Bengang Steel Plates Co., Ltd.
FINANCIAL STATEMENTS
(From January to June 2017)
(Unaudited)
23 August 2017
INDEX PAGES
CONSOLIDATED STATEMENT OF FINANCIAL 1-4
POSITION AND STATEMENT OF FINANCIAL
POSITION
CONSOLIDATED STATEMENT OF 5-6
COMPREHENSIVE INCOME AND STATEMENT
OF COMPREHENSIVE INCOME
CONSOLIDATED STATEMENT OF CASH FLOWS 7-8
AND STATEMENT OF CASH FLOWS
CONSOLIDATED STATEMENT OF CHANGES IN 9-12
EQUITY AND STATEMENT OF CHANGES IN
EQUITY
NOTES TO THE FINANCIAL STATEMENTS 1-98
BENGANG STEEL PLATES CO., LTD.
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
As at 30 June 2017
(Expressed in Renminbi unless otherwise indicated)
Assets Notes Ending balance Beginning balance
Current assets:
Cash at bank and on hand 5(1) 12,240,579,151.57 12,931,912,017.84
Settlement provisions
Capital lent
Financial assets at fair value through profit or loss
Derivative financial assets
Notes receivable 5(2) 3,486,513,747.73 2,030,681,138.03
Accounts receivable 5(3) 536,054,820.21 623,865,427.25
Prepayments 5(4) 658,157,852.16 493,839,659.44
Premium receivable
Reinsurance accounts receivable
Receivable deposit for reinsurance contract
Interests receivable 5(5) 2,663,285.16 4,208,818.85
Dividends receivable
Other receivables 5(6) 165,294,616.70 117,909,972.49
Redemptory financial assets for sale
Inventories 5(7) 9,834,703,845.66 9,782,173,936.74
Assets classified as held for sale
Non-current assets due within one year
Other current assets 5(8) 280,833,153.36 513,398,815.83
Total current assets 27,204,800,472.55 26,497,989,786.47
Non-current assets:
Loan and advances issued
Available-for-sale financial assets 5(9) 5,856,585.63 14,856,585.63
Held-to-maturity investment
Long-term receivables
Long-term equity investments
Investment properties
Fixed assets 5(10) 19,753,582,768.45 20,688,468,637.44
Construction in progress 5(11) 7,030,049,975.69 6,210,673,674.11
Construction materials 5(12) 4,558,925.80 7,783,370.29
Disposal of fixed assets
Productive biological assets
Oil and gas assets
Intangible assets 5(13) 256,855,104.56 259,837,410.93
Development expenditure
Goodwill
Long-term deferred expenses
Deferred tax assets 5(14) 375,792,716.94 476,101,254.04
Other non-current assets
Total non-current assets 27,426,696,077.07 27,657,720,932.44
Total assets 54,631,496,549.62 54,155,710,718.91
The notes to the financial statements attached form part of these financial statements.
Legal Representative: Wang Shu Person in charge of accounting: Han Ge
Accounting Dept. Leader: Wang Shaoyu
Financial Statements Page 1
BENGANG STEEL PLATES CO., LTD.
CONSOLIDATED STATEMENT OF FINANCIAL POSITION (Continued)
As at 30 June 2017
(Expressed in Renminbi unless otherwise indicated)
Liabilities and equities Notes Ending balance Beginning balance
Current Liabilities:
Short-term loans 5(15) 22,787,674,400.00 18,762,472,779.48
Loan from central bank
Absorbed deposit and interbank deposit
Loan from other financial institutions
Financial liabilities at fair value through profit or loss
Advance from customers
Notes payable 5(16) 2,654,713,650.65 6,372,173,897.13
Accounts payable 5(17) 5,379,872,618.65 5,680,244,661.52
Advance from customers 5(18) 3,290,002,245.71 3,679,477,129.80
Financial assets sold for repurchase
Handling charges and commission payable
Employee benefits payable 5(19) 41,263,867.18 24,063,493.70
Current tax liabilities 5(20) 19,670,459.30 45,771,585.46
Interests payable 5(21) 43,877,149.04 75,115,265.66
Dividends payable
Other payables 5(22) 469,499,960.08 460,009,213.78
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) 1,110,787,748.00 437,669,535.66
Other current liabilities
Total current liabilities 35,797,362,098.61 35,536,997,562.19
Non-current liabilities:
Long-term loans 5(24) 3,161,338,135.87 3,448,931,721.62
Bonds payable 5(25) 1,496,550,521.55 1,494,825,782.32
Including: Preferred stock
Perpetual bond
Long-term payables
Long-term employee benefits payable
Special accounts payable
Estimated liabilities
Deferred income 5(26) 396,052,000.00 410,399,000.00
Deferred tax liabilities
Other non-current liabilities
Total non-current liabilities 5,053,940,657.42 5,354,156,503.94
Total liabilities 40,851,302,756.03 40,891,154,066.13
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) 10,656,973.74 372,721.86
Surplus reserves 5(30) 961,105,529.85 961,105,529.85
General risk reserve
Undistributed profits 5(31) 26,666,410.96 -496,969,242.61
Total equity attributable to equity holders of the parent 13,249,274,456.60 12,715,354,551.15
company interests 530,919,336.99 549,202,101.63
Total shareholder’s equity 13,780,193,793.59 13,264,556,652.78
Total liabilities and shareholder’s equity 54,631,496,549.62 54,155,710,718.91
The notes to the financial statements attached form part of these financial statements.
Legal Representative: Wang Shu Person in charge of accounting: Han Ge
Accounting Dept. Leader: Wang Shaoyu
Financial Statements Page 2
BENGANG STEEL PLATES CO., LTD.
STATEMENT OF FINANCIAL POSITION
As at 30 June 2017
(Expressed in Renminbi unless otherwise indicated)
Assets Notes Ending balance Beginning balance
Current assets:
Cash at bank and on hand 12,007,831,826.87 12,402,995,087.03
Financial assets at fair value through profit or loss
Derivative financial assets
Notes receivable 3,364,985,137.62 1,870,384,367.64
Accounts receivable 13(1) 491,938,145.44 455,070,302.00
Prepayments 657,548,793.61 487,869,713.72
Interests receivable 2,663,285.16 4,208,818.85
Dividends receivable
Other receivables 13(2) 176,028,682.36 210,089,804.88
Inventories 7,999,016,015.18 8,308,291,029.07
Assets classified as held for sale
Non-current assets due within one year
Other current assets 207,402,337.05 431,675,085.33
Total current assets 24,907,414,223.29 24,170,584,208.52
Non-current assets:
Available-for-sale financial assets 3,888,980.00 12,888,980.00
Held-to-maturity investment
Long-term receivables
Long-term equity investments 13(3) 1,751,981,902.16 1,700,981,902.16
Investment properties
Fixed assets 17,358,400,004.89 18,125,714,092.15
Construction in progress 7,010,468,962.64 6,196,524,880.06
Construction materials 4,134,139.48 4,134,139.52
Disposal of fixed assets
Productive biological assets
Oil and gas assets
Intangible assets 153,735,383.89 155,388,452.53
Development expenditure
Goodwill
Long-term deferred expenses
Deferred tax assets 278,388,067.92 378,696,605.02
Other non-current assets
Total non-current assets 26,560,997,440.98 26,574,329,051.44
Total assets 51,468,411,664.27 50,744,913,259.96
The notes to the financial statements attached form part of these financial statements.
Legal Representative: Wang Shu Person in charge of accounting: Han Ge
Accounting Dept. Leader: Wang Shaoyu
Financial Statements Page 3
BENGANG STEEL PLATES CO., LTD.
STATEMENT OF FINANCIAL POSITION (Continued)
As at 30 June 2017
(Expressed in Renminbi unless otherwise indicated)
Liabilities and equities Notes Ending balance Beginning balance
Current Liabilities:
Short-term loans 21,016,634,400.00 17,376,963,500.00
Financial liabilities at fair value through profit or loss
Advance from customers
Notes payable 2,652,021,225.65 5,768,523,196.16
Accounts payable 5,603,674,065.16 5,939,417,729.46
Advance from customers 3,281,133,671.61 3,671,944,099.35
Employee benefits payable 40,881,869.18 22,386,057.59
Current tax liabilities 7,746,972.51 28,902,954.65
Interests payable 31,334,821.13 70,109,821.13
Dividends payable
Other payables 275,216,874.86 289,522,026.53
Liabilities held for sale
Non-current liabilities due within one year 1,110,787,748.00 437,669,535.66
Other current liabilities
Total current liabilities 34,019,431,648.10 33,605,438,920.53
Non-current liabilities:
Long-term loans 3,161,338,135.87 3,448,931,721.62
Bonds payable 1,496,550,521.55 1,494,825,782.32
Including: Preferred stock
Perpetual bond
Long-term payables
Long-term employee benefits payable
Special accounts payable
Estimated liabilities
Deferred income 396,052,000.00 410,399,000.00
Deferred tax liabilities
Other non-current liabilities
Total non-current liabilities 5,053,940,657.42 5,354,156,503.94
Total liabilities 39,073,372,305.52 38,959,595,424.47
Shareholders’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 8,125,511.20 230,735.89
Surplus reserves 961,105,529.85 961,105,529.85
Undistributed profits -404,885,542.23 -1,006,712,290.18
Total shareholder’s equity 12,395,039,358.75 11,785,317,835.49
Total liabilities and shareholder’s equity 51,468,411,664.27 50,744,913,259.96
The notes to the financial statements attached form part of these financial statements.
Legal Representative: Wang Shu Person in charge of accounting: Han Ge
Accounting Dept. Leader: Wang Shaoyu
Financial Statements Page 4
BENGANG STEEL PLATES CO., LTD.
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
From January to June 2017
(Expressed in Renminbi unless otherwise indicated)
Items Notes January to June January to June
2017 2016
1. Total operating income 20,736,486,903.74 12,629,584,569.35
Including: Operating income 5(32) 20,736,486,903.74 12,629,584,569.35
Interest income
Premium earned
Income from handling charges and commission
2. Total operating cost 20,109,129,759.95 12,307,317,804.75
Including: Operating cost 5(32) 18,690,665,966.11 10,914,182,302.04
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
Taxes and surcharges 5(33) 133,756,731.07 26,332,894.76
Selling and distribution expenses 5(34) 587,632,707.43 430,061,063.14
General and administrative expenses 5(35) 358,951,405.08 351,954,718.48
Financial expenses 5(36) 381,513,404.80 586,667,825.19
Asset impairment loss 5(37) -43,390,454.54 -1,880,998.86
Add: Gains from the change in fair value("-" for loss)
Income on investment("-" for loss) 5(38) 3,294,593.14
Including: Income from associates and joint ventures
Exchange Income("-" for loss)
Other income
3. Operating profit("-" for loss) 630,651,736.93 322,266,764.60
Add: Non-operating income 5(39) 21,014,488.58 24,196,669.55
Including: Gain on disposal of non-current assets 3,015,294.00 2,120,458.89
Less: Non-operating expenses 5(40) 4,593,420.30 105,474.99
Including: Loss on disposal of non-current assets 4,593,420.30 105,474.99
4. Total profit("-" for total loss) 647,072,805.21 346,357,959.16
Less: Income tax expenses 5(41) 117,105,061.16 140,062,221.29
5. Net Profit("-" for net loss) 529,967,744.05 206,295,737.87
Attributable to: Owners of parent company 523,635,653.57 182,538,176.32
Non-controlling shareholders 6,332,090.48 23,757,561.55
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 529,967,744.05 206,295,737.87
Total comprehensive income attributable to owners of parent company 523,635,653.57 182,538,176.32
Total comprehensive income attributable to non-controlling shareholders 6,332,090.48 23,757,561.55
8. Earnings per share:
1) Basic earnings per share(RMB) 0.167 0.058
2) Diluted earnings per share(RMB) 0.167 0.058
The notes to the financial statements attached form part of these financial statements.
Legal Representative: Wang Shu Person in charge of accounting: Han Ge Accounting Dept. Leader: Wang Shaoyu
Financial Statements Page 5
BENGANG STEEL PLATES CO., LTD.
STATEMENT OF COMPREHENSIVE INCOME
From January to June 2017
(Expressed in Renminbi unless otherwise indicated)
Items Notes January to June 2017 January to June 2016
1. Operating income 13(4) 21,197,516,779.20 13,185,388,447.19
Less: Operating cost 13(4) 19,482,976,074.32 11,729,886,784.21
Taxes and surcharges 116,783,416.00 14,639,973.93
Selling and distribution expenses 373,519,186.39 352,259,509.33
General and administrative expenses 336,370,276.02 321,474,092.99
Financial expenses 350,175,885.42 555,023,839.47
Asset impairment loss -43,390,454.54 -1,880,998.86
Add: Gains from the change in fair value("-" for loss)
Income on investment("-" for loss) 13(5) 105,369,227.90 13,713,328.45
Including: Income from associates and joint ventures
Other income
2. Operating profit("-" for loss) 686,451,623.49 227,698,574.57
Add: Non-operating income 20,277,081.86 23,562,540.98
Including: Gain on disposal of non-current assets 3,015,294.00 2,050,505.76
Less: Non-operating expenses 4,593,420.30 105,474.99
Including: Loss on disposal of non-current assets 4,593,420.30 105,474.99
3. Total profit("-" for total loss) 702,135,285.05 251,155,640.56
Less: Income tax expenses 100,308,537.10 138,090,659.07
4. Net Profit("-" for net loss) 601,826,747.95 113,064,981.49
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
saleEffective portion of gains or losses from cash flow
hedging
(5)Gains and losses resulting from translating the foreign
currency financial statements
(6) Other
6. Total comprehensive income 601,826,747.95 113,064,981.49
7. Earnings per share:
1) Basic earnings per share(RMB)
2) Diluted earnings per share(RMB)
The notes to the financial statements attached form part of these financial statements.
Legal Representative: Wang Shu Person in charge of accounting: Han Ge
Accounting Dept. Leader: Wang Shaoyu
Financial Statements Page 6
BENGANG STEEL PLATES CO., LTD.
CONSOLIDATED STATEMENT OF CASH FLOWS
From January to June 2017
(Expressed in Renminbi unless otherwise indicated)
Items Notes January to June 2017 January to June 2016
1.Cash flow from operating activities
Cash received from sale of goods or rendering of services 14,489,666,407.59 10,026,046,529.17
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 71,132,309.30 303,389,091.42
Other cash received relating to operating activities 5(42) 87,817,078.61 84,327,996.29
Subtotal of cash inflows from operating activities 14,648,615,795.50 10,413,763,616.88
Cash paid for goods and services 17,237,734,129.30 6,825,224,385.05
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 719,101,828.61 643,200,672.87
Cash paid for all types of taxes 390,701,219.38 154,701,105.71
Other cash paid relating to operating activities 5(42) 348,384,302.93 399,860,089.73
Subtotal of cash outflows from operating activities 18,695,921,480.22 8,022,986,253.36
Net cash flows from operating activities -4,047,305,684.72 2,390,777,363.52
2. Cash flows from investing activities
Cash received from return on investments 424,000,000.00
Cash received from distribution of dividends or profit 3,294,593.14
Net cash received from disposal of fixed assets, intangible assets
2,405,531.00
and other 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 427,294,593.14 2,405,531.00
Cash paid for acquisition of fixed assets, intangible assets and
702,058,422.96 758,159,102.38
other long-term assets
Cash paid for acquisition of investments 180,000,000.00 113,000,000.00
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 882,058,422.96 871,159,102.38
Net cash flows from investing activities -454,763,829.82 -868,753,571.38
3. Cash flows from financing activities
Proceeds from investment
Including: Proceeds from investment of non-controlling
shareholders of subsidiary
Proceeds from borrowings 10,419,164,500.00 7,222,865,800.00
Cash received from bond issuance
Other proceeds relating to financing activities 5(42) 210,000,000.00
Subtotal of cash inflows from financing activities 10,419,164,500.00 7,432,865,800.00
Cash repayments of borrowings 6,099,082,442.74 6,003,720,086.94
Cash payments for distribution of dividends, profit or interest
565,025,996.70 573,974,920.33
expenses
Including: Cash paid to non-controlling shareholders as dividend
and profit by subsidiaries
Other cash payments relating to financing activities 5(42)
Subtotal of cash outflows from financing activities 6,664,108,439.44 6,577,695,007.27
Net cash flows from financing activities 3,755,056,060.56 855,170,792.73
4. Effect of foreign exchange rate changes on cash and cash
-41,586,403.20 388,468,098.61
equivalents
5. Net increase in cash and cash equivalents -788,599,857.18 2,765,662,683.48
Add: Cash and cash equivalents at the beginning of the period 12,273,574,488.67 4,612,782,772.98
6. Cash and cash equivalents at the ending of the period 11,484,974,631.49 7,378,445,456.46
The notes to the financial statements attached form part of these financial statements.
Legal Representative: Wang Shu Person in charge of accounting: Han Ge
Accounting Dept. Leader: Wang Shaoyu
Financial Statements Page 7
BENGANG STEEL PLATES CO., LTD.
STATEMENT OF CASH FLOWS
From January to June 2017
(Expressed in Renminbi unless otherwise indicated)
January to June January to June
Items Notes
2017 2016
1. Cash flow from operating activities
Cash received from sale of goods or rendering of services 14,377,855,065.89 9,828,128,086.69
Tax rebate received 21,102,552.86 299,232,274.50
Other cash received relating to operating activities 80,547,620.06 71,902,496.61
Subtotal of cash inflows from operating activities 14,479,505,238.81 10,199,262,857.80
Cash paid for goods and services 17,094,207,253.57 6,988,799,423.39
Cash paid to and on behalf of employees 672,852,272.11 598,176,442.20
Cash paid for all types of taxes 330,314,831.68 51,750,618.52
Other cash paid relating to operating activities 244,216,504.53 277,308,179.29
Subtotal of cash outflows from operating activities 18,341,590,861.89 7,916,034,663.40
Net cash flows from operating activities -3,862,085,623.08 2,283,228,194.40
2. Cash flows from investing activities
Cash received from return on investments 424,000,000.00
Cash received from distribution of dividends or profit 105,353,447.08
Net cash received from disposal of fixed assets, intangible assets and
2,368,625.00
other long-term assets
Net cash received from disposal of subsidiary and other operating
units
Other cash received relating to investing activities
Subtotal of cash inflows from investing activities 529,353,447.08 2,368,625.00
Cash paid for acquisition of fixed assets, intangible assets and other
687,313,444.96 746,341,472.97
long-term assets
Cash paid for acquisition of investments 180,000,000.00 113,000,000.00
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 867,313,444.96 859,341,472.97
Net cash flows from investing activities -337,959,997.88 -856,972,847.97
3. Cash flows from financing activities
Proceeds from investment
Cash received from borrowings 9,396,164,500.00 6,782,865,800.00
Other proceeds relating to financing activities
Other cash received relating to financing activities 210,000,000.00
Subtotal of cash inflows from financing activities 9,396,164,500.00 6,992,865,800.00
Cash repayments of borrowings 5,345,526,396.17 5,551,474,882.41
Cash payments for distribution of dividends, profit or interest 399,928,132.12 541,489,070.30
Other cash payments relating to financing activities
Subtotal of cash outflows from financing activities 5,745,454,528.29 6,092,963,952.71
Net cash flows from financing activities 3,650,709,971.71 899,901,847.29
4. Effect of foreign exchange rate changes on cash and cash
-41,635,090.04 388,459,851.48
equivalents
5. Net increase in cash and cash equivalents -590,970,739.29 2,714,617,045.20
Add: Cash and cash equivalents at the beginning of the period 11,876,536,613.66 4,489,630,951.08
6. Ending balance of cash and cash equivalents 11,285,565,874.37 7,204,247,996.28
The notes to the financial statements attached form part of these financial statements.
Legal Representative: Wang Shu Person in charge of accounting: Han Ge
Accounting Dept. Leader: Wang Shaoyu
Financial Statements Page 8
BENGANG STEEL PLATES CO., LTD.
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
From January to June 2017
(Expressed in Renminbi unless otherwise indicated)
January to June 2017
Owner’s equity attributable to parent company
Item Other equity instruments Less: Other General Non-controlling Total of owner's
Surplus interest equity
Share capital Preference Perpetual Capital reserves Treasury comprehensiv Special reserves risk Undistributed profit
Others reserves
shares bond shares e income reserve
1. Ending balance of last 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
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 9,114,845,542.05 372,721.86 961,105,529.85 -496,969,242.61 549,202,101.63 13,264,556,652.78
3. Changes in current year (“-” for decrease ) 10,284,251.88 523,635,653.57 -18,282,764.64 515,637,140.81
1) Total comprehensive income 523,635,653.57 6,332,090.48 529,967,744.05
2) Capital increase and decrease by shareholders 9,003,815.84 9,003,815.84
(1) Common share invested by shareholders 9,003,815.84 9,003,815.84
(2) Capital input by the holder of other equity
instruments
(3) Share-based payment attributable to owners'
equity
(4) Others
3) Profit distribution -34,024,878.25 -34,024,878.25
(1) Appropriation to surplus reserves
(2) Appropriation to general risk reserve
(3) Profit distribution to shareholders -34,024,878.25 -34,024,878.25
(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 10,284,251.88 406,207.29 10,690,459.17
(1) Provision of special reserves 19,733,398.02 406,207.29 20,139,605.31
(2) Use of special reserves 9,449,146.14 9,449,146.14
6) Others
4. Ending balance of current year 3,136,000,000.00 9,114,845,542.05 10,656,973.74 961,105,529.85 26,666,410.96 530,919,336.99 13,780,193,793.59
The notes to the financial statements attached form part of these financial statements.
Legal Representative: Wang Shu Person in charge of accounting: Han Ge Accounting Dept. Leader: Wang Shaoyu
Financial Statements Page 9
BENGANG STEEL PLATES CO., LTD.
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY (Continued)
From January to June 2017
(Expressed in Renminbi unless otherwise indicated)
January to June 2016
Owner’s equity attributable to parent company
Item Other equity instruments Less: Other General Non-controlling Total shareholder’s
Special Surplus Undistributed
Share capital Preference Perpetu Capital reserves treasury comprehensive risk interests equity
Others reserves reserves profits
shares al 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: Wang Shu Person in charge of accounting: Han Ge Accounting Dept. Leader: Wang Shaoyu
Financial Statements Page 10
BENGANG STEEL PLATES CO., LTD.
STATEMENT OF CHANGES IN EQUITY
From January to June 2017
(Expressed in Renminbi unless otherwise indicated)
January to June 2017
Other equity instruments Less: Other
Item Special Total shareholder’s
Share capital Preference Perpetual Capital reserves treasury comprehensive Surplus reserves Undistributed profits
Others reserves equity
shares bond shares income
1. Ending balance of last 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
Add: Change of accounting policies
Correction of errors for last period
Others
2. Beginning balance of current year 3,136,000,000.00 8,694,693,859.93 230,735.89 961,105,529.85 -1,006,712,290.18 11,785,317,835.49
3. Changes in current year (“-” for decrease ) 7,894,775.31 601,826,747.95 609,721,523.26
1) Total comprehensive income 601,826,747.95 601,826,747.95
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 7,894,775.31 7,894,775.31
(1) Provision of special reserves 17,253,644.64 17,253,644.64
(2) Use of special reserves 9,358,869.33 9,358,869.33
6) Others
4. Ending balance of current year 3,136,000,000.00 8,694,693,859.93 8,125,511.20 961,105,529.85 -404,885,542.23 12,395,039,358.75
The notes to the financial statements attached form part of these financial statements.
Legal Representative: Wang Shu Person in charge of accounting: Han Ge Accounting Dept. Leader: Wang Shaoyu
Financial Statements Page 11
BENGANG STEEL PLATES CO., LTD.
STATEMENT OF CHANGES IN EQUITY (Continued)
From January to June 2017
(Expressed in Renminbi unless otherwise indicated)
January to June 2016
Other equity instruments Less: Other
Item Special Total shareholder’s
Share capital Preference Perpetual Capital reserves treasury comprehensive Surplus reserves Undistributed profits
Others reserves equity
shares bond shares income
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
shareholders' equity
(4) Others
3) Profit distribution
(1) Appropriation of surplus reserves
(2) Profit distribution to shareholders
(3) Others
4) Transfers within shareholders' equity
(1) Capital reserves transferred into paid-in
capital (or stock)
(2) Surplus reserves transferred into paid-in
capital (or stock)
(3) Surplus reserves to recover loss
(4) 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: Wang Shu Person in charge of accounting: Han Ge Accounting Dept. Leader: Wang Shaoyu
Financial Statements Page 12
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2017
Notes to the financial statements
Bengang Steel Plates Co., Ltd.
Notes to the financial statements
From January to June 2017
(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
Notes to the financial statements Page 1
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2017
Notes to the financial statements
liability was caused by 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 23 August 2017.
(2) Consolidation Scope
As at 30 June 2017, 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 Plate Liaoyang Orel Ball Co., Ltd.
Dalian Benruitong Automobile Material Technologies Co., Ltd.
Changchun Bengang Steel & Iron Sales Co., Ltd.
Harbin Bengang Economic and Trading Co., Ltd.
Nanjing Bengang Steel Material Sales Ltd.
Wuxi Bengang Steel & Iron Sales Co., Ltd.
Xiamen Bengang Steel & Iron Sales Co., Ltd.
Yantai Bengang Steel & Iron Sales Co., Ltd.
Notes to the financial statements Page 2
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2017
Notes to the financial statements
Tianjin Bengang Steel & Iron Trading Co., Ltd.
Bengang Puxiang Cool Rolling Steel Sheet Co., Ltd.
Benxi Bengang Steel Sales Co., Ltd
Shenyang Bengang Metallurgical Science and Technology Co., Ltd.
Bengang Baojin (Shenyang)Automobile New Material Technology Co., Ltd.
Notes: Bengang Baojin (Shenyang) Automobile New Material Technology Co., Ltd. is a new
subsidy included in the Company’s consolidated financial statements.
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.
Notes to the financial statements Page 3
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2017
Notes to the financial statements
(4) Functional currency
The Company’s functional currency is RMB.
(5) The accounting treatment for Business combination under/now under common control
Business consolidation under common control: The assets and liabilities that the Company
acquired in a business combination shall be measured on the basis of their carrying amount of
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.
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.
Notes to the financial statements Page 4
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2017
Notes to the financial statements
2. Procedure of consolidation
The consolidated financial statements shall be presented by the parent based on the financial
statements of the parent and its subsidiaries, and using other related information. When
preparing consolidated financial statements, the parent shall consider the entire group as an
accounting entity, adopt uniform accounting policies and apply the requirements of
Accounting Standard for Business Enterprises related to recognition, measurement and
presentation. The consolidated financial statements shall reflect the overall financial position,
operating results and cash flows of the group.
The accounting policy and accounting period of the subsidiaries within the consolidation
scope shall be in accordance with those of the Company. If not, it is necessary to make the
adjustment according to the Company’s accounting policies and accounting period when
preparing the consolidated financial statements.
For subsidiaries through acquisition that are now under common control, the financial
statements are adjusted according to fair value of identifiable net assets on the acquisition
date.
For subsidiaries through acquisition that are under common control, the assets, liabilities (as
well as the goodwill arising from purchasing the subsidiary by the ultimate controller) are
adjusted according to book value of net assets in the financial statements of the ultimate
controller.
The owners’ interests, profit or loss, and comprehensive income of the subsidiary attributable
to the non-controlling shareholders shall be presented separately in the shareholders’ equity
of the consolidated balance sheet and under the item of net profit of the consolidated
statement of comprehensive income and under the item of total comprehensive income.
Where losses assumed by the minority exceed the minority’s interests in the beginning equity
of a subsidiary, the excess shall be charged against the minority’s interests.
(1) 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
Notes to the financial statements Page 5
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2017
Notes to the financial statements
end of the reporting period is included in the Company’s consolidated statement of cash
flows. And meanwhile the Company shall adjust the relevant items of the comparative
financial statements as if the reporting entity for the purpose of consolidation has been in
existence since the date the ultimate controlling party first obtained control.
When the Company becomes capable of exercising control over an investee under
common control due to additional investment or other reasons, Adjustment shall be made
as if the reporting entity after the combination has been in existence since the date the
ultimate controlling party first obtained control. The investment income recognized
between date of previously obtaining equity investment and the date the acquiree and
acquirer are under common control, which is later, and the combining date, other
comprehensive income and other changes of net assets arising from the equity investment
previously-held before obtaining the control the acquiree shall be adjusted against the
prior retained earnings of the comparative financial statements and the current profit or
loss respectively.
If it is now under common control, the Company shall not adjust the beginning balance in
the consolidated statement of financial position when preparing consolidated statement of
financial position. The revenue, expenses and profits of the subsidiaries from the
acquisition date to the end of the reporting period are included in the parent company’s
consolidated statement of comprehensive income. The cash flow of the subsidiaries from
the acquisition date to the end of the reporting period is included in the Company’s
consolidated statement of cash flows.
When the Company becomes capable of exercising control over an investee now under
common control due to additional investment or other reasons, the acquirer shall
remeasure its previously held equity interest in the acquiree to its fair value at the
acquisition date. The difference between the fair value and the carrying amount shall be
recognized as investment income for the period when the acquisition takes place. When
the previously-held equity investment is accounted for under the equity method, any other
comprehensive income previously recognized in relation to the acquiree’s equity changes
shall be transferred to profit or loss for the current period when the acquisition takes place.
Other comprehensive income arising from remeasurement of defined benefit plan is
excluded.
(2) Disposing subsidiary or business
1. General treatment
Notes to the financial statements Page 6
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2017
Notes to the financial statements
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.
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.
Notes to the financial statements Page 7
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2017
Notes to the financial statements
If each of the multiple transactions forms part of a bundled transaction which
eventually results in loss of control of the subsidiary, these multiple transactions shall
be accounted for as a single transaction. In the consolidated financial statements, the
difference between the consideration received and the corresponding proportion of the
subsidiary’s net assets in each transaction prior to the loss of control shall be
recognized in other comprehensive income and transferred to the profit or loss when
the Company eventually loses control of the subsidiary.
If each of the multiple transactions which eventually results in loss of control of the
subsidiary 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.
Notes to the financial statements Page 8
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2017
Notes to the financial statements
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
(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
Notes to the financial statements Page 9
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2017
Notes to the financial statements
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
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.
Notes to the financial statements Page 10
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2017
Notes to the financial statements
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.
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.
Notes to the financial statements Page 11
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2017
Notes to the financial statements
If it retained nearly all of the risks and rewards related to the ownership of the financial asset,
it shall not stop recognizing the financial asset.
To judge whether the transfer of a financial asset can satisfy the conditions as prescribed in
these Standards for stopping the recognition of a financial asset, the Company shall follow
the principle of the substance over form. Transfer of an entire financial asset can be divided
into partial financial assets transfer and entire financial asset transfer. If the transfer of an
entire financial asset satisfies the conditions for de-recognition, the difference between the
amounts of the following 2 items shall be recorded in the profits and losses of the current
period:
(1) The book value of the transferred financial asset; and
(2) The sum of consideration received from the transfer, and the accumulative amount of the
changes of the fair value originally recorded in the owners' equities (in the event that the
financial asset involved in the transfer is a financial asset Available-for-sale).
If the transfer of partial financial asset satisfies the conditions to derecognize, the entire book
value of the transferred financial asset shall, between the portion whose recognition has been
stopped and the portion whose recognition has not been stopped(under such circumstance,
the service asset retained shall be deemed as a portion of financial asset whose recognition
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
Notes to the financial statements Page 12
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2017
Notes to the financial statements
stipulations regarding the new financial liability is substantially different from that regarding
the existing financial liability, it shall terminate the recognition of the existing financial
liability, and shall at the same time recognize the new financial liability.
Where the Company makes substantial revisions to 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
Notes to the financial statements Page 13
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2017
Notes to the financial statements
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.
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 RMB 10 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.
Notes to the financial statements Page 14
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2017
Notes to the financial statements
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
Recognition and provision for bad debts for portfolio
Portfolio 1: Aging analysis method
Aging analysis method for bad debts provision:
Bad debts ratio for accounts Bad debts ratio for other
Aging
receivable (%) 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) Inventories
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.
Notes to the financial statements Page 15
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2017
Notes to the financial statements
The net realizable value of inventories for further processing in the daily business activity
shall be calculated by deducting the estimated cost of completion, estimated sale expense and
relevant taxes from the estimated sale price of inventories.
The net realizable value of inventories held for the execution of sales contracts or labor
contracts shall be calculated on the ground of the contract price. If an enterprise holds more
inventories than the quantities subscribed in the sales contract, the net realizable value of the
excessive part of 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.
Notes to the financial statements Page 16
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2017
Notes to the financial statements
(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
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.
Notes to the financial statements Page 17
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2017
Notes to the financial statements
(2) The initial cost of the long-term equity investment other than from business
acquisition
The initial cost of a long-term equity investment obtained by making payment in cash shall
be the purchase cost which is actually paid.
The initial cost of a long-term equity investment obtained on the basis of issuing equity
securities shall be the fair value of the equity securities issued.
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
Notes to the financial statements Page 18
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2017
Notes to the financial statements
current period, and the cost of the long-term equity investment shall be adjusted
accordingly.
The Company shall recognize its share of the investee’s net profits or losses, as well as its
share of the investee’s other comprehensive income, as investment income or losses and
other comprehensive income, and adjust the carrying amount of the investment accordingly.
The carrying amount of the investment shall be reduced by the portion of any profit
distributions or cash dividends declared by the investee that is attributable to the investor.
The investor’s share of the investee’s owners’ equity changes, other than those arising from
the investee’s net profit or loss, other comprehensive income or profit distribution, and the
carrying amount of the long-term equity investment shall be adjusted accordingly.
The investor shall recognize its share of the investee’s net profits or losses after making
appropriate adjustments 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
Notes to the financial statements Page 19
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2017
Notes to the financial statements
received and the carrying amount shall be recognized in 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.
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.
Notes to the financial statements Page 20
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2017
Notes to the financial statements
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.
Notes to the financial statements Page 21
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2017
Notes to the financial statements
2. Fixed assets depreciation
Fixed assets are depreciated under the straight line method. The depreciation rate is
determined according to the category of assets, the useful life and the expected residual rate.
If the components of the fixed assets have different useful lives or provide the economic
benefits in a different way, then different depreciation rate or method shall be applied and the
depreciation of the components shall be calculated separately.
Fixed assets acquired under financial leasing is depreciated over the useful life if it is
reasonably certain that the ownership of the leased assets will be acquired upon expiry of
lease, or over the shorter of lease term and useful life if it is not reasonably certain that the
ownership of the leased assets will be acquired upon expiry of lease.
Details of classification, depreciation period, residual value rate and annual depreciation rate
are as follows:
Depreciation Residual Value 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.
Notes to the financial statements Page 22
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2017
Notes to the financial statements
(17) Construction in progress
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 cost
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.
Notes to the financial statements Page 23
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2017
Notes to the financial statements
2. The capitalization period of borrowing costs
The capitalization period shall refer to the period from the commencement to the cessation of
capitalization of the borrowing costs, excluding the period of suspension of capitalization of
the borrowing costs.
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
Notes to the financial statements Page 24
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2017
Notes to the financial statements
accumulative asset disbursements minus the general borrowing by the capitalization rate of
the general borrowing used. The capitalization rate shall be calculated and determined in light
of the weighted average interest rate of the general borrowing.
Where there is any discount or premium, the amount of discounts or premiums that shall be
amortized during each accounting period shall be determined by the 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.
Notes to the financial statements Page 25
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2017
Notes to the financial statements
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.
Notes to the financial statements Page 26
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2017
Notes to the financial statements
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
Notes to the financial statements Page 27
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2017
Notes to the financial statements
combinations of asset groups is possible, the Company shall first make an impairment test on
the asset groups or combinations of asset groups not containing business reputation, calculate
the recoverable amount, compare it with the relevant carrying value and recognize the
corresponding impairment loss. Then the Company shall make an impairment test of the asset
groups or combinations of asset groups containing business reputation, and compare the
carrying value of these asset groups or combinations of asset groups(including the carrying
value of the business reputation apportioned thereto) with the recoverable amount. Where the
recoverable amount of the relevant assets or combinations of the asset groups is lower than
the carrying value thereof, it shall recognize the impairment loss of the business reputation.
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
Notes to the financial statements Page 28
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2017
Notes to the financial statements
bases and percentages in determining the amount of employee benefits, with a
corresponding charge to the profit or loss or cost of an asset for the current period.
(2) Defined benefit plan
None.
3. Accounting treatment of termination benefits
The Company 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.
Notes to the financial statements Page 29
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2017
Notes to the financial statements
The best estimate shall be conducted in accordance with the following situations,
respectively:
If there is a continuous range for the necessary expenses and if all the outcomes within this
range are equally likely to occur, the best estimate shall be determined in accordance with the
average estimate within the range, that is, the average of the upper and lower limit.
If there is not a sequent range for the necessary expenses and if the outcomes within this
range are not equally likely to occur, the best estimate shall be determined as follows:
(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.
Notes to the financial statements Page 30
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2017
Notes to the financial statements
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
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.
Notes to the financial statements Page 31
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2017
Notes to the financial statements
If the result of a transaction concerning the providing of labor services cannot be reliably
measured at the balance sheet date, it shall be measured as follows:
(1) If the cost of labor services incurred is expected to be compensated, the revenue from
the providing of labor services shall be recognized to the extent of the cost of labor services
incurred, and the cost of labor services shall be recognized; or
(2) If the cost of labor services incurred is not expected to compensate, the cost incurred
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.
Government subsidies related to assets are government subsidies whose primary condition is
that an entity qualifying for them should purchase, construct or otherwise acquire long-term
assets. Government subsidies related to incomes refer to the government subsidies beside
government subsidies pertinent to assets.
The specific condition of government subsidies related to assets for the Company is that,
government subsidies qualifying for the Company should purchase, construct or otherwise
acquire long-term assets, including fiscal appropriation for fixed assets and intangible assets
acquired, finance discount of specific borrowing pertinent to fixed assets acquired.
Government subsidies related to incomes refer to the government subsidies beside
government subsidies pertinent to assets.
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
Notes to the financial statements Page 32
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2017
Notes to the financial statements
Government subsidies related to assets shall be recognized by deducting the subsidies at the
caring amount of the assets or recognized as deferred income. Subsidies that recognized as
deferred income shall be recognized in profit or loss on a systematic basis over the periods
during the useful lives of the relevant assets (Subsidies related to daily activities should be
figured into Other Income. Subsidies that unrelated to daily activities should be figured into
Non-operating Income).
The government subsidies related to incomes to compensate future expenses, shall be
recognized as deferred income and transferred to current profit or loss (Subsidies related to
daily activities should be figured into Other Income. Subsidies that unrelated to daily
activities should be figured into Non-operating Income) in the period during which the
expenses compensation is recognized, or deduct relevant cost or loss. Government subsidies
to compensate expenses or losses already incurred shall be recognized in current profit and
loss (Subsidies related to daily activities should be figured into Other Income. Subsidies that
unrelated to daily activities should be figured into Non-operating Income) or deduct relevant
cost or loss.
Policy-related preferential loans at a below-market rate of interest the Company obtained
could be distinguished into the following two conditions, which should be treated differently.
(1) If Financial Administration allocates the discount interest funds to lending bank and the
lending bank provides loans to the Company with policy preferential below-market rate of
interest, the book value of the loans was the actual amount of loans the Company received,
while the borrowing cost should be calculated by principal and the policy preferential interest
rates.
(2) If discount interest funds are allocated to the Company by Financial Administration
directly, the discount interest shall be deducted from the borrowing cost.
(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.
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.
Notes to the financial statements Page 33
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2017
Notes to the financial statements
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.
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.
Notes to the financial statements Page 34
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2017
Notes to the financial statements
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
1. Significant changes in accounting policies.
The company’s accounting policies have not changed during the reporting period.
2. Significant changes in accounting estimates
Notes to the financial statements Page 35
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2017
Notes to the financial statements
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 accordance with 17%,11%,6
Value-added Tax(VAT) the tax laws after subtracting the deductible input VAT
of the period %
City maintenance and construction 7%,5%
Based on VAT and business tax actually paid
tax
Based on VAT and business tax actually paid
Educational surcharges 3%,2%
Based on taxable profit
Enterprise income tax 25%
(2) Tax preference
None.
5. Notes to the consolidated financial statements
(1) Cast at bank and on hand
Items Ending balance Beginning balance
Cash on hand 64,107.73 47,743.38
Cash at bank 11,190,437,502.33 12,238,841,745.29
Other monetary funds 1,050,077,541.51 693,022,529.17
Total 12,240,579,151.57 12,931,912,017.84
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 709,022,567.58 483,737,529.17
Guarantee for Yield Enhancement Products 46,581,952.50 174,600,000.00
Deposits for purchase of foreign currency
Total 755,604,520.08 658,337,529.17
(2) Notes receivable
1. Notes receivable disclosed by category
Items Ending balance Beginning balance
Notes to the financial statements Page 36
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2017
Notes to the financial statements
Bank acceptance bill 3,486,513,747.73 2,003,701,859.70
Commercial acceptance bill 26,979,278.33
Total 3,486,513,747.73 2,030,681,138.03
2. The pledged acceptance at the year-end
Items The pledged acceptance bill at the year-end
Bank acceptance bill 1,385,808,380.90
Total 1,385,808,380.90
3. The amount of Notes receivable endorsed over but no yet matured at the year-end.
Items Derecognized ending balance Underecognized ending balance
Bank acceptance bill 6,333,611,744.92
Commercial acceptance bill
Total 6,333,611,744.92
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
Carrying amount Provision for bad debts
Bad
Items
Percentage debts Book value
Amount Amount
(%) ratio
(%)
Individually significant and
tested for impairment
individually
Accounts receivable tested for
736,368,346.43 100.00 200,313,526.22 27.20 536,054,820.21
impairment by portfolio
Other insignificant items but
tested for impairment
individually
Total 736,368,346.43 100.00 200,313,526.22 27.20 536,054,820.21
Notes to the financial statements Page 37
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2017
Notes to the financial statements
Beginning balance
Carrying amount Provision for bad debts
Bad
Items
Percentage debts Book value
Amount Amount
(%) ratio
(%)
Individually significant and
tested for impairment
individually
Accounts receivable tested for
829,837,954.48 100.00 205,972,527.23 24.82 623,865,427.25
impairment by portfolio
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
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) 354,317,340.48
1-2 years (inclusive) 161,343,387.24 8,067,169.36 5
2-3 years (inclusive) 35,576,577.31 7,115,315.46 20
Over 3 years 185,131,041.40 185,131,041.40 100
Total 736,368,346.43 200,313,526.22 27.20
2. Information of provision, reversal or recovery of bad debts of current period.
The provision of bad debts of current period is RMB 5,659,001.01.
3. No accounts receivable has been written off this year.
4. Top five debtors at the year-end
Ending balance
Percentage of
Company Provision for bad
Amount total accounts
debts
receivable (%)
Huachen Auto Group Holding Co., Ltd. 119,239,063.73 16.19
Benxi Nanfen Xinhe Metallurgical Co.,
87,396,378.47 11.87 4,368,958.76
Ltd.
Benxi Steel & Iron (Group) Machinery
52,584,877.55 7.14 6,252,766.59
Manufacture Co., Ltd.
North China Petroleum Steel Pipe Co., Ltd. 29,732,876.07 4.04 29,616,623.65
Notes to the financial statements Page 38
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2017
Notes to the financial statements
Ending balance
Percentage of
Company Provision for bad
Amount total accounts
debts
receivable (%)
Ningbo CIMC Logistics Equipment Co.,
21,855,329.22 2.97
Ltd.
Total 310,808,525.04 42.21 40,238,349.00
(4) Prepayments
1. Prepayments disclosed by aging
Ending balance Beginning balance
Aging
Amount Percentage (%) Amount Percentage (%)
Within 1 year 598,454,617.50 90.93 452,700,499.16 91.67
1-2 years 47,879,302.45 7.27 31,080,628.03 6.29
2-3 years 10,018,315.85 1.52 8,279,599.88 1.68
Over 3 years 1,805,616.36 0.27 1,778,932.37 0.36
Total 658,157,852.16 100.00 493,839,659.44 100.00
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. 336,897,265.03 51.19
Shanxi Xishan Coal and Elect-ricity Power Co., Ltd. 93,542,918.52 14.21
MCC-SFRE Heavy Industry Equipment Co., Ltd. 21,274,964.40 3.23
Shenhua Sales Group Northeast Trade Co., Ltd. 21,000,000.00 3.19
Huaibei Mining Industry Co., Ltd. Coal Transportation and Sales Branch 18,000,000.00 2.73
Total 490,715,147.95 74.56
(5) Interest receivable
1. Interest receivable disclosed by category
Items Ending balance Beginning balance
2,663,285.16 4,208,818.85
Fixed deposit
2,663,285.16 4,208,818.85
Total
(6) Other receivables
1. Other receivables disclosed by category:
Items Ending balance
Notes to the financial statements Page 39
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2017
Notes to the financial statements
Carrying amount Provision for bad debts
Bad
Percentage debts Book value
Amount Amount
(%) ratio
(%)
Individually significant and
tested for impairment
individually
Accounts receivable tested
229,832,912.39 99.25 66,278,295.69 28.84 163,554,616.70
for impairment by portfolio
Other insignificant items but
tested for impairment 1,740,000.00 0.75 1,740,000.00
individually
Total 231,572,912.39 100.00 66,278,295.69 28.62 165,294,616.70
Beginning balance
Carrying amount Provision for bad debts
Bad
Items
Percentage debts Book value
Amount Amount
(%) ratio
(%)
Individually significant and
tested for impairment
individually
Accounts receivable tested for
183,443,116.06 99.06 67,273,143.57 36.67 116,169,972.49
impairment by portfolio
Other insignificant items but
tested for impairment 1,740,000.00 0.94 1,740,000.00
individually
Total 185,183,116.06 100.00 67,273,143.57 36.33 117,909,972.49
Other receivables tested for impairment by portfolio using the method of Aging analysis:
Ending balance
Items
Other receivables Provision for bad debts Bad debts ratio (%)
Within 1 year(inclusive) 150,578,901.00
1-2 years(inclusive) 9,896,312.40 494,815.62 5
2-3 years(inclusive) 4,467,773.65 893,554.73 20
Over 3 years 64,889,925.34 64,889,925.34 100
Total 229,832,912.39 66,278,295.69 28.84
Other receivables individually insignificant but tested for impairment individually
Items Carrying amount Provision for bad debts Bad debts ratio (%) Reason
Notes to the financial statements Page 40
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2017
Notes to the financial statements
Sinking Fund of
Japanese yen from
Finance Bureau of
Benxi 1,740,000.00 Sinking fund
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 994,847.88.
3. No other receivables have been written off this year.
4. Other receivables disclosed by nature
Nature Ending balance Beginning balance
Accounts 211,298,263.27 165,494,806.44
Export tax rebate 4,990,848.26
Margin and deposit 4,075,331.26 3,329,519.00
Others 16,199,317.86 11,367,942.36
Total 231,572,912.39 185,183,116.06
5. Top five debtors at the year-end
Percentage of
Nature or Provision for
Company Amount Aging total other
content bad debts
receivables
Bengang Group International Within 1
Economic and Trading Co., Accounts 15,997,051.61 year, over 6.91 2,000.00
Ltd. 3 years
Benxi Steel and Iron(Group)
Within 1
Mechanical Manufacturing Co., Accounts 4,610,543.21 1.99
year
Ltd.
Huozhou Coal and Electricity Over 3
Accounts 4,341,257.18 1.87 4,341,257.18
Group Co., Ltd. years
State Grid Liaoning Power Within 1
Accounts 3,530,637.67 1.52
Supply Co., Ltd. Benxi Branch year
Benxi Steel & Iron(Group)
Within 3
Real-estate Development Co., Accounts 2,511,984.11 1.08 173,991.52
years
Ltd.
Total 30,991,473.78 -- 13.38 4,517,248.70
(7) Inventories
1. Inventories disclosed by category
Notes to the financial statements Page 41
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2017
Notes to the financial statements
Ending balance Beginning balance
Items Carrying Carrying Impairmen
Impairment Book value Book value
amount amount t
Raw material
and main 5,942,137,530.69 4,894,918.76 5,937,242,611.93 5,524,143,499.59 4,894,918.76 5,519,248,580.83
material
Work in
process and
self-made 1,809,499,061.74 19,429,824.09 1,790,069,237.65 1,565,629,213.06 52,905,684.06 1,512,723,529.00
semi-finished
product
Finished
2,109,456,655.73 2,064,659.65 2,107,391,996.08 2,755,527,232.24 5,325,405.33 2,750,201,826.91
products
Total 9,861,093,248.16 26,389,402.50 9,834,703,845.66 9,845,299,944.89 63,126,008.15 9,782,173,936.74
Notes: No inventories are used as mortgage or guarantee at the year-end.
2. Impairment of inventory
Beginning Increase in current period Decrease in current period Ending
Items Write-back or
balance Provision Others Others balance
write-off
Raw
material and
4,894,918.76 4,894,918.76
main
material
Work in
process and
self-made 52,905,684.06 33,475,859.97 19,429,824.09
semi-finishe
d product
Finished
5,325,405.33 3,260,745.68 2,064,659.65
products
Total 63,126,008.15 36,736,605.65 26,389,402.50
(8) Other current assets
Items Ending balance Beginning balance
Prepaid enterprise income tax 182,372,542.02 183,264,161.99
Input tax to be deducted 98,460,611.34 86,134,653.84
Bank Short-Term Financial Products 244,000,000.00
Total 280,833,153.36 513,398,815.83
(9) Available-for-sale financial assets
1. Details of available-for-sale financial assets
Notes to the financial statements Page 42
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2017
Notes to the financial statements
Ending balance Beginning balance
Items Book Carrying
Carrying amount Impairment Impairment Book value
value amount
Available-for-sale
debt instruments
Available-for-sale
20,271,278.63 14,414,693.00 5,856,585.63 29,271,278.63 14,414,693.00 14,856,585.63
equity instruments
Including:
Measured at fair
value
Measured at
20,271,278.63 14,414,693.00 5,856,585.63 29,271,278.63 14,414,693.00 14,856,585.63
cost
Total 20,271,278.63 14,414,693.00 5,856,585.63 29,271,278.63 14,414,693.00 14,856,585.63
Notes to the financial statements Page 43
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2017
Notes to the financial statements
2. Available-for-sale financial assets measured at cost
Carrying amount Total impairment Cash
Percentage of dividend
Company
Beginning Ending Beginning Ending share in the of the
invested in Increase Decrease Increase Decrease
Balance Balance Balance Balance firm (%) current
period
Zhejiang
Bengang Jingrui
1,967,605.63 1,967,605.63 20.00
Steel 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
9,000,000.00 9,000,000.00
mobile New
Material Co., Ltd
Total 29,271,278.63 9,000,000.00 20,271,278.63 14,414,693.00 14,414,693.00
Notes to the financial statements Page 44
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2017
Notes to the financial statements
(10) Fixed assets
1. Details of fixed assets
Transportation
Items Buildings Machinery Total
equipment
1. Total original value
Beginning balance 11,782,464,504.30 38,138,073,694.83 832,584,624.54 50,753,122,823.67
Increase
5,636,318.96 5,636,318.96
in current period
Including: Purchase 155,476.52 155,476.52
Transferred
from
5,480,842.44 5,480,842.44
construction
in progress
Merging
Others
Decrease in current
59,712,493.86 59,712,493.86
period
Including: Disposal 59,712,493.86 59,712,493.86
Others
Ending balance 11,782,464,504.30 38,083,997,519.93 832,584,624.54 50,699,046,648.77
2.Total accumulated
depreciation
Beginning balance 5,001,998,265.97 24,497,112,858.57 544,382,199.18 30,043,493,323.72
Increase
173,725,458.08 759,332,914.48 2,066,651.70 935,125,024.26
in current period
Including: Provision 173,725,458.08 759,332,914.48 2,066,651.70 935,125,024.26
Others
Decrease in current
54,315,330.17 54,315,330.17
period
Including: Disposal 54,315,330.17 54,315,330.17
Others
Ending balance 5,175,723,724.05 25,202,130,442.88 546,448,850.88 30,924,303,017.81
3. Total impairment
Beginning balance 8,208,087.85 12,952,774.66 21,160,862.51
Increase
in current period
Including: Provision
Others
Decrease in current
period
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 6,598,532,692.40 12,868,914,302.39 286,135,773.66 19,753,582,768.45
Beginning book value 6,772,258,150.48 13,628,008,061.60 288,202,425.36 20,688,468,637.44
Notes to the financial statements Page 45
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2017
Notes to the financial statements
2. Fixed assets leased out by operating lease
Items Book value
Buildings 23,686,878.11
Machinery 3,674,508.08
Total 27,361,386.19
3. Fixed assets without property rights certificates at the year-end
Items Book value Reason
Plants and Buildings 996,678,256.84 To be handled in batches
(11) Construction in progress
1. Details of construction in progress
Ending balance Beginning balance
Items Impa
Impair
Carrying amount ment Book value Carrying amount irme Book value
nt
High Strength Cold
Rolling Steel 5,368,077,954.30 5,368,077,954.30 4,947,002,125.33 4,947,002,125.33
Renovation Project
The Third Cold
Rolling Work
Hot-Dip
456,515,887.84 456,515,887.84 398,719,600.41 398,719,600.41
Galvanizing
Production Line
Project
Energy Saving And
Environmental
Protection
Reconstruction Of
196,050,260.88 196,050,260.88 160,819,316.39 160,819,316.39
The Converter
System And 180 Ton
Dephophorization
Converter Project
The 360 Square
Meter Sintering 9,533,810.01 9,533,810.01
Machine
Manufacturing
Department Energy 6,063,367.91 6,063,367.91 4,656,735.30 4,656,735.30
Control Center
Information System
29,967,791.00 29,967,791.00 27,813,512.90 27,813,512.90
Engineering
Power Plant the
447,174,799.98 447,174,799.98 427,626,724.92 427,626,724.92
Third Plant
Notes to the financial statements Page 46
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2017
Notes to the financial statements
Ending balance Beginning balance
Items Impa
Impair
Carrying amount ment Book value Carrying amount irme Book value
nt
Renovation Project
Other Projects 516,666,103.77 516,666,103.77 244,035,658.86 244,035,658.86
Total 7,030,049,975.69 7,030,049,975.69 6,210,673,674.11 6,210,673,674.11
Notes to the financial statements Page 47
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2017
Notes to the financial statements
2. The change of major construction in progress
Budget (In Other
10 Beginning Increase Transfer to
Items Thousand decrea Ending balance
balance Amount FA
Yuan) se
High Strength
Cold Rolling
613,498.00 4,947,002,125.33 421,075,828.97 5,368,077,954.30
Steel Renovation
Project
The Third Cold
Rolling Work
Hot-Dip
86,918.00 398,719,600.41 57,796,287.43 456,515,887.84
Galvanizing
Production Line
Project
Energy Saving
And
Environmental
Protection
Reconstruction
Of The
177,864.40 160,819,316.39 35,230,944.49 196,050,260.88
Converter
System And 180
Ton
Dephophorizatio
n Converter
Project
The 360 Square
Meter Sintering 128,403.20 9,533,810.01 9,533,810.01
Machine
Manufacturing
Department
29,450.00 4,656,735.30 3,398,152.03 1,991,519.42 6,063,367.91
Energy Control
Center
Information
System 42,725.00 27,813,512.90 2,154,278.10 29,967,791.00
Engineering
Power Plant the
Third Plant
61,072.00 427,626,724.92 19,548,075.06 447,174,799.98
Renovation
Project
Other Projects 244,035,658.86 276,119,767.93 3,489,323.02 516,666,103.77
Total 1,139,930.60 6,210,673,674.11 421,075,828.97 5,480,842.44 7,030,049,975.69
Continued
Notes to the financial statements Page 48
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2017
Notes to the financial statements
Including:
Input Accumulated
capitalized
of Progres amount of Capitalizatio
Items s (%) interest of Source of fund
Budge capitalized n rate
current
t (%) interest
period
High Strength
Cold Rolling 168,535,430.9 Self-raised fund &
80% 82% 721,446,966.74 4.10%
Steel Renovation 3 Loan
Project
The Third Cold
Rolling Work
Hot-Dip
53% 80% Self-raised fund
Galvanizing
Production Line
Project
Energy Saving
And
Environmental
Protection
Reconstruction
Self-raised fund &
Of The Converter 85% 90% 159,551,833.50 10,884,374.52 4.10%
Loan
System And 180
Ton
Dephophorizatio
n Converter
Project
The 360 Square
Self-raised fund &
Meter Sintering 88% 96% 68,627,433.26 4.10%
Loan
Machine
Manufacturing
Department Self-raised fund &
91% 96% 45,372,134.03 4.10%
Energy Control Loan
Center
Information
Self-raised fund &
System 92% 96% 34,557,523.62 379550.99
Loan
Engineering
Power Plant the
Third Plant Self-raised fund &
73% 83% 27,140,056.82 9,768,778.16 4.10%
Renovation Loan
Project
Other Projects Self-raised fund
1,035,876,056.3 189,568,134.6
Total
0 0
Notes to the financial statements Page 49
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2017
Notes to the financial statements
(12) Construction material
Items Beginning balance Increase Decrease Ending balance
Special
7,783,370.29 100,869,463.30 104,093,907.79 4,558,925.80
equipment
Total 7,783,370.29 100,869,463.30 104,093,907.79 4,558,925.80
(13) Intangible assets
1. Details of intangible assets
Items Land use right Office software Total
1.Total of original value
Beginning balance 296,245,314.76 397,064.99 296,642,379.75
Increase
Including: Purchase
Decrease
Including: Disposal
Ending balance 296,245,314.76 397,064.99 296,642,379.75
2. Total of Accumulated
Amortization
Beginning balance 36,763,695.35 41,273.47 36,804,968.82
Increase 2,962,453.13 19,853.24 2,982,306.37
Including: Provision 2,962,453.13 19,853.24 2,982,306.37
Decrease
Including: Disposal
Ending balance 39,726,148.48 61,126.71 39,787,275.19
4. Total of Impairment
Beginning balance
Increase
Including: Provision
Decrease
Including: Disposal
Ending balance
5. Total of Net value
Ending book value 256,519,166.28 335,938.28 256,855,104.56
Beginning book value 259,481,619.41 355,791.52 259,837,410.93
Notes to the financial statements Page 50
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2017
Notes to the financial statements
(14) Deferred tax assets and deferred tax liability
1. Undeducted deferred tax asset
Ending balance Beginning balance
Deductible Deductible
Items Deferred tax Deferred tax
temporary temporary
asset asset
differences differences
(1) Temporary differences
between Carrying amount and
tax basis
Total impairment 325,245,151.01 81,311,287.75 368,635,605.55 92,158,901.41
Differences of depreciation and
333,978,859.03 83,494,714.76 333,978,859.03 83,494,714.76
amortization
Welfare for early retirement 4,686,056.91 1,171,514.23 5,859,027.00 1,464,756.75
Unpaid employee salary 32,180,728.46 8,045,182.12 7,339,835.99 1,834,959.00
(2) Deductible operating losses 728,330,824.55 182,082,706.14 1,136,092,189.97 284,023,047.49
(3) Internal unrealized profit 78,749,247.78 19,687,311.95 52,499,498.52 13,124,874.63
Total 1,503,170,867.74 375,792,716.94 1,904,405,016.06 476,101,254.04
2. Unrecognized deferred tax assets
Item Ending balance Beginning balance
Deductible temporary differences 3,311,628.91 3,311,628.91
Deductible losses 2,339,030,279.85 3,041,165,564.90
Total 2,342,341,908.76 3,044,477,193.81
3. The deductible loss of unrecognized deferred tax assets due in the following period:
Year Ending balance Beginning balance Notes
2017 44,146,053.02
2018 61,226,455.38
2019 179,596,211.65
2020 2,328,797,491.85 2,745,964,056.85
2021 10,232,788.00 10,232,788.00
Total 2,339,030,279.85 3,041,165,564.90
Notes: The balance is subject to the verification and confirmation of the local tax bureau.
(15) Short-term loans
Items Ending balance Beginning balance
Guaranteed loans 14,508,963,200.00 10,633,173,500.00
Credit loans 8,278,711,200.00 7,483,988,079.48
Mortgage loans
Pledge loans 645,311,200.00
Notes to the financial statements Page 51
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2017
Notes to the financial statements
Total 22,787,674,400.00 18,762,472,779.48
(16) Notes payable
Items Ending balance Beginning balance
Bank acceptance bill 2,654,713,650.65 1,712,218,775.03
Domestic letter of credit 4,659,955,122.10
Total 2,654,713,650.65 6,372,173,897.13
(17) Accounts payable
1. Accounts payable disclosed by category:
Item Ending balance Beginning balance
Accounts payable for goods 4,109,974,739.18 4,399,863,760.66
Accounts payable for labor 72,532,213.00 78,583,112.68
Accounts payable for project and equipment 719,619,305.25 818,679,528.16
Accounts payable for repair 476,312,718.96 382,273,450.21
Others 1,433,642.25 844,809.81
Total 5,379,872,618.65 5,680,244,661.52
2. Significant accounts payable aging over one year:
Items Amount Amount aging over one year Reason
Benxi Steel & Iron(Group) Mining
911,756,652.03 56,314,691.30 Not yet settled
Co., Ltd.
Bengang Group International
790,278,853.89 47,503,047.75 Not yet settled
Economic and Trading Co., Ltd.
Liaoning Shenjiao International Trade
82,865,953.79 46,526,747.07 Not yet settled
Co., Ltd.
Jixi Huasheng Fengyuan Coal
46,005,916.07 46,005,916.07 Not yet settled
Preparation Co., Ltd.
Benxi Nanfen Xinhe Metallurgical Not yet settled
39,634,041.29 39,634,041.29
Co., Ltd.
Total 1,870,541,417.07 235,984,443.48
(18) Advance from customers
1. Advance from customers disclosed by category
Items Ending balance Beginning balance
Advance for goods 3,290,002,245.71 3,679,477,129.80
Total 3,290,002,245.71 3,679,477,129.80
2. There is no significant advance from customers aging over one year.
Notes to the financial statements Page 52
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2017
Notes to the financial statements
(19) Employee benefits payable
1. Employee benefits payable
Beginning
Items Increase Decrease Ending balance
balance
Short-term employee
18,146,736.28 791,828,227.17 773,455,834.34 36,519,129.11
benefits
Post-employment benefits -
57,730.42 124,856,230.57 124,853,279.83 60,681.16
defined contribution plans
5,859,027.00 1,174,970.09 4,684,056.91
Termination benefits
24,063,493.70 916,684,457.74 899,484,084.26 41,263,867.18
Total
2. Short-term employee benefits
Beginning Ending
Items Increase Decrease
balance balance
(1) Salary, bonus, allowance and
8,895,580.36 638,787,236.89 621,067,078.06 26,615,739.19
subsidy
(2) Employee welfare 26,039,726.71 26,039,726.71
(3) Social Insurance 655,574.20 58,424,922.00 58,424,922.00 655,574.20
Including: Medical insurance 43,281,121.35 43,281,121.35
Work injury
655,574.20 15,133,590.27 15,133,590.27 655,574.20
insurance
Maternity insurance 10,210.38 10,210.38
(4) Housing 6,850,713.00 55,104,166.20 55,102,166.20 6,852,713.00
(5) Union funds and staff
1,744,868.72 13,472,175.37 12,821,941.37 2,395,102.72
education fee
(6) Short-term compensated
absences
(7) Short-term profit - sharing
scheme
(8) Others
18,146,736.28 791,828,227.17 773,455,834.34 36,519,129.11
Total
3. Defined contribution plans
Beginning Ending
Items Increase Decrease
balance balance
56,104.40 119,965,183.93 119,961,538.23 59,750.10
Basic pension fund
1,626.02 4,891,046.64 4,891,741.60 931.06
Unemployment insurance
57,730.42 124,856,230.57 124,853,279.83 60,681.16
Total
Notes to the financial statements Page 53
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2017
Notes to the financial statements
(20) Current tax liabilities
Items Ending balance Beginning balance
Value-added Tax(VAT) 1,490,500.36 2,173,913.92
Enterprise income tax 9,038,660.74 13,019,967.76
City maintenance and construction tax 2,179,408.04 14,026,666.46
Educational surcharges 1,570,190.02 10,029,654.63
Housing property tax 3,178,293.23 2,970,971.37
Others 2,213,406.91 3,550,411.32
Total 19,670,459.30 45,771,585.46
(21) Interests payable
Items Ending balance Beginning balance
Corporate bond interest 31,334,821.13 70,109,821.13
Loan interests 12,542,327.91 5,005,444.53
43,877,149.04 75,115,265.66
Total
(22) Other payables
1. Other payables disclosed by nature
Items Ending balance Beginning balance
Deposit 2,360,628.87 2,719,618.51
Margin 148,174,624.13 130,550,329.63
Accounts 300,236,728.97 304,191,214.76
Others 18,727,978.12 22,548,050.88
Total 469,499,960.08 460,009,213.78
2. Significant other payables ageing over one year
Name Ending balance Amount aging over one year Reason
Benxi Steel & Iron(Group) Co., Ltd. 200,504,584.76 116,485,854.66 Not yet settled
Bengang Group International
27,984,077.05 9,489,590.79 Not yet settled
Economic and Trading Co., Ltd.
Total 228,488,661.81 125,975,445.45
(23) Non-current liabilities due within one year
1. Breakdown of Non-current liabilities due within one year
Item Ending balance Beginning balance
Long-term loans due within one year 1,110,787,748.00 227,669,535.66
Long-term payables due within one year 210,000,000.00
Notes to the financial statements Page 54
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2017
Notes to the financial statements
Total 1,110,787,748.00 437,669,535.66
2. Long-term loans due within one year
Items Ending balance Beginning balance
Guaranteed loans 1,110,787,748.00 226,789,535.66
Credit loans 880,000.00
Total 1,110,787,748.00 227,669,535.66
3. Long-term payables due within one year
Items Ending balance Beginning balance
Liaoning Hengyi Financial Leasing Co., Ltd. 210,000,000.00
Total 210,000,000.00
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)
The purchase price of the leased asset is RMB 210,000,000. 00. Lease period is one year
staring from 28 March 2016. The due date was 28 March 2017.
(24) Long-term loans
Categories Ending balance Beginning balance
3,139,041,691.87 3,440,691,721.62
Guaranteed loans
22,296,444.00 8,240,000.00
Credit loans
3,161,338,135.87 3,448,931,721.62
Total
(25) Bonds payables
1. Details of bonds payable
Items Ending balance Beginning balance
Corporate bond 1,496,550,521.55 1,494,825,782.32
Total 1,496,550,521.55 1,494,825,782.32
2. Changes in bonds payable:
Bond
Name Par value Date of issue Issue value
maturity
Bengang Steel Plate Co., Ltd.
Corporate Bond of 2015 1,500,000,000.00 5 February 2015 3 years 1,500,000,000.00
(Phase I)
Continued
Issuance Interest calculated Amortization Repayme
Name Ending balance
in current by par value of the nt in
Notes to the financial statements Page 55
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2017
Notes to the financial statements
period Premiums and current
Discounts period
Bengang Steel Plate Co.,
Ltd. Corporate Bond of 38,775,000.00 -1,724,739.23 1,496,550,521.55
2015 (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.
(26) Deferred income
Items Ending balance Beginning balance
Government Subsidies 396,052,000.00 410,399,000.00
Total 396,052,000.00 410,399,000.00
Notes to the financial statements Page 56
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2017
Notes to the financial statements
Other
Items Beginning balance Increase Transfer to non-operating income decrea Ending balance Related to assets or income
se
MES PROJECT SPECIAL FUND 5,160,000.00 860,000.00 4,300,000.00 Assets
Second Batch of National Cleaned Manufacturing
800,000.00 400,000.00 Assets
Demonstration Project Fund 400,000.00
Industrial Enterprise Energy Management Center
11,600,000.00 Assets
Construction Demonstration Project 11,600,000.00
Environment Pollution Renovation Project 12,474,000.00 2,617,000.00 9,857,000.00 Assets
Environment Renovation Project and Regional Basin
1,180,000.00 250,000.00 Assets
Environment Protection Project 930,000.00
Energy-saving Technological Reform Fiscal Reward
2,954,000.00 1,477,000.00 Assets
Project 1,477,000.00
High Strength Cold Rolling Steel Renovation Project 250,000,000.00 250,000,000.00 Assets
Automobile High-class Electrolytic Zinc Steel Plate
32,832,000.00 4,104,000.00 Assets
Production Line Project 28,728,000.00
Sintering Machine Residue Heat Usage and
12,612,000.00 2,102,000.00 Assets
Desulfurization Project 10,510,000.00
Wastewater Treatment Plant Renovation Project 1,500,000.00 750,000.00 750,000.00 Assets
Overseas R&D Team Introduction Special Fund 4,000,000.00 4,000,000.00 Income
7 130t Boilers Flue Gas Desulfurization Renovation
24,000,000.00 Assets
Project of Power Plant 24,000,000.00
Treatment and Salt Extraction Project of Desulfurization
200,000.00 50,000.00 Assets
Waste Liquid of Coke Plant 150,000.00
Overseas Advanced Technology Introduction Special
12,652,000.00 442,000.00 Assets
Fund 12,210,000.00
Automobile Steel Sheet Engineering Laboratory Project 1,000,000.00 1,000,000.00 Assets
Notes to the financial statements Page 57
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2017
Notes to the financial statements
Other
Items Beginning balance Increase Transfer to non-operating income decrea Ending balance Related to assets or income
se
Third-generation High Strength Steels for Automobile
2,900,000.00 Assets
R&D Project 2,900,000.00
The 360 Cubic Meter Sintering Machine Flue Gas
Desulfurization Renovation Project of Blast Furnace 600,000.00 100,000.00 Assets
Plant 500,000.00
Environment Protection Project Special Fund 3,480,000.00 580,000.00 2,900,000.00 Assets
Advance Treatment of Carbon Fiber Waste Water
9,500,000.00 Assets
Project of Plates Coke Plant Dongfeng Workshop 9,500,000.00
Coal-fired Boiler Desulfuration and Denitration Project
6,000,000.00 Assets
of Bengang Power Plant High Pressure Workshop 6,000,000.00
Cogeneration Transformation Project of Power Plant the
10,000,000.00 Assets
Third Workshop 10,000,000.00
Sintering Machine Energy Conservation and
4,640,000.00 580,000.00 Assets
Environment Protection Project of Iron Making Plant 4,060,000.00
Air Quality Automatic Monitoring System 315,000.00 35,000.00 280,000.00 Assets
Compensation from Xihu Resource Management
700,000.00 700,000.00 /
Committee
Total 410,399,000.00 700,000.00 15,047,000.00 396,052,000.00
Notes to the financial statements Page 58
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2017
Notes to the financial statements
(27) Share capital
Ending
Increase/decrease(+ , - )
Beginning balance
Items
balance Issuing of new Bonus Transferred from Othe Subto
share shares reserves rs tal
Capital 3,136,000,00 3,136,000,00
shares 0.00 0.00
(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 372,721.86 19,733,398.02 9,449,146.14 10,656,973.74
Total 372,721.86 19,733,398.02 9,449,146.14 10,656,973.74
(30) Surplus reserves
Items Beginning balance Increase Decrease Ending balance
Statutory surplus
961,105,529.85 961,105,529.85
reserves
Total 961,105,529.85 961,105,529.85
(31) Undistributed profits
Item Amount Distribution rate
Before adjustments: undistributed profits at last year-end -496,969,242.61 -1,278,244,071.93
Adjustments of the beginning distributed profits(increase
+ / decease -)
After adjustments: undistributed profit at this
-496,969,242.61 -1,278,244,071.93
year-beginning
Add: undistributed profit belonging to parent company 523,635,653.57 781,274,829.32
Less : Statutory surplus reserves
Discretionary reserves
General risk reserves
Notes to the financial statements Page 59
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2017
Notes to the financial statements
Common shares dividend payable
Common shares dividend transferred to paid-in capital
Ending balance of undistributed profits 26,666,410.96 -496,969,242.61
(32) Operating income and operating cost
January to June 2017 January to June 2016
Item
Revenue Cost Revenue Cost
Principal
19,476,278,905.41 17,638,682,335.86 11,890,962,256.28 10,286,817,465.00
business
Other
1,260,207,998.33 1,051,983,630.25 738,622,313.07 627,364,837.04
business
20,736,486,903.74 18,690,665,966.11 12,629,584,569.35 10,914,182,302.04
Total
(33) Tax and surcharges
Items January to June 2017 January to June 2016
Housing property tax 37,046,142.33
Business tax 24,297.03
City maintenance and
construction tax 46,713,364.91 15,218,000.34
Educational surcharges 33,504,830.35 11,090,597.39
Land use right 3,155,810.05
Vehicle and vessel use right 15,152.73
Stamp tax 13,321,430.70
Others
Total 133,756,731.07 26,332,894.76
Notes:
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.
(34) Selling and distribution expenses
Items January to June 2017 January to June 2016
Freight 428,678,322.48 282,160,883.00
Port surcharges 86,681,806.22 90,759,527.08
Agency fee 38,969,368.55 28,513,161.47
Package fee 3,109,039.80 2,761,636.55
Salary and benefits 10,794,773.70 10,503,082.85
Notes to the financial statements Page 60
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2017
Notes to the financial statements
Others 19,399,396.68 15,362,772.19
Total 587,632,707.43 430,061,063.14
Notes:
Selling and distribution expenses of the current period was RMB 587,632,707.43, increased RMB
157,571,644.29 compared to last period which was RMB 430,061,063.14, at the rate of 36.64%.
The reason of the increase is the increase of external freight expenses.
(35) General and administrative expenses
Items January to June 2017 January to June 2016
Salary and benefits 94,209,841.05 76,395,221.96
Accounts payable for repair 80,215,426.18 92,167,672.38
Taxes 44,353,333.71
Land use right fee 27,345,714.30 28,257,238.10
Depreciation 25,945,531.46 13,236,195.97
Social security expense 21,716,785.13 20,539,733.05
Pollution discharge fee 25,709,122.00 5,866,430.00
Water resources fee 5,596,700.00
Housing fund 4,614,199.60 5,022,412.40
Heating fee 11,677,556.25 4,103,468.74
Entertainment expense 1,535,128.96 1,333,401.18
Amortization of intangible assets 2,982,306.37 2,969,528.58
Freight 277,851.35 290,256.00
Lease expense 572,987.24 693,067.82
Others 56,552,255.19 56,726,758.59
Total 358,951,405.08 351,954,718.48
(36) Financial expenses
Category January to June 2017 January to June 2016
Interest cost 434,308,806.10 396,101,669.29
Less: Interest income 36,772,069.07 12,694,596.80
Exchange loss -23,234,309.69 175,055,105.02
Others 7,210,977.46 28,205,647.68
Total 381,513,404.80 586,667,825.19
Notes:
Financial expenses of the current period was RMB 381,513,404.80, decreased RMB
205,154,420.39 compared to the previous period which was RMB 586,667,825.19, at the rate of
34.97%. The reason of the decrease is because of the decrease of exchange loss.
Notes to the financial statements Page 61
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2017
Notes to the financial statements
(37) Asset impairment loss
Items January to June 2017 January to June 2016
Loss for bad debts -6,653,848.89 -1,880,998.86
Impairment of inventories -36,736,605.65
Impairment of available-for-sale assets
Impairment of Fixed assets
Total -43,390,454.54 -1,880,998.86
Notes:
Asset impairment loss of the current period was RMB-43,390,450.54, decreased RMB
41,509,455.68 compared to last period which was RMB -1,880,998.86, at the rate of 2,206.78%.
The reason of the decrease is because of the reverse of inventory impairment.
(38) Income on investment
Items January to June 2017 January to June 2016
Equity method Income
Income on disposal of long-term equity investment
Income on the changes of financial assets fair value
Income on the disposal of financial assets where the fair value
changed
Income on held-to-maturity investment
Income on available-for-sale financial assets
Investment on disposal of available-for-sale financial assets
Income from bank short-term financial products 3,294,593.14
Total 3,294,593.14
(39) Non-operating income
January to June January to June The amount recognized in non-operating
Items
2017 2016 profit
Non-current
assets
disposal
income 3,015,294.00 2,120,458.89 3,015,294.00
Including:
Fixed assets
disposal
income 3,015,294.00 2,120,458.89 3,015,294.00
Notes to the financial statements Page 62
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2017
Notes to the financial statements
Intangible
assets
disposal
income
Debt
restructuring
gain 822,116.45 4,527,416.04 822,116.45
Non-monetar
y assets
exchange
income
Donations
received
Government
Subsidies 15,047,000.00 16,622,000.00 15,047,000.00
Fines and the
penalty
income
Others 2,130,078.13 926,794.62 2,130,078.13
21,014,488.58 24,196,669.55 21,014,488.58
Total
Details of government subsidies recorded into current profits and loss:
January to June January to June Related to assets Note
Items
2017 2016 or income s
Transfer from deferred income 14,347,000.00 16,622,000.00 Related to assets
Compensation from Benxi Lake
700,000.00 Income
Resource Management Committee
Total 15,047,000.00 16,622,000.00
(40) Non-operating expenses
January to June January to June The amount recognized in non-operating
Items
2017 2016 profit
Non-curren
4,593,420.30 105,474.99 4,593,420.30
t assets
disposal
Notes to the financial statements Page 63
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2017
Notes to the financial statements
loss
Including:
Fixed
4,593,420.30 105,474.99 4,593,420.30
assets
disposal
loss
Fines and
overdue
payment
Others
4,593,420.30 105,474.99 4,593,420.30
Total
(41) Income tax expense
1. Income tax expense
Items January to June 2017 January to June 2016
Income tax payable for the current year 16,796,524.06 3,949,704.94
Deferred income tax expense 100,308,537.10 136,112,516.35
Total 117,105,061.16 140,062,221.29
2. Accounting profit and income tax expense adjustment process
Item January to June 2017
Total profit 647,072,805.21
Income tax expense calculate according to the official or
161,768,201.30
applicable tax rate
Effect of different tax rates applied by subsidiaries
Effect of adjustment of the income tax expense of prior period
Effect of non-taxable income
Effect of undeductable costs, expenses or losses
Effect of use of deductible losses of unrecognized deferred tax
-44,663,140.14
asset of prior period
Effect of deductible temporary differences or deductible losses
of unrecognized deferred tax asset of current period
Income tax expense 117,105,061.16
(42) Notes of statement of cash flows
Notes to the financial statements Page 64
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2017
Notes to the financial statements
1. Cash received related to other operating activities
Items January to June 2017 January to June 2016
Withdraw of current accounts, advance for another 49,988,918.77 70,468,435.19
Interest income 36,772,069.07 12,694,596.80
Special subsidy income 700,000.00
Non-operating income 350,490.77 926,794.62
Others 5,600.00 238,169.68
Total 87,817,078.61 84,327,996.29
2. Cash paid related to other operating activities
Item January to June 2017 January to June 2016
Current accounts, advance for another 317,981,786.61 322,978,268.19
General and administrative expenses 18,370,234.96 40,919,405.31
Selling and distribution expenses 4,534,010.56 5,628,363.93
Bank charges 7,210,977.46 28,205,647.68
Others 287,293.34 2,128,404.62
Total 348,384,302.93 399,860,089.73
3. Cash received related to other financing activities
Item January to June 2017 January to June 2016
Financial leasing 210,000,000.00
Total 210,000,000.00
(43) Supplementary details of statement of cash flows
1. Supplementary details of statement of cash flows
January to June January to June
Items
2017 2016
1. A reconciliation of net profit to cash flows from operating
activities:
Net profit 529,967,744.05 206,295,737.87
Add: Asset impairment losses -43,390,454.54 -1,880,998.86
Depreciation of fixed assets and so on 935,125,024.26 1,015,556,593.59
Amortization of intangible assets 2,982,306.37 2,969,528.58
Amortization of long-term prepayment
Losses proceeds from disposal of PPE, intangible assets and other
long-term assets (Earnings marked“－”) 1,578,126.30 -2,014,983.90
Scrapped losses from fixed assets
Fair value losses (Earnings marked“－”)
Financial expenses (Earnings marked“－”) 381,513,404.80 586,667,825.19
Notes to the financial statements Page 65
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2017
Notes to the financial statements
January to June January to June
Items
2017 2016
Investment losses (Earnings marked“－”) -3,294,593.14
Deferred tax assets reduction (Addition marked“－”) 100,308,537.11 136,112,516.35
Deferred tax liabilities increased (Reduction marked“－”)
Reduction of inventory (Addition marked“－”) -52,529,908.92 -902,878,201.17
Operating receivable items reduction (Addition marked“－”) 40,403,360.62 32,967,723.56
Operating payable items increase (Less marked"－") -5,939,969,231.63 1,316,981,622.31
Others
Net cash flows generated from operating activities -4,047,305,684.72 2,390,777,363.52
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 11,484,974,631.49 7,378,445,456.46
Less: Beginning balance of the monetary funds 12,273,574,488.67 4,612,782,772.98
Add: Ending balance of cash equivalents
Less: Opening balance of cash equivalents
The net increase in cash and cash equivalents -788,599,857.18 2,765,662,683.48
2. The structure of cash and cash equivalents
Items Ending balance Beginning balance
1. Cash 11,484,974,631.49 12,273,574,488.67
Including: Cash on hand 64,107.73 47,743.38
Bank deposits available on demand 11,190,437,502.33 12,238,841,745.29
Other monetary funds available on demand 294,473,021.43 34,685,000.00
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 11,484,974,631.49 12,273,574,488.67
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
Notes to the financial statements Page 66
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2017
Notes to the financial statements
Items Ending balance Reason
Monetary assets 755,604,520.08 Deposit for notes and L/C
Notes receivable 1,385,808,380.90 Pledged for acceptance bill
Bank short-term financing products
Total 2,141,412,900.98
(45) Foreign currency monetary items
Ending balance
Item Ending balance in foreign currency Exchange rate at the year-end translated to
RMB
Cash at bank
and on hand
Including: HKD 1,009,079.01 0.8679 875,779.67
USD 477,924,242.86 6.7744 3,237,649,990.83
EUR 87,829,623.74 7.7496 680,644,452.14
Short-term
loans
Including: USD 965,500,000.00 6.7744 6,540,683,200.00
Non-current
liabilities due
within one year
Including: USD 149,000,000.00 6.7744 1,009,385,600.00
JPY 23,176,000.00 0.0605 1,402,148.00
Long-term
loans
Including: USD 181,000,000.00 6.7744 1,226,166,400.00
EUR 105,775,601.20 7.7496 819,718,599.06
JPY 220,172,000.00 0.0605 13,320,406.00
6. Change of the consolidation scope
Bengang Baojin (Shenyang) Automobile New Material Technology Co., Ltd. is a new
subsidy included in the Company’s consolidated financial statements.
Notes to the financial statements Page 67
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2017
Notes to the financial statements
7. Equity in other entities
(1) Constitution of enterprise group
Name of the Registered Notes of Shareholding Acquiring
Principal place of business
subsidiaries address business ratio method
Direct Indirect
Business
consolida
Xiamen Bengang Steel & tion
Xiamen Xiamen Sales 100.00
Iron Sales Co., Ltd. under
common
control
Business
consolida
Wuxi Bengang Steel & Iron tion
Wuxi Wuxi Sales 100.00
Sales Co., Ltd. under
common
control
Business
consolida
Tianjin Bengang Steel & tion
Tianjin Tianjin Sales 100.00
Iron Trading Co., Ltd. under
common
control
Business
consolida
Nanjing Bengang Steel tion
Nanjing Nanjing Sales 100.00
Material Sales Ltd. under
common
control
Business
consolida
Yantai Bengang Steel & tion
Yantai Yantai Sales 100.00
Iron Sales Co., Ltd. under
common
control
Business
consolida
Harbin Bengang Economic tion
Harbin Harbin Sales 100.00
and Trading Co., Ltd. under
common
control
Business
Changchun Bengang Steel consolida
Changchun Changchun Sales 100.00
& Iron Sales Co., Ltd. tion
under
Notes to the financial statements Page 68
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2017
Notes to the financial statements
Name of the Registered Notes of Shareholding Acquiring
Principal place of business
subsidiaries address business ratio method
Direct Indirect
common
control
Guangzhou Bengang Steel Establish
Guangzhou Guangzhou Sales 100.00
& Iron Trading Co., Ltd. ment
Shanghai Bengang
Establish
Metallurgy Science and Shanghai Shanghai Sales 100.00
ment
Technology Co., Ltd.
Bengang Steel Plate
Manufacturi Establish
Liaoyang Orel Ball Co., Liaoyang Liaoyang 100.00
ng ment
Ltd.
Dalian Benruitong
Manufacturi Establish
Automobile Material Dalian Dalian 65.00
ng ment
Technologies Co., Ltd.
Business
consolida
Bengang Puxiang Cool
Manufacturi tion
Rolling Steel Sheet Co., Benxi Benxi 75.00
ng under
Ltd.
common
control
Benxi Bengang Steel Sales Establish
Benxi Benxi Sales 100.00
Co., Ltd ment
Shenyang Bengang
Establish
Metallurgical Science and Shenyang Shenyang Sales 100.00
ment
Technology Co., Ltd.
Business
consolida
Bengang Baojin
tion
(Shenyang) Automobile Shenyang Shenyang Sales 85.00
under
New Material Co., Ltd
common
control
(2) Significant not wholly-owned subsidiaries
Dividend
Profits and losses Ending
Proportion of declared to
Name of the attributing to balance of
non-controlling distribute to
subsidiaries non-controlling non-controlling
interests (%) non-controlling
shareholders interests
shareholders
Bengang Puxiang Cool
Rolling Steel Sheet Co., 25.00 7,001,363.17 34,024,878.25 495,896,015.95
Ltd.
Dalian Benruitong
35.00 -677,807.69 26,010,970.18
Automobile Material
Notes to the financial statements Page 69
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2017
Notes to the financial statements
Dividend
Profits and losses Ending
Proportion of declared to
Name of the attributing to balance of
non-controlling distribute to
subsidiaries non-controlling non-controlling
interests (%) non-controlling
shareholders interests
shareholders
Technologies Co., Ltd.
(3) The main financial information of significant not wholly owned subsidiary
Ending balance
Non-cu
Name of the
Current Non-current Current rrent Total
subsidiaries Total Assets
assets assets Liabilities liabiliti liabilities
es
Bengang Puxiang
Cool Rolling Steel 2,050,711,701.48 2,159,343,225.82 4,210,054,927.30 2,226,470,863.51 2,226,470,863.51
Sheet Co., Ltd.
Dalian Benruitong
Automobile
Material 119,006,557.85 157,858,619.47 276,865,177.32 202,548,119.65 202,548,119.65
Technologies Co.,
Ltd.
Beginning balance
Non-cu
Subsidiaries
Current Non-current Current rrent Total
Name Total Assets
assets assets Liabilities liabiliti liabilities
es
Bengang Puxiang
Cool Rolling Steel 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
Sheet 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
Technologies Co.,
Ltd.
January to June 2017
Name of the Total Net cash flows
subsidiaries Operating income Net Profit comprehensive from operating
income activities
Bengang Puxiang 3,953,643,069.30 28,005,452.68 28,005,452.68 -44,864,088.81
Notes to the financial statements Page 70
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2017
Notes to the financial statements
January to June 2017
Name of the Total Net cash flows
subsidiaries Operating income Net Profit comprehensive from operating
income activities
Cool Rolling Steel
Sheet Co., Ltd.
Dalian Benruitong
Automobile
Material 84,612,504.06 -1,936,593.41 -1,936,593.41 16,421,759.65
Technologies Co.,
Ltd.
January to June 2016
Name of the Total Net cash flows
subsidiaries Operating income Net Profit comprehensive from operating
income activities
Bengang Puxiang
Cool Rolling Steel
Sheet Co., Ltd. 2,592,071,400.46 99,409,153.77 99,409,153.77 58,017,011.97
Dalian Benruitong
Automobile
Material
Technologies Co.,
Ltd. 137,623,373.15 -3,127,791.12 -3,127,791.12 -12,791,423.79
8. Risks associated with financial instruments
(1) Credit risk
Credit risk refers to a financial loss to a party due to failure to discharge an obligation by the
counterparties. The Company is exposed to credit risk arising from customers’ failure to discharge
an obligation in sales on credit. 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.
Notes to the financial statements Page 71
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2017
Notes to the financial statements
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, Hong Kong dollars and Japanese Yen. The ending balance of the assets and
liabilities after converted in RMB is shown as below:
(In 10 Thousand Yuan)
Ending balance
Items Hong Kong Total
USD EUR Japanese Yen
Dollars
Assets 323,765.00 68,064.45 87.58 391,917.02
liabilities 877,623.52 81,971.86 1,472.26 961,067.64
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)
At end of the period
Items Impact on Impact on Impact on Total
Impact on USD
Euro HKD Japanese Yen
Notes to the financial statements Page 72
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2017
Notes to the financial statements
Appreciation by
-12,141.19 2,552.42 3.28 -55.21 -9,640.70
5%
Depreciation by
12,141.19 -2,552.42 -3.28 55.21 9,640.70
5%
(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 630,502.58 120,022.87 80,242.31 30,122.01 860,889.77
Loans and interests 2,389,846.21 99,468.00 133,086.83 83,578.98 2,705,980.03
Bonds payable 157,755.00 157,755.00
Total 3,178,103.79 219,490.87 213,329.14 113,701.00 3,724,624.80
9. Related party transactions
(1) Details of parent company
(In 100 Million Yuan)
Name of
Place of Notes of Registered Share proportion Voting rights
parent
Registry Business capital (%) (%)
company
Benxi
Steel &
Iron(Grou Benxi Manufacturing 53.69 77.88 77.88
p) Co.,
Ltd.
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
Notes to the financial statements Page 73
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2017
Notes to the financial statements
For details of subsidiaries of the Company please refer to Note 7 “Equity in other entities”.
(3) Details of other related parties
Name of Other related parties Relationship
Bengang Group International Economic and Trading Co.,
Both belong to Bengang Group Co., Ltd.
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.,
Same parent company
Ltd.
Benxi Steel & Iron(Group) Steel & Iron Process and
Same parent company
Logistics Co., Ltd.
Benxi Steel & Iron(Group) Machinery Manufacture Co.,
Same parent company
Ltd.
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
Same parent company
Co., Ltd.
Benxi Steel & Iron(Group) Designing Institute Same parent company
Benxi Steel & Iron(Group) Industrial Development Co.,
Same parent company
Ltd.
Benxi Steel & Iron(Group) Information and Automatic
Same parent company
Tech Co., Ltd.
Benxi Steel & Iron(Group) Construction and Repairing
Same parent company
Co., Ltd.
Benxi Steel & Iron(Group) Metallurgy Residues Co., Ltd. Same parent company
Benxi Steel & Iron(Group)Plant Construction Supervisor
Same parent company
Co., Ltd.
Benxi Steel & Iron(Group) Zhengtai Construction
Same parent company
Materials Co., Ltd.
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.
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
Same parent company
Co., Ltd.
Liaoning Metallurgy Technician College Same parent company
Liaoning Metallurgy Technician College Same parent company
Suzhou Bengang Industrial Co., Ltd. Shareholding company
Notes to the financial statements Page 74
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2017
Notes to the financial statements
Name of Other related parties Relationship
Shanghai Bengang Steel & Iron Trade Co., Ltd. Both belong to Benxi Steel and Iron(Group) Co., Ltd.
Benxi Steel & Iron(Group) Medical 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)
January to June January to June
Name The content of related party transactions
2017 2016
Benxi Steel
&
Accounts payable for repair 12,781.87 14,291.48
Iron(Group)
Co., Ltd.
Benxi Steel
&
Land leasing fee 2,734.57 2,825.72
Iron(Group)
Co., Ltd.
Bengang
Cold-rolled
Stainless
Products 17.50 19.79
Steel
Dandong
Co., Ltd.
Benxi Steel
&
Iron(Group) Labor cost 253.76 801.23
Mining Co.,
Ltd.
Benxi Steel
&
Iron(Group) Raw material and supplementary material 217,638.69 193,052.00
Mining Co.,
Ltd.
Benxi Steel
&
Iron(Group) Freight 3.18 144.26
Mining Co.,
Ltd.
Benxi Steel
Raw material and supplementary material 12,820.08 5,726.18
&
Notes to the financial statements Page 75
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2017
Notes to the financial statements
January to June January to June
Name The content of related party transactions
2017 2016
Iron(Group)
Metallurgy
Residues
Co., Ltd.
Benxi Steel
&
Iron(Group)
Steel & Iron Processing fee 76.12 86.72
Process and
Logistics
Co., Ltd.
Benxi Steel
&
Iron(Group)
Raw materials 5,006.75 3,688.55
Real-estate
Developmen
t Co., Ltd.
Benxi Steel
&
Iron(Group)
Spare parts 5,522.36 5,420.19
Machinery
Manufacture
Co., Ltd.
Benxi Steel
&
Iron(Group)
Repair services 368.87 530.24
Machinery
Manufacture
Co., Ltd.
Benxi Steel
&
Iron(Group) Spare parts 734.34 763.59
Construction
Co., Ltd.
Benxi Steel
&
Iron(Group) Project fee 12,940.60 12,280.93
Construction
Co., Ltd.
Benxi Steel
& Repair services 3,237.98 4,193.07
Iron(Group)
Notes to the financial statements Page 76
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2017
Notes to the financial statements
January to June January to June
Name The content of related party transactions
2017 2016
Construction
Co., Ltd.
Benxi Steel
&
Iron(Group) Raw material and supplementary material 464.78 372.62
Construction
Co., Ltd.
Benxi Steel
&
Iron(Group) Freight 155.04 139.28
Construction
Co., Ltd.
Benxi Steel
&
Iron(Group)
Spare parts 8,905.66 1,209.81
Industrial
Developmen
t Co., Ltd.
Benxi Steel
&
Iron(Group)
Raw material and supplementary material 10,672.66 11,814.04
Industrial
Developmen
t Co., Ltd.
Benxi Steel
&
Iron(Group)
Repair services 1,117.99 700.44
Industrial
Developmen
t Co., Ltd.
Benxi Steel
&
Iron(Group)
Freight 137.06 287.04
Industrial
Developmen
t Co., Ltd.
Benxi Steel
&
Iron(Group)
Project fee 139.82 63.01
Industrial
Developmen
t Co., Ltd.
Notes to the financial statements Page 77
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2017
Notes to the financial statements
January to June January to June
Name The content of related party transactions
2017 2016
Benxi Steel
&
Iron(Group)
Raw material & supplementary materials & spare
Construction 139.66 413.14
parts
and
Repairing
Co., Ltd.
Benxi Steel
&
Iron(Group)
Construction Project fee 2,870.64 2,816.62
and
Repairing
Co., Ltd.
Benxi Steel
&
Iron(Group)
Construction Accounts payable for repair 2,130.99 2,066.02
and
Repairing
Co., Ltd.
Bengang
Electronics
Raw material and supplementary material 8,426.07 5,393.90
and Gas Co.,
Ltd.
Bengang
Electronics
Project fee 41.94 142.96
and Gas Co.,
Ltd.
Bengang
Electronics
Repair services 692.18 442.75
and Gas Co.,
Ltd.
Benxi
High-tech
Drilling
Spare parts 39.31 26.30
Tools
Manufacture
Co., Ltd.
Benxi New
Career Labor protection fee 29.45 118.36
Developmen
Notes to the financial statements Page 78
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2017
Notes to the financial statements
January to June January to June
Name The content of related party transactions
2017 2016
t Co., Ltd.
Liaoning
Metallurgy
Spare parts 1,319.31 706.55
Technician
College
Liaoning
Metallurgy
Spare parts 230.33 -
Technician
College
Bengang
Group
International
Agency fee 3,685.68 2,851.32
Economic
and Trading
Co., Ltd.
Bengang
Group
International
Port surcharges 7,751.15 10,301.65
Economic
and Trading
Co., Ltd.
Benxi Steel
&
Iron(Group)
Information
Spare parts 693.23 1,430.02
and
Automatic
Tech Co.,
Ltd.
Benxi Steel
&
Iron(Group)
Information
Repair services 305.94 1,180.90
and
Automatic
Tech Co.,
Ltd.
Benxi Steel
&
Iron(Group) Heating costs 168.60 627.40
Thermal
Power
Notes to the financial statements Page 79
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2017
Notes to the financial statements
January to June January to June
Name The content of related party transactions
2017 2016
Developmen
t Co., Ltd.
Benxi Steel
&
Iron(Group)
Thermal Raw material and supplementary material - 3.38
Power
Developmen
t Co., Ltd.
Benxi Steel
&
Iron(Group) Design fees 235.90 446.34
Designing
Institute
Benxi
Beiying
Steel & Raw material and supplementary material 472,729.42 277,525.66
Iron(Group)
Co., Ltd.
Benxi
Beiying
Steel & Energy & Power 50,184.08 18,687.37
Iron(Group)
Co., Ltd.
Benxi
Beiying
Steel & Freight 889.48 391.03
Iron(Group)
Co., Ltd.
Benxi
Beiying
Steel & Labor cost 5,563.01 2,698.85
Iron(Group)
Co., Ltd.
Benxi
Beiying
Steel & Spare parts 1,844.21 554.63
Iron(Group)
Co., Ltd.
Liaoning
Hengtong Raw material and spare parts 10,661.54 4,045.09
Metallurgica
Notes to the financial statements Page 80
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2017
Notes to the financial statements
January to June January to June
Name The content of related party transactions
2017 2016
l Equipment
Manufacture
Co., Ltd.
Liaoning
Hengtai
Heavy Raw material and spare parts 3,873.44 334.80
Machinery
Co., Ltd.
Liaoning
Hengtai
Heavy Repair and labor cost 636.47 759.49
Machinery
Co., Ltd.
Bengang
Group Co., Property management fee 31.07 42.28
Ltd.
Total 870,902.75 592,416.99
Company as the seller (In 10 Thousand Yuan)
The content of
January to June January to June
Name related party
2017 2016
transactions
Bengang Electronics and Gas Co., Ltd. Energy & Power 49.63 50.64
Raw material &
supplementary
Benxi Beiying Steel & Iron(Group) Co., Ltd. 34,778.43 4,800.39
materials &
spare parts
Benxi Beiying Steel & Iron(Group) Co., Ltd. Products 497.33 220.01
Benxi Beiying Steel & Iron(Group) Co., Ltd. Energy & Power 14,389.31 4,933.19
Benxi Steel & Iron(Group) Real-estate Development
Energy & Power 13.76 47.71
Co., Ltd.
Benxi Steel & Iron(Group) Steel & Iron Process and
Energy & Power 50.30 28.88
Logistics Co., Ltd.
Benxi Steel & Iron(Group) Steel & Iron Process and
Products 4,200.09
Logistics Co., Ltd.
Benxi Steel & Iron(Group) Machinery Manufacture
Products 462.07 605.32
Co., Ltd.
Benxi Steel & Iron(Group) Machinery Manufacture
Energy & Power 791.36 917.91
Co., Ltd.
Benxi Steel & Iron(Group) Machinery Manufacture Raw material &
51.41 151.46
Co., Ltd. supplementary
Notes to the financial statements Page 81
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2017
Notes to the financial statements
The content of
January to June January to June
Name related party
2017 2016
transactions
materials &
spare parts
Benxi Steel & Iron(Group) Construction Co., Ltd. Energy & Power 214.45 245.55
Raw material &
supplementary
Benxi Steel & Iron(Group) Construction Co., Ltd. 138.41 4,056.35
materials &
spare parts
Benxi Steel & Iron(Group) Mining Co., Ltd. Energy & Power 45,858.21 36,147.92
Raw material &
supplementary
Benxi Steel & Iron(Group) Mining Co., Ltd. 646.77 4,161.56
materials &
spare parts
Benxi Steel & Iron(Group) Mining Co., Ltd. Freight revenue 407.23 436.25
Benxi Steel & Iron(Group) Thermal Power
Energy & Power 1,452.38 1,959.85
Development Co., Ltd.
Raw material &
Benxi Steel & Iron(Group) Thermal Power supplementary
68.57 533.38
Development Co., Ltd. materials &
spare parts
Benxi Steel & Iron(Group) Thermal Power
Freight revenue 9.67 8.28
Development Co., Ltd.
Benxi Steel & Iron(Group) Industrial Development
Energy & Power 405.31 331.64
Co., Ltd.
Benxi Steel & Iron(Group) Industrial Development
Products 12.69 12.64
Co., Ltd.
Raw material &
Benxi Steel & Iron(Group) Industrial Development supplementary
2,759.53 2,814.40
Co., Ltd. materials &
spare parts
Benxi Steel & Iron(Group) Information and
Energy & Power 8.30 10.07
Automatic Tech Co., Ltd.
Benxi Steel & Iron(Group) Construction and
Energy & Power 77.22 47.79
Repairing Co., Ltd.
Raw material &
Benxi Steel & Iron(Group) Construction and supplementary
9.84 114.14
Repairing Co., Ltd. materials &
spare parts
Benxi Steel & Iron(Group) Metallurgy Residues Co.,
Energy & Power 130.04 105.61
Ltd.
Benxi Steel & Iron(Group) Metallurgy Residues Co., Raw material &
4,358.02 1,022.12
Ltd. supplementary
Notes to the financial statements Page 82
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2017
Notes to the financial statements
The content of
January to June January to June
Name related party
2017 2016
transactions
materials &
spare parts
Benxi Steel & Iron(Group) Metallurgy Residues Co.,
Freight revenue 0.31 0.43
Ltd.
Benxi Steel & Iron(Group) Metallurgy Residues Co.,
Products 712.63 155.38
Ltd.
Benxi Steel & Iron(Group) Co., Ltd. Energy & Power 614.52 3,525.98
Raw material &
supplementary
Benxi Steel & Iron(Group) Co., Ltd. 321.55 337.11
materials &
spare parts
Benxi New Career Development Co., Ltd. Energy & Power 18.60 16.52
Dalian Boluole Steel Tube Co., Ltd. Products 223.79 153.24
Liaoning Bengang Steel & Iron Trading Co., Ltd. Products 46.04 9,298.37
Benxi Steel & Iron(Group) General Hospital Energy & Power 5.17 4.83
Liaoning Hengtong Metallurgical Equipment
Energy & Power 899.19 844.91
Manufacture Co., Ltd.
Raw material &
Liaoning Hengtong Metallurgical Equipment supplementary
879.76 651.49
Manufacture Co., Ltd. materials &
spare parts
Liaoning Hengtong Metallurgical Equipment
Products 810.93
Manufacture Co., Ltd.
Suzhou Bengang Industrial Co., Ltd. Products 13,623.10 9,698.50
Bengang Group Finance Co., Ltd. Energy & Power 0.75 0.82
Bengang Group Co., Ltd. Energy & Power 7.63 2.88
Total 124,993.26 93,464.57
2. Lease information of related parties
Company as the lessor: (in Yuan)
The lease
The lease income
income
Lessee Lease capital category confirmed in last
confirmed in
year
this year
Benxi Steel & Iron(Group) Steel & Iron Process
Warehouse and machinery 250,000.00 158,500.00
and Logistics Co., Ltd.
Benxi Steel & Iron(Group) Machinery
Plants and machinery
Manufacture Co., Ltd. 244,805.87
Notes to the financial statements Page 83
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2017
Notes to the financial statements
Company as the lessee:
Lessor Lease capital Lease charges of the Lease charges of the Nature
category current period previous period
Benxi Steel & Iron 2300 Hot rolling
120,000,000.00 120,000,000.00 1
(Group) Co., Ltd. product line
Benxi Steel & Iron
Land use right 27,345,714.30 28,257,238.10 2
(Group) Co., Ltd.
Benxi Beiying Steel
1780 Hot rolling
& Iron(Group) Co., 77,816,940.06 65,950,200.00 3
product line
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 from 1 January 2017 to 31 December 2019. 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. Information of Guarantee among related parties
Company as the warrantee
(1) Guarantee of bank loans (in Yuan)
Has the
Amount of Starting
Ending date of guarantee
Warrantor Currency guarantee in date of
Guarantee been
original currency Guarantee
fulfilled
Bengang Group Co., Ltd.和 Benxi 2016/11/10 2017/9/13
RMB 200,000,000.00 No
Steel & Iron(Group) Co., Ltd.
Bengang Group Co., Ltd.和 Benxi 2016/11/9 2017/8/23
RMB 100,000,000.00 No
Steel & Iron(Group) Co., Ltd.
Bengang Group Co., Ltd.和 Benxi 2016/11/9 2017/8/17
RMB 200,000,000.00 No
Steel & Iron(Group) Co., Ltd.
Bengang Group Co., Ltd.和 Benxi RMB 150,000,000.00 2016/11/11 2017/10/19 No
Notes to the financial statements Page 84
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2017
Notes to the financial statements
Has the
Amount of Starting
Ending date of guarantee
Warrantor Currency guarantee in date of
Guarantee been
original currency Guarantee
fulfilled
Steel & Iron(Group) Co., Ltd.
Bengang Group Co., Ltd.和 Benxi 2016/11/11 2017/10/12
RMB 200,000,000.00 No
Steel & Iron(Group) Co., Ltd.
Bengang Group Co., Ltd.和 Benxi 2016/11/15 2017/11/8
RMB 200,000,000.00 No
Steel & Iron(Group) Co., Ltd.
Bengang Group Co., Ltd.和 Benxi 2016/11/16 2017/11/15
RMB 200,000,000.00 No
Steel & Iron(Group) Co., Ltd.
Bengang Group Co., Ltd.和 Benxi 2016/12/8 2017/12/7
RMB 200,000,000.00 No
Steel & Iron(Group) Co., Ltd.
Bengang Group Co., Ltd.和 Benxi 2016/12/6 2017/12/5
RMB 80,000,000.00 No
Steel & Iron(Group) Co., Ltd.
Bengang Group Co., Ltd.和 Benxi 2016/12/13 2017/12/12
RMB 200,000,000.00 No
Steel & Iron(Group) Co., Ltd.
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
2016/8/5 2017/8/5
Bengang Group Co., Ltd. RMB 180,000,000.00 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 140,000,000.00 2017/5/19 2018/5/19 No
Bengang Group Co., Ltd. RMB 200,000,000.00 2017/5/19 2018/5/19 No
Bengang Group Co., Ltd. RMB 200,000,000.00 2017/5/19 2018/5/19 No
Bengang Group Co., Ltd. RMB 160,000,000.00 2017/5/19 2018/5/19 No
Bengang Group Co., Ltd. RMB 150,000,000.00 2017/1/13 2018/1/13 No
Bengang Group Co., Ltd. RMB 110,000,000.00 2017/1/13 2018/1/13 No
Bengang Group Co., Ltd. RMB 200,000,000.00 2017/3/24 2018/3/24 No
Bengang Group Co., Ltd. RMB 168,000,000.00 2017/6/9 2018/6/9 No
Bengang Group Co., Ltd. RMB 300,000,000.00 2017/5/17 2018/5/16 No
Bengang Group Co., Ltd. RMB 200,000,000.00 2017/5/17 2018/5/16 No
Bengang Group Co., Ltd. RMB 135,000,000.00 2017/1/20 2018/1/19 No
Notes to the financial statements Page 85
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2017
Notes to the financial statements
Has the
Amount of Starting
Ending date of guarantee
Warrantor Currency guarantee in date of
Guarantee been
original currency Guarantee
fulfilled
Bengang Group Co., Ltd. RMB 500,000,000.00 2017/6/23 2018/6/23 No
Benxi Steel & Iron(Group) Co., 2016/9/28 2017/9/27
RMB 74,000,000.00 No
Ltd.
Benxi Steel & Iron(Group) Co., 2017/5/16 2018/5/15
RMB 150,000,000.00 No
Ltd.
Benxi Steel & Iron(Group) Co., 2017/5/24 2018/5/23
RMB 74,000,000.00 No
Ltd.
Benxi Steel & Iron(Group) Co., 2017/1/17 2018/1/16
RMB 270,000,000.00 No
Ltd.
Benxi Steel & Iron(Group) Co., 2017/2/16 2018/2/15
RMB 400,000,000.00 No
Ltd.
Benxi Steel & Iron(Group) Co., 2017/1/12 2018/1/11
RMB 200,000,000.00 No
Ltd.
Benxi Steel & Iron(Group) Co., 2017/4/25 2017/7/24
RMB 400,000,000.00 No
Ltd.
Benxi Steel & Iron(Group) Co., 2017/4/28 2017/7/27
RMB 500,000,000.00 No
Ltd.
Benxi Steel & Iron(Group) Co., 2017/4/28 2017/11/27
RMB 460,000,000.00 No
Ltd.
Benxi Steel & Iron(Group) Co., 2017/5/27 2018/1/26
RMB 170,000,000.00 No
Ltd.
Benxi Steel & Iron(Group) Co., 2017/2/27 2025/2/20
RMB 700,000,000.00 No
Ltd.
Bengang Group Co., Ltd. USD 100,000,000.00 2016/8/19 2017/8/14 No
Benxi Steel & Iron(Group) Co., 2016/9/30 2017/9/29
USD 103,000,000.00 No
Ltd.
Benxi Steel & Iron(Group) Co., 2016/9/28 2017/9/27
USD 150,000,000.00 No
Ltd.
Benxi Steel & Iron(Group) Co., 2016/12/23 2017/12/22
USD 22,500,000.00 No
Ltd.
Benxi Steel & Iron(Group) Co., 2017/5/19 2018/5/18
USD 90,000,000.00 No
Ltd.
Benxi Steel & Iron(Group) Co., 2017/5/19 2018/5/15
USD 103,000,000.00 No
Ltd.
Benxi Steel & Iron(Group) Co., 2017/5/19 2018/5/8
USD 150,000,000.00 No
Ltd.
Benxi Steel & Iron(Group) Co., 2017/2/24 2018/2/23
USD 100,000,000.00 No
Ltd.
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 2016/8/3 2018/8/28 No
Notes to the financial statements Page 86
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2017
Notes to the financial statements
Has the
Amount of Starting
Ending date of guarantee
Warrantor Currency guarantee in date of
Guarantee been
original currency Guarantee
fulfilled
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
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
Bengang Group Co., Ltd. EUR 61,028.58 2016/12/14 2020/4/30 No
Benxi Steel & Iron(Group) Co., 1997/10/10 2027/9/10
JPY 231,760,000.00 No
Ltd.
Bengang Group Co., Ltd.；Benxi 2016/3/30 2025/3/20
RMB 100,000,000.00 No
Steel & Iron(Group) Co., Ltd.
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
Notes to the financial statements Page 87
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2017
Notes to the financial statements
Has the
Amount of Starting
Ending date of guarantee
Warrantor Currency guarantee in date of
Guarantee been
original currency Guarantee
fulfilled
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
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., 1997/10/10 2027/9/10
JPY 23,176,000.00 No
Ltd.
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 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., Benxi 2016/7/29 2017/7/26
RMB 200,000,000.00 No
Steel & Iron(Group) Co., Ltd.
Bengang Group Co., Ltd., Benxi 2016/10/25 2017/10/23
RMB 100,000,000.00 No
Steel & Iron(Group) Co., Ltd.
Bengang Group Co., Ltd. RMB 500,000,000.00 2016/11/10 2017/8/1 No
Notes to the financial statements Page 88
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2017
Notes to the financial statements
(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.
4. Other related party transactions
(1) Loan from and deposits in Bengang Group Finance Co., Ltd. (In 10 Thousand Yuan)
Items Beginning balance Increase Decrease Ending balance Notes
Deposits 366,863.85 4,656,434.34 4,439,792.54 583,505.65 1
1. The interests of deposits in Bengang Group Finance Co., Ltd. is RMB 12,943.20
thousand from January to June in 2017.As at 30 June 2017, interest due from
Bengang Group Finance Co., Ltd is RMB 892.60 thousand.
(2) Bengang Group Finance Co., Ltd. offered the Company an amount of RMB 2.5 billion
unsecured credit line this year.
As at 30 June 2017, the ending balance of electronic bank acceptance bill in Bengang
Group Finance Co., Ltd was 1,123,591.50 thousand.
(3) Loans from and deposits in Benxi Steel and Iron (Group) Co., Ltd.
(In 10 Thousand Yuan)
Items Beginning balance Increase Decrease Ending balance
Loans 8,550.97 4458.94 3,068.97 9,940.94
The details of borrowing balance by 30 June 2017 are as follows: (in Yuan)
Name Lease form Loan amount Start date Due date
Benxi Steel & Entrusted loan through Bengang
14,220,000.00 2017/1/17 2018/1/16
Iron(Group) Co., Ltd. Group Finance Co., Ltd.
Benxi Steel & Entrusted loan through Bengang
19,000,000.00 2017/6/14 2018/6/13
Iron(Group) Co., Ltd. Group Finance Co., Ltd.
Benxi Steel & Entrusted loan through Bengang
11,369,400.00 2017/6/22 2018/6/21
Iron(Group) Co., Ltd. Group Finance Co., Ltd.
Benxi Steel & Entrusted loan through Bengang
32,700,000.00 2016/10/24 2017/10/23
Iron(Group) Co., Ltd. Group Finance Co., Ltd.
Benxi Steel & Entrusted loan through Bengang
22,120,000.00 2016/11/11 2017/11/10
Iron(Group) Co., Ltd. Group Finance Co., Ltd.
Total 99,409,400.00
Notes: The interest accrued is RMB 2,623,082.97, and as at 30 June 2017, the interest
Notes to the financial statements Page 89
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2017
Notes to the financial statements
not paid is RMB 567,730.13.
(5) Receivables and payables of the related parties
1. Receivables of the Company
Ending balance Beginning balance
Items Provision Provision
Name Carrying Carrying
Name for bad for bad
amount amount
debts debts
Accounts receivable
Benxi Beiying Steel & Iron(Group) Co., Ltd. 1,773.30 1,839.22
Bengang Electronics and Gas Co., Ltd. 251.90 19.12 254.41 19.12
Benxi Steel & Iron(Group) Machinery
5,258.49 625.28 5,868.85 697.85
Manufacture Co., Ltd.
Benxi Steel & Iron(Group) Construction Co.,
2,046.55 1,695.38 2,759.18 1,695.38
Ltd.
Benxi Steel & Iron(Group) Industrial
2,076.72 216.02 4,313.90 216.02
Development Co., Ltd.
Benxi New Career Development Co., Ltd. 510.15 449.35 602.15 449.35
Benxi Steel & Iron(Group) Thermal Power
170.77 706.55
Development Co., Ltd.
Benxi Steel & Iron(Group) Steel & Iron Process
41.18 49.96
and Logistics Co., Ltd.
Bengang Cold-rolled Stainless Steel Dandong
16.74 1.03 20.55 1.03
Co., Ltd.
Liaoning Hengtong Metallurgical Equipment
998.76 977.77
Manufacture Co., Ltd.
Bengang Group International Economic and
1,611.69 1,901.47
Trading Co., Ltd.
Subtotal 14,756.24 3,006.18 19,294.01 3,078.75
Prepayments
Benxi Beiying Steel & Iron(Group) Co., Ltd. 33,689.73 20,963.90
Benxi Steel & Iron(Group) Machinery
1,298.67 967.60
Manufacture Co., Ltd.
Bengang Cold-rolled Stainless Steel Dandong
2.25 4.73
Co., Ltd.
Subtotal 34,990.64 21,936.23
Other receivables
Benxi Steel & Iron(Group) Real-estate
251.20 17.40 279.73 17.40
Development Co., Ltd.
Liaoning Metallurgy Technician College 13.25 15.63 15.63 15.63
Benxi Steel & Iron(Group) Machinery
461.05 0.01 65.80 0.01
Manufacture Co., Ltd.
Benxi Steel & Iron(Group) Construction Co.,
104.20 88.50 121.90 88.50
Ltd.
Notes to the financial statements Page 90
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2017
Notes to the financial statements
Ending balance Beginning balance
Items Provision Provision
Name Carrying Carrying
Name for bad for bad
amount amount
debts debts
Bengang Group International Economic and
1,599.71 0.20 1,295.31 0.20
Trading Co., Ltd.
Benxi Steel & Iron(Group) Industrial
59.87 32.68 48.23 32.68
Development Co., Ltd.
Benxi Steel & Iron(Group) Zhengtai
19.15 14.01 19.85 14.01
Construction Materials Co., Ltd.
Benxi Steel & Iron(Group) Medical
77.35 61.13 90.50 61.13
Department
Subtotal 2,585.77 229.55 1,936.95 229.56
2. Payables of the Company
Items Name Ending balance Beginning balance
Notes payable
Benxi Steel & Iron(Group) Industrial Development Co., Ltd. 2,040.44 2,819.23
Benxi Steel & Iron(Group) Machinery Manufacture Co., Ltd. 4,916.87 3,182.47
Bengang Electronics and Gas Co., Ltd. 230.37 30.75
Benxi Steel & Iron(Group) Construction and Repairing Co., Ltd. 204.16
Liaoning Metallurgy Technician College 620.40
Benxi Steel & Iron(Group) Mining Co., Ltd. 56,874.04
Benxi Steel & Iron(Group) Construction Co., Ltd. 277.97 196.36
Benxi Steel & Iron(Group) Information and Automatic Tech Co., Ltd. 298.07 64.63
Benxi Beiying Steel & Iron(Group) Co., Ltd. 32,098.77
Liaoning Hengtong Metallurgical Equipment Manufacture Co., Ltd. 5,711.80
Liaoning Metallurgy Technician College 41.04
Liaoning Hengtai Heavy Machinery Co., Ltd. 66.43
Benxi Steel & Iron(Group) Metallurgy Residues Co., Ltd. 146.18
Subtotal 39,862.48 69,957.47
Accounts payable
Bengang Electronics and Gas Co., Ltd. 1,413.65 1,436.38
Benxi Steel & Iron(Group) Real-estate Development Co., Ltd. 88.71 348.18
Bengang Group International Economic and Trading Co., Ltd. 79,027.89 133,235.11
Benxi Steel & Iron(Group) Machinery Manufacture Co., Ltd. 13,129.28 15,359.57
Benxi Steel & Iron(Group) Construction Co., Ltd. 15,927.94 12,263.90
Benxi Steel & Iron(Group) Mining Co., Ltd. 91,175.67 87,583.27
Benxi Steel & Iron(Group) Industrial Development Co., Ltd. 8,858.44 8,966.16
Benxi New Career Development Co., Ltd. 653.18 1,011.15
Benxi Steel & Iron(Group) Construction and Repairing Co., Ltd. 12,753.96 11,297.09
Notes to the financial statements Page 91
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2017
Notes to the financial statements
Items Name Ending balance Beginning balance
Benxi Steel & Iron(Group) Designing Institute 550.56 442.85
Benxi Steel & Iron(Group) Metallurgy Residues Co., Ltd. 5,794.76 6,783.85
Benxi Steel & Iron(Group) Medical Department 2.09 2.04
Benxi Steel & Iron(Group) Information and Automatic Tech Co., Ltd. 4,616.36 4,085.80
Benxi High-tech Drilling Tools Manufacture Co., Ltd. 65.22 54.51
Liaoning Metallurgy Technician College 1,167.91 1,304.29
Liaoning Bengang Steel & Iron Trading Co., Ltd.
Benxi Steel & Iron(Group) Thermal Power Development Co., Ltd. 11.53 10.84
Benxi Steel & Iron(Group) Zhengtai Construction Materials Co., Ltd. 23.92 35.20
Liaoning Hengtong Metallurgical Equipment Manufacture Co., Ltd. 2,738.12 2,834.53
Liaoning Metallurgy Technician College 340.06 306.41
Bengang Cold-rolled Stainless Steel Dandong Co., Ltd. 54.45 60.73
Liaoning Hengtai Heavy Machinery Co., Ltd. 1,442.97 1,615.38
Benxi Steel & Iron(Group)Plant Construction Supervisor Co., Ltd. 4.72 5.00
Bengang Group Co., Ltd. 0.56 0.47
Subtotal 239,841.94 289,042.72
Advance from customers
Benxi Steel & Iron(Group) Machinery Manufacture Co., Ltd. 75.83 68.32
Benxi Steel & Iron(Group) Industrial Development Co., Ltd. 228.02 205.45
Benxi Steel & Iron(Group) Metallurgy Residues Co., Ltd. 189.62 156.73
Benxi Steel & Iron(Group) Steel & Iron Process and Logistics Co., Ltd. 592.12 741.81
Dalian Boluole Steel Tube Co., Ltd. 88.25 137.79
Liaoning Bengang Steel & Iron Trading Co., Ltd. 6,623.72 8,765.59
Liaoning Hengtong Metallurgical Equipment Manufacture Co., Ltd. 18.64 64.09
Liaoning Hengtai Heavy Machinery Co., Ltd.
Bengang Group International Economic and Trading Co., Ltd.
Suzhou Bengang Industrial Co., Ltd. 6.90 6.90
Subtotal 3,112.91 1,884.97
Other payables
Benxi Steel & Iron(Group) Real-estate Development Co., Ltd. 203.25 231.17
Bengang Group International Economic and Trading Co., Ltd. 2,798.41 2,220.96
Benxi Steel & Iron(Group) Machinery Manufacture Co., Ltd. 7.00 7.28
Benxi Steel & Iron(Group) Construction Co., Ltd. 517.11 527.97
Benxi Steel & Iron(Group) Industrial Development Co., Ltd. 201.38 179.69
Benxi New Career Development Co., Ltd. 52.27 106.22
Benxi Steel & Iron(Group) Metallurgy Residues Co., Ltd. 35.00 35.00
Benxi Steel & Iron(Group) Medical Department
Benxi Steel & Iron(Group) Information and Automatic Tech Co., Ltd. 9.56 10.70
Benxi Steel & Iron(Group) Steel & Iron Process and Logistics Co., Ltd. 106.91 134.97
Notes to the financial statements Page 92
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2017
Notes to the financial statements
Items Name Ending balance Beginning balance
Benxi Steel & Iron(Group) Co., Ltd. 20,050.46 15,394.63
Benxi Steel & Iron(Group) Thermal Power Development Co., Ltd. 93.91 112.77
Guangzhou Free Trade Zone Bengang Sales Co., Ltd. 267.44 267.44
Benxi Steel & Iron(Group)Plant Construction Supervisor Co., Ltd. 36.00 45.38
Liaoning Hengyi Financial Leasing Co., Ltd. 53.99 53.99
Liaoning Metallurgy Technician College 0.30 0.30
Subtotal 24,433.00 19,328.47
Non-current liabilities due within one year
Liaoning Hengyi Financial Leasing Co., Ltd. 21,000.00
Subtotal 21,000.00
10. Commitments and Contingencies
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 2017 to 31 December 2019.
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.
For details of above leasing conditions please refer to Note 9(4) 2.
2. Contingencies
At the balance sheet date, no significant contingencies need to be disclosed.
11. Subsequent events
There is no significant subsequent event during the current period.
Notes to the financial statements Page 93
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2017
Notes to the financial statements
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 March 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 30 June 2017, the controlling shareholder Benxi Steel & Iron (Group) Co., Ltd. held a
total number of 1,251,000,000 shares pledged, accounting for 39.89% of the total number of
shares of the Company.
13. Notes to the financial statement of parent company
(1) Accounts receivable
1. Accounts receivable disclosed by category
Items Ending balance
Notes to the financial statements Page 94
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2017
Notes to the financial statements
Carrying amount Provision for bad debts
Percenta Bad debts ratio Book value
Amount Amount
ge (%) (%)
Individually significant and
tested for impairment
individually
Accounts receivable tested
689,888,707.86 100.00 197,950,562.42 28.69 491,938,145.44
for impairment by portfolio
Other insignificant items
but tested for impairment
individually
Total 689,888,707.86 100.00 197,950,562.42 28.69 491,938,145.44
Beginning balance
Carrying amount Provision for bad debts
Items
Percentage Bad debts Book value
Amount Amount
(%) ratio (%)
Individually significant
and tested for impairment
individually
Accounts receivable tested
658,679,865.43 100.00 203,609,563.43 30.91 455,070,302.00
for impairment by portfolio
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
Accounts receivables tested for impairment by portfolio:
Ending balance
Items
Carrying amount Provision for bad debts Bad debts ratio (%)
Within 1 year(inclusive) 337,110,882.55
1-2 years(inclusive) 138,635,838.56 6,931,791.93 5
2-3 years(inclusive) 28,904,020.32 5,780,804.06 20
Over 3 years 185,237,966.42 185,237,966.42 100
Total 689,888,707.86 197,950,562.42 28.69
2. Information of provision, reversal or recovery of bad debts of current period.
The provision of bad debts of current period is RMB 5,659,001.01.
3. No accounts receivable has been written off this year.
Notes to the financial statements Page 95
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2017
Notes to the financial statements
4. Top five debtors at the year-end
Ending balance
Percentage of total
Company Provision for bad
Amount accounts
debts
receivable (%)
Benxi Nanfen Xinhe Metallurgical Co., Ltd. 87,396,378.47 12.67 4,368,958.76
Benxi Steel & Iron(Group) Machinery
52,584,877.55 7.62 6,252,766.59
Manufacture Co., Ltd.
North China Petroleum Steel Pipe Co., Ltd. 29,732,876.07 4.31 29,616,623.65
Ningbo CIMC Logistics Equipment Co., Ltd. 21,855,329.22 3.17
Benxi Steel & Iron(Group) Industrial
19,023,387.89 2.76 2,052,158.72
Development Co., Ltd.
Total 210,592,849.20 30.53 42,290,507.72
(2) Other receivables
1. Other receivables disclosed by category:
Ending balance
Carrying amount Provision for bad debts
Bad
Items
Percentage debts Book value
Amount Amount
(%) ratio
(%)
Individually significant and
tested for impairment
individually
Accounts receivable tested
236,478,074.50 99.27 62,189,392.14 23.27 174,288,682.36
for impairment by portfolio
Other insignificant items but
tested for impairment 1,740,000.00 0.73 1,740,000.00
individually
Total 238,218,074.50 100.00 62,189,392.14 26.11 176,028,682.36
Beginning balance
Carrying amount Provision for bad debts
Bad
Items
Percentage debts Book value
Amount Amount
(%) ratio
(%)
Individually significant and
Notes to the financial statements Page 96
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2017
Notes to the financial statements
Beginning balance
Carrying amount Provision for bad debts
Bad
Items
Percentage debts Book value
Amount Amount
(%) ratio
(%)
tested for impairment
individually
Accounts receivable tested for
271,534,044.90 99.36 63,184,240.02 23.27 208,349,804.88
impairment by portfolio
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
Other receivables tested for impairment by portfolio using the method of Aging analysis:
Ending balance
Items
Other receivables Provision for bad debts Bad debts ratio (%)
Within 1 year(inclusive) 164,487,738.98
1-2 years(inclusive) 6,663,168.20 333,158.41 5.00
2-3 years(inclusive) 4,338,666.99 867,733.40 20.00
Over 3 years 60,988,500.33 60,988,500.33 100.00
Total 236,478,074.50 62,189,392.14 26.30
Other receivables individually insignificant but tested for impairment individually
Items Carrying amount Provision for bad debts Bad debts ratio (%) Reason
Sinking Fund of
Japanese yen from
Finance Bureau of
Benxi 1,740,000.00 Sinking fund
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 994,847.88.
3. No other receivables have been written off this year.
4. Other receivables disclosed by nature
Nature Ending balance Beginning balance
Notes to the financial statements Page 97
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2017
Notes to the financial statements
Accounts 227,525,677.56 259,660,295.88
Export tax rebate 4,990,848.26
Others 10,692,396.94 8,622,900.76
Total 238,218,074.50 273,274,044.90
5. Top five debtors at the year-end:
Percentage of
Notes or Provision for
Company Amount Aging total other
content bad debts
receivables
Benxi Steel &Iron(Group)
Within 1
Machinery Manufacturing Accounts 4,610,543.21 1.94
year
Co., Ltd.
Huozhou Coal and Electricity Over 3
Accounts 4,341,257.18 1.82 4,341,257.18
Group Co., Ltd. years
State Grid Liaoning Power
Within 1
Supply Co., Ltd. Benxi Accounts 3,530,637.67 1.48
year
Branch
Benxi Steel & Iron(Group)
Within 3
Real-estate Development Co., Accounts 2,511,984.11 1.05 173,991.52
years
Ltd.
Liaoning Huawei Coal Over 3
Accounts 2,261,360.00 0.95 2,261,360.00
Preparation Co., Ltd. years
Total 17,255,782.17 7.24 6,776,608.70
(3) Long-term equity investment
Ending balance Beginning balance
Items Carrying Impairmen Carrying Impairmen
t Book value t Book value
amount amount
Subsidiarie 1,751,981,902.1 1,751,981,902.1 1,700,981,902.1 1,700,981,902.1
s
6 6 6 6
1,751,981,902.1 1,751,981,902.1 1,700,981,902.1 1,700,981,902.1
Total
6 6 6 6
Details of investment in subsidiaries
Impair
Ending
Beginning ment of
Name of entity Increase Decrease Ending balance balance of
balance current
impairment
period
Guangzhou Bengang
1,000,000.00 1,000,000.00
Steel & Iron Trading
Notes to the financial statements Page 98
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2017
Notes to the financial statements
Impair
Ending
Beginning ment of
Name of entity Increase Decrease Ending balance balance of
balance current
impairment
period
Co., Ltd.
Shanghai Bengang
Metallurgy Science
19,200,000.00 19,200,000.00
and Technology Co.,
Ltd.
Bengang Steel Plate
Liaoyang Orel Ball 529,899,801.38 529,899,801.38
Co., Ltd.
Dalian Benruitong
Automobile Material
65,000,000.00 65,000,000.00
Technologies Co.,
Ltd.
Bengang Puxiang
Cool Rolling Steel 1,019,781,571.10 1,019,781,571.10
Sheet Co., Ltd.
Changchun Bengang
Steel & Iron Sales -1,355,124.64 -1,355,124.64
Co., Ltd.
Harbin Bengang
Economic and 423,398.23 423,398.23
Trading Co., Ltd.
Nanjing Bengang
Steel Material Sales 2,081,400.65 2,081,400.65
Ltd.
Wuxi Bengang Steel
936,718.57 936,718.57
& Iron Sales Co., Ltd.
Xiamen Bengang
Steel & Iron Sales 1,095,711.66 1,095,711.66
Co., Ltd.
Yantai Bengang Steel
19,600,329.41 19,600,329.41
& Iron Sales Co., Ltd.
Tianjin Bengang
Steel & Iron Trading 33,318,095.80 33,318,095.80
Co., Ltd.
Notes to the financial statements Page 99
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2017
Notes to the financial statements
Impair
Ending
Beginning ment of
Name of entity Increase Decrease Ending balance balance of
balance current
impairment
period
Benxi Bengang Steel
5,000,000.00 5,000,000.00
Sales Co., Ltd
Shenyang Bengang
Metallurgical Science
5,000,000.00 5,000,000.00
and Technology Co.,
Ltd.
Bengang Baojin
(Shenyang)
51,000,000.00 51,000,000.00
Automobile New
Material Co, Ltd.
Total 1,700,981,902.16 51,000,000.00 1,751,981,902.16
(4) Operating income and operating cost
January to June 2017 January to June 2016
Item
Revenue Cost Revenue Cost
19,350,686,493.45 17,842,348,026.16 12,051,859,180.54 10,706,509,048.28
Principal business
1,846,830,285.75 1,640,628,048.16 1,133,529,266.65 1,023,377,735.93
Other business
21,197,516,779.20 19,482,976,074.32 13,185,388,447.19 11,729,886,784.21
Total
(5) Income on investment
January to June January to June
Items
2017 2016
102,074,634.76 13,713,328.45
Income from long-term equity investment(cost method)
3,294,593.14
Income from bank short-term financial products
105,369,227.90 13,713,328.45
Total
14. Supplementary information
(1) Details of non-recurring profit and loss
Items Amount Notes
Profit or loss from disposal of non-current assets -1,578,126.30
Details of government subsidies recorded into current profits and
15,047,000.00
loss(except such government subsidy closely related to the company’s
Notes to the financial statements Page 100
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2017
Notes to the financial statements
Items Amount Notes
normal 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 3,294,593.14
Profit or loss from debt restructuring 822,116.45
Other non-operating revenue and expenditure other than above items 2,130,078.13
Impact of income tax 4,928,915.36
Impact of minority interests 24,516.33
Total 14,762,229.74
(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
4.04 0.167 0.167
shareholders
Net profit attributable to ordinary
shareholders after deducting 3.92 0.162 0.162
non-recurring profit and loss
Bengang Steel Plates Co., Ltd.
23 August 2017
Notes to the financial statements Page 101
