Bengang Steel Plates Co., Ltd.
FINANCIAL STATEMENTS
(From January to June 2019)
(Unaudited)
28 August 2019
INDEX PAGES
FINANCIAL STATEMENTS
CONSOLIDATED STATEMENT OF FINANCIAL
POSITION AND STATEMENT OF FINANCIAL 1-4
POSITION
CONSOLIDATED STATEMENT OF
COMPREHENSIVE INCOME AND STATEMENT 5-6
OF COMPREHENSIVE INCOME
CONSOLIDATED STATEMENT OF CASH FLOWS
AND STATEMENT OF CASH FLOWS 7-8
CONSOLIDATED STATEMENT OF CHANGES IN
EQUITY AND STATEMENT OF CHANGES IN
9-12
EQUITY
NOTES TO THE FINANCIAL STATEMENTS 1-98
BENGANG S TEEL PLATES CO., LTD.
CONSOLIDATED S TATEMENT OF FINANCIAL POS ITION
As at 30 June 2019
(Expressed in Renminbi unless otherwise indicated)
. Notes Endi ng balance Beginning bal ance
Current assets
Cash at bank and on hand 5(1) 16,945,772,392.43 16,567,471,755.77
Settlement provisions
Financial assets held for trading
Financial assets at fair value through profit or
loss
Derivative financial assets
Notes receivable 5(2) 4,518,016,226.76 3,580,145,843.38
Accounts receivable 5 (3) 614,718,839.21 639,482,481.45
Receivables financing
Prepayments 5 (4) 1,314,464,404.93 1,321,537,514.78
Premiu m receivable
Reinsurance accounts receivable
Receivable deposit for reinsurance contract
Other receivables 5 (5) 205,466,650.77 202,763,964.98
Including: Interest receivable 13,872,107.84 11,608,705.43
Div idend receivable
Inventories 5 (6) 11,967,579,023.47 10,677,747,112.40
Non-current assets due within one year
Other current assets 5 (7) 247,612,982.23 292,119,771.13
Total current assets 35,813,630,519.80 33,281,268,443.89
Non-current assets
Available-for-sale financial assets 5 (8) 1,041,824,829.00
Held-to-maturity investment
Long-term receivables
Long-term equity investments 5 (9) 2,481,589.04 2,455,681.55
Other equity investment 5 (10) 1,041,824,829.00
Investment property
Fixed assets 5 (11) 22,672,967,771.15 23,924,504,539.97
Construction in progress 5 (12) 1,374,410,959.70 836,594,457.82
Productive biological assets
Oil and gas assets
Intangible assets 5 (13) 274,783,708.74 278,062,441.04
Develop ment expenditure
Goodwill
Long-term deferred expenses
Deferred tax assets 5 (14) 175,524,513.32 191,452,547.21
Other non-current assets 5 (15) 68,303,165.35 76,341,975.35
Total non-current assets 25,610,296,536.30 26,351,236,471.94
Total assets 61,423,927,056.10 59,632,504,915.83
The notes to the financial statements attached form part of these financial statements.
Legal Representative: Chief Financial Officer: Chief Accountant:
Financial Statements Page 1
BENGANG S TEEL PLATES CO., LTD.
CONSOLIDATED S TATEMENT OF FINANCIAL POS ITION (Continued)
As at 30 June 2019
(Expressed in Renminbi unless otherwise indicated)
Liabilities and equities Notes Ending balance Beginning balance
Current Liabilities
Short-term loans 5 (16) 12,298,193,000.00 11,938,490,375.85
Financial liabilities at fair value through profit or loss
Notes payable 5 (17) 11,650,282,357.86 10,013,192,014.02
Accounts payable 5 (18) 5,626,838,770.27 5,522,042,811.65
Advance from customers 5 (19) 3,345,451,646.56 3,331,854,098.42
Employee benefits payable 5 (20) 50,261,386.01 51,466,231.72
Current tax liabilities 5 (21) 62,888,848.55 515,752,369.68
Other payables 5 (22) 899,997,986.06 862,511,178.96
Including: Interest payables 9,343,905.54 9,658,681.99
Dividend payables 193,768,576.60
Non-current liabilities due within one year 5 (23) 1,036,582,163.28 350,965,576.32
Other current liabilities
Total current liabilities 34,970,496,158.59 32,586,274,656.62
Non-current liabilities
Long-term loans 5 (24) 6,213,054,564.15 7,083,640,094.16
Bonds payable
Including: Preferred stock
Perpetual bond
Long-term payables 5 (25) 52,733,529.65 13,686,705.92
Estimated liabilities
Deferred income 5 (26) 248,232,002.97 289,499,002.97
Deferred tax liabilities
Other non-current liabilities
Total non-current liabilities 6,514,020,096.77 7,386,825,803.05
Total liabilities 41,484,516,255.36 39,973,100,459.67
Shareholders' equity:
Share capital 5 (27) 3,875,371,532.00 3,875,371,532.00
Other equity instruments
Including: Preferred stock
Perpetual bond
Capital reserves 5 (28) 12,343,209,847.29 12,343,209,847.29
Less: treasury shares
Other comprehensive income
Special reserves 5 (29) 21,013,956.29 683,937.71
Surplus reserves 5 (30) 961,105,529.85 961,105,529.85
General risk reserve
Undistributed profits 5 (31) 2,205,328,308.98 1,945,887,269.82
Total equity attributable to equity holders of the parent
19,406,029,174.41 19,126,258,116.67
company
Non-controlling interests 533,381,626.33 533,146,339.49
Total shareholder's equity 19,939,410,800.74 19,659,404,456.16
Total of liabilities and owners’ equity 61,423,927,056.10 59,632,504,915.83
The notes to the financial statements attached form part of these financial statements.
Legal Representative： Chief Financial Officer: Chief Accountant
Financial Statements Page 2
BENGANG S TEEL PLATES CO., LTD.
S TATEMENT OF FINANCIAL POS ITION
As at 30 June 2019
(Expressed in Renminbi unless otherwise indicated)
Assets Notes Ending balance Beginning balance
Current assets
Cash at bank and on hand 14,845,582,986.81 15,536,305,375.00
Financial assets at fair value through profit or loss
Notes receivable 4,296,253,321.51 3,356,020,598.89
Accounts receivable 13(1) 402,397,751.85 409,553,059.27
Receivables financing
Prepayments 1,292,855,972.17 1,309,194,738.97
Other receivables 13(2) 228,691,383.89 235,037,391.46
Including: Interest receivable 12,222,112.07 9,815,280.04
Dividend receivable
Inventories 10,420,332,375.72 8,681,362,081.72
Non-current assets due within one year
Other current assets 194,348,087.50 193,989,096.20
Total current assets 31,680,461,879.45 29,721,462,341.51
Non-current assets
Available-for-sale financial assets 1,041,624,829.00
Held-to-maturity investment
Long-term receivables
Long-term equity investment 13(3) 2,016,281,902.16 2,016,281,902.16
Other equity investment 1,041,624,829.00
Investment property
Fixed assets 20,954,291,845.88 22,035,187,328.57
Construction in progress 1,357,632,503.06 825,553,510.15
Productive biological assets
Oil and gas assets
Intangible assets 147,123,109.32 148,776,177.96
Development expenditure
Goodwill
Long-term deferred expenses
Deferred tax assets 80,910,940.25 96,220,003.00
Other non-current assets 68,303,165.35 76,341,975.35
Total non-current assets 25,666,168,295.02 26,239,985,726.19
Total assets 57,346,630,174.47 55,961,448,067.70
The notes to the financial statements attached form part of these financial statements.
Legal Representative: Chief Financial Officer: Chief Accountant:
Financial Statements Page 3
BENGANG S TEEL PLATES CO., LTD.
S TATEMENT OF FINANCIAL POS ITION (Continued)
As at 30 June 2019
(Expressed in Renminbi unless otherwise indicated)
Liabilities and shareholders' equities Notes Ending balance Beginning balance
Current liabilities
Short-term loans 10,998,193,000.00 10,624,270,375.85
Financial liabilities at fair value through profit or loss
Notes payable 9,985,911,079.49 9,213,748,427.22
Accounts payable 6,566,943,730.51 5,940,816,426.48
Advance from customers 3,042,304,493.12 3,189,143,565.45
Employee benefits payable 49,866,464.88 49,378,095.47
Current tax liabilities 47,720,744.95 507,003,883.57
Other payables 689,660,196.29 538,051,513.13
Including: Interest payables 7,250,794.60 7,341,833.33
Dividend payables 193,768,576.60
Liabilities held for sale
Non-current liabilities due within one year 1,036,582,163.28 350,965,576.32
Other current liabilities
Total current liabilities 32,417,181,872.52 30,413,377,863.49
Non-current liabilities
Long term loans 6,213,054,564.15 7,083,640,094.16
Bonds payable
Including: Preferred stock
Perpetual bond
Long-term payables 52,733,529.65 13,686,705.92
Estimated liabilities
Deferred income 248,232,002.97 289,499,002.97
Deferred tax liabilities
Other non-current liabilities
Total non-current liabilities 6,514,020,096.77 7,386,825,803.05
Total liabilities 38,931,201,969.29 37,800,203,666.54
Shareholder’s equity:
Share capital 3,875,371,532.00 3,875,371,532.00
Other equity instruments
Including: Preferred stock
Perpetual bond
Capital reserves 11,923,058,165.17 11,923,058,165.17
Less: Treasury shares
Other comprehensive income
Special reserves 18,126,059.79 525,218.48
Surplus reserves 961,105,529.85 961,105,529.85
Undistributed Profits 1,637,766,918.37 1,401,183,955.66
Total shareholder's equity 18,415,428,205.18 18,161,244,401.16
Total liabilities and shareholder’s equity 57,346,630,174.47 55,961,448,067.70
The notes to the financial statements attached form part of these financial statements.
Legal Representative: Chief Financial Officer: Chief Accountant:
Financial Statements Page 4
BENGANG S TEEL PLATES CO., LTD.
CONSOLIDATED S TATEMENT OF COMPREHENS IVE INCOME
For the period Jan.-Jun. 2019
(Expressed in Renminbi unless otherwise indicated)
Items Notes Jan.-Jun. 2019 Jan.-Jun. 2018
1. Total operating income 24,102,595,167.14 23,441,247,377.14
Including: Operating income 5(32) 24,102,595,167.14 23,441,247,377.14
Interest income
P remium earned
Income from handling charges and commission
2. Total operating cost 23,621,825,282.23 22,738,904,288.94
Including: Operating cost 5(32) 22,067,612,729.65 20,804,207,420.98
Interest expense
Expenditure for handling charges and commission
Surrender value
Net expenditure for co mpensation
Net provision for insurance contract appropriated
Bonus payment for policy
Reinsurance premium
Ta x and surcharges 5(33) 114,125,362.97 153,307,375.64
Selling and distribution expenses 5(34) 574,445,199.14 514,038,008.95
General and administrative expenses 5(35) 446,767,811.77 461,842,424.56
Research and development expenses 5(36) 15,408,472.28 2,470,641.53
Financial expenses 5(37) 403,465,706.42 803,038,417.28
Including: Interest expense 586,490,262.69 575,001,615.20
Interest income 127,083,779.58 61,605,403.34
Add: Other income 5(38) 41,695,000.00 41,274,238.70
Inco me on investment(“ -” for loss) 5(39) 25,907.49 3,493,150.68
Including: Income fro m associates and joint ventures 25,907.49
Gains from change of fair value (“ -” for loss)
Credit impairment loss (“ -” for loss) 5(40) 3,751,513.83
Asset impairment loss (“ -” for loss) 5(41) 20,917,963.64
Assets disposal gains(“ -” for loss) 5(42) 2,418,704.34 825,580.63
3. Operational profit(“ -” for loss) 528,661,010.57 768,854,021.85
Add: Non-operating income 5(43) 8,210,182.24 2,138,397.80
Less: Non-operating expenses 5(44) 57,974,322.05 1,382,402.26
4. Total profit (“ -” for loss) 478,896,870.76 769,610,017.39
Less: Income tax e xpenses 5(45) 25,962,181.73 11,636,226.04
5. Net profit(“ -” for loss) 452,934,689.03 757,973,791.35
1.Classification by continuing operating
1.Net profit fro m continuing operation 452,934,689.03 757,973,791.35
2.Net profit fro m discontinued operation
2.Classification by ownership
1. Net profit attributable to the owners of parent company 453,209,615.76 756,951,987.59
2. Net profit attributable to non-controlling shareholders -274,926.73 1,021,803.76
6.Other comprehensive income
Other co mprehensive income attributable to owners of the parent company after
tax
1.Other comprehensive income ite ms that will not be reclassified into
gains/losses
1)Re-measurement of defined benefit plans of changes in net debt or
net assets
2)Other comprehensive income under the equity method cannot be
reclassified into profit or loss
2.Other comprehensive income that will be reclassified into profit or loss.
1) Other co mprehensive income under the equity method can be reclassified
into profit or loss
2) Gains and losses fro m changes in fair value o f available for sale financial
assets
3) Gains and losses from reclassification of held -to-maturity investments to
available-for-sale financial assets
4) The e ffective portion of cash flow hedges and losses
5) Tr anslation differences in foreign currency financial statements
6) Others
Other comprehensive income attributable to non-controlling
shareholders’ equity after tax
7. Total co mprehensive income 452,934,689.03 757,973,791.35
Total comprehensive income attributable to the owner of the parent company 453,209,615.76 756,951,987.59
Total comprehensive income attributable to non -controlling shareholders -274,926.73 1,021,803.76
8. Earnings per share
1)Basic earnings per share 0.12 0.20
2)Diluted earnings per share 0.12 0.20
The notes to the financial statements attached form part of these financial statements.
Legal Representative: Chief Financial Officer: Chief Accountant:
Financial Statements Page 5
BENGANG S TEEL PLATES CO., LTD.
S TATEMENT OF COMPREHENS IVE INCOME
For the period Jan.-Jun. 2019
(Expressed in Renminbi unless otherwise indicated)
Items Notes Jan.-Jun. 2019 Jan.-Jun. 2018
1. Total operating income 13(4) 23,447,215,857.93 23,682,865,109.14
Less: Operating cost 13(4) 21,757,289,997.18 21,401,191,962.20
Tax and surcharges 84,467,404.41 135,543,392.96
Selling and distribution expenses 335,094,548.06 265,554,867.46
General and administrative expenses 419,337,998.35 438,193,017.33
Research and development expenses 15,408,472.28 2,470,641.53
Financial expenses 388,071,914.59 774,523,490.60
Including: Interest expense 558,095,343.66 543,682,390.97
Interest income 114,189,626.94 58,304,426.91
Add: Other income 41,695,000.00 41,274,238.70
Income on investment(“-” for loss) 13(5) 3,493,150.68
Including: Income from associates and joint
ventures
Gains from change of fair value (“ -” for loss)
Credit impairment loss (“-” for loss) 3,751,513.83
Asset impairment loss (“-” for loss) 20,917,963.64
Assets disposal gains(“-” for loss) 2,465,706.59 825,580.63
2. Operational profit (“-” for loss) 495,457,743.48 731,898,670.71
Add: Non-operating income 8,138,040.75 1,714,748.66
Less: Non-operating expenses 57,935,182.17 1,382,402.26
3. Total profit (“-” for loss) 445,660,602.06 732,231,017.11
Less: Income tax expenses 15,309,062.75 5,679,337.17
4. Net profit(“-” for loss) 430,351,539.31 726,551,679.94
1.Net profit from continuing operation 430,351,539.31 726,551,679.94
2.Net profit from discontinued operation
5.Other comprehensive income
1.Other comprehensive income items that will not
be reclassified into gains/losses
1)Re-measurement of defined benefit plans of
changes
2)Other comprehensive income under the equity
method cannot be reclassified into profit or loss
2.Other comprehensive income that will be
reclassified into profit or loss.
1) Other co mprehensive income under the equity method
can be reclassified into profit or loss
2) Gains and losses fro m changes in fair value o f available
for sale financial assets
3) Gains and losses fro m re classification of held -to
maturity investments to available-for-sale financial assets
4) The e ffective portion of cash flow hedges and losses
5) Translation differences in foreign currency financial
statements
6) Others
6. Total comprehensive income 430,351,539.31 726,551,679.94
7. Earnings per share
1)Basic earnings per share
2)Diluted earnings per share
The notes to the financial statements form part of these financial statements
Legal Representative: Chief Financial Officer: Chief Accountant:
Financial Statements Page 6
BENGANG S TEEL PLATES CO., LTD.
CONSOLIDATED S TATEMENT OF CAS H FLOWS
For the period Jan.-Jun. 2019
(Expressed in Renminbi unless otherwise indicated)
Items Notes Jan.-Jun. 2019 Jan.-Jun. 2018
1.Cash flow from operating activities
Cash received from sale of goods or rendering of servi ces 16,357,053,782.81 15,984,735,085.76
Net increas e of customers' deposit and interbank deposit
Net increas e of loan from central bank
Net increas e of loans from other financial institutions
Cash received for premium of original insurance cont ract
Net cash received for reinsurance business
Net increas e of deposit and investment of the insured
Net increas e of Financial assets at fair value through profit or loss
Cash from receiving interest, handling charge and commission
Net increas e of loans from Borrowing funds
Net increas e of fund for buy-back business
Tax rebate received 247,667,635.74 246,514,404.27
Other cash received relating to operating activities 5(46) 144,904,624.34 81,782,480.19
Subtotal of cash inflows from operating activities 16,749,626,042.89 16,313,031,970.22
Cash paid for goods and services 13,876,838,386.74 14,086,077,537.47
Net increas e of customer's loan and advances
Net increas e 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 987,603,117.25 779,373,374.96
Cash paid for all types of taxes 653,208,180.03 406,064,168.90
Other cash paid relating to operating activities 5(46) 247,189,353.20 310,997,147.42
Subtotal of cash outflows from operating activities 15,764,839,037.22 15,582,512,228.75
Net cash flows from operating activities 984,787,005.67 730,519,741.47
2. Cash flows from investing activities
Cash received from return on investments 500,000,000.00
Cash received from distribution of dividends or profit 3,493,150.68
Net cash received from disposal of fixed assets, intangible assets 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 503,493,150.68
Cash paid for acquisition of fixed assets, intangible assets and other
545,199,197.41 680,441,782.39
long-term assets
Cash paid for acquisition of investments
Net increas e 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 545,199,197.41 680,441,782.39
Net cash flows from investing activities -545,199,197.41 -176,948,631.71
3. Cash flows from financing activities
Proceeds from investment 3,965,799,988.19
Including: Proceeds from investment of non-controlling shareholders
of subsidiary
Proceeds from borrowings 5,828,037,190.72 9,721,396,957.08
Cash received from bond issuance
Other proceeds relating to financing activities
Subtotal of cash inflows from financing activities 5,828,037,190.72 13,687,196,945.27
Cash repayments of borrowings 5,653,303,509.62 14,683,452,081.71
Cash payments for distribution of dividends, profit or interest expenses 626,178,049.57 661,538,139.82
Including: Cash paid to non-controlling shareholders as dividend and
profit by subsidiaries
Other cash payments relating to financing activities
Subtotal of cash outflows from financing activities 6,279,481,559.19 15,344,990,221.53
Net cash flows from financing activities -451,444,368.47 -1,657,793,276.26
4. Effect of foreign exchange rate changes on cash and cash
48,230,507.75 105,015,610.23
equivalents
5. Net increase in cash and cash equivalents 36,373,947.54 -999,206,556.27
Add: Cash and cash equivalents at the beginning of the period 11,752,548,621.97 17,037,713,410.49
6. Cash and cash equivalents at the ending of the period 11,788,922,569.51 16,038,506,854.22
The notes to the financial statements attached form part of these financial statements
Legal Representative: Chief Financial Officer: Chief Accountant:
BENGANG S TEEL PLATES CO., LTD.
Financial Statements Page 7
S TATEMENT OF CAS H FLOWS
For the period Jan.-Jun. 2019
(Expressed in Renminbi unless otherwise indicated)
Items Notes Jan.-Jun. 2019 Jan.-Jun. 2018
1. Cash flow from operating activities
Cash received from sale of goods or rendering of
15,970,406,775.11 15,778,223,117.53
services
Tax rebate received 219,614,786.86 119,119,395.04
Other cash received relating to operating activities 140,536,583.70 76,026,838.22
Subtotal of cash inflows from operating activities 16,330,558,145.67 15,973,369,350.79
Cash paid for goods and services 13,842,821,616.84 13,721,886,325.25
Cash paid to and on behalf of employees 928,568,022.64 726,170,588.86
Cash paid for all types of taxes 576,260,568.31 341,018,028.32
Other cash paid relating to operating activities 165,446,890.35 222,352,157.09
Subtotal of cash outflows from operating activities 15,513,097,098.14 15,011,427,099.52
Net cash flows from operating activities 817,461,047.53 961,942,251.27
2. Cash flows from investing activities
Cash received from return on investments 500,000,000.00
Cash received from distribution of dividends or profit 3,493,150.68
Net cash received from disposal of fixed assets,
intangible assets and 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 503,493,150.68
Cash paid for acquisition of fixed assets, intangible
539,451,276.57 677,920,104.21
assets and other long-term assets
Cash paid for acquisition of investments 259,300,000.00
Net cash paid for acquisition of subsidiary and other
operating unit
Other cash paid relating to investing activities
Subtotal of cash outflows paid for investing activities 539,451,276.57 937,220,104.21
Net cash flows from investing activities -539,451,276.57 -433,726,953.53
3. Cash flows from financing activities
Proceeds from investment 3,965,799,988.19
Cash received from borrowings 4,902,327,190.72 8,986,529,900.00
Cash received from bond issuance
Other cash received relating to financing activities
Subtotal of cash inflows from financing activities 4,902,327,190.72 12,952,329,888.19
Cash repayments of borrowings 4,713,373,509.62 13,939,938,977.79
Cash payments for distribution of dividends, profit or
589,497,122.29 635,530,683.74
interest
Other cash payments relating to financing activities
Subtotal of cash outflows from financing activities 5,302,870,631.91 14,575,469,661.53
Net cash flows from financing activities -400,543,441.19 -1,623,139,773.34
4. Effect of foreign exchange rate changes on cash
48,222,621.42 105,012,744.72
and cash equivalents
5. Net increase in cash and cash equivalents -74,311,048.81 -989,911,730.88
Add: Cash and cash equivalents at the beginning of
10,807,824,843.20 16,713,104,199.65
the period
6. Ending balance of cash and cash equivalents 10,733,513,794.39 15,723,192,468.77
The notes to the financial statements form part of these financial statements
Legal Representative: Chief Financial Officer: Chief Accountant
Financial Statements Page 8
BENGANG S TEEL PLATES CO., LTD.
CONSOLIDATED S TATEMENT OF CHANGES IN EQUITY
For the period Jan.-Jun. 2019
(Expressed in Renminbi unless otherwise indicated)
Jan.-Jun. 2019
Owne r's equity attributable to parent company
Items Othe r equity instrumen ts Less:
Othe r Gene ral Non-controlling Total of owner's
Treasu Special Undistribu ted interes t equity
Share capital Preferen ce Perpe tual Capital reserves comprehensi Surplus reserves risk
Othe rs ry reserves profit
shares bond ve income reserve
shares
1. Ending balance of last year 3,875,371,532.00 12,343,209,847.29 683,937.71 961,105,529.85 1,945,887,269.82 533,146,339.49 19,659,404,456.16
Add: Change of accounting policies
Correction of errors for last period
Business consolidation under common control
Others
2. Beginning balance of current year 3,875,371,532.00 12,343,209,847.29 683,937.71 961,105,529.85 1,945,887,269.82 533,146,339.49 19,659,404,456.16
3. Changes in current year (“ -” for decrease) 20,330,018.58 259,441,039.16 235,286.84 280,006,344.58
1) Total comprehensive income 453,209,615.76 -274,926.73 452,934,689.03
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 -193,768,576.60 -193,768,576.60
(1) Appropriation to surplus reserves
(2) Appropriation to general risk reserve
(3) Profit distribution to shareholders -193,768,576.60 -193,768,576.60
(4) Others
4) Transfers within shareholders' equity
(1) Capital reserves trans ferred into paid-in
capital (or stock)
(2) Surplus reserves trans ferred into paid-in
capital (or stock)
(3) Surplus reserves to recover loss
(4) Net changes of defined contribution plans
transferred into Retained Earnings
(5) Other comprehensive income transferred into
Retained Earnings
(6) Others
5) Special reserves 20,330,018.58 510,213.57 20,840,232.15
(1) Provision of special reserves 25,542,658.45 510,213.57 26,052,872.02
(2) Use of special reserves 5,212,639.87 5,212,639.87
6) Others
4. Ending balance of current year 3,875,371,532.00 12,343,209,847.29 21,013,956.29 961,105,529.85 2,205,328,308.98 533,381,626.33 19,939,410,800.74
The notes to the financial statements attached form part of these financial statement
Legal Representative: Chief Financial Officer: Chief Accountant:
Financial Statements Page 9
BENGANG S TEEL PLATES CO., LTD.
CONSOLIDATED S TATEMENT OF CHANGES IN EQUITY (Continued)
For the period Jan.-Jun. 2019
(Expressed in Renminbi unless otherwise indicated)
Jan.-Jun. 2018
Owner's equity attributable to parent company
Items Other equity instruments Less: Other General Non-controlling Total shareholder's
Special Undistributed
Share capital Prefe rence Perpetual Capital reserves Treasury comprehensive Surplus reserves risk interest equity
Others reserves profit
shares bond shares income reserve
1. Ending balance of last year 3,136,000,000.00 9,114,845,542.05 475,046.75 961,105,529.85 1,103,162,610.35 533,475,744.19 14,849,064,473.19
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 9,114,845,542.05 475,046.75 961,105,529.85 1,103,162,610.35 533,475,744.19 14,849,064,473.19
3. Changes in current year (“ -” for decrease) 739,371,532.00 3,228,364,305.24 208,890.96 842,724,659.47 -329,404.70 4,810,339,982.97
1) Total comprehensive income 1,036,493,236.07 -315,177.71 1,036,178,058.36
2) Capital increase and decrease by shareholders 739,371,532.00 3,228,364,305.24 3,967,735,837.24
(1) Common share invested by shareholders 739,371,532.00 3,228,364,305.24 3,967,735,837.24
(2) Capital input by the holder of other equity
instruments
(3) Share-based payment attributable to shareholders'
equity
(4) Others
3) Profit distribution -193,768,576.60 -193,768,576.60
(1) Appropriation to surplus reserves
(2) Appropriation to general risk reserves
(3) Profit distribution to shareholders -193,768,576.60 -193,768,576.60
(4) Others
4) Transfers within shareholders' equity
(1) Capital reserves trans ferred into paid-in capital (or
stock)
(2) Surplus reserves trans ferred into paid-in capital (or
stock)
(3) Surplus reserves to recover loss
(4) Net changes of defined contribution plans
trans ferred into Retained Earnings
(5) Other comprehensive income trans ferred into
Retained Earnings
(6) Others
5) Special reserves 208,890.96 -14,226.99 194,663.97
(1) Provision of special reserves 46,823,964.39 46,823,964.39
(2) Use of special reserves 46,615,073.43 14,226.99 46,629,300.42
6) Others
4. Ending balance of current year 3,875,371,532.00 12,343,209,847.29 683,937.71 961,105,529.85 1,945,887,269.82 533,146,339.49 19,659,404,456.16
The notes to the financial statements attached form part of these financial statement
Legal Representative: Chief Financial Officer: Chief Accountant:
Financial Statements Page 10
BENGANG S TEEL PLATES CO., LTD.
S TATEMENT OF CHANGES IN EQUITY
For the period Jan.-Jun. 2019
(Expressed in Renminbi unless otherwise indicated)
Jan.-Jun. 2019
Other equity instruments
Less: Other
Items Special Undistributed Total shareholder’s
Share capital Pref erence Perpetual Capital reserves Treasury comprehensive Surplus reserves
Others reserves profits equity
shares bond shares income
1. Ending balance of last year 3,875,371,532.00 11,923,058,165.17 525,218.48 961,105,529.85 1,401,183,955.66 18,161,244,401.16
Add: Change of accounting policies
Correction of errors for last period
Others
2. Beginning balance of current year 3,875,371,532.00 11,923,058,165.17 525,218.48 961,105,529.85 1,401,183,955.66 18,161,244,401.16
3. Changes in current year (“ -” for decrease) 17,600,841.31 236,582,962.71 254,183,804.02
1) Total comprehensive income 430,351,539.31 430,351,539.31
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 -193,768,576.60 -193,768,576.60
(1) Appropriation of surplus reserves
(2) Profit distribution to shareholders -193,768,576.60 -193,768,576.60
(3) Others
4) Transfers within shareholders' equity
(1) Capital reserves trans ferred into
paid-in capital (or stock)
(2) Surplus reserves trans ferred into
paid-in capital (or stock)
(3) Surplus reserves to recover loss
(4) Net changes of defined contribution
plans transferred into Retained Earnings
(5) Other comprehensive income
trans ferred into Retained Earnings
(6) Others
5) Special reserves 17,600,841.31 17,600,841.31
(1) Provision of special reserves 22,722,987.71 22,722,987.71
(2) Use of special reserves 5,122,146.40 5,122,146.40
6) Others
4. Ending balance of current year 3,875,371,532.00 11,923,058,165.17 18,126,059.79 961,105,529.85 1,637,766,918.37 18,415,428,205.18
The notes to the financial statements attached form part of these financial statements
Legal Representative: Chief Financial Officer: Chie f Accountant:
Financial Statements Page 11
BENGANG S TEEL PLATES CO., LTD.
S TATEMENT OF CHANGES IN EQUITY (Continued)
For the period Jan.-Jun. 2019
(Expressed in Renminbi unless otherwise indicated)
Jan.-Jun. 2018
Other equity instruments
Less: Other
Items Special Undistributed Total shareholder’s
Share capital Pref erence Perpetual Capital reserves Treasury comprehensive Surplus reserves
Others reserves profits equity
shares bond shares income
1. Ending balance of last year 3,136,000,000.00 8,694,693,859.93 276,727.96 961,105,529.85 613,351,724.38 13,405,427,842.12
Add: Change of accounting policies
Correction of errors for last period
Others
2. Beginning balance of current year 3,136,000,000.00 8,694,693,859.93 276,727.96 961,105,529.85 613,351,724.38 13,405,427,842.12
3. Changes in current year (“ -” for decrease) 739,371,532.00 3,228,364,305.24 248,490.52 787,832,231.28 4,755,816,559.04
1) Total comprehensive income 981,600,807.88 981,600,807.88
2) Capital increase and decrease by 739,371,532.00 3,228,364,305.24 3,967,735,837.24
shareholders
(1) Common share invested by 739,371,532.00 3,228,364,305.24 3,967,735,837.24
shareholders
(2) Capital input by the holder of other
equity instruments
(3) Share-based payment attributable to
shareholders' equity
(4) Others
3) Profit distribution -193,768,576.60 -193,768,576.60
(1) Appropriation of surplus reserves
(2) Profit distribution to shareholders -193,768,576.60 -193,768,576.60
(3) Others
4) Transfers within shareholders' equity
(1) Capital reserves trans ferred into
paid-in capital (or stock)
(2) Surplus reserves trans ferred into
paid-in capital (or stock)
(3) Surplus reserves to recover loss
(4) Net changes of defined contribution
plans transferred into Retained Earnings
(5) Other comprehensive income
trans ferred into Retained Earnings
(5) Others
5) Special reserves 248,490.52 248,490.52
(1) Provision of special reserves 40,685,554.06 40,685,554.06
(2) Use of special reserves 40,437,063.54 40,437,063.54
6) Others
4. Ending balance of current year 3,875,371,532.00 11,923,058,165.17 525,218.48 961,105,529.85 1,401,183,955.66 18,161,244,401.16
The notes to the financial statements attached form part of these financial statements
Legal Representative: Chief Financial Officer: Ch ief Accountant:
Financial Statements Page 12
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2019
Notes to the financial statements
Bengang Steel Plates Co., Ltd.
Notes to the financial statements
For the peri od from Jan. to J un. 2019
(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 RMB 5.40 each, and listed in Shenzhen
Stock Exchange since 15 January 1998. The capital shares were totaled to 1,136,000,000 shares.
On 14 March 2006, according to the resolutions of the Shareholders’ Meeting regarding share equity relocation, the
Share Equity Relocation Scheme, Response to Bengang Steel Plate Co., Ltd. about Share Equity Relocation issued by
Liaoning Provincial Government State-owned Asset Administrative Committee, Bengang Group – the only holder of
non-negotiable state-owned legal person shares paid the consideration to the current shareholders to obtain the current
option for the 40,800,000 shares of the total 616,000,000 shares it was holding. Shareholding positions have been
registered with China Securities Depository & Clearing Corporation Ltd. Shenzhen Office. However, the total amount
of capital shares of Bengang Steel Plates Co., Ltd. was not changed through the share equity relocation action.
According to the approval document “Zheng-Jian-Gong-Si-Zi [2006] No. 126” by China Securities Regulatory
Commission on 30 June 2006, the Company was approved to place 2 billion Renminbi common shares particularly to
Bengang Group and the proceeds would be used to purchase the related assets of the Group. On the same day, Bengang
Group received circular Zheng-Jian-Gong-Si-Zi [2006] No. 127 issued by China Securities Regulatory Committee, and
were exempted for the liability of undertaking the purchase offer. The liability was caused by 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 placing price was RMB4.6733 per share.
Notes to the financial statements Page 1
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2019
Notes to the financial statements
Approved by the China Securities Regulatory Commission [2017] No. 1476, Bengang Steel Plate Co., Ltd. privately
placed no more than 739,371,534 RMB ordinary shares (A shares) to no more than 10 issuers. The non-public offering
was completed on 9 February 2018, and 739,371,532 shares were actually issued. The placing price was RMB5.41 per
share.
As at 30 June 2019, the capital shares were totaled to 3,875,371,532 shares.
The Company’s uniform social credit code: 91210000242690243E.
The Company’s registered address: 16th Renmin Road, Pingshan District, Benxi, Liaoning Province.
The Company’s legal representative: Gao Lie.
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. Consolidation scope
The financial statements have been approved for reporting by the board of directors of the Company on 28 August
2019.
(2) Consolidation scope
As at 30 June 2019, 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 M etallurgy Science and Technology Co., Ltd.
Bengang Steel Plates Liaoyang Pellet Co., Ltd.
Dalian Benruitong Automobile M aterial Technology Co., Ltd.
Changchun Bengang Steel & Iron Sales Co., Ltd.
Harbin Bengang Economic and Trading Co., Ltd.
Nanjing Bengang M aterials Sales Co., Ltd.
Wuxi Bengang Steel & Iron Sales Co., Ltd.
Xiamen Bengang Steel & Iron Sales Co., Ltd.
Yantai Bengang Steel & Iron Sales Co., Ltd.
Tianjin Bengang Steel & Iron Trading Co., Ltd.
Bengang Posco Cold-rolled Sheet Co., Ltd.
Benxi Bengang Steel Sales Co., Ltd
Shenyang Bengang M etallurgical Science and Technology Co., Ltd.
Chongqing Liaoben Steel & Iron Trading Co., Ltd.
Notes to the financial statements Page 2
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2019
Notes to the financial statements
Bengang Baojin (Shenyang) Automobile New M aterial Technology Co., Ltd.
For details of consolidation scope and change of the consolidation scope for the period, please refer to Note 6 “Equity
in other entities”.
2. Basis of preparation
(1) Basis of preparation
The financial statements have been prepared on the going concern basis of actual trading and events in accordance with
“Accounting Standards for Business Enterprises – Basic Standard” and relevant specific standards, application
materials, interpretations (together hereinafter referred to as “Accounting Standards for Business Enterprises”) issued
by the Ministry of Finance, and “Information Disclosure Rules for Companies of securities for public issuance No. 15
– General Regulations for Financial Statements” issued by the China Securities Regulatory Commission.
(2) Going concern
The Company is operating normally and in a good condition, and thus has the capability to continue to operate in the
next twelve months from the end of reporting period.
3. Significant accounting policies and accounting estimates
The following disclosed content covers the detailed accounting policies and accounting estimates that are adopted by
the Company according to the actual features of production or operation.
(1) Statement of compliance with China Accounting Standards for Business Enterprises
The financial statements present truly and completely the financial position, operation results and cash flows of the
Company during the reporting period in accordance with China Accounting Standards for Business Enterprises.
(2) Accounting year
The Accounting year is from 1 January to 31 December.
(3) Operating period
The operating period is twelve months.
(4) Functional currency
The Company’s functional currency is RMB.
(5) The accounting treatment for Business combination under/not under common control
Business combination under common control
The assets and liabilities that the Company acquired in a business combination shall be measured on the basis of their
carrying amount of aquiree’s assets, liabilities (as well as the goodwill arising from the business combination) in the
consolidated financ ial statement of the ultimate controller on the combining date. As for the balance between the
Notes to the financial statements Page 3
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2019
Notes to the financial statements
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 not 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 fees for the business combination paid by the acquirer, including the expenses for
audit, assessment and legal services, shall be recorded into the profits and losses at the current period. The transaction
expenses for the issuance of equity securities for the business combination shall be recorded into the initial recognition
amount of equity securities.
(6) Consolidation of Financial Statements
1. Scope of consolidation
The scope of consolidation of consolidated financial statements is determined based on control. All the s ubsidies
(including separable sections of the investees controlled by the Company) have been consolidated into the scope of
consolidation for this period ended.
2. Procedure of consolidation
The consolidated financial statements shall be presented by the parent based on the financial statements of the parent
and its subsidiaries, and using other related information. When preparing consolidated financial statements, the parent
shall consider the entire group as an accounting entity, adopt uniform accounting policies and apply the requirements
of Accounting 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 aris ing 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.
Notes to the financial statements Page 4
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2019
Notes to the financial statements
The owners’ interests, profit or loss, and comprehensive income of the subsidiary attributable to the non-controlling
shareholders shall be presented separately in the shareholders’ equity of the consolidated balance sheet and under the
item of net profit of the consolidated statement of comprehensive income and under the item of total comprehensive
income. Where losses assumed by the minority exceed the minority’s interests in the beginning equity of a subsidiary,
the excess shall be charged against the minority’s interests.
(1) Increasing new subsidiaries and businesses
If the Company has a new subsidiary due to business combination under common control during the reporting period,
it shall adjust the beginning balance in the consolidated statement of financial position when preparing consolidated
statement of financial position. The revenue, expenses and profits of the subsidiaries from the acquisition date to the
end of the reporting period are included in the Company’s consolidated statement of comprehensive income. The cash
flow of the subsidiaries from the acquisition date to the end of the reporting period is included in the Company’s
consolidated statement of cash flows. And meanwhile the Company shall adjust the relevant items of the comparative
financial statements as if the reporting entity for the purpose of consolidation has been in existence since the date the
ultimate controlling party first obtained control.
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.
Notes to the financial statements Page 5
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2019
Notes to the financial statements
(2) Disposing subsidiaries or businesses
1. General treatment
If the Company disposes a subsidiary during the 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
re-measure 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 re-measurement 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 subsidiaries by multiple transactions
Where the Company loses control of a subsidiary in multiple transactions in which it disposes of its subsidiary in
stages, in determining whether to account for the multiple transactions as a single transaction, the Company shall
consider all of the terms and conditions of the transactions and their economic effects. One or more of the following
may indicate that the Company shall account for the multiple arrangements as a single transaction:
(a) Arrangements are entered into at the same time or in contemplation of each other;
(b) Arrangements work together to achieve an overall commercial effect;
(c) The occurrence of one arrangement is dependent on the occurrence of at least one other arrangement; and
(d) One arrangement considered on its own is not economically justified, but it is economically justified when
considered together with other arrangements.
If each of the multiple transactions forms part of a bundled transaction which eventually results in loss of control of
the subsidiary, these multiple transactions shall be accounted for as a single transaction. In the consolidated financial
statements, the difference between the consideration received and the corresponding proportion of the subsidiary’s
net assets in each transaction prior to the loss of control shall be recognized in other comprehensive income and
transferred to the profit or loss when the Company eventually loses control of the subsidiary.
Notes to the financial statements Page 6
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2019
Notes to the financial statements
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 subsidiaries’ 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 continuous ly from the acquisition date or the combination date
based on the new shareholding proportion shall be adjusted to the capital reserve( capital premium or share premium)
in the consolidated financial statements. If the balance of the capital reserve is not sufficient, any excess shall be
adjusted against retained earnings.
(4) Disposing portion of equity investments in subsidiaries without lossing 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) 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.
(8) 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.
2. Translation of foreign currency financial statements
Notes to the financial statements Page 7
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2019
Notes to the financial statements
The asset and liability items in the statement of financial position shall be translated at a spot exchange rate on the
balance sheet date. Among the owner's equity items, except the ones as "undistributed profits", others shall be
translated at the spot exchange rate at the time when they are incurred. The income and expense items in the income
statement shall be translated using an exchange rate that is determined in a systematic and reasonable manner and
approximates the spot exchange rate on the transaction date.
When disposing 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.
(9) Financial instruments
Financial instruments include financial assets, financial liabilities and equity instruments.
1. Classification of financial instruments
The Company shall classify financ ial assets on the basis of both the entity’s business model for managing the financial
assets and the contractual cash flow characteristics of the financial asset as: financial assets measured at amort ised cost,
financial assets measured at fair value through other comprehensive income (debt instrument) and financial assets
measured at fair value through profit or loss at initial measurement.
A financial asset shall be measured at amortised cost if both of the following conditions are met. The financial asset is
held within a business model whose objective is to hold financial assets in order to collect contractual cash flows and
the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of
principal and interest on the principal amount outstanding.
A financial asset shall be measured at fair value through other comprehensive income if both of the following
conditions are met. The financial asset is held within a business model whose objective is achieved by both collecting
contractual cash flows and selling financ ial assets and the contractual terms of the financial asset give rise on specified
dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.
Other financial assets other than these are classified as financial assets measured at fair value through profit or loss.
The Company may make an election at initial recognition for non-trading equity instrument investments whether it is
designated as a financial asset (equity instrument) that is measured at fair value through other comprehensive income.
The Company shall classify financial liabilities as financial liabilities measured at amortised cost and financial
liabilities measured at fair value through profit or loss at initial measurement.
Notes to the financial statements Page 8
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2019
Notes to the financial statements
The Company may, at initial recognition, des ignate a financial liability as measured at fair value through profit or loss
because either:
(a) it eliminates or significantly reduces an accounting mismatch;
(b) a group of financial liabilities or financial assets and financial liabilities is managed and its performance is
evaluated on a fair value basis, in accordance with a documented risk management or investment strategy, and
information about the group is provided internally on that basis to the entity’s key management personnel;
(c) the financial liability contains embedded derivatives that need to be separated.
2. Recognition and measurement of financial instruments
(1) Financial assets measured at amortised cost
Financial assets measured at amortized cost include notes receivables, accounts receivables, other receivables,
long-term receivables, debt investments, etc. At initial recognition, the Company shall measure a financial asset at its
fair value plus or minus transaction costs that are directly attributable to the acquisition or issue of the financial asset.
The Company shall measure account receivables at their transaction price if the account receivables do not contain a
significant financing component and accounts receivables that the company has decided not to consider for a financing
component of no more than one year.
Interests calculated by using the effective interest method during the holding period shall be recognized in profit or
loss.
When recovering or disposing the receivables, the difference between the price obtained and the carrying value shall be
recognized in current profit or loss.
(2) Financial assets measured at fair value through other comprehensive income (debt instruments)
Financial assets measured at fair value through other comprehensive income (debt instruments) include receivables
financing, other debt investments, etc. At initial recognition, the Company shall measure a financial asset at its fair
value plus transaction costs that are directly attributable to the acquisition or issuance of the financial asset. The
financial assets are subsequently measured at fair value. Changes in fair value are included in other comprehensive
income except for interest calculated using the effective interest method, impairment losses or gains and exchange
gains and losses.
When the financial assets are derecognized, the accumulated gain or loss previously recognized in other
comprehensive income is transferred from other comprehensive income and recognized in profit or loss.
(3) Financial assets at fair value through other comprehensive income (equity instruments)
Financial assets at fair value through other comprehensive income (equity instruments) include other equity instrument
investments, etc.
Notes to the financial statements Page 9
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2019
Notes to the financial statements
At initial recognition, the Company shall measure a financial asset at its fair value plus transaction costs that are
directly attributable to the acquisition or issue of the financial asset. The financial assets are subsequently measured at
fair value. Changes in fair value are included in other comprehensive income. The dividends obtained are recognised in
profit and loss.
When the financial assets are derecognized, the accumulated gain or loss previously recognised in other comprehensive
income is transferred from other comprehensive income and recognised in retained earnings .
(4) Financial assets at fair value through profit or loss
Financial assets at fair value through profit or loss include transactional financial assets, derivative financial assets,
other non-current financial assets, etc.
The Company shall measure the financial assets at fair value at initial recognition. Transaction costs are recognised in
profit or loss. Changes in fair value are included in profit or loss.
When the financial assets are derecognized, the difference between the fair value and the initially recorded amount is
recognized as investment income, and the gains and losses from changes in fair value are adjusted.
(5) Financial liabilities at fair value through profit or loss
Financial liabilities at fair value through profit or loss include current financial liabilities, derivative financial liabilities,
etc.
The Company shall measure the financial assets at fair value at initial recognition. Transaction costs are recognised in
profit or loss. Changes in fair value are included in profit or loss.
When the financial liabilities are derecognized, the difference between the fair value and the initially recorded amount
is recognized as investment income, and the gains and losses from changes in fair value are adjusted.
(6) Financial liabilities measured at amortised cost
Financial liabilities measured at amortised cost include short-term borrowings, notes payables, accounts payables,
other payables, long-term borrowings, bonds payables, long-term payables.
At initial recognition, the Company shall measure a financial liability at its fair value plus transaction costs that are
directly attributable to the acquisition or issue of the financial asset.
Interests calculated by using the effective interest method during the holding period shall be recognized in profit or
loss.
Notes to the financial statements Page 10
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2019
Notes to the financial statements
When the financial liabilities are derecognized, the difference between the price obtained and the carrying value shall
be recognised in profit and loss.
3. Recognition 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 derecognize the financial asset. If it retained nearly all of the risks and rewards related to the
ownership of the financial asset, it shall not derecognize the financial asset.
To judge whether the transfer of a financial asset can satisfy the conditions as prescribed in these Standards for the
derecognition 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 financ ial assets transfer and entire financial asset transfer. If the
transfer of an entire financial asset satisfies the conditions for derecognition, the difference between the amounts of the
following 2 items shall be recorded in the profit or loss 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 be derecognized, the entire book value of the
transferred financial asset shall, between the portion derecognized and the portion not derecognized, 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 profit or loss of the current period :
(1) The book value of the portion derecognized; and
(2) The sum of consideration of the portion derecognized, 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 derecognized (in t he
case 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 of derecognition, it shall continue to be recognized as
financial assets and the consideration received shall be recognized as financial liabilities.
4. Derecognition of financial liabilities
Only when the prevailing obligations of a financial liability are relieved in all or in part may the financial liability be
derecognized in all or partly.
Where the Company (debtor) enters into an agreement with a creditor so as to substitute the existing financial liabilities
by way of any new financial liability, and if the contractual stipulations regarding the new financial liability is
Notes to the financial statements Page 11
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2019
Notes to the financial statements
substantially different from that regarding the existing financial liability, it shall derecognize the existing financial
liability, and shall at the same time recognize a new financial liability.
Where the Company makes substantial revis ions to part or all of the contractual stipulations of the existing financial
liability, it shall derecognize 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 a financial liability is totally or partially derecognized, the Company shall recognize in the profit or loss of the
current period the difference between the carrying amount derecognized 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 recognized. The gap between the carrying amount which is distributed to the part derecognized
and the considerations it has paid (inc luding the noncash assets it has transferred out and the new financial liabilities it
has assumed) shall be recognized into profit or loss of the current period.
5. Determination of the fair value of the financial assets (liabilities)
If active markets for the financial instruments exist, the fair value shall be measured by quoted prices in the active
markets. If active markets for the financial instruments do not exist, valuation techniques shall be applied for the
measurement. The Company uses valuation techniques appropriate in the circums tances and for which sufficient data
are available to measure fair value. The Company chooses relevant observable inputs for identical or similar assets or
liabilities. Only when relevant observable inputs are unavailable or should the Company use unobservable inputs for
the asset or liability.
6. Impairment of the financial assets
The Company shall recognize loss allowance for expected credit losses on financial asset measured at amortised cost,
and financial assets measured at fair value through other comprehensive income, such as debt instrument investments,
contract assets, financial guarantee contract, etc.
The Company considers reasonable and relevant information on past events, current conditions and forecasts of future
economic conditions, and takes the risk of default as a weight, and calculates the difference between the cash flow
receivable from the contract and the cash flow expected to be received. The probability-weighted amount of the present
value of the current value confirms the expected credit loss.
At each reporting date, the Company shall measure the expected credit losses of financial instruments at different
stages. If the credit risk on a financial instrument has not increased significantly since initial recognition, it is in the
first stage, the Company shall measure the loss allowance for that financial instrument at an amount equal to 12-month
Notes to the financial statements Page 12
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2019
Notes to the financial statements
expected credit losses. If the credit risk has increased significantly since initial recognition but the credit impairment
has not occurred, it is in the second stage, and the company shall measure the loss allowance for a financial instrument
at an amount equal to the lifetime expected credit losses. If the credit risk has increased significantly since initial
recognition and the credit impairment has occurred, it is in the third stage, and the company shall measure the loss
allowance for a financial instrument at an amount equal to the lifetime expected credit losses.
The Company may assume that the credit risk on a financial instrument has not increased significantly since initial
recognition if the financial instrument is determined to have low credit risk at the reporting date and measure the loss
allowance for that financial instrument at an amount equal to 12-month expected credit losses..
The Company shall recognize the amount of expected credit losses or reversal in profit or loss. For debt instruments
held at fair value through other comprehensive income, the Company shall recognize the amount of expected credit
losses or gains in profit or loss, and adjust other comprehensive income.
For note receivables, account receivables and asset contracts, whether a significant financing component is contained
or not, the Company shall always measure the loss allowance at an amount equal to lifetime expected credit losses.
The impairment test shall be assessed individually for account receivables if there is evidence indicating that the
receivables have been impaired, and for others applicable to individual assessments to recognise the expected credit
losses and individual impairment.
For accounts receivable that do not have objective evidence of impairment or when individual financial assets cannot
be used to estimate expected credit losses at reasonable cost, the Company shall divide receivables based on the credit
risk characteristics into different portfolio and calculate expected credit loss based on portfolios.
The recognition of expected credit losses for the receivables in portfolio：
Items Criteria for portfolio Recognition method for expected credit losses
The Co mpany shall, based on past events, current conditions and forecasts
Similar credit
Account receivables – of future economic condit ions, calculate expected credit losses using
characteristics for
Aging analysis method comparison table of accounts receivables aging analysis and lifet ime
similar ag ing
expected credit loss ratio.
The Co mpany shall, based on past events, current conditions and forecasts
Similar credit
Other receivables – of future economic condit ions, calculate expected credit losses using
characteristics for
Aging analysis method comparison table of other receivables aging analysis and lifetime expected
similar ag ing
credit loss ratio.
Account receivables and other receivables - Aging analys is method for lifetime expected credit loss ratio:
Notes to the financial statements Page 13
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2019
Notes to the financial statements
Expected credit loss ratio for Expected credit loss ratio for
Aging
accounts receivable (%) other receivables (%)
Within 1 year (inclusive)
1-2 years (inclusive) 5.00 5.00
2-3 years (inclusive) 20.00 20.00
Over 3 years 100.00 100.00
(10) Inventory
1. Inventory classification
Inventories include material in transit, raw material, low -valued consumables, finished goods, work in process,
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
inventory impairment loss
The net realizable value of inventories (finished products, stock commodity, material, etc.) held for direct selling in the
daily business activity shall be calculated by deducting the estimated sale expense and relevant taxes from the
estimated sale price of inventories; The net realizable value of inventories for further processing in the daily business
activity shall be calculated by deducting the estimated cost of completion, estimated sale expense and relevant taxes
from the estimated sale price of inventories; The net realiz able value of inventories held for the execution of sales
contracts or labor contracts shall be calculated on the ground of the contract price. If the Company holds more
inventories than the quantities subscribed in the sales contract, the net realizable value of the excessive part of the
inventories shall be calculated on the ground of the general sales price.
The Company shall make provis ion 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.
Notes to the financial statements Page 14
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2019
Notes to the financial statements
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.
(11) Assets hold for sales
The Company classifies non-current assets or disposal asset groups when the assets meet the following criterion into
holding categories for sale simultaneously:
(1) According to the practice of selling such assets or disposal asset groups in similar transactions, they can be sold
immediately under current conditions;
(2) The sale of assets is highly probable, as the company has already made a resolution on a sale plan and obtained a
certain purchase commitment, and the transaction is expected to be completed within one year. The relevant
regulations that the assets can be sold have been approved by relevant authorities or regulatory authorities of the
Company.
(12) Long-term equity investment
1. Criteria of joint control and significant influence
Joint control is the contractually agreed sharing of control of an arrangement, which exists only when decisions about
the relevant activities require the unanimous consent of the parties sharing control. If the Company and other joint
venture have joint control of the investee and have rights to the net assets of the investee, the investee is a joint venture
of the Company.
Significant influence is the power to participate in the financia l 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 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
Notes to the financial statements Page 15
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2019
Notes to the financial statements
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.
For a business combination not under common control, the initial investment cost of the long-term equity investment
shall be the acquisition cost at the acquisition date. When an investor becomes capable of exercising control over an
investee due to additional investment or other reasons, the initial investment cost under the cost method shall be the
carrying amount of previously-held equity investment together with the additional investment cost.
(2) The initial cost of the long-term equity investment other than from business acquisition
The initial cost of a long-term equity investment obtained by making payment in cash shall be the purchase cost which
is actually paid.
The initial cost of a long-term equity investment obtained on the basis of issuing equity securities shall be the fair value
of the equity securities issued.
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 t he
acquisition date, the difference shall be credited to profit or loss for the current period.
Notes to the financial statements Page 16
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2019
Notes to the financial statements
The Company shall recognize its share of the investee’s net profits or losses, as well as its share of the investee’s other
comprehensive income, as investment income or losses and other comprehensive income, and adjust the carrying
amount of the investment accordingly. The carrying amount of the investment shall be reduced by the portion of any
profit distributions or cash dividends declared by the investee that is attributable to the investor. The investor’s share of
the investee’s owners’ equity changes, other than those arising from the investee’s net profit or loss, other
comprehensive income or profit distribution, and the carrying amount of the long-term equity investment shall be
adjusted accordingly.
The investor shall recognize its share of the investee’s net profits or losses after making appropriate adjustments
according to the Company’s accounting principles and operating period based on the fair values of the investee’s
identifiable net assets at the acquisition date. During the holding period, if the investee makes consolidated financial
statements, the Company shall calculate its share based on the investee’s net profit, other comprehensive income and
the amount of other owners' equity attribute to the investee in the consolidated financial statements.
The unrealized profits or losses resulting from transactions between the investor and its associate or joint venture shall
be eliminated in proportion to the investor’s equity interest in the investee, based on which investment income or losses
shall be recognized. 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 3 (5) “The
accounting treatment for Business combination under/now under common control” and Note 3 (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
When disposing long-term equity investment, the difference between the proceeds actually received and the carrying
amount shall be recognized in profit or loss for the current period.
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
Notes to the financial statements Page 17
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2019
Notes to the financial statements
profit or loss of current period, other comprehensive income arising from the re-measurement 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 s hall 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 due
to decrease of shareholding ratio because of additional investment by other investors, 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.
When the equity investment disposed is acquired through business combination due to additiona l investment or other
reasons, in stand-alone financ ial 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.
(13) Investment property
Investment property refers to real estate held for the purpose of earning rent or capital appreciation, or both, including
leased land use rights, land use rights held and prepared for transfer after appreciation, and leased buildings ( Buildings
that are leased after completion of self-construction or development activities and buildings that are being used for
rental in the future during construction or development).
Notes to the financial statements Page 18
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2019
Notes to the financial statements
The company uses the cost model to measure the existing investment property. For investment property measured
according to the cost model - the rental building adopts the same depreciation policy as the fixed assets of the company,
and the land use right for rental is amortized according to the same amortization policy as the intangible assets.
(14) Fixed assets
1. Recognition of Fixed assets
The term "fixed assets" refers to the tangible assets held for the sake of producing commodities, rendering labor service,
renting or business management and of which useful life is in excess of one fiscal year. No fixed asset may be
recognized unless it simultaneous ly meets the conditions as follows:
(1) The economic benefits pertinent to the fixed asset are likely to flow into the enterprise; and
(2) The cost of the fixed asset can be measured reliably.
2. Fixed assets depreciation
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 leas ing 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
Category Depreciation method
Period (%) (%)
Plants and Buildings straight line method 8-40 years 0.00 2.50-12.50
M achinery straight line method 4-18 years 3.00 5.39-24.25
Transportation and other straight line method
5-18 years 3.00 5.39-19.40
equipment
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.
Notes to the financial statements Page 19
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2019
Notes to the financial statements
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.
(15) 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.
(16) Borrowing costs
1. Principle of the recognition of capitalized borrowing costs
The borrowing costs shall include interest on borrowings, amortization of discounts or premiums on borrowings,
ancillary expenses, and exchange balance on foreign currency borrowings.
Where the borrowing costs incurred to an enterprise can be directly attributable to the ac quisition and construction or
production of assets eligible for capitalization, it shall be capitalized and recorded into the costs of relevant assets.
Other borrowing costs shall be recognized as expenses on the basis of the actual amount incurred, and shall be
recorded into the current profits and losses.
Assets eligible for capitalization refer to the fixed assets, investment 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 simultaneous ly meet the following requirements :
(1) The asset disbursements have already incurred, which shall include cash, transferred non-cash assets or interest
bearing debts paid for the acquisition and construction or production activities for preparing assets eligible for
capitalization;
(2) The borrowing costs has already incurred; and
(3) The acquisition and construction or production activities which are necessary to prepare the asset for its intended
use or sale have already started.
2. The capitalization period of borrowing costs
Notes to the financial statements Page 20
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2019
Notes to the financial statements
The capitalization period shall refer to the period from the commencement to the cessation of capitalization of the
borrowing costs, excluding the period of suspension of capitalization of the borrowing costs.
When the qualified asset under acquisition and construction or production is ready for the intended use or sale, the
capitalization of the borrowing costs shall be ceased.
Where each part of a qualified asset under acquisition and construction or production is completed separately and is
ready for use, the capitalization of the borrowing costs in relation to this part of asset shall be ceased.
Where each part of an asset under acquisition and construction or production is completed separately and is ready for
use or sale during the continuing construction of other parts, but it cannot be used or sold until the asset is entirely
completed, the capitalization of the borrowing costs shall be ceased when the asset is completed entirely.
3. The suspension of capitalization of borrowing costs
Where the acquisition and construction or production of a qualified asset is interrupted abnormally and the interruption
period lasts for more than 3 months, the capitalization of the borrowing costs shall be suspended. If the interruption is a
necessary step for making the qualified asset under acquisition and construction or production ready for the intended
use or sale, the capitalization of the borrowing costs shall continue. The borrowing costs incurred during such period
shall be recognized as expenses, and shall be recorded into the profits and losses of the current period, till the
acquisition and construction or production of the asset restarts.
4. Method of calculating the capitalization rate and capitalized amount of borrowing costs
For interest expense (minus the income of interests earned on the unused borrowing loans as a deposit in the bank or
investment income earned on the loan as a temporary investment) and the ancillary expense incurred to a specifically
borrowed loan, those incurred before a qualified asset under acquisition, construction or production is ready for the
intended use or sale shall be capitalized at the incurred amount when they are incurred, and shall be recorded into the
costs of the asset eligible for capitalization.
The Company shall calculate and determine the to-be-capitalized amount of interests on the general borrowing by
multiplying the weighted average asset disbursement of the part of the accumulative asset disbursements minus the
general borrowing by the capitalization rate of the general borrowing used. The capitalization rate shall be calculated
and determined in light of the weighted average interest rate of the general borrowing.
(17) Intangible Assets
1. Measurement of Intangible Assets
(1) Initial measurement is based on cost upon acquisition
The cost of an intangible asset on acquisition inc lude 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
Notes to the financial statements Page 21
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2019
Notes to the financial statements
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 benefic ial 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.
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.
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.
Notes to the financial statements Page 22
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2019
Notes to the financial statements
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.
(18) Impairment of long-term assets
For long-term assets under the cost model such as long-term equity investments, Investment property, fixed assets,
construction in progress, intangible assets with limited useful lives 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 w ritten 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 ass et
group to which the asset belongs. The term "group assets” refers to a minimum combination of assets by which the
cash flows could be generated independently
The goodwill shall be subject to an impairment test at least at the end of each year.
When the Company makes an impairment test of assets, it shall, as of the purchasing day, apportion the carrying value
of the business reputation formed by merger of enterprises to the relevant asset groups by a reasonable method. Where
it is difficult to do so, it shall be apportioned to the relevant combinations of asset groups. When apportioning the
carrying value of the business reputation to the relevant asset groups or combinations of asset groups, it shall be
apportioned on the basis of the proportion of the fair value of each asset group or combination of asset groups to the
total fair value of the relevant asset groups or combinations of asset groups. Where it is difficult to measure the fair
value reliably, it shall be apportioned on the basis of the proportion of the carrying value of each asset group or
combination of asset groups to the total carrying value of the relevant asset groups or combinations of asset groups.
When making an impairment test on the relevant asset groups or combination of asset groups containing business
reputation, if any evidence shows that the impairment of asset groups or combinations of asset groups is possible, the
Company shall first make an impairment test on 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.
Notes to the financial statements Page 23
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2019
Notes to the financial statements
(19) 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
(20) 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
The Company shall recognize, in the accounting period in which an employee provides service, pension fund and
unemployment fund for employees as a liability according to the local government regulations. The amount shall be
calculated according to local prescribed bases and percentages in determining the amount of employee benefits, with a
corresponding charge to the profit or loss or cost of an asset for the current period.
3.Accounting treatment of termination benefits
The Company 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: when the Company cannot unilaterally
withdraw the offer of termination benefits because of an employment termination plan or a curtailment proposal; or
when the Company recognizes costs or expenses related to a restructuring that involves the payment of termination
benefits.
(21) 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 liability when the following conditions are satisfied simultaneously:
(1) That obligation is a current obligation of the enterprise;
Notes to the financial statements Page 24
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2019
Notes to the financial statements
(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, unc ertainty, time value of
money, and other factors pertinent to the Contingencies. If the time value of money is of great significance, the best
estimate shall be determined after discounting the relevant future outflow of cash.
The best estimate shall be conducted in accordance with the following situations, respectively:
If there is a 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.
(22) Revenue
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
Notes to the financial statements Page 25
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2019
Notes to the financial statements
The Company mainly sells steel and other products. Domestic sales revenue is recognized when the following
conditions are met: The Company has delivered the products to buyer under the contract, amount of product sales
revenue is determinable, received or the certificate of the right to receive the amount has been obtained and the
relevant economic benefits are likely to flow into the entity, and related costs can be measured reliably.
Export sales revenue is recognized when the following conditions are met: the Company has undertaken the Customs
declaration and delivery has occurred under the contract, bill of lading has been obtained, amount of product sales
revenue is determinable, received or the 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.
3.Recognition Criteria for the Revenue from alienating of Assets Use Rights
When it is probable that economic benefits in relation to the transaction will flow into the enterprise; and the amount
of revenues can be measured reliably. The Company shall ascertain the amount of revenues from the transfer of
Assets Use Right based on the following circumstances respectively:
(1) Interest income shall be calculated based on the duration of which the Company's cash is used by others and the
actual interest rate; or
(2) Royalty revenue shall be calculated based on the period and method of charging as stipulated in the relevant
contract or agreement.
(23) 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.
The criteria and accounting treatment of government subsidies pertinent to assets.
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.
Recognition
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 over the periods during the useful lives of the relevant assets.
Accounting treatment
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 recorded in Other Income. Subsidies that unrelated to daily activities should
be recorded in Non-operating Income).
The criteria and accounting treatment of government subsidies pertinent to income.
Notes to the financial statements Page 26
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2019
Notes to the financial statements
The government subsidy related to income refers to the government subsidy other than the government subsidy
related to the asset.
Recognition
The government subsidies related to incomes to compensate future expenses, shall be recognized as deferred
income and transferred to current profit or loss. Government subsidies to compensate expenses or losses already
incurred shall be recognized in current profit and loss.
Accounting treatment
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 recorded in Other
Income. Subsidies that unrelated to daily activities should be recorded in 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 recorded in Other Income. Subsidies unrelated to daily activities should be recorded
in Non-operating Income) or deduct relevant cost or loss.
(24) Deferred tax assets and deferred tax liabilities
An enterprise shall recognize the deferred income tax assets 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.
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 rec ognition 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.
(25) Leases
Notes to the financial statements Page 27
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2019
Notes to the financial statements
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.
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.
(26) Discontinuing operation
Notes to the financial statements Page 28
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2019
Notes to the financial statements
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.
(27) Change of significant accounting policy and accounting estimate
1. Change of major accounting policy during this reporting period
(1) New Financial Instrument guidelines
Since January 1, 2019, the company has implemented the “Accounting Standards for Business Enterprises No. 22 –
Recognition and Measurement of Financial Instruments”, “Accounting Standards for Business Enterprises No. 23 –
Transfer of Financial Assets” and “Accounting Standards for Business Enterprises No. 24 - Hedge Accounting” and
“Accounting Standards for Business Enterprises No. 37 - Financial Instruments Disclosure” (hereinafter referred to
as "New Financial Instruments Guidelines ") revised by the Ministry of Finance in 2017.
In terms of the classification and measurement of financial assets, the new financial instrument standard requires
financial assets to be classified as subsequently measured at amortised cost, fair value through other comprehensive
income or fair value through profit or loss on the basis of both the entity’s business model for managing the
financial assets and the contractual cash flow characteristics of the financial asset and eliminates the classification
of loans, receivables, held to maturity investments, and available for sale financial assets in the original financ ial
instruments. An investment in an equity instrument is generally classified as a financial asset at fair value through
profit or loss. It also allows a non-tradable equity instrument investment to be designated as a financial asset at fair
value through other comprehensive income. The designation is irrevocable and the accumulated fair value changes
previously recognised in other comprehensive income are not carried forward to profit or loss. In respect of
impairment, the requirements of the new financial instrument standard for impairment are applied to financial
assets measured at amortised cost, financial assets measured at fair value through other comprehensive income,
lease receivables and financial guarantee contracts. The new financial instrument s tandard requires the use of an
expected credit loss model to confirm credit loss provisions to replace the original credit loss model. The new
impairment model adopts a three-stage model. According to the relevant item, whether the credit risk has increased
significantly since the initial recognition, the loss allowance is measured at an amount equal to 12-month expected
credit losses or an amount equal to the lifetime expected credit losses. For receivables and long-term receivables
formed by transactions regulated by the income standard, as well as the receivables of finance leases formed by
transactions regulated by the “Accounting Standards for Business Enterprises No. 21 – Leases”, the Company shall
measure the loss allowance at an amount equal to lifet ime expected credit losses.
If the recognition and measurement of financial instruments before January 1, 2019 is inconsistent with the
requirements of the new financial instruments, the company shall make retrospective adjustments in accordance
Notes to the financial statements Page 29
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2019
Notes to the financial statements
with the requirements of the new financial instruments guidelines. The company does not make adjustments when it
involves inconsistency between the previous comparative financial statement data and the new financial instrument
guidelines. The difference between the original book value of the financial instrument and the new book value on
the date of the implementation of the new financial instrument's standard is included in retained earnings or other
comprehensive income as of January 1, 2019.
(2) The revision of the format for the issuance of the financial statements
Ministry of Finance issued “Notice of the Ministry of Finance on the revision of the format for the issuance of the
financial statements of the general enterprise for the year 2019” (Cai Kuai 2019 No.6, hereinafter referred to as
“Cai Kuai No. 6 Notice”) on 30 April 2019, which revised the format of financial statement for the general
enterprise. The major impact of the implementation of the above regulations are as follows:
The contents and reasons
The items affected and the amount
of accounting policy changes
“Notes receivable and accounts receivable” is separated into "Notes receivable"
and "Accounts receivable", amount for current year is 4,518,016,226.76 and
(1) In Statement of Financial Position,
614,718,839.21, amount for previous year is 3,580,145,843.38 and
“Notes receivable and accounts receivable” is
639,482,481.45.
separated into "Notes receivable" and
“Notes receivable and accounts receivable” is separated into "Notes receivable"
"Accounts receivable"; The comparative
and "Accounts receivable", amount for current year is 4,296,253,321.51 and
data is adjusted accordingly.
402,397,751.85, amount for previous year is 3,356,020,598.89 and
409,553,059.27.
Adjust the “asset impairment loss” in the income statement to add the operating
(2) Adjust the “credit impairment loss” and
profit, amount for the current year is 0.00, amount for previous year is
“asset impairment loss” in the income
20,917,963.64;
statement to add the operating profit, and the
Adjust the “credit impairment loss” in the income statement to add the operating
loss is listed as “-”.
profit, amount for the current year is 3,751,513.83.
2. Change of accounting estimate during this reporting period
None.
4. Taxes
Major type of taxes and corresponding tax rates
Tax Taxation Method Tax Rate
The balance of output VAT calculated based on 6%，10%、16%(Jan to M ar in
product sales and taxable services revenue in 2019)
Value-added Tax(VAT)
accordance with the tax laws after subtracting the 6%, 9%, 13% (Apr to Jun in
deductible input VAT of the period 2019)
City maintenance and construction tax Based on VAT and business tax actually paid 7%, 5%
Educational surcharges Based on VAT and business tax actually paid 3%, 2%
Notes to the financial statements Page 30
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2019
Notes to the financial statements
Enterprise income tax Based on taxable profit 25%
5. Notes to the consolidated financial statements
(1) Cash at bank and on hand
Items Ending balance Beginning balance
Cash on hand 5,346.25 4,839.95
Cash at bank 11,788,917,223.26 11,752,543,782.02
Other monetary funds 5,156,849,822.92 4,814,923,133.80
Total 16,945,772,392.43 16,567,471,755.77
Total amount deposited abroad
The details of restricted monetary funds resulted from guarantee or pledge or freeze accounts are as follows:
Items Ending balance Beginning balance
M argin for bank acceptance bill 4,538,099,822.92 3,794,647,133.80
M argin for letter of credit 165,270,000.00 105,000,000.00
Time deposit or notice deposit for
453,480,000.00 915,276,000.00
guarantee
Total 5,156,849,822.92 4,814,923,133.80
(2) Notes receivable
1.Notes receivable disclosed by category
Items Ending balance Beginning balance
Bank acceptance bill 4,361,187,029.40 3,540,317,759.10
Commercial acceptance bill 156,829,197.36 39,828,084.28
Total 4,518,016,226.76 3,580,145,843.38
2.The pledged acceptance bill at the end of the period
There is no pledged acceptance bill at the end of the period.
3.The amount of Notes receivable endorsed over but not yet matured at the year-end.
Items Derecognized ending balance Unrecognized ending balance
Bank acceptance bill 7,280,230,450.89
Commercial acceptance bill
Total 7,280,230,450.89
4.No Notes receivable has been transferred into accounts receivable due to inability of drawer to meet
acceptance bill at the year-end.
Notes to the financial statements Page 31
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2019
Notes to the financial statements
(3) Accounts receivable
1.Accounts receivable disclosed by category
Ending balance
Carrying amount Provision for bad debts
Items
Percentage Bad debts Book value
Amount Amount
(%) ratio (%)
Accounts receivable tested for
47,762,337.18 6.02 47,762,337.18 100.00
impairment individually
Accounts receivable tested for
745,278,892.11 93.98 130,560,052.90 17.52 614,718,839.21
impairment by portfolio
Total 793,041,229.29 100.00 178,322,390.08 22.49 614,718,839.21
Beginning balance
Carrying amount Provision for bad debts
Items
Bad debts ratio Book value
Amount Percentage (%) Amount
(%)
Accounts receivable tested for
47,762,337.18 5.82 47,762,337.18 100.00
impairment individually
Accounts receivable tested for
773,432,447.14 94.18 133,949,965.69 17.32 639,482,481.45
impairment by portfolio
Total 821,194,784.32 100.00 181,712,302.87 639,482,481.45
Accounts receivables individually significant and tested for impairment individually
Ending balance
Company Provision for bad Bad debts ratio
Carrying amount Reason
debts (%)
Benxi Nanfen Xinhe M etallurgical
47,762,337.18 47,762,337.18 100.00 Halt operation
Furnace M aterial Co., Ltd
Total 47,762,337.18 47,762,337.18
Accounts receivables disclosed by aging
Ending balance
Items
Carrying amount Provision for bad debts Bad debts ratio (%)
Within 1 year (inclusive) 538,645,725.73
1-2 years (inclusive) 56,752,847.90 2,837,642.39 5
2-3 years (inclusive) 27,697,384.96 5,539,476.99 20
Over 3 years 169,945,270.70 169,945,270.70 100
Notes to the financial statements Page 32
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2019
Notes to the financial statements
Ending balance
Items
Carrying amount Provision for bad debts Bad debts ratio (%)
Total 793,041,229.29 178,322,390.08
2.Information of provision, reversal or recovery of bad debts of current period.
The provision of bad debts of current period is RMB 3,389,912.79.
3.No accounts receivable has been written off this year.
4.Top five debtors at the year-end
Ending balance
Company Percentage of total Accounts receivable Provision for
Amount
(%) bad debts
The first 296,599,328.97 37.40
The second 106,438,276.12 13.42
The third 62,482,368.63 7.88 6,792,099.51
The fourth 47,762,337.18 6.02 47,762,337.18
The fifth 41,687,479.04 5.26
Total 554,969,789.94 69.98 54,554,436.69
(4) Prepayments
1. Prepayments disclosed by aging
Ending balance Beginning balance
Aging
Amount Percentage (%) Amount Percentage (%)
Within 1 year (inclusive) 1,311,404,160.39 99.77 1,318,136,339.11 99.74
1-2 years (inclusive) 2,226,256.90 0.17 2,494,489.34 0.19
2-3 years (inclusive) 833,987.64 0.06 901,900.77 0.07
Over 3 years 4,785.56 0.00
Total 1,314,464,404.93 100.00 1,321,537,514.78 100.00
Notes: As of June 30, 2019, there were no outstanding prepayments of over 1 year.
2. Top five prepaid companies at the year-end
Name of the company Amount Percentage (%)
The First 698,463,245.75 53.14
The Second 98,729,978.44 7.51
The Third 87,022,226.90 6.62
The Fourth 79,143,421.14 6.02
The Fifth 20,957,800.88 1.59
Total 984,316,673.11 74.88
Notes to the financial statements Page 33
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2019
Notes to the financial statements
(5) Other receivables
Items Ending balance Beginning balance
Interest receivables 13,872,107.84 11,608,705.43
Dividend receivables
Other receivables 191,594,542.93 191,155,259.55
Total 205,466,650.77 202,763,964.98
1．Interest receivable
(1) Interest receivable disclosed by category
Items Ending balance Beginning balance
Deposit interest 13,872,107.84 11,608,705.43
Total 13,872,107.84 11,608,705.43
2．Other receivables
(1) Other receivables disclosed by category
Ending balance
Carrying amount Provision for bad debts
Items
Bad debts Book value
Amount Percentage (%) Amount
ratio (%)
Other receivables tested for
254,437,069.84 99.32 64,582,526.91 25.38 189,854,542.93
impairment by portfolio
Other receivables tested for
1,740,000.00 0.68 1,740,000.00
impairment individually
Total 256,177,069.84 100.00 64,582,526.91 25.21 191,594,542.93
Beginning balance
Carrying amount Provision for bad debts
Items
Bad debts Book value
Amount Percentage (%) Amount
ratio (%)
Other receivables tested for
254,359,387.50 99.32 64,944,127.95 25.53 189,415,259.55
impairment by portfolio
Other receivables tested for
1,740,000.00 0.68 1,740,000.00
impairment individually
Total 256,099,387.50 100.00 64,944,127.95 191,155,259.55
Other receivables disclosed by Aging
Ending balance
Items
Carrying amount Provision for bad debts Bad debts ratio (%)
Within 1 year (inclusive) 158,226,535.01
Notes to the financial statements Page 34
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2019
Notes to the financial statements
Ending balance
Items
Carrying amount Provision for bad debts Bad debts ratio (%)
1-2 years (inclusive) 4,278,962.95 213,948.15 5
2-3 years (inclusive) 34,453,741.40 6,890,748.28 20
Over 3 years 59,217,830.48 57,477,830.48 97
Total 256,177,069.84 64,582,526.91
(2) Information of provision, reversal or recovery of bad debts of current period.
The provision of bad debts of current period is RMB 361,601.04.
(3) No other receivables have been written off this year.
(4) Other receivables disclosed by nature
Nature Ending balance Beginning balance
Accounts 204,915,146.72 203,695,979.62
M argin and deposit 2,286,886.27 2,238,972.26
Others 48,975,036.85 50,164,435.62
Total 256,177,069.84 256,099,387.50
(5) Top five debtors at the year-end
Percentage of Provision
Nature or
Company Amount Aging total other for bad
content
receivables (%) debts
The First Accounts 7,718,029.34 within 1 year 2.86
The Second Accounts 4,807,446.56 within 1 year 1.78
The Third Accounts 4,514,286.35 2-3 years 1.67 2,138,916.66
The Fourth Accounts 4,341,257.18 2-3 years 1.61 868,251.44
The Fifth Accounts 3,526,146.54 within 1 year 1.31
Total 24,907,165.97 9.23 3,007,168.10
(6) Inventories
1. Inventories disclosed by category
Ending balance Beginning balance
Items
Carrying amount Impairment Book value Carrying amount Impairment Book value
Raw material and
6,468,803,309.62 26,986,533.69 6,441,816,775.93 5,509,216,101.37 26,986,533.69 5,482,229,567.68
main material
Work in process and
self-made
1,402,852,181.92 1,402,852,181.92 1,365,365,191.33 29,012,489.61 1,336,352,701.72
semi-finished
product
Finished products 4,123,737,309.00 827,243.38 4,122,910,065.62 3,888,124,260.41 28,959,417.41 3,859,164,843.00
Notes to the financial statements Page 35
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2019
Notes to the financial statements
Ending balance Beginning balance
Items
Carrying amount Impairment Book value Carrying amount Impairment Book value
Total 11,995,392,800.54 27,813,777.07 11,967,579,023.47 10,762,705,553.11 84,958,440.71 10,677,747,112.40
2. Impairment of inventory
Increase Decrease
Category Beginning balance Write-back or Ending balance
Provision Others Others
write-off
Raw material and main
26,986,533.69 26,986,533.69
material
Work in process and 29,012,489.61
self-made semi-finished 29,012,489.61
product
Finished products 28,959,417.41 28,132,174.03 827,243.38
Total 84,958,440.71 57,144,663.64 27,813,777.07
(7) Other current assets
Items Ending balance Beginning balance
Prepaid enterprise income tax 184,668,751.64 189,634,393.98
VAT input tax 62,944,230.59 102,485,377.15
Total 247,612,982.23 292,119,771.13
Notes to the financial statements Page 36
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2019
Notes to the financial statements
(8) Available-for-sale financial assets
Ending balance Beginning balance
Items
Carrying amount Impairment Book value Carrying amount Impairment Book value
Available-for-sale
debt instruments
Available-for-sale
1,056,239,522.00 14,414,693.00 1,041,824,829.00
equity instruments
Including:
M easured at fair
value
M easured at cost 1,056,239,522.00 14,414,693.00 1,041,824,829.00
Total 1,056,239,522.00 14,414,693.00 1,041,824,829.00
Notes to the financial statements Page 37
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2019
Notes to the financial statements
(9) Long-term equity investment
Increase/decrease
Investment Amount Total
Beginning Gains and Ending Provision Impairment
Investees Reduce Adjustment Other Declaration of
Balance Add Losses Balance Total Ending
Investme Comprehen Equity Cash Dividends Others
Investment Recognized Impairment Balance
nt sive Income Changes or Profit
under the
Equity Method
Joint Venture
Zhejiang Bengang
Jingrui Steel 2,455,681.55 25,907.49 2,481,589.04
Processing Co., Ltd.
Subtotal 2,455,681.55 25,907.49 2,481,589.04
Total 2,455,681.55 25,907.49 2,481,589.04
Notes to the financial statements Page 38
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2019
Notes to the financial statements
(10) Other equity investment
Items Ending Balance Beginning Balance
Suzhou Bengang Industrial Co., Ltd. 3,888,980.00
Sinosteel Shanghai Steel Processing Co., Ltd. 0.00
Northeast Special Steel Group Co., Ltd. 1,037,735,849.00
Guangzhou Benpu Auto Board Sales Co., Ltd. 200,000.00
Total 1,041,824,829.00
(11) Fixed assets
1. Details of fixed assets
Transportation
Items Buildings Machinery equipment and Total
others
1．Total original value
(1) Beginning balance 12,174,491,765.86 43,551,735,976.27 902,527,777.12 56,628,755,519.25
(2) Increase in current period 7,596,518.16 7,596,518.16
Including: Purchase
Transferred from
7,596,518.16 7,596,518.16
construction in progress
M erging
Others
(3) Decrease in current period 28,441,077.44 362,164,072.02 1,076,210.06 391,681,359.52
Including: Disposal 28,441,077.44 362,164,072.02 1,076,210.06 391,681,359.52
Others
(4) Ending balance 12,146,050,688.42 43,197,168,422.41 901,451,567.06 56,244,670,677.89
2．Total accumulated depreciation
(1) Beginning balance 5,576,027,013.36 26,526,053,819.79 560,595,347.69 32,662,676,180.84
(2) Increase in current period 188,520,413.30 932,455,392.69 78,888,442.73 1,199,864,248.72
Including: Provision 188,520,413.30 932,455,392.69 78,888,442.73 1,199,864,248.72
Others -
(3) Decrease in current period 20,923,664.12 303,852,548.23 7,296,035.40 332,072,247.75
Including: Disposal 20,923,664.12 303,852,548.23 7,296,035.40 332,072,247.75
Others
(4) Ending balance 5,743,623,762.54 27,154,656,664.25 632,187,755.02 33,530,468,181.81
3．Total impairment
(1) Beginning balance 38,948,079.36 2,626,719.08 41,574,798.44
(2) Increase in current period
Including: Provision
Others
(3) Decrease in current period 340,073.51 340,073.51
Including: Disposal 340,073.51 340,073.51
Others
Notes to the financial statements Page 39
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2019
Notes to the financial statements
Transportation
Items Buildings Machinery equipment and Total
others
(4) Ending balance 38,608,005.85 2,626,719.08 - 41,234,724.93
4．Total net book value of Fixed
assets
(1) Ending book value 6,363,818,920.03 16,039,885,039.08 269,263,812.04 22,672,967,771.15
(2) Beginning book value 6,559,516,673.14 17,023,055,437.40 341,932,429.43 23,924,504,539.97
2. Temporary idle fixed assets
Items Original book value Accumulated depreciation Impairment Book value
Buildings 201,165,792.22 118,513,395.96 35,014,689.33 47,637,706.93
M achinery 1,224,688.89 1,149,022.46 75,666.43
Total 202,390,481.11 119,662,418.42 35,090,355.76 47,637,706.93
3. Fixed assets leased out by operating lease
Items Book value
Buildings 9,460,723.71
M achinery 85,459.55
Total 9,546,183.26
4. Fixed assets without property rights certificates at the end of the period
Items Book value Reason
Buildings 1,016,286,114.63 To be handled
(12) Construction in progress
1. Construction in progress and Construction materials
Beginning
Items Ending balance
balance
Construction in progress 1,355,784,359.63 831,693,471.71
Project materials 18,626,600.07 4,900,986.11
Total 1,374,410,959.70 836,594,457.82
2. Details of construction in progress
Notes to the financial statements Page 40
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2019
Notes to the financial statements
Ending balance Beginning balance
Total net book
Items Total Total net book Total
Carrying amount Carrying amount value of Fixed
impairment value of Fixed assets impairment
assets
High Strength Cold Rolling Steel Renovation
43,856,840.06 43,856,840.06
Project
The Third Cold Rolling Work Hot-Dip
4,575,442.24 4,575,442.24
Galvanizing Production Line Project
The 360 Square Meter Sintering Machine 48,115,730.79 48,115,730.79 39,870,921.39 39,870,921.39
Energy Control Center Project 16,521,792.81 16,521,792.81 16,068,616.55 16,068,616.55
Renovation Project of Power Plant Three - Power
77,265,082.68 77,265,082.68 67,436,716.24 67,436,716.24
Plant.
Energy Saving And Environmental Protection
107,484,022.00 107,484,022.00 81,652,336.52 81,652,336.52
Reconstruction Of No.1 Converter Project
Modifying and Upgrading of No.2 Casting
71,055,463.93 71,055,463.93 67,751,518.71 67,751,518.71
machine in Hot steel plant
No. 5 blast furnace overhaul project (new No. 2
205,247,220.39 205,247,220.39 79,221,161.00 79,221,161.00
blast furnace)
Power plant 4-5# coke oven dry quenching waste
30,116,417.01 30,116,417.01 27,607,246.17 27,607,246.17
heat steam utilization project
1700 hot rolling perfect trans form ation 29,822,575.23 29,822,575.23 25,521,831.89 25,521,831.89
CCPP power generation project 66,004,363.05 66,004,363.05 24,961,721.54 24,961,721.54
Coking plant gas deamination and sulfur ammonia
34,800,566.05 34,800,566.05 34,300,566.05 34,300,566.05
maintenance project
360 square meter sintering machine waste heat
50,994,694.50 50,994,694.50 44,777,158.00 44,777,158.00
utilization
5#-7# Oxygen Generator Nitrogen Increase
28,911,871.30 28,911,871.30 21,715,145.18 21,715,145.18
Energy Saving Reconstruction
Dry dedusting of No. 7 blast furnace and energy
27,673,848.07 27,673,848.07 22,973,276.80 22,973,276.80
saving reform of TRT power generation
No. 6 blast furnace environment al protection
39,093,141.87 39,093,141.87 22,895,777.14 22,895,777.14
overhaul project
Other 474,245,287.65 474,245,287.65 254,939,478.53 254,939,478.53
Total 1,355,784,359.63 1,355,784,359.63 831,693,471.71 831,693,471.71
Notes to the financial statements Page 41
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2019
Notes to the financial statements
3. Changes in important construction projects in the current period
Project
Transferred Decrease cumulative
Accumulated Including：Interest Interest
to fixed d by investment
Increase in Project amount of capitalization capitalization
Items Budget（10 Beginning balance asset in others in Ending balance accounted for Sources
current period progress interest amount in current rate in current
thousand） current current the proportion of funds
(%) capitalization period period (%)
period period of the budget
(%)
High Strength Cold
Rolling Steel Renovation 613,498.00 43,856,840.06 43,856,840.06 90% 100% 855,901,421.79 Other
Project
The Third Cold Rolling
Work Hot-Dip Galvanizing 86,918.00 4,575,442.24 4,575,442.24 72% 100% Other
Production Line Project
Energy-saving and
environmental protection
trans formation of convert er
system and 180-ton
177,864.40 1,908,118.60 1,908,118.60 87% 100% 127,847,567.31 Other
dephosphorization
converter project
Renovation Project of
Power Plant Three - Power 59,399.00 67,436,716.24 9,828,366.44 77,265,082.68 80% 90% 34,827,795.34 Other
Plant.
Energy Saving and
Environmental Protection
21,800.00 81,652,336.52 25,831,685.48 107,484,022.00 49% 50% 336,061.23 336,061.23 3.48% Other
Reconstruction Of No.1
Converter Project
Modifying and Upgrading
of No.2 Casting machine in 10,090.00 67,751,518.71 3,303,945.22 71,055,463.93 70% 80% 40,530.19 40,530.19 3.48% Other
Hot steel plant
No. 5 blast furnace
overhaul project (new No. 150,000.00 79,221,161.00 126,026,059.39 205,247,220.39 14% 25% 783,807.97 783,807.97 3.48% Other
2 blast furnace)
Total 1,119,569.40 296,061,732.47 215,330,457.43 511,392,189.90 1,019,737,183.83 1,160,399.39
Notes to the financial statements Page 42
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2019
Notes to the financial statements
4. Construction materials
Ending balance Beginning balance
Items
Carrying amount Impairment Book value Carrying amount Impairment Book value
Construction materials 18,626,600.07 18,626,600.07 4,900,986.11 4,900,986.11
Total 18,626,600.07 18,626,600.07 4,900,986.11 4,900,986.11
(13) Intangible assets
1. Details of intangible assets
Items Land use right S oftware Total
1．Total of original value
(1)Beginning balance 327,028,797.84 310,401.55 327,339,199.39
(2)Increase
Including: Purchase
Including: Internal R&D
Including: Increase in M ergers
Including: Others
(3)Decrease
Including: Disposal
Including: Others
(4)Ending balance 327,028,797.84 310,401.55 327,339,199.39
2．Total of Accumulated Amortization
(1)Beginning balance 49,176,692.15 100,066.21 49,276,758.36
(2)Increase 3,270,287.92 8,444.37 3,278,732.29
Including: Provision 3,270,287.92 8,444.37 3,278,732.29
Including: Others
(3)Decrease
Including: Disposal
Including: Others
(4)Ending balance 52,446,980.07 108,510.58 52,555,490.65
3．Total of Impairment
(1)Beginning balance
(2)Increase
Including: Provision
Including: Others
(3)Decrease
Including: Disposal
Including: Others
(4)Ending balance
4．Total of Net value
(1)Ending book value 274,581,817.77 201,890.97 274,783,708.74
(2)Beginning book value 277,852,105.69 210,335.35 278,062,441.04
Notes to the financial statements Page 43
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2019
Notes to the financial statements
2. Land use right without Certificate of Land use right at the end of the period.
None.
(14) Deferred tax asset and deferred tax liability
1. Undedicated deferred tax asset
Ending balance Beginning balance
Items Deductible temporary Deductible temporary
Deferred tax asset Deferred tax asset
differences differences
Impairment 323,453,331.07 80,863,332.77 384,689,582.05 96,172,395.52
Internal unrealized profit 44,665,863.14 11,166,465.79 47,141,747.73 11,785,436.93
Differences of depreciation and
333,978,859.03 83,494,714.76 333,978,859.03 83,494,714.76
amortization
Total 702,098,053.24 175,524,513.32 765,810,188.81 191,452,547.21
2. Unrecognized deferred tax assets
Items Ending balance Beginning balance
Deductible temporary differences 2,914,780.92 2,914,780.92
Deductible losses 667,057,769.20 1,112,718,371.26
Total 669,972,550.12 1,115,633,152.18
3. The deductible loss of unrecognized deferred tax assets due in the following period
Items Ending balance Beginning balance Notes
Year 2020 639,818,319.71 1,085,478,921.77
Year 2021 11,436,302.83 11,436,302.83
Year 2022 1,000,766.72 1,000,766.72
Year 2023 14,802,379.94 14,802,379.94
Year 2024
Total 667,057,769.20 1,112,718,371.26
(15) Other non-current assets
Items Ending balance Beginning balance
Prepaid of long-term assets 68,303,165.35 76,341,975.35
Total 68,303,165.35 76,341,975.35
Notes: The prepaid long-term assets at the end of the period are prepaid equipment and construction funds.
(16) Short-term loans
1. Classification of short-term loans
Items Ending balance Beginning balance
Pledge loans 48,262,375.85
Notes to the financial statements Page 44
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2019
Notes to the financial statements
Items Ending balance Beginning balance
Guaranteed loans 12,078,193,000.00 10,361,008,000.00
Credit loans 220,000,000.00 1,529,220,000.00
Total 12,298,193,000.00 11,938,490,375.85
2. Overdue short-term loans
(17) Notes payables
Items Ending balance Beginning balance
Bank acceptance bill 9,317,222,357.86 8,738,192,014.02
Domestic letter of credit 2,333,060,000.00 1,275,000,000.00
Total 11,650,282,357.86 10,013,192,014.02
Notes: There are no outstanding notes payable at the end of this period.
(18) Accounts payable
1. Accounts payable disclosed by category
Items Ending balance Beginning balance
Accounts payable for goods 4,432,010,176.48 4,483,900,163.08
Accounts payable for labor 29,371,271.02 30,829,506.69
Accounts payable for project and equipment 509,540,291.98 424,097,390.68
Repair expense 652,340,212.43 579,971,383.23
Others 3,576,818.36 3,244,367.97
Total 5,626,838,770.27 5,522,042,811.65
2. Significant accounts payable aging over one year
Items Ending balance Reason
Liaoning Shenjiao International Trade Co.,Ltd 72,839,065.27 Not yet settled
M CC Southern Engineering Technology Co., Ltd. 51,119,440.77 Not yet settled
Hangzhou Tianshen M aterials Co., Ltd. 20,145,902.65 Not yet settled
M CC Jiao Nai Engineering Technology Co., Ltd. 19,379,163.99 Not yet settled
M CC Jiao Nai (Dalian) Engineering Technology Co.,
17,415,300.00 Not yet settled
Ltd.
Shenyang Railway Construction Bridge and Tunnel
14,200,000.00 Not yet settled
Engineering Co., Ltd.
Jixi Huasheng Fengyuan Coal Preparation Co., Ltd. 6,485,138.18 Not yet settled
Total 201,584,010.86
Notes to the financial statements Page 45
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2019
Notes to the financial statements
(19) Advance from customers
1. Advance from customers disclosed by category
Items Ending balance Beginning balance
Advance for goods 3,345,451,646.56 3,331,854,098.42
Total 3,345,451,646.56 3,331,854,098.42
2. Significant advance from customers aging over one year.
None
(20) Employee benefits payable
1. Employee benefits payable
Items Beginning balance Increase Decrease Ending balance
(1) Short-term employee
47,824,468.42 916,510,872.23 916,669,401.25 47,665,939.40
benefits
(2) Post-employment
benefits - defined 174,373.43 128,070,045.18 128,069,809.64 174,608.97
contribution plans
(3) Termination benefits 3,467,389.87 1,046,552.23 2,420,837.64
(4) Other benefits due
within one year
Total 51,466,231.72 1,044,580,917.41 1,045,785,763.12 50,261,386.01
2. Short-term employee benefits
Beginning
Items Increase Decrease Ending balance
balance
(1) Salary, bonus,
38,282,721.78 684,822,157.27 685,422,131.12 37,682,747.93
allowance and subsidy
(2) Employee welfare 47,016,070.43 47,016,070.43
(3) Social Insurance 652,400.36 71,083,855.14 71,083,855.14 652,400.36
Including: M edical
1,598.15 53,654,171.68 53,654,171.68 1,598.15
insurance
Work injury
650,802.21 17,416,640.12 17,416,640.12 650,802.21
insurance
M aternity
13,043.34 13,043.34
insurance
(4) Housing 6,854,689.00 52,823,804.00 52,887,301.00 6,791,192.00
(5) Union funds and staff
2,034,657.28 60,764,985.39 60,260,043.56 2,539,599.11
education fee
(6) Short-term compensated
absences
(7) Short-term profit -
sharing scheme
Notes to the financial statements Page 46
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2019
Notes to the financial statements
Beginning
Items Increase Decrease Ending balance
balance
Total 47,824,468.42 916,510,872.23 916,669,401.25 47,665,939.40
3. Defined contribution plans
Beginning
Items Increase Decrease Ending balance
balance
Basic pension fund 68,338.82 124,734,324.48 124,734,498.12 68,165.18
Unemployment insurance 106,034.61 3,335,720.70 3,335,311.52 106,443.79
Total 174,373.43 128,070,045.18 128,069,809.64 174,608.97
(21) Current tax liabilities
Items Ending balance Beginning balance
Value-added tax 35,376,964.97 442,980,368.02
Corporate income tax 4,317,717.53 2,769,293.58
City maintenance and construction tax 9,587,112.00 32,813,368.49
House property tax 3,506,456.37 3,004,878.95
Educational surcharges 4,137,761.43 23,450,632.11
Environmental tax 381,305.56 7,340,495.80
Others 5,581,530.69 3,393,332.73
Total 62,888,848.55 515,752,369.68
(22) Other payables
Items Ending balance Beginning balance
Interest payables 9,343,905.54 9,658,681.99
Dividends payables 193,768,576.60
Other payables 696,885,503.92 852,852,496.97
Total 899,997,986.06 862,511,178.96
1. Interest Payable
Items Ending balance Beginning Balance
Loan interests 9,343,905.54 9,658,681.99
Total 9,343,905.54 9,658,681.99
2. Dividends payables
Items Ending balance Beginning Balance
Common dividend 193,768,576.60
Preferred shares divided into equity
instruments/Sustainable Debt Dividend
Including: Tool 1
Tool 2
Notes to the financial statements Page 47
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2019
Notes to the financial statements
Items Ending balance Beginning Balance
Total 193,768,576.60
3. Other payables
(1)Other payables disclosed by nature
Items Ending balance Beginning Balance
Deposit 6,756,148.49 6,876,696.99
M argin 131,820,736.18 129,911,043.84
Accounts 395,056,845.92 568,285,473.68
Others 163,251,773.33 147,779,282.46
Total 696,885,503.92 852,852,496.97
(2)Significant other payables ageing over one year
Name Ending balance Reason
Benxi Steel & Iron (Group) Co., Ltd. 101,874,612.92 Not yet settled
(23) Non-current liabilities due within one year
Items Ending balance Beginning balance
Long-term loans due within one year 1,036,582,163.28 350,965,576.32
Bond payables due within one year
Total 1,036,582,163.28 350,965,576.32
(24) Long-term loans
Categories Ending balance Beginning balance
Pledged loans
M ortgage loan
Guaranteed loans 3,195,042,608.56 3,931,317,094.16
Credit loans 3,018,011,955.59 3,152,323,000.00
Total 6,213,054,564.15 7,083,640,094.16
(25) Long-term payables
Items Ending balance Beginning balance
Long-term payables 52,733,529.65 13,686,705.92
Special payables
Total 52,733,529.65 13,686,705.92
1. Long-term payables
Items Ending balance Beginning balance
Financing lease payments 52,733,529.65 13,686,705.92
Total 52,733,529.65 13,686,705.92
Notes to the financial statements Page 48
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2019
Notes to the financial statements
(26) Deferred income
Beginning Ending
Items Increase Decrease Reason
balance balance
Government
289,499,002.97 428,000.00 41,695,000.00 248,232,002.97
subsidy
Total 289,499,002.97 428,000.00 41,695,000.00 248,232,002.97
Notes to the financial statements Page 49
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2019
Notes to the financial statements
Projects of government subsidies:
Beginning Transfer to Other Related to assets or
Items Increase Ending balance
balance non-operating income decrease income
M ES Project Special Fund 1,720,000.00 860,000.00 860,000.00 Related to assets
Industrial Enterprise Energy M anagement Center Construction Demonstration
6,960,000.00 1,160,000.00 5,800,000.00 Related to assets
Project
Environment Pollution Renovation Project 3,620,000.00 1,810,000.00 1,810,000.00 Related to assets
Environment Renovation Project and Regional Basin Environment Protection
340,000.00 170,000.00 170,000.00 Related to assets
Project
Cold Rolling Steel High Strength Renovation Project 200,000,000.00 25,000,000.00 175,000,000.00 Related to assets
Automobile High-class Electrolytic Zinc Steel Plate Production Line Project 16,416,000.00 4,104,000.00 12,312,000.00 Related to assets
Sintering M achine Residue Heat Usage and Desulfurization Project 4,204,000.00 2,102,000.00 2,102,000.00 Related to assets
7 130t Boilers Flue Gas Desulfurization Renovation Project of Power Plant 19,200,000.00 2,400,000.00 16,800,000.00 Related to assets
Overseas Advanced Technology Introduction Special Fund 6,884,000.00 1,442,000.00 5,442,000.00 Related to assets
Automobile Steel Sheet Engineering Laboratory Project 1,000,000.00 1,000,000.00 Related to assets
Third-generation High Strength Steels for Automobile R&D Project 2,900,000.00 2,900,000.00 Related to assets
The 360 Cubic M eter Sintering M achine Flue Gas Desulfurization Renovation
200,000.00 100,000.00 100,000.00 Related to assets
Project of Blast Furnace Plant
Environment Protection Project Special Fund 1,160,000.00 580,000.00 580,000.00 Related to assets
Advanced Treatment of Carbon Fiber Wastewater Project of Coke Plant Dongfeng
9,500,000.00 9,500,000.00 Related to assets
Area
Desulfurization and Denitration Projects for Coal-fired Boiler of Power Plant Related to assets
4,800,000.00 300,000.00 4,500,000.00
High-pressure Workshop
Power Plant No 3 workshop Heat and Power Cogeneration Renovation Project 8,000,000.00 1,000,000.00 7,000,000.00 Related to assets
Sintering M achine Energy Saving and Environmental Protection Project of Blast Related to assets
2,320,000.00 580,000.00 1,740,000.00
Furnace Plant
Air Quality Automatic M onitoring System 175,000.00 35,000.00 140,000.00 Related to assets
Notes to the financial statements Page 50
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2019
Notes to the financial statements
Beginning Transfer to Other Related to assets or
Items Increase Ending balance
balance non-operating income decrease income
Liaoning Grand Craftsman Subsidy and Skill M aster Workstation Grant 100,002.97 240,000.00 340,002.97 Related to income
Support fund for the project of high-strength pipeline steel under low temperature
188,000.00 52,000.00 136,000.00 Related to income
and high pressure service conditions
Total 289,499,002.97 428,000.00 41,695,000.00 248,232,002.97
Notes to the financial statements Page 51
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2019
Notes to the financial statements
(27) Share capital
Increase/decrease (+ , - )
Issuing
Items Beginning balance Bonus Transferred Ending balance
of new Others Subtotal
shares from reserves
share
Capital
shares 3,875,371,532.00 3,875,371,532.00
(28) Capital reserves
Items Beginning balance Increase Decrease Ending balance
Capital premium over par
value 12,227,292,378.47 12,227,292,378.47
Other capital reserves 115,917,468.82 115,917,468.82
Total 12,343,209,847.29 12,343,209,847.29
(29) Special Reserves
Items Beginning balance Increase Decrease Ending balance
Safety production cost
683,937.71 25,542,658.45 5,212,639.87 21,013,956.29
Total 683,937.71 25,542,658.45 5,212,639.87 21,013,956.29
(30) Surplus Reserves
Items Beginning balance Increase Decrease Ending balance
Statutory surplus
reserves 961,105,529.85 961,105,529.85
Total 961,105,529.85 961,105,529.85
(31) Undistributed Profits
Items Current period Previous period
Before adjustments: undistributed profits at last
year-end 1,945,887,269.82 1,103,162,610.35
Adjustments of the beginning distributed profits
(increase + / decease -)
After adjustments: undistributed profit at this
year-beginning 1,945,887,269.82 1,103,162,610.35
Add: undistributed profit belonging to parent company 453,209,615.76 756,951,987.59
Less: Statutory surplus reserves
Notes to the financial statements Page 52
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2019
Notes to the financial statements
Items Current period Previous period
Discretionary reserves
General risk reserves
Common shares dividend payable 193,768,576.60 193,768,576.60
Common shares dividend transferred to paid-in capital
Ending balance of undistributed profits 2,205,328,308.98 1,666,346,021.34
(32) Operating income and operating cost
Current period Previous period
Items
Revenue Cost Revenue Cost
Principal business 22,581,458,005.55 20,807,089,888.18 21,302,037,073.89 19,140,922,165.53
Other business 1,521,137,161.59 1,260,522,841.47 2,139,210,303.25 1,663,285,255.45
Total 24,102,595,167.14 22,067,612,729.65 23,441,247,377.14 20,804,207,420.98
(33) Tax and surcharges
Items Current period Previ ous period
City maintenance and construction tax 27,561,420.89 48,666,138.65
Educational surcharge 19,877,089.62 34,952,935.92
Housing property tax 38,778,891.04 36,610,915.20
Land use right tax 6,538,299.88 3,421,519.74
Stamp duty and others 14,961,858.43 15,742,454.27
Environmental tax 6,387,222.58 13,896,524.30
others 20,580.53 16,887.56
Total 114,125,362.97 153,307,375.64
(34) Selling and distribution expenses
Notes to the financial statements Page 53
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2019
Notes to the financial statements
Items Current period Previous period
Freight 456,217,341.94 393,290,897.61
Port surcharges 52,405,847.32 56,907,191.59
Import and export agency fee 34,174,633.61 35,649,297.75
Salary and benefits 13,553,533.82 11,993,852.41
Others 13,751,821.86 12,721,174.90
Package fee
4,342,020.59 3,475,594.69
Total 574,445,199.14 514,038,008.95
(35) General and administrative expenses
Items Current period Previous period
Salary and benefits 122,383,642.39 116,352,823.92
Repair expense 142,464,599.50 174,107,156.65
Land use right fee 27,345,714.30 27,345,714.30
Others 62,667,766.52 57,134,166.31
Depreciation
24,216,703.47 26,164,322.31
Social insurance fee 23,532,872.66 23,452,571.91
Heating fee 22,391,441.18 20,783,413.87
Water resources fee 11,993,951.74 6,546,763.90
Housing fund 4,737,351.00 4,445,529.00
Amortization 2,970,897.50 2,982,926.09
Entertainment fee
1,070,316.75 1,527,871.52
Rental fee 643,214.78 543,240.66
Shipping fee 349,339.98 455,924.12
Total 446,767,811.77 461,842,424.56
(36) Research and development expenses
Notes to the financial statements Page 54
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2019
Notes to the financial statements
Items Current period Previous period
Depreciation, materials and compensation, etc. 15,408,472.28 2,470,641.53
Total 15,408,472.28 2,470,641.53
(37) Financial expenses
Items Current period Previous period
Interest expenditure 586,490,262.69 575,001,615.20
Less: Interest income 127,083,779.58 61,605,403.34
Exchange loss -71,095,752.13 286,291,324.68
Others 15,154,975.44 3,350,880.74
Total
403,465,706.42 803,038,417.28
Notes：The financial expenses of this period were 403 million yuan, a decrease of 400 million yuan
fro m the previous period of 803 million yuan, a decrease of 49.76%, mainly due to the increase in
exchange income and interest income during the period.
(38) Other income
Related to
Items Current period Previous period assets or
income
M ES Project Special Fund 860,000.00 860,000.00 Assets
Industrial Enterprise Energy M anagement Center
1,160,000.00 1,160,000.00 Assets
Construction Demonstration Project
Environment Pollution Renovation Project 1,810,000.00 1,810,000.00 Assets
Environment Renovation Project and Regional
170,000.00 170,000.00 Assets
Basin Environment Protection Project
Cold Rolling Steel High Strength Renovation
25,000,000.00 25,000,000.00 Assets
Project
Automobile High-class Electrolytic Zinc Steel
4,104,000.00 4,104,000.00 Assets
Plate Production Line Project
Sintering M achine Residue Heat Usage and
2,102,000.00 2,102,000.00 Assets
Desulfurization Project
7 130t Boilers Flue Gas Desulfurization
2,400,000.00 2,400,000.00 Assets
Renovation Project of Power Plant
Treatment and Salt Extraction Project of
50,000.00 Assets
Desulfurization Waste Liquid of Coke Plant
Overseas R&D Team Introduction Special Fund 1,442,000.00 1,442,000.00 Assets
Notes to the financial statements Page 55
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2019
Notes to the financial statements
Related to
Items Current period Previous period assets or
income
The 360 Cubic M eter Sintering M achine Flue
Gas Desulfurization Renovation Project of Blast 100,000.00 100,000.00 Assets
Furnace Plant
Environment Protection Project Special Fund 580,000.00 580,000.00 Assets
Bengang Power plant high pressure workshop
coal burning boiler desulfurization and Assets
denitrification items
Bengang Power plant high pressure workshop
coal burning boiler desulfurization and 300,000.00 300,000.00 Assets
denitrification items
Power Plant No 3 workshop Heat and Power
1,000,000.00 Assets
Cogeneration Renovation Project
Iron and steel plant sintering machine energy
580,000.00 580,000.00 Assets
saving and environmental protection project
Air quality automatic monitoring system 35,000.00 35,000.00 Assets
Xihu source resource management committee
414,300.00 Income
compensation
Liaoning Grand Craftsman Subsidy and Skill
166,938.70 Income
M aster Workstation Grant
Support fund for the project of high-strength
pipeline steel under low temperature and high 52,000.00 Income
pressure service conditions
Total 41,695,000.00 41,274,238.70
(39) Income on investment
Items Current period Previous period
Income on disposal of long-term equity investment by equity
method 25,907.49
Income on bank short-term financial products 3,493,150.68
Total 25,907.49 3,493,150.68
(40) Credit impairment loss
Items Current period Previous period
Account receivable bad debt loss 3,389,912.79
Other account receivable bad debt loss 361,601.04
Long-term account receivable bad debt loss
Notes to the financial statements Page 56
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2019
Notes to the financial statements
Total 3,751,513.83
(41) Asset impairment loss
Items Current period Previous period
Bad debt loss 14,523,332.71
Inventory impairment loss 6,394,630.93
Total 20,917,963.64
(42) Assets disposal gains
The amount
Items Current period Previous period recognized in
non-recurring profit
Disposal gains or losses arising from disposal
2,418,704.34 825,580.63 2,418,704.34
of fixed assets not classified for sale
Total 2,418,704.34 825,580.63 2,418,704.34
(43) Non-operating income
The amount
Current period Previous period recognized in
Items
non-recurring profit
Debt restructuring gain 50,640.00 945,892.23 50,640.00
Non-current assets scrapped gains 7,955,444.40 7,955,444.40
Others 204,097.84 1,192,505.57 204,097.84
Total 8,210,182.24 2,138,397.80 8,210,182.24
(44) Non-operating expense
The amount
Items Current period Previous period recognized in
non-recurring profit
Non-current assets scrapped loss 57,974,322.05 1,382,402.26 57,974,322.05
Total 57,974,322.05 1,382,402.26 57,974,322.05
(45) Income tax expense
1. Income tax expense
Items Current period Previous period
Income tax payable for the current year 9,415,176.70 5,956,888.87
Notes to the financial statements Page 57
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2019
Notes to the financial statements
Adjustment of deferred income tax 16,547,005.03 5,679,337.17
Total
25,962,181.73 11,636,226.04
2. Accounting profit and income tax expense adjustment process
Items Current period
Total profit 478,870,963.27
Income tax expense calculate according to the official or applicable tax rate 119,717,740.82
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 undeductible costs, expenses or losses
Effect of use of deductible losses of unrecognized deferred tax asset of prior period -93,755,559.09
Effect of deductible temporary differences or deductible losses of unrecognized
deferred tax asset of current period
Income tax expenses 25,962,181.73
(46) Notes of statement of cash flows
1. Cash received related to other operating activities
Items Current period Previous period
Withdraw of current accounts, advance for another 17,151,876.47 19,218,434.76
Interest income 127,083,779.58 61,605,403.34
Special subsidy income 428,000.00 694,300.00
Non-operating income 117,870.10 162,619.82
Others 123,098.19 101,722.27
Total
144,904,624.34 81,782,480.19
2. Cash paid related to other operating activities
Items Current period Previous period
Current accounts, advance for another 221,234,925.29 285,018,187.10
Sales expenses 4,449,939.39 4,646,000.62
Administrative expenses 17,883,394.86 18,078,644.22
Bank charges 3,255,172.22 2,896,060.69
Others 365,921.44 358,254.79
Notes to the financial statements Page 58
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2019
Notes to the financial statements
Items Current period Previous period
Total 247,189,353.20 310,997,147.42
(47) Supplementary details of statement of cash flows
1. Supplementary details for statement of cash flows
Items Current period Previous period
1. A reconciliation of net profit to cash flows from
operating activities:
Net profit 452,934,689.03 757,973,791.35
Add: Credit impairment loss 3,751,513.83
Asset impairment loss -20,917,963.64
Depreciation of fixed assets and so on 1,199,864,248.72 1,144,984,195.00
Amortization of right use asset
Amortization of intangible assets 3,278,732.29 3,239,455.09
Long-term deferred expenses
Losses proceeds from disposal of PPE, intangible assets
57,974,322.05 556,821.63
and other long-term assets (Earnings marked“－”)
Scrapped losses from fixed assets (Earnings
marked“－”)
Change in fair value loss (Earnings marked“－”)
Financial expenses (Earnings marked“－”) 403,465,706.42 803,038,417.28
Investment losses (Earnings marked“－”) -3,493,150.68
Deferred tax assets reduction (Addition marked“－”) 15,928,033.89 5,679,337.17
Deferred tax liabilities increased (Reduction
marked“－”)
Reduction of inventory (Addition marked“－”) -1,289,831,911.07 -1,683,906,453.31
Operating receivable items reduction (Addition
-908,736,317.08 817,004,548.19
marked“－”)
Operating payable items increase (Less marked"－") 1,046,157,987.59 -1,093,639,256.61
Other
Net cash flows generated from operating activities 984,787,005.67 730,519,741.47
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 cash 11,788,922,569.51 16,038,506,854.22
Less: Beginning balance of cash 11,752,548,621.97 17,037,713,410.49
Notes to the financial statements Page 59
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2019
Notes to the financial statements
Items Current period Previous period
Add: Ending balance of cash equivalents
Less: Opening balance of cash equivalents
The net increase in cash and cash equivalents 36,373,947.54 -999,206,556.27
2. The structure of cash and cash equivalents
Items Ending balance Beginning balance
1. Cash 11,788,922,569.51 11,752,548,621.97
Including: Cash on hand 5,346.25 4,839.95
Bank deposits available on demand 11,788,917,223.26 11,752,543,782.02
Other monetary funds available on demand
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 11,788,922,569.51 11,752,548,621.97
Including: Cash and cash equivalents limited to use by the
parent company of other subsidiary in the group
(48) Assets of which ownership or right to use are restricted
Items Ending balance Reason
Cash at bank and on hand 5,156,849,822.92 Deposit for notes and letter of credit
Total 5,156,849,822.92
(49) Foreign currency monetary items
Exchange rate at
Ending balance in Ending balance
Items the end of the
foreign currency translated to RMB
period
Cash at bank and on hand 582,105,770.06
Including: U SD 83,505,239.72 6.8747 574,073,471.50
EUR 936,843.39 7.8170 7,323,304.78
HKD 805,949.50 0.8797 708,993.78
Short-term loans 1,306,193,000.00
Including: U SD 190,000,000.00 6.8747 1,306,193,000.00
Notes to the financial statements Page 60
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2019
Notes to the financial statements
Exchange rate at
Ending balance in Ending balance
Items the end of the
foreign currency translated to RMB
period
Non-current liabilities due
within one year 1,036,582,163.28
Including: U SD 145,000,000.00 6.8747 996,831,500.00
EUR 4,895,952.88 7.8170 38,271,663.66
JPY 23,176,000.00 0.0638 1,478,999.62
Long-term loans 1,648,495,389.11
Including: U SD
168,600,000.00 6.8747 1,159,074,420.00
EUR
61,285,400.00 7.8170 479,067,971.80
JPY
162,232,000.00 0.0638 10,352,997.31
6. Equity in other entities
(1) Equity in subsidiaries
1. Constitution of enterprise group
Notes Shareholding ratio
Principal Register
of
Name of the subsidiaries place of ed Indi Acquiring method
busine Direct
business address rect
ss
Business combination
Xiamen Bengang Steel & Iron Sales Co., Ltd. Xiamen Xiamen Sales 100.00
under common control
Business combination
Wuxi Bengang Steel & Iron Sales Co., Ltd. Wuxi Wuxi Sales 100.00
under common control
Business combination
Tianjin Bengang Steel & Iron Trading Co., Ltd. Tianjin Tianjin Sales 100.00
under common control
Business combination
Nanjing Bengang M aterials Sales Co., Ltd. Nanjing Nanjing Sales 100.00
under common control
Business combination
Yantai Bengang Steel & Iron Sales Co., Ltd. Yantai Yantai Sales 100.00
under common control
Business combination
Harbin Bengang Economic and Trading Co., Ltd. Harbin Harbin Sales 100.00
under common control
Changchu Business combination
Changchun Bengang Steel & Iron Sales Co., Ltd. Changchun Sales 100.00
n under common control
Notes to the financial statements Page 61
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2019
Notes to the financial statements
Notes Shareholding ratio
Principal Register
of
Name of the subsidiaries place of ed Indi Acquiring method
busine Direct
business address rect
ss
Guangzhou Bengang Steel & Iron Trading Co., Guangzho
Guangzhou Sales 100.00 Establishment
Ltd. u
Shanghai Bengang M etallurgy Science and
Shanghai Shanghai Sales 100.00 Establishment
Technology Co., Ltd.
M anuf
Bengang Steel Plates Liaoyang Pellet Co., Ltd. Liaoyang Liaoyang acturin 100.00 Establishment
g
M anuf
Dalian Benruitong Automobile M aterial
Dalian Dalian acturin 65.00 Establishment
Technology Co., Ltd.
g
M anuf
Business combination
Bengang Posco Cold-rolled Sheet Co., Ltd. Benxi Benxi acturin 75.00
under common control
g
Benxi Bengang Steel Sales Co., Ltd Benxi Benxi Sales 100.00 Establishment
Shenyang Bengang M etallurgical Science and
Shenyang Shenyang Sales 100.00 Establishment
Technology Co., Ltd.
Chongqing Liaoben Steel & Iron Trading Co., Chongqin
Chongqing Sales 100.00 Establishment
Ltd. g
M anuf
Bengang Baojin (Shenyang) auto new material Business combination
Shenyang Shenyang acturin 85.00
technology Co., Ltd. under common control
g
2. Significant but not wholly-owned subsidiaries
Profits and losses Dividend declared Ending
Proportion of
attributing to to distribute to balance of
Name of the subsidiaries non-controlling
non-controlling non-controlling non-controlling
interests (%)
shareholders shareholders interests
Bengang Posco Cold-rolled Sheet Co.,
25.00% 1,926,183.65 502,422,724.15
Ltd.
3. Financial information of significant but not wholly-owned subsidiaries
Ending balance
Name of the Non-curre
Non-current Current
subsidiaries Current assets Total assets nt Total liabilities
assets liabilities
liabilities
Bengang Posco
4,223,695,815.76 1,544,857,225.81 5,768,553,041.57 3,758,862,144.98 3,758,862,144.98
Cold-rolled Sheet
Notes to the financial statements Page 62
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2019
Notes to the financial statements
Name of the Ending balance
Co.,subsidiaries
Ltd.
Beginning balance
Name of the Current Non-current Current Non-curren
Total assets Total liabilities
subsidiaries assets assets liabilities t liabilities
Bengang Posco
Cold-rolled Sheet 2,986,224,229.42 1,692,675,158.81 4,678,899,388.23 2,678,954,080.56 2,678,954,080.56
Co., Ltd.
Current period
Total
Name of the subsidiaries Operating Net cash flows from
Net profit comprehensive
income operating activities
income
Bengang Posco Cold-rolled Sheet
3,720,975,482.91 7,704,734.61 7,704,734.61 1,318,506,299.45
Co., Ltd.
Previous period
Total
Name of the subsidiaries Operating Net cash flows from
Net profit comprehensive
income operating activities
income
Bengang Posco Cold-rolled Sheet
3,971,529,847.27 5,511,711.19 5,511,711.19 686,401,003.83
Co., Ltd.
(2) Equity in joint venture or associates
1. Summary of financial information of unimportant joint ventures and associates
Ending balance/Current period Beginning balance/Previous period
Joint ventures:
Total book value of investment: 2,481,589.04 2,455,681.55
The total amount of the following items
calculated according to the shareholding ratio
—Net profit 25,907.49 171,488.75
—Other comprehensive income
—Total comprehensive income 25,907.49 171,488.75
Notes to the financial statements Page 63
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2019
Notes to the financial statements
7. 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.
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 ensure 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
Notes to the financial statements Page 64
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2019
Notes to the financial statements
framework of risk management and optimization of debt structures to lower the currency
risk.
The currency risk facing the Company originates from the assets and liabilities measured by
US dollars, Euro, Hongkong dollars and Japanese Yen. The ending balance of the assets and
liabilities after converted in RMB is shown as below:
(In 10 Thousand Yuan)
Ending balance
Items
Total
US D Euro HKD Japanese Yen
57,407.35 732.33 70.90 58,210.58
Assets
346,209.89 51,733.96 1,183.20 399,127.06
Liabilities
Total 403,617.24 52,466.29 70.90 1,183.20 457,337.63
The table below shows the sensitivity analys is of RMB vs other currencies when RMB
deprecated or appreciated by 5% over other currencies under the assumption that other
variables remain the same. 5% is the sensitivity rate used by the management for internal
report of currency risk and it represents the estimation of the management over the possible
change of foreign currency. Sensitivity analysis only includes the monetary items measured
by foreign currency unpaid and will be adjusted at the year-end by 5%. The positive figures
reflect the increase of profit by 5% and the negative figures indicate the reduction of profit.
(In 10 Thousand Yuan)
Ending balance
Items Impact on Impact on
Total
Impact on US D Impact on Euro
HKD Japanese Yen
-14,440.13 -2,550.08 3.54 -59.16 -17,045.82
Appreciation by 5%
14,440.13 2,550.08 -3.54 59.16 17,045.82
Depreciation by 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.
Notes to the financial statements Page 65
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2019
Notes to the financial statements
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 Over 5
Within 1 year 1-2 years 2-5 years Total
years
Trade and other payables 1,797,686.94 31,109.67 135.72 94.60 1,829,026.93
Loans and interests 1,333,477.52 430,629.37 77,769.29 112,906.80 1,954,782.98
Total 3,131,164.46 461,739.04 77,905.01 113,001.40 3,783,809.91
(In 10 Thousand Yuan)
Beginning balance
Items Over 5
Within 1 year 1-2 years 2-5 years Total
years
Trade and other payables 1,638,885.92 67.12 130.65 71.79 1,639,155.48
Loans and interests 1,229,911.46 224,083.41 371,055.41 113,225.19 1,938,275.47
Total 2,868,797.38 224,150.53 371,186.06 113,296.98 3,577,430.95
8. Related party transactions
(1) Details of parent company
(In 100 M illion Yuan)
Place of Notes of Registered Share Voting
Name of parent company
Registry Business capital proportion (%) rights (%)
Benxi Steel (Group) Co., Ltd. Benxi M anufacturing 62.92 61.43 61.43
Note:
The parent company of Benxi Steel (Group) Co., Ltd is Bengang Group Co., Ltd.
The ultimate controlling party of the Company is the State-owned Assets Supervision and
Administration Commission of Liaoning Province.
(2) Details of the subsidiaries
For details of subsidiaries of the Company please refer to Note 6 “Equity in other entities”.
Notes to the financial statements Page 66
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2019
Notes to the financial statements
(3) Details of other related parties
Name of Other related parties Relationship
Bengang Group International Economic
Both belong to Bengang Group Co., Ltd.
and Trading Co., Ltd.
Bengang Cold-rolled Stainless Steel
Same parent company
Dandong Co., Ltd.
Benxi Beiying Steel & Iron (Group) Co.,
Both belong to Bengang Group Co., Ltd.
Ltd.
Bengang Electronics and Gas Co., Ltd. Both belong to Benxi Steel and Iron (Group) Co., Ltd.
Benxi Steel & Iron (Group) Real-estate
Same parent company
Development Co., Ltd.
Benxi Steel & Iron (Group) Steel & Iron
Same parent company
Process and Logistics Co., Ltd.
Benxi Steel & Iron (Group) M achinery
Same parent company
M anufacture Co., Ltd.
Benxi Steel & Iron (Group) Construction
Same parent company
Co., Ltd.
Benxi Steel & Iron (Group) M ining Co.,
Same parent company
Ltd.
Benxi Steel & Iron (Group) Thermal Power
Same parent company
Development Co., Ltd.
Benxi Steel & Iron (Group) Designing
Same parent company
Institute
Benxi Steel & Iron (Group) Industrial
Same parent company
Development Co., Ltd.
Benxi Steel & Iron (Group) Information
Same parent company
and Automatic Tech Co., Ltd.
Benxi Steel & Iron (Group) Construction Same parent company
Notes to the financial statements Page 67
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2019
Notes to the financial statements
Name of Other related parties Relationship
and Repairing Co., Ltd.
Benxi Steel & Iron (Group) M etallurgy
Same parent company
Residues Co., Ltd.
Benxi Iron and Steel (Group) Engineering
Same parent company
Construction Supervision Co., Ltd.
Benxi Steel & Iron (Group) Zhengtai
Same parent company
Construction M aterials Co., Ltd.
Benxi High-tech Drilling Tools
Both belong to Bengang Group Co., Ltd.
M anufacture 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
Both belong to Benxi Steel and Iron (Group) Co., Ltd.
Sales Co., Ltd.
Benxi Steel & Iron (Group) General
Both belong to Benxi Steel and Iron (Group) Co., Ltd.
Hospital
Liaoning Bengang Steel & Iron Trading
Same parent company
Co., Ltd.
Liaoning Hengtai Heavy M achinery Co.,
Same parent company
Ltd.
Liaoning Hengtong M etallurgical
Same parent company
Equipment M anufacture Co., Ltd.
Liaoning M etallurgy Technician College Same parent company
Liaoning M etallurgy Vocational Technical
Same parent company
College
Suzhou Bengang Industrial Co., Ltd. Shareholding company
Benxi Steel & Iron (Group) M edical
Related party that the parent company has significant influence on it
Services Department;
Bengang Group Finance Co., Ltd. Both belong to Bengang Group Co., Ltd.
Notes to the financial statements Page 68
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2019
Notes to the financial statements
Name of Other related parties Relationship
Liaoning Hengyi Financial Leasing Co., Both belong to Bengang Group Co., Ltd.
Ltd.
(4) Related Party Transactions
1. Related party transactions of purchasing goods and services
Company as the purchaser
(In 10 Thousand Yuan)
The content of related party Current Previous
Name
transactions period period
Benxi Steel & Iron (Group) Co., Ltd. Repair expense 14,299.69 19,767.05
Benxi Steel & Iron (Group) Co., Ltd. Land lease fee 2,734.57 2,734.57
Bengang Cold-rolled Stainless Steel Dandong Co., Ltd. Products 82.25 64.19
Benxi Steel & Iron (Group) M ining Co., Ltd. Labor cost 391.41 386.75
Raw material and
Benxi Steel & Iron (Group) M ining Co., Ltd. 215,655.53 203,816.33
supplementary material
85.36 -
Benxi Steel & Iron (Group) M ining Co., Ltd. Freight
Raw material and
11,056.03 12,852.84
Benxi Steel & Iron (Group) M etallurgy Residues Co., Ltd.
supplementary material
Benxi Steel & Iron (Group) Steel & Iron Process and Logistics
84.61 87.67
Processing fee
Co., Ltd.
3,418.04 3,627.99
Benxi Steel & Iron (Group) Real-estate Development Co., Ltd. Raw materials
3,341.85 4,600.29
Benxi Steel & Iron (Group) M achinery M anufacture Co., Ltd. Spare parts
370.37 495.18
Benxi Steel & Iron (Group) M achinery M anufacture Co., Ltd. Repair services
Benxi Steel & Iron (Group) Construction Co., Ltd. Spare parts 424.68 191.80
7,123.75 2,028.95
Benxi Steel & Iron (Group) Construction Co., Ltd. Project fee
7,085.65 11,481.87
Benxi Steel & Iron (Group) Construction Co., Ltd. Repair services
Raw material and
332.06 109.40
Benxi Steel & Iron (Group) Construction Co., Ltd.
supplementary material
Notes to the financial statements Page 69
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2019
Notes to the financial statements
The content of related party Current Previous
Name
transactions period period
152.48 131.35
Benxi Steel & Iron (Group) Construction Co., Ltd. Freight
2,896.02 2,808.40
Benxi Steel & Iron (Group) Industrial Development Co., Ltd. Spare parts
Raw material and
6,106.81 6,730.62
Benxi Steel & Iron (Group) Industrial Development Co., Ltd.
supplementary material
940.92 1,829.45
Benxi Steel & Iron (Group) Industrial Development Co., Ltd. Repair services
349.19 101.81
Benxi Steel & Iron (Group) Industrial Development Co., Ltd. Freight
15.80 91.68
Benxi Steel & Iron (Group) Industrial Development Co., Ltd. Project fee
Raw material &
Benxi Steel & Iron (Group) Construction and Repairing Co.,
supplementary materials & 88.60 326.39
Ltd.
spare parts
Benxi Steel & Iron (Group) Construction and Repairing Co.,
Project fee 453.18 1,175.38
Ltd.
Benxi Steel & Iron (Group) Construction and Repairing Co.,
5,520.77 8,327.40
Repair expense
Ltd.
Raw material and
5,873.36 6,411.95
Bengang Electronics and Gas Co., Ltd.
supplementary material
252.09 1,862.90
Bengang Electronics and Gas Co., Ltd. Repair services
4.47 31.12
Benxi High-tech Drilling Tools M anufacture Co., Ltd. Spare parts
Benxi New Career Development Co., Ltd. Labor protection fee 47.20 44.20
Raw material and
48.42 -
Benxi New Career Development Co., Ltd. supplementary material
and food
699.54 317.07
Liaoning M etallurgy Technician College Spare parts
Bengang Group International Economic and Trading Co., Ltd. Agency fee 3,417.46 3,564.93
5,240.58 5,690.72
Bengang Group International Economic and Trading Co., Ltd. Port surcharges
Benxi Steel & Iron (Group) Information and Automatic Tech
Spare parts 226.21 933.25
Co., Ltd.
Notes to the financial statements Page 70
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2019
Notes to the financial statements
The content of related party Current Previous
Name
transactions period period
Benxi Steel & Iron (Group) Information and Automatic Tech
Project fee 2,191.45 2,335.89
Co., Ltd.
Benxi Steel & Iron (Group) Thermal Power Development Co.,
27.20 37.73
Heating costs
Ltd.
Benxi Steel & Iron (Group) Thermal Power Development Co., Raw material and
2.84
Ltd. supplementary material
29.24 231.58
Benxi Steel & Iron (Group) Designing Institute Design fees
Raw material and
591,426.43 566,834.95
Benxi Beiying Steel & Iron (Group) Co., Ltd.
supplementary material
31,906.75 38,865.84
Benxi Beiying Steel & Iron (Group) Co., Ltd. Energy & Power
234.47 303.15
Benxi Beiying Steel & Iron (Group) Co., Ltd. Freight
4,250.18 3,931.44
Benxi Beiying Steel & Iron (Group) Co., Ltd. Labor cost
758.28 1,064.59
Benxi Beiying Steel & Iron (Group) Co., Ltd. Spare parts
Liaoning Hengtong M etallurgical Equipment M anufacture Co., Raw material and spare
4,493.46 5,398.61
Ltd. parts
Raw material and spare
Liaoning Hengtai Heavy M achinery Co., Ltd. 171.84 124.87
parts
1,133.13 1,477.37
Liaoning Hengtai Heavy M achinery Co., Ltd. Repair and labor cost
Bengang Group Co., Ltd. House renting fee 37.61
31.07
Bengang Group Co., Ltd. Property management fee
935,481.84 923,260.58
Total
Company as the seller
(In 10 Thousand Yuan)
The content of related party
Name Current period Previous period
transactions
50.42 51.90
Bengang Electronics and Gas Co., Ltd. Energy & Power
Raw material &
60,230.78 116,469.29
Benxi Beiying Steel & Iron (Group) Co., Ltd.
supplementary materials &
Notes to the financial statements Page 71
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2019
Notes to the financial statements
The content of related party
Name Current period Previous period
transactions
spare parts
792.19 1,230.13
Benxi Beiying Steel & Iron (Group) Co., Ltd. Products
7,565.39 5,706.89
Benxi Beiying Steel & Iron (Group) Co., Ltd. Energy & Power
Benxi Steel & Iron (Group) Real-estate
6.20 6.94
Energy & Power
Development Co., Ltd.
Benxi Steel & Iron (Group) Steel & Iron Process
Energy & Power 27.47 37.52
and Logistics Co., Ltd.
Benxi Steel & Iron (Group) M achinery
995.77 973.31
Products
M anufacture Co., Ltd.
Benxi Steel & Iron (Group) M achinery
716.43 943.21
Energy & Power
M anufacture Co., Ltd.
Raw material &
Benxi Steel & Iron (Group) M achinery
605.66 113.58
supplementary materials &
M anufacture Co., Ltd.
spare parts
19.45 94.13
Benxi Steel & Iron (Group) Construction Co., Ltd. Energy & Power
Raw material &
108.13 71.24
Benxi Steel & Iron (Group) Construction Co., Ltd. supplementary materials &
spare parts
Benxi Steel & Iron (Group) M ining Co., Ltd. Energy & Power 34,182.02 35,940.67
Raw material &
3,156.26 2,831.52
Benxi Steel & Iron (Group) M ining Co., Ltd. supplementary materials &
spare parts
487.08 402.48
Benxi Steel & Iron (Group) M ining Co., Ltd. Freight revenue
Benxi Steel & Iron (Group) Thermal Power
2,289.99 2,374.96
Energy & Power
Development Co., Ltd.
Benxi Steel & Iron (Group) Thermal Power Raw material &
994.94 801.85
Development Co., Ltd. supplementary materials &
Notes to the financial statements Page 72
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2019
Notes to the financial statements
The content of related party
Name Current period Previous period
transactions
spare parts
Benxi Steel & Iron (Group) Thermal Power
8.58
Freight revenue
Development Co., Ltd.
Benxi Steel & Iron (Group) Industrial
407.66 388.54
Energy & Power
Development Co., Ltd.
Benxi Steel & Iron (Group) Industrial
Products 12.46 11.32
Development Co., Ltd.
Raw material &
Benxi Steel & Iron (Group) Industrial
supplementary materials & 717.36 1,251.78
Development Co., Ltd.
spare parts
Benxi Steel & Iron (Group) Information and
Energy & Power 7.68 9.01
Automatic Tech Co., Ltd.
Benxi Steel & Iron (Group) Construction and
79.48 83.99
Energy & Power
Repairing Co., Ltd.
Raw material &
Benxi Steel & Iron (Group) Construction and
248.68 12.26
supplementary materials &
Repairing Co., Ltd.
spare parts
Benxi Steel & Iron (Group) M etallurgy Residues
302.41 260.48
Energy & Power
Co., Ltd.
Raw material &
Benxi Steel & Iron (Group) M etallurgy Residues
9,363.79 9,045.64
supplementary materials &
Co., Ltd.
spare parts
Benxi Steel & Iron (Group) M etallurgy Residues
711.36
Freight revenue
Co., Ltd.
147.07 702.65
Benxi Steel & Iron (Group) Co., Ltd. Energy & Power
Raw material &
Benxi Steel & Iron (Group) Co., Ltd. 156.10 270.51
supplementary materials &
Notes to the financial statements Page 73
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2019
Notes to the financial statements
The content of related party
Name Current period Previous period
transactions
spare parts
15.13 18.10
Benxi New Career Development Co., Ltd. Energy & Power
188.32 175.76
Dalian Boluole Steel Tube Co., Ltd. Products
Benxi Steel & Iron (Group) General Hospital Energy & Power 3.09 3.42
Benxi Steel & Iron (Group) Zhengtai Construction
0.27 -
Energy & Power
M aterials Co., Ltd.
Raw material &
Liaoning Hengtong M etallurgical Equipment
832.61 1,305.43
supplementary materials &
M anufacture Co., Ltd.
spare parts
Raw material &
Bengang Cold-rolled Stainless Steel Dandong Co.,
24.14
supplementary materials &
Ltd.
spare parts
16,362.43 17,052.85
Suzhou Bengang Industrial Co., Ltd. Products
Bengang Group Finance Co., Ltd. Energy & Power 0.69 0.70
7.79 9.47
Bengang Group Co., Ltd. Energy & Power
141,105.34 199,371.47
Total
2. Lease information of related parties
Company as the lessor
Lessee Lease capital category Lease income of current period Lease income of previous period
Benxi Steel & Iron
(Group) Steel & Iron
Warehouse and machinery 250,000.00 250,000.00
Process and
Logistics Co., Ltd.
Benxi Steel & Iron
(Group) M achinery
Plants and machinery 245,000.00 245,000.00
M anufacture Co.,
Ltd.
Company as the lessee
Lessor Lease capital category Lease charges of current period Lease charges of previous period
Notes to the financial statements Page 74
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2019
Notes to the financial statements
Benxi Steel & Iron
2300 Hot rolling product line 123,426,656.64 120,000,000.00
(Group) Co., Ltd
Benxi Steel & Iron
Land use right 27,345,714.30 27,345,714.30
(Group) Co., Ltd
Benxi Beiying Steel
& Iron (Group) Co., 1780 Hot rolling product line 59,013,278.16 64,929,604.02
Ltd.
Financial lease matters:
During the reporting period, the company leased machinery and equipment from Liaoning
Hengyi Finance Leasing Co., Ltd. in the form of financial leases. As of the end of the reporting
period, the long-term accounts payable amounted to RMB 52,733,529.65.
Notes to lease from or to related parties:
1. The Company leases land from Bengang Group Co., Ltd., with a monthly rent of 0.594 yuan
per square meter. The leased land is 7,669,068.17 square meters and the annual rent is
54,665.10 thousand yuan.
2. For the 2300mm hot rolling product line leased from the Group to the Company, lease
period lasts from 1 January 2018 to 31 December 2020. 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. “Notice on Bengang Steel Plates Co., Ltd. signing a renewal agreement
with Benxi Steel (group) Co., Ltd” were adopted on the sixth meeting of the seventh board of
directors, it stipulated that the company leased the 1780 hot rolling product line from Benxi
Beiying Steel & Iron (Group) Co., Ltd., 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. The annual rent shall not exceed RM B
150,000,000.00.
Notes to the financial statements Page 75
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2019
Notes to the financial statements
3. Information of Guarantee among related parties
(1) Company as the guarantor
No.
(2) Company as the warrantee
Guarantee of loans:
Has the
Ending date
S tarting date guarantee
Warrantor Amount of guarantee of
of Guarantee been
Guarantee
fulfilled
Bengang Group Co., Ltd. and Benxi No
200,000,000.00 2018/9/7 2019/9/5
Steel & Iron (Group) Co., Ltd.
Bengang Group Co., Ltd. and Benxi No
150,000,000.00 2018/10/17 2019/10/16
Steel & Iron (Group) Co., Ltd.
Bengang Group Co., Ltd. and Benxi No
200,000,000.00 2018/10/12 2019/10/10
Steel & Iron (Group) Co., Ltd.
Bengang Group Co., Ltd. and Benxi No
90,000,000.00 2016/3/30 2025/3/20
Steel & Iron (Group) Co., Ltd.
Bengang Group Co., Ltd. and Benxi No
610,000,000.00 2017/2/27 2025/2/20
Steel & Iron (Group) Co., Ltd.
Bengang Group Co., Ltd. and Benxi No
200,000,000.00 2018/11/ 9 2019/11/ 7
Steel & Iron (Group) Co., Ltd.
Bengang Group Co., Ltd. and Benxi No
200,000,000.00 2018/11/ 14 2019/11/ 13
Steel & Iron (Group) Co., Ltd.
Bengang Group Co., Ltd. and Benxi No
200,000,000.00 2019/6/13 2020/6/9
Steel & Iron (Group) Co., Ltd.
Bengang Group Co., Ltd. and Benxi No
200,000,000.00 2019/6/17 2020/6/17
Steel & Iron (Group) Co., Ltd.
Bengang Group Co., Ltd. and Benxi No
100,000,000.00 2019/1/24 2020/1/23
Steel & Iron (Group) Co., Ltd.
Notes to the financial statements Page 76
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2019
Notes to the financial statements
Has the
Ending date
S tarting date guarantee
Warrantor Amount of guarantee of
of Guarantee been
Guarantee
fulfilled
Bengang Group Co., Ltd. and Benxi No
178,000,000.00 2018/12/13 2019/12/12
Steel & Iron (Group) Co., Ltd.
Bengang Group Co., Ltd.
300,000,000.00 2018/11/ 15 2019/11/ 14 No
Bengang Group Co., Ltd. 140,000,000.00 2019/1/25 2020/1/25 No
Bengang Group Co., Ltd. 900,000,000.00 2018/11/ 28 2019/11/ 27 No
Bengang Group Co., Ltd. 100,000,000.00 2015/6/25 2021/9/21 No
Bengang Group Co., Ltd. 340,000,000.00 2019/3/29 2020/3/27 No
Bengang Group Co., Ltd. 520,000,000.00 2019/1/8 2019/12/14 No
Bengang Group Co., Ltd.
480,000,000.00 2019/1/28 2020/1/27 No
Bengang Group Co., Ltd. 310,000,000.00 2019/5/14 2020/5/13 No
Bengang Group Co., Ltd. 720,000,000.00 2019/5/14 2020/5/13 No
Bengang Group Co., Ltd. 24,000,000.00 2015/12/9 2022/3/21 No
Bengang Group Co., Ltd. 36,450,000.00 2016/12/27 2020/6/21 No
Bengang Group Co., Ltd. 87,280,000.00 2018/3/26 2024/6/21 No
Bengang Group Co., Ltd. 59,570,000.00 2017/11/ 15 2021/12/21 No
Bengang Group Co., Ltd. 622,600,000.00 2017/12/15 2024/8/20 No
Bengang Group Co., Ltd. 390,000,000.00 2018/11/ 29 2019/11/ 28 No
Bengang Group Co., Ltd. 150,000,000.00 2018/7/13 2019/7/13 No
Bengang Group Co., Ltd. 150,000,000.00 2018/7/13 2019/7/13 No
Bengang Group Co., Ltd.
100,000,000.00 2018/7/2 2019/7/1 No
Benxi Steel & Iron (Group) Co., Ltd. 147,000,000.00 2018/12/19 2019/12/19 No
Benxi Steel & Iron (Group) Co., Ltd. 330,000,000.00 2019/1/18 2020/1/18 No
Benxi Steel & Iron (Group) Co., Ltd. 340,000,000.00 2019/1/25 2020/1/25 No
Benxi Steel & Iron (Group) Co., Ltd. 224,000,000.00 2019/3/25 2020/3/25 No
Benxi Steel & Iron (Group) Co., Ltd. 300,000,000.00 2018/12/14 2019/12/14 No
Benxi Steel & Iron (Group) Co., Ltd.
373,000,000.00 2018/12/13 2019/12/13 No
Notes to the financial statements Page 77
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2019
Notes to the financial statements
Has the
Ending date
S tarting date guarantee
Warrantor Amount of guarantee of
of Guarantee been
Guarantee
fulfilled
Benxi Steel & Iron (Group) Co., Ltd. 480,000,000.00 2018/12/13 2019/12/13 No
Benxi Steel & Iron (Group) Co., Ltd. 500,000,000.00 2018/12/13 2019/12/13 No
Bengang Group Co., Ltd.
EUR 1,813,075.20 2015/6/25 2019/8/31 No
Bengang Group Co., Ltd. EUR 2,311,613.67 2015/6/25 2019/10/31 No
Bengang Group Co., Ltd. EUR 1,948,053.95 2015/6/25 2020/4/30 No
Bengang Group Co., Ltd. EUR 483,803.97 2015/6/25 2025/6/30 No
Bengang Group Co., Ltd. EUR 13,834,496.03 2015/6/25 2025/6/30 No
Bengang Group Co., Ltd. EUR 609,296.41 2015/6/25 2025/8/31 No
Bengang Group Co., Ltd.
EUR 11,990,585.71 2015/6/25 2025/8/31 No
Bengang Group Co., Ltd. EUR 233,211.78 2015/6/25 2025/9/30 No
Bengang Group Co., Ltd. EUR 719,075.68 2015/6/25 2025/10/31 No
Bengang Group Co., Ltd. EUR 9,901,243.51 2015/6/25 2025/10/31 No
Bengang Group Co., Ltd. EUR 6,162.48 2015/6/25 2026/4/30 No
Bengang Group Co., Ltd. EUR 557,460.75 2015/6/25 2026/4/30 No
Bengang Group Co., Ltd. EUR 597,187.50 2015/8/20 2019/9/30 No
Bengang Group Co., Ltd. EUR 7,967,631.00 2015/8/20 2025/9/30 No
Bengang Group Co., Ltd. EUR 642,082.50 2015/12/28 2019/7/30 No
Bengang Group Co., Ltd. EUR 239,173.64 2015/12/28 2019/8/31 No
Bengang Group Co., Ltd. EUR 44,356.22 2015/12/28 2019/10/31 No
Bengang Group Co., Ltd.
EUR 696,676.50 2015/12/28 2020/4/30 No
Bengang Group Co., Ltd. EUR 424,686.42 2015/12/28 2025/6/30 No
Bengang Group Co., Ltd. EUR 253,120.00 2015/12/28 2025/8/31 No
Bengang Group Co., Ltd. EUR 4,579,846.88 2015/12/28 2025/10/31 No
Bengang Group Co., Ltd. EUR 4,069.11 2015/12/28 2026/4/30 No
Bengang Group Co., Ltd. EUR 6,798,868.28 2015/12/28 2026/4/30 No
Bengang Group Co., Ltd.
EUR 410,699.25 2016/6/27 2020/4/30 No
Notes to the financial statements Page 78
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2019
Notes to the financial statements
Has the
Ending date
S tarting date guarantee
Warrantor Amount of guarantee of
of Guarantee been
Guarantee
fulfilled
Bengang Group Co., Ltd. EUR 3,727,122.75 2016/6/27 2020/4/30 No
Bengang Group Co., Ltd. EUR 36,617.16 2016/12/14 2020/4/30 No
Bengang Group Co., Ltd.
EUR 2,833,183.48 2016/12/14 2026/4/30 No
Bengang Group Co., Ltd. EUR 21,690.00 2017/6/30 2025/10/31 No
Bengang Group Co., Ltd. EUR 1,091,628.91 2017/6/30 2025/10/31 No
Bengang Group Co., Ltd. and Benxi No
Beiying Steel & Iron (Group) Co., US$20,000,000.00 2018/5/8 2020/5/7
Ltd.
Bengang Group Co., Ltd. and Benxi No
Beiying Steel & Iron (Group) Co., US$80,000,000.00 2018/5/2 2020/5/21
Ltd.
Bengang Group Co., Ltd. and Benxi No
Beiying Steel & Iron (Group) Co., US$45,000,000.00 2018/7/3 2020/7/2
Ltd.
Bengang Group Co., Ltd. and Benxi No
Beiying Steel & Iron (Group) Co., US$45,000,000.00 2018/8/17 2020/8/7
Ltd.
Bengang Group Co., Ltd. and Benxi No
Beiying Steel & Iron (Group) Co., US$100,000,000.00 2018/8/29 2020/8/28
Ltd.
Benxi Steel & Iron (Group) Co., Ltd. US$90,000,000.00 2019/3/29 2020/3/29 No
Benxi Steel & Iron (Group) Co., Ltd. US$100,000,000.00 2019/1/24 2020/1/24 No
Benxi Steel & Iron (Group) Co., Ltd. JPY185,408,000.00 1997/10/10 2027/9/10 No
4. Other related party transactions
(1) Loan from and deposits in Bengang Group Finance Co., Ltd.
Notes to the financial statements Page 79
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2019
Notes to the financial statements
(In 10 Thousand Yuan)
Item Beginning balance Increase Decrease Ending balance Notes
Deposits 975,193.08 6,857,385.39 6,793,699.59 1,038,878.89
1. The interests of deposits in Bengang Group Finance Co., Ltd. is RMB 94,469.5
thousand from January to June in 2019. As at 30 June 2019, the interest receivable from
Bengang Group Finance Co., Ltd. is RMB 13,872.1 thousand.
2. As at 30 June 2019, the restricted deposits in Bengang Group Finance Co., Ltd. is
RMB 1,489,439.90 thousand.
3. From January to June in 2019, the company and its subsidiaries did not borrow money
from financial companies.
4. Bengang Group Finance Co., Ltd. granted the company an unsecured credit line of
RMB 2.5 billion from January to June in 2019. As at 30 June 2019, the amount of
acceptance bill opened by Bengang Group Finance Co., Ltd. was RMB 2.15 billion, and
the amount of the acceptance bill that had been opened and unpaid by Bengang Group
Finance Co., Ltd. is RMB 1.632 billion, 1.509 billion of whic h is 100% deposit and
remaining 0.123 billion exposure.
5. From January to June in 2019, the Company did not apply for bill discounting to the
finance company.
(2) The company's loan and interest payment to Benxi Steel and Iron (Group) Co., Ltd.
(In 10 Thousand yuan).
Item Beginning balance Increase Decrease Ending balance
Entrusted loan through Bengang
1,422.00 0.00 1,422.00 0.00
Group Finance Co., Ltd.
Capital lending 7,770.00 2,140.00 1,400.00 8,770.00
Total 9,192.00 2,140.00 2,822.00 8,770.00
Details of outstanding loans as at 30 June 2019:
Related parties Lease form Lease amount S tart date Due date
32,700,000.00 2018/10/25 2019/10/25
Benxi Steel and Iron (Group) Co., Ltd. Entrusted loan
20,000,000.00 2018/12/5 2019/12//5
Benxi Steel and Iron (Group) Co., Ltd. M oney lending
10,000,000.00 2019/1/18 2020/1/18
Benxi Steel and Iron (Group) Co., Ltd. M oney lending
Benxi Steel and Iron (Group) Co., Ltd. M oney lending 14,000,000.00 2019/6/14 2020/6/14
11,000,000.00 2018/7/5 2019/7/5
Benxi Steel and Iron (Group) Co., Ltd. M oney lending
Notes to the financial statements Page 80
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2019
Notes to the financial statements
Related parties Lease form Lease amount S tart date Due date
87,700,000.00
Total
Notes: The interest accrued is RMB 2,028,394.55 during the current period, and as at 30
June 2019, the company has no interest that has not been paid.
(5) Receivables and payables of the related parties
1. Receivables of the Company
(in 10 thousand yuan)
Ending Balance Beginning Balance
Provision Provision
Items Name Name Carrying Carrying
for bad for bad
amount amount
debts debts
Accounts receivable
Benxi Beiying Steel & Iron
967.76 1,206.26
(Group) Co., Ltd.
Bengang Electronics and
401.11 112.76 408.26 112.76
Gas Co., Ltd.
Benxi Steel & Iron (Group)
52.68
Machinery Manufacture
Co., Ltd.
Benxi Steel & Iron (Group)
85.48
Industrial Development
Co., Ltd.
Benxi Steel & Iron (Group)
Thermal Power 803.58 937.22
Development Co., Ltd.
Bengang Cold-rolled
106.16 19.31 155.04 19.31
Stainless Steel Dandong
Co., Ltd.
Liaoning Hengtong
37.10
Metallurgical Equipment
Notes to the financial statements Page 81
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2019
Notes to the financial statements
Ending Balance Beginning Balance
Provision Provision
Items Name Name Carrying Carrying
for bad for bad
amount amount
debts debts
Manufacture Co., Ltd.
Bengang Group
10.10 12,906.30
International Economic
and Trading Co., Ltd.
Benxi Steel & Iron
113.22
(Group) M etallurgy
Residues Co., Ltd.
Total: 2,463.97 132.08 15,726.31 132.08
Prepayments
Benxi Beiying Steel & Iron
628,463.25 71,312.43
(Group) Co., Ltd.
Benxi Steel & Iron (Group)
2,174.38
Machinery Manufacture
Co., Ltd.
Bengang Cold-rolled
120.12 4.73
Stainless Steel Dandong
Co., Ltd.
Total: 630,757.75 71,317.16
Other receivables
Benxi Steel & Iron (Group)
255.40 72.45 261.61 72.45
Real-estate Development
Co., Ltd.
Liaoning M etallurgy
3.94 - 5.80 -
Technician College
Benxi Steel & Iron
136.62 - 259.26 -
(Group) M achinery
M anufacture Co., Ltd.
451.43 - 449.20 -
Benxi Steel & Iron (Group)
Notes to the financial statements Page 82
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2019
Notes to the financial statements
Ending Balance Beginning Balance
Provision Provision
Items Name Name Carrying Carrying
for bad for bad
amount amount
debts debts
Construction Co., Ltd.
Bengang Group
480.74 - 622.45 -
International Economic
and Trading Co., Ltd.
Benxi Steel & Iron
223.55 - 181.50 -
(Group) Industrial
Development Co., Ltd.
Benxi Steel & Iron
(Group) Zhengtai
20.11 19.32 20.41 19.32
Construction M aterials
Co., Ltd.
Benxi Steel & Iron
95.51 73.32 93.95 73.32
(Group) M edical Co.,
Ltd.
1,667.31 165.09 1,894.19 165.09
Total:
2. Payables of the Company
(in 10 thousand yuan)
Items Name Ending balance Beginning balance
Notes payable
Benxi Steel & Iron (Group) Industrial Development Co.,
0.00 190.51
Ltd.
Benxi Steel & Iron (Group) M achinery M anufacture Co.,
100.82 22.44
Ltd.
Benxi Iron and Steel (Group) M ining Co., Ltd. 124,323.34 98,047.94
Benxi Beiying Steel & Iron (Group) Co., Ltd. 516,313.71 470,958.00
Benxi Steel & Iron (Group) M etallurgy Residues Co., Ltd. 3,000.00 0.00
Benxi Steel & Iron (Group) Real-estate Development Co.,
0.00 291.70
Ltd.
Total 643,737.87 569,510.58
Accounts payable
Notes to the financial statements Page 83
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2019
Notes to the financial statements
Items Name Ending balance Beginning balance
Bengang Electronics and Gas Co., Ltd. 507.18 2,038.30
Benxi Steel & Iron (Group) Real-estate Development Co.,
282.90 318.45
Ltd.
Bengang Group International Economic and Trading Co.,
20,040.23 151,974.50
Ltd.
Benxi Steel & Iron (Group) M achinery M anufacture Co.,
2,560.48 3,239.73
Ltd.
Benxi Steel & Iron (Group) Construction Co., Ltd. 7,609.90 9,288.02
Benxi Steel & Iron (Group) M ining Co., Ltd. 25,294.53 46,435.71
Benxi Steel & Iron (Group) Industrial Development Co.,
9,528.57 7,543.14
Ltd.
Benxi New Career Development Co., Ltd. 4.40 356.98
Benxi Steel & Iron (Group) Construction and Repairing
11,268.41 10,736.73
Co., Ltd.
Benxi Steel & Iron (Group) M etallurgy Residues Co., Ltd. 1,245.42 1,473.85
Benxi Steel & Iron (Group) M edical and Health
2.04 2.04
department
Benxi Steel & Iron (Group) Information and Automatic
3,634.35 4,578.45
Tech Co., Ltd.
Benxi High-tech Drilling Tools M anufacture Co., Ltd. 281.78 10.80
Liaoning M etallurgical Technician College 280.76 1,033.31
Benxi Steel & Iron (Group) Thermal Power Development
38.31 20.97
Co., Ltd.
Benxi Steel & Iron (Group) Zhengtai Construction
0.00 0.24
M aterials Co., Ltd.
Liaoning Hengtong M etallurgical Equipment M anufacture
1,644.37 529.45
Co., Ltd.
Liaoning M etallurgy Vocational Technical College 341.92 531.92
Bengang Cold-rolled Stainless Steel Dandong Co., Ltd. 325.89 454.96
Liaoning Hengtai Heavy M achinery Co., Ltd. 2,454.64 2,991.38
Benxi Iron and Steel (Group) Engineering Construction
0.00 123.00
Supervision Co., Ltd.
Total: 87,346.09 243,681.91
Advance from customers
Benxi Steel & Iron (Group) M achinery M anufacture Co.,
738.29 0.00
Ltd.
Benxi Steel & Iron (Group) Industrial Development Co.,
948.76 35.80
Ltd.
Benxi Steel & Iron (Group) M etallurgy Residues Co., Ltd. 583.00 0.00
Benxi Steel & Iron (Group) Steel & Iron Process and
741.11 6,069.05
Logistics Co., Ltd.
Dalian Boluole Steel Tube Co., Ltd. 221.80 66.42
Notes to the financial statements Page 84
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2019
Notes to the financial statements
Items Name Ending balance Beginning balance
Liaoning Bengang Steel & Iron Trading Co., Ltd. 0.00 50.02
Liaoning Hengtong M etallurgical Equipment M anufacture
940.85 12.91
Co., Ltd.
Bengang Group International Economic and Trading Co.,
758.37 786.55
Ltd.
Suzhou Bengang Industrial Co., Ltd. 3,737.35 571.81
Total: 8,669.53 7,592.55
Other payables
Benxi Steel & Iron (Group) Real-estate Development Co.,
143.82 143.59
Ltd.
Bengang Group International Economic and Trading Co.,
3243.65 4948.15
Ltd.
Benxi Steel & Iron (Group) M achinery M anufacture Co.,
64.57 75.09
Ltd.
Benxi Steel & Iron (Group) Construction Co., Ltd. 346.21 590.19
Benxi Steel & Iron (Group) Industrial Development Co.,
85.16 49.15
Ltd.
Benxi New Career Development Co., Ltd. 89.77 97.07
Benxi Steel & Iron (Group) M etallurgy Residues Co., Ltd. 29.00 50.15
Benxi Steel & Iron (Group) Co., Ltd. 10187.46 21832.88
Benxi Steel & Iron (Group) Thermal Power Development
299.13 307.73
Co., Ltd.
Guangzhou Free Trade Zone Bengang Sales Co., Ltd. 267.44 267.44
Liaoning M etallurgical Vocational and Technical College 181.67 0.3
Bengang Group Finance Co., Ltd. 0 2.12
Liaoning M etallurgy Technician College 28.95 36.33
Benxi Beiying Steel & Iron (Group) Co., Ltd. 1,404.05 1,824.27
Total: 16,370.88 30,224.46
Long-term payables
Liaoning Hengyi Financial Leasing Co., Ltd. 5,273.35 1,368.67
Total: 5,273.35 1,368.67
Notes to the financial statements Page 85
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2019
Notes to the financial statements
9. Government subsidy
(1) Governme nt subsidy related to assets
Amount recognized in the profit and loss or offset related Item recognized in the
Item listed on the
Category Amount costs or expenses profit and loss or offset
balance sheet
Current Period Previous Period related costs or expenses
M ES Project Special Fund 860,000.00 Deferred Income 860,000.00 860,000.00 Other Income
Industrial Enterprise Energy M anagement
5,800,000.00 Deferred Income 1,160,000.00 1,160,000.00 Other Income
Center Construction Demonstration Project
Environment Pollution Renovation Project 1,810,000.00 Deferred Income 1,810,000.00 1,810,000.00 Other Income
Environment Renovation Project and Regional
170,000.00 Deferred Income 170,000.00 170,000.00 Other Income
Basin Environment Protection Project
High Strength Cold Rolling Steel Renovation
175,000,000.00 Deferred Income 25,000,000.00 25,000,000.00 Other Income
Project
Automobile High-class Electrolytic Zinc Steel
12,312,000.00 Deferred Income 4,104,000.00 4,104,000.00 Other Income
Plate Production Line Project
Sintering M achine Residue Heat Usage and
2,102,000.00 Deferred Income 2,102,000.00 2,102,000.00 Other Income
Desulfurization Project
7 130t Boilers Flue Gas Desulfurization
16,800,000.00 Deferred Income 2,400,000.00 2,400,000.00 Other Income
Renovation Project of Power Plant
Treatment and Salt Extraction Project of
Deferred Income 50,000.00 Other Income
Desulfurization Waste Liquid of Coke Plant
Overseas Advanced Technology Introduction
5,442,000.00 Deferred Income 1,442,000.00 1,442,000.00 Other Income
Special Fund
Bengang Group Co., Ltd. Automotive Board 1,000,000.00 Deferred Income Other Income
Notes to the financial statements Page 86
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2019
Notes to the financial statements
Item listed on the Amount recognized in the profit and loss or offset related Item recognized in the
Category Amount
balance sheet costs or expenses profit and loss or offset
Engineering Laboratory Construction Project related costs or expenses
Fund
R&D for the Third Generation of
2,900,000.00 Deferred Income Other Income
High-strength Steel for Automobile
The 360 Cubic M eter Sintering M achine Flue
Gas Desulfurization Renovation Project of 100,000.00 Deferred Income 100,000.00 100,000.00 Other Income
Blast Furnace Plant
Environment Protection Project Special Fund 580,000.00 Deferred Income 580,000.00 580,000.00 Other Income
Advanced Treatment of Carbon Fiber
Wastewater Project of Coke Plant Dongfeng 9,500,000.00 Deferred Income Other Income
Area
Desulfurization and Denitration Projects for
Coal-fired Boiler of Power Plant 4,500,000.00 Deferred Income 300,000.00 300,000.00 Other Income
High-pressure Workshop
Power Plant No 3 workshop Heat and Power
7,000,000.00 Deferred Income 1,000,000.00 Other Income
Cogeneration Renovation Project
Sintering M achine Energy Saving and
Environmental Protection Project of Blast 1,740,000.00 Deferred Income 580,000.00 580,000.00 Other Income
Furnace Plant
Air Quality Automatic M onitoring System 140,000.00 Deferred Income 35,000.00 35,000.00 Other Income
Notes to the financial statements Page 87
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2019
Notes to the financial statements
(2) Governme nt subsidy related to income
Amount recognized in the profit and Item recognized in
loss or offset related costs or expenses the profit and loss
Category Amount
or offset related
Current Period Previous Period
costs or expenses
Xihu Resource M anagement
414,300.00 Other Income
Committee Compensation
Liaoning artisan subsidies and
340,002.97 166,938.70 Other Income
skills master workstation subsidies
High-strength pipeline steel
support under low temperature and 136,000.00 52,000.00 Other Income
high-pressure service conditions
10. Commitments and Contingencies
(1) Commitments
1. Lease contracts in progress or to be performed and their financial impacts
(1) For the land leased from the Company to the Group, price is RMB 0.594 per Square
meter per month, and the area of the land is 7,669,068.17 square meters; hence annual
rent is RMB 54,665.10 thousand.
(2) For the 2300mm hot rolling product line leased from the Group to the Company, lease
period lasts from 1 January 2018 to 31 December 2020. 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. “Notice on Bengang Steel Plates Co., Ltd. signing a renewal
agreement with Benxi Steel (group) Co., Ltd” were adopted on the sixth meeting of the
seventh board of directors, it stipulated that the company leased the 1780 hot rolling
product line from Benxi Beiying Steel & Iron (Group) Co., Ltd., 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. The
annual rent shall not exceed RMB 150,000,000.00.
Notes to the financial statements Page 88
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2019
Notes to the financial statements
2. Irrevocable letter of credit
As at June 30, 2019, the amount of irrevocable letter of credit that was not fulfilled is
RMB 2.333 billion.
(2) Contingencies
At the balance sheet date, no significant contingencies need to be disclosed.
11. Subsequent events
(1) Profit distribution after the reporting period
On April 17, 2019, the resolution of the 24th meeting of the 7th Board of
Directors passed the 2018 dividend distribution plan. Based on the total
share capital of the company's 2018 annual profit distribution equity
registration date, a cash dividend of 0.5 yuan (including tax) will be
Proposed profit or dividend
distributed to every 10 shares of all registered shareholders. The cash
dividend is 193,768,576.60 yuan. The above profit distribution plan has
been reviewed and approved by the shareholders meeting and was
distributed on July 12, 2019.
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) Other material issues that will influence investors ’ decisions
1. Financing Lease
For prioritizing the capital structure and exploring financing channel, the Company signed the
“Financial lease cooperation framework” with Liaoning Hengyi Financial Leas ing Co., Ltd.
with the amount of financial lease not exceeding RMB 5 billion per year. 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
Notes to the financial statements Page 89
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2019
Notes to the financial statements
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 lease security ratio is not higher than 30%
of the lease principal amount. The term of financial lease shall not exceed 12 years.
2. Shares pledged by the Controlling Shareholders
As at 30 June 2019, within the total shares held by the controlling shareholder Benxi Steel &
Iron (Group) Co., Ltd., 1,652,095,133 shares are pledged and 45,000,000.00 shares are frozen.
13. Notes to the financial statements of parent company
(1) Accounts receivable
1. Accounts receivable disclosed by category
Ending balance
Carrying amount Provision for bad debts
Items
Percentage Bad debts Book value
Amount Amount
(%) ratio (%)
Accounts receivable tested
for impairment 47,762,337.18 8.26 47,762,337.18 100.00
individually
Accounts receivable tested
for impairment by 530,605,966.90 91.74 128,208,215.05 24.16 402,397,751.85
portfolio
Total 578,368,304.08 100.00 175,970,552.23 402,397,751.85
Beginning balance
Carrying amount Provision for bad debts
Items
Percentag Bad debts Book value
Amount Amount
e (%) ratio (%)
Accounts receivable tested
for impairment 47,762,337.18 8.11 47,762,337.18 100.00
individually
Accounts receivable tested
for impairment by 541,151,187.11 91.89 131,598,127.84 24.32 409,553,059.27
portfolio
Total 588,913,524.29 100.00 179,360,465.02 409,553,059.27
Receivables individually significant and tested for impairment individually
Notes to the financial statements Page 90
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2019
Notes to the financial statements
Ending balance
Items Provision for Bad debts
Accounts receivable Reason
bad debts ratio(%)
Benxi Nanfen Xinhe M etallurgical
47,762,337.18 47,762,337.18 100.00 Halt operation
Co., Ltd.
Total 47,762,337.18 47,762,337.18
Accounts receivable disclosed by aging
Ending balance
Items
Carrying amount Provision for bad debts Bad debts ratio (%)
Within 1 year (inclusive) 326,326,994.80
1-2 years (inclusive) 56,750,367.45 2,837,518.37 5
2-3 years (inclusive) 27,697,384.96 5,539,476.99 20
Over 3 years 167,593,556.87 167,593,556.87 100
Total 578,368,304.08 175,970,552.23
2. Information of provision, reversal or recovery of bad debts of current period.
The provision of bad debts of current period is RMB 3,389,912.79.
3. No accounts receivable has been written off this year.
4. Top five debtors at the year-end
Ending balance
Company Percentage of total Provision for
Amount
accounts receivable (%) bad debts
No.1 206,877,478.40 35.77
62,482,368.63 10.80 6,792,099.51
No.2
47,762,337.18 8.26 47,762,337.18
No.3
41,687,479.04 7.21
No.4
10,140,717.39 1.75 1,150,024.13
No.5
368,950,380.64 63.79 55,704,460.82
Total
(2) Other receivables
Items Ending balance Beginning balance
Notes to the financial statements Page 91
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2019
Notes to the financial statements
Interest receivables 9,815,280.04
12,222,112.07
Dividend receivables
Other receivables 216,469,271.82 225,222,111.42
Total 228,691,383.89 235,037,391.46
1．Interest receivable
(1) Interest receivable disclosed by category
Items Ending balance Beginning balance
Deposit interest 12,222,112.07 9,815,280.04
Total 12,222,112.07 9,815,280.04
1. Other receivables disclosed by category
Ending balance
Carrying amount Provision for bad debts
Items
Percentage Bad debts Book value
Amount Amount
(%) ratio (%)
Other receivables tested
for impairment by 278,939,285.62 99.4 64,210,013.80 23.02 214,729,271.82
portfolio
Other receivables tested
for impairment 1,740,000.00 0.6 1,740,000.00
individually
Total 280,679,285.62 100 64,210,013.80 216,469,271.82
Beginning balance
Carrying amount Provision for bad debts
Items
Percentage Bad debts Book value
Amount Amount
(%) ratio (%)
Other receivables tested
for impairment by 288,053,726.26 99.4 64,571,614.84 22.42 223,482,111.42
portfolio
Other receivables tested
for impairment 1,740,000.00 0.6 1,740,000.00
individually
Total 289,793,726.26 100 64,571,614.84 225,222,111.42
Other receivables disclosed by Aging
Notes to the financial statements Page 92
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2019
Notes to the financial statements
Ending balance
Items
Carrying amount Provision for bad debts Bad debts ratio (%)
Within 1 year (inclusive) 175,866,828.59
1-2 years (inclusive) 3,202,196.37 160,109.82 5
2-3 years (inclusive) 44,775,445.85 8,955,089.17 20
Over 3 years 56,834,814.81 55,094,814.81 97
Total 280,679,285.62 64,210,013.80
2. Information of provision, reversal or recovery of bad debts of current period.
Reversal of bad debts for other receivables in current period is RMB 361,601.04.
3. No other receivables have been written off this year.
4. Other receivables disclosed by Nature
Nature Ending balance Beginning balance
Current Accounts 269,737,685.54 278,547,233.77
Others 10,941,600.08 11,246,492.49
Total 280,679,285.62 289,793,726.26
5. Top five debtors at the year-end
Percentage
of total other Provision for
Company Notes or content Amount Aging
receivables bad debts
(%)
66,559,873.88 23.71
No.1 Accounts Within 1 year
14,664,372.10 5.22 2,932,874.42
No.2 Accounts 2-3 years
7,718,029.34 2.75
No.3 Accounts Within 1 year
No.4 Accounts 5,302,064.54 2-3 years 1.89
4,341,257.18 1.55 868,251.44
No.5 Accounts Within 1 year
Total 98,585,597.04 35.12 3,801,125.86
(3) Long-term equity investment
Ending balance Beginning balance
Items Carrying Impairme Impai
Book value Carrying amount Book value
amount nt rment
Notes to the financial statements Page 93
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2019
Notes to the financial statements
Subsidiaries 2,016,281,902.16 2,016,281,902.16 2,016,281,902.16 2,016,281,902.16
Joint ventures
Total 2,016,281,902.16 2,016,281,902.16 2,016,281,902.16 2,016,281,902.16
Details of investment in subsidiaries
Impair
Ending
ment
balance
Ending of
Name of entity Beginning balance Increase Decrease of
balance curren
impair
t
ment
period
Guangzhou Bengang Steel & Iron Trading
30,000,000.00 30,000,000.00
Co., Ltd.
Shanghai Bengang M etallurgy Science and
Technology Co., Ltd. 30,000,000.00 30,000,000.00
Bengang Steel Plates Liaoyang Pellet Co.,
529,899,801.38 529,899,801.38
Ltd.
Dalian Benruitong Automobile M aterial
65,000,000.00 65,000,000.00
Technology Co., Ltd.
Bengang Posco Cold-rolled Sheet Co., Ltd. 1,019,781,571.10 1,019,781,571.10
Changchun Bengang Steel & Iron Sales Co.,
28,144,875.36 28,144,875.36
Ltd.
Harbin Bengang Economic and Trading Co.,
29,923,398.23 29,923,398.23
Ltd.
Nanjing Bengang M aterials Sales Co., Ltd. 2,081,400.65 2,081,400.65
Wuxi Bengang Steel & Iron Sales Co., Ltd. 29,936,718.57 29,936,718.57
Xiamen Bengang Steel & Iron Sales Co.,
1,095,711.66 1,095,711.66
Ltd.
Yantai Bengang Steel & Iron Sales Co., Ltd. 49,100,329.41 49,100,329.41
Tianjin Bengang Steel & Iron Trading Co.,
60,318,095.80 60,318,095.80
Ltd.
Benxi Bengang Steel Sales Co., Ltd 5,000,000.00 5,000,000.00
Shenyang Bengang M etallurgical Science
30,000,000.00 30,000,000.00
and Technology Co., Ltd.
Chongqing Liaoben Steel & Iron Trade Co.,
30,000,000.00 30,000,000.00
Ltd.
Bengang Baojin (Shenyang) Automobile
76,000,000.00 76,000,000.00
New M aterials Technology Co., Ltd.
Total 2,016,281,902.16 2,016,281,902.16
Notes to the financial statements Page 94
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2019
Notes to the financial statements
(4) Operating income and operating cost
Current period Previous period
Items
Revenue Cost Revenue Cost
Principal business 21,327,519,597.49 19,894,713,843.28 21,543,654,805.89 19,737,906,706.75
Other business 2,119,696,260.44 1,862,576,153.90 2,139,210,303.25 1,663,285,255.45
Total 23,447,215,857.93 21,757,289,997.18 23,682,865,109.14 21,401,191,962.20
(5) Income on investment
Items Current period Previous period
Income from long-term equity investment (cost method)
Income from bank short-term financial products 3,493,150.68
Total 3,493,150.68
14. Supple mentary information
(1) Details of non-recurring profit and loss
Items Amount Notes
Profit or loss from disposal of non-current assets -49,987,558.33
Government subsidy attributable to profit and loss of current period
(except such government subsidy closely related to the company's normal
41,695,000.00
business operation, meeting the regulation of national policy and enjoyed
constantly in certain quota or quantity according to a certain standard)
Profit or loss from investment or assets entrusted to others
Profit or loss from debt restructuring 50,640.00
Net profit or loss of subsidiary from the beginning to consolidation date
gained from consolidation under same control
Other non-operating revenue and expenditure other than above items
172,778.52
Impact of income tax 55,854.63
Impact of minority interests 3,799.93
Total -8,128,794.37
(2) Net asset yield and earnings per share
Weighted average Earnings per share (Yuan)
Profit in the Reporting Period
net assets yield Basic EPS Diluted EPS
Net profit attributable to ordinary shareholders 2.35% 0.12 0.12
Net profit attributable to ordinary shareholders
2.50% 0.12 0.12
after deducting non-recurring profit and loss
Notes to the financial statements Page 95
Bengang Steel Plates Co., Ltd.
For the half year ended 30 June 2019
Notes to the financial statements
Bengang Steel Plates Co., Ltd.
（Seal）
28 August 2019
Notes to the financial statements Page 96
