089,000.00 136,992,233.61 36,089,000.00
Fines and the penalty income 314,353.33 661,135.12 314,353.33
Others 1,234,615.46 4,994,858.60 1,234,615.46
Total 58,071,429.33 176,054,356.57 58,071,429.33
Details of government subsidies recorded into current profits and loss
Related to
Items 2016 2015 assets or Notes
income
Transfer from deferred income 34,439,000.00 25,036,000.00 Assets
Overseas R&D Team Introduction
500,000.00 Income
Special Fund
Reward of Elimination of Outdated
19,500,000.00 Income
Industrial Capacity
Environment Protection Special
91,456,233.61 Income
Subsidy
Financial support fund Income
Tax refund 650,000.00 Income
Enterprise development fund 1,000,000.00 500,000.00 Income
Total 36,089,000.00 136,992,233.61
(40) Non-operating expense
The amount
Items 2016 2015 recognized in
non-operating profit
Non-current assets disposal loss 13,656,534.23 24,124,620.55 13,656,534.23
Including: Fixed assets disposal loss 13,656,534.23 24,124,620.55 13,656,534.23
Intangible assets disposal loss
Fines and overdue payment 11,162.62
Others 885,124.43 885,124.43
Total 14,541,658.66 24,135,783.17 14,541,658.66
(41) Income tax expense
1. Income tax expense
Items 2016 2015
Income tax payable for the current year 47,448,194.16 20,046,449.20
Adjustment of deferred income tax 165,829,876.74 -460,436,665.36
Total 213,278,070.90 -440,390,216.16
2. Accounting profit and income tax expense adjustment process
Items 2016
Total profit 1,038,757,477.55
157
Bengang Steel Plates Co., Ltd. Annual Report 2016
Income tax expense calculate according to the official or applable tax rate 259,689,369.39
Effect of different tax rates applied by subsidiaries
Effect of adjustment of the income tax expense of prior period 550,517.51
Effect of non-taxable income
Effect of undeductable costs, expenses or losses -28,823,719.30
Effect of use of deductible losses of unrecognized deferred tax asset of prior
period -53,768,229.64
Effect of deductible temporary differences or deductible losses of
unrecognized deferred tax asset of current period 35,630,132.94
Income tax expenses 213,278,070.90
(42) Notes of statement of cash flows
1. Cash received related to other operating activities
Items 2016 2015
Withdraw of current accounts, advance for another 369,658,346.29 205,201,226.09
Interest income 29,972,291.28 34,026,570.83
Special subsidy income 32,650,000.00 122,656,233.61
Non-operating income 775,265.69 633,960.32
Others 8,500.00 30,870.87
Total 433,064,403.26 362,548,861.72
2. Cash paid related to other operating activities
Items 2016 2015
Current accounts, advance for another 419,237,454.51 230,339,040.56
Administrative expenses 64,905,432.72 60,477,057.28
Sales expenses 132,862,957.98 56,331,692.81
Bank charges 1,925,187.57 3,807,258.40
Others 287,293.34 343,932.37
Total 619,218,326.12 351,298,981.42
3. Cash received related to other financing activities
Items 2016 2015
Loan deposits 310,000,000.00
Financial leasing 210,000,000.00 490,000,000.00
Margin for acceptance bill, letter of guarantee
and letter of credit 13,457,494.90
Total 223,457,494.90 800,000,000.00
4. Cash paid related to other financing activities
Items 2016 2015
Margin for acceptance bill, letter of guarantee and letter
145,843,565.68 371,791,357.66
of credit
158
Bengang Steel Plates Co., Ltd. Annual Report 2016
Items 2016 2015
Financing service charges and handling fees 37,383,921.15 27,605,690.09
Total 183,227,486.83 399,397,047.75
(43) Supplementary details of statement of cash flows
1. Supplementary details for statement of cash flows
Items 2016 2015
1. A reconciliation of net profit to cash flows from
operating activities:
Net profit 825,479,406.65 -3,240,928,357.24
Add: Asset impairment losses 136,135,960.40 514,276,448.24
Depreciation of fixed assets and so on 1,847,129,545.38 1,824,882,394.51
Amortization of intangible assets 5,939,057.20 5,939,057.18
Amortization of long-term prepayment
Losses proceeds from disposal of PPE, intangible assets
1,854,918.03 2,918,523.73
and other long-term assets (Earnings marked“－”)
Scrapped losses from fixed assets
Fair value losses (Earnings marked“－”)
Financial expenses (Earnings marked“－”) 968,845,631.70 1,070,215,863.81
Investment losses (Earnings marked“－”) -2,019,053.44 -7,226,589.08
Deferred tax assets reduction (Addition marked“－”) 165,829,876.74 -460,436,665.36
Deferred tax liabilities increased (Reduction marked“－”)
Reduction of inventory (Addition marked“－”) -739,606,851.51 1,998,873,344.78
Operating receivable items reduction (Addition
340,403,360.62 395,827,676.24
marked“－”)
Operating payable items increase (Less marked"－") 6,007,362,054.75 -4,409,347,664.91
Others
Net cash flows generated from operating activities 9,557,353,906.52 -2,305,005,968.10
2. Payments of investing and financing activities not
involving cash:
Liabilities transferred to capital
Convertible bonds due within one year
Fixed assets financed by leasing
3. The net increase in cash and cash equivalents:
Ending balance of the monetary funds 12,273,574,488.67 4,612,782,772.98
Less: Beginning balance of the monetary funds 4,612,782,772.98 9,327,034,030.07
Add: Ending balance of cash equivalents
Less: Opening balance of cash equivalents
The net increase in cash and cash equivalents 7,660,791,715.69 -4,714,251,257.09
2. The structure of cash and cash equivalents
Items Ending balance Beginning balance
159
Bengang Steel Plates Co., Ltd. Annual Report 2016
Items Ending balance Beginning balance
1. Cash 12,273,574,488.67 4,612,782,772.98
Including: Cash on hand 47,743.38 72,220.66
Bank deposits available on demand 12,238,841,745.29 4,612,384,032.13
Other monetary funds available on demand 34,685,000.00 326,520.19
Central bank deposits available on demand
Balances with other financial institutions
Loans to other financial institutions
2. Cash equivalents
Including: Investment of securities due within 3 months
3. Ending balance of cash and cash equivalents 12,273,574,488.67 4,612,782,772.98
Including: Cash and cash equivalents limited to use by the
parent company of other subsidiary in the group
(44) Assets of which ownership or right to use are restricted
Items Ending balance Reason
Monetary assets 658,337,529.17 Deposit for notes and L/C
Notes receivable 682,288,925.93 Pledged for acceptance bill
Bank short-term financing products 244,000,000.00 Pledged for letter of credit
Total 1,584,626,455.10
(45) Foreign currency monetary items
Ending balance in Exchange rate at Ending balance
Items
foreign currency the year-end translated to RMB
Cash at bank and on hand
Including: HKD 1,009,028.70 0.8945 902,576.17
USD 551,659,244.37 6.9370 3,826,860,178.18
EUR 216,971,860.10 7.3068 1,585,369,987.36
Short-term loans
Including: USD 865,500,000.00 6.9370 6,003,973,500.00
Non-current liabilities due
within one year
Including: USD 2,350,000.00 6.9370 16,301,950.00
EUR 20,309,369.99 7.3068 148,396,504.66
JPY 23,176,000.00 0.0596 1,381,081.02
Long-term loans
Including: USD 330,000,000.00 6.9370 2,289,210,000.00
EUR 115,930,279.48 7.3068 847,079,366.10
JPY 254,936,000.00 0.0596 15,191,891.18
6. Change of the consolidation scope
There is no change of scope of consolidation this year.
160
Bengang Steel Plates Co., Ltd. Annual Report 2016
7. Equity in other entities
(1) Equity in subsidiaries
1. Constitution of enterprise group
Principal Shareholding ratio
Registered Notes of
Name of the subsidiaries place of Acquiring method
address business Direct Indirect
business
Xiamen Bengang Steel & Iron Sales Co., Ltd. Xiamen Xiamen Sales 100.00 Business combination under common control
Wuxi Bengang Steel & Iron Sales Co., Ltd. Wuxi Wuxi Sales 100.00 Business combination under common control
Tianjin Bengang Steel & Iron Trading Co., Ltd. Tianjin Tianjin Sales 100.00 Business combination under common control
Nanjing Bengang Materials Sales Co., Ltd. Nanjing Nanjing Sales 100.00 Business combination under common control
Yantai Bengang Steel & Iron Sales Co., Ltd. Yantai Yantai Sales 100.00 Business combination under common control
Harbin Bengang Economic and Trading Co., Ltd. Harbin Harbin Sales 100.00 Business combination under common control
Changchun Bengang Steel & Iron Sales Co., Ltd. Changchun Changchun Sales 100.00 Business combination under common control
Guangzhou Bengang Steel & Iron Trading Co., Ltd. Guangzhou Guangzhou Sales 100.00 Establishment
Shanghai Bengang Metallurgy Science and Technology Co., Ltd. Shanghai Shanghai Sales 100.00 Establishment
Bengang Steel Plates Liaoyang Pellet Co., Ltd. Liaoyang Liaoyang Manufacturing 100.00 Establishment
Dalian Benruitong Automobile Material Eechnology Co., Ltd. Dalian Dalian Manufacturing 65.00 Establishment
Bengang Posco Cold-rolled Sheet Co., Ltd. Benxi Benxi Manufacturing 75.00 Business combination under common control
Benxi Bengang Steel Sales Co., Ltd Benxi Benxi Sales 100.00 Establishment
Shenyang Bengang Metallurgical Science and Technology Co., Ltd. Shenyang Shenyang Sales 100.00 Establishment
161
Bengang Steel Plates Co., Ltd. Annual Report 2016
2. Significant not wholly-owned subsidiaries
Profits and losses Dividend declared Ending
Proportion of
Name of the attributing to to distribute to balance of
non-controlling
subsidiaries non-controlling non-controlling non-controlling
interests (%)
shareholders shareholders interests
Bengang Posco Cold-rolled
25.00 46,762,576.20 522,513,323.75
Sheet Co., Ltd.
Dalian Benruitong
Automobile Material 35.00 -2,557,998.87 26,688,777.88
Technology Co., Ltd.
3. Financial information of significant not wholly-owned subsidiaries
Ending balance
Name of the
subsidiaries Current Non-current Current Non-current Total
Total assets
assets assets liabilities liabilities liabilities
Bengang Posco
Cold-rolled Sheet 2,110,629,548.42 2,306,996,743.92 4,417,626,292.34 2,327,572,997.38 2,327,572,997.38
Co., Ltd.
Dalian Benruitong
Automobile Material 188,167,707.25 161,544,880.30 349,712,587.55 273,458,936.47 273,458,936.47
Technology Co., Ltd.
Beginning balance
Name of the
subsidiaries Current Non-current Current Non-current Total
Total assets
assets assets liabilities liabilities liabilities
Bengang Posco
Cold-rolled Sheet 1,467,411,809.82 2,567,811,403.90 4,035,223,213.72 2,132,238,122.92 2,132,238,122.92
Co., Ltd.
Dalian Benruitong
Automobile Material 191,638,815.72 168,790,370.49 360,429,186.21 276,866,966.92 276,866,966.92
Technology Co., Ltd.
2016
Name of the subsidiaries Total Net cash flows
Operating
Net profit comprehensive from operating
income
income activities
Bengang Posco Cold-rolled
Sheet Co., Ltd. 5,453,347,561.49 187,050,304.77 187,050,304.77 343,892,510.03
Dalian Benruitong Automobile
Material Technology Co., Ltd. 181,395,062.60 -7,308,568.21 -7,308,568.21 -2,559,905.57
2015
Name of the subsidiaries Total Net cash flows
Operating
Net profit comprehensive from operating
income
income activities
Bengang Posco Cold-rolled
5,242,586,237.97 229,913,579.94 229,913,579.94 1,135,756,087.02
Sheet Co., Ltd.
Dalian Benruitong Automobile
353,756,953.63 -13,663,448.71 -13,663,448.71 16,246,522.90
Material Technology Co., Ltd.
8. Risks associated with financial instruments
(1) Credit risk
162
Bengang Steel Plates Co., Ltd. Annual Report 2016
Credit risk refers to a financial loss to a party due to failure to discharge an obligation by the
counterparties. The Company is exposed to credit risk arising from customers’ failure to discharge
an obligation in sales on credit. In order to minimize the credit risk, the management of the
Company is responsible for determination of credit limits, credit approvals and other monitoring
procedures to ensure that follow-up actions are taken to recover overdue debts.
In addition, the Company strictly approves the line of credit, and only sells on credit to important
customers for newly-developed products. In the monitoring of credit risk of customers, the
Company sorts customers into groups by their credit characteristics. Those customers which are
rated as “high risk” will be put in the restricted client list. The Company can only sell to these
customers on credit with additional approval; otherwise the Company must ask for a
corresponding deposit in advance.
(2) Market risk
Market risk of financial instruments refers to fluctuations of fair value or future cash flows due to
market price changes, including currency risk, interest rate risk, and other price risk.
1. Interest rate risk
Interest rate risk refers to fluctuations of fair value or future cash flows due to market rate changes.
The Company’s exposure to currency risk is primarily arising from variable-rate bank balances
and variable-rate borrowings. Currently, the Company does not have a specific policy to manage
its interest rate risk. The management will carefully choose financing methods, and combine fixed
interest rate with variable interest rate, short-term obligations with long-term obligations. By
using effective interest rate risk management methods, the Company closely monitors interest rate
risk and will consider interest-rate swaps to acquire an expected structure of interest rates shall the
need arise.
Although these measures may not ensures that the Company completely avoids the risk of paying
at a risk higher than market risk, or that the cash flow risk relevant to interest income fluctuations
is completely eliminated, in the opinion of the management, these measures could achieve a
reasonable balance among these risks.
2. Currency risk
Currency risk refers to fluctuations of fair value or future cash flows due to exchange rate changes.
The Company has been constantly working on the adjustment of the organizational framework of
risk management and optimization of debt structures to lower the currency risk.
The currency risk facing the Company originates from the assets and liabilities measured by US
dollars, Euro, Hongkong dollars and Japanese Yen. The ending balance of the assets and liabilities
after converted in RMB is shown as below:
(In 10 Thousand Yuan)
163
Bengang Steel Plates Co., Ltd. Annual Report 2016
Ending balance
Items
USD Euro HKD Japanese Yen Total
Assets 382,686.02 158,537.00 90.26 541,313.28
Liabilities 830,948.55 99,547.59 1,657.30 932,153.44
The table below shows the sensitivity analysis of RMB vs other currencies when RMB deprecated
or appreciated by 5% over other currencies under the assumption that other variables remain the
same. 5% is the sensitivity rate used by the management for internal report of currency risk and it
represents the estimation of the management over the possible change of foreign currency.
Sensitivity analysis only includes the monetary items measured by foreign currency unpaid and
will be adjusted at the year-end by 5%. The positive figures reflect the increase of profit by 5%
and the negative figures indicate the reduction of profit.
(In 10 Thousand Yuan)
Ending balance
Items Impact on Impact on
Impact on USD Impact on Euro Total
HKD Japanese Yen
Appreciation by 5% -16,809.84 2,212.10 3.38 -62.15 -14,656.51
Depreciation by 5% 16,809.84 -2,212.10 -3.38 62.15 14,656.51
(3) Liquidity risk
Liquidity risk refers to the risk of shortage of funds which occurs in fulfilling the obligation of
settlement in a manner of delivering cash or other financial assets. The Company’s policy is to
maintain sufficient cash to meet maturing obligations. Liquidity risk is centralized controlled by
the Company’s finance department. Through the monitoring of unrestricted cash and cash
equivalents, bank acceptance bills due in short time and the continues forecasting of cash flow in
the next 12 months, the finance department ensures that the Company has sufficient cash to meet
obligations in all predicted reasonable circumstances.
The following table details the Company’s mature date of residual contract value of underivative
financial liabilities to repay according to the contract terms. The table has been drawn up based on
the undiscounted cash flows of financial liabilities based on the earliest date on which the
Company can be required to pay. The table includes both interest and principal cash flows.
(In 10 Thousand Yuan)
Ending balance
Items
Within 1 year 1-2 years 2-5 years Over 5 years Total
Trade and other payables 1,277,276.02 108.38 262.08 234.96 1,277,881.44
Loans and interests 1,906,525.75 242,211.05 46,576.60 56,105.53 2,251,418.93
Bonds payable 7,755.00 157,755.00 165,510.00
Total 3,191,556.77 400,074.43 46,838.68 56,340.49 3,694,810.37
164
Bengang Steel Plates Co., Ltd. Annual Report 2016
9. Related party transactions
(1) Details of parent company
(In 100 Million Yuan)
Place of Notes of Registered Share Voting
Name of parent company
Registry Business capital proportion (%) rights (%)
Benxi Steel (Group) Co., Ltd. Benxi Manufacturing 53.69 77.88 77.88
Note: The parent company of Benxi Steel (Group) Co., Ltd. is Bengang Group Co., Ltd.
The ultimate controlling party of the Company is the State-owned Assets Supervision and
Administration Commission of Liaoning Province.
(2) Details of the subsidiaries
For details of subsidiaries of the Company please refer to Note 7 “Equity in other entities”.
165
Bengang Steel Plates Co., Ltd. Annual Report 2016
(3) Details of other related parties
Name of Other related parties Relationship
Bengang Group International Economic and Trading Co., Ltd. Both belong to Bengang Group Co., Ltd.
Bengang Cold-rolled Stainless Steel Dandong Co., Ltd. Same parent company
Benxi Beiying Steel & Iron (Group) Co., Ltd. Both belong to Bengang Group Co., Ltd.
Bengang Electronics and Gas Co., Ltd. Both belong to Benxi Steel and Iron (Group) Co., Ltd.
Benxi Steel & Iron (Group) Real-estate Development Co., Ltd. Same parent company
Benxi Steel & Iron (Group) Steel & Iron Process and Logistics Co., Ltd. Same parent company
Benxi Steel & Iron (Group) Machinery Manufacture Co., Ltd. Same parent company
Benxi Steel & Iron (Group) Construction Co., Ltd. Same parent company
Benxi Steel & Iron (Group) Mining Co., Ltd. Same parent company
Benxi Steel & Iron (Group) Thermal Power Development Co., Ltd. Same parent company
Benxi Steel & Iron (Group) Designing Institute Same parent company
Benxi Steel & Iron (Group) Industrial Development Co., Ltd. Same parent company
Benxi Steel & Iron (Group) Information and Automatic Tech Co., Ltd. Same parent company
Benxi Steel & Iron (Group) Construction and Repairing Co., Ltd. Same parent company
Benxi Steel & Iron (Group) Metallurgy Residues Co., Ltd. Same parent company
Benxi Steel & Iron (Group) Benxi Steel & Iron (Group) Same parent company
Benxi Steel & Iron (Group) Zhengtai Construction Materials Co., Ltd. Same parent company
Benxi High-tech Drilling Tools Manufacture Co., Ltd. Both belong to Bengang Group Co., Ltd.
Benxi New Career Development Co., Ltd. Same parent company
Dalian Boluole Steel Tube Co., Ltd. Both belong to Benxi Steel and Iron (Group) Co., Ltd.
Guangzhou Free Trade Zone Bengang Sales Co., Ltd. Both belong to Benxi Steel and Iron (Group) Co., Ltd.
166
Bengang Steel Plates Co., Ltd. Annual Report 2016
Name of Other related parties Relationship
Benxi Steel & Iron (Group) General Hospital Both belong to Benxi Steel and Iron (Group) Co., Ltd.
Liaoning Bengang Steel & Iron Trading Co., Ltd. Same parent company
Liaoning Hengtai Heavy Machinery Co., Ltd. Same parent company
Liaoning Hengtong Metallurgical Equipment Manufacture Co., Ltd. Same parent company
Liaoning Metallurgy Technician College Same parent company
Liaoning Metallurgy Vocational Technical College Same parent company
Suzhou Bengang Industrial Co., Ltd. Shareholding company
Shanghai Bengang Steel & Iron Sales Co., Ltd. Both belong to Benxi Steel and Iron (Group) Co., Ltd.
Benxi Steel & Iron (Group) Medical Services Department; Both belong to Benxi Steel and Iron (Group) Co., Ltd.
Bengang Group Finance Co., Ltd. Both belong to Bengang Group Co., Ltd.
Liaoning Hengyi Financial Leasing Co., Ltd. Both belong to Bengang Group Co., Ltd.
(4) Related Party Transactions
1. Related party transactions of purchasing goods and services
Company as the purchaser (In 10 Thousand Yuan)
Name The content of related party transactions 2016 2015
Benxi Steel & Iron (Group) Co., Ltd. Repair expense 22,377.59 15,699.59
Benxi Steel & Iron (Group) Co., Ltd. Land lease fee 5,560.30 5,742.60
Bengang Cold-rolled Stainless Steel Dandong Co., Ltd. Products 19.79 30.11
Benxi Steel & Iron (Group) Mining Co., Ltd. Labor cost 2,202.94 2,206.62
Benxi Steel & Iron (Group) Mining Co., Ltd. Raw material and supplementary material 275,948.02 352,968.68
Benxi Steel & Iron (Group) Mining Co., Ltd. Freight 8.45 328.55
Benxi Steel & Iron (Group) Metallurgy Residues Co., Ltd. Raw material and supplementary material 12,193.97 11,292.38
167
Bengang Steel Plates Co., Ltd. Annual Report 2016
Name The content of related party transactions 2016 2015
Benxi Steel & Iron (Group) Steel & Iron Process and Logistics Co., Ltd. Processing fee 409.35 235.46
Benxi Steel & Iron (Group) Real-estate Development Co., Ltd. Raw materials 7,343.63 6,841.89
Benxi Steel & Iron (Group) Machinery Manufacture Co., Ltd. Spare parts 19,213.76 14,345.66
Benxi Steel & Iron (Group) Machinery Manufacture Co., Ltd. Repair services 1,822.64 1,705.45
Benxi Steel & Iron (Group) Construction Co., Ltd. Spare parts 24.29 1,702.93
Benxi Steel & Iron (Group) Construction Co., Ltd. Project fee 17,318.35 33,274.63
Benxi Steel & Iron (Group) Construction Co., Ltd. Repair services 11,396.14 8,995.74
Benxi Steel & Iron (Group) Construction Co., Ltd. Raw material and supplementary material 1,195.60 996.28
Benxi Steel & Iron (Group) Construction Co., Ltd. Freight 293.69 375.35
Benxi Steel & Iron (Group) Industrial Development Co., Ltd. Spare parts 4,081.96
Benxi Steel & Iron (Group) Industrial Development Co., Ltd. Raw material and supplementary material 21,849.65 19,458.13
Benxi Steel & Iron (Group) Industrial Development Co., Ltd. Repair services 1,003.80 1,135.96
Benxi Steel & Iron (Group) Industrial Development Co., Ltd. Freight 745.85 618.05
Benxi Steel & Iron (Group) Industrial Development Co., Ltd. Project fee 248.27 209.8
Benxi Steel & Iron (Group) Construction and Repairing Co., Ltd. Raw material & supplementary materials & spare parts 782.34 1,276.74
Benxi Steel & Iron (Group) Construction and Repairing Co., Ltd. Project fee 12,773.74 11,717.68
Benxi Steel & Iron (Group) Construction and Repairing Co., Ltd. Repair expense 4,555.98 9,254.41
Bengang Electronics and Gas Co., Ltd. Raw material and supplementary material 12,138.43 9,978.36
Bengang Electronics and Gas Co., Ltd. Project fee 116.85 537.07
Bengang Electronics and Gas Co., Ltd. Repair services 1,514.32 1,660.16
Benxi High-tech Drilling Tools Manufacture Co., Ltd. Spare parts 46.97 100.96
Benxi New Career Development Co., Ltd. Labor protection fee 743.00 849.12
Benxi New Career Development Co., Ltd. Raw material and supplementary material and food 91.91 167.65
Liaoning Metallurgy Technician College Training fee 82.48
Liaoning Metallurgy Technician College Spare parts 948.48 1,692.09
168
Bengang Steel Plates Co., Ltd. Annual Report 2016
Name The content of related party transactions 2016 2015
Liaoning Metallurgy Technician College Project fee 140.93 602.25
Liaoning Metallurgy Technician College Repair services 219.08 241.04
Bengang Group International Economic and Trading Co., Ltd. Agency fee 5,727.01 5,429.31
Bengang Group International Economic and Trading Co., Ltd. Port surcharges 16,060.87 19,882.00
Benxi Steel & Iron (Group) Information and Automatic Tech Co., Ltd. Spare parts 1,448.52 1,911.93
Benxi Steel & Iron (Group) Information and Automatic Tech Co., Ltd. Project fee 1,055.39 3,007.58
Benxi Steel & Iron (Group) Information and Automatic Tech Co., Ltd. Repair services 80.00 89.5
Benxi Steel & Iron (Group) Thermal Power Development Co., Ltd. Heating costs 664.79 1,290.34
Benxi Steel & Iron (Group) Thermal Power Development Co., Ltd. Raw material and supplementary material 13.35 9.18
Benxi Steel & Iron (Group) Designing Institute Design fees 690.52 1,365.96
Benxi Beiying Steel & Iron (Group) Co., Ltd. Raw material and supplementary material 531,397.56 434,677.55
Benxi Beiying Steel & Iron (Group) Co., Ltd. Energy & Power 56,085.19 43,620.86
Benxi Beiying Steel & Iron (Group) Co., Ltd. Freight 572.61 702.77
Benxi Beiying Steel & Iron (Group) Co., Ltd. Labor cost 3,951.30 5,766.07
Benxi Beiying Steel & Iron (Group) Co., Ltd. Spare parts 910.42 1,644.18
Liaoning Hengtong Metallurgical Equipment Manufacture Co., Ltd. Raw material and spare parts 10,121.19 10,315.47
Liaoning Hengtai Heavy Machinery Co., Ltd. Raw material and spare parts 1,263.91 1,186.06
Liaoning Hengtai Heavy Machinery Co., Ltd. Repair and labor cost 1,068.72 2,670.61
Bengang Group Co., Ltd. Property management fee 84.55 84.55
Total 1,066,444.01 1,054,059.75
169
Bengang Steel Plates Co., Ltd. Annual Report 2016
Company as the seller (In 10 Thousand Yuan)
Name The content of related party transactions 2016 2015
Bengang Electronics and Gas Co., Ltd. Energy & Power 94.80
Benxi Beiying Steel & Iron (Group) Co., Ltd. Raw material & supplementary materials & spare parts 11,910.03 16,948.08
Benxi Beiying Steel & Iron (Group) Co., Ltd. Products 765.30 779.67
Benxi Beiying Steel & Iron (Group) Co., Ltd. Energy & Power 23,879.65 6,787.24
Benxi Steel & Iron (Group) Real-estate Development Co., Ltd. Energy & Power 61.72 115.79
Benxi Steel & Iron (Group) Steel & Iron Process and Logistics Co., Ltd. Energy & Power 54.71 62.05
Benxi Steel & Iron (Group) Steel & Iron Process and Logistics Co., Ltd. Products 7,329.61 47,928.33
Benxi Steel & Iron (Group) Machinery Manufacture Co., Ltd. Products 1,120.45 582.41
Benxi Steel & Iron (Group) Machinery Manufacture Co., Ltd. Energy & Power 1,554.19 1,890.33
Benxi Steel & Iron (Group) Machinery Manufacture Co., Ltd. Raw material & supplementary materials & spare parts 136.05 555.35
Benxi Steel & Iron (Group) Construction Co., Ltd. Energy & Power 392.78 457
Benxi Steel & Iron (Group) Construction Co., Ltd. Raw material & supplementary materials & spare parts 2,756.04 12,409.23
Benxi Steel & Iron (Group) Mining Co., Ltd. Energy & Power 74,573.08 71,950.34
Benxi Steel & Iron (Group) Mining Co., Ltd. Raw material & supplementary materials & spare parts 7,117.49 12,307.32
Benxi Steel & Iron (Group) Mining Co., Ltd. Freight revenue 858.68 850.95
Benxi Steel & Iron (Group) Mining Co., Ltd. Products 781.85 662.63
Benxi Steel & Iron (Group) Thermal Power Development Co., Ltd. Energy & Power 2,819.49 3,152.93
Benxi Steel & Iron (Group) Thermal Power Development Co., Ltd. Raw material & supplementary materials & spare parts 2,599.61 2,646.73
Benxi Steel & Iron (Group) Thermal Power Development Co., Ltd. Freight revenue 66.15
Benxi Steel & Iron (Group) Industrial Development Co., Ltd. Energy & Power 823.58 928.48
Benxi Steel & Iron (Group) Industrial Development Co., Ltd. Products 22.30 53.12
Benxi Steel & Iron (Group) Industrial Development Co., Ltd. Raw material & supplementary materials & spare parts 11,640.04 9,601.42
Benxi Steel & Iron (Group) Information and Automatic Tech Co., Ltd. Energy & Power 18.43 20.19
Benxi Steel & Iron (Group) Construction and Repairing Co., Ltd. Energy & Power 97.49 102.17
170
Bengang Steel Plates Co., Ltd. Annual Report 2016
Name The content of related party transactions 2016 2015
Benxi Steel & Iron (Group) Construction and Repairing Co., Ltd. Raw material & supplementary materials & spare parts 188.50 420.32
Benxi Steel & Iron (Group) Metallurgy Residues Co., Ltd. Energy & Power 371.37 420.88
Benxi Steel & Iron (Group) Metallurgy Residues Co., Ltd. Raw material & supplementary materials & spare parts 1,669.59 2,377.45
Benxi Steel & Iron (Group) Metallurgy Residues Co., Ltd. Freight revenue 0.89
Benxi Steel & Iron (Group) Metallurgy Residues Co., Ltd. Products 217.33 678.9
Benxi Steel & Iron (Group) Co., Ltd. Energy & Power 272.47 5,550.46
Benxi Steel & Iron (Group) Co., Ltd. Raw material & supplementary materials & spare parts 923.88 896.16
Benxi New Career Development Co., Ltd. Energy & Power 47.31 41.12
Dalian Boluole Steel Tube Co., Ltd. Products 369.82 519.52
Liaoning Bengang Steel & Iron Trading Co., Ltd. Products 6,564.11 58,766.02
Benxi Steel & Iron (Group) General Hospital Energy & Power 9.00 13.4
Benxi Steel & Iron (Group) Zhengtai Construction Materials Co., Ltd. Energy & Power 0.14 0.23
Liaoning Hengtong Metallurgical Equipment Manufacture Co., Ltd. Energy & Power 1,565.92 1,518.16
Liaoning Hengtong Metallurgical Equipment Manufacture Co., Ltd. Raw material & supplementary materials & spare parts 2,681.90 1,439.34
Liaoning Hengtong Metallurgical Equipment Manufacture Co., Ltd. Products 226.76 359.13
Bengang Cold-rolled Stainless Steel Dandong Co., Ltd. Raw material & supplementary materials & spare parts 52.57
Bengang Cold-rolled Stainless Steel Dandong Co., Ltd. Products 121.71
Suzhou Bengang Industrial Co., Ltd. Products 17,469.08 16,236.92
Bengang Group Finance Co., Ltd. Energy & Power 1.58 1.48
Bengang Group Co., Ltd. Energy & Power 8.30 11.9
Total 184,061.47 280,217.43
171
Bengang Steel Plates Co., Ltd. Annual Report 2016
2. Lease information of related parties
Company as the lessor (In Yuan)
Lessee Lease capital category Lease income of 2016 Lease income of 2015
Benxi Steel & Iron (Group) Steel
& Iron Process and Logistics Co., Plants and machinery 500,000.00 500,000.00
Ltd.
Benxi Steel & Iron (Group)
Plants and machinery 489,611.73
Machinery Manufacture Co., Ltd.
Company as the lessee (In Yuan)
Lessor Lease capital category Lease charges of 2016 Lease charges of 2015 Notes
Benxi Steel & Iron
2300 Hot rolling product line 243,576,194.11 243,576,194.11 1
(Group) Co., Ltd
Benxi Steel & Iron
Land use right 55,602,952.40 57,426,000.00 2
(Group) Co., Ltd
Benxi Beiying Steel &
1780 Hot rolling product line 131,900,400.00 137,619,792.50 3
Iron (Group) Co., Ltd.
Notes:
1. The Company leases 2300 hot rolling product line from the Group. Lease period lasts
from 1 January 2015 to 31 December 2017. Lease charges are negotiated between the lessor
and the lessee based on the original cost, depreciation, and national taxation of the product
line, with consideration of conditions of production and equipment performance.
2. The Company leases land use right from the Group. Lease period lasts from 15 April 2009.
The leasing fee is determined by the area of the land which is 7,669,068.17 square meters.
Average price is RMB 0.624 per Square meter per month; hence annual rent is RMB
57,426,000.00.
3. The Company leases 1780 hot rolling product line from Benxi Beiying Steel & Iron
(Group) Co., Ltd. The lease term lasts from1 1 January 2014 to 31 December 2016. Lease
charges are negotiated between the lessor and the lessee based on the original cost,
depreciation, and national taxation of the product line, with consideration of conditions of
production and equipment performance. The annual rent shall not exceed RMB
150,000,000.00.
172
Bengang Steel Plates Co., Ltd. Annual Report 2016
3. Information of Guarantee among related parties
Company as the warrantee
(1) Guarantee of bank loans (In Yuan)
Amount of guarantee Starting date of Ending date of Has the guarantee
Warrantor Currency
in original currency Guarantee Guarantee been fulfilled
Bengang Group Co., Ltd. RMB 200,000,000.00 2016/2/5 2017/1/11 No
Bengang Group Co., Ltd. and Benxi Steel & Iron (Group) Co., Ltd. RMB 200,000,000.00 2016/11/10 2017/9/13 No
Bengang Group Co., Ltd. and Benxi Steel & Iron (Group) Co., Ltd. RMB 100,000,000.00 2016/11/9 2017/8/23 No
Bengang Group Co., Ltd. and Benxi Steel & Iron (Group) Co., Ltd. RMB 200,000,000.00 2016/11/9 2017/8/17 No
Bengang Group Co., Ltd.andBenxi Steel & Iron (Group) Co., Ltd. RMB 150,000,000.00 2016/11/11 2017/10/19 No
Bengang Group Co., Ltd.andBenxi Steel & Iron (Group) Co., Ltd. RMB 200,000,000.00 2016/11/11 2017/10/12 No
Bengang Group Co., Ltd.and Benxi Steel & Iron (Group) Co., Ltd. RMB 200,000,000.00 2016/11/15 2017/11/8 No
Bengang Group Co., Ltd. and Benxi Steel & Iron (Group) Co., Ltd. RMB 200,000,000.00 2016/11/16 2017/11/15 No
Bengang Group Co., Ltd. and Benxi Steel & Iron (Group) Co., Ltd. RMB 200,000,000.00 2016/12/8 2017/12/7 No
Bengang Group Co., Ltd. and Benxi Steel & Iron (Group) Co., Ltd. RMB 80,000,000.00 2016/12/6 2017/12/5 No
Bengang Group Co., Ltd. and Benxi Steel & Iron (Group) Co., Ltd. RMB 200,000,000.00 2016/12/13 2017/12/12 No
Bengang Group Co., Ltd. RMB 150,000,000.00 2016/1/26 2017/1/26 No
Bengang Group Co., Ltd. RMB 110,000,000.00 2016/1/22 2017/1/22 No
Bengang Group Co., Ltd. RMB 200,000,000.00 2016/5/20 2017/5/20 No
Bengang Group Co., Ltd. RMB 140,000,000.00 2016/5/20 2017/5/20 No
Bengang Group Co., Ltd. RMB 200,000,000.00 2016/5/31 2017/5/31 No
Bengang Group Co., Ltd. RMB 160,000,000.00 2016/5/31 2017/5/31 No
Bengang Group Co., Ltd. RMB 150,000,000.00 2016/7/22 2017/7/22 No
Bengang Group Co., Ltd. RMB 150,000,000.00 2016/7/21 2017/7/21 No
Bengang Group Co., Ltd. RMB 230,000,000.00 2016/8/12 2017/8/12 No
Bengang Group Co., Ltd. RMB 490,000,000.00 2016/8/19 2017/8/18 No
173
Bengang Steel Plates Co., Ltd. Annual Report 2016
Amount of guarantee Starting date of Ending date of Has the guarantee
Warrantor Currency
in original currency Guarantee Guarantee been fulfilled
Bengang Group Co., Ltd. RMB 180,000,000.00 2016/8/5 2017/8/5 No
Bengang Group Co., Ltd. RMB 200,000,000.00 2016/8/12 2017/8/12 No
Bengang Group Co., Ltd. RMB 170,000,000.00 2016/8/5 2017/8/5 No
Bengang Group Co., Ltd. RMB 220,000,000.00 2016/8/5 2017/8/5 No
Bengang Group Co., Ltd. RMB 250,000,000.00 2016/10/20 2017/10/20 No
Bengang Group Co., Ltd. RMB 250,000,000.00 2016/10/20 2017/10/20 No
Bengang Group Co., Ltd. RMB 100,000,000.00 2016/9/29 2017/8/1 No
Bengang Group Co., Ltd. RMB 500,000,000.00 2016/12/30 2017/6/10 No
Bengang Group Co., Ltd. RMB 120,000,000.00 2016/6/29 2017/6/28 No
Bengang Group Co., Ltd. RMB 130,000,000.00 2016/6/29 2017/6/28 No
Benxi Steel & Iron (Group) Co., Ltd. RMB 74,000,000.00 2016/9/28 2017/9/27 No
Bengang Group Co., Ltd. USD 100,000,000.00 2016/8/19 2017/8/14 No
Benxi Steel & Iron (Group) Co., Ltd. USD 90,000,000.00 2016/5/19 2017/5/18 No
Benxi Steel & Iron (Group) Co., Ltd. USD 103,000,000.00 2016/9/30 2017/9/29 No
Benxi Steel & Iron (Group) Co., Ltd. USD 150,000,000.00 2016/9/28 2017/9/27 No
Benxi Steel & Iron (Group) Co., Ltd. USD 22,500,000.00 2016/12/23 2017/12/22 No
Bengang Group Co., Ltd. USD 30,650,000.00 2016/12/27 2020/6/21 No
Bengang Group Co., Ltd. USD 100,000,000.00 2016/8/30 2018/8/28 No
Bengang Group Co., Ltd. USD 48,000,000.00 2016/7/14 2018/7/12 No
Bengang Group Co., Ltd. USD 50,000,000.00 2016/6/21 2018/6/20 No
Bengang Group Co., Ltd. USD 80,000,000.00 2016/5/30 2018/5/18 No
Bengang Group Co., Ltd. USD 19,000,000.00 2016/4/28 2018/4/18 No
Bengang Group Co., Ltd. EUR 266,527.73 2015/6/25 2025/9/30 No
Bengang Group Co., Ltd. EUR 9,105,864.00 2015/8/20 2025/9/30 No
Bengang Group Co., Ltd. EUR 1,194,375.00 2015/8/20 2019/9/30 No
174
Bengang Steel Plates Co., Ltd. Annual Report 2016
Amount of guarantee Starting date of Ending date of Has the guarantee
Warrantor Currency
in original currency Guarantee Guarantee been fulfilled
Bengang Group Co., Ltd. EUR 6,162.48 2015/6/25 2026/4/30 No
Bengang Group Co., Ltd. EUR 632,610.51 2015/6/25 2026/4/30 No
Bengang Group Co., Ltd. EUR 4,069.11 2015/12/28 2026/4/30 No
Bengang Group Co., Ltd. EUR 7,705,926.60 2015/12/28 2026/4/30 No
Bengang Group Co., Ltd. EUR 3,246,756.57 2015/6/25 2020/4/30 No
Bengang Group Co., Ltd. EUR 1,161,127.50 2015/12/28 2020/4/30 No
Bengang Group Co., Ltd. EUR 558,235.35 2015/6/25 2025/6/30 No
Bengang Group Co., Ltd. EUR 15,962,880.03 2015/6/25 2025/6/30 No
Bengang Group Co., Ltd. EUR 490,022.77 2015/12/28 2025/6/30 No
Bengang Group Co., Ltd. EUR 2,881,893.22 2015/6/25 2019/6/30 No
Bengang Group Co., Ltd. EUR 2,062,602.61 2015/12/28 2019/6/30 No
Bengang Group Co., Ltd. EUR 719,075.68 2015/6/25 2025/10/31 No
Bengang Group Co., Ltd. EUR 11,418,432.03 2015/6/25 2025/10/31 No
Bengang Group Co., Ltd. EUR 5,234,110.72 2015/12/28 2025/10/31 No
Bengang Group Co., Ltd. EUR 4,623,227.33 2015/6/25 2019/10/31 No
Bengang Group Co., Ltd. EUR 88,712.47 2015/12/28 2019/10/31 No
Bengang Group Co., Ltd. EUR 609,296.41 2015/6/25 2025/8/31 No
Bengang Group Co., Ltd. EUR 13,790,568.87 2015/6/25 2025/8/31 No
Bengang Group Co., Ltd. EUR 289,280.00 2015/12/28 2025/8/31 No
Bengang Group Co., Ltd. EUR 3,626,099.20 2015/6/25 2019/8/31 No
Bengang Group Co., Ltd. EUR 478,347.26 2015/12/28 2019/8/31 No
Bengang Group Co., Ltd. EUR 1,284,165.00 2015/12/28 2019/7/30 No
Bengang Group Co., Ltd. EUR 684,498.75 2016/6/27 2020/4/30 No
Bengang Group Co., Ltd. EUR 4,224,072.45 2016/6/27 2020/4/30 No
Bengang Group Co., Ltd. EUR 3,210,941.28 2016/12/14 2026/4/30 No
175
Bengang Steel Plates Co., Ltd. Annual Report 2016
Amount of guarantee Starting date of Ending date of Has the guarantee
Warrantor Currency
in original currency Guarantee Guarantee been fulfilled
Bengang Group Co., Ltd. EUR 61,028.58 2016/12/14 2020/4/30 No
Benxi Steel & Iron (Group) Co., Ltd. JPY 231,760,000.00 1997/10/10 2027/9/10 No
Bengang Group Co., Ltd.；Benxi Steel & Iron (Group) Co., Ltd. RMB 100,000,000.00 2016/3/30 2025/3/20 No
Bengang Group Co., Ltd. RMB 100,000,000.00 2016/3/31 2018/3/31 No
Bengang Group Co., Ltd. RMB 59,140,000.00 2015/3/26 2019/3/21 No
Bengang Group Co., Ltd. RMB 100,000,000.00 2015/6/25 2021/9/21 No
Bengang Group Co., Ltd. RMB 24,000,000.00 2015/12/9 2022/3/21 No
Bengang Group Co., Ltd. RMB 72,150,000.00 2016/12/27 2020/6/21 No
Bengang Group Co., Ltd. USD 2,350,000.00 2016/12/27 2020/6/21 No
Bengang Group Co., Ltd. EUR 33,315.97 2015/6/25 2025/9/30 No
Bengang Group Co., Ltd. EUR 1,138,233.00 2015/8/20 2025/9/30 No
Bengang Group Co., Ltd. EUR 597,187.50 2015/8/20 2019/9/30 No
Bengang Group Co., Ltd. EUR 75,149.76 2015/6/25 2026/4/30 No
Bengang Group Co., Ltd. EUR 907,058.32 2015/12/28 2026/4/30 No
Bengang Group Co., Ltd. EUR 1,298,702.63 2015/6/25 2020/4/30 No
Bengang Group Co., Ltd. EUR 464,451.00 2015/12/28 2020/4/30 No
Bengang Group Co., Ltd. EUR 74,431.38 2015/6/25 2025/6/30 No
Bengang Group Co., Ltd. EUR 2,128,384.00 2015/6/25 2025/6/30 No
Bengang Group Co., Ltd. EUR 65,336.37 2015/12/28 2025/6/30 No
Bengang Group Co., Ltd. EUR 1,921,262.14 2015/6/25 2019/6/30 No
Bengang Group Co., Ltd. EUR 1,375,068.40 2015/12/28 2019/6/30 No
Bengang Group Co., Ltd. EUR 1,517,188.46 2015/6/25 2025/10/31 No
Bengang Group Co., Ltd. EUR 654,263.84 2015/12/28 2025/10/31 No
Bengang Group Co., Ltd. EUR 2,311,613.66 2015/6/25 2019/10/31 No
Bengang Group Co., Ltd. EUR 44,356.25 2015/12/28 2019/10/31 No
176
Bengang Steel Plates Co., Ltd. Annual Report 2016
Amount of guarantee Starting date of Ending date of Has the guarantee
Warrantor Currency
in original currency Guarantee Guarantee been fulfilled
Bengang Group Co., Ltd. EUR 1,799,983.16 2015/6/25 2025/8/31 No
Bengang Group Co., Ltd. EUR 36,160.00 2015/12/28 2025/8/31 No
Bengang Group Co., Ltd. EUR 1,813,049.60 2015/6/25 2019/8/31 No
Bengang Group Co., Ltd. EUR 239,173.63 2015/12/28 2019/8/31 No
Bengang Group Co., Ltd. EUR 642,082.50 2015/12/28 2019/7/30 No
Bengang Group Co., Ltd. EUR 273,799.50 2016/6/27 2020/4/30 No
Bengang Group Co., Ltd. EUR 496,949.70 2016/6/27 2020/4/30 No
Bengang Group Co., Ltd. EUR 377,757.80 2016/12/14 2026/4/30 No
Bengang Group Co., Ltd. EUR 24,411.42 2016/12/14 2020/4/30 No
Benxi Steel & Iron (Group) Co., Ltd. JPY 23,176,000.00 1997/10/10 2027/9/10 No
Bengang Group Co., Ltd. RMB 15,000,000.00 2014/12/29 2017/3/21 No
Bengang Group Co., Ltd. RMB 27,860,000.00 2015/3/26 2019/3/21 No
Bengang Group Co., Ltd. RMB 17,850,000.00 2016/12/27 2020/6/21 No
Bengang Group Co., Ltd. RMB 140,000,000.00 2016/1/8 2017/1/8 No
Bengang Group Co., Ltd. RMB 340,000,000.00 2016/8/25 2017/8/24 No
Bengang Group Co., Ltd. RMB 220,000,000.00 2016/10/20 2017/10/20 No
Bengang Group Co., Ltd. RMB 100,000,000.00 2016/2/5 2017/1/10 No
Bengang Group Co., Ltd. and Benxi Steel & Iron (Group) Co., Ltd. RMB 200,000,000.00 2016/7/29 2017/7/26 No
Bengang Group Co., Ltd. and Benxi Steel & Iron (Group) Co., Ltd. RMB 200,000,000.00 2016/6/30 2017/6/29 No
Bengang Group Co., Ltd. Benxi Steel & Iron (Group) Co., Ltd. RMB 100,000,000.00 2016/10/25 2017/10/23 No
Benxi Steel & Iron (Group) Co., Ltd. RMB 180,000,000.00 2016/12/9 2017/6/7 No
Benxi Steel & Iron (Group) Co., Ltd. RMB 264,000,000.00 2016/12/31 2017/6/7 No
Bengang Group Co., Ltd. RMB 500,000,000.00 2016/11/10 2017/8/1 No
177
Bengang Steel Plates Co., Ltd. Annual Report 2016
(2) Guarantee of bonds payable
The public issuance of corporate bonds is guaranteed by the Bengang Group Co. Ltd., who
offered full unconditional irrevocable joint and several liability guarantees. Guarantees
include the principal amount and the interest thereof, default fine, compensation for damage
and expenses for enforcing the claim. Guarantee period lasts from the first day of issuance
to 12 months after the maturity date.
(3) Guarantee of Letter of Guarantee
Up to 31 December 2016, the balance of Letter of Guarantee not yet matured is RMB
60,000,000.00, and the counter guarantor is Benxi Steel & Iron (Group) Co., Ltd. The
gurantee period is from 16 May 2016 to 16 May 2017.
4. Remuneration of key management personnel (In 10 Thousand Yuan)
Name 2016 2015
Remuneration of key management personnel 197.11 222.80
5. Other related party transactions
(1) Loan from and deposits in Bengang Group Finance Co., Ltd. (In 10 Thousand Yuan)
Item Beginning balance Increase Decrease Ending balance Notes
Deposits 109,766.10 5,358,606.90 5,101,509.15 366,863.85 1
Loans 1,422.00 1,422.00 2
1. The interests of deposits in Bengang Group Finance Co., Ltd. is RMB 5,459.00 thousand
in 2016. As at 31 December 2016, interest due from Bengang Group Finance Co., Ltd is
RMB 771.00 thousand. As at 31 December 2016, deposits in Bengang Group Finance Co.,
Ltd. by the Company includes an amount of RMB 0.2 billion margin for bank acceptance
bill which is restricted.
2. The subsidiary of the Company Dalian Benruitong Automobile Material Technology Co.,
Ltd. borrowed RMB 142.2 thousand from Bengang Group Finance Co., Ltd. In 2016,
interest of borrowing is RMB 745.7 thousand, and as at 31 December 2016, the prinicipal
and interest is all paid and closed.
(2) Bengang Group Finance Co., Ltd. offered the Company an amount of RMB 2.5 billion
unsecured credit line this year. As at 31 December 2016, the amount of the Company's
acceptance of the bill opened from Bengang Group Finance Co., Ltd. is RMB 300 million.
(3) Loans from and deposits in Benxi Steel and Iron (Group) Co., Ltd. (In 10 Thousand Yuan)
Item Beginning balance Increase Decrease Ending balance
Loans 8,445.20 8550.97 8,445.20 8550.97
178
Bengang Steel Plates Co., Ltd. Annual Report 2016
Details of outstanding loans as at 31 December 2016 (In Yuan)
Related parties Lease form Lease amount Start date Due date
Benxi Steel and Iron (Group) Co., Ltd. Entrusted loan through Bengang Group Finance Co., Ltd. 19,320,300.00 2016/5/20 2017/5/19
Benxi Steel and Iron (Group) Co., Ltd. Entrusted loan through Bengang Group Finance Co., Ltd. 11,369,400.00 2016/6/23 2017/6/22
Benxi Steel and Iron (Group) Co., Ltd. Entrusted loan through Bengang Group Finance Co., Ltd. 32,700,000.00 2016/10/24 2017/10/23
Benxi Steel and Iron (Group) Co., Ltd. Entrusted loan through Bengang Group Finance Co., Ltd. 22,120,000.00 2016/11/11 2017/11/10
Total 85,509,700.00
Notes: In 2016, the interest accrued is RMB 4,874,593.56, and as at 31 December 2016, the interest not paid is RMB 198,694.53.
(5) Receivables and payables of the related parties
1. Receivables of the Company (In RMB 10 thousand)
Ending balance Beginning balance
Items Name Name Provision for bad Provision for bad
Carrying amount Carrying amount
debts debts
Accounts receivable
Benxi Beiying Steel & Iron (Group) Co., Ltd. 1,839.22 10,713.37
Bengang Electronics and Gas Co., Ltd. 254.41 19.12 258.50 19.15
Benxi Steel & Iron (Group) Machinery Manufacture Co., Ltd. 5,868.85 697.85 5,469.82 155.38
Benxi Steel & Iron (Group) Construction Co., Ltd. 2,759.18 1,695.38 1,426.24 516.73
Benxi Steel & Iron (Group) Industrial Development Co., Ltd. 4,313.90 216.02 4,622.18 49.38
Benxi New Career Development Co., Ltd. 602.15 449.35 567.77 387.90
Benxi Steel & Iron (Group) Thermal Power Development Co., Ltd. 706.55 786.12
Benxi Steel & Iron (Group) Steel & Iron Process and Logistics Co., Ltd. 49.96 50.00
179
Bengang Steel Plates Co., Ltd. Annual Report 2016
Ending balance Beginning balance
Items Name Name Provision for bad Provision for bad
Carrying amount Carrying amount
debts debts
Bengang Cold-rolled Stainless Steel Dandong Co., Ltd. 20.55 1.03 20.55
Liaoning Hengtong Metallurgical Equipment Manufacture Co., Ltd. 977.77 775.69
Bengang Group International Economic and Trading Co., Ltd. 1,901.47
Subtotal 19,294.01 3,078.75 24,690.24 1,128.54
Prepayments
Benxi Beiying Steel & Iron (Group) Co., Ltd. 20,963.90 18,333.76
Benxi Steel & Iron (Group) Machinery Manufacture Co., Ltd. 967.60 886.57
Bengang Cold-rolled Stainless Steel Dandong Co., Ltd. 4.73
Subtotal 21,936.23 19,220.33
Other receivables
Benxi Steel & Iron (Group) Real-estate Development Co., Ltd. 279.73 17.40 210.30 2.47
Liaoning Metallurgy Technician College 15.63 15.63 15.63 7.28
Benxi Steel & Iron (Group) Machinery Manufacture Co., Ltd. 65.80 0.01 14.81
Benxi Steel & Iron (Group) Construction Co., Ltd. 121.90 88.50 108.94 86.35
Bengang Group International Economic and Trading Co., Ltd. 1,295.31 0.20 1,400.70
Benxi Steel & Iron (Group) Industrial Development Co., Ltd. 48.23 32.68 128.52 28.69
Benxi Steel & Iron (Group) Zhengtai Construction Materials Co., Ltd. 19.85 14.01 19.98 2.92
Benxi Steel & Iron (Group) Medical Co., Ltd. 90.50 61.13 91.99 46.44
Subtotal 1,936.95 229.56 1,990.87 174.15
2、 Payables of the Company
Items Name Ending balance Beginning balance
Notes payable
180
Bengang Steel Plates Co., Ltd. Annual Report 2016
Items Name Ending balance Beginning balance
Benxi Steel & Iron (Group) Industrial Development Co., Ltd. 2,819.23 2,005.80
Benxi Steel & Iron (Group) Machinery Manufacture Co., Ltd. 3,182.47 474.39
Bengang Electronics and Gas Co., Ltd. 30.75
Benxi Steel & Iron (Group) Construction and Repairing Co., Ltd. 204.16 138.16
Liaoning Metallurgy Technician College 620.40 151.77
Benxi Steel & Iron (Group) Mining Co., Ltd. 56,874.04 18,684.48
Benxi Steel & Iron (Group) Construction Co., Ltd. 196.36 15.25
Benxi Steel & Iron (Group) Information and Automatic Tech Co., Ltd. 64.63 32.38
Benxi Beiying Steel & Iron (Group) Co., Ltd. 16,728.82
Liaoning Hengtong Metallurgical Equipment Manufacture Co., Ltd. 5,711.80 77.74
Liaoning Metallurgy Technician College 41.04 22.13
Liaoning Hengtai Heavy Machinery Co., Ltd. 66.43 36.58
Benxi Steel & Iron (Group) Metallurgy Residues Co., Ltd. 146.18
Subtotal 69,957.49 38,367.50
Accounts payable
Bengang Electronics and Gas Co., Ltd. 1,436.38 823.35
Benxi Steel & Iron (Group) Real-estate Development Co., Ltd. 348.18 146.44
Bengang Group International Economic and Trading Co., Ltd. 133,235.11 71,916.23
Benxi Steel & Iron (Group) Machinery Manufacture Co., Ltd. 15,359.57 9,010.16
Benxi Steel & Iron (Group) Construction Co., Ltd. 12,263.90 15,522.33
Benxi Steel & Iron (Group) Mining Co., Ltd. 87,583.27 67,523.29
Benxi Steel & Iron (Group) Industrial Development Co., Ltd. 8,966.16 9,652.77
Benxi New Career Development Co., Ltd. 1,011.15 1,254.32
Benxi Steel & Iron (Group) Construction and Repairing Co., Ltd. 11,297.09 10,386.36
Benxi Steel & Iron (Group) Designing Institute 442.85 1,448.41
181
Bengang Steel Plates Co., Ltd. Annual Report 2016
Items Name Ending balance Beginning balance
Benxi Steel & Iron (Group) Metallurgy Residues Co., Ltd. 6,783.85 2,871.65
Benxi Steel & Iron (Group) Medical Co., Ltd. 2.04 2.04
Benxi Steel & Iron (Group) Information and Automatic Tech Co., Ltd. 4,085.80 6,055.14
Benxi High-tech Drilling Tools Manufacture Co., Ltd. 54.51 95.44
Liaoning Metallurgy Technician College 1,304.29 1,286.47
Liaoning Bengang Steel & Iron Trading Co., Ltd. 5,300.00
Benxi Steel & Iron (Group) Thermal Power Development Co., Ltd. 10.84 27.43
Benxi Steel & Iron (Group) Zhengtai Construction Materials Co., Ltd. 35.20 39.60
Liaoning Hengtong Metallurgical Equipment Manufacture Co., Ltd. 2,834.53 112.26
Liaoning Metallurgy Technician College 306.41 394.85
Bengang Cold-rolled Stainless Steel Dandong Co., Ltd. 60.73 19.79
Liaoning Hengtai Heavy Machinery Co., Ltd. 1,615.38 2,838.06
Benxi Steel & Iron (Group) Engineering Construction Supervision Co., Ltd. 5.00
Bengang Group Co., Ltd. 0.47
Subtotal 289,042.71 206,726.39
Advance from customers
Benxi Steel & Iron (Group) Machinery Manufacture Co., Ltd. 68.32 26.87
Benxi Steel & Iron (Group) Industrial Development Co., Ltd. 205.45 153.41
Benxi Steel & Iron (Group) Metallurgy Residues Co., Ltd. 156.73 0.17
Benxi Steel & Iron (Group) Steel & Iron Process and Logistics Co., Ltd. 741.81 6,263.12
Dalian Boluole Steel Tube Co., Ltd. 137.79
Liaoning Bengang Steel & Iron Trading Co., Ltd. 8,765.59 3,179.84
Liaoning Hengtong Metallurgical Equipment Manufacture Co., Ltd. 64.09 9.43
Liaoning Hengtai Heavy Machinery Co., Ltd. 18.47
Bengang Group International Economic and Trading Co., Ltd. 6.90 1,782.42
182
Bengang Steel Plates Co., Ltd. Annual Report 2016
Items Name Ending balance Beginning balance
Suzhou Bengang Industrial Co., Ltd. 1,884.97 1,098.50
Subtotal 12,031.65 12,532.23
Other payables
Benxi Steel & Iron (Group) Real-estate Development Co., Ltd. 231.17 231.17
Bengang Group International Economic and Trading Co., Ltd. 2,220.96 1,016.52
Benxi Steel & Iron (Group) Machinery Manufacture Co., Ltd. 7.28 7.08
Benxi Steel & Iron (Group) Construction Co., Ltd. 527.97 482.44
Benxi Steel & Iron (Group) Industrial Development Co., Ltd. 179.69 141.92
Benxi New Career Development Co., Ltd. 106.22 81.70
Benxi Steel & Iron (Group) Metallurgy Residues Co., Ltd. 35.00 100.00
Benxi Steel & Iron (Group) Medical Co., Ltd. 1.21
Benxi Steel & Iron (Group) Information and Automatic Tech Co., Ltd. 10.70 10.50
Benxi Steel & Iron (Group) Steel & Iron Process and Logistics Co., Ltd. 134.97 597.23
Benxi Steel & Iron (Group) Co., Ltd. 15,394.63 17,954.00
Benxi Steel & Iron (Group) Thermal Power Development Co., Ltd. 112.77 237.31
Guangzhou Free Trade Zone Bengang Sales Co., Ltd. 267.44 267.44
Benxi Steel & Iron (Group) Engineering Construction Supervision Co., Ltd. 45.38
Liaoning Hengyi Financial Leasing Co., Ltd. 53.99
Liaoning Metallurgy Technician College 0.30
Subtotal 19,328.47 21,128.52
Non-current liabilities due within one year
Liaoning Hengyi Financial Leasing Co., Ltd. 21,000.00 49,000.00
Subtotal 21,000.00 49,000.00
183
Bengang Steel Plates Co., Ltd. Annual Report 2016
10. Commitments and Contingencies
(1) Commitments
1. Lease contracts in progress or to be performed and their financial impacts
(1) For the land leased from the Company to the Group, price is RMB 0.624 per Square meter
per month, and the area of the land is 7,669,068.17 square meters; hence annual rent is RMB
57.426 million.
(2) For the 2300 hot rolling product line leased from the Group to the Company, lease
period lasts from 1 January 2015 to 31 December 2017. Lease charges are negotiated
between the lessor and the lessee based on the original cost, depreciation, and national
taxation of the product line, with consideration of conditions of production and equipment
performance.
(3) For the 1780 hot rolling product line leased from Benxi Beiying Steel & Iron (Group)
Co., Ltd. to the Company, the lease period lasts from 1 January 2014 to 31 December 2016.
Lease charges are negotiated between the lessor and the lessee based on the original cost,
depreciation, and national taxation of the product line, with consideration of conditions of
production and equipment performance. The annual rent shall not exceed RMB
150,000,000.00. At the expiration of the original lease agreement at 31 December 2016,
both parties have signed a renewal agreement, and the lease period lasts from 1 January
2017 to 31 December 2019.
For details of above leasing conditions please refer to Note 9 (4) 2.
2. Up to 31 December 2016, the balance of Letter of Guarantee not yet matured is
RMB 60,000,000.00, and the counter guarantor is Benxi Steel & Iron (Group) Co., Ltd.
(2) Contingencies
At the balance sheet date, no significant contingencies need to be disclosed.
11. Subsequent events
(1) Profit distribution after the reporting period
According to “The Company’s 2016 Plan of annual profit distribution and capital reserve to
be converted into share capital” approved on the 6th meeting of the 7th board of directors, no
profit is available for distribution due to loss in 2016, and therefore no profits will be
distributed; no capital reserve will be converted into share capital in 2016. The above plan is
to be approved by shareholders meeting
184
Bengang Steel Plates Co., Ltd. Annual Report 2016
(2) Significant notes to post reporting period events
None.
12. Other significant events
(1) Segment information
Since the Company’s main product is steel with other products accounting for only a small
proportion, and the main production base is located in Liaoning area, segmented reporting is not
applicable.
(2) Financial lease
For prioritizing the capital structure and exploring financing channel, on 20 April 2015, the
Company signed the “Financial lease cooperation framework” with Liaoning Hengyi Financial
Leasing Co., Ltd. with the amount of financial lease not exceeding RMB 5,000 million. The
Company obtains the fund through sales and lease back financial lease with interest rate not above
the benchmark interest rate of loan over the same period published by the People’s bank of China
and the interest rate will be adjusted with the changes of benchmark interest rate of loan published
by the People’s bank of China over the lease term. The term of financial lease shall not exceed 36
months
On 28 December 2016, the Company signed the “Financing lease back after sales contract”
(Contract No. 2016HYZL0006-ZL-01). The purchase price of the leased asset is RMB
210,000,000. 00. Lease period is one year starting from 28 March 2016. Lease rate was
4.35% when signing the contract.
(3) On 27 December 2016, as the 1st extraordinary Shareholders’ general meeting approves “the
proposal of the non-public offering of A shares program of the Company (December 2016 revised
edition)”, the Company considers to undertake the non-public offering shares to particular
investors and thus raise capital of RMB 4 billion. The Company raises funds mainly for the
purpose of high strength cold rolling steel renovation project, the third cold rolling work hot-dip
galvanizing production line project, and repaying bank loans. Legal procedures are being
reviewed for approval
(4) As at 31 December 2016, the controlling shareholder Benxi Steel & Iron (Group) Co., Ltd.
held a total number of 924,000,000 shares pledged, accounting for 29.46% of the total number of
shares of the Company. As of the date of audit report, the controlling shareholder Benxi Steel &
Iron (Group) Co., Ltd. held a total number of 1,221,000,000 shares pledged, accounting for
38.93% of the total number of shares of the Company.
185
Bengang Steel Plates Co., Ltd. Annual Report 2016
13. Notes to the financial statements of parent company
(1) Accounts receivable
1. Accounts receivable disclosed by category
Ending balance
Items Carrying amount Provision for bad debts
Percentage Bad debts
Book value
Amount (%)
Amount ratio (%)
Individually significant and
tested for impairment
individually
Accounts receivable tested
for impairment by portfolio 658,679,865.43 100.00 203,609,563.43 30.91 455,070,302.00
Other insignificant items but
tested for impairment
individually
Total 658,679,865.43 100.00 203,609,563.43 30.91 455,070,302.00
Beginning balance
Items Carrying amount Provision for bad debts
Percentage Bad debts Book value
Amount (%)
Amount ratio (%)
Individually significant and
tested for impairment
individually
Accounts receivable tested
600,793,311.03 100.00 151,599,889.01 25.23 449,193,422.02
for impairment by portfolio
Other insignificant items but
tested for impairment
individually
Total 600,793,311.03 100.00 151,599,889.01 25.23 449,193,422.02
Accounts receivable tested for impairment by portfolio
Ending balance
Items
Carrying amount Provision for bad debts Bad debts ratio (%)
Within 1 year (inclusive) 264,063,089.02
1-2 years (inclusive) 174,803,236.45 8,740,161.81 5.00
2-3 years (inclusive) 31,180,172.93 6,236,034.59 20.00
Over 3 years 188,633,367.03 188,633,367.03 100.00
Total 658,679,865.43 203,609,563.43 30.91
2. Information of provision, reversal or recovery of bad debts of current period.
The provision of bad debts of current period is RMB 52,009,674.42.
3. No accounts receivable has been written off this year.
4. Top five debtors at the year-end
186
Bengang Steel Plates Co., Ltd. Annual Report 2016
Ending balance
Company Percentage of
Provision for
Amount total accounts
bad debts
receivable (%)
Benxi Nanfen Xinhe Metallurgical Co., Ltd. 87,396,378.47 13.27 4,368,958.76
Benxi Steel & Iron (Group) Machinery Manufacture
58,688,479.41 8.91 6,978,534.14
Co., Ltd.,
Ningbo CIMC Logistics and Equipment Co., Ltd. 49,157,039.02 7.46
Benxi Steel & Iron (Group) Industrial Development
43,138,986.20 6.55 2,160,167.07
Co., Ltd.
China Petroleum Steel Pipe Co., Ltd. 32,873,213.55 4.99 29,616,623.65
Total 271,254,096.65 41.18 43,124,283.62
(2) Other receivables
1. Other receivables disclosed by category
Ending balance
Items Carrying amount Provision for bad debts
Percentage Bad debts
Book value
Amount (%)
Amount ratio (%)
Individually significant and
tested for impairment
individually
Accounts receivable tested
for impairment by portfolio 271,534,044.90 99.36 63,184,240.02 23.27 208,349,804.88
Other insignificant items but
tested for impairment 1,740,000.00 0.64 1,740,000.00
individually
Total 273,274,044.90 100 63,184,240.02 23.12 210,089,804.88
Beginning balance
Items Carrying amount Provision for bad debts
Percentage Bad debts
Book value
Amount (%)
Amount ratio (%)
Individually significant and
tested for impairment
individually
Accounts receivable tested
289,792,710.30 99.40 62,104,550.36 21.43 227,688,159.94
for impairment by portfolio
Other insignificant items but
tested for impairment 1,740,000.00 0.60 1,740,000.00
individually
Total 291,532,710.30 100.00 62,104,550.36 21.30 229,428,159.94
Other receivables tested for impairment by portfolio using the method of Aging analysis
Ending balance
Items
Carrying amount Provision for bad debts Bad debts ratio (%)
Within 1 year (inclusive) 195,339,605.98
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Bengang Steel Plates Co., Ltd. Annual Report 2016
Ending balance
Items
Carrying amount Provision for bad debts Bad debts ratio (%)
1-2 years (inclusive) 9,920,551.26 496,027.57 5.00
2-3 years (inclusive) 4,482,094.01 896,418.80 20.00
Over 3 years 61,791,793.65 61,791,793.65 100.00
Total 271,534,044.90 63,184,240.02 23.27
Other receivables individually insignificant but tested for impairment individually
Carrying Provision for Bad debts
Items Reason
Amount bad debts ratio (%)
Sinking Fund of Japanese yen from
1,740,000.00 Sinking fund
Finance Bureau of Benxi
Total 1,740,000.00
Notes: The Sinking Fund of Japanese yen from Finance Bureau of Benxi is the margin for JPY
loans of which the aging is over 3 years and no bad debts provision has been made for it.
2. Information of provision, reversal or recovery of bad debts of current period.
Reversal of bad debts for other receivable in current period is RMB 1,079,689.66.
3. No other receivables have been written off this year.
4. Other receivables disclosed by Notes
Notes Ending balance Beginning balance
Accounts 259,660,295.88 255,674,062.26
Export tax rebate 4,990,848.26 30,841,071.89
Others 8,622,900.76 5,017,576.15
Total 273,274,044.90 291,532,710.30
5. Top five debtors at the year-end
Percentage
Provision
Notes or of total
Company Amount Aging for
content other
bad debts
receivables
National Tax Bureau Bengang
Accounts 4,990,848.26 Within 1 year 1.83
Branch
Huozhou Coal and Electricity
Accounts 4,341,257.18 Over 3 years 1.59 4,341,257.18
Group Co., Ltd.
State Grid Liaoning Power
Accounts 3,530,637.67 Within 1 year 1.29
Supply Co., Ltd. Benxi Branch
Benxi Steel (Group) Real
Accounts 2,797,309.70 Within 3 years 1.02 173,991.52
Estate development Co., Ltd.
Liaoning Huawei Coal
Accounts 2,261,360.00 Over 3 years 0.83 2,261,360.00
Preparation Co., Ltd.
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Bengang Steel Plates Co., Ltd. Annual Report 2016
Total 17,921,412.81 6.56 6,776,608.70
(3) Long-term equity investment
Ending balance Beginning balance
Items Carrying Carrying
Impairment Book value Impairment Book value
amount amount
Subsidiaries 1,700,981,902.16 1,700,981,902.16 1,700,981,902.16 1,700,981,902.16
Total 1,700,981,902.16 1,700,981,902.16 1,700,981,902.16 1,700,981,902.16
Details of investment in subsidiaries
Impairment Ending
Beginning Ending
Name of entity Increase Decrease of current balance of
balance balance
period impairment
Guangzhou Bengang Steel & Iron
1,000,000.00 1,000,000.00
Trading Co., Ltd.
Shanghai Bengang Metallurgy
19,200,000.00 19,200,000.00
Science and Technology Co., Ltd.
Bengang Steel Plates Liaoyang
529,899,801.38 529,899,801.38
Pellet Co., Ltd.
Dalian Benruitong Automobile
65,000,000.00 65,000,000.00
Material Technology Co., Ltd.
Bengang Posco Cold-rolled Sheet
1,019,781,571.10 1,019,781,571.10
Co., Ltd.
Changchun Bengang Steel & Iron
-1,355,124.64 -1,355,124.64
Sales Co., Ltd.
Harbin Bengang Economic and
423,398.23 423,398.23
Trading Co., Ltd.
Nanjing Bengang Materials Sales
2,081,400.65 2,081,400.65
Co., Ltd.
Wuxi Bengang Steel & Iron Sales
936,718.57 936,718.57
Co., Ltd.
Xiamen Bengang Steel & Iron
1,095,711.66 1,095,711.66
Sales Co., Ltd.
Yantai Bengang Steel & Iron
19,600,329.41 19,600,329.41
Sales Co., Ltd.
Tianjin Bengang Steel & Iron
33,318,095.80 33,318,095.80
Trading Co., Ltd.
Benxi Bengang Steel Sales Co.,
5,000,000.00 5,000,000.00
Ltd
Shenyang Bengang Metallurgical
5,000,000.00 5,000,000.00
Science and Technology Co., Ltd.
Total 1,700,981,902.16 1,700,981,902.16
(4) Operating income and operating cost
2016 2015
Items
Revenue Cost Revenue Cost
Principal business 26,825,240,785.98 23,752,893,478.35 25,840,994,498.57 27,226,906,929.92
Other business 2,539,154,696.32 2,330,465,719.79 2,682,107,120.42 2,542,383,008.46
Total 29,364,395,482.30 26,083,359,198.14 28,523,101,618.99 29,769,289,938.38
(5) Income on investment
189
Bengang Steel Plates Co., Ltd. Annual Report 2016
Items 2016 2015
Income from long-term equity investment (cost method) 13,713,328.45
Income from bank short-term financial products 1,715,742.47 7,226,589.08
Total 15,429,070.92 7,226,589.08
14. Supplementary information
(1) Details of non-recurring profit and loss
Items Amount Notes
Profit or loss from disposal of non-current assets -1,854,918.03
Government subsidy attributable to profit and loss of current period
(except such government subsidy closely related to the company's normal
36,089,000.00
business operation, meeting the regulation of national policy and enjoyed
constantly in certain quota or quantity according to a certain standard)
Profit or loss from investment or assets entrusted to others 1,715,742.47
Profit or loss from debt restructuring 8,631,844.34
Other non-operating revenue and expenditure other than above items 663,844.36
Impact of income tax -11,311,378.29
Impact of minority interests -327,998.92
Total 33,606,135.93
(2) Net asset yield and earnings per share
Weighted average Earnings per share (Yuan)
Profit in the Reporting Period
net assets yield (%) Basic EPS Diluted EPS
Net profit attributable to ordinary shareholders 6.34 0.249 0.249
Net profit attributable to ordinary shareholders
6.07 0.238 0.238
after deducting non-recurring profit and loss
Bengang Steel Plates Co., Ltd.
28 March 2 017
190
Bengang Steel Plates Co., Ltd. Annual Report 2016
XII. Documents Available for Inspection
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;
3. Original copy of the Auditors’ Report under the seal of the CPA and signed by and under the
seal of certified accountants.
191
