Bengang Steel Plates Co., Ltd. Annual Report 2020
Bengang Steel Plates Co., Ltd.
Annual Report 2020
April, 2021
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Bengang Steel Plates Co., Ltd. Annual Report 2020
I. Important Notice, Table of Contents, and Definitions
The Board of Directors, the Supervisory Committee and the Directors, members of the
Supervisory Committee and senior management of the Company guarantee that there
are no misrepresentations or misleading statements, or material omission in this report,
and individually and collectively accept full responsibility for the authenticity,
accuracy and integrity of the information contained in this report.
Gao Lie, chairman of the Company, Lin Dong, Chief financial officer, and Cong Yajuan,
the person in charge of the accounting department (the person in charge of the
accounting), make the pledge for the authenticity, accuracy and integrity of the attached
financial statements.
All the members of the Board of Directors attended the board meeting on which this
report was examined.
The prospective statements contained in this annual report do not constitute any
substantial commitment to the investors. Investors should pay attention to the risks
attached to investment decisions. This report is prepared in both of Chinese and English.
The Chinese version shall prevail when there are any controversial statements in the
two versions.
The company has described the existing risks and countermeasures in detail in this
report. Please refer to Section 4-9 “Prospects for the Future Development of the
Company”. “China Securities Journal”, “Securities Times”, “Hong Kong Commercial
Daily” and Juchao Information Network (www.cninfo.com.cn) are the company's
selected information disclosure media. All information of the company is based on the
information published in the above-mentioned designated media. Investors are advised
to pay attention to investment risks.
The company’s profit distribution plan is approved by the board of directors. Taking
3,875,371,532 shares as the base, a cash dividend of 0.1 yuan (tax included) will be
distributed to all shareholders for every 10 shares, and stock dividend is 0. The capital
reserve will not be converted into share capital.
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Bengang Steel Plates Co., Ltd. Annual Report 2020
Table of Contents
I. IMPORTANT NOTICE, TABLE OF CONTENTS, AND DEFINITIONS .............................................................. 2
II. COMPANY PROFILE AND MAIN FINANCIAL INDEX ...................................................................................... 5
III. SUMMARY OF COMPANY BUSINESS ................................................................................................................ 9
IV. MANAGEMENT DISCUSSION AND ANALYSIS .............................................................................................. 11
V. IMPORTANT EVENTS ............................................................................................................................................ 26
VI. STATUS OF SHARE CAPITAL CHANGES AND SHAREHOLDERS ............................................................ 66
VII. STATUS OF PREFERRED SHARES .................................................................................................................. 72
VIII. STATUS OF CONVERTIBLE CORPORATE BONDS ................................................................................... 73
IX. STATUS OF DIRECTORS, SUPERVISORS, SENIOR EXECUTIVES AND EMPLOYEES ........................ 75
X. CORPORATE GOVERNANCE .............................................................................................................................. 83
XI. RELEVANT INFORMATION ABOUT CORPORATE BONDS ....................................................................... 92
XII. FINANCIAL REPORT .......................................................................................................................................... 97
XIII. DOCUMENTS AVAILABLE FOR INSPECTION ......................................................................................... 253
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Bengang Steel Plates Co., Ltd. Annual Report 2020
Definition
Terms to be defined Refers to Definition
Bengang Bancai, Bengang Steel, the Company, the
Refers to Bengang Steel Plates Co., Ltd.
Listed Company
Bengang Group Refers to Bengang Group Co., Ltd.
Benxi Steel & Iron CO., Bengang Co. Refers to Benxi Steel & Iron (Group) Co., Ltd.
Liaoning Provincial State-asset Administration Refers to Liaoning State-owned Asset Supervisory and Management Committee
SSE Refers to Shenzhen Stock Exchange
Bengang Puxiang Refers to Bengang Puxiang Cool Rolling Steel Sheet Co., Ltd.
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Bengang Steel Plates Co., Ltd. Annual Report 2020
II. Company Profile and Main Financial Index
I. Company Information
Stock abbreviation Bengang Bancai, Bengangban B Stock Code 000761, 200761
Stock exchange for listing Shenzhen Stock Exchange
Company name in Chinese 本钢板材股份有限公司
Abbreviation of Company name in
本钢板材
Chinese
Company name in English (If any) BENGANG STEEL PLATES CO., LTD.
Abbreviation of Company name in
BSP
English (If any)
Legal representative Gao Lie
Registration Address No.16, Renmin Road, Pingshan District, Benxi City, Liaoning Province
Post Code of registration Address 117000
Office address No.16, Renmin Road, Pingshan District, Benxi City, Liaoning Province
Post Code of office address 117000
Web Address None
Email bgbcdm@163.com
II. Contact Information
Secretary of Board of Directors Representative of Securities Affairs
Name Gao Desheng Chen Liwen
No.16, Renmin Road, Pingshan District, No.16, Renmin Road, Pingshan District,
Address
Benxi City, Liaoning Province Benxi City, Liaoning Province
Tel 024-47827003 024-47828980
Fax 024-47827004 024-47827004
Email bgbcdm@163.com bgbcclw@126.com
III. Information Disclosure and Place for Consulting
Press media for information disclosure China Securities Journal, Securities Times, Hong Kong Commercial Daily
Web address for the annual report as assigned by
http://www.cninfo.com.cn
CSRC
Place for inquiry of the annual report Secretary Office of the Board, Bengang Steel Plate Co., Ltd.
IV. Change of Business Registration
Organization Code 91210000242690243E
Changes of principal business activities since listing (if any) No change
Changes of the controlling shareholder in the past (is any) No change
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Bengang Steel Plates Co., Ltd. Annual Report 2020
V. Other Information
Accountants’ firm engaged by the Company:
Name of the accountants’ firm BDO China Shu Lun Pan Certified Public Accountants LLP
Address of the accountants’ firm Address: 4/F 61 Nanjing Rd. East, Huangpu, Shanghai
Signing name of accountants Zhu Jinmei, Li Guiying
Sponsor engaged by the Company to conduct sustained supervision during the reporting period
√ Applicable □ Not applicable
Address of the sponsor Name of the sponsor
Name of the sponsor institution Sustained supervision period
institution representative
Guotai Junan Securities Co., No. 768, Nanjing West Road, August 5th, 2020 to December
Chi Huitao, Yang Keyi
Ltd. Jingan District, Shanghai 31st, 2021
Financial consultancy institution engaged by the Company to conduct sustained supervision during the reporting period
□ Applicable √ Not applicable
VI. Main Accounting Data and Financial Index
Whether the Company makes retroactive adjustment or restatement of the accounting data of the last years due to change of the
accounting policy and correction of accounting errors
□ Yes √ No
Changes over last
2020 2019 2018
year
Operating income（RMB） 48,684,792,685.58 52,741,353,582.28 -7.69% 50,181,869,721.54
Net profit attributable to the shareholders
384,252,740.78 555,646,971.40 -30.85% 1,036,493,236.07
of the listed company（RMB）
Net profit after deducting of non-recurring
gain/loss attributable to the shareholders 381,469,784.99 549,528,817.13 -30.58% 1,093,065,140.59
of listed company（RMB）
Net Cash flow generated by business
-2,039,000,213.29 6,977,824,041.16 -129.22% 3,619,937,841.93
operation（RMB）
Basic earnings per share (RMB/Share) 0.099 0.143 -30.77% 0.27
Diluted earnings per share (RMB/Share) 0.099 0.143 -30.77% 0.27
Weighted average net assets yield 1.90% 2.88% -0.98% 5.64%
Changed over last
End of 2020 End of 2019 End of 2018
year
Gross assets（RMB） 65,007,470,749.20 60,731,425,193.90 7.04% 59,632,504,915.83
Net assets attributable to shareholders of
21,018,296,389.10 19,487,665,261.17 7.85% 19,126,258,116.67
the listed company（RMB）
The lower of the company’s net profit before and after deduction of non-recurring gains and losses in the most recent three fiscal years
is negative, and the audit report of the most recent year shows that the company’s ability to continue operations is uncertain
□ Yes √ No
The lower of the net profit before and after non-recurring gains and losses is negative
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Bengang Steel Plates Co., Ltd. Annual Report 2020
□ Yes √ No
VII. Differences between Domestic and Foreign Accounting Standards
1. Differences of net profit and net assets disclosed in financial reports prepared under IFRS and Chinese
accounting standards.
□ Applicable √ Not applicable
There are no differences of net profit and net assets disclosed in financial reports prepared under IFRS and Chinese accounting standards
during the reporting period.
2. Differences of net profit and net assets disclosed in financial reports prepared under overseas and Chinese
accounting standards.
□ Applicable √ Not applicable
There are no differences of net profit and net assets disclosed in financial reports prepared under overseas and Chinese accounting
standards during the reporting period.
VIII. Main Financial Index by Quarters
Unit: Yuan
First quarter Second quarter Third quarter Fourth quarter
Operation income 11,728,574,704.88 10,455,962,555.17 12,667,300,144.93 13,832,955,280.60
Net profit attributable to the
177,998,575.36 76,645,628.97 28,865,084.77 100,743,451.68
shareholders of the listed company
Net profit after deducting non-
recurring gain/loss attributable to 168,656,828.67 71,228,643.86 4,967,865.94 136,616,446.52
the shareholders of listed company
Net cash flows generated by
684,846,620.22 -836,322,327.30 -1,256,153,637.34 -631,370,868.87
operating activities
Whether significant variances exist between the above financial index or the index with its sum and the financial index of the quarterly
report as well as semi-annual report index disclosed by the Company
□ Yes √ No
IX. Items and Amount of Non-recurring Profits and Losses
√ Applicable □ Not applicable
Unit: Yuan
Item 2020 2019 2018 Notes
Gains and losses on disposal of non-current
assets (including the write off part of the -92,695,525.95 -77,292,030.26 -148,409,630.35
provision for impairment)
Government subsidy attributable to profit and
loss of current period (except such
government subsidy closely related to the
company's normal business operation, 81,193,591.56 83,914,522.47 86,085,297.03
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
605,795.19 5,041,397.26
assets entrusted to others
Gains and losses of debt restructuring 32,800.02 50,640.00
Profits excluded effective hedging business 13,500,000.00
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Bengang Steel Plates Co., Ltd. Annual Report 2020
related to the company's normal business
operations, from holding transactional
financial assets, derivative financial assets,
transactional financial liabilities, fair value
changes in derivative financial liabilities, and
disposal of transactional financial assets and
derivative financial assets, financial liabilities
held for trading, derivative financial liabilities
and other debt investments
Other non-operating income and expenses
1,592,660.62 779,757.58 771,191.90
other than above
Other profit and loss items that meet the
2,084.65
definition of non-recurring gains and losses
Less: impact of income tax 786,094.20 1,818,703.48 22,141.38
impact of minority equity (after tax) 54,476.26 123,911.88 38,018.98
Total 2,782,955.79 6,118,154.27 -56,571,904.52 --
Explanation for defining non-recurring gains and losses items according to the "Public Offering of Securities Information Disclosure
Explanatory Notice No. 1 – Non-Recurring Gains and Losses", and reasons for defining non-recurring gains and losses items listed in
the document as recurring items.
□ Applicable√ Not applicable
There exists no situation of defining non-recurring gains and losses items listed in the document as recurring items.
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Bengang Steel Plates Co., Ltd. Annual Report 2020
III. Summary of Company Business
I. The Company's main business during the reporting period
(1) During the reporting period, the company’s main businesses include iron and steel smelting, rolling processing, power generation,
coal chemical industry, special steel profiles, railways, import and export trade, scientific research, product sales, etc. The introduction
of world advanced equipment and technology to implement equipment upgrades for the main iron and steel industry and have built a
high-quality steel base, formed more than 60 varieties, more than 7,500 specifications of product series, the proportion of high value-
added and high-tech products reached more than 80%. The leading products for automotive surface panels, home appliance panels,
petroleum pipeline steel, container panels, shipboard, etc. are widely used in the fields of automobiles, home appliances, petrochemicals,
aerospace, machinery manufacturing, energy and transportation, building decoration and metal products, and are exported to more than
60 countries and regions.
During the reporting period, the main performance drivers were: the implementation of a new round of technological transformation,
the new fifth furnace, the eighth casting machine, and the converter environmental protection transformation and other key projects
reached production and efficiency. Strengthen capital management operations, and complete the 6.8 billion yuan issuance of convertible
bonds. This is the first time in 20 years that the company has achieved super-large-scale direct refinancing through public issuance.
Bengang Steel Plate Co., Ltd. won the Quality Award from the Governor of Liaoning Province and was identified as "the first batch
of high-value patent cultivation centers in Liaoning Province."
During the reporting period, no major changes occurred in the above content.
(2) Affected by the global epidemic during the reporting period, the production and operation of enterprises were severely affected at
the beginning of the epidemic. With the implementation of national policies such as "six stability and six guarantees" and the success
of my country's epidemic prevention and control, the production and operation of my country's iron and steel enterprises have gradually
improved. The company always adheres to the supply-side structural reform as the main line, implements high-quality development
requirements, resolutely implements the national, provincial, and municipal epidemic prevention and control work deployments and
the "six stability and six guarantees" requirements, grasps epidemic prevention and control on the one hand, and stabilizes production
and high yield on the other. , Achieved both epidemic prevention and control and production and operation, achieved stable economic
development, continuously improved comprehensive competitiveness, and continued to consolidate industry status.
II. Major Changes in Main Assets
1. Major Changes in Main Assets
Main assets Notes to major changes
The balance as of 31 December 2020 is RMB 4,189,977.9 thousand and it has increased
Accounts receivable financing RMB 1,760,435.4 thousand compared to the beginning balance, which is mainly caused
by the increase of notes receivable.
The balance as of 31 December 2020 is RMB 5,523,646.8 thousand and it has increased
Other current assets RMB 5,210,742 thousand compared to the beginning balance, which is mainly caused by
the increase of time deposit.
The balance as of 31 December 2020 is RMB 995,840.3 thousand and it has increased by
Other non-current assets RMB 287,337.8 thousand compared to the beginning balance, which mainly due to the
increase in the rental deposit.
2. Main Information of Overseas Assets
□ Applicable √ Not applicable
III. Analysis on Core Competitiveness
The company adheres to the innovation-driven and "quality + service" development model, with the strategic goal of building an
internationally competitive high-quality plate base, a domestic first-class special steel base and a comprehensive service provider, and
exerts a strategic leading role, focusing on improving quality and efficiency, In terms of product upgrades, technological innovation,
green and intelligent manufacturing, we will innovate management ideas, enhance the core competitiveness of enterprises, and promote
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Bengang Steel Plates Co., Ltd. Annual Report 2020
enterprises to achieve high-quality, green and intelligent development.
1. Manufacturing capabilities. Innovate management ideas, strengthen professional management and control of the entire chain, and
continuously improve corporate management efficiency. All departments and units interact with each other, continue to implement the
concept of priority on output, adhere to the iron system as the core, focus on the process connection of iron and steel, and rationally
match the production line and resource production organization principles of the steel post process, so that the production process and
operation Continuously standardize and refine, make every effort to maximize quality, efficiency and production scale, and promote
the entire production chain toward high-end manufacturing.
2. Equipment transformation and upgrading. In 2020, the company issued a fixed asset investment plan of 5.14 billion yuan. A new
round of large-scale technological transformation represented by key projects such as the new No. 5 blast furnace, No. 8 casting
machine, No. 4-6 converter environmental protection transformation, and special steel electric furnace upgrade and transformation. At
present, the No. 5 blast furnace energy-saving and environmental protection renovation project, No. 8 casting machine, and the
steelmaking 4-6 converter energy-saving and environmental protection renovation project have been successfully completed and put
into production; the special steel electric furnace upgrade and renovation project, 50% of the project construction progress has been
achieved in 2020.
3. New product development capabilities. Successfully developed 36 new varieties. The high-strength complex phase steel CP980 for
roll forming has filled the blank of Bengang Steel Plates’s cold-rolling production; the oil drill uses steel series products to achieve
mass supply in the international market, and E4340 steel is produced by continuous casting instead of die casting. It is a domestic
initiative to replace imported high-end products. In terms of product certification, 33 certification projects have been carried out,
involving 150 brands and 178 specifications. The 2000MPa hot-formed steel has passed the certification of AIWAYS and Great Wall
Motors; the cold-rolled CR420LA and galvanized CR240LA products have passed the Pan Asia certification.
4. Technological innovation ability. In terms of scientific and technological cooperation, to undertake meetings of the Expert Committee
of the Metals, establish the strategic docking between Bengang group and China Iron and Steel Research Group, strengthen cooperation
with Northeastern University and other universities and research institutes, and invite national academicians and authoritative experts
to discuss the latest technological progress and industry development trends. , To direct and to promote the high-quality development
of Benxi Iron and Steel Group. In terms of scientific and technological achievements, it has won 4 metallurgical science and technology
awards and 3 scientific and technological progress awards in Liaoning Province. Among them, "the research and development of hot
stamping steel with the highest strength and extra-thick specifications and its serial development" won the first prize in the metallurgical
industry. The industry's highest award. In terms of intellectual property rights, 3 national standards and 11 corporate standards were
drafted; 211 patents were accepted by the National Bureau, a year-on-year increase of 21.2%; 108 patents were authorized by the
National Bureau, including 16 inventions and 92 utility models. Bengang Steel Plate Co., Ltd. won the Quality Award from the
Governor of Liaoning Province and was identified as "the first batch of high-value patent cultivation centers in Liaoning Province."
5. Green development capability. In combination with the steel industry and local ultra-low emission policy requirements, the company
has the courage to assume social responsibilities, relying on professional planning and research institutions to prepare an environmental
protection improvement plan and an annual implementation plan. Through all-round green improvement such as cleaner production
level, three waste management, environmental protection management, the company is striving to achieve "ultra-low emissions",
achieve community-based environmental quality, promote the integration of industry and city, and build the company into an
"ecological steel" that develops harmoniously with the city. plant". At present, the two dust collectors of the second sintering product
of the iron smelting plant have completed the transformation to meet the emission standards; the CCPP power generation project using
surplus gas is planned to be completed and put into operation in August 2021; the new mixed material yard and the fully enclosed
project of the material yard are also being planned Under design, it is expected to be completed and put into operation in 2024.
6. Intelligent manufacturing capabilities. The company has steadily promoted the construction of related projects on the integration of
industrialization and industrialization, and intelligent chemical plants. In 2020, it has issued an investment plan of 63 million yuan for
the upgrading of information infrastructure, production and manufacturing management, intelligent equipment for cold rolling areas,
and the upgrading and transformation of railway transportation dispatching and commanding information systems Intelligent
transformation in other fields. It plans to increase investment in information technology and intelligent manufacturing, keep up with
the pace of enterprise development in the era of big data, and achieve high-quality development.
7. Marketing ability. The company adheres to the benefit-oriented approach, optimizes the product structure, achieves steady growth
in the output of its leading products, and significantly enhances the core competitiveness of its products. Intensify market development,
reasonably match resources, develop 32 new customers and 45 new steel grades, and achieve the goal of 100% production and sales
rate. The products are sold to more than 30 countries along the "Belt and Road", with 1 million tons, accounting for 42% of total exports.
It has completed the certification of 70 grades of cold-rolled, galvanized, pickled, and special steel products, an increase of 25% over
last year, covering users of automotive sheets, home appliance sheets, and special steel. Some of the company's automotive sheet
products have been included in the Mercedes-Benz BQF (Global Purchasing) list. The key certification work of BMW, Mercedes-Benz,
Renault and others have achieved phased results; the inspection of SGS, ELV and Reach products has been completed.
8. Brand building. The company builds a symbiosis and shared quality management model of "supporting a better life with steel power",
attaches importance to the construction of corporate culture, actively expands brand influence, strives to fulfill social responsibilities,
enhances corporate social image, and successfully wins the 2019 Liaoning Provincial Governor Quality Award. The company is the
only steel company to win this honor.
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Bengang Steel Plates Co., Ltd. Annual Report 2020
IV. Management Discussion and Analysis
I. General
During the reporting period, the company adhered to the guidance of Xi Jinping’s Thought on Socialism with Chinese
Characteristics for a New Era, thoroughly implemented the spirit of General Secretary Jinping’s important speech during
his inspection in Liaoning and the seminar on deepening the revitalization of Northeast China, and insisted on supply-
side structural reform as the main line. Implement high-quality development requirements, resolutely implement the
national, provincial, and municipal epidemic prevention and control work deployment and the "six stability and six
guarantees" requirements, focus on epidemic prevention and control on the one hand, and stabilize production and high
yield on the other, and achieved both epidemic prevention and control and production and operation and realized the
stable development of economic operation. The annual production of pig iron was 10.069 million tons, a year-on-year
increase of 3.52%; crude steel 10.31 million tons, a year-on-year increase of 3.47%; hot-rolled plates 12.235 million tons,
a year-on-year decrease of 0.26%; cold-rolled plates 5.438 million tons, a year-on-year increase of 0.4%; special steel
721,000 tons, an increase of 48.21% year-on-year, and the realization of "three zeros" in safe production with large
personal accidents, large fire accidents and major equipment accidents. Reviewing the work of the year, it is mainly
reflected in the following aspects:
(1) Management innovation. Taking benefit as the guide, improve the assessment system of the responsibility certificate,
increase the "cost rejection index" for factories and mines on the basis of the bonus coefficient of the main contract, and
implement the "dual switch" assessment. Organize the signing of the letter of responsibility, and require each unit to
decompose the indicators to the work area level by level, and guide the grassroots units to sign the responsibility letter
indicators with the work area to achieve full coverage of the signing of the responsibility letter and no dead ends, so that
the leadership team at all levels can focus more on the performance appraisal indicators and to achieve a good
performance-oriented situation. The company learned from the advanced experience of steel companies such as Angang
Iron and Steel Co., Ltd., formulated a "three-step" benchmarking management model of “bright indicators, select
benchmarks,” “align indicators, find gaps,” “determine measures, and create benefits”, and build a comprehensive
benchmarking management model and improve management level. Strengthen capital management operations, and
completed the 6.8 billion yuan issuance of convertible bonds for plate companies. This is the first time in 20 years that it
has achieved super-large-scale direct refinancing through a public offering.
(2) Scientific and technological innovation work. Adhering to the design concept of lightweight, green and environmental
protection, aiming at stable quality, reasonable cost, high added value and strong market competitiveness, closely
combining market demand and future technological development, considering the characteristics of its own production
line, and developing marketable products New product. Successfully developed cold-rolled complex-phase steel CP980,
filled the blank in the production of cold-rolled complex-phase steel, and seized the high-end product market; oil drills
used steel series products to achieve mass supply in the international market, and E4340 steel was successfully replaced
by continuous casting instead of die casting production and such replacement of imported high-end products was the first
case in China. Strengthen cooperation with Northeastern University and other universities and research institutes, invite
national academicians and authoritative experts to jointly discuss the latest technological progress and industry
development trends, and direct and to promote high-quality development. Bengang Steel Plate Co., Ltd. was identified as
"the first batch of high-value patent cultivation centers in Liaoning Province".
(3) Production and operation work. Adhere to the focus on smooth operation, cost, and quality, carry out hidden danger
investigations, benchmark potential, increase efficiency and reduce consumption in each process, and promote stable and
high output. Further optimize the production organization, give full play to the role of dispatching, command and
coordination, scientifically and efficiently organize the comprehensive balance of various production, and steadily
promote the work of reducing costs and increasing efficiency. Adhere to the implementation of the cost management and
control system and the daily settlement mechanism, carry out comprehensive benchmarking and process cost analysis,
and achieve dynamic management and control of key indicators and cost operations.
(4) Party building and group work. Earnestly implement the arrangements of the Party Central Committee, the Provincial
Party Committee, and the company’s party committees, and carry out the activities of "Grassroots Party Building Work
Construction Year" and "Grassroots Party Building System Implementation Year". Revise and improve the party building
work system, strengthen the education and management of party members, and the standardization and standardization
of grassroots party organizations have been continuously improved. Organize the "Craftsman Cup" employee vocational
skills competition and the "Ankang Cup" competition to continuously stimulate the labor enthusiasm and innovation
vitality of the majority of employees.
(5) People's livelihood and social responsibility. The multi-dimensional parking lot project at Gate 4 added 251 parking
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Bengang Steel Plates Co., Ltd. Annual Report 2020
spaces; the bus in the factory was put into operation, which met the commuting and parking needs of employees to the
greatest extent. Fully implement the three-year special rectification action for safety production, adhere to the
management and control of major hazards and risk points, carry out the "clearing" of potential accidents, adhere to the
"anti-three violations", and establish a sound safety assessment and evaluation system.
II. Main Business Analysis
1. General
For relevant information please refer to “Management Discussion and Analysis 1. General”.
2. Income and Cost
(1) Breakdown of Operating Income
Unit: Yuan
2020 2019 Change over last
Amount Proportion Amount Proportion year
Total operating income 48,684,792,685.58 100% 52,741,353,582.28 100% -7.69%
By industries
Industry 48,684,792,685.58 100.00% 52,741,353,582.28 100.00% -7.69%
By products
Steel plate 45,321,849,577.55 93.09% 46,805,252,792.90 88.74% -3.17%
Others 3,362,943,108.03 6.91% 5,936,100,789.38 11.26% -43.35%
By regions
Northeast 20,420,940,894.42 41.95% 20,024,243,641.60 37.97% 1.98%
North China 1,608,496,520.50 3.30% 5,084,223,402.71 9.64% -68.36%
East China 21,783,663,312.31 44.74% 20,568,857,942.71 39.00% 5.91%
Northwest 48,736,790.89 0.10% 57,451,092.38 0.11% -15.17%
Southwest 241,981,145.95 0.50% 232,028,336.48 0.44% 4.29%
Central south 25,508,604.19 0.05% 26,564,062.51 0.05% -3.97%
Export 4,555,465,417.32 9.36% 6,747,985,103.89 12.79% -32.49%
(2) Industry, Product and Regions Accounting for the Company’s Operating Income or Profit over 10%
√ Applicable □ Not applicable
Unit: Yuan
Operating income Operating costs Gross margin
Operating income Operating costs Gross margin change over last change over last change over last
year year year
By industries
Industry 48,684,792,685.58 46,392,180,562.59 4.71% -7.69% -5.73% -1.98%
By products
Steel plate 45,321,849,577.55 43,322,474,075.93 4.41% -3.17% -1.32% -1.79%
Others 3,362,943,108.03 3,069,706,486.66 8.72% -43.35% -42.20% -1.81%
By regions
Northeast 20,420,940,894.42 19,414,606,651.84 4.93% 1.98% 4.48% -2.27%
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Bengang Steel Plates Co., Ltd. Annual Report 2020
North China 1,608,496,520.50 1,526,943,028.55 5.07% -68.36% -67.91% -1.35%
East China 21,783,663,312.31 20,791,821,739.26 4.55% 5.91% 8.27% -2.09%
Northwest 48,736,790.89 46,538,965.99 4.51% -15.17% -14.06% -1.24%
Southwest 241,981,145.95 231,749,437.80 4.23% 4.29% 6.74% -2.20%
Central south 25,508,604.19 24,194,939.67 5.15% -3.97% -2.56% -1.37%
Export 4,555,465,417.32 4,356,325,799.48 4.37% -32.49% -31.64% -1.20%
Operating data of recent one year according to adjusted statistics caliber at the year-end in the case that the Company's main business
statistics caliber has changed during the reporting period
□ Applicable √Not applicable
(3) Whether the Company’s Physical Sales Income Exceeded Service Income
√ Yes □ No
Change over last
Industry classification Item Unit 2020 2019
year
Sales ton 12,968,385.12 12,936,378.68 0.25%
Steel rolling processing
Production ton 12,940,697.06 12,753,498.73 1.47%
industry
Inventory ton 489,522.19 461,834.13 6.00%
The main reasons that the relevant data changed more than 30%
□ Applicable √ Not applicable
(4) Performance of Significant Sales Contract Signed-up in this Reporting Period
□ Applicable √ Not applicable
(5) Breakdown of Operating Cost
Industry classification
Unit: Yuan
Industry 2020 2019 Change over last
Item
classification Amount Proportion Amount Proportion year
Steel rolling
Raw material 23,138,475,447.81 49.88% 24,287,695,988.38 49.35% 0.52%
processing industry
Steel rolling Supplementary
2,089,395,547.62 4.50% 2,244,278,919.58 4.56% -0.06%
processing industry materials
Steel rolling Spare parts and
737,780,144.94 1.59% 792,470,544.15 1.61% -0.02%
processing industry tools
Steel rolling
Fuel 12,727,140,058.39 27.43% 13,563,168,678.04 27.56% -0.13%
processing industry
Steel rolling
Energy 2,687,362,561.57 5.79% 2,886,572,220.88 5.87% -0.07%
processing industry
Steel rolling Salary and
1,980,205,516.91 4.27% 2,132,408,812.44 4.33% -0.06%
processing industry benefits
Steel rolling
Depreciation 2,191,070,638.31 4.72% 2,474,423,868.41 5.03% -0.31%
processing industry
Steel rolling
Others 840,750,647.04 1.81% 830,395,613.74 1.69% 0.12%
processing industry
Steel rolling
Total 46,392,180,562.59 100.00% 49,211,414,645.62 100.00% 0.00%
processing industry
13
Bengang Steel Plates Co., Ltd. Annual Report 2020
(6) Whether Changes Occurred in Consolidation Scope in the Reporting Period
□ Yes √No
(7) Relevant Information of Significant Changes or Adjustment of the Business, Product or Service in the
Reporting Period
□ Applicable √ Not applicable
(8) Information of Main Customers and Main Suppliers
Information of the Company’s main customers
Total sales amount of the top five customers (Yuan) 9,461,208,019.24
Total sales amount of the top five customers accounted for the proportion of total
19.43%
annual sales
The proportion of the total sales of the related parties in the top five customers 3.35%
Information of the top 5 customers
No Name Amount (Yuan) Proportion
1 Ouyeel Cloud Trade Co., Ltd. 3,427,597,868.74 7.04%
2 Benxi Beiying Steel & Iron (Group) Co., Ltd. 1,631,630,570.63 3.35%
3 Xiamen Jian Fa Metal Co., Ltd. 1,561,111,934.43 3.21%
4 Ningbo AUX Trade Co., Ltd. 1,492,384,207.69 3.07%
Shanghai Min Xing Da International Trade Co.,
5 1,348,483,437.75 2.77%
Ltd.
Total -- 9,461,208,019.24 19.43%
Other information of principal customers
□ Applicable √ Not applicable
Information of the Company’s main suppliers
Total purchase amount of the top five suppliers (Yuan) 20,250,289,490.17
Total purchase amount of the top five suppliers accounted for the proportion of
43.65%
total purchase
The proportion of the total purchase of the related parties in the top five suppliers 34.29%
Information of the top 5 suppliers
No. Name Amount (Yuan) Proportion
1 Benxi Beiying Steel & Iron (Group) Co., Ltd. 5,482,888,445.65 11.82%
Bengang Group International Economic and
2 5,237,730,233.06 11.29%
Trading Co., Ltd.
3 Benxi Steel & Iron (Group) Mining Co., Ltd. 5,186,341,981.67 11.18%
Liaoning Electric Power Co., Ltd. Benxi Electric
4 2,489,089,422.71 5.37%
Power Supply Company
5 Heilongjiang Dragon Coal Group Co., Ltd. 1,854,239,407.08 4.00%
Total -- 20,250,289,490.17 43.65%
Other information of principal suppliers
□ Applicable √ Not applicable
3. Expenses
Unit: Yuan
Notes to significant
2020 2019 Change over last year
change
14
Bengang Steel Plates Co., Ltd. Annual Report 2020
Due to the application of
Selling and distribution expenses 97,279,280.21 1,096,688,903.70 -91.13%
new revenue standard
General and administrative expenses 792,826,294.81 831,945,841.56 -4.70%
Loss of exchange
decreases and interest
Financial expenses 364,775,155.62 681,842,689.23 -46.50%
income increases during
the current period
Research and development expenses 37,989,623.28 30,780,463.74 23.42%
4. Research and Development Input
√ Applicable □ Not applicable
Comprehensively improve the level of innovation and the ability to generate profits and increase efficiency, strengthen variety
adjustment and market development, improve product quality stability and assurance capabilities, promote low-cost and green
manufacturing technology, and determine the company's technology project plan based on the three elements of variety, quality and
cost. ; Promote school-enterprise cooperation and industry-university-research cooperation, promote the transformation of scientific
and technological achievements of universities and scientific research institutes, and drive technological development of enterprises;
plan to develop 30 new products and more than 10 foreign cooperation projects throughout the year; The quality has been significantly
improved due to the increased R&D investment and some products have reached the leading domestic level, which has improved
corporate profitability.
Information of research and development input by the company
2020 2019 Change over last year
Number of Research and
1,732 1,632 6.13%
Development personnel
Proportion of number of
Research and Development 10.34% 9.18% 1.16%
personnel
Amount of Research and
Development Investment (In 1,541,000,000.00 1,287,080,000.00 19.73%
RMB)
Proportion of Research and
Development investment to 3.17% 2.44% 0.73%
operating income
Amount of capitalized Research
0.00 0.00 0.00%
and Development investment
Proportion of capitalized
Research and Development
investment accounted to total 0.00% 0.00% 0.00%
Research and Development
investment
Illustrations of the prominent change in proportion of research and development input occupying the operating income over same
period last year
□ Applicable √ Not applicable
Illustrations of significant change in the research and development input’s capitalization rate and its reasonableness
□ Applicable √ Not applicable
5. Cash Flow
Unit: Yuan
Item 2020 2019 Change over last year
Subtotal of cash inflows from
40,062,379,161.40 48,140,957,956.69 -16.78%
operating activities
Subtotal of cash outflows from
42,101,379,374.69 41,163,133,915.53 2.28%
operating activities
Net cash flows from operating -2,039,000,213.29 6,977,824,041.16 -129.22%
15
Bengang Steel Plates Co., Ltd. Annual Report 2020
activities
Subtotal of cash inflows from
14,037,738.77 53,984,827.07 -74.00%
investing activities
Subtotal of cash outflows paid
6,213,928,829.62 4,598,859,687.86 35.12%
for investing activities
Net cash flows from investing
-6,199,891,090.85 -4,544,874,860.79 36.42%
activities
Subtotal of cash inflows from
22,997,390,314.56 17,484,678,971.97 31.53%
financing activities
Subtotal of cash outflows from
18,941,067,286.47 18,304,173,598.95 3.48%
financing activities
Net cash flows from financing
4,056,323,028.09 -819,494,626.98 234.80%
activities
Net increase in cash and cash
-4,211,997,393.46 1,688,866,366.61 -349.40%
equivalents
Illustrations of key factors of significant changes over same period last year
√ Applicable □Not applicable
Notes:
(1) Net cash flows generated from operating activities decreased 129.22% compared to the previous period, mainly
because the increase of cash received from sales of goods is less than the increase of cash paid for goods.
(2) Subtotal of cash inflows from investing activities decreased 74% compared to the previous period, mainly because
the decrease of cash withdrawn from purchase of financial products.
(3) Subtotal of cash outflows from investing activities increased 35.12% compared to the previous period, mainly
because the increase of cash paid for investment.
(4) Net cash flows from investing activities increased 36.42% compared to the previous year, mainly because the increase
of cash paid for investment.
(5) Subtotal of cash outflows from financing activities increased 3.48% compared to the previous period, mainly because
the increase of cash repayment.
(6) Net cash flows from financing activities increased 234.8% compared to the previous period, mainly because the
issuance of convertible corporate bonds in the current period.
Illustrations of significant difference between cash flow from operating activities and net profit during the reporting period
□ Applicable √Not applicable
III. Analysis of Non-core Business
√Applicable □ Not applicable
Unit: Yuan
Amount Proportion in total profit Explanation of cause Whether sustainable
Investment income 13,951,362.33 3.35% Due to external equity investment No
Due to provision of impairment of
Impairment of assets -67,185,869.37 -16.12% No
finished products
Due to income raised from
Non-operating income 4,328,563.52 1.04% No
scrapping of non-current assets
Due to scrapping of assets in
Non-operating expenses 95,724,280.44 22.96% No
current period
IV. Assets and Liabilities
1. Significant Change of Assets Components
Adjustment to the beginning balance of the current period due to the first adoption of new revenue standards or new leasing standards
since 2020
√ Applicable □ Not applicable
Unit: Yuan
16
Bengang Steel Plates Co., Ltd. Annual Report 2020
Ending balance of 2020 Beginning balance of 2020
Notes to
Proportion in Proportion in Proportion
significant
Amount the total assets Amount the total assets change
change
(%) (%)
Cash at bank and on
13,126,666,915.26 20.19% 18,415,844,397.77 30.32% -10.13%
hand
Accounts receivable 245,217,182.66 0.38% 235,696,265.66 0.39% -0.01%
Inventories 9,040,065,342.65 13.91% 7,700,397,685.61 12.68% 1.23%
Long-term equity
0.00% 0.00%
investment
Fixed assets 2,742,064.73 0.00% 2,642,998.70 0.00% 0.00%
Construction in
26,284,567,956.44 40.43% 26,123,375,492.40 43.01% -2.58%
process
Short-term loans 1,839,933,715.58 2.83% 1,833,853,572.58 3.02% -0.19%
Long-term loans 10,067,731,000.00 15.49% 13,151,478,000.00 21.66% -6.17%
3,502,934,427.65 5.39% 4,849,675,910.73 7.99% -2.60%
2. Assets and Liabilities Measured at Fair Value
√ Applicable □ Not applicable
Unit: yuan
Profit and
Accumulated
loss from Purchase
fair value Impairment Sales amount
Beginning changes in amount Other Ending
Item changes accrued in the during the
balance fair value in during the changes balance
recognised in current period current period
the current current period
equity
period
Financial
assets
4.Other equity
1,042,024,829 1,042,024,8
instrument
.00 29.00
investments
Subtotal of
1,042,024,829 1,042,024,8
financial
.00 29.00
assets
1,042,024,829 1,042,024,8
Total
.00 29.00
Financial
0.00 0.00
liabilities
3. Restricted Assets by the End of the Period
Items Ending balance Reason
Cash at bank and on hand 3,897,249,320.14 Deposit for notes and L/C
Accounts receivable financing 887,473,044.29 Pledged for acceptance bill
Other equity instrument investments 1,037,735,849.00 Pledged for loans
Fixed assets 94,790,118.09 Mortgage for fund lending
Intangible assets 37,116,386.66 Mortgage for fund lending
Total 5,954,364,718.18
17
Bengang Steel Plates Co., Ltd. Annual Report 2020
V. Investment
1. General
□ Applicable √ Not applicable
2. Acquiring Significant Equity Investment in the Reporting Period
□ Applicable √ Not applicable
3. Undergoing Significant Non-equity Investment in the Reporting Period
□ Applicable √ Not applicable
4. Investment of Financial Assets
(1) Investment in Securities
□ Applicable √ Not applicable
There was no investment in securities during the reporting period.
(2) Investment in Derivatives
□Applicable √ Not applicable
There was no investment in derivatives during the reporting period.
5. Use of Raised Funds
√ Applicable □ Not applicable
(1) Use of Raised Funds
√Applicable □ Not applicable
Unit: 10 thousand yuan
The
total
amount
Cumulativ The
of funds Cumulativ Amount of
e purpose
Used The total raised e total The total funds
proportion and
Way of Total amount amount of used for amount of amount of raised after
of total destination
Year raising of raised raised amount of change funds funds being idle
raised of the
funds funds fund this funds of raised for raised not for more
funds for raised
year raised purpose change of used than two
changes of funds not
during purpose years
purposes yet used
the
reportin
g period
Private
placement
2018 396,580 9,390.49 327,758.9 68,821.1 Deposit
to raise
funds
Issue of
246,295.9 246,295.9
2020 convertibl 675,920 429,624.03 Deposit
7 7
e bonds
255,686.4 574,054.8
Total -- 1,072,500 0 0 0.00% 498,445.13 -- 0
6 7
18
Bengang Steel Plates Co., Ltd. Annual Report 2020
Description of the overall use of raised funds
1. The company's use of idle raised funds to temporarily supplement working capital does not involve changing the use of raised
funds in disguised form or affecting the normal progress of the investment plan of raised funds. The sponsor of the company's non-
public offering agreed to the company's use of idle raised funds to temporarily supplement liquidity and issued the "Guotai Junan
Securities Co., Ltd. Verification Opinions on the Company's Use of Idle Raised Funds to Supplement Liquidity Provisionally".
As of July 27, 2020, the company has returned the above-mentioned idle raised funds of RMB 666,000,000.00 for temporary
supplementary liquidity to the company's special account for raised funds.
The funds raised from the non-public offering of shares in July 2020 for temporarily supplement working capital
The company used idle raised funds of RMB 666,000,000.00 (RMB 370,000,000.00 for the cold-rolled high-strength steel
transformation project and RMB 296,000,000.00 for the third cold-rolling plant hot-dip galvanizing production line project) to
temporarily supplement the working capital. The 4th meeting and the 12th meeting of the 8th Board of Supervisors reviewed and
approved. The independent directors of the company have issued clear opinions and fulfilled the necessary decision-making
procedures. The use of idle raised funds to temporarily supplement liquidity matters will not change the use of raised funds or affect
the normal progress of the investment plan with raised funds, there is no situation that harms the interests of shareholders, and the
time for a single replenishment of liquidity does not exceed 12 months. The company has promised not to use idle raised funds for
high-risk investments, which is in line with "Guidelines for the Supervision of Listed Companies". No.-Regulatory Requirements for
the Management and Use of Funds Raised by Listed Companies”, the “Shenzhen Stock Exchange Stock Listing Rules” and the
“Guidelines for the Normative Operation of Listed Companies on the Main Board of the Shenzhen Stock Exchange” and other
relevant laws, regulations and regulatory documents.
The company's use of idle raised funds to temporarily supplement working capital does not involve changing the use of raised funds
in disguised form or affecting the normal progress of the investment plan of raised funds. The sponsor of the company's non-public
offering agreed to the company's use of idle raised funds to temporarily supplement working capital and issued the "Guotai Junan
Securities Co., Ltd. Verification Opinions on the Company's Use of Idle Raised Funds to Supplement Liquidity Provisionally". As of
December 31, 2020, the company used idle funds raised from non-public issuance of stocks to temporarily supplement the balance
of working capital of RMB 666,000,000.00.
2. The temporary supplement of liquidity with funds raised from the public issuance of convertible corporate bonds
The company uses idle raised funds of 4,180,000,000.00 yuan (high grade high magnetic induction non-oriented silicon steel project
1,010,000,000.00 yuan, steelmaking plant No. 8 caster project 220,000,000.00 yuan, ironmaking plant No. 5 blast furnace capacity
replacement project 800,000,000.00 yuan, special steel electric furnace upgrade and transformation project 1,300,000,000.00 yuan,
CCPP power generation project 700,000,000.00 yuan, steelmaking plant No. 4-6 converter environmental protection renovation
project 150,000,000.00 yuan) temporary supplement of working capital matters. The fourteenth meeting of the eighth board of
directors of the company held on July 28, 2020, Deliberated and approved at the 12th meeting of the 8th Board of Supervisors, the
independent directors of the company have issued clear consent and fulfilled the necessary decision-making procedures. This time
the use of idle raised funds to temporarily supplement liquidity matters will not change the use of raised funds or affect normal plan
of the investment of raised funds. There is no situation that harms the interests of shareholders, and the time for a single replenishment
of liquidity does not exceed 12 months. The company has promised not to use idle raised funds for high-risk investments, which
complies with the "Guidelines for Supervision of Listed Companies No. 2-Listed Companies The regulatory requirements for the
management and use of raised funds”, the “Shenzhen Stock Exchange Stock Listing Rules”, and the “Guidelines for the Normative
Operation of Listed Companies on the Main Board of the Shenzhen Stock Exchange” and other relevant laws, regulations and
regulatory documents.
The company's use of idle raised funds to temporarily supplement working capital does not involve changing the use of raised funds
in disguised form or affecting the normal progress of the investment plan of raised funds. The sponsor of the company’s public
issuance of convertible corporate bonds agreed to the company's use of idle raised funds to temporarily supplement liquidity and
issued the "Guotai Junan Securities Co., Ltd. Verification Opinions on the Company's Use of Idle Raised Funds to Supplement
Liquidity Provisionally".
As of December 31, 2020, the company used idle funds raised from the public issuance of convertible corporate bonds to temporarily
supplement the balance of working capital of RMB 4,180,000,000.00.
3. Use of surplus funds raised
During the reporting period, the company did not use surplus funds raised.
4. The use of over-raised funds
During the reporting period, the company did not use over-raised funds.
5. Purpose and destination of unused raised funds
As of December 31, 2020, the company has excluded the aforementioned "Preliminary Investment and Replacement of Raised Funds
Investment Projects", "Present Investment and Replacement of Funds Raised in Investment Projects with Idle Raised Funds" and
"Use of Idle Raised Funds for Temporary Supplement of Working Capital". Except for the temporary supplement of working capital,
the remaining funds raised are temporarily stored in a special account for raised funds.
6. Other usage of raised funds
During the reporting period, the company had no other use of raised funds.
7. Change the use of funds for investment projects with raised funds
During the reporting period, the company's investment projects with raised funds remained unchanged.
8. Problems in the use and disclosure of raised funds
During the reporting period, the company strictly followed the "Shenzhen Stock Exchange Stock Listing Rules", the "Guidelines for
19
Bengang Steel Plates Co., Ltd. Annual Report 2020
the Standardized Operation of Companies Listed on the Main Board of the Shenzhen Stock Exchange (Revised in 2015)" (Shenzheng
Shang [2015] No. 65) and the company's "Raise Funds" Management System" and other relevant regulations manage the special
account of raised funds, and the investment projects of raised funds will be implemented as planned. The use and management of the
company's raised funds are legal and effective, and it has strictly fulfilled its information disclosure obligations. There is no untimely,
untrue, incorrect, or incomplete disclosure, and there is no violation of the management of raised funds.
9. Approval of special report
This special report was approved by the board of directors on April 26, 2021.
(2) Fundraising commitments
√Applicable □ Not applicable
Unit: 10 thousand yuan
Accumul Investme
Whether Date of Whether
Total ated nt
the Raised Amount the Benefits Whether the
amount investme
project funds invested progress project achieved the project
Committed investment of nt
has been promised during as of the reaches during expected feasibility
projects and over- investme amount
changed total the end of the the the benefits has
raised funds nt after as of the period
(includin investme reporting expected reporting are changed
adjustme end of the
g partial nt period (3)＝ usable period achieved significan
nt (1) period
changes) (2)/(1) status tly
(2)
Committed invested projects
High Strength Cold
187,466.2
Rolling Steel No 226,580 226,580 9,390.49 82.74% 31.12.2017 5,357.65 No No
9
Renovation Project
The Third Cold Rolling
Work Hot-Dip
Galvanizing No 70,000 70,000 40,292.61 57.56% 31.12.2018 8,490.1 No No
Production Line
Project
Not
Repayment of bank
No 100,000 100,000 100,000 100.00% applicabl No
loans
e
High grade, high
Not
magnetic induction
No 101,620 101,620 123 123 0.12% applicabl No
non-oriented silicon
e
steel project
Steelmaking Plant No.
8 Casting Machine No 33,500 33,500 9,864.44 9,864.44 29.45% 31.10.2020 2,819.04 No No
Project
Capacity Replacement
Project of No. 5 Blast
No 96,000 96,000 13,322.74 13,322.74 13.88% 31.11.2020 -3,749.14 No No
Furnace in Ironmaking
Plant
Special Steel Electric Not
Furnace Upgrade No 141,600 141,600 11,703.34 11,703.34 8.27% applicabl No
Project e
Not
CCPP power
No 83,300 83,300 9,570.15 9,570.15 11.49% applicabl No
generation project
e
Steelmaking plant No.
4-6 converter
environmental No 19,900 19,900 1,712.3 1,712.3 8.60% 31.12.2020 No No
protection renovation
project
Not
Repayment of bank
No 200,000 200,000 200,000 200,000 applicabl No
loans
e
20
Bengang Steel Plates Co., Ltd. Annual Report 2020
255,686.4 574,054.8
Subtotal -- 1,072,500 1,072,500 -- -- 12,917.65 -- --
6 7
Over-raised funds
Not applicable No
255,686.4 574,054.8
Total -- 1,072,500 1,072,500 -- -- 12,917.65 -- --
6 7
1. The market environment has undergone major changes. Although the cold-rolled high-strength steel
transformation project and the third cold-rolling plant hot-dip galvanizing production line project have
basically reached production capacity and profitability has improved, there is still a need to steadily
Situation and cause of increase the production of high value-added products. More customers recognized the new line of
failure to meet planned products.
progress or projected 2. The No. 8 caster engineering project of the steelmaking plant reached the expected usable state in
earnings (disclosed by October 2020, and the capacity is in the ramp-up phase this year, and the expected profit in this period has
project) not been reached; the capacity replacement project of the No. 5 blast furnace of the iron smelting plant
reached the expected usable status in November 2020. This year is in a ramp-up phase of production
capacity, and after considering the provision for impairment of assets related to the replacement capacity of
the original No. 5 blast furnace, the expected profit has not been reached in this period.
Description of major
changes in project None.
feasibility
Amount, use and Not applicable
progress of usage of
over-raised funds
Change in the Not applicable
implementation
location of the raised
funds investment
project
Adjustment of Not applicable
implementation
methods of fund-
raising investment
projects
The initial investment Applicable
and replacement of the
fundraising investment Refer to the Contents in Special Report III 3
project
Temporary Applicable
replenishment of
working capital with Refer to the Contents in Special Report III 4
idle raised funds
The amount and reason Applicable
for the rest of raised
fund in the project There was no surplus of funds raised for project implementation this year.
implementation
Use and destination of
raised funds that have Refer to the Contents in Special Report III 7
not been used
Problems or other
situations in the use
None.
and disclosure of raised
funds
(3) The situation for raised funds change project
□ Applicable √ Not applicable
During the reporting period, the company did not have any changes in the fundraising project.
21
Bengang Steel Plates Co., Ltd. Annual Report 2020
VI. Significant Assets and Equity Sold in Reporting Period
1. Significant Assets Sold
□ Applicable √ Not applicable
There was no significant asset sold during the reporting period.
2. Substantial Equity Sold
□ Applicable √ Not applicable
VII. Analysis on Main Subsidiaries and Share Participating Companies
√ Applicable □ Not applicable
Main subsidiaries and the joint-stock companies influencing over 10% net profit of the Company
Unit: Yuan
Company Main Registered Operating Operating
Company Name Total assets Net assets Net Profit
type business capital income profit
Bengang
Processing
Puxiang Cool 1,920,000,000 5,184,119,484. 2,024,536,003 7,327,060,880
Subsidiaries and sales 56,003,512.60 42,005,550.17
Rolling Steel .00 86 .56 .66
of steel
Sheet Co., Ltd.
Acquirement and disposal of subsidiaries during the reporting period
□ Applicable √ Not applicable
Illustration of main joint-stock companies
None
VIII. Structure Entities controlled by the Company
□ Applicable √ Not applicable
IX. Prospect for Future Development of the Company
(1) The development trend of the industry and the market competition pattern the company faces
In 2021, from the perspective of the international economic situation, there are many uncertainties in the changes in the
epidemic and the external environment. Next year, the world economic situation will remain complex and severe, the
recovery will be unstable and uneven, and various derivative risks caused by the impact of the epidemic cannot be ignored.
From the perspective of the domestic economic situation, China will enter the "14th Five-Year Plan" period, and creating
a new pattern of "dual cycles" will be the main strategic direction, and "expansion of domestic demand" has become an
important strategic basis. At present, China has become the only major economy in the world to achieve positive economic
growth. The three major battles have made decisive achievements. The rapid economic recovery will drive a significant
increase in steel demand. At the same time, we must also see that steel production maintains high strength under the
expected upward pull of demand, high steel inventories are running high, steel prices are under pressure, and other issues
are more prominent, and it is also very difficult for companies to improve economic efficiency. Therefore, we must
maintain a clear understanding, fully implement the national "revitalizing the Northeast" decision and deployment, firmly
grasp the development opportunities of "digital Liaoning, intelligent building a strong province", give full play to the
22
Bengang Steel Plates Co., Ltd. Annual Report 2020
advantages of resources, location and other advantages, maintain strategic determination, and actively Responding to
market changes, we insist on focusing on economic benefits, improve quality and increase production, reduce costs and
increase efficiency, and ensure that the company achieves higher-quality development.
(2) Company development strategy
The overall work plan for 2021: guided by Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era,
thoroughly study and implement the spirit of the 19th National Congress of the Communist Party of China and the 2nd,
3rd, 4th, and 5th Plenary Sessions of the 19th National Congress of the Communist Party of China, and earnestly
implement the Party Central Committee and the State Council , Provincial and municipal epidemic prevention and control
and the "six stability" and "six guarantees" work requirements, comprehensively strengthen the party's leadership,
standardize corporate governance, and adhere to the principle of benefit-centered and technological innovation on the
basis of normalizing epidemic prevention and control As a guide, with deepening reform as the driving force, and with
stable and high output as the guarantee, we will strive to achieve a high starting point for the 14th Five-Year Plan.
(3) Business plan
The overall goal of production and operation in 2021: Strive to complete 10.76 million tons of pig iron, 11.303 million
tons of crude steel, 13.797 million tons of hot-rolled plates, 5.82 million tons of cold-rolled plates (deducting 200,000
tons of chilled internal supply), and 700,000 tons of special steel, Safety production realizes "three for zero".
In order to achieve the above goals, we will focus on the following aspects:
1. Promote the construction of smart enterprises and achieve higher quality development
2. Strengthen safety management and realize energy-saving and green development
3. Adhere to the innovation-driven strategy and promote the construction of smart factories
4. Consolidate various basic management and enhance corporate management efficiency
5. Unswervingly deepen reforms and stimulate the vitality of enterprise development
6. Adhere to the leadership of the party to the enterprise and provide strong political guarantee
(4) Maintain the current business and complete the funding arrangements required for the investment projects under
construction
The company will use its own funds and bank loans to meet the funds required for production and operation and
technological transformation.
(5) Possible risks
1. The risk of raw material price fluctuations
Risk: The company's main raw materials, iron ore, coal, etc., fluctuate greatly. In particular, iron ore prices continued to
rise during the reporting period, which had a greater impact on the company's profitability.
Response measures: In terms of bulk raw material procurement, make efforts in market analysis and judgment, increase
the inventory through low-cost bulk material purchases, and strive to reduce procurement costs; adjust the inventory
23
Bengang Steel Plates Co., Ltd. Annual Report 2020
structure to improve inventory turnover; solidly carry out cost reduction and efficiency enhancement work, and actively
promote the enterprise Competitiveness: Set research index items for the weak links and bottlenecks that affect the level
of the index, clarify the research goals, measures, time points, and responsible persons, and steadily advance the index
improvement.
2. Risks of prevention and control of the COVID-19 epidemic
Risk: Since the outbreak of the COVID-19 in early 2020, the prevention and control of the epidemic has been continuing
nationwide. With a series of strong epidemic prevention and control measures adopted by governments at all levels,
domestic epidemic prevention and control has been effectively controlled, and various economic activities have gradually
resumed, but overseas epidemics are still continuing and facing greater uncertainty. The company will effectively
implement the government's requirements for epidemic prevention and control, and strengthen support for epidemic
prevention and control, so as to reduce the impact of the epidemic on the company's normal production and operation
activities.
Response measures: Establish various strict and normalized epidemic prevention and control mechanisms, strengthen the
publicity of all employees' health knowledge related to the epidemic, and highlight the supervision and inspection of
internal epidemic prevention and control.
3. Environmental risks
Risk: The country promotes carbon peaking and carbon neutrality. The steel industry is one of the important areas in my
country to achieve emission reduction and carbon reduction. The industry faces more requirements for carbon emission
restriction mechanisms and low-carbon development, making the company face greater environmental pressure.
Countermeasures: Optimize the production process and further improve the recycling rate of various energy sources. Pay
attention to various national environmental protection policies, improve corporate environmental protection standards,
and make them meet and appropriately exceed national standards. Strengthen the self-supervision and inspection of the
company's various pollution sources and strengthen the environmental protection awareness of all employees. Accelerate
the construction progress of the identified environmental protection projects to ensure that the national environmental
protection requirements are met.
4. Market risk
Risks: The competition in the steel industry is fierce, and the industry concentration is accelerating, driven by national
policies and the market. At the same time, due to the continued overseas epidemic, the export business is facing more
challenges, and the company is facing fierce market competition risks.
Response measures: increase the development of new products, increase investment in technology research and
development, optimize product structure, and increase the market share of core products; comprehensively improve
management, improve management energy efficiency, reduce operating costs, and increase profitability; improve the
marketing service system and continue to optimize the company's marketing strategy to enhance brand influence.
24
Bengang Steel Plates Co., Ltd. Annual Report 2020
X. Researches, visits and interviews received in this reporting period
1. Registration form of researches, visits and interviews received in this reporting period
□ Applicable √ Not applicable
During the reporting period, the Company did not receive any research, communication, interviews and other activities.
25
Bengang Steel Plates Co., Ltd. Annual Report 2020
V. Important Events
I. Profit Distribution or Capital Reserve Conversion
Formulation, implementation and adjustment of profit distribution policy of common shares especially cash dividend
policy during the reporting period
√ Applicable □ Not applicable
As audited by BDO China Shu Lun Pan Certified Public Accountants LLP., the company's net profit attributable to the
parent company in 2020 is RMB 384,252,740.78, plus the undistributed profit at the beginning of the year of RMB
2,307,765,664.6, and the undistributed profit at the end of the year is RMB 2,692,018,405.40.
Profits distribution plan of 2019: based on the company’s existing share capital of 3,875,371,532 shares, a cash dividend
of 0.1 yuan (including tax) will be distributed to all shareholders for every 10 shares. The proposed distribution of ordinary
share dividends is RMB 38,753,715.32, and the remaining RMB 2,653,264,690.08 will be carried forward to the next
year’s undistributed profits.
Special description of cash dividend policy
Whether it meets the requirements of the company's articles of
Yes
association or the resolutions of the shareholders meeting:
Whether the dividend standard and ratio are clear: Yes
Whether the relevant decision-making procedures and
Yes
mechanisms are complete:
Whether independent directors have performed their duties due
Yes
diligence and played their due role:
Whether small and medium shareholders have sufficient
opportunities to express their opinions and demands, and whether Yes
their legitimate rights and interests are fully protected:
If the cash dividend policy is adjusted or changed, whether the
Yes
conditions and procedures are compliant and transparent:
The profit distribution plan or proposal and the plan or proposal of conversion of the capital reserve into share capital in
recent three years (including the reporting period)
1. Profit distribution proposal of 2020
As audited by BDO China Shu Lun Pan Certified Public Accountants LLP., the company's net profit attributable to the
parent company in 2020 is RMB 384,252,740.78, plus the undistributed profit at the beginning of the year of RMB
2,307,765,664.62, and the undistributed profit at the end of the year is RMB 2,692,018,405.40.
Based on the company’s existing share capital of 3,875,371,532 shares, a cash dividend of 0.1 yuan (including tax) will
be distributed to all shareholders for every 10 shares. The proposed distribution of ordinary share dividends is RMB
38,753,715.32, and the remaining RMB 2,653,264,690.08 will be carried forward to the next year’s undistributed profits.
2. Profit distribution proposal of 2019
As audited by BDO China Shu Lun Pan Certified Public Accountants LLP., the net profit attributable to the parent
company of the year 2019 was RMB 555,646,971.4. After adding the retained profit of RMB 1,945,887,269.82 at the
beginning of the year, and deducting the actual dividend of RMB 193,768,576.6 from the previous year, the balance of
undistributed profit was RMB 2,307,765,664.62.
Profits distribution plan of 2019:
Considering the uncertainty of the Coronavirus on the economy, the company did not make profit distribution or convert
the provident fund into capital in 2019.
3. Profit distribution proposal of 2018
As audited by BDO China Shu Lun Pan Certified Public Accountants LLP., the net profit attributable to the parent
26
Bengang Steel Plates Co., Ltd. Annual Report 2020
company of the year 2018 was RMB 1,036,493,236.07. After adding the retained profit of RMB 1,103,162,610.35 at the
beginning of the year, and deducting the actual dividend of RMB 193,768,576.6 from the previous year, the balance of
undistributed profit was RMB 1,945,887,269.82.
Profits distribution plan of 2018: The company will take existing share capital 3,875,371,532 shares as the base,
distributing cash dividends RMB 0.5 per 10 shares (including tax) to shareholders. The company plans to distribute
RMB193,768,576.60 dividends of ordinary shares, and the remaining RMB 1,752,118,693.22 will be carried over to next
year’s undistributed profits.
Cash dividend distribution in recent three years
Unit: Yuan
Ratio in net profit Amount of cash Ratio of cash
Net profit dividends in dividend in other Amount of Proportion
Cash attributable to the
attributable to the other ways way in net profit
dividend parent company in cash of cash
Year parent company in (repurchasing attributable to the dividends in dividends in
(Including the consolidated
the consolidated shares) parent company in other ways other ways
Tax) financial
financial statements the consolidated
statements
financial
statements
38,753,715. 38,753,715.
2020 384,252,740.78 10.09% 0.00 0.00% 9.69%
32 32
2019 0.00 555,646,971.40 0.00% 0.00 0.00% 0.00 0.00%
193,768,576 193,768,576
2018 1,036,493,236.07 18.69% 0.00 0.00% 18.69%
.60 .60
Both the Company’s profit and the parent company’s retained earnings are positive however no proposal of cash dividend distribution
was proposed during the reporting period
□ Applicable √ Not applicable
II. Profit Distribution or Capital Reserve Conversion Proposal in the Reporting Period
√ Applicable □ Not applicable
Number of bonus shares for every 10 shares
0
(shares)
Dividend per 10 shares (yuan) (tax included) 0.1
The base of the share capital of the distribution
3,875,371,532.00
plan (shares)
Cash dividend amount (yuan) (tax included) 38,753,715.32
Cash dividend amount in other ways (such as share
0.00
repurchase) (yuan)
Total cash dividends (including other methods)
0
(yuan)
Distributable profit (yuan) 2,692,018,405.40
The ratio of total cash dividends (including other
0
methods) to total profit distribution
Cash dividend of the current period
If the company's development stage is in the growth period and has major capital expenditure arrangements, when the profit
distribution is carried out, the proportion of cash dividends in this profit distribution should be at least 20%.
Notes to the profit distribution or capital reserve transfer plan
The profit distribution plan or proposal and the plan or proposal of conversion of the capital reserve into share capital
in recent three years (including the reporting period)
1. Profit distribution proposal of 2020
As audited by BDO China Shu Lun Pan Certified Public Accountants LLP., the company's net profit attributable to the
parent company in 2020 is RMB 384,252,740.78, plus the undistributed profit at the beginning of the year of RMB
2,307,765,664.62, and the undistributed profit at the end of the year is RMB 2,692,018,405.40.
27
Bengang Steel Plates Co., Ltd. Annual Report 2020
Profits distribution plan of 2020: based on the company’s existing share capital of 3,875,371,532 shares, a cash dividend
of 0.1 yuan (including tax) will be distributed to all shareholders for every 10 shares. The proposed distribution of
ordinary share dividends is RMB 38,753,715.32, and the remaining RMB 2,653,264,690.08 will be carried forward to
the next year’s undistributed profits.
2. Profit distribution proposal of 2019
As audited by BDO China Shu Lun Pan Certified Public Accountants LLP., the net profit attributable to the parent
company of the year 2019 was RMB 555,646,971.40. After adding the retained profit of RMB 1,945,887,269.82 at the
beginning of the year, and deducting the actual dividend of RMB 193,768,576.6 from the previous year, the balance of
undistributed profit was RMB 2,307,765,664.62.
Profits distribution plan of 2019:
Considering the uncertainty of the Coronavirus on the economy, the company did not make profit distribution or convert
the provident fund into capital in 2019.
3. Profit distribution proposal of 2018
As audited by BDO China Shu Lun Pan Certified Public Accountants LLP., the net profit attributable to the parent
company of the year 2018 was RMB 1,036,493,236.07. After adding the retained profit of RMB 1,103,162,610.35 at
the beginning of the year, and deducting the actual dividend of RMB 193,768,576.6 from the previous year, the balance
of undistributed profit was RMB 1,945,887,269.82.
Profits distribution plan of 2018: The company will take existing share capital 3,875,371,532 shares as the base,
distributing cash dividends RMB 0.5 per 10 shares (including tax) to shareholders. The company plans to distribute
RMB193,768,576.60 dividends of ordinary shares, and the remaining RMB 1,752,118,693.22 will be carried over to
next year’s undistributed profits.
III. Performance of Committed Issues
1. The fulfilled commitments during the reporting period and under-fulfillment commitments by the end of
the period made by actual controller, acquirer, director, supervisor, senior management personnel and other
related parties.
√ Applicable □ Not applicable
Commitment Type of Commitment Commitment
Commitments Contents Performance
party commitment time period
Commitment of shares
reform
Commitment made in the
acquisition report or the
equity change report
Commitment made during
asset restructuring
According to the
relevant regulations of
the China Securities
Regulatory Commission,
all directors and senior
management of the
Company Company have made the
Commitment made during following commitments
directors, Other Under normal
initial public offering or to the Company’s May 22, 2019 Long term
senior commitment fulfillment
refinancing fulfillment of the diluted
management
immediate return
measures: 1. I promise to
perform my duties
faithfully and diligently,
and safeguard the
legitimate rights and
interests of the Company
28
Bengang Steel Plates Co., Ltd. Annual Report 2020
and all shareholders. 2. I
promise not to deliver
benefits to other units or
individuals without
compensation or under
unfair conditions, nor to
use other means to
damage the Company's
interests. 3. I promise to
restrict the position-
related consumption
behavior of company
directors and senior
management personnel.
4. I promise not to use
the Company’s assets to
do investment and
consumption activities
that are not related to the
performance of my
duties. 5. Within the
scope of my
responsibilities and
authority, I promise to
make every effort to
promote the company's
board of directors or the
remuneration system
established by the
remuneration and
appraisal committee to
be linked to the
implementation of the
company's
compensation measures,
and vote in favor of the
relevant proposals
reviewed by the
company's board of
directors and general
meeting (If I have voting
rights). 6. If the company
intends to implement
equity incentives, I
promise to, within my
own responsibilities and
jurisdiction, make every
effort to promote the
Company’s proposed
equity incentive exercise
conditions to be linked to
the Company’s
implementation of the
return measures, and to
review the Company’s
board of directors and
shareholders’ general
meetings and vote in
favor of the relevant
proposals reviewed by
the company's board of
directors and general
meeting (If I have voting
rights). 7. If the future
issuance of this
commitment and the
implementation of the
29
Bengang Steel Plates Co., Ltd. Annual Report 2020
Company’s public
issuance of convertible
corporate bonds are
completed, if the China
Securities Regulatory
Commission makes
other new regulatory
provisions on the
measures for filling
returns and their
commitments, and the
above commitments
cannot meet the
requirements of the
China Securities
Regulatory Commission
When other regulations
are stipulated, a
commitment will be
issued in accordance
with the latest
regulations of the China
Securities Regulatory
Commission. The
company's controlling
shareholder, Benxi Iron
and Steel (Group) Co.,
Ltd., promised not to
interfere with the
company's operation and
management activities
beyond its authority and
not to infringe on the
Company's interests.
The sales companies of
Bengang International
Trade Co., Ltd. and
Bengang Steel plates in
the same region
guarantee independent
personnel, independent
business, independent
finance, and independent
assets, and are
guaranteed not to be in
the same registration
place or in the same
Benxi Steel & office; The filing of
Iron (Group) foreign economic and
Co., Ltd. and Other trade operators, taking July 24,2019 Under normal
Long term
Bengang Commitment into account the need to fulfillment
Group Co., gradually improve the
Ltd. qualification
certification of raw
material suppliers,
customs import and
export qualification
certification, etc. In the
short term, the actual
conditions and
capabilities for
independent import and
export business are still
lacking. In order to
ensure the normal
business development of
30
Bengang Steel Plates Co., Ltd. Annual Report 2020
Benxi Steel Plate, the
Group agrees that within
the period of not more
than 5 years from the
date of issuance of this
commitment, the main
import and export
business of Benxi Steel
Plate will still be
represented by Bengang
International Trade until
Bengang Steel Plates can
be independently
developed Import and
export business, and
during this period,
Bengang International
Trade will provide the
necessary support for the
establishment and
improvement of
Bengang's import and
export business. In
addition, the sales
company under Bengang
International Trade is
only responsible for
selling the products of
Beiying Iron and Steel
Group, and never sells
third-party steel
products. 3. The three
sales companies under
the Group, Shanghai
Bengang Iron and Steel
Sales Co., Ltd., Shanghai
Bengang Iron and Steel
Materials Co., Ltd., and
Guangzhou Free Trade
Zone Bengang Sales Co.,
Ltd., are currently no
longer actually engaged
in any business
activities, as follows: (1 )
Shanghai Bengang Iron
& Steel Sales Co., Ltd.
filed for bankruptcy in
2014, and the Shanghai
Changning District
People's Court issued an
announcement to
appoint Guohao Lawyer
(Shanghai) Office as the
bankruptcy
administrator. After
communication with the
bankruptcy
administrator, it is
expected that the
bankruptcy and
liquidation of Shanghai
Bengang Iron and Steel
Sales Co., Ltd. will be
completed by the end of
2020. Upon completion
of the aforementioned
bankruptcy liquidation
31
Bengang Steel Plates Co., Ltd. Annual Report 2020
procedures, the relevant
procedures for
cancellation of Shanghai
Bengang Iron and Steel
Sales Co., Ltd. will be
handled immediately. (2)
Shanghai Bengang Iron
& Steel Materials Co.,
Ltd. is a holding
subsidiary of Shanghai
Bengang Iron & Steel
Sales Co., Ltd., and its
business license has been
revoked. As the
shareholder Shanghai
Bengang Iron & Steel
Sales Co., Ltd. is in the
process of bankruptcy
and liquidation,
Shanghai Bengang Iron
& Steel Materials Co.,
Ltd. was unable to
convene a shareholders'
meeting to cancel the
company and establish a
liquidation group
according to law.
Therefore, the
cancellation has not yet
been completed. After
the aforementioned
bankruptcy and
liquidation procedures of
Shanghai Bengang Iron
& Steel Sales Co., Ltd.
are completed, the
relevant procedures for
cancellation of Shanghai
Bengang Iron & Steel
Materials Co., Ltd. will
be processed
immediately. (3)
Guangzhou Free Trade
Zone Bengang Sales Co.,
Ltd. has a contract
arrears dispute with
Jiedong County Trading
Corporation. According
to the Civil Judgment
((1999) Ben Jing No.
116), Guangzhou Free
Trade Zone Bengang
Sales Co., Ltd. applied to
the court to seal 62
properties under the
name of Jiedong County
Trading Corporation.
However, due to serious
local protection,
property rights and other
factors, the content of the
judgment has not been
enforceable. Later, after
applying again from
Guangzhou Free Trade
Zone Bengang Sales Co.,
Ltd., the Intermediate
32
Bengang Steel Plates Co., Ltd. Annual Report 2020
People's Court of Benxi
City, Liaoning Province
issued an execution
ruling again, and 62
properties of Jiedong
County Trading
Corporation were re-
sealed. As of February 4,
2022. Except for
participating in the
litigation activities for
the purpose of realizing
creditor's rights,
Guangzhou Free Trade
Zone Bengang Sales Co.,
Ltd has not carried out
other business activities.
After the litigation is
completed, the relevant
procedures for the
cancellation of
Guangzhou Free Trade
Zone Bengang Sales Co.,
Ltd. will be handled
immediately.
The Group's horizontal
competition with Benxi
Steel Plates and the
measures and
commitments to avoid
inter-industry
competition 1. During
the period when the
Group is the controlling
shareholder of Bengang
Steel Plates, in addition
to the matters listed in The company
Article 1 of this has completed
Commitment Letter, the the acquisition
Group and other of the
enterprises controlled by 2300mm hot
the Group other than rolling mill
Bengang Steel Plates no production
longer produce or line, and the
Benxi Steel & develop any products
Other industry
Iron (Group) that compete or may July 24,2019 Long term
Commitment competition
Co., Ltd. compete with the problem has
products produced by been
Bengang Steel Plates and completely
its subsidiaries at home resolved.
and abroad, and do not Other
directly or indirectly commitments
operate any business that continue to be
competes with Bengang fulfilled
Steel Plates and its
subsidiaries. Businesses
that may constitute
competition, nor are they
involved in investing in
any other enterprise that
competes with or may
compete with products
or businesses produced
by Bengang Steel Plates
and its subsidiaries. 2. If
Bengang Steel Plates and
33
Bengang Steel Plates Co., Ltd. Annual Report 2020
its subsidiaries further
expand their business
scope, the Group and
other enterprises
controlled by the Group
will not compete with the
expanded business of
Bengang Steel Plates and
its subsidiaries; they may
compete with Bengang
Steel Plates and its
subsidiaries If the
company's expanded
business produces
competition, it will
withdraw from the
competition with
Bengang Steel Plates as
follows: (1) Stop
business that may or may
compete with Bengang
Steel Plates and its
subsidiaries; (2) Will
compete The business is
incorporated into
Bengang Steel Plates and
its subsidiaries in a legal
and compliant manner;
(3) Competitive business
is transferred to
unrelated third parties. 3.
If the Group has any
business opportunities to
engage in or participate
in the competition with
Bengang Steel Plates’
operations, the Group
shall immediately notify
Bengang Steel Plates of
the above commercial
opportunities. Within a
reasonable period
specified in the notice,
Bengang Steel Plates If
an affirmative answer is
made to take advantage
of the business
opportunity, the Group
will endeavor to give the
business opportunity to
Bengang Steel Plates on
terms not less than that
provided to any
independent third party.
4. If the above
commitments are
violated, the Group is
willing to bear all the
responsibilities arising
therefrom, and fully
compensate or
compensate for all direct
or indirect losses caused
to Bengang Steel Plates.
5. This letter of
commitment continues
to be effective during the
34
Bengang Steel Plates Co., Ltd. Annual Report 2020
period of the Group as
the controlling
shareholder of Bengang
Steel Plates and cannot
be changed or withdrawn
In order to regulate and
reduce the Company ’s
transactions with
controlling shareholders
and other related parties,
and to protect the
interests of the Company
and small and medium
shareholders, Benxi Iron
and Steel (Group) Co.,
Ltd. and Bengang Group
Co., Ltd. have issued the
following commitments:
"Benxi Iron and Steel
(Group) Co., Ltd. and
Bengang Group Co.,
Ltd. (hereinafter
collectively referred to
as the "Group"), as a
direct controlling
shareholder and an
indirect controlling
shareholder of Bengang
Steel Plates Co., Ltd.
(hereinafter referred to
as "Bengang Steel
Plates"), in order to
Benxi Steel & protect the interests of
Iron (Group) Bengang Steel Plates and
Co., Ltd. and Other other shareholders of Under normal
Bengang Commitment Bengang Steel Plates, July 24,2019 Long term
fulfillment
Group Co., regulate The Group's
Ltd. related transaction with
Bengang Steel Plates
hereby promises: 1. The
Group will fully respect
the independent legal
person status of Bengang
Steel Plates, ensure the
independent operation
and independent
decision-making of
Bengang Steel Plates,
ensure the independence
of Bengang Steel Plates’
business, asset integrity
and personnel
Independence and
financial independence
to avoid and reduce
unnecessary related
transactions; the Group
will strictly control
related transactions with
Bengang Steel Plates and
its subsidiaries. 2. The
Group and other
controlled companies
promise not to use loans
or occupy or
misappropriate the funds
35
Bengang Steel Plates Co., Ltd. Annual Report 2020
of Bengang Steel Plates
and its subsidiaries to
repay debts, substitute
funds or otherwise, nor
We ask Bengang Steel
Plates and its
subsidiaries to provide
illegal guarantees for the
Group and other
companies under its
control. 3. The Group
and other controlled
companies and Bengang
Steel Plates will
minimize related
transactions. It is indeed
necessary and
unavoidable to carry out
in the related party
transactions, strictly
implement the decision-
making authority,
decision-making
procedures, avoidance
system and other
contents stipulated in
Bengang's "Articles of
Association" and related
party transaction
decision-making system,
give full play to the role
of the board of
supervisors and
independent directors,
and earnestly fulfill the
obligation of
information disclosure
To ensure that
transactions are
conducted in accordance
with the open, fair, and
fair principles of market
transactions and normal
commercial terms, the
Group and other
companies under control
will not require or accept
Bengang Steel Sheets to
give preferential
treatment to third parties
in any fair market
transaction Conditions to
protect other
shareholders of Benxi
Steel Plates and the
interests of Benxi Steel
Plates from damage. 4.
The Group guarantees
that the above
commitments are
continuously effective
and irrevocable as long
as Bengang Steel Plates
is listed on the domestic
stock exchange and the
Group acts as its direct
and indirect controlling
36
Bengang Steel Plates Co., Ltd. Annual Report 2020
shareholder. If any
violation of the above
commitments occurs, the
Group therefore bear all
the losses caused to
Bengang Steel Plates.
Stock option incentive
commitment
Other commitments to the
company's minority
shareholders
Whether Commitment
No
fulfilled on time or not
2. The Company made illustrations that there are assets or projects which meet the original profit forecast
and the reasons when there are assets or projects profit forecast of the Company and the reporting period is
still in the forecast period
□ Applicable √ Not applicable
IV. Illustrations of Non-Operating Occupation of Funds by the Controlling Shareholder and
Related Parties
□ Applicable √ Not applicable
There was no non-operating occupation of funds by the controlling shareholder and related parties
V. Illustrations of the Supervisory Committee and Independent Directors (If Applicable) on the
Qualified Audit Report Issued by the CPAs
□ Applicable √ Not applicable
VI. Illustrations of Changes in the Accounting Policy, Accounting Estimate and Measurement
Methods as Compared with the Financial Report of Last Year
√ Applicable □ Not applicable
A. Change of major accounting policy during this reporting period
(1) Implementation of "Accounting Standards for Business Enterprises No. 14-Revenue" (revised in 2017) (hereinafter referred
to as "New Revenue Standards")
The Ministry of Finance revised the "Accounting Standards for Business Enterprises No. 14-Revenue" in 2017. The revised
standard stipulates that for the first implementation of the standard, the amount of retained earnings and other related items in
the financial statements at the beginning of the year should be adjusted according to the cumulative impact, and the information
for the comparable period should not be adjusted.
The Company implemented the new revenue standard from January 1, 2020. According to the standard, the Company only
37
Bengang Steel Plates Co., Ltd. Annual Report 2020
adjusts the retained earnings at the beginning of 2020 and the amount of other related items in the financial statements for the
cumulative impact of contracts that have not been completed on the date of first implementation, and does not make adjustments
to the comparative financial statements.
The major impact of the implementation of the above regulations are as follows:
Amount of impact on the balance on Jan 1, 2020
Change of accounting policy content
Affected items Consolidated Financial Parent company
and reason
statement financial statement
Advance from customers -4,429,821,526.79 -5,597,707,687.22
The Company implemented the
"Accounting Standards for Business
Enterprises No. 14-Revenue"
(referred to as "New Revenue Contract liabilities 3,920,196,041.41 4,953,723,617.01
Standards") promulgated by the
Ministry of Finance in 2017 on
January 1, 2020
Other current liabilities 509,625,485.38 643,984,070.21
Compared with the original revenue standards, the impact of the implementation of the new revenue standards on the relevant
items of the financial statements for the period of 2020 is as follows (increase/(decrease)):
Amount of impact on the balance on Dec 31, 2020
Affected items in the statement of
Consolidated Financial Parent company financial
financial position
statement statement
Advance from customers -5,038,299,156.48 -6,016,524,270.87
Contract liabilities 4,458,671,819.90 5,324,357,761.83
Other current liabilities 579,627,336.58 692,166,509.04
Impact amounts to the period of 2020
Affected items in the statement of
comprehensive income Parent company financial
Consolidated Financial statement
statement
Operating costs 1,112,122,323.44 655,370,940.93
Selling and distribution expenses -1,112,122,323.44 -655,370,940.93
(2) Implementation of "Accounting Standards for Business Enterprises No. 13 "
The Ministry of Finance issued the "Accounting Standards for Business Enterprises Interpretation No. 13" (Cai Kuai [2019] No.
21, hereinafter referred to as "Interpretation No. 13") on December 10, 2019, which will come into force on January 1, 2020.
38
Bengang Steel Plates Co., Ltd. Annual Report 2020
No requirement of retrospective adjustment.
a. The recognition of related parties
Interpretation No. 13 clarifies that the following circumstances constitute a related party: a joint venture or joint venture between
an enterprise and other member units (including parent companies and subsidiaries) of the enterprise group to which it belongs;
a joint venture of the enterprise and other joint ventures or joint ventures of the enterprise. In addition, Interpretation No. 13 also
clarifies that only two or more companies that are significantly affected by one party do not constitute related parties. It also
adds that joint ventures include joint ventures and their subsidiaries.
b. The definition of business
Interpretation No. 13 completes the three elements of business composition, refines the judgment conditions of the business
composition, and introduces the "concentration test" option to simplify to a certain extent the judgment of whether a combination
obtained under the same control constitutes a business, etc.
The company implemented Interpretation No. 13 from January 1, 2020, and the comparative financial statements will not be
adjusted. Implementation Interpretation No. 13 has not had a significant impact on the company's financial position and
operating results.
(3) Implementation of the "Interim Provisions on Accounting Treatment of Carbon Emissions Trading"
On December 16, 2019, the Ministry of Finance issued the "Interim Provisions on the Accounting Treatment of Carbon
Emissions Trading" (Cai Kuai [2019] No. 22), which is applicable to the related companies in the key emission enterprises
(hereinafter referred to as key emission companies) that conduct carbon emission rights business in accordance with the "Interim
Measures for the Administration of Carbon Emissions Trading" and other relevant regulations. This regulation came into effect
on January 1, 2020, and key emission companies should adopt the prospective application to apply this regulation.
The Company implemented the above regulation from January 1, 2020, and the comparative financial statements will not be
adjusted. The implementation of this regulation has not had a significant impact on the company's financial position and
operating results.
(4) Implement the "Regulations on Accounting Treatment of Rental Concessions Related to the Coronavirus Pandemic"
On June 19, 2020, the Ministry of Finance issued the "Regulations on Accounting Treatment of Rental Concessions Related to
the Coronavirus Pandemic " (Caikuai (2020) No. 10), which came into effect on June 19, 2020, allowing companies to adjust
the relevant rental concessions that occurred between Jan 1, 2020 and the implementation date of this regulation. According to
the regulation, companies can choose to adopt simplified methods for accounting treatments for rent reductions and deferred
payment of rents directly caused by the Coronavirus Pandemic that meet the conditions.
The company chooses to adopt a simplified method for accounting treatment for all rent concessions that fall within the scope
of the regulation, and adjusts the relevant rent concessions that occur between January 1, 2020 and the effective date of the
regulation accordingly.
39
Bengang Steel Plates Co., Ltd. Annual Report 2020
The implementation of the regulations did not have a significant impact on the company's financial position and operating results.
B. Change of accounting estimate during the reporting period
Approval Application Affected Affected
Items
procedure date items amounts
Accumulated
633,195,486.72
depreciation
Operating costs 616,340,171.08
Change in Approved by the eighth
General and
depreciation meeting of the eighth Jan 1, 2020
administrative 16,855,315.64
period board of directors
expenses
Total profit 633,195,486.72
Net profit 474,896,615.04
C. The first implementation of the new revenue standard adjustment to the financial statements at the beginning of the
year
Consolidated Statement of Financial Position
Ending balance of Beginning balance Adjusted amounts
Items
the last period of the current period Reclassification Remeasurement Total
Advance
from 4,429,821,526.79 -4,429,821,526.79 -4,429,821,526.79
customers
Contract
3,920,196,041.41 3,920,196,041.41 3,920,196,041.41
liabilities
Other
current 509,625,485.38 509,625,485.38 509,625,485.38
liabilities
Statement of Financial Position of the Parent Company
Ending balance of Beginning balance Adjusted amounts
Items
the last period of the current period Reclassification Remeasurement Total
Advance from 5,597,707,687.22 -5,597,707,687.22 -5,597,707,687.22
40
Bengang Steel Plates Co., Ltd. Annual Report 2020
Ending balance of Beginning balance Adjusted amounts
Items
the last period of the current period Reclassification Remeasurement Total
customers
Contract
4,953,723,617.01 4,953,723,617.01 4,953,723,617.01
liabilities
Other current
643,984,070.21 643,984,070.21 643,984,070.21
liabilities
Ⅶ. Illustrations of Retrospective Restatement Due to Correction of Significant Accounting
Errors in the Reporting Period
□ Applicable √ Not applicable
There was no retrospective restatement due to correction of significant accounting errors during the reporting period
VIII. Illustrations of Changes of the Consolidation Scope as Compared with the Financial
Report of Last Year
□ Applicable √ Not applicable
There is no change of the consolidation scope during the reporting period.
IX. Appointment and Dismiss of Certified Accountant’s Firm
Accountant’s firm currently appointed
Name of the domestic accountant’s firm BDO China Shu Lun Pan Certified Public Accountants LLP
Payment to the domestic accountant’s firm (RMB 10
280
thousand)
Service life of domestic accountant’s firm providing
13
audit service
Name of CPAs from the domestic accountant’s firm Zhu Jinmei, Li Guiying
Service life of domestic accountants’ providing audit
0
service
Name of the overseas accountant’s firm (if any) None
Payment to overseas accountant’s firm (RMB 10
0
thousand) (if any)
Service life of overseas accountant’s firm providing
None
audit service (if any)
Name of CPAs from the overseas accountant’s firm
None
(if any)
Whether the accountant’s firm was changed during the reporting period
□ Yes √ No
Engagement of accountant’s firms, financial consultants or sponsors for internal control auditing
√ Applicable □ Not applicable
The Company appointed BDO China Shu Lun Pan Certified Public Accountants LLP as the auditor of internal control auditing at RMB
600 thousand.
During the year, due to the issue of convertible corporate bonds in this year, the company hired Guotai Junan Securities Co., Ltd. as
the sponsor at RMB 40.80 million.
41
Bengang Steel Plates Co., Ltd. Annual Report 2020
X. Risk of Suspension or Termination of Listing after the Disclosure of Annual Report
□ Applicable √ Not applicable
XI. Bankrupt and Reforming Events
□ Applicable √ Not applicable
There was no bankrupt and reforming event during the reporting period.
XII. Significant Lawsuits and Arbitrations
□ Applicable √ Not applicable
There was no significant lawsuit or arbitrations during the reporting period.
XIII. Punishment and Rectification
□ Applicable √ Not applicable
There was no punishment or rectification during the reporting period.
XIV. Credit Status of the Company and its Controlling Shareholders and Actual Controllers
□ Applicable √ Not applicable
XV. Implementation Situation of Stock Incentive Plan of the Company, Employee Stock
Ownership Plan or Other Employee Incentive Measures
□ Applicable √ Not applicable
There was no implementation situation of stock incentive plan of the Company, employee stock ownership plan or other
employee incentive measures during the reporting period.
XVI. Major Related Party Transactions
1. Related party transactions relevant to daily operations
√ Applicable □ Not applicable
The
Amou appro
Pricin Whet Mean Avail
nt of ved
Type Conte g Price Propo her s of able
relate tradin
of nt of princi of rtion excee paym marke
d g Date Index
Relati relate relate ple of relate of d the ent of t price
Related party limit of of
onshi d d relate d simila appro relate of
parties transa of disclo discl
p party party d party r ved d simila
ctions transa sure osure
transa transa party transa transa limite party r
(in 10 ctions
ctions ctions transa ctions ctions d transa transa
thous (in 10
ctions (Y/N) ctions ctions
and) thous
and)
Execu
Bengan Sales
Relat te
g of
same Energ on ed accor
Electro goods 0.00 2020/
contro y& agree agree 72.4 500 No ding Yes
nics and % 4/22
ller Power ment ment to the
and servic
price agree
Gas es
ment
42
Bengang Steel Plates Co., Ltd. Annual Report 2020
The
Amou appro
Pricin Whet Mean Avail
nt of ved
Type Conte g Price Propo her s of able
relate tradin
of nt of princi of rtion excee paym marke
d g Date Index
Relati relate relate ple of relate of d the ent of t price
Related party limit of of
onshi d d relate d simila appro relate of
parties transa of disclo discl
p party party d party r ved d simila
ctions transa sure osure
transa transa party transa transa limite party r
(in 10 ctions
ctions ctions transa ctions ctions d transa transa
thous (in 10
ctions (Y/N) ctions ctions
and) thous
and)
Co.,
Ltd.
Raw
materi
Benxi Execu
Sales al &
Beiying Relat te
of supple
Steel & same on ed accor
goods menta 138,4 2.84 300,0 2020/
Iron contro agree agree No ding Yes
and ry 09.84 % 00 4/22
(Group) ller ment ment to the
servic materi
Co., price agree
es als &
Ltd. ment
spare
parts
Benxi Execu
Sales
Beiying Relat te
of
Steel & same on ed accor
goods produ 2,150. 0.04 2020/
Iron contro agree agree No ding Yes
and cts 96 % 4/22
(Group) ller ment ment to the
servic
Co., price agree
es
Ltd. ment
Benxi Execu
Sales
Beiying Relat te
of
Steel & same Energ on ed accor
goods 22,60 0.46 2020/
Iron contro y& agree agree No ding Yes
and 2.26 % 4/22
(Group) ller Power ment ment to the
servic
Co., price agree
es
Ltd. ment
Benxi
Steel &
Execu
Iron Sales
Relat te
(Group) of
same Energ on ed accor
Real- goods 0.00 2020/
contro y& agree agree 8.65 500 No ding Yes
estate and % 4/22
ller Power ment ment to the
Develo servic
price agree
pment es
ment
Co.,
Ltd.
Benxi
Steel &
Iron Execu
Sales
(Group) Relat te
of
Steel & same Energ on ed accor
goods 0.00 2020/
Iron contro y& agree agree 25.88 500 No ding Yes
and % 4/22
Process ller Power ment ment to the
servic
and price agree
es
Logisti ment
cs Co.,
Ltd.
Benxi Relat Execu
same Sales on ed
Steel & produ 0.00 te 2020/
contro of agree agree No Yes
Iron cts % accor 4/22
ller goods ment ment
(Group) ding
and price
Steel & to the
43
Bengang Steel Plates Co., Ltd. Annual Report 2020
The
Amou appro
Pricin Whet Mean Avail
nt of ved
Type Conte g Price Propo her s of able
relate tradin
of nt of princi of rtion excee paym marke
d g Date Index
Relati relate relate ple of relate of d the ent of t price
Related party limit of of
onshi d d relate d simila appro relate of
parties transa of disclo discl
p party party d party r ved d simila
ctions transa sure osure
transa transa party transa transa limite party r
(in 10 ctions
ctions ctions transa ctions ctions d transa transa
thous (in 10
ctions (Y/N) ctions ctions
and) thous
and)
Iron servic agree
Process es ment
and
Logisti
cs Co.,
Ltd.
Benxi
Steel &
Execu
Iron Sales
Relat te
(Group) of
same on ed accor
Machin goods produ 1,898. 0.04 2020/
contro agree agree 8,000 No ding Yes
ery and cts 85 % 4/22
ller ment ment to the
Manufa servic
price agree
cture es
ment
Co.,
Ltd.
Benxi
Steel &
Execu
Iron Sales
Relat te
(Group) of
same Energ on ed accor
Machin goods 2,088. 0.04 2020/
contro y& agree agree No ding Yes
ery and 72 % 4/22
ller Power ment ment to the
Manufa servic
price agree
cture es
ment
Co.,
Ltd.
Benxi Raw
Steel & materi
Execu
Iron Sales al &
Relat te
(Group) of supple
same on ed accor
Machin goods menta 338.5 0.01 2020/
contro agree agree No ding Yes
ery and ry 6 % 4/22
ller ment ment to the
Manufa servic materi
price agree
cture es als &
ment
Co., spare
Ltd. parts
Benxi
Execu
Steel & Sales
Relat te
Iron of
same Energ on ed accor
(Group) goods 699.1 0.01 10,00 2020/
contro y& agree agree No ding Yes
Constru and 6 % 0 4/22
ller Power ment ment to the
ction servic
price agree
Co., es
ment
Ltd.
Benxi Raw Execu
Steel & Sales materi Relat te
Iron of al &
same on ed accor
(Group) goods supple 6,452. 0.13 2020/
contro agree agree No ding Yes
Constru and menta 06 % 4/22
ller ment ment to the
ction servic ry price agree
Co., es materi ment
Ltd. als &
44
Bengang Steel Plates Co., Ltd. Annual Report 2020
The
Amou appro
Pricin Whet Mean Avail
nt of ved
Type Conte g Price Propo her s of able
relate tradin
of nt of princi of rtion excee paym marke
d g Date Index
Relati relate relate ple of relate of d the ent of t price
Related party limit of of
onshi d d relate d simila appro relate of
parties transa of disclo discl
p party party d party r ved d simila
ctions transa sure osure
transa transa party transa transa limite party r
(in 10 ctions
ctions ctions transa ctions ctions d transa transa
thous (in 10
ctions (Y/N) ctions ctions
and) thous
and)
spare
parts
Benxi Execu
Sales
Steel & Relat te
of
Iron same Energ on ed accor
goods 62,02 1.27 100,0 2020/
(Group) contro y& agree agree No ding Yes
and 0.89 % 00 4/22
Mining ller Power ment ment to the
servic
Co., price agree
es
Ltd. ment
Raw
materi
Benxi Execu
Sales al &
Steel & Relat te
of supple
Iron same on ed accor
goods menta 9,678. 0.20 2020/
(Group) contro agree agree No ding Yes
and ry 23 % 4/22
Mining ller ment ment to the
servic materi
Co., price agree
es als &
Ltd. ment
spare
parts
Benxi Execu
Sales
Steel & Relat te
of Freigh
Iron same on ed accor
goods t 0.02 2020/
(Group) contro agree agree 743.9 No ding No
and reven % 4/22
Mining ller ment ment to the
servic ue
Co., price agree
es
Ltd. ment
Benxi Execu
Sales
Steel & Relat te
of
Iron same on ed accor
goods produ 1,107. 0.02 2020/
(Group) contro agree agree No ding Yes
and cts 48 % 4/22
Mining ller ment ment to the
servic
Co., price agree
es
Ltd. ment
Benxi
Steel &
Execu
Iron Sales
Relat te
(Group) of
same Energ on ed accor
Therma goods 2,995. 0.06 2020/
contro y& agree agree 8,000 No ding Yes
l Power and 62 % 4/22
ller Power ment ment to the
Develo servic
price agree
pment es
ment
Co.,
Ltd.
Benxi Raw Execu
Steel & Sales materi Relat te
Iron of al &
same on ed accor
(Group) goods supple 1,750. 0.04 2020/
contro agree agree No ding Yes
Therma and menta 62 % 4/22
ller ment ment to the
l Power servic ry price agree
Develo es materi ment
pment als &
45
Bengang Steel Plates Co., Ltd. Annual Report 2020
The
Amou appro
Pricin Whet Mean Avail
nt of ved
Type Conte g Price Propo her s of able
relate tradin
of nt of princi of rtion excee paym marke
d g Date Index
Relati relate relate ple of relate of d the ent of t price
Related party limit of of
onshi d d relate d simila appro relate of
parties transa of disclo discl
p party party d party r ved d simila
ctions transa sure osure
transa transa party transa transa limite party r
(in 10 ctions
ctions ctions transa ctions ctions d transa transa
thous (in 10
ctions (Y/N) ctions ctions
and) thous
and)
Co., spare
Ltd. parts
Benxi
Steel &
Execu
Iron Sales
Relat te
(Group) of Freigh
same on ed accor
Therma goods t 0.00 2020/
contro agree agree No ding No
l Power and reven % 4/22
ller ment ment to the
Develo servic ue
price agree
pment es
ment
Co.,
Ltd.
Benxi
Steel &
Execu
Iron Sales
Relat te
(Group) of
same Energ on ed accor
Industri goods 824.4 0.02 2020/
contro y& agree agree 5,000 No ding Yes
al and 7 % 4/22
ller Power ment ment to the
Develo servic
price agree
pment es
ment
Co.,
Ltd.
Benxi
Steel &
Execu
Iron Sales
Relat te
(Group) of
same on ed accor
Industri goods produ 0.00 2020/
contro agree agree 3.97 No ding Yes
al and cts % 4/22
ller ment ment to the
Develo servic
price agree
pment es
ment
Co.,
Ltd.
Benxi Raw
Steel & materi
Execu
Iron Sales al &
Relat te
(Group) of supple
same on ed accor
Industri goods menta 1,914. 0.04 2020/
contro agree agree No ding Yes
al and ry 44 % 4/22
ller ment ment to the
Develo servic materi
price agree
pment es als &
ment
Co., spare
Ltd. parts
Benxi
Steel & Execu
Iron Sales
Relat te
(Group) of
same Energ on ed accor
Informa goods 0.00 2020/
contro y& agree agree 14.64 300 No ding Yes
tion and % 4/22
ller Power ment ment to the
and servic
price agree
Automa es
ment
tic
Tech
46
Bengang Steel Plates Co., Ltd. Annual Report 2020
The
Amou appro
Pricin Whet Mean Avail
nt of ved
Type Conte g Price Propo her s of able
relate tradin
of nt of princi of rtion excee paym marke
d g Date Index
Relati relate relate ple of relate of d the ent of t price
Related party limit of of
onshi d d relate d simila appro relate of
parties transa of disclo discl
p party party d party r ved d simila
ctions transa sure osure
transa transa party transa transa limite party r
(in 10 ctions
ctions ctions transa ctions ctions d transa transa
thous (in 10
ctions (Y/N) ctions ctions
and) thous
and)
Co.,
Ltd.
Benxi
Steel &
Execu
Iron Sales
Relat te
(Group) of
same Energ on ed accor
Constru goods 125.1 0.00 2020/
contro y& agree agree 8,000 No ding Yes
ction and 5 % 4/22
ller Power ment ment to the
and servic
price agree
Repairi es
ment
ng Co.,
Ltd.
Benxi Raw
Steel & materi
Execu
Iron Sales al &
Relat te
(Group) of supple
same on ed accor
Constru goods menta 368.0 0.01 2020/
contro agree agree No ding Yes
ction and ry 3 % 4/22
ller ment ment to the
and servic materi
price agree
Repairi es als &
ment
ng Co., spare
Ltd. parts
Benxi
Steel & Execu
Sales
Iron Relat te
of
(Group) same Energ on ed accor
goods 659.8 0.01 30,00 2020/
Metallu contro y& agree agree No ding Yes
and 4 % 0 4/22
rgy ller Power ment ment to the
servic
Residue price agree
es
s Co., ment
Ltd.
Raw
Benxi
materi
Steel & Execu
Sales al &
Iron Relat te
of supple
(Group) same on ed accor
goods menta 26,83 0.55 2020/
Metallu contro agree agree No ding Yes
and ry 9.91 % 4/22
rgy ller ment ment to the
servic materi
Residue price agree
es als &
s Co., ment
spare
Ltd.
parts
Benxi
Steel & Execu
Sales
Iron Relat te
of Freigh
(Group) same on ed accor
goods t 0.00 2020/
Metallu contro agree agree No ding No
and reven % 4/22
rgy ller ment ment to the
servic ue
Residue price agree
es
s Co., ment
Ltd.
47
Bengang Steel Plates Co., Ltd. Annual Report 2020
The
Amou appro
Pricin Whet Mean Avail
nt of ved
Type Conte g Price Propo her s of able
relate tradin
of nt of princi of rtion excee paym marke
d g Date Index
Relati relate relate ple of relate of d the ent of t price
Related party limit of of
onshi d d relate d simila appro relate of
parties transa of disclo discl
p party party d party r ved d simila
ctions transa sure osure
transa transa party transa transa limite party r
(in 10 ctions
ctions ctions transa ctions ctions d transa transa
thous (in 10
ctions (Y/N) ctions ctions
and) thous
and)
Benxi
Steel & Execu
Sales
Iron Relat te
of
(Group) same on ed accor
goods produ 423.5 0.01 2020/
Metallu contro agree agree No ding Yes
and cts 3 % 4/22
rgy ller ment ment to the
servic
Residue price agree
es
s Co., ment
Ltd.
Execu
Benxi Sales
Relat te
Steel & of
Parent Energ on ed accor
Iron goods 205.4 0.00 2020/
Comp y& agree agree 2,000 No ding Yes
(Group) and 7 % 4/22
any Power ment ment to the
Co., servic
price agree
Ltd. es
ment
Raw
materi
Execu
Benxi Sales al &
Relat te
Steel & of supple
Parent on ed accor
Iron goods menta 1,013. 0.02 2020/
Comp agree agree No ding Yes
(Group) and ry 53 % 4/22
any ment ment to the
Co., servic materi
price agree
Ltd. es als &
ment
spare
parts
Benxi Execu
Sales
New Relat te
of
Career same Energ on ed accor
goods 0.00 2020/
Develo contro y& agree agree 38.37 500 No ding Yes
and % 4/22
pment ller Power ment ment to the
servic
Co., price agree
es
Ltd. ment
Execu
Dalian Sales
Relat te
Boluole of
same on ed accor
Steel goods produ 1,136. 0.02 2020/
contro agree agree 1,000 No ding Yes
Tube and cts 33 % 4/22
ller ment ment to the
Co., servic
price agree
Ltd. es
ment
Liaonin
Execu
g Sales
Relat te
Bengan of
same on ed accor
g Steel goods produ 0.00 2020/
contro agree agree No ding Yes
& Iron and cts % 4/22
ller ment ment to the
Trading servic
price agree
Co., es
ment
Ltd.
Benxi same Sales Energ on Execu
Relat 0.00 2020/
Steel & contro of y& agree 50 No te Yes
ed % 4/22
Iron ller goods Power ment accor
agree
(Group) and ding
48
Bengang Steel Plates Co., Ltd. Annual Report 2020
The
Amou appro
Pricin Whet Mean Avail
nt of ved
Type Conte g Price Propo her s of able
relate tradin
of nt of princi of rtion excee paym marke
d g Date Index
Relati relate relate ple of relate of d the ent of t price
Related party limit of of
onshi d d relate d simila appro relate of
parties transa of disclo discl
p party party d party r ved d simila
ctions transa sure osure
transa transa party transa transa limite party r
(in 10 ctions
ctions ctions transa ctions ctions d transa transa
thous (in 10
ctions (Y/N) ctions ctions
and) thous
and)
General servic ment to the
Hospita es price agree
l ment
Benxi
Steel &
Iron Execu
Sales
(Group) Relat te
of
Zhengt same Energ on ed accor
goods 0.00 2020/
ai contro y& agree agree 2.16 500 No ding Yes
and % 4/22
Constru ller Power ment ment to the
servic
ction price agree
es
Materia ment
ls Co.,
Ltd.
Liaonin
g
Hengto
Execu
ng Sales
Relat te
Metallu of
same Energ on ed accor
rgical goods 0.00 2020/
contro y& agree agree 5,000 No ding Yes
Equipm and % 4/22
ller Power ment ment to the
ent servic
price agree
Manufa es
ment
cture
Co.,
Ltd.
Liaonin
g Raw
Hengto materi
Execu
ng Sales al &
Relat te
Metallu of supple
same on ed accor
rgical goods menta 731.8 0.02 2020/
contro agree agree No ding Yes
Equipm and ry 6 % 4/22
ller ment ment to the
ent servic materi
price agree
Manufa es als &
ment
cture spare
Co., parts
Ltd.
Liaonin
g
Hengto
Execu
ng Sales
Relat te
Metallu of
same on ed accor
rgical goods produ 908.8 0.02 2020/
contro agree agree No ding Yes
Equipm and cts 9 % 4/22
ller ment ment to the
ent servic
price agree
Manufa es
ment
cture
Co.,
Ltd.
49
Bengang Steel Plates Co., Ltd. Annual Report 2020
The
Amou appro
Pricin Whet Mean Avail
nt of ved
Type Conte g Price Propo her s of able
relate tradin
of nt of princi of rtion excee paym marke
d g Date Index
Relati relate relate ple of relate of d the ent of t price
Related party limit of of
onshi d d relate d simila appro relate of
parties transa of disclo discl
p party party d party r ved d simila
ctions transa sure osure
transa transa party transa transa limite party r
(in 10 ctions
ctions ctions transa ctions ctions d transa transa
thous (in 10
ctions (Y/N) ctions ctions
and) thous
and)
Raw
Bengan materi
Execu
g Cold- Sales al &
Relat te
rolled of supple
same on ed accor
Stainles goods menta 0.00 50,00 2020/
contro agree agree No ding Yes
s Steel and ry % 0 4/22
ller ment ment to the
Dandon servic materi
price agree
g Co., es als &
ment
Ltd. spare
parts
Bengan
Execu
g Cold- Sales
Relat te
rolled of
same on ed accor
Stainles goods produ 2,716. 0.06 2020/
contro agree agree No ding Yes
s Steel and cts 09 % 4/22
ller ment ment to the
Dandon servic
price agree
g Co., es
ment
Ltd.
Execu
Suzhou Sales
Relat te
Bengan of
same on ed accor
g goods produ 49,98 1.03 65,00 2020/
contro agree agree No ding Yes
Industri and cts 3.82 % 0 4/22
ller ment ment to the
al Co., servic
price agree
Ltd. es
ment
Execu
Bengan Sales
Relat te
g of
same Energ on ed accor
Group goods 0.00 2020/
contro y& agree agree 1.3 50 No ding Yes
Finance and % 4/22
ller Power ment ment to the
Co., servic
price agree
Ltd. es
ment
Execu
Sales
Bengan Relat te
of
g Energ on ed accor
contro goods 0.00 2020/
Group y& agree agree 7.33 No ding Yes
ller and % 4/22
Co., Power ment ment to the
servic
Ltd. price agree
es
ment
Raw
materi
Execu
Sales al &
Bengan Relat te
of supple
g on ed accor
contro goods menta 1,539. 0.03 2020/
Group agree agree 500 No ding Yes
ller and ry 32 % 4/22
Co., ment ment to the
servic materi
Ltd. price agree
es als &
ment
spare
parts
50
Bengang Steel Plates Co., Ltd. Annual Report 2020
The
Amou appro
Pricin Whet Mean Avail
nt of ved
Type Conte g Price Propo her s of able
relate tradin
of nt of princi of rtion excee paym marke
d g Date Index
Relati relate relate ple of relate of d the ent of t price
Related party limit of of
onshi d d relate d simila appro relate of
parties transa of disclo discl
p party party d party r ved d simila
ctions transa sure osure
transa transa party transa transa limite party r
(in 10 ctions
ctions ctions transa ctions ctions d transa transa
thous (in 10
ctions (Y/N) ctions ctions
and) thous
and)
Liaonin Execu
Sales
g Relat te
of
Hengtai same on ed accor
goods produ 0.00 2020/
Heavy contro agree agree 29.54 No ding Yes
and cts % 4/22
Machin ller ment ment to the
servic
ery Co., price agree
es
Ltd. ment
Execu
Benxi Purch
Relat te
Steel & ase of
Parent on ed accor
Iron goods repair 30,20 0.65 50,00 2020/
Comp agree agree No ding No
(Group) and fees 6.47 % 0 4/22
any ment ment to the
Co., servic
price agree
Ltd. es
ment
Raw
Execu
Benxi Purch materi
Relat te
Steel & ase of al &
Parent on ed accor
Iron goods supple 2,121. 0.05 2020/
Comp agree agree No ding Yes
(Group) and menta 13 % 4/22
any ment ment to the
Co., servic ry
price agree
Ltd. es materi
ment
als
Bengan
Execu
g Cold- Purch
Relat te
rolled ase of
same on ed accor
Stainles goods invent 0.00 2020/
contro agree agree 22.39 500 No ding No
s Steel and ory % 4/22
ller ment ment to the
Dandon servic
price agree
g Co., es
ment
Ltd.
Benxi Execu
Purch
Steel & Relat te
ase of
Iron same on ed accor
goods labor 3,213. 0.07 650,0 2020/
(Group) contro agree agree No ding No
and costs 23 % 00 4/22
Mining ller ment ment to the
servic
Co., price agree
es
Ltd. ment
Raw
Benxi Execu
Purch materi
Steel & Relat te
ase of al &
Iron same on ed accor
goods supple 514,1 11.08 2020/
(Group) contro agree agree No ding Yes
and menta 93.5 % 4/22
Mining ller ment ment to the
servic ry
Co., price agree
es materi
Ltd. ment
als
Purch
Benxi Relat Execu
ase of
Steel & same on ed te
goods Freigh 1,227. 0.03 2020/
Iron contro agree agree No accor No
and t 47 % 4/22
(Group) ller ment ment ding
servic
Mining price to the
es
51
Bengang Steel Plates Co., Ltd. Annual Report 2020
The
Amou appro
Pricin Whet Mean Avail
nt of ved
Type Conte g Price Propo her s of able
relate tradin
of nt of princi of rtion excee paym marke
d g Date Index
Relati relate relate ple of relate of d the ent of t price
Related party limit of of
onshi d d relate d simila appro relate of
parties transa of disclo discl
p party party d party r ved d simila
ctions transa sure osure
transa transa party transa transa limite party r
(in 10 ctions
ctions ctions transa ctions ctions d transa transa
thous (in 10
ctions (Y/N) ctions ctions
and) thous
and)
Co., agree
Ltd. ment
Benxi
Raw
Steel & Execu
Purch materi
Iron Relat te
ase of al &
(Group) same on ed accor
goods supple 34,30 0.74 40,00 2020/
Metallu contro agree agree No ding Yes
and menta 3.84 % 0 4/22
rgy ller ment ment to the
servic ry
Residue price agree
es materi
s Co., ment
als
Ltd.
Benxi
Steel &
Iron Execu
Purch
(Group) Relat te
ase of
Steel & same Proces on ed accor
goods 0.00 2020/
Iron contro sing agree agree 63.22 300 No ding No
and % 4/22
Process ller fees ment ment to the
servic
and price agree
es
Logisti ment
cs Co.,
Ltd.
Benxi
Steel &
Execu
Iron Purch
Relat te
(Group) ase of
same Raw on ed accor
Real- goods 0.00 10,00 2020/
contro materi agree agree No ding Yes
estate and % 0 4/22
ller als ment ment to the
Develo servic
price agree
pment es
ment
Co.,
Ltd.
Benxi
Steel &
Execu
Iron Purch
Relat te
(Group) ase of
same on ed accor
Machin goods spare 5,984. 0.13 25,00 2020/
contro agree agree No ding Yes
ery and parts 04 % 0 4/22
ller ment ment to the
Manufa servic
price agree
cture es
ment
Co.,
Ltd.
Benxi
Steel &
Execu
Iron Purch
Relat te
(Group) ase of
same repair on ed accor
Machin goods 2,773. 0.06 2020/
contro servic agree agree No ding No
ery and 62 % 4/22
ller es ment ment to the
Manufa servic
price agree
cture es
ment
Co.,
Ltd.
52
Bengang Steel Plates Co., Ltd. Annual Report 2020
The
Amou appro
Pricin Whet Mean Avail
nt of ved
Type Conte g Price Propo her s of able
relate tradin
of nt of princi of rtion excee paym marke
d g Date Index
Relati relate relate ple of relate of d the ent of t price
Related party limit of of
onshi d d relate d simila appro relate of
parties transa of disclo discl
p party party d party r ved d simila
ctions transa sure osure
transa transa party transa transa limite party r
(in 10 ctions
ctions ctions transa ctions ctions d transa transa
thous (in 10
ctions (Y/N) ctions ctions
and) thous
and)
Benxi
Execu
Steel & Purch
Relat te
Iron ase of
same on ed accor
(Group) goods spare 1,624. 0.04 50,00 2020/
contro agree agree No ding Yes
Constru and parts 97 % 0 4/22
ller ment ment to the
ction servic
price agree
Co., es
ment
Ltd.
Benxi
Execu
Steel & Purch
Relat te
Iron ase of
same on ed accor
(Group) goods projec 20,27 0.44 2020/
contro agree agree No ding No
Constru and t fees 4.33 % 4/22
ller ment ment to the
ction servic
price agree
Co., es
ment
Ltd.
Benxi
Execu
Steel & Purch
Relat te
Iron ase of
same repair on ed accor
(Group) goods 18,02 0.39 2020/
contro servic agree agree No ding No
Constru and 2.98 % 4/22
ller es ment ment to the
ction servic
price agree
Co., es
ment
Ltd.
Benxi Raw
Execu
Steel & Purch materi
Relat te
Iron ase of al &
same on ed accor
(Group) goods supple 1,241. 0.03 2020/
contro agree agree No ding Yes
Constru and menta 22 % 4/22
ller ment ment to the
ction servic ry
price agree
Co., es materi
ment
Ltd. als
Benxi
Execu
Steel & Purch
Relat te
Iron ase of
same on ed accor
(Group) goods Freigh 0.00 2020/
contro agree agree 51.39 No ding No
Constru and t % 4/22
ller ment ment to the
ction servic
price agree
Co., es
ment
Ltd.
Benxi
Steel & Raw
Execu
Iron Purch materi
Relat te
(Group) ase of al &
same on ed accor
Industri goods supple 21,09 0.45 30,00 2020/
contro agree agree No ding Yes
al and menta 5.06 % 0 4/22
ller ment ment to the
Develo servic ry
price agree
pment es materi
ment
Co., als
Ltd.
53
Bengang Steel Plates Co., Ltd. Annual Report 2020
The
Amou appro
Pricin Whet Mean Avail
nt of ved
Type Conte g Price Propo her s of able
relate tradin
of nt of princi of rtion excee paym marke
d g Date Index
Relati relate relate ple of relate of d the ent of t price
Related party limit of of
onshi d d relate d simila appro relate of
parties transa of disclo discl
p party party d party r ved d simila
ctions transa sure osure
transa transa party transa transa limite party r
(in 10 ctions
ctions ctions transa ctions ctions d transa transa
thous (in 10
ctions (Y/N) ctions ctions
and) thous
and)
Benxi
Steel &
Execu
Iron Purch
Relat te
(Group) ase of
same repair on ed accor
Industri goods 1,537. 0.03 2020/
contro servic agree agree No ding No
al and 66 % 4/22
ller es ment ment to the
Develo servic
price agree
pment es
ment
Co.,
Ltd.
Benxi
Steel &
Execu
Iron Purch
Relat te
(Group) ase of
same on ed accor
Industri goods Freigh 0.00 2020/
contro agree agree No ding No
al and t % 4/22
ller ment ment to the
Develo servic
price agree
pment es
ment
Co.,
Ltd.
Benxi
Steel &
Execu
Iron Purch
Relat te
(Group) ase of
same projec on ed accor
Industri goods 107.0 0.00 2020/
contro t agree agree No ding No
al and 1 % 4/22
ller funds ment ment to the
Develo servic
price agree
pment es
ment
Co.,
Ltd.
Benxi Raw
Steel & materi
Execu
Iron Purch al &
Relat te
(Group) ase of supple
same on ed accor
Constru goods menta 228.1 0.00 35,00 2020/
contro agree agree No ding Yes
ction and ry 8 % 0 4/22
ller ment ment to the
and servic materi
price agree
Repairi es als &
ment
ng Co., spare
Ltd. parts
Benxi
Steel &
Execu
Iron Purch
Relat te
(Group) ase of
same on ed accor
Constru goods projec 1,911. 0.04 2020/
contro agree agree No ding No
ction and t fees 38 % 4/22
ller ment ment to the
and servic
price agree
Repairi es
ment
ng Co.,
Ltd.
54
Bengang Steel Plates Co., Ltd. Annual Report 2020
The
Amou appro
Pricin Whet Mean Avail
nt of ved
Type Conte g Price Propo her s of able
relate tradin
of nt of princi of rtion excee paym marke
d g Date Index
Relati relate relate ple of relate of d the ent of t price
Related party limit of of
onshi d d relate d simila appro relate of
parties transa of disclo discl
p party party d party r ved d simila
ctions transa sure osure
transa transa party transa transa limite party r
(in 10 ctions
ctions ctions transa ctions ctions d transa transa
thous (in 10
ctions (Y/N) ctions ctions
and) thous
and)
Benxi
Steel &
Execu
Iron Purch
Relat te
(Group) ase of
same on ed accor
Constru goods repair 17,47 0.38 2020/
contro agree agree No ding No
ction and fees 5.94 % 4/22
ller ment ment to the
and servic
price agree
Repairi es
ment
ng Co.,
Ltd.
Bengan Raw
Execu
g Purch materi
Relat te
Electro ase of al &
same on ed accor
nics goods supple 13,85 0.30 20,00 2020/
contro agree agree No ding Yes
and and menta 6.3 % 0 4/22
ller ment ment to the
Gas servic ry
price agree
Co., es materi
ment
Ltd. als
Bengan
Execu
g Purch
Relat te
Electro ase of
same repair on ed accor
nics goods 3,063. 0.07 2020/
contro servic agree agree No ding No
and and 31 % 4/22
ller es ment ment to the
Gas servic
price agree
Co., es
ment
Ltd.
Benxi
High- Execu
Purch
tech Relat te
ase of
Drilling same on ed accor
goods spare 0.00 2020/
Tools contro agree agree 39 500 No ding Yes
and parts % 4/22
Manufa ller ment ment to the
servic
cture price agree
es
Co., ment
Ltd.
Benxi Execu
Purch
New Relat te
ase of
Career same repair on ed accor
goods 0.00 2020/
Develo contro servic agree agree 1,800 No ding No
and % 4/22
pment ller es ment ment to the
servic
Co., price agree
es
Ltd. ment
Raw
Benxi materi Execu
Purch
New al & Relat te
ase of
Career same supple on ed accor
goods 1,028. 0.02 2020/
Develo contro menta agree agree No ding Yes
and 9 % 4/22
pment ller ry ment ment to the
servic
Co., materi price agree
es
Ltd. als & ment
food
55
Bengang Steel Plates Co., Ltd. Annual Report 2020
The
Amou appro
Pricin Whet Mean Avail
nt of ved
Type Conte g Price Propo her s of able
relate tradin
of nt of princi of rtion excee paym marke
d g Date Index
Relati relate relate ple of relate of d the ent of t price
Related party limit of of
onshi d d relate d simila appro relate of
parties transa of disclo discl
p party party d party r ved d simila
ctions transa sure osure
transa transa party transa transa limite party r
(in 10 ctions
ctions ctions transa ctions ctions d transa transa
thous (in 10
ctions (Y/N) ctions ctions
and) thous
and)
Liaonin Execu
Purch
g Relat te
ase of
Metallu same on ed accor
goods spare 933.2 0.02 2020/
rgy contro agree agree 1,500 No ding Yes
and parts 6 % 4/22
Technic ller ment ment to the
servic
ian price agree
es
College ment
Liaonin
g Execu
Purch
Metallu Relat te
ase of
rgy same on ed accor
goods projec 0.00 2020/
Vocatio contro agree agree 1,000 No ding No
and t fees % 4/22
nal ller ment ment to the
servic
Technic price agree
es
al ment
College
Liaonin
g Execu
Purch
Metallu Relat te
ase of
rgy same repair on ed accor
goods 648.2 0.01 2020/
Vocatio contro servic agree agree No ding No
and 4 % 4/22
nal ller es ment ment to the
servic
Technic price agree
es
al ment
College
Bengan
g Raw
Execu
Group Purch materi
Relat te
Internat ase of al &
same on ed accor
ional goods supple 508,9 10.97 25,00 2020/
contro agree agree No ding Yes
Econo and menta 61.39 % 0 4/22
ller ment ment to the
mic and servic ry
price agree
Trading es materi
ment
Co., als
Ltd.
Bengan
g
Execu
Group Purch
Relat te
Internat ase of
same on ed accor
ional goods agenc 5,531. 0.12 2020/
contro agree agree No ding No
Econo and y fees 64 % 4/22
ller ment ment to the
mic and servic
price agree
Trading es
ment
Co.,
Ltd.
Bengan Execu
Purch
g Relat te
ase of
Group same Port on ed accor
goods 9,279. 0.20 2020/
Internat contro surcha agree agree No ding No
and 98 % 4/22
ional ller rges ment ment to the
servic
Econo price agree
es
mic and ment
56
Bengang Steel Plates Co., Ltd. Annual Report 2020
The
Amou appro
Pricin Whet Mean Avail
nt of ved
Type Conte g Price Propo her s of able
relate tradin
of nt of princi of rtion excee paym marke
d g Date Index
Relati relate relate ple of relate of d the ent of t price
Related party limit of of
onshi d d relate d simila appro relate of
parties transa of disclo discl
p party party d party r ved d simila
ctions transa sure osure
transa transa party transa transa limite party r
(in 10 ctions
ctions ctions transa ctions ctions d transa transa
thous (in 10
ctions (Y/N) ctions ctions
and) thous
and)
Trading
Co.,
Ltd.
Benxi
Steel &
Iron
Execu
(Group) Purch
Relat te
Informa ase of
same on ed accor
tion goods spare 850.3 0.02 10,00 2020/
contro agree agree No ding Yes
and and parts 5 % 0 4/22
ller ment ment to the
Automa servic
price agree
tic es
ment
Tech
Co.,
Ltd.
Benxi
Steel &
Iron
Execu
(Group) Purch
Relat te
Informa ase of
same on ed accor
tion goods projec 1,121. 0.02 2020/
contro agree agree No ding No
and and t fees 38 % 4/22
ller ment ment to the
Automa servic
price agree
tic es
ment
Tech
Co.,
Ltd.
Benxi
Steel &
Iron
Execu
(Group) Purch
Relat te
Informa ase of
same repair on ed accor
tion goods 1,732. 0.04 2020/
contro servic agree agree No ding No
and and 5 % 4/22
ller es ment ment to the
Automa servic
price agree
tic es
ment
Tech
Co.,
Ltd.
Benxi
Steel &
Execu
Iron Purch
Relat te
(Group) ase of
same heatin on ed accor
Therma goods 0.00 2020/
contro g agree agree 119 500 No ding No
l Power and % 4/22
ller costs ment ment to the
Develo servic
price agree
pment es
ment
Co.,
Ltd.
Benxi same Purch Raw on Relat Execu
0.00 2020/
Steel & contro ase of materi agree ed 71.04 No te Yes
% 4/22
Iron ller goods al & ment agree accor
57
Bengang Steel Plates Co., Ltd. Annual Report 2020
The
Amou appro
Pricin Whet Mean Avail
nt of ved
Type Conte g Price Propo her s of able
relate tradin
of nt of princi of rtion excee paym marke
d g Date Index
Relati relate relate ple of relate of d the ent of t price
Related party limit of of
onshi d d relate d simila appro relate of
parties transa of disclo discl
p party party d party r ved d simila
ctions transa sure osure
transa transa party transa transa limite party r
(in 10 ctions
ctions ctions transa ctions ctions d transa transa
thous (in 10
ctions (Y/N) ctions ctions
and) thous
and)
(Group) and supple ment ding
Therma servic menta price to the
l Power es ry agree
Develo materi ment
pment als
Co.,
Ltd.
Benxi
Execu
Steel & Purch
Relat te
Iron ase of
same on ed accor
(Group) goods design 125.9 0.00 2020/
contro agree agree 2,000 No ding No
Designi and fees 8 % 4/22
ller ment ment to the
ng servic
price agree
Institut es
ment
e
Raw
Benxi Execu
Purch materi
Beiying Relat te
ase of al &
Steel & same on ed accor
goods supple 492,3 10.61 1,550, 2020/
Iron contro agree agree No ding Yes
and menta 90.02 % 000 4/22
(Group) ller ment ment to the
servic ry
Co., price agree
es materi
Ltd. ment
als
Benxi Execu
Purch
Beiying Relat te
ase of
Steel & same Energ on ed accor
goods 46,58 1.00 2020/
Iron contro y& agree agree No ding Yes
and 9.86 % 4/22
(Group) ller Power ment ment to the
servic
Co., price agree
es
Ltd. ment
Benxi Execu
Purch
Beiying Relat te
ase of
Steel & same on ed accor
goods Freigh 407.5 0.01 2020/
Iron contro agree agree No ding No
and t 3 % 4/22
(Group) ller ment ment to the
servic
Co., price agree
es
Ltd. ment
Benxi Execu
Purch
Beiying Relat te
ase of
Steel & same on ed accor
goods labor 7,190. 0.15 2020/
Iron contro agree agree No ding No
and costs 62 % 4/22
(Group) ller ment ment to the
servic
Co., price agree
es
Ltd. ment
Benxi Execu
Purch
Beiying Relat te
ase of
Steel & same on ed accor
goods spare 1,710. 0.04 2020/
Iron contro agree agree No ding Yes
and parts 81 % 4/22
(Group) ller ment ment to the
servic
Co., price agree
es
Ltd. ment
58
Bengang Steel Plates Co., Ltd. Annual Report 2020
The
Amou appro
Pricin Whet Mean Avail
nt of ved
Type Conte g Price Propo her s of able
relate tradin
of nt of princi of rtion excee paym marke
d g Date Index
Relati relate relate ple of relate of d the ent of t price
Related party limit of of
onshi d d relate d simila appro relate of
parties transa of disclo discl
p party party d party r ved d simila
ctions transa sure osure
transa transa party transa transa limite party r
(in 10 ctions
ctions ctions transa ctions ctions d transa transa
thous (in 10
ctions (Y/N) ctions ctions
and) thous
and)
Liaonin
g
Hengto
Execu
ng Purch
raw Relat te
Metallu ase of
same materi on ed accor
rgical goods 8,336. 0.18 15,00 2020/
contro al & agree agree No ding Yes
Equipm and 02 % 0 4/22
ller spare ment ment to the
ent servic
parts price agree
Manufa es
ment
cture
Co.,
Ltd.
Liaonin
g
Hengto
Execu
ng Purch
Relat te
Metallu ase of repair
same on ed accor
rgical goods & 661.1 0.01 2020/
contro agree agree No ding No
Equipm and labor 4 % 4/22
ller ment ment to the
ent servic costs
price agree
Manufa es
ment
cture
Co.,
Ltd.
Liaonin Execu
Purch
g raw Relat te
ase of
Hengtai same materi on ed accor
goods 138.5 0.00 2020/
Heavy contro al & agree agree 8,000 No ding Yes
and 9 % 4/22
Machin ller spare ment ment to the
servic
ery Co., parts price agree
es
Ltd. ment
Liaonin Execu
Purch
g Relat te
ase of repair
Hengtai same on ed accor
goods & 716.9 0.02 2020/
Heavy contro agree agree No ding No
and labor 9 % 4/22
Machin ller ment ment to the
servic costs
ery Co., price agree
es
Ltd. ment
Execu
Purch
Bengan proper Relat te
ase of
g ty on ed accor
contro goods 0.00 20,00 2020/
Group manag agree agree No ding No
ller and % 0 4/22
Co., ement ment ment to the
servic
Ltd. fees price agree
es
ment
Execu
Purch
Bengan Relat te
ase of
g on ed accor
contro goods labor 18,87 0.41 2020/
Group agree agree No ding No
ller and costs 6.38 % 4/22
Co., ment ment to the
servic
Ltd. price agree
es
ment
59
Bengang Steel Plates Co., Ltd. Annual Report 2020
The
Amou appro
Pricin Whet Mean Avail
nt of ved
Type Conte g Price Propo her s of able
relate tradin
of nt of princi of rtion excee paym marke
d g Date Index
Relati relate relate ple of relate of d the ent of t price
Related party limit of of
onshi d d relate d simila appro relate of
parties transa of disclo discl
p party party d party r ved d simila
ctions transa sure osure
transa transa party transa transa limite party r
(in 10 ctions
ctions ctions transa ctions ctions d transa transa
thous (in 10
ctions (Y/N) ctions ctions
and) thous
and)
2,144,
3,141,
Total -- -- 591.3 -- -- -- -- -- --
500
3
Details of any sales return of a large
No applicable
amount
Give the actual situation during the
reporting period where a forecast
had been made for the total amounts
of routine related-party No applicable
transactions，by type to occur in
the current period(if any)
Reason for any significant
difference between the transaction
No applicable
price and the Market price for
reference (if applicable)
2. Related transactions relevant to asset acquisition or sold
□ Applicable √ Not applicable
There was no related transaction relevant to asset acquisition or sold during the reporting period.
3. Related transactions relevant to joint investments
□ Applicable √ Not applicable
There was no related transaction relevant to joint investments during the reporting period.
4. Credits and liabilities with related parties
□Applicable √ Not applicable
There were no non-operating related credits and debts during the reporting period.
5. Other significant related transactions
□Applicable √ Not applicable
XVII. Major Contracts and Their Performance
1. Trusteeship, contracting and lease
(1) Trusteeship
□ Applicable √ Not applicable
There was no trusteeship during the reporting period.
60
Bengang Steel Plates Co., Ltd. Annual Report 2020
(2) Contracting
□ Applicable √ Not applicable
There was no contracting during the reporting period.
(3) Lease
√ Applicable □ Not applicable
Lease income of
Lease income of 2020
Lessee Lease capital category 2019 (included
(included tax)
tax)
Benxi Steel & Iron (Group) Steel & Warehouse and Affiliated facilities
Iron Process and Logistics Co., Ltd. 500,000.00 500,000.00
Benxi Steel & Iron (Group) Plants and Affiliated facilities
Machinery Manufacture Co., Ltd. 122,500.03
Lessor Lease capital category Lease income of 2020 Lease income of
(without tax) 2019 (without tax)
Land use rights 7,669,068.17 square
Benxi Steel & Iron (Group) Co., Ltd. meters, land use rights 42,920.00 55,277,544.11 54,984,486.36
square meters
2300 hot rolling mill production line,
Benxi Steel & Iron (Group) Co., Ltd.
related properties 16,098,161.06 167,859,103.82
Benxi Beiying Steel & Iron (Group) 1780 hot rolling mill production line,
Co., Ltd. related properties 15,006,983.06 83,686,698.60
Land use rights 728,282.30 square
Bengang Group Co., Ltd
meters 9,945,423.08 4,972,711.56
Gains or losses from lease counted over 10% of total profit.
□ Applicable √ Not applicable
During the reporting period, there were no lease projects that resulted in a profit or loss of more than 10% of the total profit of the
company during the reporting period
2. Guarantee
□ Applicable √ Not applicable
There was no guarantee during the reporting period.
3. Entrusting Others for Managing Cash Asset
(1) Entrusted Finance
□ Applicable √ Not applicable
There was no entrusted finance during the reporting period.
(2) Entrusted Loans
□ Applicable √ Not applicable
There was no entrusted loan during the reporting period.
4. Other Major Contracts
□ Applicable √ Not applicable
There was no other major contract during the reporting period.
61
Bengang Steel Plates Co., Ltd. Annual Report 2020
XVIII. Social Responsibilities
1. Performing other corporation social responsibilities
During the reporting period, the company actively protected the legitimate rights and interests of creditors and all
employees while pursuing the economic benefits of the company and protecting the interests of shareholders, in
accordance with the spirit of corporate social responsibility, and actively treated suppliers, customers and consumers.
Public welfare undertakings such as environmental protection and community building. In the business activities,
consciously follow the principles of voluntariness, fairness, equal pay, honesty and credit, consciously abide by social
morality, professional ethics, consciously accept the supervision of the government and the public, and actively fulfill the
corporate social responsibility.
2. Performing corporation social responsibility of targeted poverty alleviation
In the annual report of the company, there has been no accurate poverty alleviation work, and there is no follow-up
accurate poverty alleviation plan.
3. Environmental protection-related conditions
Whether the listed company and its subsidiaries belong to the key pollutant discharge units announced by the
environmental protection department.
Yes
Main The
The distribution Emission The Approved Surpass the
pollutants Discharge number of Total
Name of discharge concentra emission total emission
and specific modes discharge emission
hatch tion standard emission standard
pollutants hatch
Sewage COD：240
Bengang Energy integral COD24 Sewage Unapproved
COD、 tons；
Steel Plates Continuous 1 factory sewage 、 COD50、 by the None
Ammonia Ammonia： government
Co., Ltd. treatment plant. Ammonia Ammonia 8
2 5.43 tons
Raw material
dumper, transfer
station, Raw
receiving ore materials
tank, pre-batch; 14-23; Raw
coke oven Sintering materials
adding coal, 8-40; 25;
pushing coke Ironmaki Sintering
dry quenching; ng 7-35; 30-50;
ironmaking Steelmaki Ironmaking
tapping field, ng 7-27; 25-50;
furnace roof, Special Steelmaking
fuel, solvent, steel 7- 20-50;
Bengang Continuous granulation, ore 15; Special Unapproved
Particulate coke tank; Coking steel 20-50; 13081 tons by the
Steel Plates and 179 None
Matter sintering head, Coking 15-
Co., Ltd. intermittent 15-30; government
machine Tail; 50;
iron and steel Power
generatio power
water
n 5-10; generation
pretreatment,
Cold 10-30;
ferroalloy
feeding, north- rolling; cold rolling
south infusion 6-18 ; 20; hot
station, tundish, hot rolling 20;
primary dust rolling 6- Scrap steel
removal, 15. 20.
secondary dust Scrap
removal, steel 20
refining dust
removal; special
62
Bengang Steel Plates Co., Ltd. Annual Report 2020
steel electric
furnace, refining
furnace, electric
slag furnace;
power
generation
boiler
desulfurization
and
denitrification;
cold rolling acid
regeneration,
Pickling,
drawing
straightening,
welding
machine,
smoothing,
annealing,
roasting; hot
rolling heating
furnace. Scrap
steel cutting
Sintering
head 12-
40;
Sintering head; Power Sintering
Power generatio head 200;
generation n boiler Power
Bengang Continuous boiler; Coke 10-70; generation Unapproved
5262.76
Steel Plates SO and 64 oven chimney; Coke 100; Coke by the None
tons
Co., Ltd. intermittent cold rolling oven 40; oven 50; government
roasting, Cold Cold rolling
annealing; hot rolling 150; Hot
rolling furnace. 80-100; rolling 150.
Hot
rolling
118-128.
Sintering
head 100- Sintering
Sintering head; 230; head 300;
power Power Coke oven
generation generatio chimney
Bengang Continuous Unapproved
Oxides of boiler; cold n 50-140; 150; Power
Steel Plates and 57 11267 tons by the None
nitrogen rolling roasting, Cold generation
Co., Ltd. intermittent government
annealing; hot rolling 100-200;
rolling furnace. 69-172; Cold rolling
furnace. Hot 300; Hot
rolling rolling 300.
105-124.
Construction and operation of pollution prevention facility:
The company has a total of 179 sets of environmental pollution prevention and control facilities. All processes are equipped with dust
removal, desulfurization and denitrification, and online facilities in accordance with pollutant emission standards. Environmental
protection facilities such as wet desulfurization of sintering machine head, dry desulfurization and denitrification of coke oven chimney,
and wet desulfurization and SCR denitrification of power generation have been put into use normally.
Environmental Impact Assessment and Other Environmental Protection Administrative Licensing of Construction Projects
(1) Advanced treatment and reuse project of board water. Obtained EIA approval: Benxi City Ecological Environment
Bureau, Ben Huan Jian Table Zi [2020] No. 03.
(2) Special steel rolling mill renovation project (Phase II, Phase III) project. Obtained EIA approval: Benxi City Ecological
Environment Bureau, Ben Huan Jian Table Zi [2020] 05.
(3) Upgrade and transformation project of plate special steel electric furnace. Obtained EIA approval: Liaoning Provincial
Department of Ecology and Environment, Liaohuanhan [2019] No. 172.
(4) Production capacity replacement project for plate No. 5 blast furnace. Obtained EIA approval: Liaoning Provincial
63
Bengang Steel Plates Co., Ltd. Annual Report 2020
Department of Ecology and Environment, Liaohuanhan [2019] No. 171.
(5) The flue gas desulfurization and denitrification project of No. 7 coke oven in the plate coking plant. Obtained EIA
approval: Benxi City Ecological Environment Bureau, Ben Huan Jian Biao Zi [2019] No. 10.
(6) Ultra-low emission transformation project for thermal power workshop of sheet power plant. It has completed the EIA
registration form for the record, record number: 202021050200000075.
(7) A new tower type desulfurization renovation project was added to the plate coking plant. It has completed the EIA
registration form for the record, record number: 202021050200000081.
(8) Plate steelmaking plant 1#2#3#7# converter secondary and tertiary dust removal system transformation project: It has
completed the environmental assessment registration form for the record, record number: 202021050200000084.
(9) The converter gas recovery and efficiency improvement project in the plate plant area has obtained the environmental
impact assessment approval: Benxi City Ecological Environment Bureau, Ben Huan Jian Biao Zi [2020] No. 10.
(10) The flue gas desulfurization and denitrification project of No. 8 and 9 coke ovens of the plate coking plant, obtained
the environmental impact assessment approval: Benxi City Ecological Environment Bureau, Ben Huan Jian Table Zi
[2020] No. 11.
(11) The Caixi Special Steel Feeding Station Project of Benxi Iron and Steel Plate Scrap Plant has obtained environmental
assessment approval: Benxi City Ecological Environment Bureau, Benhuan Jianbiao Zi [2020] No. 12.
Emergency plan for emergency environmental incidents
The company and its subordinate 13 units are revised the emergency plans for emergency environmental incidents, and
carried out related work such as risk assessment and investigation of emergency resources in accordance with the "Law
of the People's Republic of China on Incident Responses", "Notice on Printing and Distributing the Guidelines for Risk
Assessment of Enterprises' Environmental Emergencies (Trial)", and "Emergency Preparedness for Environmental
Incidents of Enterprises and Institutions" Existing laws and regulations such as the Administrative Measures (Trial).
Environmental self-monitoring project.
In 2020, the self-monitoring plan was carried out in accordance with the requirements of the pollutant discharge permit.
The monitoring points of Bengang Steel pollution sources: 168 flue gas, 10 wastewater monitoring points, 13 noise points
at the boundary of the plant, 27 atmospheric dustfall points, and 71 unorganized monitoring. From the plate factory to the
mine, the monitoring is divided into weekly, monthly, seasonal, semi-annual and annual frequency monitoring. The main
monitoring items of the automatic air quality monitoring station obtained total of 52,560 monitoring data throughout the
year; 27 steel dust points were distributed in the steel plant area, and 324 monitoring data were obtained; routine
monitoring tasks for flue gas were completed, and monitoring was achieved throughout the year 1624 data; 13 noise
monitoring points at the boundary of the plant, 416 monitoring data; 10 wastewater monitoring points, 4,847 monitoring
data; 251 temporary monitoring data, and a total of 7,462 monitoring data reported by the monitoring station. Monthly,
quarterly reports and separate monitoring reports for each mine are reported.
Other environmental information that should be disclosed
None
Other environmental protection related information
None
XIX. Other Major Issues
√ Applicable □ Not applicable
1. Issuance and listing of convertible bonds
Approved by the China Securities Regulatory Commission "Zheng Jian Xu Ke [2020] No. 46", the company publicly issued 68 million
convertible corporate bonds on June 29, 2020, each with a face value of RMB 100 and a total issuance of RMB 6.8 billion. The
convertible bonds of this public offering are given priority placement to the original shareholders of the company registered after the
market close on the equity registration date, and the balance of the original shareholders' priority placement (including the portion that
the original shareholders waived the priority placement) is used online to public investors through the Shenzhen Stock Exchange The
way the trading system is sold. The part of the subscription amount less than 6.80 billion will be underwritten by the lead underwriter.
With the approval of the “Shenzhen Stock Exchange [2020] No. 656” of the Shenzhen Stock Exchange, the company’s RMB 6.80
billion of convertible corporate bonds will be listed on the Shenzhen Stock Exchange on August 4, 2020. The abbreviation of the bonds
is "Bengang Convertible Bonds" and the bond code is " 127018".
2. Benxi Iron and Steel (Group) Co., Ltd., the controlling shareholder of the company, plans to increase its own funds through methods
permitted by laws and regulations (including but not limited to centralized bidding and block transactions) within 6 months from
February 14, 2020. Holding company shares. The total amount of this shareholding increase plan is not less than RMB 50 million, not
more than RMB 100 million, and there is no price range. The implementation of the share increase plan was completed on August 13,
2020. Benxi Iron and Steel Company has increased its holdings of the company’s shares by 28,523,000 shares, accounting for 0.74%
of the company’s total share capital, the total amount of holdings increased by RMB 99,976,300, and the average holding price was
64
Bengang Steel Plates Co., Ltd. Annual Report 2020
RMB 3.51 per share.
XX. Major Issues of Subsidiaries
□ Applicable √ Not applicable
65
Bengang Steel Plates Co., Ltd. Annual Report 2020
VI. Status of Share Capital Changes and Shareholders
I. Share Capital Changes
1. Share capital changes
Unit: Share
Before the change Increase/decrease(+，-) After the Change
Capitaliz
ation of
Percenta Issuing of new Bonus Percenta
Quantity common Others Subtotal Quantity
ge share shares ge
reserve
fund
I. Restricted Shares
2. State-own Legal-person
Shareholding
3. Other domestic
shareholdings
Including: Domestic legal
person holding
Domestic
person holding
II. Non-restricted Shares 3,875,371,532 100.00% 3,875,371,532 100.00%
1. Common shares in
3,475,371,532 89.68% 3,475,371,532 89.68%
RMB
2. Foreign shares in
400,000,000 10.32% 400,000,000 10.32%
domestic market
III. Total shares 3,875,371,532 100.00% 3,875,371,532 100.00%
Causation of share capital changes
□Applicable √Not applicable
Approval of share capital changes
□Applicable √Not applicable
Status of registration process of transferred shares
□Applicable √Not applicable
Progress of Share Repurchase
□ Applicable √ Not applicable
Implementation Progress of Reducing Holdings of Repurchase Shares by Centralized Bidding
□ Applicable √ Not applicable
Influences of share capital changes on financial indices such as basic earnings per share, diluted earnings per share, and net asset per
share attributed to common shareholders
□ Applicable √ Not applicable
Other information the Company deems necessary to be disclosed or required by the authority
□ Applicable √ Not applicable
2. Changes of Restricted Shares
□ Applicable √ Not applicable
66
Bengang Steel Plates Co., Ltd. Annual Report 2020
II. Securities Issuance and Listing
1. Status of Security Issuance (Excluding Preferred Shares) in the Reporting Period
√ Applicable □ Not applicable
The name of Issue price Number of
Transaction
the stock and （or interest Issue number Listing date approved Disclosure Disclosure
Issue date termination
derivative listing Index date
rate） date
securities transactions
Stocks
Convertible corporate bonds, separately traded convertible corporate bonds, corporate bonds
Bengang
6,800,000,00 August 6,800,000,00
Convertible June 29 ,2020 100 June 28,2026
0 04,2020 0
Bonds
Other derivative securities
Notes to securities issuance (excluding preferred shares) during the reporting period
Approved by the China Securities Regulatory Commission "Zheng Jian Xu Ke [2020] No. 46", the company publicly issued 68 million
convertible corporate bonds on June 29, 2020, each with a face value of RMB 100 and a total issuance of RMB 6.8 billion. The
convertible bonds of this public offering are given priority placement to the original shareholders of the company registered after the
market close on the equity registration date, and the balance of the original shareholders' priority placement (including the portion that
the original shareholders waived the priority placement) is used online to public investors through the Shenzhen Stock Exchange The
way the trading system is sold. The part of the subscription amount less than RMB 6.80 billion will be underwritten by the lead
underwriter.
With the approval of the “Shenzhen Stock Exchange [2020] No. 656” of the Shenzhen Stock Exchange, the company’s RMB 6.80
billion of convertible corporate bonds will be listed on the Shenzhen Stock Exchange on August 4, 2020. The abbreviation of the bonds
is "Bengang Convertible Bonds" and the bond code is " 127018".
Bond’s term to maturity: The maturity of the convertible corporate bonds issued this time is 6 years from the date of issuance, that is,
from June 29, 2020 to June 28, 2026.
Coupon interest rates: 0.6% in the first year, 0.8% in the second year, 1.5% in the third year, 2.9% in the fourth year, 4.0% in the fifth
year, and 5.0% in the sixth year.
Conversion period: The conversion period of the convertible corporate bonds issued this time starts from six months after the first
trading day issuance of the convertible corporate bonds (July 3, 2020) to the convertible corporate bonds The expiry date is from
January 4, 2021 to June 28, 2026.
Initial conversion price: RMB 5.03 /share.
2. Total Share and Shareholder Change and Asset and Liability Structure Change
□ Applicable √ Not applicable
3. Employee Shareholding Status
□ Applicable √ Not applicable
III. Shareholders and Actual Controller
1. Total Number of shareholders and shareholding
In Shares
Total
The total number of Total preferred
shareholders at
Total number of shareholders at the
the end of the preferred shareholders
common shareholders end of the month from
50,293 month from the 51,611 voting rights restored at 0 0
at the end of the the date of disclosing
date of the end of the reporting
reporting period the annual report (if
disclosing the period (See Notes 8) any) (See Notes 8)
annual report
67
Bengang Steel Plates Co., Ltd. Annual Report 2020
Shareholding of shareholders holding more than 5% or top 10 shareholders
Holding Number of Changes in Number of pledged or
Name of the Nature of Restricted Un-restricted frozen shares
Percentage shares held at reporting
shareholder shareholder shares held shares held
(%) period-end period Status Number
Benxi Steel & Iron State-owned Pledged 712,545,000
62.18% 2,409,628,094 28,523,000 2,409,628,094
(Group) Co., Ltd. legal person Frozen 102,100,000
CCB Principal Asset
Management – ICBC
– CR Trust – CR
Others 4.77% 184,842,883 184,842,883
Trust Xing Sheng
No. 5 Collective Fund
Trust Plan
Bei Xin Rui Feng
Fund – China
Merchants Bank – Bei
Xin Rui Feng Fund Others 4.77% 184,842,883 184,842,883
Feng Qing No. 229
Asset Management
Plan
China Life AMP
Fund– ICBC – China
Life AMP – Hua Xin
Trust Targeted Others 4.77% 184,842,883 184,842,883
Additional Shares
Issuance No. 10 Asset
Management Plan
Liaoning Provincial
Transportation State-owned
3.88% 150,470,883 -34,248,500 150,470,883
Investment Group legal person
Co., Ltd.
Shanghai Yicun
Investment
Management Co.,
Ltd.-Yicun Shenghui Others 0.31% 12,000,000 12,000,000 12,000,000
No. 3 Private Equity
Securities Investment
Fund
Domestic
Fang Lei 0.28% 10,885,300 10,885,300 10,885,300
natural person
VANGUARD
EMERGING Foreign legal
0.28% 10,702,004 10,702,004 10,702,004
MARKETS STOCK person
INDEX FUND
Domestic
Fang Huaiyue 0.24% 9,205,501 9,205,501 9,205,501
natural person
Shanghai Yingshui
Investment
Management Co.,
Ltd.-Yingshui Fulin Others 0.24% 9,175,030 9,175,030 9,175,030
No. 10 Private
Securities Investment
Fund
Strategy investors or general legal
person becomes top 10 shareholders due None
to rights issued (if any) (See Notes 3)
It is unknown to the Company whether there is any related connection or ‘Action in Concert’ as
Notes to relationship or ‘action in
described by Rules of Information Disclosing Regarding Changing of Shareholding Status of
concert’ among the top 10 shareholders.
Listed Companies existing among the above shareholders.
Shareholding of top 10 unrestricted shareholders
Un-restricted shares held at Category of shares
Name of the shareholder
the end of the reporting period Category of shares Quantity
68
Bengang Steel Plates Co., Ltd. Annual Report 2020
Benxi Steel & Iron (Group) Co., Ltd. 2,409,628,094 Common shares in RMB 2,409,628,094
CCB Principal Asset Management – ICBC – CR
Trust – CR Trust Xing Sheng No. 5 Collective 184,842,883 Common shares in RMB 184,842,883
Fund Trust Plan
Bei Xin Rui Feng Fund – China Merchants
Bank – Bei Xin Rui Feng Fund Feng Qing No. 184,842,883 Common shares in RMB 184,842,883
229 Asset Management Plan
China Life AMP Fund– ICBC – China Life
AMP – Hua Xin Trust Targeted Additional 184,842,883 Common shares in RMB 184,842,883
Shares Issuance No. 10 Asset Management Plan
Liaoning Provincial Transportation Investment
150,470,883 Common shares in RMB 150,470,883
Group Co., Ltd.
Shanghai Yicun Investment Management Co.,
Ltd.-Yicun Shenghui No. 3 Private Equity 12,000,000 Common shares in RMB 12,000,000
Securities Investment Fund
Fang Lei 10,885,300 Common shares in RMB 10,885,300
VANGUARD EMERGING MARKETS
10,702,004 Common shares in RMB 10,702,004
STOCK INDEX FUND
Fang Huaiyue 9,205,501 Common shares in RMB 9,205,501
Shanghai Yingshui Investment Management
Co., Ltd.-Yingshui Fulin No. 10 Private 9,175,030 Common shares in RMB 9,175,030
Securities Investment Fund
Benxi Steel & Iron (Group) Co., Ltd., the holding shareholder, has no relationship with
any of the other shareholders among the top 10 shareholders, neither being regarded as
action-in-concert parties by the Information Disclosure Regulations for Change of
Notes to relationship or ‘action in concert’
Shareholding in PLC. The Company is not aware of any relationship among the other
among the top 10 non-restricted shareholders,
shareholders, neither being regarded as action-in-concert parties by the Information
and among the top 10 non-restricted
Disclosure Regulations for Change of Shareholding in PLC. The Company is not aware
shareholders and top 10 shareholders
of any relationship among the top 10 shareholders, neither being regarded as action-in-
concert parties by the Information Disclosure Regulations for Change of Shareholding in
PLC.
Benxi Steel & Iron (Group) Co., Ltd. Holds 2,170,628,094 shares of the Company’s stock
through credit security account and holds 239,000,000 shares of the Company’s stock,
totaling 2,409,628,094 shares. Shanghai Yicun Investment Management Co., Ltd.-Yicun
Shenghui No. 3 Private Securities Investment Fund holds 12,000,000 shares of the
Shareholders among the top 10 participating in company's stock through investor credit securities account; Fang Lei holds 10,885,300
securities margin trading (if any) (see Note 4) shares of the company's stock through investor credit securities account; Fang Huaiyue
holds 9,205,501 shares of the company's stock through the investor's credit securities
account; Shanghai Yingshui Investment Management Co., Ltd.-Yingshui Fulin No. 10
Private Securities Investment Fund holds 9,175,030 shares of the company's stock through
the investor's credit securities account.
Whether top 10 common shareholders and top 10 un-restricted common shareholders have a buy-back agreement
dealing in reporting period
□ Yes √ No
Top 10 common shareholders and top 10 un-restricted common shareholders had no buy-back agreement dealing in
reporting period.
2. Controlling Shareholder
Nature of Controlling Shareholders: Local state holding
Type of Controlling Shareholders: Legal person
Name of the
Legal representative Date of Organization
Controlling Principal business activities
/ person in charge incorporation Code
shareholder
Business scope: steel smelt, mine exploitation, panel
Benxi Steel & Iron 9121050011972 rolling, oxygen manufacturing, pipe manufacturing, power
Yang Chengguang July 10,1996
(Group) Co., Ltd. 6263U generating, coal industry, special steel material
manufacturing, heating, supply of the water, electricity,
69
Bengang Steel Plates Co., Ltd. Annual Report 2020
wind and gas, metal processing, electro mechanics builds,
device manufacturing, architecture installation, railway,
highway transportation, import and export trade, traveling
industry, construction material, refractory material,
measuring device instrument, goods and materials supply
and marketing, development of real estate, scientific
research, design, information service, property
management, telecommunication, processing of waste
iron, property leasing, exchange of steel material, and
recycling of waste oils (to the extent of licensed to the
subsidiary companies) , property management; publishing
of Bengang Daily; designing and making of presswork and
advertisement, releasing, producing of TV advertisements
in the country and abroad.
Equity of other
domestic/foreign
listed company
with share
controlling and None
share participation
by controlling
shareholder in
reporting period
Changes of controlling shareholders during the reporting period
□ Applicable √ Not applicable
The controlling shareholder of the company has not changed during the reporting period.
3. Actual Controller
Actual controller nature: Local state owned assets management
Actual controller type: Legal person
Legal representative Date of Principal business
Name of the controlling shareholder Organization Code
/ person in charge incorporation activities
Liaoning Provincial State-owned Assets
Unknown Unknown Unknown
Supervision and Administration Commission
Equity of other domestic/foreign listed
company with share controlling and share The Company was not informed of the actual controller's control of the equity of other
participation by controlling shareholder in domestic and foreign listed companies during the reporting period.
reporting period
Change of actual controller during the reporting period
□ Applicable √ Not applicable
There is no change of actual controller during the reporting period.
Block diagram of the ownership and control relations between the Company and the actual controller
Liaoning Provincial State-owned Assets
Supervision and Administration Commission
Liaoning Council for social security fund
80% 20%
Bengang Group Co., Ltd. Huatai Securities (Shanghai) Asset Management Co., Ltd.
85.33% 14.67%
Benxi Steel & Iron (Group) Co., Ltd.
62.18%
Bengang Steel Plates Co., Ltd.
70
Bengang Steel Plates Co., Ltd. Annual Report 2020
Whether the actual controller is controlling the Company through trusteeship or other asset management service
□ Applicable √ Not applicable
4. Shareholders holding More than 10% of the Shares
□ Applicable √ Not applicable
5. Status of Share Reduction Limitation of Controlling Shareholders, Actual Controller, Restructuring Party
and Other Commitment Subjects
□ Applicable √ Not applicable
71
Bengang Steel Plates Co., Ltd. Annual Report 2020
VII. Status of Preferred Shares
□ Applicable √ Not applicable
There was no preferred stock in the company during the reporting period.
72
Bengang Steel Plates Co., Ltd. Annual Report 2020
VIII. Status of Convertible Corporate Bonds
√ Applicable □ Not applicable
I. Previous adjustments to the conversion price
With the approval of the Shenzhen Stock Exchange "Shenzhen Securities [2020] No. 656", the company’s RMB 6.8 billion convertible
corporate bonds will be listed on the Shenzhen Stock Exchange on August 4, 2020. The abbreviation of the bonds is "Bengang
Convertible Bonds" and the bond code is " 127018". Since the listing of the convertible bonds, the company has not adjusted the
conversion price, and the initial conversion price is RMB 5.03/share.
II. Cumulative share conversion
□ Applicable √ Not applicable
III. Top ten holders of convertible bonds
Unit: shares
Number of Amount of
Percentage of
Nature of convertible bonds convertible bonds
Convertible bond convertible bonds
No. convertible bond held at the end of the held at the end of the
holders held at the end of the
holders reporting period reporting period
reporting period
(sheets) (yuan)
Benxi Iron and Steel State-owned legal
1 5,500,000 550,000,000.00 8.09%
(Group) Co., Ltd. person
Shanghai Pudong
Development Bank
Co., Ltd.-Yifangda
2 Others 2,646,781 264,678,100.00 3.89%
Yuxiang Return
Bond Securities
Investment Fund
Huaxin International
Trust Co., Ltd.-
3 Huaxin TrustZhidu Others 1,046,355 104,635,500.00 1.54%
Investment No. 16
Single Fund Trust
CITIC Securities State-owned legal
4 1,000,000 100,000,000.00 1.47%
Co., Ltd. person
E Fund-Minsheng
5 Bank-Bank of Others 888,048 88,804,800.00 1.31%
Hangzhou Co., Ltd.
Huaxin International
Trust Co., Ltd.-
Huaxin
6 Others 857,768 85,776,800.00 1.26%
Trust Caitong
Investment No. 12
Single Fund Trust
7 E Fund Stable Others 779,998 77,999,800.00 1.15%
Return Fixed-income
73
Bengang Steel Plates Co., Ltd. Annual Report 2020
Pension Product-
Bank of
Communications
Co., Ltd.
Industrial and
Commercial Bank of
China Co., Ltd.-E
8 Fund Security Others 776,230 77,623,000.00 1.14%
Return Bond
Securities
Investment Fund
China Everbright
Bank Co., Ltd.-E
Fund E Fund 6-
9 month regular Others 761,925 76,192,500.00 1.12%
opening of bond
securities investment
funds
China Construction
Bank Corporation-E
Fund Double Bond
10 Others 733,755 73,375,500.00 1.08%
Enhanced Bond
Securities
Investment Fund
IV. Significant changes in the guarantor’s profitability, asset status, and credit status
□ Applicable √ Not applicable
V. At the end of the reporting period, the company’s liabilities, credit changes, and cash
arrangements for debt repayment in future years
For details, please refer to Section XI. VIII. As of the end of the reporting period, the company’s main accounting data and financial
indicators for the past two years, the company’s convertible bond credit rating for the current year has not changed.
74
Bengang Steel Plates Co., Ltd. Annual Report 2020
IX. Status of Directors, Supervisors, Senior Executives and
Employees
I. Change in Shares held by Directors, Supervisors and Senior Executives
Shares Shares Shares
Expiry Other Shares
Starting held at increased decreased
Office date of increase held at
Name Position Sex Age date of the during the during the
status office / the year-
office term year- reporting reporting
term decrease end
begin period period
Director, Mar 14, May
Gao Lie In office Male 53
Chairman 2019 16,2022
Director,
Jun 03, May
Cao Aimin Vice In office Male 53
2010 16,2022
Chairman
Director,
Shen May 16, May
General In office Male 52
Qiang 2019 16,2022
Manager
Huang May 24, May
Director In office Male 57
Xinghua 2018 16,2022
Yuan Independent May 21, May
In office Male 39
Zhizhu Director 2020 21,2023
Zhao Independent May 21, May 21,
In office Male 60
Xinan Director 2015 2021
Zhang Independent Femal May 16, May
In office 65
Suxun Director e 2019 16,2022
Supervisor,
Chairman of Femal Feb 19, May
Han Mei In office 51
Supervisory e 2014 16,2022
Committee
Femal Feb 19, May
Li Lin Supervisor In office 52
e 2014 16,2022
Mar 14, May
Li Xiaowei Supervisor In office Male 45
2019 16,2022
Zhao Jun 26, May
Supervisor In office Male 48
Xingtao 2019 16,2022
75
Bengang Steel Plates Co., Ltd. Annual Report 2020
Zhang Jan 26, May
Supervisor In office Male 43
Yanlong 2014 16,2022
Deputy
Bao Dec 28, May
General In office Male 57
Mingwei 2012 16,2022
Manager
Deputy
Wang Jan 26, May
General In office Male 55
Fengmin 2014 16,2022
Manager
Deputy
March May
Huo Gang General In office Male 47
14,2019 16,2022
Manager
Zhao Director of Femal April 18, May
In office 36
Zhonghua Finance e 2019 16,2022
Gao Secretary of September May
In office Male 46
Desheng the Board 20,2018 16,2022
Zhong Independent Leaving Femal May
64 20-May-14
Tianli Director office e 21,2020
Total -- -- -- -- -- --
II. Change in Directors, Supervisors and Senior Executives
√Applicable □ Not applicable
Name Position Type of change Date Reason
Independent Leaving office after Leaving office after expiry of
Zhong Tianli May 21, 2020
Director expiry of term term
III. Posts holding
Work experience, professional background and currently mainly responsibilities of Directors, Supervisors and Senior
Executives in current office
Gao Lei, Male, 53, undergraduate, master of engineering, professor-level senior engineer. Once Chairman of Benxi
Iron and Steel(Group)Mining Co.,Ltd; Manager of Mineral Resources Development Company; Assistant General
Manager of Bengang Group Co., Ltd. and Manager of Mineral Resources Development Company; He is now
Member of the Standing Committee of the company's party committee, Deputy General Manager of Bengang Group
Co.,Ltd, chairman of Bengang Steel Plate Co., Ltd.
Cao Aimin, Male, 53, undergraduate, professor-level senior accountant. Once Head of Capital Division of Finance
Department; Head of Planning and Finance Division; and Chief Accountant. Director and Chief Accountant of Benxi
Iron and Steel (Group) Co., Ltd., Ltd. He is now Member of the Standing Committee of the company's party
76
Bengang Steel Plates Co., Ltd. Annual Report 2020
committee, Director and Chief Accountant of Bengang Group Co., Ltd,, Vice Chairman of Bengang Steel Plates Co.,
Ltd.
Shen Qiang, Male, 52 years old, undergraduate, master of engineering, senior engineer. He has served as Secretary
of the Board of Directors and Director of the Board of Directors of Bengang Group Corporation, Director of the
Office, Director of the Secretary of Secretaries, Secretary of the Party Committee of Bengang Group Corporation,
Chairman of the Board of Directors of the Real Estate Company, Secretary of the Party Committee; Director of
Benxi Iron and Steel Company, Deputy Secretary of the Party Committee, Deputy General Manager, Board of
Directors Secretary; Assistant General Manager of Bengang Group Corporation, Minister of Human Resources
Department (Organization Department); assistant to the General Manager, Secretary of the Board of Directors,
Director of the Office of the Board of Directors, and Minister of the Organization Department (Human Resources
Department) of Bengang Group; current Director and General Manager of Bengang Steel Plate Co., Ltd.
Huang Xinghua, Male, 57, College degree, senior accountant. Once Deputy director of the planning and finance
department of Benxi Iron and Steel (Group) Co., Ltd.; Director and Chief accountant of Benxi Iron and Steel (Group)
Co., Ltd.; Director of the finance department of Bengang Group Co., Ltd. He is now the head of the finance
department of Bengang Group Co., Ltd., Director of Benxi Iron and Steel (Group) Co., Ltd., Director of Bengang
Steel Plate Co., Ltd.
Zhao Xinan, Male, 60, professor (doctoral supervisor) of Northeastern University. Served as the vice dean of the
School of Business Administration of Northeastern University, and a member of the National Education Department
Management Science and Engineering Teaching Steering Committee; currently a professor of the School of Business
Administration of Northeastern University, independent director of Bengang Steel Plate Co.
Zhang Suxun, Female, 65, bachelor degree, professor. Former Liaoning University Business School teacher; now
retired. The current independent director of Bengang Steel Plate Co., Ltd.
Yuan Zhizhu, male, 39, PhD degree, associate professor of accounting at Northeastern University, master supervisor,
non-practicing member of Chinese certified public accountant. Served as a lecturer in the School of Business
Administration of Northeastern University; currently the director of the Accounting Department of the School of
Business Administration of Northeastern University, and a director of the Liaoning Accounting and Abacus Mental
Arithmetic Society, and a director of the Liaoning Auditing Society; independent director of Bengang Steel Plate
Co., Ltd.
Profiles of the Supervisory Committee:
Han Mei, Female, 50, undergraduate, senior accountant. Once she was the vice head of financial department of the
Company; vice head of auditing department and head of administration department of the supervisory committee of
Bengang Group; Provincial Government Liaison in Bengang Benxi Steel & Iron (Group) Co., Ltd. Director of Audit
Dept. She now is Head of Audit Department, Director of Finance Company; Chairman of Board of Supervisors of
Bengang Steel Plate Co., Ltd.
Li Lin, Female, 52, postgraduate, engineer. Once she was the administrator of HR department of Bengang Group;
Vice Chief Engineer of Transportation Department of the Company; Substitute Chairman of the Trade Union of
Transportation Department of the Company, Secretary of Commission for Discipline Inspection of Transportation
77
Bengang Steel Plates Co., Ltd. Annual Report 2020
Department and Chairman of the Labour Union of Bengang Steel Plates Co. Ltd, Group leader of Discipline
Inspection and Supervision group One Assigned by Discipline Inspection Commission of Bengang Group Co., Ltd.
She is now Party secretary of Railway company; Supervisor of Bengang Steel Plates Co. Ltd.
Li Xiaowei, Male, 45, undergraduate, economist. He was once senior officer of the audit department and Division
chief of the operation audit department of Bengang Group Co., Ltd. He is now the deputy director of the Audit
Department of Bengang Group Co., Ltd., the supervisor of the board of supervisors of Bengang Steel Plate Co., Ltd.
Zhang Yanlong, Male, 43, undergraduate, senior engineer. He once was the workshop manager of steel-making
factory; Vice Chief of QC department of iron-making factory, Director of Steel-making plant, Manager of
Manufacturing Department of Bengang Steel Plates Co., Ltd., Assistant of Director of Production Division of Steel-
Making Plant; He is now Vice Director of Production Division of Steel-Making Plant and Supervisor of Bengang
Steel Plates Co. Ltd.
Zhao Xingtao, Male, 49, university degree, master of engineering, senior engineer. Served as Deputy Director of the
Cold Rolling Plant of Bengang Steel Plate Co., Ltd.; Party Secretary and Chairman of the Labor Union of the Cold
Rolling Plant of Bengang Steel Plate Co., Ltd.
Executives other than directors:
Bao Mingwei, Male, 57 years old, Undergraduate, senior engineer. Served as Secretary of the Party Committee,
Deputy Plant Manager and Plant Manager of the Hot Strip Mill of Bengang Steel Plate Co., Ltd.; Deputy General
Manager and Plant Manager of the Third Cold Rolling Plant of Bengang Steel Plate Co., Ltd.; Deputy Chief Engineer,
Planning and Development Department of Bengang Steel Group Co., Ltd. (Science and Technology Development
Department) Minister; Deputy Chief Engineer of Bengang Group Co., Ltd.; current Deputy General Manager of
Bengang Plate Co., Ltd.
Wang Fengmin, Male, 55, graduate degree, professor and researcher-level senior engineer. Served as deputy director,
director and party secretary of the ironmaking plant of Benxi Iron and Steel Plate Co., Ltd.; deputy general manager
and head of the manufacturing department of Benxi Iron and Steel Plate Co., Ltd.; deputy chief engineer of Benxi
Iron and Steel Group Co., Ltd.; The current deputy general manager of Bengang Steel Plate Co., Ltd.
Huo Gang, Male, 47, graduate degree, doctor of engineering, professor and researcher-level senior engineer. Served
as acting general manager and general manager of the cold rolling mill of Benxi Iron and Steel Pohang Company;
Party Secretary and Executive Deputy Director of the Third Cold Rolling Plant of Bengang Steel Plate Co., Ltd.;
Party Secretary and Plant Manager of the Third Cold Rolling Plant of Bengang Steel Plate Co., Ltd.; Director of
Bengang Steel Plate Co., Ltd. Cold Rolling Plant and General Manager of Pohang Cold Rolling.
Zhao Zhonghua, Female, 36, graduate degree, master of management, accountant. She has successively been deputy
director and director of the Finance Department of Bengang Steel Plate Co., Ltd., assistant director of the Finance
Department of Bengang Group Co., Ltd., deputy manager of Bengang Group Finance Co., Ltd., and currently the
CFO and finance minister of Bengang Steel Plate Co., Ltd.
Gao Desheng, Male, 46, undergraduate, master of management, senior economist. He has been the acting director
78
Bengang Steel Plates Co., Ltd. Annual Report 2020
of the Business Planning Department of the Operation Improvement Department of Bengang Group Co., Ltd., the
director of the Ownership Management Department of the Operation Improvement Department of Bengang Group
Co., Ltd., the director of the Ownership Management Department of the Operation Improvement Department of
Bengang Group Co., Ltd., the vice-chairman of the First Supervisory Board, and now he is the director of the office
and Secretary of the board of Bengang Group Co., Ltd..
Posts holding in Shareholders
√ Applicable □ Not applicable
Does he /she
Expiry receive
Names of the
Names of the Titles engaged in the Starting date of date of remuneration
persons in
shareholders shareholders office term office or allowance
office
term from the
shareholder
Bengang Group Co.,
Gao Lie Vice General Manager March 1, 2014 Yes
Ltd.
Bengang Group Co., November 4,
Cao Aimin Director, Chief Accountant Yes
Ltd. 2010
Bengang Group Co.,
Huang Xinghua Minister of Finance August 1, 2017 Yes
Ltd.
Benxi Iron and Steel
Huang Xinghua Director April 1, 2018 No
(Group) Co., Ltd.
Bengang Group Co., February 1,
Han Mei Director of Audit Department Yes
Ltd. 2016
Bengang Group Co., Vice Director of Audit January 1,
Li Xiaowei Yes
Ltd. Department 2018
Posts holding in other companies
√Applicable □Not applicable
Does he /she
Names of the Titles engaged Expiry receive
Names of the other Starting date of
persons in in other date of remuneration or
companies office term
office companies office term allowance from
the shareholder
Bengang Puxiang Cold-
Gao Lie Chairman December, 1,2019 No
rolled Sheet Co., Ltd.
Bengang Group Finance
Cao Aimin Chairman October, 1,2016 No
Co., Ltd.
Zhongtian Securities Co.,
Cao Aimin Director December, 1,2016 No
Ltd.
Bengang Group Finance
Han Mei Director December, 1,2016 No
Co., Ltd.
Punishment by the securities regulatory authorities in last three years
□ Applicable √ Not applicable
79
Bengang Steel Plates Co., Ltd. Annual Report 2020
IV. Remuneration to Directors, Supervisors and Senior Executives
Decision-making procedures, basis of recognition and actual payment of the remuneration to Directors, Supervisors
and Senior Executives
Decision making procedures
1. The Remuneration and Assessment Committee will produce a plan or proposal, which will be implemented upon
approval of the Board or the Shareholders’ Meeting;
2. According to performance assessment criteria and procedures, the Remuneration and Assessment Committee
undertakes assessment on the Directors and Senior Executives;
3. Remuneration amounts and ways of rewards will be proposed according to the assessment and remuneration
policies for Directors, Supervisors and Senior Executives, and adopted by voting;
4. To be implemented upon approval of the Board.
Basis of recognition
Remuneration scheme for a particular position is recognized basing on the range of responsibilities, duties.
Remunerations are distributed based on the assessment results and remuneration policies.
Actual payment of the remuneration
Remuneration is paid on monthly basis according to the remuneration allocation policies.
Remuneration of Directors, Supervisors and Senior Executives during the reporting period
Unit: RMB 10 thousand
Total Whether receive
remuneration remuneration in
Name Position Sex Age Office status
received from the the Company's
shareholder related parties
Gao Lie Director, Chairman Male 53 In office Yes
Cao Aimin Director, Vice Chairman Male 53 In office Yes
Shen Qiang Director, General Manager Male 52 In office 40.44 No
Huang Xinghua Director Male 57 In office Yes
Zhao Xinan Independent Director Male 60 In office 5 No
Zhang Suxun Independent Director Female 65 In office 5 No
Yuan Zhizhu Independent Director Male 39 In office 5 No
Supervisor, supervisory
Han Mei Female 51 In office Yes
board chairman
Li Lin Supervisor Female 52 In office 28.58 No
Li Xiaowei Supervisor Male 45 In office Yes
Zhao Xingtao Supervisor Male 48 In office 32.28 No
Zhang Yanlong Supervisor Male 43 In office 34.64 No
Bao Mingwei Deputy General Manager Male 57 In office 34.24 No
80
Bengang Steel Plates Co., Ltd. Annual Report 2020
Wang Fengmin Deputy General Manager Male 55 In office 34.44 No
Huo Gang Deputy General Manager Male 47 In office 34.07 No
Zhao Zhonghua CFO Female 36 In office 29.72 No
Gao Desheng Secretary of Board Male 46 In office 25.63 No
Zhong Tianli Independent Director Female 64 Leaving office No
Total -- -- -- -- 309.04 --
Incentive equity to Directors, Supervisors and Senior Executives during the reporting period
□ Applicable √ Not applicable
V. Staff Condition
1. Staff Population, Professional Structure and Education Level
Population of in-service staff in parent company 16,221
Population of in-service staff in main subsidiaries 524
Total population of in-service staff 16,745
Total population of staff receiving remuneration in the current
16,745
period
Population of retired staff whose expense was borne by parent
23,377
company and major subsidiary companies
Professional Composition
Type of Professional Composition Population
Production Staff 12,922
Sales Staff 188
Technician 1,532
Financial Staff 141
Administrative Staff 1,962
Total 16,745
Educational Degree
Type of Educational Degree Population
PhD. 14
Postgraduate 359
Undergraduate 3,765
Junior College 5,325
Technical secondary school 390
High School and Technical School 3,166
Middle School and others 3,726
Total 16,745
81
Bengang Steel Plates Co., Ltd. Annual Report 2020
2. Remuneration Policies
In 2020, we will further strengthen the management of salary distribution, continue to promote the total salary
contract, guide all units to rationally allocate human resources, optimize the distribution mechanism and increase
labor productivity, and give full play to the role of salary incentives and constraints. Implementing a job performance
wage system that determines individual salaries based on job value, personal abilities and performance contributions,
opening up career development channels for business, technical and operational positions; implementing an annual
salary assessment system linked to company benefits and employee income.
3. Training Plan
The company plans to complete 86 training projects and train 17,402 people throughout the year. The training rate
of the whole staff reaches 70%, and the implementation rate of the annual training plan reaches 85%.
4. Outsourcing
□ Applicable √ Not applicable
82
Bengang Steel Plates Co., Ltd. Annual Report 2020
X. Corporate Governance
I. Basic Situation of Corporate Governance
During the reporting period, the Company has been following the laws, regulations and documents
such as the Company Law, Securities Law, Governance Guidelines for Listed Companies,
Guidelines for the Normative Operation of Listed Companies on the Shenzhen Stock Exchange and
Articles of Association. Based on the actual situation of the company, the Company has been
continuously improving the corporate governance structure and internal control system of the
company, improves the governance level, and promotes the company's standardized operation. As
of the end of the reporting period, the actual situation of corporate governance meets the
requirements of the regulatory documents related to the governance of listed companies.
1. Shareholders and Shareholders' General Meeting: The company has formulated the "Rules of
Procedures for General Meetings of Shareholders" in strict accordance with the "Company Law",
"Rules for Shareholders' General Meetings of Listed Companies" and the company's "Articles of
Association" to ensure the exercise of the rights of the company's shareholders and the standard
operation of the shareholders' meeting. The company's previous shareholder meetings have provided
two attendance channels, on-site voting and online voting, to facilitate shareholders. Involving
major issues that affect the interests of small and medium investors, the company counts the votes
of small and medium investors individually and discloses them in a timely manner to ensure that all
shareholders enjoy equal status and fully exercise their rights. And by hiring lawyers to witness and
ensure the legal compliance of the convening, convening and voting procedures of the meeting, the
legitimate rights and interests of the company and shareholders have been safeguarded.
2. Directors and the board of directors: the company's board of directors has clear responsibilities,
and the company's directors exercise their powers in strict accordance with the "Articles of
Association", "Rules of Procedures of the Company's Board of Directors", "Company Independent
Directors Work System" and other related systems, perform their duties with integrity and diligence,
and safeguard the legitimate rights and interests of the company and shareholders. The company's
board of directors has four special committees, namely audit, strategy, nomination, remuneration
and assessment, each of which performs its own responsibilities and functions, and can carry out its
work in accordance with the rules of procedure of each special committee. During the reporting
period, the convening and holding procedures of the company's board of directors complied with
the “Company Law”, “Articles of Association” and “Rules of Procedure of the Board of Directors”
and other relevant laws and regulations.
3. Supervisors and Board of Supervisors: The company's supervisors can earnestly perform their
duties, independently and effectively perform supervision and inspection functions. The company's
supervisors attend shareholders' meetings, attend board meetings as non-voting delegates, regularly
inspect the company's legal operations and financial conditions, and issue opinions from the board
of supervisors. Supervise the company's finances, the performance of the company's directors and
83
Bengang Steel Plates Co., Ltd. Annual Report 2020
senior management personnel, and the capital exchanges with related parties, so as to safeguard the
legal rights and interests of the company and shareholders. The number and structure of the board
of supervisors meet the requirements of laws and regulations, and its convening and convening are
strictly implemented in accordance with the "Articles of Association" and "Rules of Procedure of
the Board of Supervisors" to ensure that the board of supervisors effectively performs its duties.
4. Controlling shareholders and the company: The company has independent and complete business
and independent management capabilities, and is independent of the controlling shareholders and
actual controllers in terms of business, personnel, assets, institutions, and finances; The company's
board of directors, board of supervisors and other internal institutions operate independently; The
company's major decisions are made by the board of directors or the general meeting of shareholders
in accordance with the law. There is no direct or indirect intervention in the company's decision-
making and production and operation activities beyond the general meeting of shareholders, nor
does it harm the interests of the company and other shareholders.
5. Information disclosure and transparency: The company strictly complies with the requirements
of the "Shenzhen Stock Exchange Stock Listing Rules" and the "Information Disclosure
Management System" and other requirements, truthful, accurate, and complete, without false
records, misleading statements or major omissions in performing information disclosure obligation,
"China Securities Journal", "Securities Times", "Hong Kong Commercial Daily" and
www.cninfo.com.cn are the designated media for company information disclosure. The company
publishes regular reports and temporary announcements through the above-mentioned information
disclosure media to ensure that all shareholders of the company can obtain information with equal
opportunities.
6. Investor relationship management: The company continues to strengthen communication with
investors to deepen investors' understanding and recognition of the company. The company appoints
the secretary of the board of directors as the person in charge of investor relations management, and
the office of the board of directors is the organization that undertakes the daily work of investor
relations management. The company makes full use of on-site meetings, dedicated telephone calls,
investor interaction platforms and other methods to communicate with the company's shareholders,
listens carefully to the opinions and suggestions of investors on the company's strategic
development and production and operation, and has established a good communication mechanism
with investors, which enhances investors' understanding and investment confidence in the company.
Whether there exists any difference in compliance with corporate governance, PRC Company Law
and relevant provisions of CSRC
□ Yes √ No
There exists no difference in compliance with corporate governance, PRC Company Law and
relevant provisions of CSRC.
84
Bengang Steel Plates Co., Ltd. Annual Report 2020
II. Explanation on Structural Independence of the Company on Business, Personnel, Assets,
Organization and Finance from the Controlling Shareholder
The Company is separated from the controlling shareholder in aspects of business, personnel, assets,
organization and finance, etc. and has its own independent and complete business operation.
(1) In business operation: The Company has its own production and business planning, financial
affairs check and calculate, labor and personnel, raw material supplies and products selling business
system independently and completely.
(2) In personnel: The Company and controlling shareholder are separate in such aspects as labor,
personnel and salary management. Such senior executives as company's chairman, general manager,
vice general manager, secretary of Board of Directors, etc. get salary from the Company, and hold
the important position other than a director in shareholder department.
(3) In Asset: The Company is separated from the controlling shareholder's clearly in asset. The
Company has its own independent purchase, production, and marketing system.
(4) In organization: The internal operations of the Company are independent; organization structure
and working function are totally independent.
(5) In finance: The company has independent financial management department, the accounting and
financial management system where are complete and operated independently, and has bank account
and pay taxes independently.
III. Competition Situations of the Industry
□ Applicable √Not applicable
IV. Annual General Meeting and Extraordinary Shareholders’ Meetings in the Reporting
Period
1. Annual General Meeting
Investor Index of information
Sessions Type Meeting Date Date of disclosure
participation ratio disclosure
Annual General Annual General Announcement No.:
76.79% May 21, 2020 May 22, 2020
Meeting of 2019 Meeting 2020-030
2. Request for Extraordinary General Meeting by Preferred Stockholders Whose Voting Rights
Restore
□ Applicable √ Not applicable
V. Duty fulfillment of Independent Directors in Reporting Period
1. The situation of independent directors attending the BOD and shareholders meeting
Attendance of independent directors
85
Bengang Steel Plates Co., Ltd. Annual Report 2020
Number of
Board Failure to
Number of
meetings Number of personally Number of
Number of meetings
Independent necessary to be attendances Number of attend board general
spot attended by
Directors attended by absence meetings meetings to be
attendances Communicatio
during the representative successively attended
n
reporting twice (Yes/No)
period
Zhao Xinan 9 1 8 0 0 No 1
Zhang Suxun 9 1 8 0 0 No 1
Yuan Zhizhu 6 1 5 0 0 No 1
Zhong Tianli 3 0 3 0 0 No 1
Illustration to failure to personally attend Board Meetings Twice Successively
2. Objection of Independent Directors on Relevant Issues
Objection of independent directors on some relevant issues
□ Yes √ No
Independent directors proposed no objection against the relevant matters during the reporting period.
3. Other Notes to Duty Fulfillment of Independent Directors
Whether any independent director’s advice to the Company was accepted
√ Yes □ No
Illustration of acceptance of or failure to accept an independent director’s advice to the Company
Independent directors have not made recommendations during the reporting period.
VI. Duty Fulfillment of the Special Committees under the Board during the reporting period
There are four special committees under the company's board of directors, namely, the audit
committee, the remuneration and appraisal committee, the nomination committee, and the
development strategy committee. During the reporting period, the special committees carried out
their work in accordance with the relevant laws and regulations, regulatory documents and other
relevant provisions based on the principle of diligence and due diligence.
(1) Performance of Audit Committee
During the reporting period, the audit committee of the company's board of directors actively
performed its duties in accordance with the “Company Law”, “Listed Company Governance
Guidelines”, “Articles of Association”, “Rules of Procedure of Audit Committee” and other
relevant regulations. Reviewed the company's regular reports, internal control self-evaluation
reports, financial final accounts reports, special reports on the deposit and use of raised funds,
renewal of the appointment of an accounting firm, Anticipating daily connected transactions, using
raised funds to replace self-raised funds invested in investment projects with raised funds in advance
and paid issuance fees, using temporarily idle funds for cash management, using idle raised funds
86
Bengang Steel Plates Co., Ltd. Annual Report 2020
to temporarily supplement working capital, etc.
(2) Performance of the Remuneration and Appraisal Committee of the Board of Directors
During the reporting period, the Remuneration and Appraisal Committee conscientiously performed
its duties in accordance with the Articles of Association, the Rules of Procedure for the
Remuneration and Appraisal Committee of the Board of Directors and other relevant regulations.
The Remuneration and Appraisal Committee reviewed the remuneration of the company's directors
and senior management in 2019, and believed that the remuneration system implemented by the
company's senior management staff, the company's directors, supervisors, and senior management
staff's remuneration during the reporting period were true and in line with the company's
performance appraisal indicators.
(3) Performance of the Nomination Committee
During the reporting period, the Nomination Committee carried out its work and performed its
duties in accordance with the Articles of Association, the Rules of Procedure for the Nomination
Committee of the Board of Directors and other relevant regulations. Deliberated the company's
nomination of independent director candidates, and put forward suggestions on the selection criteria
and procedures for company directors and senior executives.
(4) Performance of the Development Strategy Committee
During the reporting period, the Development Strategy Committee conscientiously performed its
duties in accordance with the Articles of Association, the Rules of Procedure for the Development
Strategy Committee of the Board of Directors and other relevant regulations, and reviewed the
company's 2019 Board of Directors Work Report and the 2020 Investment Framework Plan
Proposal. , According to the actual situation of the company, formulate development strategies,
discuss and analyze development plans and foreign investment, put forward opinions and
suggestions, and make decisions.
VII. Duty Fulfillment of the Supervisory Committee
Whether the supervisory board made any objection against the supervision issue during the reporting
period
□ Yes √ No
The Supervisory Board made no objection against the supervision issue during the reporting period.
VIII. Appraisal and Incentive System for Senior Executives
The Company’s performance assessment scheme for executives implements a combination of daily
accountability and annual comprehensive assessment and evaluation. Senior Executives shall be
punished if they fail to perform their duties properly, make mistakes or neglect their duty. The annual
comprehensive assessment is conducted in the form of positive evaluation, horizontal evaluation
and reverse democratic evaluation. The comprehensive evaluation results are an important basis for
selecting and appointing senior management personnel, cultivating education, management
87
Bengang Steel Plates Co., Ltd. Annual Report 2020
supervision and incentives.
IX. Internal Control
1. Significant defects of the internal control found in the internal control self-assessment report in
the reporting period
□ Yes √ No
2. Self-Evaluation Report on Internal Control
Disclosing date of internal control auditing
April 28, 2021
report full text
Index of the internal control auditing report
http://www.cninfo.com.cn
full text
Proportion of total assets of subsidiaries
belong to the scope of self-evaluation
97.79%
report in the total assets of the Company’s
consolidated financial statements
Proportion of operation income of
subsidiaries belong to the scope of self-
evaluation report in the operation income 74.70%
of the Company’s consolidated financial
statements
Standards of Defects Evaluation
Category Financial Report Non-financial Report
1. Material deficiencies：The frauds made by 1. Material
the directors, or supervisors, or senior deficiencies ： Major
management personnel that leads to errors caused by
significant losses and adverse effects to the decision-making
company. 2. Significant deficiencies：Not in procedure; the important
accordance with generally accepted business lacks
accounting standards selection and institutional control or
application of accounting policies; ； Not has a systematic failure
established anti-fraud procedures and control while lacking effective
Qualitative criteria
measures; Not established the corresponding compensatory control;
control mechanism or not implemented the serious drain of senior
corresponding compensatory control on the and middle level
accounting treatment of non-conventional or management personnel
special deals; there are one or more defects in and senior technical
the process control of the final financial report staff; the results of
and which leads to cannot reasonably internal control
guaranteeing the financial report compiled to evaluation, especially
achieve the goal of being true and accurate. the significant
88
Bengang Steel Plates Co., Ltd. Annual Report 2020
3. General deficiencies：the internal control deficiencies have not
deficiencies except those constitute the been corrected; other
material deficiencies and the significant circumstances that have
deficiencies. big negative impact on
the company. 2.
Significant
deficiencies ： General
errors caused by
decision-making
procedure; there are
defects in the important
business regulations and
system serious drain of
business personnel in
key posts; the results of
internal control
evaluation, especially
the important
deficiencies have not
been corrected; other
circumstances that have
comparably big negative
impact on the company.
3. General deficiencies：
low-efficiency on the
decision-making
process; existed defects
in the ordinary business
institution or system;
serious drain of business
personnel in general
posts; general
deficiencies that have
not been corrected.
1. Material deficiencies：1） 1. Material
misstatement≥5% of the total profits; 2） deficiencies：1）
misstatement≥3% of the total assets; 3） misstatement≥5% of the
misstatement≥1% of the total operating total profits；2）
income; 4）misstatement≥1% of the total misstatement≥3% of the
Quantitative criteria
amount of the owner’s equity. 5) 3% of the total assets；3）
total profits ≤misstatement＜5% of the total misstatement≥1% of the
profits；2. Significant deficiencies：1） total operating income.
0.5% of the total assets ≤misstatement＜3% 4）misstatement≥1% of
of the total assets；2）0.5% of the total the total amount of the
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Bengang Steel Plates Co., Ltd. Annual Report 2020
operating income ≤misstatement＜1% of the owner’s equity. 5) 3%
total operating income； 3）0.5% of the of the total profits
total amount of the owner’s equity ≤misstatement＜5% of
≤misstatement＜1% of the total amount of the total profits；2.
the owner’s equity。3. General Significant
deficiencies：1）misstatement＜3% of the deficiencies：1）0.5%
total profits；2）misstatement＜0.5% of the of the total assets
total assets；3）misstatement＜0.5% of the ≤misstatement＜3% of
total operating income；4）misstatement＜ the total assets；2）
0.5% of the total amount of the owner’s 0.5% of the total
equity。 operating income
≤misstatement＜1% of
the total operating
income；3）0.5% of
the total amount of the
owner’s equity
≤misstatement＜1% of
the total amount of the
owner’s equity。3.
General deficiencies：
1）misstatement＜3%
of the total profits；2）
misstatement＜0.5% of
the total assets；3）
misstatement＜0.5% of
the total operating
income；
Number of major defects in financial
0
reporting(a)
Number of major defects in non-financial
0
reporting (a)
Number of important defects in financial
0
reporting(a)
Number of important defects in non-
0
financial reporting(a)
X. Internal Control Audit Report
√ Applicable □ Not applicable
Opinion in the internal control audit report
We acknowledge that internal control of Bengang Bancai is effective in all material respects and is compliance
with ‘Fundamental Rules of Enterprise Internal Control’ up to December 31, 2020.
Internal Control Audit Report Disclosure
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Bengang Steel Plates Co., Ltd. Annual Report 2020
Status
Disclosure date of audit report of
April 28, 2021
internal control (full-text)
Index of audit report of internal
http://www.cninfo.com.cn
control (full-text)
Internal audit report’s opinion Standard unqualified opinion
Whether there is significant defect
No
in non-financial report
Whether the accountants’ firm issued a qualified opinion on report of internal control audit
□ Yes √ No
Whether the internal control audit report issued by the accountants’ firm agree with the self-
assessment report of the Board of Directors
√ Yes □ No
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Bengang Steel Plates Co., Ltd. Annual Report 2020
XI. Relevant Information about Corporate Bonds
Whether the company has publicly issued corporate bond which is listed on the stock exchange and is not due on
the date of approval of the annual report or has not been fully redeemed at the due date
Yes
I. Basic information about corporate bonds
Bond balance Repayment of
Bond
Bond name Bond Code Issue date Maturity Date （ten Interest rate principal and
abbreviation
thousand） interest
The convertible
bonds issued in
this issuance
adopt the
method of
paying interest
once a year,
and the
company will
Convertible pay 119% of
corporate Bengang the face value
bonds of Convertible 127018 29th June 2020 28th June 2026 680,000 of the
Bengang Steel bond convertible
Plate Co., Ltd. bonds
(including the
last annual
interest) to
investors for
the
unconverted
convertible
bond at
maturity.
Trading place for the listing or
Shenzhen Stock Exchange
transfer of corporate bonds
Investor suitability
Not applicable
arrangements
Interest payment and
The interest payment date is not due during the reporting period
redemption of corporate bonds
92
Bengang Steel Plates Co., Ltd. Annual Report 2020
during the reporting period
The implementation of the
relevant clauses during the
reporting period if corporate
bonds are accompanied by
Not applicable
special clauses such as issuer or
investor option clauses,
exchangeable clauses, etc. (if
applicable).
II. Information on bond trustees and credit rating agencies
Bond trustee：
618
Shangcheng
Guotai Junan
Road, China Chi Huitao,
Name Securities Co., Office address Contact Contact Tel 021-38676666
(Shanghai) Yang Keyi
Ltd.
Pilot Free
Trade Zone
Credit rating agencies that tracked and rated corporate bonds during the reporting period：
China Chengxin International Credit Rating Co., No. 2 Nanzhugan Hutong, Dongcheng District,
Name Office address
Ltd. Beijing 60101
During the reporting period, the bond
trustee and credit rating agency hired by
the company changed, the reason for the
Not applicable
change, the procedures performed, the
impact on the interests of investors, etc. (if
applicable)
III. Use of proceeds from corporate bonds
The use of proceeds from corporate bonds Please refer to "5 Use of raised funds" in "Five. Analysis of Investment Status" in
and the procedures for implementation "Section IV Discussion and Analysis of Business Conditions" of this report
Ending balance（RMB ten thousand） 499,130.52
In order to regulate the use and management of the company’s raised funds and protect
the rights and interests of small and medium-sized investors, in accordance with the
China Securities Regulatory Commission’s "Listed Companies Supervision Guidelines
Operation of the special account for raised No. 2-Regulatory Requirements for the Management and Use of Funds Raised by
funds Listed Companies" and "Regulations for Listed Companies on the Shenzhen Stock
Exchange" "Operation Guidelines" and the company’s fund-raising management
system and other relevant regulations, the company will cooperate with Industrial and
Commercial Bank of China Co., Ltd. Benxi Branch, Bank of China Co., Ltd. Benxi
93
Bengang Steel Plates Co., Ltd. Annual Report 2020
Branch, China Construction Bank Co., Ltd. Benxi Branch, and China Construction
Bank Co., Ltd. on July 9, 2020. Benxi Branch of Bank Co., Ltd., Benxi Xinhua Sub-
branch of Agricultural Bank of China Co., Ltd., and the sponsor Guotai Junan
Securities Co., Ltd. signed the "Tripartite Supervision Agreement on Special Accounts
for Raising Funds" and disclosed them (Announcement No.: 2020-044)
whether the use of raised funds consistent
with the promised purpose, use plan and Consistent
other agreements in the prospectus
IV. Information rating of corporate bonds
On December 10, 2019, China Chengxin International Credit Rating Co., Ltd. issued the "Bengang Steel Plate Co.,
Ltd. Public Issuance of A-Share Convertible Corporate Bonds Credit Rating Report". The rating result: The
company's main body credit rating is AA+, and the rating outlook is Stable; the corporate bond credit rating is AAA.
For details, please refer to the "Credit Rating Report of Bengang Steel Plate Co., Ltd. Public Issuance of A-Share
Convertible Corporate Bonds" disclosed on Juchao Information Website on June 23, 2020.
On July 31, 2020, China Chengxin International Credit Rating Co., Ltd. issued the "Bengang Steel Plate Co., Ltd.
Public Issuance of A-Share Convertible Corporate Bond Tracking Rating Report". The tracking rating result:
maintain the company's entity credit rating at AA+, rating the outlook is stable; the credit rating of the "Bengang
Convertible Bonds" is maintained at AAA. For details, please refer to the "Tracking Rating Report on the Public
Issuance of A-Share Convertible Bonds of Bengang Steel Plate Co., Ltd." disclosed by the company on Juchao.com
on August 6, 2020.
V. Corporate bond credit enhancement mechanism, debt repayment plan and
other debt repayment safeguard measures
1 、 Convertible corporate bond credit enhancement mechanism: Bengang Group Co., Ltd. provides a full
unconditional and irrevocable joint liability guarantee for the convertible corporate bonds issued by the company
this time. The guarantee scope includes bond principal, interest, default amount, and damages and the full cost of
realizing the creditor's rights
2、Repayment plan：
1）The convertible bond issued this time adopts the interest payment method of paying interest once a year, and the
start date of interest calculation is the first day of issuance of the convertible bond；
2）Interest payment date: The interest payment date of each year is the day of each full year from the first day of
issuance of the convertible bonds issued this time. If that day is a legal holiday or a rest day, it will be postponed to
the next trading day. The postponement period does not apply for interest payment. An interest accrual year is defined
between every two adjacent interest payment dates；
3）Creditor's interest rights registration date: The annual creditor's rights registration date is the trading day before
the annual interest payment date, and the company will pay the current year's interest within five trading days after
the annual interest payment date. For application of conversion of convertible bonds into the company's A shares
before the creditor's rights registration date (including the creditor's rights registration date), the company will no
longer pay its holders the interest of this year and interests of subsequent years；
4）The tax payable on the interest income received by the holder of the convertible bond shall be borne by the holder
of the convertible bond。
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Bengang Steel Plates Co., Ltd. Annual Report 2020
3、Repayment safeguard measures
From the end of 2018 to the end of 2020, the company's asset-liability ratio (consolidated basis) was 67.03%, 67.05%,
and 66.85%, respectively, and the asset-liability ratio (parent company) was 67.55%, 67.87%, and 67.45%, showing
a steady but declining trend; Overall, the company’s debt-to-asset ratio is still within a reasonable range.
From the end of 2018 to the end of 2020, the company's current ratio was 1.02, 0.87, and 1.04, and the quick ratio
was 0.69, 0.65, and 0.77, respectively. The current ratio and quick ratio are on the rise, and the company's short-term
debt solvency has increased.
From the end of 2018 to the end of 2020, the company's interest coverage ratio were 1.98, 1.59 and 1.4 respectively,
and the interest repayment risk was relatively low.
The source of funds for the interest payment and redemption of the convertible bonds mainly includes the income
and cash inflows from the normal operations of the company's business. The company will formulate a fund
utilization plan based on the interest payment and redemption of convertible bonds, rationally allocate funds, pay
interest on schedule, and redeem relevant amounts of convertible bonds. In the past three years and the first quarter,
the company has been operating well, with stable financial indicators and good debt solvency.
VI. Meetings of bondholders held during the reporting period
During the reporting period, the company did not hold bondholder meetings。
Ⅶ. The performance of the bond trustee's duties during the reporting period
The company’s convertible corporate bond trustee is Guotai Junan Securities Co., Ltd. During the reporting period,
Guotai Junan strictly performed the duties of the trustee in accordance with the agreement, continued to pay attention
to the company’s production and operation, financial status and credit status, and urged the company to implement
the obligations stipulated in the document of the convertible bond prospectus and have actively performed the duties
of bond trustees and effectively safeguarded the legitimate rights and interests of bondholders.
The trustee has issued to the Public on May 12, 2020, the 2019 sponsorship report on the continuous supervision of
Bengang Steel Plates, the 2019 training report on the continuous supervision of Bengang Steel Plates, the 2019 on-
site inspection report on the continuous supervision of Bengang Steel Plates, and Summary Report on Continuous
Supervision and Sponsorship of the Non-public Issuance of A Shares of Bengang Steel Plates.
VIII. As of the end of the reporting period, the Company's main accounting data
and financial indicators for the past 2 years
Unit：RMB10 thousand
Item 2020 2019 Change
EBITDA 299,275.63 334,839.47 -10.62%
Current ratio 1.04% 0.87% 0.17%
Assets and liabilities ratio 66.85% 67.05% -0.20%
Quick ratio 0.77% 0.65% 0.12%
EBITDA total liabilities ratio 0.07% 0.08% -0.01%
Interest coverage ratio 1.4 1.59 -11.95%
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Bengang Steel Plates Co., Ltd. Annual Report 2020
Cash interest coverage ratio -0.96 8.37 -111.47%
EBITDA interest coverage ratio 7.91 10.03 -21.14%
Loan repayment rate 100.00% 100.00% 0.00%
Interest repayment rate 100.00% 100.00% 0.00%
The main reason why the above accounting data and financial indicators have changed more than 30% year-on-
year
□ applicable √ Not applicable
IX. Interest payment status of other bonds and debt financing instruments during
the reporting period
During the reporting period, the Company did not make interest payments for other bonds and debt financing
instruments.
X. The status of bank credits, usage, and repayment of bank loans during the
reporting period
At the end of the reporting period, the total bank credit of the company was 37.58 billion yuan,
28.35 billion yuan had been used, and the unused credit line was 9.23 billion yuan. The total amount
of loans at the beginning of the reporting period was 18.236 billion yuan, the net repayment of loans
in the current period was 3.357 billion yuan, and the loan balance at the end of the period was 14.879
billion yuan.
XI. Implementation of relevant agreements or commitments in the corporate bond
prospectus during the reporting period
During the reporting period, the Company strictly implemented the relevant agreements and commitments in the
prospectus of convertible corporate bonds, and there was no damage to the interests of bond investors.
XII. Significant events occurred during the reporting period
None.
XIII. Whether there is any guarantor for corporate bonds
√ Yes □ No
Whether the guarantor of the corporate bonds is a legal person or other organization
√ Yes □ No
Whether to separately disclose the financial statements of the guarantor during the reporting period within 4 months
from the end of each fiscal year, including the balance sheet, income statement, cash flow statement, statement of
changes in owner's equity (shareholders' equity) and notes to the financial statements
√ Yes □ No
96
Bengang Steel Plates Co., Ltd. Annual Report 2020
XII. Financial Report
Opinion of audit report Unqualified audit opinion
Date of audit report 26th April 2021
Name of CPA Firm BDO China Shu Lun Pan CPAs LLP
PCPAR [2020] No. ZB10714
Audit report number
Name of CPA Zhu Jinmei, Li Guiying
Auditors’ Report
PCPAR [2021] No. ZB10714
To All Shareholders of Bengang Steel Plates Co., Ltd.:
Auditor’s Opinion
We have audited the accompanying financial statements of Bengang Steel Plates Co., Ltd.
(hereinafter referred to as “the Company”) which comprise the consolidated statement of
financial position and statement of financial position as at 31 December 2020, the
consolidated statement of comprehensive income and statement of comprehensive income,
the consolidated statement of changes in equity and statement of changes in equity, the
consolidated statement of cash flows and statement of cash flows for the year then ended,
and notes to the financial statements.
In our opinion, the financial statements present fairly, in all material respects, the
consolidated financial position and financial position of the Company as at 31 December
2020, and the consolidated results of operations and results of operations and the
consolidated cash flows and cash flows of the Company for the year then ended in
accordance with the requirements of Accounting standards for Business Enterprises.
Basis for Opinion
We conducted our audit in accordance with China Standards on Auditing for Certified
Public Accountants. Our responsibilities under those standards are further described in the
Auditor’s Responsibilities for the Audit of the Financial Statements section of our report.
We are independent of the Company in accordance with the China Code of Ethics for
Certified Public Accountants, and we have fulfilled our other ethical responsibilities in
accordance with China Code of Ethics for Certified Public Accountants. We believe that
the audit evidence we have obtained is sufficient and appropriate to provide a basis for our
opinion.
Key Audit Matters
97
Bengang Steel Plates Co., Ltd. Annual Report 2020
The key audit matters are matters that we consider to be the most important for the audit of
the current financial statements based on professional judgment. The response to these
matters is based on the overall audit of the financial statements and the formation of audit
opinions. We do not express a separate opinion on these matters.
We have identified the following items as key audit matters that need to be disclosed in the
audit report.
Key Audit Matters Audit Procedure
1. Provision for Bad Debts
Please refer to the Note (10) financial The audit process implemented for
instruments under “3. Significant recoverability of Accounts receivable
accounting policies and accounting includes mainly:
estimates” and Note (2) Accounts 1. Understand, evaluate and test
receivable under “5. Notes to consolidated management's aging analysis of
financial statements”. receivables and the internal control process
related to determine bad debt provision for
As at December 31, 2020, the carrying accounts receivable;
amount of Accounts receivable is RMB 2. Review the management's consideration
733,850,787.45 and the bad debt is RMB and objective evidence for the impairment
488,633,604.79. test of accounts receivable and pay close
attention to whether the management has
fully identified the items that have been
The management determines the estimated
impaired;
recoverable amount of accounts receivable
based on the assessment of the credit 3. Sample the accounts receivable tested
status, financial status and actual for impairment individually, and review on
repayment status of relevant customers. the assumption and reasonableness of
future cash flows estimation made by the
management;
Because the management determines the
4. For accounts receivable tested for
estimated recoverable amount of accounts
impairment by portfolio, evaluate the
receivable based on significant accounting
reasonableness of the bad debt provision
estimation and judgement, and the impact
proportion;
amount is significant, we determine that
the recoverability of accounts receivable is 5. Perform confirmation procedure, and
a key audit matter. check the confirmation results with the
amount recorded by the management;
6. Check the amount received after the
reporting period and evaluate the
reasonableness of provision for bad debts
made by the management.
2. Impairment of Inventory
Please refer to the Note （11）Inventory The procedures carried out for the
under “3. Significant accounting policies impairment of inventory include:
and accounting estimates” and (6) 1. Evaluated the design and operation of
Inventory under “5. Notes to internal control related to the impairment
consolidated financial statements”. of inventory;
2. Supervise stock taking and check the
As at December 31,2020, the carrying quantity and status of inventory, especially
amount of inventory in consolidated the aged inventory;
statement is RMB 9,073,623,111.13, 3. Obtain the calculation of the impairment
impairment of inventory is RMB of inventory. Check whether it follows the
33,557,768.48, the book value of inventory requirements of related accounting
98
Bengang Steel Plates Co., Ltd. Annual Report 2020
is RMB 9,040,065,342.65. Inventory is standards of the Company, check any
measured at the lower of cost and net changes of the accrual of inventory
realizable value. The sufficiency of impairment in the current period and
impairment for inventory will exert a great analyse the sufficiency of impairment;
impact on the financial statement. 4. For products with open market selling
price, we inquired the open market price
The net realizable value of finished independently and compared with the
products held for direct selling in the daily estimated selling price. For products
business activity shall be calculated by without open market selling price, we
deducting the estimated sale expense and compare the estimated price of the
relevant taxes from the estimated sale price products with the latest actual selling price
of inventories. or selling price after the reporting period.
5.Evaluate the estimated sales expenses
It involves significant judgement when the and related taxes and fees made by the
management determines the estimated management and compare with the
selling price of the finished products based historical data of similar products and
on status. compare with the actual costs occurred
after the balance sheet date.
As at December 31, 2020, the carrying
amount of inventory was significant and
involves the estimation of net realizable
value. Therefore, we identified it as a key
audit matter.
Other information
The management of the Company is responsible for the other information. The other
information comprises information of the Company's annual report for the period of 2020
but excludes the financial statements and our auditor's report.
Our opinion on the financial statements does not cover the other information and we do not
and will not express any form of assurance conclusion thereon.
In connection with our audit of the financial statements, our responsibility is to read the
other information identified above and, in doing so, consider whether the other information
is materially inconsistent with the financial statements or our knowledge obtained in the
audit if there appears to be a material misstatement.
Based on the work we have performed, if we determine that there is a material misstatement
of other information, we should report that fact. In this regard, we have nothing to report.
Responsibilities of Management and Those Charged with Governance for the Financial
Statements
Management is responsible for the preparation and fair presentation of the financial
statements in accordance with requirements of Accounting Standards for Business
Enterprises, and for such internal control as management determines is necessary to enable
the preparation of financial statements that are free from material misstatement, whether
due to fraud or error.
In preparing the financial statements, management of the Company is responsible for
assessing the Company's ability to continue as a going concern, disclosing, as applicable,
99
Bengang Steel Plates Co., Ltd. Annual Report 2020
matters related to going concern and using the going concern basis of accounting unless
management either intends to liquidate the Company or to cease operations, or has no
realistic alternative but to do so.
Those charged with governance are responsible for supervising the Company's financial
reporting process.
Auditor's Responsibilities for the Audit of the Financial Statements
Our objectives are to obtain reasonable assurance about whether the financial statements
are free from material misstatement, whether due to fraud or error, and to issue an auditor’s
report that includes our opinion. Reasonable assurance is a high level of assurance but is
not a guarantee that an audit conducted in accordance with China Standards on Auditing
for Certified Public Accountants will always detect a material misstatement when it exists.
Misstatements can arise from fraud or error and are considered material if, individually or
in the aggregate, they could reasonably be expected to influence the economic decisions of
users taken on the basis of these financial statements.
As part of an audit in accordance with accordance with Chinese Certified Public
Accountants Auditing Standards, we exercise professional judgment and maintain
professional skepticism throughout the audit. We also:
(1) Identify and assess the risks of material misstatement of the financial statements,
whether due to fraud or error, design and perform audit procedures responsive to those risks,
and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion.
The risk of not detecting a material misstatement resulting from fraud is higher than for one
resulting from error, as fraud may involve collusion, forgery, intentional omissions,
misrepresentations, or the override of internal control.
(2) Obtain an understanding of internal control relevant to the audit in order to design audit
procedures that are appropriate in the circumstances.
(3) Evaluate the appropriateness of accounting policies used and the reasonableness of
accounting estimates and related disclosures made by management.
(4) Conclude on the appropriateness of management’s use of the going concern basis of
accounting and, based on the audit evidence obtained, whether a material uncertainty exists
related to events or conditions that may cast significant doubt on Bengang Steel Plate’s
ability to continue as a going concern. If we conclude that a material uncertainty exists, we
are required to draw attention in our auditor’s report to the related disclosures in the
financial statements or, if such disclosures are inadequate, to modify our opinion. Our
conclusions are based on the audit evidence obtained up to the date of our auditor’s report.
However, future events or conditions may cause Bengang Steel Plates to cease to continue
as a going concern.
(5) Evaluate the overall presentation, structure and content of the financial statements,
including the disclosures, and whether the financial statements represent the underlying
transactions and events in a manner that achieves fair presentation.
(6) Obtain sufficient and appropriate audit evidence regarding the financial information of
entities or business activities within Bengang Steel Plates to express an opinion on the
financial statements. We are responsible for guiding, supervising and executing the group
audit and assume full responsibility for the audit opinion.
We communicate with those charged with governance regarding, among other matters, the
planned scope and timing of the audit and significant audit findings, including any
significant deficiencies in internal control that we identify during our audit.
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Bengang Steel Plates Co., Ltd. Annual Report 2020
We also provide a statement to those charged with governance on compliance with the
ethical requirements associated with independence and communicate with those charged
with governance all relationships and other matters that may reasonably be considered to
affect our independence, and related precautions (if applicable).
From the matters communicated with those charged with governance, we determine those
matters that were of most significance in the audit of the financial statements of the current
period and are therefore the key audit matters. We describe these matters in our auditor's
report unless law or regulation precludes public disclosure about the matter or when, in
extremely rare circumstances, we determine that a matter should not be communicated in
our report because the adverse consequences of doing so would reasonably be expected to
outweigh the public interest benefits of such communication.
BDO CHINA SHULUN PAN CERTIFIED Certified Public Accountants of China
PUBLIC ACCOUNTANTS LLP (Engagement Partner)
Certified Public Accountants of China
Shanghai, the People’s Republic of China 26 April 2021
This auditor’s report and the accompanying notes to the financial statement are English translation of the
Chinese auditors’ report. In case of doubt as to the presentation of these documents, the Chinese version shall
prevail.
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Bengang Steel Plates Co., Ltd. Annual Report 2020
BENGANG STEEL PLATES CO., LTD.
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
As at 31 December 2020
(Expressed in Renminbi unless otherwise indicated)
Assets Notes 5 31 Dec, 2020 31 Dec, 2019
Current assets
Cash at bank and on hand (1) 13,126,666,915.26 18,415,844,397.77
Settlement provisions
Capital lent
Financial assets held for trading
Derivative financial assets
Notes receivable -
Accounts receivable (2) 245,217,182.66 235,696,265.66
Accounts receivable financing (3) 4,189,977,871.92 2,429,542,461.88
Prepayments (4) 2,108,044,777.65 1,291,047,458.11
Premium receivable
Reinsurance accounts receivable
Receivable deposit for reinsurance contract
Other receivables (5) 142,101,351.27 172,807,036.77
Redemptory financial assets for sale
Inventories (6) 9,040,065,342.65 7,700,397,685.61
Contract assets
Assets held for sale
Non-current assets due within one year
Other current assets (7) 5,523,646,836.01 312,904,824.09
Total current assets 34,375,720,277.42 30,558,240,129.89
Non-current assets
Loan and advances issued
Debt Investments
Other debt investments
Long-term receivables
Long-term equity investments (8) 2,742,064.73 2,642,998.70
Other equity instrument investments (9) 1,042,024,829.00 1,041,824,829.00
Other non-current financial assets
Investment property
Fixed assets (10) 26,284,567,956.44 26,123,375,492.40
Construction in progress (11) 1,839,933,715.58 1,833,853,572.58
Productive biological assets
Oil and gas assets
Intangible assets (12) 264,932,652.54 271,500,023.34
Development expenditure
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Bengang Steel Plates Co., Ltd. Annual Report 2020
Assets Notes 5 31 Dec, 2020 31 Dec, 2019
Goodwill
Long-term deferred expenses
Deferred tax assets (13) 201,708,932.84 191,485,595.49
Other non-current assets (14) 995,840,320.65 708,502,552.50
Total non-current assets 30,631,750,471.78 30,173,185,064.01
Total assets 65,007,470,749.20 60,731,425,193.90
The notes to the financial statements attached form part of these financial statements.
Legal Representative: Chief Financial Officer: Chief Accountant:
BENGANG STEEL PLATES CO., LTD.
CONSOLIDATED STATEMENT OF FINANCIAL POSITION (Continued)
As at 31 December 2020
(Expressed in Renminbi unless otherwise indicated)
Liabilities and equities Notes 5 31 Dec, 2020 31 Dec, 2019
Current Liabilities
Short-term loans (15) 10,067,731,000.00 13,151,478,000.00
Loan from central bank
Loan from other banks
Financial liability held for trading
Derivative financial liabilities
Notes payable (16) 9,814,149,348.42 11,828,514,676.95
Accounts payable (17) 5,914,228,256.82 4,527,513,030.27
Advance from customers (18) 4,429,821,526.79
Contract liabilities (19) 4,458,671,819.90
Financial assets sold for repurchase
Deposits from customers and interbank
Receipt from vicariously traded securities
Receipt from vicariously underwriting securities
Employee benefits payable (20) 25,749,485.25 23,698,174.56
Current tax liabilities (21) 55,302,080.96 284,825,814.80
Other payables (22) 709,448,301.92 662,701,744.97
Handling charges and commission payable
Reinsurance accounts payable
Liabilities held for sale
Non-current liabilities due within one year (23) 1,308,030,361.43 234,474,657.99
Other current liabilities (24) 579,627,336.58
Total current liabilities 32,932,937,991.28 35,143,027,626.33
Non-current liabilities
Provision for insurance contract
Long-term loans (25) 3,502,934,427.65 4,849,675,910.73
Bonds payable (26) 5,752,229,339.52
Including: Preferred stock
Perpetual bond
Long-term payables (27) 1,114,232,362.74 516,939,408.14
Long-term employee benefits payable
Estimated liabilities
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Bengang Steel Plates Co., Ltd. Annual Report 2020
Liabilities and equities Notes 5 31 Dec, 2020 31 Dec, 2019
Deferred income (28) 154,451,833.23 208,955,407.30
Deferred tax liabilities
Other non-current liabilities
Total non-current liabilities 10,523,847,963.14 5,575,570,726.17
Total liabilities 43,456,785,954.42 40,718,598,352.50
Shareholders' equity:
Share capital (29) 3,875,371,532.00 3,875,371,532.00
Other equity instruments (30) 1,146,290,662.42
Including: Preferred stock
Perpetual bond
Capital reserves (31) 12,343,209,847.29 12,343,209,847.29
Less: treasury shares
Other comprehensive income
Special reserves (32) 300,412.14 212,687.41
Surplus reserves (33) 961,105,529.85 961,105,529.85
General risk reserve
Undistributed profits (34) 2,692,018,405.40 2,307,765,664.62
Total equity attributable to equity holders of the parent company 21,018,296,389.10 19,487,665,261.17
Non-controlling interests 532,388,405.68 525,161,580.23
Total shareholder's equity 21,550,684,794.78 20,012,826,841.40
Total of liabilities and owners’ equity 65,007,470,749.20 60,731,425,193.90
The notes to the financial statements attached form part of these financial statements.
Legal Representative： Chief Financial Officer: Chief Accountant:
BENGANG STEEL PLATES CO., LTD.
STATEMENT OF FINANCIAL POSITION
As at 31 December 2020
(Expressed in Renminbi unless otherwise indicated)
Assets Notes 14 31 Dec, 2020 31 Dec, 2019
Current assets
Cash at bank and on hand 11,808,618,300.87 16,982,227,928.89
Financial assets held for trading
Derivative financial assets
Notes receivable
Accounts receivable (1) 289,865,462.20 388,997,108.46
Accounts receivable financing (2) 4,143,431,412.08 2,193,319,842.60
Prepayments 2,117,204,935.75 1,184,632,345.13
Other receivables (3) 228,180,190.02 266,663,235.81
Inventories 7,420,499,172.20 6,114,582,832.33
Contract assets
Assets held for sale
Non-current assets due within one year
104
Bengang Steel Plates Co., Ltd. Annual Report 2020
Assets Notes 14 31 Dec, 2020 31 Dec, 2019
Other current assets 5,437,282,088.94 191,249,460.42
Total current assets 31,445,081,562.06 27,321,672,753.64
Non-current assets
Debt investments
Other debt investments
Long-term receivables
Long-term equity investments (4) 2,016,281,902.16 2,016,281,902.16
Other equity instrument investments 1,041,624,829.00 1,041,624,829.00
Other non-current financial assets
Investment property
Fixed assets 24,755,665,765.30 24,447,763,305.12
Construction in progress 1,798,639,941.58 1,813,889,136.42
Productive biological assets
Oil and gas assets
Intangible assets 142,163,903.40 145,470,040.68
Development expenditure
Goodwill
Long-term deferred expenses
Deferred tax assets 98,480,706.23 93,555,276.54
Other non-current assets 988,475,426.53 696,351,867.38
Total non-current assets 30,841,332,474.20 30,254,936,357.30
Total assets 62,286,414,036.26 57,576,609,110.94
The notes to the financial statements attached form part of these financial statements.
Legal Representative: Chief Financial Officer: Chief Accountant:
BENGANG STEEL PLATES CO., LTD.
STATEMENT OF FINANCIAL POSITION (Continued)
As at 31 December 2020
(Expressed in Renminbi unless otherwise indicated)
Liabilities and shareholders' equities Notes 14 31 Dec, 2020 31 Dec, 2019
Current liabilities
Short-term loans 9,107,731,000.00 11,851,478,000.00
Financial liability held for trading
Derivative financial liabilities
Notes payable 8,348,607,405.21 10,225,969,445.22
Accounts payable 6,280,468,684.34 4,909,389,629.86
Prepayments 5,597,707,687.22
Contract liabilities 5,324,357,761.83
105
Bengang Steel Plates Co., Ltd. Annual Report 2020
Liabilities and shareholders' equities Notes 14 31 Dec, 2020 31 Dec, 2019
Employee benefits payable 23,981,010.53 21,872,906.71
Current tax liabilities 42,514,891.31 274,181,048.14
Other payables 368,374,954.61 384,125,032.59
Liabilities held for sale
Non-current liabilities due within one year 1,308,030,361.43 234,474,657.99
Other current liabilities 692,166,509.04
Total current liabilities 31,496,232,578.30 33,499,198,407.73
Non-current liabilities
Long term loans 3,502,934,427.65 4,849,675,910.73
Bonds payable 5,752,229,339.52
Including: Preferred stock
Perpetual bond
Long-term payables 1,108,412,163.50 516,939,408.14
Long-term employee benefits payable
Estimated liabilities
Deferred income 154,451,833.23 208,955,407.30
Deferred tax liabilities
Other non-current liabilities
Total non-current liabilities 10,518,027,763.90 5,575,570,726.17
Total liabilities 42,014,260,342.20 39,074,769,133.90
Shareholder’s equity:
Share capital 3,875,371,532.00 3,875,371,532.00
Other equity instruments 1,146,290,662.42
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 120,972.62 53,330.99
Surplus reserves 961,105,529.85 961,105,529.85
Undistributed Profits 2,366,206,832.00 1,742,251,419.03
Total shareholder's equity 20,272,153,694.06 18,501,839,977.04
Total liabilities and shareholder’s equity 62,286,414,036.26 57,576,609,110.94
The notes to the financial statements attached form part of these financial statements.
Legal Representative: Chief Financial Officer: Chief Accountant:
BENGANG STEEL PLATES CO., LTD.
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
For the year ended 31 December 2020
(Expressed in Renminbi unless otherwise indicated)
Items Notes 5 Current period Previous period
1. Total operating income 48,684,792,685.58 52,741,353,582.28
106
Bengang Steel Plates Co., Ltd. Annual Report 2020
Items Notes 5 Current period Previous period
Including: Operating income (35) 48,684,792,685.58 52,741,353,582.28
Interest income
Premium earned
Income from handling charges and commission
2. Total operating cost 47,900,922,736.61 52,124,252,623.88
Including: Operating cost (35) 46,392,180,562.59 49,211,414,645.62
Interest expense
Expenditure for handling charges and commission
Surrender value
Net expenditure for compensation
Net provision for insurance contract appropriated
Bonus payment for policy
Reinsurance premium
Tax and surcharges (36) 215,871,820.10 271,580,080.03
Selling and distribution expenses (37) 97,279,280.21 1,096,688,903.70
General and administrative expenses (38) 792,826,294.81 831,945,841.56
Research and development expenses (39) 37,989,623.28 30,780,463.74
Financial expenses (40) 364,775,155.62 681,842,689.23
Including: Interest expense 1,028,857,436.14 948,799,627.90
Interest income 378,523,984.03 333,750,262.79
Add: Other income (41) 81,305,181.92 83,916,607.12
Income on investment（“-” for loss） (42) 13,951,362.33 1,058,377.90
Including: Income from associates and joint ventures 374,119.86 452,582.71
Income from derecognition of financial assets measured at amortized cost
Exchange gains（“-” for loss）
Net exposure hedge income（“-” for loss）
Gains from change of fair value （“-” for loss）
Credit impairment loss （“-” for loss） (43) -304,019,761.75 -6,541,900.62
Asset impairment loss （“-” for loss） (44) -67,185,869.37 -43,256,982.72
Assets disposal gains（“-” for loss） (45) 325,651.61 3,441,646.67
3. Operational profit（“-” for loss） 508,246,513.71 655,718,706.75
Add: Non-operating income (46) 4,328,563.52 10,306,462.87
Less: Non-operating expenses (47) 95,724,280.44 90,209,742.22
4. Total profit (“-” for loss) 416,850,796.79 575,815,427.40
Less: Income tax expenses (48) 25,371,230.56 18,954,938.42
5. Net profit（“-” for loss） 391,479,566.23 556,860,488.98
1.Classification by continuing operating
1.Net profit from continuing operation（“-” for loss） 391,479,566.23 556,860,488.98
2.Net profit from discontinued operation（“-” for loss）
2.Classification by ownership
1. Net profit attributable to the owners of parent company （“-” for loss） 384,252,740.78 555,646,971.40
2. Net profit attributable to non-controlling shareholders （“-” for loss） 7,226,825.45 1,213,517.58
6.Other comprehensive income
Other comprehensive income attributable to owners of the parent company after tax
1.Other comprehensive income items 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
3) Changes in fair value of investments in other equity instruments
4) Changes in fair value of company's credit risk
2.Other comprehensive income that will be reclassified into profit or loss.
1) Other comprehensive income under the equity method which can be reclassified into
profit or loss
2) Changes in fair value of other debt investments
3) Amount of financial assets reclassified into other comprehensive income
107
Bengang Steel Plates Co., Ltd. Annual Report 2020
Items Notes 5 Current period Previous period
4) Credit impairment provision of other debt investments
5) Cash flow hedges reserve
6) Translation differences in foreign currency financial statements
7) Others
Other comprehensive income attributable to non-controlling shareholders’ equity after tax
7. Total comprehensive income 391,479,566.23 556,860,488.98
Total comprehensive income attributable to the owner of the parent company 384,252,740.78 555,646,971.40
Total comprehensive income attributable to non-controlling shareholders 7,226,825.45 1,213,517.58
8. Earnings per share
1）Basic earnings per share 0.099 0.143
2）Diluted earnings per share 0.099 0.143
The notes to the financial statements attached form part of these financial statements.
Legal Representative: Chief Financial Officer: Chief Accountant:
BENGANG STEEL PLATES CO., LTD.
STATEMENT OF COMPREHENSIVE INCOME
For the year ended 31 December 2020
(Expressed in Renminbi unless otherwise indicated)
Items Notes 14 Current period Previous period
1. Total operating income (5) 48,811,106,474.73 52,605,113,207.02
Less: Operating cost (5) 46,742,700,421.70 49,734,189,460.60
Tax and surcharges 182,486,280.99 219,994,347.76
Selling and distribution expenses 86,927,530.44 640,211,381.70
General and administrative expenses 738,689,535.43 775,147,352.42
Research and development expenses 37,989,623.28 30,780,463.74
Financial expenses 339,059,288.37 654,332,095.34
Including: Interest expense 973,520,152.09 889,827,373.77
Interest income 348,394,576.76 302,622,279.00
Add: Other income 80,671,964.84 83,594,522.47
Income on investment（“-” for loss） (6) 13,577,242.47 27,594,915.42
Including: Income from associates and joint ventures
Income from derecognition of financial assets
measured at amortized cost
Net exposure hedge income（“-” for loss）
Gains from change of fair value （“-” for loss）
Credit impairment loss（“-” for loss） 1,333,341.31 -4,408,068.83
Assets impairment loss（“-” for loss） -67,185,869.37 -43,256,982.72
Assets disposal gains（“-” for loss） 325,651.61 3,488,648.92
2. Operational profit（“-” for loss） 711,976,125.38 617,471,140.72
Add: Non-operating income 3,588,687.69 10,128,386.99
Less: Non-operating expenses 95,171,437.11 90,098,761.28
3. Total profit (“-” for loss) 620,393,375.96 537,500,766.43
Less: Income tax expenses -3,562,037.01 2,664,726.46
4. Net profit（“-” for loss） 623,955,412.97 534,836,039.97
1.Net profit from continuing operation (“-” for loss) 623,955,412.97 534,836,039.97
2.Net profit from discontinued operation (“-” for loss)
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
108
Bengang Steel Plates Co., Ltd. Annual Report 2020
Items Notes 14 Current period Previous period
2) Other comprehensive income under the equity method cannot be
reclassified into profit or loss
3) Changes in fair value of investments in other equity instruments
4) Changes in fair value of company's credit risk
2.Other comprehensive income that will be reclassified into profit or
loss.
1) Other comprehensive income under the equity method investee
can be reclassified into profit or loss
2) Changes in fair value of other debt investments
3) Amount of financial assets reclassified into other comprehensive
income
4) Credit impairment provision of other debt investments
5) Cash flow hedges reserve
6) Translation differences in foreign currency financial statements
7) Others
6. Total comprehensive income 623,955,412.97 534,836,039.97
7. Earnings per share
1）Basic earnings per share
2）Diluted earnings per share
The notes to the financial statements attached form part of these financial statements.
Legal Representative: Chief Financial Officer: Chief Accountant:
BENGANG STEEL PLATES CO., LTD.
CONSOLIDATED STATEMENT OF CASH FLOWS
For the year ended 31 December 2020
(Expressed in Renminbi unless otherwise indicated)
Items Notes 5 Current period Previous period
1.Cash flow from operating activities
Cash received from sale of goods or rendering of services 38,849,024,657.06 47,399,776,780.22
Net increase of customers' deposit and interbank deposit
Net increase of loan from central bank
Net increase of loans from other financial institutions
Cash received for premium of original insurance contract
Net cash received for reinsurance business
Net increase of deposit and investment of the insured
Cash from receiving interest, handling charge and commission
Net increase of loans from borrowing funds
Net increase of fund for repurchase business
Net cash received from traded securities
Tax rebate received 396,399,799.91 364,095,520.25
Other cash received relating to operating activities (48) 816,954,704.43 377,085,656.22
Subtotal of cash inflows from operating activities 40,062,379,161.40 48,140,957,956.69
Cash paid for goods and services 38,688,312,946.57 37,675,995,353.53
Net increase of customer's loan and advances
Net increase of deposit in central bank and interbank deposit
Cash for payment of compensation for original insurance contract
Net increase in capital lent
Cash for payment of interest, handling charge and commission
Cash for payment of policy bonus
Cash paid to and on behalf of employees 1,973,351,870.94 2,109,471,410.71
109
Bengang Steel Plates Co., Ltd. Annual Report 2020
Items Notes 5 Current period Previous period
Cash paid for all types of taxes 952,434,837.20 1,054,705,726.35
Other cash paid relating to operating activities (48) 487,279,719.98 322,961,424.94
Subtotal of cash outflows from operating activities 42,101,379,374.69 41,163,133,915.53
Net cash flows from operating activities -2,039,000,213.29 6,977,824,041.16
2. Cash flows from investing activities
Cash received from disposal of investments 52,773,000.00
Cash received from return on investments 13,852,296.30 871,060.75
Net cash received from disposal of fixed assets, intangible assets and other long-
185,442.47 340,766.32
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 14,037,738.77 53,984,827.07
Cash paid for acquisition of fixed assets, intangible assets and other long-term assets 1,013,928,829.62 4,546,086,687.86
Cash paid for acquisition of investments 5,200,000,000.00 52,773,000.00
Net increase of mortgage loan
Net cash received from subsidiary and other operating unit
Other cash paid relating to investing activities
Subtotal of cash outflows from investing activities 6,213,928,829.62 4,598,859,687.86
Net cash flows from investing activities -6,199,891,090.85 -4,544,874,860.79
3. Cash flows from financing activities
Proceeds from investment
Including: Proceeds from investment of non-controlling shareholders of subsidiary
Proceeds from borrowings 21,667,514,000.00 15,913,409,000.00
Other proceeds relating to financing activities (48) 1,329,876,314.56 1,571,269,971.97
Subtotal of cash inflows from financing activities 22,997,390,314.56 17,484,678,971.97
Cash repayments of borrowings 18,115,736,896.61 17,121,821,388.69
Cash payments for distribution of dividends, profit or interest expenses 749,821,254.37 1,172,008,803.59
Including: Cash paid to non-controlling shareholders as dividend and profit by
9,198,305.14
subsidiaries
Other cash payments relating to financing activities (48) 75,509,135.49 10,343,406.67
Subtotal of cash outflows from financing activities 18,941,067,286.47 18,304,173,598.95
Net cash flows from financing activities 4,056,323,028.09 -819,494,626.98
4. Effect of foreign exchange rate changes on cash and cash equivalents -29,429,117.41 75,411,813.22
5. Net increase in cash and cash equivalents -4,211,997,393.46 1,688,866,366.61
Add: Cash and cash equivalents at the beginning of the period 13,441,414,988.58 11,752,548,621.97
6. Cash and cash equivalents at the ending of the period 9,229,417,595.12 13,441,414,988.58
The notes to the financial statements attached form part of these financial statements.
Legal Representative: Chief Financial Officer: Chief Accountant:
BENGANG STEEL PLATES CO., LTD.
STATEMENT OF CASH FLOWS
For the year ended 31 December 2020
(Expressed in Renminbi unless otherwise indicated)
Items Notes 14 Current period Previous period
1. Cash flow from operating activities
Cash received from sale of goods or rendering of services 43,332,373,821.90 45,925,314,655.54
Tax rebate received 324,045,932.64 318,311,209.48
Other cash received relating to operating activities 786,085,304.22 289,883,909.31
Subtotal of cash inflows from operating activities 44,442,505,058.76 46,533,509,774.33
110
Bengang Steel Plates Co., Ltd. Annual Report 2020
Items Notes 14 Current period Previous period
Cash paid for goods and services 43,585,984,954.05 35,992,848,593.70
Cash paid to and on behalf of employees 1,870,605,772.33 1,975,902,597.93
Cash paid for all types of taxes 824,396,654.24 897,467,468.84
Other cash paid relating to operating activities 476,274,984.82 231,467,233.26
Subtotal of cash outflows from operating activities 46,757,262,365.44 39,097,685,893.73
Net cash flows from operating activities -2,314,757,306.68 7,435,823,880.60
2. Cash flows from investing activities
Cash received from disposal of investments
Cash received from return on investments 13,577,242.47 27,594,915.42
Net cash received from disposal of fixed assets, intangible
1,637.16
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 13,578,879.63 27,594,915.42
Cash paid for acquisition of fixed assets, intangible assets and
1,013,911,078.29 4,500,165,073.02
other long-term assets
Cash paid for acquisition of investments 5,200,000,000.00
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 6,213,911,078.29 4,500,165,073.02
Net cash flows from investing activities -6,200,332,198.66 -4,472,570,157.60
3. Cash flows from financing activities
Proceeds from investment
Cash received from borrowings 20,607,514,000.00 14,603,409,000.00
Other cash received relating to financing activities 1,294,921,225.43 1,484,945,138.77
Subtotal of cash inflows from financing activities 21,902,435,225.43 16,088,354,138.77
Cash repayments of borrowings 16,715,736,896.61 15,794,901,388.69
Cash payments for distribution of dividends, profit or interest 701,262,726.60 1,101,521,395.66
Other cash payments relating to financing activities 72,689,078.37 8,731,273.67
Subtotal of cash outflows from financing activities 17,489,688,701.58 16,905,154,058.02
Net cash flows from financing activities 4,412,746,523.85 -816,799,919.25
4. Effect of foreign exchange rate changes on cash and cash
-29,414,313.38 75,337,651.52
equivalents
5. Net increase in cash and cash equivalents -4,131,757,294.87 2,221,791,455.27
Add: Cash and cash equivalents at the beginning of the period 13,029,616,298.47 10,807,824,843.20
6. Ending balance of cash and cash equivalents 8,897,859,003.60 13,029,616,298.47
The notes to the financial statements attached form part of these financial statements.
Legal Representative: Chief Financial Officer: Chief Accountant:
111
Bengang Steel Plates Co., Ltd. Annual Report 2020
BENGANG STEEL PLATES CO., LTD.
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
For the year ended 31 December 2020
(Expressed in Renminbi unless otherwise indicated)
Current period
Owner's equity attributable to parent company
Items Other equity instruments Non-controlling Total of owner's
Less: Other General
Undistributed interest equity
Share capital Preference Perpetual Capital reserves Treasury comprehensive Special reserves Surplus reserves risk Subtotal
Others profit
shares bond shares income reserve
1. Ending balance of last year 3,875,371,532.00 12,343,209,847.29 212,687.41 961,105,529.85 2,307,765,664.62 19,487,665,261.17 525,161,580.23 20,012,826,841.40
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 12,343,209,847.29 212,687.41 961,105,529.85 2,307,765,664.62 19,487,665,261.17 525,161,580.23 20,012,826,841.40
3. Changes in current year (“-” for decrease) 1,146,290,662.42 87,724.73 384,252,740.78 1,530,631,127.93 7,226,825.45 1,537,857,953.38
1) Total comprehensive income 384,252,740.78 384,252,740.78 7,226,825.45 391,479,566.23
2) Capital increase and decrease by
1,146,290,662.42 1,146,290,662.42 1,146,290,662.42
shareholders
(1) Common share invested by shareholders
(2) Capital input by the holder of other equity
1,146,290,662.42 1,146,290,662.42 1,146,290,662.42
instruments
(3) Share-based payment attributable to
owners' equity
(4) Others
3) Profit distribution
(1) Appropriation to surplus reserves
(2) Appropriation to general risk reserve
(3) Profit distribution to shareholders
(4) Others
4) Transfers within shareholders' equity
(1) Capital reserves transferred into paid-in
capital (or stock)
(2) Surplus reserves transferred into paid-in
capital (or stock)
(3) Surplus reserves to recover loss
(4) Net changes of defined contribution plans
transferred into Retained Earnings
(5) Other comprehensive income transferred
into Retained Earnings
(6) Others
112
Bengang Steel Plates Co., Ltd. Annual Report 2020
Current period
Owner's equity attributable to parent company
Items Other equity instruments Non-controlling Total of owner's
Less: Other General
Undistributed interest equity
Share capital Preference Perpetual Capital reserves Treasury comprehensive Special reserves Surplus reserves risk Subtotal
Others profit
shares bond shares income reserve
5) Special reserves 87,724.73 87,724.73 87,724.73
(1) Provision of special reserves 54,000,536.58 54,000,536.58 54,000,536.58
(2) Use of special reserves 53,912,811.85 53,912,811.85 53,912,811.85
6) Others
4. Ending balance of current year 3,875,371,532.00 1,146,290,662.42 12,343,209,847.29 300,412.14 961,105,529.85 2,692,018,405.40 21,018,296,389.10 532,388,405.68 21,550,684,794.78
The notes to the financial statements attached form part of these financial statements
Legal Representative: Chief Financial Officer: Chief Accountant:
BENGANG STEEL PLATES CO., LTD.
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY (Continued)
For the year ended 31 December 2020
(Expressed in Renminbi unless otherwise indicated)
Previous period
Owner's equity attributable to parent company
Items Other equity instruments Non-controlling Total of owner's
Less: Other General
Undistributed interest equity
Share capital Preference Perpetual Capital reserves Treasury comprehensive Special reserves Surplus reserves risk Subtotal
Others profit
shares bond shares income reserve
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 19,126,258,116.67 533,146,339.49 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 19,126,258,116.67 533,146,339.49 19,659,404,456.16
3. Changes in current year (“-” for decrease) -471,250.30 361,878,394.80 361,407,144.50 -7,984,759.26 353,422,385.24
1) Total comprehensive income 555,646,971.40 555,646,971.40 1,213,517.58 556,860,488.98
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
113
Bengang Steel Plates Co., Ltd. Annual Report 2020
Previous period
Owner's equity attributable to parent company
Items Other equity instruments Non-controlling Total of owner's
Less: Other General
Undistributed interest equity
Share capital Preference Perpetual Capital reserves Treasury comprehensive Special reserves Surplus reserves risk Subtotal
Others profit
shares bond shares income reserve
(4) Others
3) Profit distribution -193,768,576.60 -193,768,576.60 -9,198,305.14 -202,966,881.74
(1) Appropriation to surplus reserves
(2) Appropriation to general risk reserve
(3) Profit distribution to shareholders -193,768,576.60 -193,768,576.60 -9,198,305.14 -202,966,881.74
(4) Others
4) Transfers within shareholders' equity
(1) Capital reserves transferred into paid-in capital
(or stock)
(2) Surplus reserves transferred into paid-in
capital (or stock)
(3) Surplus reserves to recover loss
(4) Net changes of defined contribution plans
transferred into Retained Earnings
(5) Other comprehensive income transferred into
Retained Earnings
(6) Others
5) Special reserves -471,250.30 -471,250.30 28.30 -471,222.00
(1) Provision of special reserves 47,843,133.40 47,843,133.40 28.30 47,843,161.70
(2) Use of special reserves 48,314,383.70 48,314,383.70 48,314,383.70
6) Others
4. Ending balance of current year 3,875,371,532.00 12,343,209,847.29 212,687.41 961,105,529.85 2,307,765,664.62 19,487,665,261.17 525,161,580.23 20,012,826,841.40
The notes to the financial statements attached form part of these financial statements
Legal Representative: Chief Financial Officer: Chief Accountant:
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BENGANG STEEL PLATES CO., LTD.
STATEMENT OF CHANGES IN EQUITY
For the year ended 31 December 2020
(Expressed in Renminbi unless otherwise indicated)
Current period
Other equity instruments Less: Other
Items Special Undistributed Total shareholder’s
Share capital Preference Perpetual Capital reserves Treasury comprehensi Surplus reserves
Others reserves profits equity
shares bond shares ve income
1. Ending balance of last year 3,875,371,532.00 11,923,058,165.17 53,330.99 961,105,529.85 1,742,251,419.03 18,501,839,977.04
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 53,330.99 961,105,529.85 1,742,251,419.03 18,501,839,977.04
3. Changes in current year (“-” for decrease) 1,146,290,662.42 67,641.63 623,955,412.97 1,770,313,717.02
1) Total comprehensive income 623,955,412.97 623,955,412.97
2) Capital increase and decrease by shareholders 1,146,290,662.42 1,146,290,662.42
(1) Common share invested by shareholders
(2) Capital input by the holder of other equity instruments 1,146,290,662.42 1,146,290,662.42
(3) Share-based payment attributable to shareholders' equity
(4) Others
3) Profit distribution
(1) Appropriation of surplus reserves
(2) Profit distribution to shareholders
(3) Others
4) Transfers within shareholders' equity
(1) Capital reserves transferred into paid-in capital (or stock)
(2) Surplus reserves transferred into paid-in capital (or stock)
(3) Surplus reserves to recover loss
(4) Net changes of defined contribution plans transferred into
Retained Earnings
(5) Other comprehensive income transferred into retained earnings
(6) Others
5) Special reserves 67,641.63 67,641.63
(1) Provision of special reserves 47,926,472.22 47,926,472.22
(2) Use of special reserves 47,858,830.59 47,858,830.59
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Bengang Steel Plates Co., Ltd. Annual Report 2020
Current period
Other equity instruments Less: Other
Items Special Undistributed Total shareholder’s
Share capital Preference Perpetual Capital reserves Treasury comprehensi Surplus reserves
Others reserves profits equity
shares bond shares ve income
6) Others
4. Ending balance of current year 3,875,371,532.00 1,146,290,662.42 11,923,058,165.17 120,972.62 961,105,529.85 2,366,206,832.00 20,272,153,694.06
The notes to the financial statements attached form part of these financial statements
Legal Representative: Chief Financial Officer: Chief Accountant:
BENGANG STEEL PLATES CO., LTD.
STATEMENT OF CHANGES IN EQUITY (Continued)
For the year ended 31 December 2020
(Expressed in Renminbi unless otherwise indicated)
Previous period
Other equity instruments Less: Other
Items Special Undistributed Total shareholder’s
Share capital Preference Perpetual Capital reserves Treasury comprehensi Surplus reserves
Others reserves profits equity
shares bond shares ve 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) -471,887.49 341,067,463.37 340,595,575.88
1) Total comprehensive income 534,836,039.97 534,836,039.97
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
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Bengang Steel Plates Co., Ltd. Annual Report 2020
Previous period
Other equity instruments Less: Other
Items Special Undistributed Total shareholder’s
Share capital Preference Perpetual Capital reserves Treasury comprehensi Surplus reserves
Others reserves profits equity
shares bond shares ve income
4) Transfers within shareholders' equity
(1) Capital reserves transferred into paid-in capital (or stock)
(2) Surplus reserves transferred into paid-in capital (or stock)
(3) Surplus reserves to recover loss
(4) Net changes of defined contribution plans transferred into
Retained Earnings
(5) Other comprehensive income transferred into retained earnings
(6) Others
5) Special reserves -471,887.49 -471,887.49
(1) Provision of special reserves 45,445,975.41 45,445,975.41
(2) Use of special reserves 45,917,862.90 45,917,862.90
6) Others
4. Ending balance of current year 3,875,371,532.00 11,923,058,165.17 53,330.99 961,105,529.85 1,742,251,419.03 18,501,839,977.04
The notes to the financial statements attached form part of these financial statements
Legal Representative: Chief Financial Officer: Chief Accountant:
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Bengang Steel Plates Co., Ltd. Annual Report 2020
Bengang Steel Plates Co., Ltd.
Notes to the financial statements
For the year ended 31 December 2020
(Expressed in Renminbi unless otherwise indicated)
1. Basic Information of the Company
(1) Company profile
Bengang Steel Plates Co., Ltd. (hereinafter referred to as “Bengang Steel Plates” or “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 HKD 2.38 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.
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Bengang Steel Plates Co., Ltd. Annual Report 2020
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 31 December 2020, 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.
The financial statements have been approved for reporting by the board of directors of the Company on 26
April 2021.
(2) Consolidation scope
As at 31 December 2020, subsidiaries included in the Company’s consolidated financial
statements are as follows:
Name of the subsidiaries
Guangzhou Bengang Steel & Iron Trading Co., Ltd.
Shanghai Bengang Metallurgy Science and Technology Co., Ltd.
Bengang Steel Plates Liaoyang Pellet Co., Ltd.
Dalian Benruitong Automobile Material Technology Co., Ltd.
Changchun Bengang Steel & Iron Sales Co., Ltd.
Harbin Bengang Economic and Trading Co., Ltd.
Nanjing Bengang Materials Sales Co., Ltd.
Wuxi Bengang Steel & Iron Sales Co., Ltd.
Xiamen Bengang Steel & Iron Sales Co., Ltd.
Yantai Bengang Steel & Iron Sales Co., Ltd.
Tianjin Bengang Steel & Iron Trading Co., Ltd.
Bengang POSCO Cold-rolled Sheet Co., Ltd.
Benxi Bengang Steel Sales Co., Ltd
Shenyang Bengang Metallurgical Science and Technology Co., Ltd.
Chongqing Liaoben Steel & Iron Trading Co., Ltd.
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Bengang Steel Plates Co., Ltd. Annual Report 2020
Bengang Baojin (Shenyang) Automobile New Material Technology Co., Ltd.
The scope of the consolidated financial statements in this period has not changed compared
with the previous period.
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
Notes for specific accounting policies and accounting estimates:
The following disclosed content covers the specific accounting policies and accounting estimates that are
adopted by the Company based on the actual production and operation characteristics. Please see Note (10)
Financial instruments, (11) Inventory, (15) Fixed assets, (18) Intangible assets, (24) Revenue under “3.
Significant accounting policies and accounting estimates” for details.
(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
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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 financial statement of the ultimate controller on the combining date. As for
the balance between the carrying amount of the net assets obtained by the Company and the carrying amount
of the consideration paid by it (or the total par value of the shares issued), capital reserve needs to be adjusted.
If the capital reserve is not sufficient, any excess shall be adjusted against retained earnings.
Business combination 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
subsidies (including separable sections of the investees controlled by the Company) have been consolidated
into the scope of consolidation for this period ended.
2. Procedure of consolidation
The consolidated financial statements shall be presented by the parent based on the financial
statements of the parent and its subsidiaries, and using other related information. When
preparing consolidated financial statements, the parent shall consider the entire group as an
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
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Bengang Steel Plates Co., Ltd. Annual Report 2020
common control, the financial statements are adjusted according to fair value of identifiable net
assets on the acquisition date. For subsidiaries through acquisition that are under common
control, the assets, liabilities (as well as the goodwill arising from purchasing the subsidiary by
the ultimate controller) are adjusted according to book value of net assets in the financial
statements of the ultimate controller.
The owners’ interests, profit or loss, and comprehensive income of the subsidiary attributable
to the non-controlling shareholders shall be presented separately in the shareholders’ equity of
the consolidated balance sheet and under the item of net profit of the consolidated statement of
comprehensive income and under the item of total comprehensive income. Where losses
assumed by the minority exceed the minority’s interests in the beginning equity of a subsidiary,
the excess shall be charged against the minority’s interests.
(1) 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
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Bengang Steel Plates Co., Ltd. Annual Report 2020
date to the end of the reporting period are included in the parent company’s consolidated
statement of comprehensive income. The cash flow of the subsidiaries from the acquisition
date to the end of the reporting period is included in the Company’s consolidated statement of
cash flows.
When the Company becomes capable of exercising control over an investee now under
common control due to additional investment or other reasons, the acquirer shall remeasure its
previously held equity interest in the acquiree to its fair value at the acquisition date. The
difference between the fair value and the carrying amount shall be recognized as investment
income for the period when the acquisition takes place. When the previously-held equity
investment is accounted for under the equity method, any other comprehensive income
previously recognized in relation to the acquiree’s equity changes shall be transferred to profit
or loss for the current period when the acquisition takes place. Other comprehensive income
arising from remeasurement of defined benefit plan is excluded.
(2) Disposing 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.
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Bengang Steel Plates Co., Ltd. Annual Report 2020
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.
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 continuously from the acquisition date or the combination date based on the new
shareholding proportion shall be adjusted to the capital reserve( capital premium or share
premium) in the consolidated financial statements. If the balance of the capital reserve is not
sufficient, any excess shall be adjusted against retained earnings.
(4) Disposing portion of equity investments in subsidiaries without losing 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
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Bengang Steel Plates Co., Ltd. Annual Report 2020
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) Classification of joint venture arrangements and accounting treatment
Joint venture arrangements are divided into joint operations and joint ventures.
When the Company is a joint venture party of a joint venture arrangement and have the assets related to the
arrangement and assumes the liabilities related to the arrangement, it is a joint operation.
The Company confirms the following items related to the share of interest in the joint operation and performs
accounting treatment in accordance with the relevant enterprise accounting standards:
a. Confirm the assets held by the company separately, and confirm the assets held jointly by the Company's
share;
b. Recognize the liabilities assumed by the Company separately and the liabilities jointly assumed by the
company's share;
c. Recognize the income generated by the sale of the Company’s share of common operating output;
d. Recognize the revenue generated from the sale of joint operations based on the Company's share;
e. Confirm the expenses incurred separately and the expenses incurred in the joint operation according to the
Company's share.
(8) Recognition of cash and cash equivalents
The term “cash” refers to the cash on hand and the unrestricted deposit. And the term “cash equivalents” refers
to short-term (maturing within three months from acquisition) and highly liquid investments that are readily
convertible to known amounts of cash and which are subject to an insignificant risk of change in value.
(9) Foreign currency transaction and translation of foreign currency financial statements
1. Foreign currency transaction
Foreign currency transactions are translated into RMB at the current rate at the day of transactions.
The foreign currency monetary items shall be translated at the spot exchange rate on the balance sheet date.
The balance of exchange arising from the difference between the spot exchange rate on the balance sheet date
and the spot exchange rate at the time of initial recognition or prior to the balance sheet date, except those
arising from the raising of special foreign debt for the purchase or construction of capitalizable assets thus shall
be capitalized according to the borrowing costs capitalization principle, shall be recorded into the profits and
losses at the current period.
2. Translation of foreign currency financial statements
The asset and liability items in the statement of financial position shall be translated at a spot exchange rate on
the balance sheet date. Among the owner's equity items, except the ones as "undistributed profits", others shall
be translated at the spot exchange rate at the time when they are incurred. The income and expense items in the
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.
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Bengang Steel Plates Co., Ltd. Annual Report 2020
(10) Financial instruments
Financial instruments include financial assets, financial liabilities and equity instruments
1. Classification of financial instruments
The Company shall classify financial 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 amortised cost, financial assets measured at fair value through
other comprehensive income 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 financial 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.
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 designation is made on the basis of a single
investment, and the related investment meets the definition of an equity instrument from the
issuer's perspective.
Other financial assets other than these are classified as financial assets measured at fair value
through profit or loss. At the initial recognition, in order to eliminate or significantly reduce
accounting mismatches, financial assets that should be classified as measured at amortized
value or financial assets measured at fair value through other comprehensive income can be
designated as financial assets measured at fair value through profit or loss.
The Company shall classify financial liabilities as financial liabilities measured at amortised
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Bengang Steel Plates Co., Ltd. Annual Report 2020
cost and financial liabilities measured at fair value through profit or loss at initial measurement.
In the initial recognition, in order to eliminate or significantly reduce accounting mismatches,
financial assets can be designated as financial assets measured at fair value and their changes
included in the current profit and loss. According to the above conditions, the Company does
not have such designated financial assets.
The Company may, at initial recognition, designate 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
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Bengang Steel Plates Co., Ltd. Annual Report 2020
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. 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.
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Bengang Steel Plates Co., Ltd. Annual Report 2020
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.
When the financial liabilities are derecognized, the difference between the price obtained and.
the carrying value shall be recognised in profit and loss.
3. Termination of recognition of financial assets and financial assets transfer
When one of the following conditions is met, the company terminates the recognition of financial assets.
- Termination of contractual rights to receive cash flows from financial assets;
- The financial assets have been transferred, and almost all the risks and rewards in the
ownership of the financial assets have been transferred to the transferee;
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- The financial assets have been transferred. Although the company has neither transferred
nor retained almost all the risks and rewards of the ownership of the financial assets, it has
not retained control of the financial assets.
If it retained nearly all of the risks and rewards related to the ownership of the financial asset, it shall not stop
recognizing the financial asset.
To judge whether the transfer of a financial asset can satisfy the conditions as prescribed in these Standards for
stopping the recognition of a financial asset, the Company shall follow the principle of the substance over form.
Transfer of an entire financial asset can be divided into partial financial assets transfer and entire financial asset
transfer. If the transfer of an entire financial asset satisfies the conditions for de-recognition, the difference
between the amounts of the following 2 items shall be recorded in the profits and losses of the current period:
(1) The book value of the transferred financial asset; and
(2) The sum of consideration received from the transfer, and the accumulative amount of the changes of the
fair value originally recorded in the owners' equities (in the event that the financial asset involved in the
transfer is a financial asset Available-for-sale).
If the transfer of partial financial asset satisfies the conditions to derecognize, the entire book value of the
transferred financial asset shall, between the portion whose recognition has been stopped and the portion
whose recognition has not been stopped (under such circumstance, the service asset retained shall be deemed
as a portion of financial asset whose recognition has not been stopped), be apportioned according to their
respective relative fair value, and the difference between the amounts of the following 2 items shall be
included into the profits and losses of the current period :
(1) The book value of the portion whose recognition has been stopped; and
(2) The sum of consideration of the portion whose recognition has been stopped, and the portion of the
accumulative amount of the changes in the fair value originally recorded in the owner's equities which is
corresponding to the portion whose recognition has been stopped (in the event that the financial asset involved
in the transfer is a financial asset Available-for-sale).
If the transfer of financial assets does not satisfy the conditions to stop the recognition, it shall continue to be
recognized as financial assets and the consideration received shall be recognized as financial liabilities.
4. Termination of recognition of financial liabilities
Only when the prevailing obligations of a financial liability are relieved in all or in part may the recognition
of the financial liability be terminated in all or partly.
Where the Company (debtor) enters into an agreement with a creditor so as to substitute the existing financial
liabilities by way of any new financial liability, and if the contractual stipulations regarding the new financial
liability is substantially different from that regarding the existing financial liability, it shall terminate the
recognition of the existing financial liability, and shall at the same time recognize the new financial liability.
Where the Company makes substantial revisions to part or all of the contractual stipulations of the existing
financial liability, it shall terminated the recognition of the existing financial liability or part of it, and at the
same time recognize the financial liability after revising the contractual stipulations as a new financial liability.
Where the recognition of a financial liability is totally or partially terminated, the Company shall include into
the profits and losses of the current period the difference between the carrying amount which has been
terminated from recognition and the considerations it has paid (including the non-cash assets it has transferred
out and the new financial liabilities it has assumed).
Where the Company buys back part of its financial liabilities, it shall distribute, on the date of repurchase, the
carrying amount of the whole financial liabilities in light of the comparatively fair value of the part that
continues to be recognized and the part whose recognition has already been terminated. The gap between the
carrying amount which is distributed to the part whose recognition has terminated and the considerations it
has paid (including the noncash assets it has transferred out and the new financial liabilities it has assumed)
shall be recorded into the profits and losses of the current period.
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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 circumstances 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 provision of the financial assets (excluding accounts receivables)
The Company recognize the expected credit loss on financial assets measured at amortized cost, financial assets
measured at fair value through other comprehensive income (debt instruments) , financial guarantee contract,
and so on, on the individual or portfolio basis.
The Company considers all reasonable and relevant information, including past events, current conditions, and
forecasts of future economic conditions, and uses the risk of default as the weight to calculate the probability-
weighted amount of present value of difference between the cash flow receivable from the contract and the cash
flow expected to be received to confirm the expected credit loss.
If the credit risk of the financial instrument has increased significantly since the initial confirmation, 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 on a financial instrument has not increased significantly since initial recognition,
the Company shall measure the loss allowance for that financial instrument at an amount equal to 12-month
expected credit losses. The increase or reversal amount of loss allowance thus formed shall be included in the
current profits and losses as impairment losses or gains.
The measurement of expected credit loss depends on whether there is a significant increase in credit risk of
financial assets since the initial recognition.
The company compares the risk of default on the balance sheet date of financial instruments with the risk of
default on the date of initial recognition to determine the relative change in the risk of default during the
expected life of the financial instrument to assess whether there is a significant increase in credit risk of financial
assets since the initial recognition. Generally, the Company believes that the credit risk of the financial
instrument has significantly increased over 30 days after the due date, unless there is solid evidence that the
credit risk of the financial instrument has not increased significantly since initial recognition.
If the credit risk of a financial instrument at the reporting date is relatively low, the Company considers that the
credit risk of the financial instrument has not increased significantly since the initial recognition.
If there is objective evidence indicating that a certain financial asset has been impaired, the Company shall
recognise provision for impairment of the financial asset individually.
For account receivables and contract assets recognized according to Accounting Standards for Business
Enterprises No. 14 Revenue (2017), 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.
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For lease receivables, the Company shall always measure the loss allowance at an amount equal to lifetime
expected credit losses.
(11) Inventory
1. Inventory classification
Inventories include material in transit, raw material, turnover materials, finished goods, work in process, issue
commodity, materials for consigned processing, etc.
Inventory is initially measured at cost. Inventory cost includes purchase cost, processing cost and other
expenditures incurred to bring inventory to its current location and state.
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
On the balance sheet date, inventories shall be measured at the lower of cost and net realizable value. When the
cost of inventories is higher than its net realizable value, provision for inventory impairment loss shall be made.
The net realizable value refers to the amount of the estimated selling price of the inventory minus the estimated
costs that will occur at the time of completion, estimated selling expenses, and relevant taxes in daily activities.
The net realizable value of inventories (finished products, stock commodity, material, etc.) held for direct
selling in the daily business activity shall be calculated by deducting the estimated sale expense and relevant
taxes from the estimated sale price of inventories; The net realizable value of inventories for further processing
in the daily business activity shall be calculated by deducting the estimated cost of completion, estimated sale
expense and relevant taxes from the estimated sale price of inventories; The net realizable value of inventories
held for the execution of sales contracts or labor contracts shall be calculated on the ground of the contract price.
If 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.
After the inventory impairment is withdrawn, if the factors that previously affected the write-down of the
inventory value have disappeared, causing the net realizable value of the inventory to be higher than its book
value, it shall be reversed within the amount of the inventory impairment that has been withdrawn, and the
reverted amount shall be included in the current profit and loss.
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.
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(12) Contract asset
Accounting Policies Adopted After January 1, 2020
1. Recognition methods and criteria of contract assets
When either party to a contract has performed, the Company shall present the contract in the statement of
financial position as a contract asset or a contract liability, depending on the relationship between the
Company’s performance and the customer’s payment. If the Company have the rights to receive
consideration (the right is conditioned on factors other than the passage of time) by transferring goods or
services to a customer, the entity shall present the contract as a contract asset. Contract assets and contract
liabilities under the same contract are disclosed in net amount. An entity shall present any unconditional
rights to consideration (only the passage of time is required) separately as a receivable.
2. Expected credit loss of contract assets
For the accounting policy of the expected credit loss of contract assets, please refer to Note (10) 6. Impairment
provision of the financial assets under “3. Significant accounting policies and accounting estimates”
(13) 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 financial and operating policy decisions of the investee
but not control or join control of those policies. If the Company could exert significant influence over the
investee, the investee is the associate of the Company.
2. The initial cost of long-term equity investment from business acquisition
(1) Long-term equity investment from business acquisition
For a business combination under common control, if the consideration of the combination is
satisfied by paying cash, transfer of non-cash assets or assumption of liabilities and issue of
equity securities, the initial investment cost of the long-term equity investment shall be the
absorbing party’s share of the carrying amount of the owner’s equity of the party being absorbed
in the consolidated financial statements of the ultimate controlling party at combination date.
When an investor becomes capable of exercising control over an investee under common
control due to additional investment or other reasons, the initial investment cost shall be the
absorbing party’s share of the carrying amount of the owner’s equity of the party being absorbed
in the consolidated financial statements of the ultimate controlling party at combination date.
The difference between the initial investment cost and the carrying amount of the previously-
held equity investment, together with the additional investment cost for new shares at
combination date, shall be adjusted to the capital reserve. If the balance of capital reserve is not
sufficient, any excess shall be adjusted to retained earnings.
For a business combination not under common control, the initial investment cost of the long-
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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.
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 investor’s interest in the fair values
of an investee’s identifiable net assets at the acquisition date, no adjustment shall be made to the initial
investment cost. Where the initial cost is less than the investor’s interest in the fair values of the investee’s
identifiable net assets at the acquisition date, the difference shall be credited to profit or loss for the current
period, and the cost of long-term equity investment shall be adjusted accordingly.
The Company shall recognize its share of the investee’s net profits or losses, as well as its share of the investee’s
other comprehensive income, as investment income or losses and other comprehensive income, and adjust the
carrying amount of the investment accordingly. The carrying amount of the investment shall be reduced by the
portion of any profit distributions or cash dividends declared by the investee that is attributable to the investor.
The investor’s share of the investee’s owners’ equity changes, other than those arising from the investee’s net
profit or loss, other comprehensive income or profit distribution, and the carrying amount of the long-term
equity investment shall be adjusted accordingly.
The investor shall recognize its share of the investee’s net profits or losses after making appropriate adjustments
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.
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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, except the transaction of investment or sale of assets is a
business. Any losses resulting from transactions between the investor and investee which are attributable to
asset impairment shall be recognized in full.
The company’s net losses incurred by joint ventures or associates, in addition to assuming additional loss
obligations, are limited to the book value of long-term equity investments and other long-term equity that
essentially constitutes net investment in joint ventures or associates. If a joint venture or associated enterprise
realizes net profits in the future, the company resumes recognizing its share of profits after the share of profits
makes up for the share of unrecognized losses.
(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.
Partial disposal of long-term equity investments accounted for by the equity method, and the remaining equity
is still accounted for by the equity method, the other comprehensive income recognized by the original equity
method shall be carried forward according to the same basis as the direct disposal of related assets or liabilities
by the investee. All other changes in the interests of the holders are carried forward to the current profit and
loss on a pro rata basis.
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, 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. Other owner's
equity change shall be transferred into profit or loss of current period in full when the Company cease to adopt
the equity method.
When an investor can no longer control the investee due to partial disposal, when the individual financial
statements are prepared, the remaining equity can exercise joint control or significant influence on the investee,
the equity method shall be used to account for the remaining equity. It is deemed that the equity method is
adopted for adjustment since the acquisition, and the other comprehensive income recognized before the control
of the investee is obtained is carried forward on the same basis as the direct disposal of related assets or liabilities
by the investee, because the equity method is used for accounting. The confirmed changes in other owners’
equity are carried forward to the current profit and loss on a pro rata basis. If the remaining equity cannot
exercise joint control or exert significant influence on the investee, it shall be recognized as a financial asset,
and the difference between its fair value and book value on the date when control is lost shall be included in
the current profit and loss, and other comprehensive income and other owner’s interests previously recognized
shall be transferred to profit or loss in full.
If the equity investment of a subsidiary is disposed through multiple transactions until it loses control, which is
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a package transaction, each transaction shall be accounted as a transaction that disposes of the equity investment
of the subsidiary and loses control. Each transaction before the loss of control, the difference between the
disposal price and the book value of the corresponding disposed part of long-term equity investment is firstly
recognized as other comprehensive income in individual financial statements, and then transferred to the current
profit and loss when the control is lost. If it is not a package transaction, each transaction shall be accounted
separately.
(14) 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).
Subsequent expenditures related to investment property are included in the cost of investment property when
the relevant economic benefits are likely to flow in and their costs can be reliably measured. Otherwise, they
are included in the current profit and loss when incurred.
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.
(15) 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 simultaneously meets the conditions as follows:
(1) The economic benefits pertinent to the fixed asset are likely to flow into the enterprise; and
(2) The cost of the fixed asset can be measured reliably.
Fixed assets are initially measured at cost (and considering the impact of expected dismantling cost factors).
Subsequent expenditures related to fixed assets are included in the cost of fixed assets when the related
economic benefits are likely to flow in and their costs can be reliably measured; the book value of the replaced
part is derecognized; all other subsequent expenditures are incurred shall be included in the current profit and
loss.
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.
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Fixed assets acquired under financial leasing is depreciated over the useful life if it is reasonably certain that
the ownership of the leased assets will be acquired upon expiry of lease, or over the shorter of lease term and
useful life if it is not reasonably certain that the ownership of the leased assets will be acquired upon expiry of
lease.
Details of classification, depreciation period, residual value rate and annual depreciation rate are as follows:
Depreciation
Depreciation Residual Value
Category Depreciation method Rate
Period Rate (%)
(%)
Plants and Buildings straight line method 10-45 years 0.00 2.22-10.00
Machinery straight line method 10-28 years 3.00 3.46-9.70
Transportation and
straight line method 8-22 years 3.00 4.41-12.13
other 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;
(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; and
(5) The leased assets are of a special nature, and unless major renovations are made, only the lessee can use it.
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.
4. Disposal of fixed assets
When a fixed asset is disposed, or it is expected that no economic benefits will be generated through use or
disposal, the recognition of fixed asset shall be de terminated. The amount of disposal income of fixed assets
raising from sell, transfer, scrapping or damage shall be included in the current profit and loss after deducting
its book value and related taxes.
(16) Construction in progress
Construction in progress is measured at the actual cost incurred. The actual cost includes construction costs,
installation costs, borrowing costs that meet the capitalization conditions, and other necessary expenditures
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incurred before the construction in progress reaches its intended use status.
Construction in progress is transferred to fixed asset when it has reached its working condition for its intended
use and depreciation will be accrued from the next month.
(17) Borrowing costs
1. Principle of the recognition of capitalized borrowing costs
Where the borrowing costs incurred to an enterprise can be directly attributable to the acquisition and
construction or production of assets eligible for capitalization, it shall be capitalized and recorded into the costs
of relevant assets. Other borrowing costs shall be recognized as expenses on the basis of the actual amount
incurred, and shall be recorded into the current profits and losses.
Assets eligible for capitalization refer to the fixed assets, investment property, 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.
2. The capitalization period of borrowing costs
The capitalization period shall refer to the period from the commencement to the cessation of capitalization of
the borrowing costs, excluding the period of suspension of capitalization of the borrowing costs.
The borrowing costs shall not be capitalized unless they simultaneously meet the following requirements:
(1) The asset disbursements have already incurred, which shall include cash, transferred non-cash assets or
interest bearing debts paid for the acquisition and construction or production activities for preparing assets
eligible for capitalization;
(2) The borrowing costs has already incurred; and
(3) The acquisition and construction or production activities which are necessary to prepare the asset for its
intended use or sale have already started.
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.
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
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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.
During the capitalization period, the exchange difference between the principal and interest of the foreign
currency special loan is capitalized and included in the cost of the assets that meet the capitalization conditions.
Exchange differences arising from the principal and interest of foreign currency borrowings other than foreign
currency special borrowings are included in the current profits and losses.
(18) Intangible Assets
1. Measurement of Intangible Assets
(1) Initial measurement is based on cost upon acquisition
The cost of an intangible asset on acquisition include the purchase price, relevant taxes and other necessary
disbursements which may be directly attributable to bringing the intangible asset to the conditions for the
expected purpose.
(2) Subsequent Measurement
The Company shall analyze and judge the beneficial period of intangible assets upon acquisition.
Intangible assets with finite beneficial period shall be amortized under the straight-line method during the period
when the intangible asset can bring economic benefits to the enterprise. If it is unable to estimate the beneficial
period of the intangible asset, it shall be regarded as an intangible asset with uncertain service life and shall not
be amortized.
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
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.
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Research phase refers to the phase of creative and planned investigation to acquire and study to acquire and
understand new scientific or technological knowledge.
Development phase refers to the phase during which the result of research phase or other knowledge is applied
into certain projects or designs for the manufacturing of new or substantially improved material, device and
product before commercial manufacturing and use.
(19) Impairment of long-term assets
For long-term assets such as long-term equity investments, Investment property under the cost
model, 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 written down to their recoverable amounts. The
write-downs are recognized as impairment losses and charged to current profit and loss. The
recoverable amounts of long-term assets are the higher of their fair values less costs to sell and
the present values of the future cash flows expected to be derived from the assets. The
Company shall estimate its recoverable amount on an individual basis. Where it is difficult to
do so, it shall determine the recoverable amount of the assets on the basis of the asset group to
which the asset belongs. The term "assets group” refers to a minimum combination of assets
by which the cash flows could be generated independently
The goodwill, intangible assets with uncertain useful life and intangible assets not meeting the
expected condition for use the 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
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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.
(20) 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
(21) Contract liability
Accounting Policies Adopted After January 1, 2020
When either party to a contract has performed, the Company shall present the contract in the
statement of financial position as a contract asset or a contract liability, depending on the
relationship between the Company’s performance and the customer’s payment. If a customer
pays consideration, or the Company has a right to an amount of consideration before the
Company transfers a good or service to the customer, the Company shall present the contract
as a contract liability. Contract assets and contract liabilities under the same contract are
disclosed in net amount.
(22) Employee benefits
1. Accounting treatment for short employee benefit
The Company shall recognise, 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 welfare expenses incurred by the company are included in the current profit and
loss or related asset costs based on the actual amount when they actually occur. Among them,
non-monetary benefits are measured at fair value.
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2. Accounting treatment of post-employment benefits
(1) Defined contribution plan
The Company shall recognize, in the accounting period in which an employee provides
service, pension fund and unemployment fund for employees as a liability according to the
local government regulations. The amount shall be calculated according to local prescribed
bases and percentages in determining the amount of employee benefits, with a
corresponding charge to the profit or loss or cost of an asset for the current period.
(2) Defined benefit plan
None
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.
(23) Estimated liabilities
The obligation pertinent to a contingency shall be recognized as an estimated liability when the following
conditions are satisfied simultaneously:
(1) That obligation is a current obligation of the enterprise;
(2) It is likely to cause any economic benefit to flow out of the enterprise as a result of performance of the
obligation; and
(3) The amount of the obligation can be measured in a reliable way.
The estimated debts shall be initially measured in accordance with the best estimate of the necessary expenses
for the performance of the current obligation.
To determine the best estimate, an enterprise shall take into full consideration of the risks, uncertainty, time
value of money, and other factors pertinent to the Contingencies. If the time value of money is of great
significance, the best estimate shall be determined after discounting the relevant future outflow of cash.
The best estimate shall be conducted in accordance with the following situations, respectively:
If there is a 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.
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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.
The company reviews the book value of the estimated liabilities on the balance sheet date. If there is conclusive
evidence that the book value does not reflect the current best estimate, the book value will be adjusted according
to the current best estimate.
(24) Revenue
Accounting policy adopted after Jan 1, 2020
(1) The general principle of revenue recognition and measurement
The company shall recognise revenue when (or as) the company satisfies a performance obligation when (or
as) the customer obtains control of a promised good or service. Control of a promised good or service refers to
the ability to direct the use of, and obtain substantially all of the remaining benefits from it.
If the contract contains two or more performance obligations, the company shall allocate the transaction price
to each individual performance obligation based on the relative proportion of the stand-alone selling price of
the goods or services promised by each individual performance obligation on the date of the contract. The
company measures revenue based on the transaction price allocated to each individual performance obligation.
The transaction price is the amount of consideration to which the company expects to be entitled in exchange
for transferring promised goods or services to a customer, excluding amounts collected on behalf of third parties
or amounts expected to be returned to customers. The company shall consider the terms of the contract and its
customary business practices to determine the transaction price. When determining the transaction price, the
company shall consider the effects of all of the following: variable consideration, the existence of a significant
financing component in the contract, non-cash consideration, and consideration payable to a customer. The
company determines the transaction price that includes variable consideration at an amount that does not exceed
the amount of accumulated recognized revenue that is unlikely to be materially reversed when the relevant
uncertainty is eliminated. If there is a significant financing component in the contract, the company shall
recognise revenue at an amount that reflects the price that a customer would have paid for the promised goods
or services if the customer had paid cash for those goods or services when (or as) they transfer to the customer,
and use the effective interest method to amortize the difference between the transaction price and the contract
consideration during the contract period. If the interval between the transfer of control and the payment by the
customer does not exceed one year, the financing component will not be considered.
The company transfers control of a good or service over time and, therefore, satisfies a performance obligation
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and recognises revenue over time, if one of the following criteria is met. Otherwise, the company satisfies the
performance obligation at a point in time.
(a) the customer simultaneously receives and consumes the benefits provided by the company’s performance
as the company performs;
(b) the company’s performance creates or enhances an asset that the customer controls as the asset is created or
enhanced; or
(c) the company’s performance does not create an asset with an alternative use to the company and the company
has an enforceable right to payment for performance completed to date.
The company shall recognise revenue over time by measuring the progress towards complete satisfaction of
that performance obligation, except where the performance progress cannot be reasonably determined. The
company considers the nature of the goods or services and adopts the output method or the input method to
determine the progress of performance. Where the performance progress cannot be reasonable determined, but
the company expects to recover the costs incurred in satisfying the performance obligation, the company shall
recognise revenue only to the extent of the costs incurred until such time that it can reasonably measure the
outcome of the performance obligation.
For performance obligations satisfied at a certain point in time, the company shall recognises revenue at the
point when the customer obtains control of the relevant goods or services. To determine the point in time at
which a customer obtains control of a promised goods or services, the company shall consider requirements as
follows:
(a) The company has a present right to payment for the promised goods or services and the customer is presently
obliged to pay for that;
(b) The company has transferred the legal title of the goods to the customer, that is, the customer has the legal
title to the goods;
(c) The company has transferred physical possession of the goods to the customer, that is, the customer has
taken possession of the goods;
(d) The company has transferred the significant risks and rewards of ownership of the goods to the customer,
that is, the customer has the significant risks and rewards of ownership of the goods;
(e) The customer has accepted the promised goods or services.
(2) The specific criteria of revenue recognition and measurement
Commodity sales contracts between companies and customers usually only include performance obligations
for the transfer of steel and other commodities. This type of performance obligation is a performance obligation
performed at a certain point in time.
The company recognizes revenue when the customer obtains control of the relevant goods or services. When
judging whether the customer has obtained control of goods or services, the company considers the following
signs:
The company obtains the current right of collection of receivables, the legal ownership of the goods is
transferred to the customer, the physical assets of the goods are transferred to the customer, the company
transfers the main risks and rewards of the ownership of the goods to the customer, and the customer has
accepted the goods.
Accounting policy adopted before Jan 1, 2020
(1) The general principle of revenue recognition and measurement
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The Company has transferred to the buyer the significant risks and rewards of ownership of the goods.
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.
The relevant costs incurred or to be incurred can be measured reliably.
(2) The specific criteria of revenue recognition and measurement
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.
(25) Contract costs
Accounting policy adopted before Jan 1, 2020
Contract costs include costs to fulfill a contract and incremental costs of obtaining a contract.
If the costs incurred in fulfilling a contract with a customer are not within the scope of another Standard, for
example, Inventories, Property, Plant and Equipment or Intangible Assets, the company shall recognise an asset
from the costs incurred to fulfil a contract only if those costs meet all of the following criteria:
(a) the costs relate directly to a contract or to an expected contract;
(b) the costs generate or enhance resources of the Company that will be used in satisfying performance
obligations in the future; and
(c) the costs are expected to be recovered.
The company shall recognise as an asset the incremental costs of obtaining a contract with a customer if the
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company expects to recover those costs.
An asset recognised in accordance with contract costs shall be amortised in consistent with the transfer to the
customer of the goods or services to which the asset relates. The company may recognise the incremental costs
of obtaining a contract as an expense when incurred if the amortisation period of the asset is one year or less.
The company shall recognise an impairment loss in profit or loss to the extent that the carrying amount of an
asset related to contract assets exceeds:
(a) the remaining amount of consideration that the company expects to receive in exchange for the goods or
services to which the asset relates; less
(b) the costs that relate directly to providing those goods or services and that have not been recognised as
expenses.
The company shall recognise in profit or loss a reversal of some or all of an impairment loss previously
recognised when the impairment conditions no longer exist or have improved. The increased carrying amount
of the asset shall not exceed the carrying amount that if no impairment loss had been recognised previously.
(26) Government Subsidies
1. Types
A government subsidy means the monetary or non-monetary assets obtained free of charge by the Company
from the government. Government subsidies consist of the government subsidies pertinent to assets and
government subsidies pertinent to income.
Government subsidies related to assets are government subsidies whose primary
condition is that an entity qualifying for them should purchase, construct or otherwise
acquire long-term assets. The government subsidies related to incomes refers to
government subsidies other than those related to assets.
The standard of the Company recognizing the government subsidies related to assets is:
an entity qualifying for them should purchase, construct or otherwise acquire long-term
assets.
The standard of the Company recognizing the government subsidies related to income is:
In addition to government subsidies related to assets, government subsidies that have been
clearly targeted for subsidies.
2. 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.
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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.
3. 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 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.
The policy discount loans obtained by the company are divided into the following two
situations and are separately accounted for:
(a) The government allocates discounted funds to the loan bank, and the loan bank
provides loans to the company at a policy preferential interest rate. The preferential
interest rate is used to calculate the relevant borrowing costs.
(b) If the government directly allocates the discounted funds to the company, the company
will offset the relevant borrowing costs with the corresponding discounts, directly
accounted for the current profit or loss or recognized as deferred income.
(27) Deferred tax assets and deferred tax liabilities
Income tax includes current income tax and deferred income tax. Except for income tax arising from business
mergers and transactions or events that are directly included in owner's equity (including other comprehensive
income), the company will include current income tax and deferred income tax in current profit and loss.
Deferred income tax assets and deferred income tax liabilities are calculated and confirmed based on the
difference (temporary difference) between the tax base of assets and liabilities and their book value.
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 be obtained 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 recognition
of goodwill; initial recognition of an asset or liability in a transaction or event that is not a business
combination and at the time of the transaction, affects neither accounting profit nor taxable profit (tax loss).
For taxable temporary differences related to investments in subsidiaries, associates and joint ventures, deferred
income tax liabilities are recognized, unless the company can control the timing of the reversal of the
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Bengang Steel Plates Co., Ltd. Annual Report 2020
temporary differences and the temporary differences are likely not to be transferred back in the foreseeable
future. For deductible temporary differences related to investments in subsidiaries, associates and joint
ventures, when the temporary differences are likely to be reversed in the foreseeable future and are likely to
be used to deduct the taxable income of deductible temporary differences in the future, income tax assets are
recognized.
On the balance sheet date, deferred income tax assets and deferred income tax liabilities are measured at the
applicable tax rate during the period when the relevant assets are expected to be recovered or the relevant
liabilities are expected to be recovered in accordance with the provisions of the tax law.
On the balance sheet date, the company reviews the book value of deferred income tax assets. If it is probable
that sufficient taxable income cannot be obtained in the future to offset the benefits of deferred income tax
assets, the book value of the deferred income tax assets shall be written down. When it is possible to obtain
sufficient taxable income, the reduced amount shall be reversed.
When the Company has the statutory right to offset and intend to offset or obtain assets and pay off liabilities
at the same time, the current income tax assets and current income tax liabilities are presented at the net amount
after offsetting.
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.
(28) Leases
1. Accounting treatment of operating lease
(1) The rents paid for operating leases shall be recorded in the profits and losses of the current period by using
the straight-line method over each period of the lease term. The initial direct costs paid by the Company shall
be recorded into the profits and losses of the current period
If the lessor has shouldered any expense related to the lease which shall have been borne by the Company,
the Company shall deduct these expenses from the total rental expense and the remaining rental expense shall
be allocated to each period during the lease term
(2) The rents collected from operating leases shall be recorded in the profits and losses of the current period
by using the straight-line method over each period of the whole lease term in which free lease period is
included. The initial direct costs paid by the Company shall be recorded into the profits and losses of the
current period. The initial direct costs shall be capitalized if it is material, and be allocated to each period as
per the basis for rental revenue recognition.
If the Company has shouldered any expense related to the lease which shall have been borne by the lessee,
the company shall deduct these expenses from the total rental revenue and the remaining rental revenue shall
be allocated to each period during the lease term.
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.
(29) Discontinuing operation
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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.
The profit and loss from continuing operations and the profit and loss from discontinued operations are
separately listed in the income statement. Operational gains and losses such as impairment losses and
reversal amounts and disposal gains and losses from discontinued operations are reported as discontinued
operation gains and losses. For the discontinued operations reported in the current period, the Company
adjusts the information previously disclosed as continuing operations profits and losses in the current
financial statements as the discontinued operations profits and losses for the comparable accounting period.
(30) Major accounting estimates and judgments
When preparing financial statements, the Company's management needs to use estimates and assumptions,
which will affect the application of accounting policies and the amount of assets, liabilities, income and
expenses. Actual conditions may differ from these estimates. The management of the company continuously
evaluates the judgment of key assumptions and uncertainties involved in the estimation, and the impact of
changes in accounting estimates will be recognized in the current and future periods.
The main uncertainties in the estimated amount are as follows:
1. Measurement of expected credit losses
The company calculates the expected credit loss through the default risk exposure and the expected credit loss
rate, and determines the expected credit loss rate based on the default probability and the default loss rate.
When determining the expected credit loss rate, the company uses internal historical credit loss experience
and other data, and adjusts the historical data in combination with current conditions and forward-looking
information. When considering forward-looking information, the indicators used by the Company include the
risk of economic downturn, the expected increase in unemployment rate, changes in the external market
environment, technological environment and customer conditions. The Company regularly monitors and
reviews assumptions related to the calculation of expected credit losses.
2. Inventory Impairment
As mentioned in note (11) Inventory under “3 Significant accounting policies and accounting estimates”, the
Company regularly estimates the net realizable value of the inventory, and recognizes the difference in
inventory cost higher than the net realizable value. When estimating the net realizable value of inventory, the
Company considers the purpose of holding the inventory and uses the available information as the basis for
estimation, including the market price of the inventory and the Company's past operating costs. The actual
selling price, completion cost, sales expenses and taxes of the inventory may change according to changes in
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market sales conditions, production technology, or the actual use of the inventory. Therefore, the amount of
inventory depreciation reserve may change according to the above reasons. Adjustments to the inventory
impairment will affect the current profit and loss.
3. Impairment of other assets except inventory and financial assets
As mentioned in note (19) Long-term Asset Impairment under “3 Significant accounting policies and
accounting estimates”, the company performs an impairment assessment on assets other than inventory and
financial assets on the balance sheet date to determine whether the recoverable amount of the asset has fallen
to a lower level than its book value. If the situation shows that the book value of the long-term assets may not
be fully recovered, the relevant assets will be deemed to be impaired and the impairment loss will be
recognized accordingly.
The recoverable amount is the higher of the net value of the fair value of the asset (or asset group) minus the
disposal expenses and the present value of the asset (or asset group) 's expected future cash flow. Because the
Company cannot reliably obtain the public market price of assets (or asset groups), and cannot reliably and
accurately estimate the fair value of assets. Therefore, the Company regards the present value of the expected
future cash flow as the recoverable amount. When estimating the present value of future cash flows, it is
necessary to make a significant judgment on the output, selling price, related operating costs of the products
produced by the asset (or asset group), and the discount rate used in calculating the present value. The
Company will use all available relevant information when estimating the recoverable amount, including the
prediction of output, selling price and related operating costs based on reasonable and supportable
assumptions.
4. Depreciation and amortization of assets such as fixed assets and intangible assets
As described in note (15) Fixed Assets and note (18) Intangible Assets under “3 Significant accounting
policies and accounting estimates”, the company shall accrue depreciation for the fixed assets and
amortization for intangible assets within the useful life after considering their residual value. The company
regularly reviews the useful life of related assets to determine the amount of depreciation and amortization
expenses to be included in each reporting period. The useful life of assets is determined by the company based
on past experience with similar assets and in combination with anticipated technological changes. If the
previous estimates change significantly, the depreciation and amortization expenses will be adjusted in the
future.
5. Deferred tax assets
When it is estimated that sufficient taxable income can be obtained in the future to use the unrecovered tax
losses and deductible temporary differences, the relevant deferred tax assets are calculated and confirmed on
the basis of the applicable income tax rate during the period when the asset is expected to be recovered and
the amount of taxable income is limited to deductible tax losses and deductible temporary differences likely
to be obtained by the Company. The Company needs to use judgment to estimate the time and amount of
future taxable income, and make reasonable estimates and judgments on the future applicable income tax rate
according to the current tax policy and other related policies to determine the deferred tax assets that should
be recognized. If the time and amount of profits actually generated in the future period or the actual applicable
income tax rate are different from the management's estimate, the difference will have an impact on the
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amount of deferred tax assets.
(31) Change of significant accounting policy and accounting estimate
A. Change of major accounting policy during this reporting period
(1) Implementation of "Accounting Standards for Business Enterprises No. 14-Revenue" (revised in 2017)
(hereinafter referred to as "New Revenue Standards")
The Ministry of Finance revised the "Accounting Standards for Business Enterprises No. 14-Revenue" in
2017. The revised standard stipulates that for the first implementation of the standard, the amount of retained
earnings and other related items in the financial statements at the beginning of the year should be adjusted
according to the cumulative impact, and the information for the comparable period should not be adjusted.
The Company implemented the new revenue standard from January 1, 2020. According to the standard, the
Company only adjusts the retained earnings at the beginning of 2020 and the amount of other related items in
the financial statements for the cumulative impact of contracts that have not been completed on the date of
first implementation, and does not make adjustments to the comparative financial statements.
The major impact of the implementation of the above regulations are as follows:
Amount of impact on the balance on Jan 1,
Change of accounting policy 2020
content and reason Affected items Consolidated Parent company
Financial statement financial statement
The Company implemented the Advance from customers -4,429,821,526.79 -5,597,707,687.22
"Accounting Standards for
Business Enterprises No. 14-
Revenue" (referred to as "New
Contract liabilities 3,920,196,041.41 4,953,723,617.01
Revenue Standards")
promulgated by the Ministry of
Finance in 2017 on January 1,
2020 Other current liabilities 509,625,485.38 643,984,070.21
Compared with the original revenue standards, the impact of the implementation of the new revenue standards
on the relevant items of the financial statements for the period of 2020 is as follows (increase/(decrease)):
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Bengang Steel Plates Co., Ltd. Annual Report 2020
Amount of impact on the balance on Dec 31, 2020
Affected items in the
Parent company
statement of Consolidated Financial
financial
financial position statement
statement
Advance from customers -5,038,299,156.48 -6,016,524,270.87
Contract liabilities 4,458,671,819.90 5,324,357,761.83
Other current liabilities 579,627,336.58 692,166,509.04
Impact amounts to the period of 2020
Affected items in the statement of
comprehensive income Consolidated Financial Parent company financial
statement statement
Operating costs 1,112,122,323.44 655,370,940.93
Selling and distribution expenses -1,112,122,323.44 -655,370,940.93
(2) Implementation of "Accounting Standards for Business Enterprises No. 13 "
The Ministry of Finance issued the "Accounting Standards for Business Enterprises Interpretation No. 13"
(Cai Kuai [2019] No. 21, hereinafter referred to as "Interpretation No. 13") on December 10, 2019, which
will come into force on January 1, 2020. No requirement of retrospective adjustment.
a. The recognition of related parties
Interpretation No. 13 clarifies that the following circumstances constitute a related party: a joint venture or
joint venture between an enterprise and other member units (including parent companies and subsidiaries) of
the enterprise group to which it belongs; a joint venture of the enterprise and other joint ventures or joint
ventures of the enterprise. In addition, Interpretation No. 13 also clarifies that only two or more companies
that are significantly affected by one party do not constitute related parties. It also adds that joint ventures
include joint ventures and their subsidiaries.
b. The definition of business
Interpretation No. 13 completes the three elements of business composition, refines the judgment conditions
of the business composition, and introduces the "concentration test" option to simplify to a certain extent the
judgment of whether a combination obtained under the same control constitutes a business, etc. .
The company implemented Interpretation No. 13 from January 1, 2020, and the comparative financial
statements will not be adjusted. Implementation Interpretation No. 13 has not had a significant impact on the
company's financial position and operating results.
(3) Implementation of the "Interim Provisions on Accounting Treatment of Carbon Emissions Trading"
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Bengang Steel Plates Co., Ltd. Annual Report 2020
On December 16, 2019, the Ministry of Finance issued the "Interim Provisions on the Accounting Treatment
of Carbon Emissions Trading" (Cai Kuai [2019] No. 22), which is applicable to the related companies in the
key emission enterprises (hereinafter referred to as key emission companies) that conduct carbon emission
rights business in accordance with the "Interim Measures for the Administration of Carbon Emissions
Trading" and other relevant regulations. This regulation came into effect on January 1, 2020, and key emission
companies should adopt the prospective application to apply this regulation.
The Company implemented the above regulation from January 1, 2020, and the comparative financial
statements will not be adjusted. The implementation of this regulation has not had a significant impact on the
company's financial position and operating results.
(4) Implement the "Regulations on Accounting Treatment of Rental Concessions Related to the Coronavirus
Pandemic"
On June 19, 2020, the Ministry of Finance issued the "Regulations on Accounting Treatment of Rental
Concessions Related to the Coronavirus Pandemic " (Caikuai (2020) No. 10), which came into effect on June
19, 2020, allowing companies to adjust the relevant rental concessions that occurred between Jan 1, 2020 and
the implementation date of this regulation. According to the regulation, companies can choose to adopt
simplified methods for accounting treatments for rent reductions and deferred payment of rents directly caused
by the Coronavirus Pandemic that meet the conditions.
The company chooses to adopt a simplified method for accounting treatment for all rent concessions that fall
within the scope of the regulation, and adjusts the relevant rent concessions that occur between January 1,
2020 and the effective date of the regulation accordingly.
The implementation of the regulations did not have a significant impact on the company's financial position
and operating results.
B. Change of accounting estimate during the reporting period
Approval Application Affected
Items Affected items
procedure date amounts
Accumulated
Approved 633,195,486.72
depreciation
by the
Change in eighth Operating costs 616,340,171.08
depreciation meeting of Jan 1, 2020 General and
period the eighth administrative 16,855,315.64
board of expenses
directors
Total profit 633,195,486.72
153
Bengang Steel Plates Co., Ltd. Annual Report 2020
Approval Application Affected
Items Affected items
procedure date amounts
Net profit 474,896,615.04
C. The first implementation of the new revenue standard adjustment to the financial statements at the
beginning of the year
Consolidated Statement of Financial Position
Ending balance of the Beginning balance of Adjusted amounts
Items
last period the current period Reclassification Remeasurement Total
Advance
-
from 4,429,821,526.79 -4,429,821,526.79
4,429,821,526.79
customers
Contract
3,920,196,041.41 3,920,196,041.41 3,920,196,041.41
liabilities
Other
current 509,625,485.38 509,625,485.38 509,625,485.38
liabilities
Statement of Financial Position of the Parent Company
Ending balance of the Beginning balance of Adjusted amounts
Items
last period the current period Reclassification Remeasurement Total
Advance
-
from 5,597,707,687.22 -5,597,707,687.22
5,597,707,687.22
customers
Contract
4,953,723,617.01 4,953,723,617.01 4,953,723,617.01
liabilities
Other current
643,984,070.21 643,984,070.21 643,984,070.21
liabilities
4. Taxes
(1) Major type of taxes and corresponding tax rates
Tax Taxation Method Tax Rate
Value-added Tax (VAT) The balance of output VAT calculated 6%, 10%, 13%
based on product sales and taxable
154
Bengang Steel Plates Co., Ltd. Annual Report 2020
services revenue in accordance with the
tax laws after subtracting the deductible
input VAT of the period
Based on VAT and business tax actually
City maintenance and construction tax 7%, 5%
paid
Enterprise income tax Based on taxable profit 25%
(2) Tax Preference
None.
5. Notes to the consolidated financial statements
(1) Cash at bank and on hand
Items 20201231 20191231
Cash on hand 3,026.68 5,588.98
Cash at bank 9,229,414,568.44 13,441,409,399.60
Other monetary funds 3,897,249,320.14 4,974,429,409.19
Total 13,126,666,915.26 18,415,844,397.77
Including: Total amount deposited abroad
The details of restricted monetary funds resulted from guarantee or pledge or freeze accounts are as
follows:
Items 20201231 20191231
Margin for bank acceptance bill 3,306,509,320.14 4,803,950,250.12
Margin for letter of credit 78,000,000.00 166,527,026.07
Time deposit or notice deposit
512,000,000.00
for guarantee
Loan deposit 740,000.00 3,330,000.00
Other 622,133.00
Total 3,897,249,320.14 4,974,429,409.19
(2) Accounts receivable
1. Accounts receivable disclosed by aging analysis
Items 20201231 20191231
Within 1 year (inclusive) 245,084,695.28 187,728,755.63
1-2 years (inclusive) 57,537,987.36 31,659,160.02
2-3 years (inclusive) 251,762,129.07 24,710,744.49
Over 3 years 179,465,975.74 177,928,572.30
Sub-total 733,850,787.45 422,027,232.44
Less: Provision for bad
488,633,604.79 186,330,966.78
debts
Total: 245,217,182.66 235,696,265.66
155
Bengang Steel Plates Co., Ltd. Annual Report 2020
2. Accounts receivable disclosed by bad debt accrual method
20201231
Carrying amount Provision for bad debts
Items
Bad Book value
Percentage
Amount Amount debts
(%)
ratio (%)
Provision for bad
352,985,418.30 48.10 352,985,418.30 100.00
debts individually
Provision for bad
debts based on 380,865,369.15 51.90 135,648,186.49 35.62 245,217,182.66
portfolio
Include:
Portfolio 1: Aging
380,865,369.15 51.90 135,648,186.49 35.62 245,217,182.66
portfolio
Total 733,850,787.45 100.00 488,633,604.79 245,217,182.66
20191231
Carrying amount Provision for bad debts
Items
Bad Book value
Percentage
Amount Amount debts
(%)
ratio (%)
Provision for bad debts
47,762,337.18 11.32 47,762,337.18 100.00
individually
Provision for bad debts
374,264,895.26 88.68 138,568,629.60 37.01 235,696,265.66
based on portfolio
Include:
Portfolio 1: Aging
374,264,895.26 88.68 138,568,629.60 37.01 235,696,265.66
portfolio
Total 422,027,232.44 100.00 186,330,966.78 235,696,265.66
Accounts receivables tested for impairment individually:
20201231
Items Provision for Bad debts
Carrying amount Reason
bad debts ratio (%)
Brilliance Automotive Bankruptcy
305,223,081.12 305,223,081.12 100.00 reorganization
Group Holdings Co., Ltd.
Benxi Nanfen Xinhe
Metallurgical Furnace 47,762,337.18 47,762,337.18 100.00 Discontinued
Material Co., Ltd
156
Bengang Steel Plates Co., Ltd. Annual Report 2020
Total 352,985,418.30 352,985,418.30
Provision for bad debts by portfolio: Aging analysis
20201231
Provision for Bad debt
Items Account
bad ratio
Receivable
debts （%）
Within 1 year
240,240,563.27 2,402,405.64 1.00
(inclusive)
1-2 year (inclusive) 2,420,911.77 242,091.18 10.00
2-3 year (inclusive) 6,500,255.55 1,300,051.11 20.00
Over 3 year 131,703,638.56 131,703,638.56 100.00
Total 380,865,369.15 135,648,186.49
3. The provision for bad debts accrued, reversed or recovered in the current period
The amount of bad debt provision accrued in the current period is RMB 302,302,638.01.
4. No accounts receivable has been written off this year.
5. Top five debtors at the year-end
20201231
Company Percentage of total Accounts Provision for
Amount
receivable (%) bad debts
The first 305,223,081.12 41.59 305,223,081.12
The second 104,634,496.36 14.26 1,046,344.96
The third 56,158,745.71 7.65 561,587.46
The fourth 47,762,337.18 6.51 47,762,337.18
The fifth 26,929,400.04 3.67 269,294.00
Total 540,708,060.41 73.68 354,862,644.72
6. Accounts receivable derecognized due to the transfer of financial assets
None.
7. The amount of assets and liabilities formed by transferring accounts receivable and
continuing to be involved
157
Bengang Steel Plates Co., Ltd. Annual Report 2020
None.
(3) Accounts receivable financing
1. Details of accounts receivable financing
Items 20201231 20191231
Notes Receivable 4,189,977,871.92 2,117,763,147.67
Including: Bank acceptance bill 1,875,594,439.85 2,108,970,139.40
Commercial acceptance bill 2,314,383,432.07 8,793,008.27
Accounts receivable 311,779,314.21
Total 4,189,977,871.92 2,429,542,461.88
Notes: Accounts receivable financing reflects notes receivable and accounts receivable
that are measured at fair value through other comprehensive income on the balance sheet
date.
2. The pledged acceptance bill at the year-end
Item The pledged acceptance bill at the year-end
Bank acceptance bill 484,093,073.28
Commercial acceptance bill 403,379,971.01
Total 887,473,044.29
3. The amount of Notes receivable endorsed over or discounted but not yet matured at
the year-end
Amount not
Amount confirmed
confirmed at
Item at the end of
the end of the
the period
period
Bank acceptance bill 19,140,766,051.06
Commercial acceptance bill 2,277,888,430.86
Total 19,140,766,051.06 2,277,888,430.86
158
Bengang Steel Plates Co., Ltd. Annual Report 2020
4. No Notes receivable has been transferred into accounts receivable due to inability of
drawer to meet acceptance bill at the year-end.
(4) Prepayments
1. Prepayments disclosed by aging
20201231 20191231
Aging
Amount Percentage (%) Amount Percentage (%)
Within 1 year 2,096,232,640.14 99.44 1,284,678,069.97 99.51
1-2 years 11,812,137.51 0.56 6,279,487.94 0.49
2-3 years 53,900.20
Over 3 years 36,000.00
Total 2,108,044,777.65 100.00 1,291,047,458.11 100.00
Notes: As of December 31, 2020, there were no outstanding prepayments over 1 year.
2. Top five prepaid companies at the year-end
Name of the company Amount Percentage (%)
The First 1,146,621,194.17 54.39
The Second 134,979,953.65 6.40
The Third 133,093,798.08 6.31
The Fourth 125,253,186.74 5.94
The Fifth 96,036,913.74 4.56
Total 1,635,985,046.38 77.60
(5) Other receivables
Items 20201231 20191231
Interest receivables 33,685,359.01 20,504,422.47
Dividend receivables
Other receivables 108,415,992.26 152,302,614.30
Total 142,101,351.27 172,807,036.77
1．Interest receivable
(1) Interest receivable disclosed by category
Items 20201231 20191231
Deposit interest 33,685,359.01 20,504,422.47
Subtotal 33,685,359.01 20,504,422.47
Less: provision for bad debts
Total 33,685,359.01 20,504,422.47
(2) The company has no significant provision for overdue interest and bad debts.
159
Bengang Steel Plates Co., Ltd. Annual Report 2020
2．Other receivables
(1) Other receivables disclosed by aging
Items 20201231 20191231
Within 1 year (inclusive) 53,420,775.41 135,162,016.85
1-2 years (inclusive) 42,323,476.43 15,306,496.22
2-3 years (inclusive) 12,988,305.06 3,479,413.70
Over 3 years 68,267,923.76 65,222,052.19
Sub-total 177,000,480.66 219,169,978.96
Less: Provision for bad
68,584,488.40 66,867,364.66
debts
Total： 108,415,992.26 152,302,614.30
（2）Information of provision for bad debts
Stage one Stage two Stage three
lifetime
expected
lifetime expected credit
Provision for bad credit losses
Total
debts 12-month expected losses
(credit
credit losses (credit impairment has not
impairment
occurred)
has already
occurred)
Beginning balance 9,494,109.69 57,373,254.97 66,867,364.66
--Transfer to the
second stage
--Transfer to the
-768,390.73 768,390.73
third stage
--Write-back to the
second stage
--Write-back to the
6,592.60 -6,592.60
first stage
Accrual for the
351,990.79 2,816,265.57 656,152.83 3,824,409.19
current period
160
Bengang Steel Plates Co., Ltd. Annual Report 2020
Stage one Stage two Stage three
lifetime
expected
lifetime expected credit
Provision for bad credit losses
Total
debts 12-month expected losses
(credit
credit losses (credit impairment has not
impairment
occurred)
has already
occurred)
Reversal during the
6,207.34 220,683.79 226,891.13
current period
Write-back of the
1,747,858.43 132,535.89 1,880,394.32
current period
Write-off during the
current period
Other changes
Ending balance 352,376.05 9,566,849.71 58,665,262.64 68,584,488.40
Changes in the book value of other receivables are as follows:
Stage one Stage two Stage three
lifetime expected credit lifetime expected
12-month
Book value losses credit losses Total
expected credit
(credit impairment has not (credit impairment has
losses
occurred) already occurred)
Beginning balance 137,511,976.11 24,284,747.88 57,373,254.97 219,169,978.96
--Transfer to the
second stage
--Transfer to the
-1,369,740.15 1,369,740.15
third stage
--Write-back to the
second stage
161
Bengang Steel Plates Co., Ltd. Annual Report 2020
Stage one Stage two Stage three
lifetime expected credit lifetime expected
12-month
Book value losses credit losses Total
expected credit
(credit impairment has not (credit impairment has
losses
occurred) already occurred)
--Write-back to the
14,813.42 -14,813.42
first stage
Increase 376,415,795.03 6,006,395.62 54,905.00 382,477,095.65
Termination of
416,212,048.83 8,302,009.23 132,535.89 424,646,593.95
confirmation
Other changes
Ending balance 97,730,535.73 20,604,580.70 58,665,364.23 177,000,480.66
(3) No other accounts receivable actually written off in the current period
(4) Other receivables disclosed by nature
Nature 20201231 20191231
Accounts 167,775,115.62 209,700,618.22
Others 9,225,365.04 9,469,360.74
Total 177,000,480.66 219,169,978.96
(5) Top five debtors at the year-end
Percentage of
Provision for
Company Nature Amount Aging total other
bad debts
receivables (%)
The First Accounts 6,012,104.38 within 1 year 3.40
The Second Accounts 5,492,200.00 within 1 year 3.10 54,922.00
The Third Accounts 3,408,537.26 within 1 year 1.93
The Fourth Accounts 2,783,078.98 within 1 year to over 3 year 1.57 2,538,389.24
The Fifth Accounts 2,394,571.41 within 1 year 1.35
Total 20,090,492.03 11.35 2,593,311.24
162
Bengang Steel Plates Co., Ltd. Annual Report 2020
(6) There is no other receivables relates to any government subsidies in the
reporting period.
(7) There is no other receivables derecognized due to the transfer of financial
assets in the reporting period
(8) There no assets and liabilities formed by transfer of other receivables and
continued involvement in the reporting period
(6) Inventories
1. Inventories disclosed by category
20201231 20191231
Items
Carrying amount Impairment Book value Carrying amount Impairment Book value
Raw material
4,535,270,857.67 26,986,533.69 4,508,284,323.98 3,737,655,945.87 26,986,533.69 3,710,669,412.18
and main material
Work in process and self-
made semi-finished 1,732,705,334.71 1,946,088.69 1,730,759,246.02 1,302,249,713.48 25,995,508.16 1,276,254,205.32
product
Finished goods 2,805,646,918.75 4,625,146.10 2,801,021,772.65 2,730,735,542.67 17,261,474.56 2,713,474,068.11
Total 9,073,623,111.13 33,557,768.48 9,040,065,342.65 7,770,641,202.02 70,243,516.41 7,700,397,685.61
2. Provision for inventory impairment and provision for impairment of contract performance costs
Increase Decrease
Category 20191231 20200101 Write-back 20201231
Provision Others Others
or write-off
Raw material
26,986,533.69 26,986,533.69 26,986,533.69
and main material
Work in process and
self-made semi-finished 25,995,508.16 25,995,508.16 1,946,088.69 25,995,508.16 1,946,088.69
product
Finished goods 17,261,474.56 17,261,474.56 4,625,146.10 17,261,474.56 4,625,146.10
Total 70,243,516.41 70,243,516.41 6,571,234.79 43,256,982.72 33,557,768.48
(7) Other current assets
Items 20201231 20191231
Prepaid tax 183,320,437.20 182,484,616.27
VAT input tax 86,091,954.53 130,420,207.82
Time deposit 5,254,234,444.28
Total 5,523,646,836.01 312,904,824.09
163
Bengang Steel Plates Co., Ltd. Annual Report 2020
(8) Long-term equity investment
Increase/decrease
Total
Investment Gains Other
Investees Add Reduce Other Declaration of Impairme
20191231 and Losses Comprehen Provision 20201231
Invest Investme Equity Cash Dividends Others nt Ending
Recognized under sive Income
ment nt Changes or Profit Balance
the Equity Method Adjustment
Joint Venture
Zhejiang Bengang Jingrui
Steel Processing Co., Ltd.. 2,642,998.70 374,119.86 -275,053.83 2,742,064.73
Subtotal
2,642,998.70 374,119.86 -275,053.83 2,742,064.73
Total
2,642,998.70 374,119.86 -275,053.83 2,742,064.73
164
Bengang Steel Plates Co., Ltd. Annual Report 2020
(9) Other equity instrument investments
Item 20201231 20191231
Equity of Suzhou Bengang
3,888,980.00 3,888,980.00
Industrial Co., Ltd.
Equity of Zhonggang Shanghai
Steel Processing Co., Ltd.
Equity of Northeast Special
1,037,735,849.00 1,037,735,849.00
Steel Group Co., Ltd.
Equity of Guangzhou Benpu
Automobile Panel Sales Co., 200,000.00 200,000.00
Ltd.
Equity of Wuhan Bengang
200,000.00
Yuanhong Trading Co., Ltd.
Total 1,042,024,829.00 1,041,824,829.00
Notes:
“Other equity instrument investment" items reflects the ending balance of non-trading
equity instrument investments designated as measured at fair value through other
comprehensive income.
The Company holds 15% equity of Zhonggang Shanghai Steel Processing Co., Ltd.
9.93% equity of Northeast Special Steel Group Co., Ltd. held by the Company has been
pledged to Bank of Dalian, Shenyang branch.
(10) Fixed assets
1. Fixed assets and Disposal of fixed assets
Items 20201231 20191231
Fixed assets 26,284,567,956.44 26,123,375,492.40
Disposal of fixed assets
Total 26,284,567,956.44 26,123,375,492.40
165
Bengang Steel Plates Co., Ltd. Annual Report 2020
2. Details of fixed assets
Transportation
Houses and Mechanical
Items and other Total
buildings equipment
equipment
1. Total original value
20191231 12,321,783,218.79 47,625,624,131.28 908,284,781.31 60,855,692,131.38
Increase
692,077,508.12 1,828,190,321.00 7,904,567.97 2,528,172,397.09
in current period
Including: Purchase 14,642,922.72 3,900,232.67 18,543,155.39
Transferre
d from construction in 692,077,508.12 1,813,547,398.28 4,004,335.30 2,509,629,241.70
progress
Merging
Decrease in current
21,686,964.04 533,554,926.88 3,269,036.43 558,510,927.35
period
Including: Disposal
21,686,964.04 514,479,792.15 3,269,036.43 539,435,792.62
or scrapping
Others 19,075,134.73 19,075,134.73
20201231 12,992,173,762.87 48,920,259,525.40 912,920,312.85 62,825,353,601.12
2.Total accumulated
depreciation
20191231 5,843,160,062.67 28,243,587,548.42 604,346,279.82 34,691,093,890.91
Increase
300,111,149.37 1,862,985,952.81 27,973,536.13 2,191,070,638.31
in current period
Including: Provision 300,111,149.37 1,862,985,952.81 27,973,536.13 2,191,070,638.31
Decrease in current
9,982,342.40 427,152,414.07 3,187,684.13 440,322,440.60
period
Including: Disposal
9,982,342.40 427,152,414.07 3,187,684.13 440,322,440.60
or scrapping
20201231 6,133,288,869.64 29,679,421,087.16 629,132,131.82 36,441,842,088.62
3. Total impairment
20191231 38,596,028.99 2,626,719.08 41,222,748.07
Increase
60,614,634.58 60,614,634.58
in current period
Including: accrued 60,614,634.58 60,614,634.58
Others
Decrease in current
1,632,408.07 1,261,418.52 2,893,826.59
period
Including: Disposal
1,632,408.07 1,261,418.52 2,893,826.59
or scrapping
20201231 36,963,620.92 61,979,935.14 98,943,556.06
4. Total net book
value of Fixed assets
20201231 6,821,921,272.31 19,178,858,503.10 283,788,181.03 26,284,567,956.44
20191231 6,440,027,127.13 19,379,409,863.78 303,938,501.49 26,123,375,492.40
166
Bengang Steel Plates Co., Ltd. Annual Report 2020
3. Fixed assets idled temporarily
Accumulated Net book
Items Gross value Impairment Notes
depreciation value
Houses and buildings 94,707,444.27 59,005,241.87 35,702,202.40
Mechanical equipment 539,534,736.81 474,785,348.84 63,241,353.66 1,508,034.31
Transportation and other
1,042,125.89 1,042,125.89
equipment
Total 635,284,306.97 534,832,716.60 98,943,556.06 1,508,034.31
4. Fixed assets leased in through financial leasing
As of the end of this reporting period, the value of the fixed assets leased in through financial leasing was RMB
1,114,232,362.74, all of which were leased from the related party Liaoning Hengyi Financial Leasing Co., Ltd.
5. Fixed assets leased out through financial leasing
Item Ending balance
Houses and buildings 6,755,257.55
Total 6,755,257.55
6. Fixed assets without property rights certificates at the year-end
Items Book value Reason
Houses and buildings 1,145,596,922.34 Being processed
(11) Construction in progress
1. Construction in progress and Construction materials
Items 20201231 20191231
Construction in progress 1,837,160,389.66 1,820,264,689.19
Project materials 2,773,325.92 13,588,883.39
Total 1,839,933,715.58 1,833,853,572.58
2. Details of construction in progress
167
Bengang Steel Plates Co., Ltd. Annual Report 2020
20201231 20191231
Items Total Total
Gross value Net book value Gross value Net book value
impairment impairment
Special Steel Electric
Furnace Capacity 358,101,195.01 358,101,195.01 62,311,284.01 62,311,284.01
Replacement Project
CCPP power
300,907,874.71 300,907,874.71 85,320,752.59 85,320,752.59
generation project
Special steel rolling
151,433,585.06 151,433,585.06 126,479,522.35 126,479,522.35
mill renovation project
Advanced Treatment
and Reuse Project of
98,563,871.96 98,563,871.96 1,300,481.22 1,300,481.22
Reclaimed Water in
General Energy Plant
360 square meter
82,878,409.99 82,878,409.99 60,930,506.79 60,930,506.79
sintering machine
No. 7 blast furnace dry
dust removal and
energy-saving 70,402,228.77 70,402,228.77 40,993,916.95 40,993,916.95
transformation of TRT
power generation
Environmental
protection overhaul
66,322,604.36 66,322,604.36 30,937,257.41 30,937,257.41
project of No. 6 blast
furnace
360 square meter
sintering machine 56,547,049.50 56,547,049.50 55,089,094.50 55,089,094.50
waste heat utilization
One-tower
desulfurization revamp 31,893,853.65 31,893,853.65 8,469,241.97 8,469,241.97
in the coking plant
168
Bengang Steel Plates Co., Ltd. Annual Report 2020
20201231 20191231
Items Total Total
Gross value Net book value Gross value Net book value
impairment impairment
The overall
improvement of Benxi
29,824,289.00 29,824,289.00 20,685,421.72 20,685,421.72
Steel's manufacturing
management
Flue gas
desulfurization and
denitrification of No. 7 28,774,283.25 28,774,283.25 17,437,798.33 17,437,798.33
coke oven in the plate
coking plant
Energy General Plant
No. 1 Converter Gas
24,008,553.86 24,008,553.86
Tank System
Transformation Project
Cold rolled high-
strength steel 23,961,023.15 23,961,023.15
renovation project
220kV Substation
Project of General 23,302,571.03 23,302,571.03 773,057.78 773,057.78
Energy Plant
Chemical Coke Oven
Gas Project – Bengang
21,840,791.70 21,840,791.70 21,840,791.70 21,840,791.70
transferred to Liaoning
Coal
5#Blast furnace
491,069,345.30 491,069,345.30
relocation overhaul
1700 Hot Rolling
39,806,201.09 39,806,201.09
Improvement
Environmental
69,541,903.74 69,541,903.74
protection
169
Bengang Steel Plates Co., Ltd. Annual Report 2020
20201231 20191231
Items Total Total
Gross value Net book value Gross value Net book value
impairment impairment
transformation of No.
4-6 converter
1# converter energy
saving and
environmental 148,803,402.52 148,803,402.52
protection
transformation
Newly built 8# single-
strand slab caster 100,460,943.24 100,460,943.24
project
5#-7# Oxygen
Generator Nitrogen-
34,339,392.96 34,339,392.96
increasing and Energy-
saving Modification
8#9# Coke oven
wastewater advanced 20,335,268.74 20,335,268.74
treatment
Transformation of No.
2 Casting Machine in 81,419,913.88 81,419,913.88
Steelmaking Plant
Other 468,398,204.66 468,398,204.66 301,919,190.40 301,919,190.40
Total 1,837,160,389.66 1,837,160,389.66 1,820,264,689.19 1,820,264,689.19
170
Bengang Steel Plates Co., Ltd. Annual Report 2020
3. The change of major construction in progress
Budget Input Accumulated Including: Capi
Other Prog
(in 10 of amount of capitalized taliza Source of
Project 20191231 Increase Transfer to FA decrea 20201231 ress
thousand Budget capitalized interest of tion fund
se (%)
yuan) (%) interest current period rate
Special Steel
Electric Furnace
Self-raised
Capacity 161,761.00 62,311,284.01 295,789,911.00 358,101,195.01 22.00 20.00
fund
Replacement
Project
CCPP power Self-raised
106,000.00 85,320,752.59 215,587,122.12 300,907,874.71 28.00 30.00 6,359,003.29 3,831,836.54 4.35
generation project fund & Loan
Special steel
Self-raised
rolling mill 59,607.00 126,479,522.35 29,779,762.70 4,825,699.99 151,433,585.06 26.00 25.00 3,905,897.06 1,923,970.35 4.35
fund & Loan
renovation project
Advanced
Self-raised
Treatment and 17,000.00 1,300,481.22 97,263,390.74 98,563,871.96 57.00 60.00
fund
Reuse Project of
171
Bengang Steel Plates Co., Ltd. Annual Report 2020
Budget Input Accumulated Including: Capi
Other Prog
(in 10 of amount of capitalized taliza Source of
Project 20191231 Increase Transfer to FA decrea 20201231 ress
thousand Budget capitalized interest of tion fund
se (%)
yuan) (%) interest current period rate
Reclaimed Water
in General Energy
Plant
No. 7 blast
furnace dry dust
removal and
Self-raised
energy-saving 9,332.00 40,993,916.95 29,408,311.82 70,402,228.77 75.00 70.00 293,980.07 123,401.63 4.35
fund & Loan
transformation of
TRT power
generation
Environmental
protection Self-raised
25,225.00 30,937,257.41 35,385,346.95 66,322,604.36 75.00 70.00
overhaul project of fund
No. 6 blast furnace
One-tower 7,000.00 8,469,241.97 23,424,611.68 31,893,853.65 45.00 40.00 Self-raised
172
Bengang Steel Plates Co., Ltd. Annual Report 2020
Budget Input Accumulated Including: Capi
Other Prog
(in 10 of amount of capitalized taliza Source of
Project 20191231 Increase Transfer to FA decrea 20201231 ress
thousand Budget capitalized interest of tion fund
se (%)
yuan) (%) interest current period rate
desulfurization fund
revamp in the
coking plant
5#Blast furnace
Self-raised
relocation 124,086.50 491,069,345.30 335,096,315.94 826,165,661.24 - 66.00 70.00 31,410,224.05 13,027,763.86 4.35
fund & Loan
overhaul
1700 Hot Rolling Self-raised
25,000.00 39,806,201.09 139,473,010.30 179,279,211.39 - 71.00 70.00
Improvement fund
No. 7 blast furnace
of the plate iron
100.0 Self-raised
plant builds a new 4,200.00 31,557,158.36 31,557,158.36 - 75.00
0 fund
4# hot blast
furnace
Perfect function of 100.0 Self-raised
6,332.00 45,544,017.06 45,544,017.06 - 71.00
hot blast stove in 0 fund
173
Bengang Steel Plates Co., Ltd. Annual Report 2020
Budget Input Accumulated Including: Capi
Other Prog
(in 10 of amount of capitalized taliza Source of
Project 20191231 Increase Transfer to FA decrea 20201231 ress
thousand Budget capitalized interest of tion fund
se (%)
yuan) (%) interest current period rate
plate ironmaking
plant
Environmental
protection Self-raised
27,000.00 69,541,903.74 92,467,786.33 162,009,690.07 - 60.00 95.00 2,799,798.26 1,548,185.22 4.35
transformation of fund & Loan
No. 4-6 converter
1# converter
energy saving and 26,54
Self-raised
environmental 21,800.00 148,803,402.52 17,992,331.86 140,247,061.81 8,672. - 64.00 70.00 1,770,758.63 821,940.53 4.35
fund & Loan
protection 57
transformation
Newly built 8#
Self-raised
single-strand slab 64,341.00 100,460,943.24 249,198,752.55 349,659,695.79 - 54.00 60.00
fund
caster project
5#-7# Oxygen 4,726.10 34,339,392.96 4,947,418.50 39,286,811.46 - 83.00 85.00 Self-raised
174
Bengang Steel Plates Co., Ltd. Annual Report 2020
Budget Input Accumulated Including: Capi
Other Prog
(in 10 of amount of capitalized taliza Source of
Project 20191231 Increase Transfer to FA decrea 20201231 ress
thousand Budget capitalized interest of tion fund
se (%)
yuan) (%) interest current period rate
Generator fund
Nitrogen-
increasing and
Energy-saving
Modification
The cold rolling
mill (three cold
process) pickling
rolling and
100.0 Self-raised
continuous 5,600.00 54,854,105.81 54,854,105.81 - 97.00
0 fund
stripping
galvanizing line
have perfect
functions
Renewal of 2# 5,800.00 56,302,688.85 56,302,688.85 - 97.00 100.0 Self-raised
175
Bengang Steel Plates Co., Ltd. Annual Report 2020
Budget Input Accumulated Including: Capi
Other Prog
(in 10 of amount of capitalized taliza Source of
Project 20191231 Increase Transfer to FA decrea 20201231 ress
thousand Budget capitalized interest of tion fund
se (%)
yuan) (%) interest current period rate
and 7# Casting 0 fund
Machine
Equipment in
Plate Steelmaking
Plant
The cold rolling
mill (first cold
process) silicon 100.0 Self-raised
5,200.00 48,647,411.29 48,647,411.29 - 93.00
steel production 0 fund
line has perfect
functions
8#9# Coke oven
wastewater 100.0 Self-raised
2,306.00 20,335,268.74 20,335,268.74 - 88.00
advanced 0 fund
treatment
176
Bengang Steel Plates Co., Ltd. Annual Report 2020
Budget Input Accumulated Including: Capi
Other Prog
(in 10 of amount of capitalized taliza Source of
Project 20191231 Increase Transfer to FA decrea 20201231 ress
thousand Budget capitalized interest of tion fund
se (%)
yuan) (%) interest current period rate
Upgrading and
Transformation of
4#, 5# Converter 100.0 Self-raised
3,800.00 35,253,273.23 35,253,273.23 - 92.00
Equipment in 0 fund
Plate Steelmaking
Plant
Transformation of
No. 2 Casting Self-raised
10,090.00 81,419,913.88 1,418,076.05 82,837,989.93 - 82.00 85.00 284,551.59 155,425.89 4.35
Machine in fund & Loan
Steelmaking Plant
26,54
1,077,625,213.
Total 1,341,588,827.97 1,839,390,803.14 2,076,805,745.02 8,672. 46,824,212.95 21,432,524.02
52
57
177
Bengang Steel Plates Co., Ltd. Annual Report 2020
4. There is no impairment of construction in progress during the current period.
5. Construction materials
20201231 20191231
Items Net Book Net Book
Gross value Impairment Gross value Impairment
Value Value
Construction
2,773,325.92 2,773,325.92 13,588,883.39 13,588,883.39
materials
Total 2,773,325.92 2,773,325.92 13,588,883.39 13,588,883.39
(12) Intangible assets
1. Details of intangible assets
Items Land use right Software Total
1.Total gross value
20191231 327,028,797.84 310,401.55 327,339,199.39
Increase
Including: Purchase
Internal Research and Development
Merger
Decrease
Including: Disposal
Invalid and terminated confirmation
20201231 327,028,797.84 310,401.55 327,339,199.39
2. Total of Accumulated Amortization
20191231 55,717,267.98 121,908.07 55,839,176.05
Increase 6,540,576.22 26,794.58 6,567,370.80
Including: Accrued 6,540,576.22 26,794.58 6,567,370.80
Decrease
Including: Disposal
Invalid and terminated confirmation
20201231 62,257,844.20 148,702.65 62,406,546.85
3. Total Impairment
20191231
Increase
Including: Accrued
Decrease
Including: Disposal
Invalid and terminated confirmation
20201231
4. Total Net value
20201231 264,770,953.64 161,698.90 264,932,652.54
20191231 271,311,529.86 188,493.48 271,500,023.34
178
Bengang Steel Plates Co., Ltd. Annual Report 2020
2. Land use right without Certificate of Land use right at the year-end
None.
(13) Deferred tax asset and deferred tax liability
1. Undedicated deferred tax asset
20201231 20191231
Items Deductible Deductible
Deferred tax
temporary Deferred tax asset temporary
asset
differences differences
Impairment of assets 398,431,973.43 99,607,993.35 378,651,125.80 94,662,781.44
Internal unrealized
74,424,898.92 18,606,224.73 53,312,397.14 13,328,099.29
profit
Depreciation of fixed
333,978,859.03 83,494,714.76 333,978,859.03 83,494,714.76
assets
Total 806,835,731.38 201,708,932.84 765,942,381.97 191,485,595.49
2. Unrecognized deferred tax assets
Items 20201231 20191231
Deductible temporary differences 305,702,137.30 428,163.12
Deductible losses 54,629,940.42 653,832,187.01
Total 360,332,077.72 654,260,350.13
3. The deductible loss of unrecognized deferred tax assets due in the following period
Items 20201231 20191231 Notes
Year 2020 19,216,380.38
Year 2021 10,945,961.04 10,981,383.41
Year 2022 1,001,166.72 589,299,581.01
Year 2023 14,114,953.21 16,327,268.19
Year 2024 17,910,573.13 18,007,574.02
Year 2025 10,657,286.32
Total 54,629,940.42 653,832,187.01
179
Bengang Steel Plates Co., Ltd. Annual Report 2020
(14) Other non-current assets
20201231 20191231
Items
Gross value Impairment Net book value Gross value Impairment Net book value
Prepaid long-
995,840,320.65 995,840,320.65 708,502,552.50 708,502,552.50
term assets
Total 995,840,320.65 995,840,320.65 708,502,552.50 708,502,552.50
180
Bengang Steel Plates Co., Ltd. Annual Report 2020
(15) Short-term loans
1. Short-term loan disclosed by type
Items 20201231 20191231
Pledge loans
Mortgage loans
Guaranteed loans 9,687,731,000.00 12,731,478,000.00
Credit loans 380,000,000.00 420,000,000.00
Total 10,067,731,000.00 13,151,478,000.00
2.There is no short-term loans that were overdue at the end of the reporting period
(16) Notes payable
Items 20201231 20191231
Bank acceptance bill 7,747,043,186.29 8,897,442,732.91
Commercial acceptance bill 857,106,162.13 1,174,963,839.77
Domestic letter of credit 1,210,000,000.00 1,756,108,104.27
Total 9,814,149,348.42 11,828,514,676.95
At the end of the reporting period, there is no notes payable due and unpaid.
(17) Accounts payable
(1) Accounts payable disclosed by category
Items 20201231 20191231
Accounts payable for goods 5,122,416,750.84 3,481,176,373.75
Accounts payable for labor 18,697,483.74 56,959,052.87
Accounts payable for project and equipment 513,842,739.32 581,909,120.17
Repair expense and others 259,271,282.92 407,468,483.48
Total 5,914,228,256.82 4,527,513,030.27
(2) Significant accounts payable aging over one year
Of which: more than
Items Ending balance
one year
Company 1 36,218,300.00 36,218,300.00
Company 2 35,081,745.24 30,361,745.24
181
Bengang Steel Plates Co., Ltd. Annual Report 2020
Company 3 23,579,692.14 23,379,692.14
Company 4 15,810,625.07 15,810,625.07
Company 5 14,200,000.00 14,200,000.00
Company 6 14,126,435.78 12,651,035.78
Total 139,016,798.23
Other notes: The above significant accounts payable aged over one year have not yet reached the settlement
conditions.
(18) Advance from customers
1. Advance from customers disclosed by category
Items 20201231 20191231
Advance for goods 4,429,821,526.79
Total 4,429,821,526.79
2. There is no significant advance from customers aging over one year.
(19) Contract liabilities
1. Details of contract liabilities
Items 20201231
Advance for goods 4,458,671,819.90
Total 4,458,671,819.90
As of December 31, 2020, the value-added tax received in advance from customers was RMB 579,627,336.58
(December 31, 2019: RMB 509,625,485.38) and disclosed as other current liabilities.
(20) Employee benefits payable
1. Employee benefits payable
Items 20191231 Increase Decrease 20201231
Short-term employee
22,208,442.94 1,813,558,032.80 1,810,017,573.44 25,748,902.30
benefits
Post-employment benefits
- defined contribution 62,312.32 166,603,750.88 166,665,480.25 582.95
plans
Termination benefits 1,427,419.30 43,733.23 1,471,152.53
Other benefits due within
one year
Total 23,698,174.56 1,980,205,516.91 1,978,154,206.22 25,749,485.25
2. Short-term employee benefits
Items 20191231 Increase Decrease 20201231
(1) Salary, bonus,
12,974,335.94 1,389,001,397.17 1,385,384,616.00 16,591,117.11
allowance and subsidy
182
Bengang Steel Plates Co., Ltd. Annual Report 2020
Items 20191231 Increase Decrease 20201231
(2) Employee welfare 137,995,433.01 137,995,433.01
(3) Social Insurance 756,616.34 131,390,670.04 131,493,573.64 653,712.74
Including: Medical
106,650.30 102,065,806.41 102,168,773.60 3,683.11
insurance
Work injury
649,966.04 27,066,935.19 27,066,871.60 650,029.63
insurance
Maternity
2,257,928.44 2,257,928.44
insurance
(4) Housing funds 6,855,601.00 119,143,709.00 119,140,115.00 6,859,195.00
(5) Union funds and staff
1,621,889.66 36,026,823.58 36,003,835.79 1,644,877.45
education fee
(6) Short-term
compensated absences
(7) Short-term profit -
sharing scheme
Total 22,208,442.94 1,813,558,032.80 1,810,017,573.44 25,748,902.30
3. Defined contribution plans
Items 20191231 Increase Decrease 20201231
Basic pension fund 60,423.10 161,461,180.42 161,521,038.24 565.28
Unemployment insurance 1,889.22 5,142,570.46 5,144,442.01 17.67
Total 62,312.32 166,603,750.88 166,665,480.25 582.95
(21) Taxes payable
Items 20201231 20191231
Value-added tax 22,541,925.74 246,921,117.21
Corporate income tax 9,589,798.62 6,250,204.39
City maintenance and construction tax 4,490,656.56 11,416,274.65
House property tax 3,661,600.13 3,445,290.84
Educational surcharges 3,211,296.48 8,146,826.78
Land holding tax 1,180,402.66 1,128,141.09
Environmental tax 8,398,902.77 5,264,008.42
Others 2,227,498.00 2,253,951.42
Total 55,302,080.96 284,825,814.80
(22) Other payables
Items 20201231 20191231
Interest payables 10,818,986.30
Dividends payables
183
Bengang Steel Plates Co., Ltd. Annual Report 2020
Items 20201231 20191231
Other payables 709,448,301.92 651,882,758.67
Total 709,448,301.92 662,701,744.97
1. Interests payable
Items 20201231 20191231
Loan interests 10,818,986.30
Total 10,818,986.30
2. Other payables
(1) Other payables disclosed by nature
Items 20201231 20191231
Deposit 1,713,563.89 1,933,435.69
Margin 98,316,454.89 86,166,961.89
Accounts 525,775,209.97 454,536,559.31
Others 83,643,073.17 109,245,801.78
Total 709,448,301.92 651,882,758.67
(2) No significant other payables aged over one year
(23) Non-current liabilities due within one year
Items 20201231 20191231
Long-term loans due within one year 1,287,630,361.43 234,474,657.99
Bond payables due within one year 20,400,000.00
Long-term payables due within one year
Total 1,308,030,361.43 234,474,657.99
Notes: RMB 255,943,331.43 of long-term due within one year is guaranteed loans, and RMB 1,031,687,030.00 is
credit loans.
(24) Other current liabilities
Items 20201231 20191231
Output tax to be transferred 579,627,336.58 509,625,485.38
Total 579,627,336.58 509,625,485.38
Please refer to “Note 3 (31) Changes in Important Accounting Policies and Accounting Estimates” for details of the
difference between the beginning balance and the ending balance of the previous year (December 31, 2019).
(25) Long-term loans
184
Bengang Steel Plates Co., Ltd. Annual Report 2020
Long-term loans disclosed by category
Categories 20201231 20191231
Pledged loans 622,600,000.00 622,600,000.00
Mortgage loan
Guaranteed loans 798,714,362.65 1,106,159,800.73
Credit loans 2,081,620,065.00 3,120,916,110.00
Total 3,502,934,427.65 4,849,675,910.73
(26) Bonds payables
(1) Bonds payables disclosed by category
Items 20201231 20191231
Convertible Bond 5,752,229,339.52
Total 5,752,229,339.52
185
Bengang Steel Plates Co., Ltd. Annual Report 2020
(2) Changes in Bonds payables ( Excluding other financial instruments such as preferred stocks and perpetual bonds classified as financial liabilities)
Issue Term to Balance at the end Interest accrued at Premium and discount Balance at the end of
Items Book value Issuance amount Current issue
date maturity of the previous year face value amortization the current year
Convertible
Jun 29, 2
Bond (Bond 6,800,000,000.00 6 years 6,800,000,000.00 6,800,000,000.00 20,400,000.00 1,047,770,660.48 5,752,229,339.52
020
code:127018)
Total 6,800,000,000.00 6,800,000,000.00 6,800,000,000.00 20,400,000.00 1,047,770,660.48 5,752,229,339.52
Description:
Approved by the China Securities Regulatory Commission "Zheng Jian Xu Ke [2020] No. 46", the Company publicly issued 68 million convertible corporate
bonds on June 29, 2020, each with a face value of 100 yuan and a total issuance of RMB 6.8 billion. The term to maturity is 6 years from June 29, 2020 to June
28, 2026. The bond coupon rate is 0.6% in the first year, 0.8% in the second year, 1.5% in the third year, 2.9% in the fourth year, 3.8% in the fifth year, and 5.0%
in the sixth year. The interest payment method is once a year, and the starting date of interest calculation is the first day of issuance of the convertible bond, that
is, June 29, 2020. The interest payment date of each year is the first day of the issuance of convertible bonds (June 29, 2020) on the day of each full year. If that
day is a legal holiday or a rest day, it will be postponed to the next working day, and no interest will be paid during the postponement period. Every two adjacent
interest payment dates constitute an interest calculation year.
In the initial measurement of the convertible corporate bonds issued by the Company this time, the fair value of the corresponding liability component after
deducting the allocated issuance expenses is RMB 5,612,624,636.40, which is included in the bonds payable; the fair value of the corresponding equity component
186
Bengang Steel Plates Co., Ltd. Annual Report 2020
after deducting the allocated issuance cost of the Company is RMB 1,146,290,662.42, which is included in other equity instruments. In the subsequent
measurement, the liability part is measured and adjusted by amortized cost using the effective interest rate method.
(3) Description of the conditions and time for conversion of convertible corporate bonds
Approved by Shenzhen Stock Exchange "Shen Zheng Shang [2020] No. 656", the Company’s RMB 6.80 billion convertible corporate bonds will be listed on
the Shenzhen Stock Exchange on August 4, 2020, and the abbreviation is "Bengang Convertible Bonds". The bond code is "127018". The conversion period of
the convertible corporate bonds issued this time is from the first trading day after six months of the issuance of the convertible corporate bonds (July 3, 2020) to
the maturity date of the convertible corporate bonds, that is, from January 4, 2021 to June 28, 2026. The initial conversion price of the convertible bonds is RMB
5.03 per share.
(4) Notes to other financial instruments classified as financial liabilities
None.
187
Bengang Steel Plates Co., Ltd. Annual Report 2020
(27) Long-term payables
Items 20201231 20191231
Long-term payables 1,114,232,362.74 516,939,408.14
Special payables
Total 1,114,232,362.74 516,939,408.14
Long-term payables
Items 20201231 20191231
Financing lease payments 1,114,232,362.74 516,939,408.14
Including: unrealized financing
779,232,152.85 427,091,325.39
xpenses
Total 1,114,232,362.74 516,939,408.14
Notes: At the end of the reporting period, the amount of unrealized financing expenses due to
finance lease payments was RMB 779,232,152.85.
The minimum financial lease payment to be paid after the balance sheet date was RMB
1,893,464,515.59.
The Company needs to pay interest on time, and the principal is paid in one lump-sum after the
lease contract expires. The lease contracts that have not yet been executed are due for more than
3 years.
(28) Deferred income
Items 20191231 Increase Decrease 20201231 Reason
Government
208,955,407.30 27,056,919.00 81,560,493.07 154,451,833.23
subsidy
Total 208,955,407.30 27,056,919.00 81,560,493.07 154,451,833.23
188
Bengang Steel Plates Co., Ltd. Annual Report 2020
Projects of government subsidies:
Related
Transfer to
Other to assets
Items 20191231 Increase current profit 20201231
decrease or
and loss
income
Cold-rolled high-strength steel reconstruction project 150,000,000.00 50,000,000.00 100,000,000.00 Assets
7 sets of 130 tons combustion boiler flue gas desulfurization
project in power plant 14,400,000.00 4,800,000.00 9,600,000.00 Assets
Production line of high-grade electro-galvanized sheet for
automobile 8,208,000.00 8,208,000.00 Assets
Advanced Treatment Project of Carbon Fiber Wastewater in
9,500,000.00 9,500,000.00 Assets
Dongfeng Plant Area of Plate Coking Plant
Power plant three power plant cogeneration reform project 6,000,000.00 2,000,000.00 4,000,000.00 Assets
Industrial enterprise energy management center construction
demonstration project 4,640,000.00 2,320,000.00 2,320,000.00 Assets
Introduce special funds for overseas advanced and
applicable technologies 4,000,000.00 2,000,000.00 2,000,000.00 Assets
Desulfurization and Denitrification Project of Coal-fired
Boiler in High-pressure Workshop of Bengang Power Plant 4,200,000.00 600,000.00 3,600,000.00 Assets
Research and development of high-strength steel for the
third generation of automobiles 2,900,000.00 580,000.00 2,320,000.00 Assets
Energy saving and environmental protection project for
1,160,000.00 1,160,000.00 Assets
sintering machine in ironworks
Bengang Group Co., Ltd. Automotive Panel Engineering
1,000,000.00 1,000,000.00 Assets
Laboratory Project Construction
Automatic air quality monitoring system 105,000.00 70,000.00 35,000.00 Assets
Liaoning Artisan Subsidy 100,002.97 99,981.08 21.89 Assets
“Steel for high-strength pipelines under low-temperature and
121,000.00 90,322.26 30,677.74 Assets
high-pressure service conditions” Project national support
189
Bengang Steel Plates Co., Ltd. Annual Report 2020
Related
Transfer to
Other to assets
Items 20191231 Increase current profit 20201231
decrease or
and loss
income
funds
2018 Municipal Skill Master Workstation Fee 187,039.34 120,423.00 66,616.34 Assets
Construction Project of Bengang Automotive Sheet
Engineering Laboratory 1,000,000.00 -1,000,000.00 Assets
Research and development of anti-oxidation hot forming
steel PHS1500A 250,000.00 84,847.73 165,152.27 Assets
Construction of professional technology innovation platform
for automobile steel industry 1,000,000.00 800,000.00 200,000.00 Assets
Research on the Influence Mechanism and Control of Rare
Earth Oxide Sulfide on Automobile Steel Plasticity 184,364.99 184,364.99 Assets
2019 Municipal Skills Master Workstation Cost
180,000.00 180,000.00 Assets
2020 Ecological Civilization Construction Project (Special
Steel Electric Furnace Upgrade Project) 20,000,000.00 20,000,000.00 Assets
Liaoning Province "Hundred, Thousand, Thousand,
Thousand Talents Project" funding project in 2018 250,000.00 250,000.00 Assets
Supplementary Fund for Relocation of Railway Transport 1,626,919.00 1,626,919.00 Income
Liaoning Provincial Local Financial Supervision and
Administration Bureau to support the development of special 5,000,000.00 5,000,000.00 Income
funds for enterprises to go public
Total 208,955,407.30 27,056,919.00 80,560,493.07 -1,000,000.00 154,451,833.23
190
Bengang Steel Plates Co., Ltd. Annual Report 2020
(29) Share capital
Increase/decrease (+ , - )
Items 20191231 Bonus Transferred from 20201231
Issuing of new share Others Subtotal
shares reserves
Capital shares 3,875,371,532.00 3,875,371,532.00
(30) Other equity instruments
1. Information of other financial instruments such as preferred stocks and perpetual bonds issued at the end of the period
The Company’s other equity instruments at the end of the period are the equity part of convertible corporate bonds. For details, please refer to “Note 5 (26) Bonds payable”.
2. Changes in financial instruments such as preferred stocks and perpetual bonds issued at the end of the period
Notes:
20191231 Increase Decrease 20201231
Items Book
Number Number Book value Number Book value Number Book value
value
Convertible
68,000,000 1,146,290,662.42 68,000,000 1,146,290,662.42
corporate bonds
Total 68,000,000 1,146,290,662.42 68,000,000 1,146,290,662.42
As of December 31, 2020, the convertible corporate bonds issued this time have not yet reached the conversion period, and there is no conversion into A-share ordinary shares in this period.
191
Bengang Steel Plates Co., Ltd. Annual Report 2020
(31) Capital reserves
Items 20191231 Increase Decrease 20201231
Capital premium 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
(32) Special Reserves
Items 20191231 Increase Decrease 20201231
Safety production cost 212,687.41 54,000,536.58 53,912,811.85 300,412.14
Total 212,687.41 54,000,536.58 53,912,811.85 300,412.14
(33) Surplus Reserves
Items 20191231 20200101 Increase Decrease 20201231
Statutory surplus
961,105,529.85 961,105,529.85 961,105,529.85
reserves
Total 961,105,529.85 961,105,529.85 961,105,529.85
(34) Undistributed Profits
Items 2020 2019
Before adjustments: undistributed profits at last year-end 2,307,765,664.62 1,945,887,269.82
Adjustments of the beginning distributed profits
(increase + / decease -)
After adjustments: undistributed profit at this year-
2,307,765,664.62 1,945,887,269.82
beginning
Add: undistributed profit belonging to parent company 384,252,740.78 555,646,971.40
Less: Statutory surplus reserves
Discretionary reserves
General risk reserves
Common shares dividend payable 193,768,576.60
Common shares dividend transferred to paid-in capital
Ending balance of undistributed profits 2,692,018,405.40 2,307,765,664.62
(35) Operating income and operating cost
2020 2019
Items
Revenue Cost Revenue Cost
Principal business 45,321,849,577.55 43,322,474,075.93 46,805,252,792.90 43,900,514,006.74
Other business 3,362,943,108.03 3,069,706,486.66 5,936,100,789.38 5,310,900,638.88
Total 48,684,792,685.58 46,392,180,562.59 52,741,353,582.28 49,211,414,645.62
192
Bengang Steel Plates Co., Ltd. Annual Report 2020
Details for operating income:
Principal
Item Other business
business
Classified by business area 45,321,849,577.55 3,362,943,108.03
Including：Domestic 40,766,384,160.23 3,362,943,108.03
Abroad 4,555,465,417.32
Classified by the time of commodity transfer 45,321,849,577.55 3,362,943,108.03
Including: recognize at a certain point in time 45,321,849,577.55 3,362,352,384.22
recognize over a certain period of time 590,723.81
Total 45,321,849,577.55 3,362,943,108.03
(36) Tax and surcharges
Items 2020 2019
City maintenance and construction tax 39,002,807.95 74,291,089.29
Educational surcharge 28,155,477.26 53,346,630.36
Housing property tax 79,753,764.80 77,359,590.55
Land use right tax 13,090,099.93 13,076,581.16
Environmental tax 28,417,193.46 22,681,208.92
Stamp duty 26,523,801.64 29,816,392.95
Others 928,675.06 1,008,586.80
Total 215,871,820.10 271,580,080.03
(37) Selling and distribution expenses
Items 2020 2019
Freight 912,729,271.74
Port surcharges 70,973,850.23
Import and export agency fee 55,316,442.53 63,097,328.89
Salary and benefits 25,955,134.20 25,965,599.95
Package fee 6,179,183.22 7,564,585.54
Others 9,828,520.26 16,358,267.35
Total 97,279,280.21 1,096,688,903.70
193
Bengang Steel Plates Co., Ltd. Annual Report 2020
(38) General and administrative expenses
Items 2020 2019
Salary and benefits 368,149,507.51 374,106,639.18
Repair expense 216,309,807.28 230,168,663.91
Land use right fee 65,600,418.40 59,957,197.92
Depreciation 39,060,982.28 44,362,834.97
Heating fee 25,929,633.73 28,855,893.31
Water resources fee 18,956,412.81 27,515,155.10
Sewage charges 13,186,781.11 11,345,616.35
Others 45,632,751.69 55,633,840.82
Total 792,826,294.81 831,945,841.56
(39) Research and development expenses
Items 2020 2019
Depreciation, materials and compensation, etc. 37,989,623.28 30,780,463.74
Total 37,989,623.28 30,780,463.74
(40) Financial expenses
Items 2020 2019
Interest expenditure 1,028,857,436.14 948,799,627.90
Less: Interest income 378,523,984.03 333,750,262.79
Exchange loss -307,919,937.19 44,724,851.35
Others 22,361,640.70 22,068,472.77
Total 364,775,155.62 681,842,689.23
(41) Other income
Items 2020 2019
Government subsidy 81,193,591.56 83,914,522.47
Others 111,590.36 2,084.65
Total 81,305,181.92 83,916,607.12
(42) Income on investment
Items 2020 2019
194
Bengang Steel Plates Co., Ltd. Annual Report 2020
Income on long-term equity investment by equity method 374,119.86 452,582.71
Income on disposal of financial assets holding for trading 13,500,000.00
Dividend income obtained during the holding period of other
77,242.47
equity instrument investments
Income on bank short-term financial products 605,795.19
Total 13,951,362.33 1,058,377.90
(43) Credit impairment losses
Items 2020 2019
Loss from bad debts of account receivable 302,302,638.01 4,618,663.91
Loss from impairment of account receivable
financing
Loss from bad debts of other receivables 1,717,123.74 1,923,236.71
Total 304,019,761.75 6,541,900.62
Note: Loss is shown as positive figures
(44) Assets impairment loss
Items 2020 2019
Impairment of inventory and contract
6,571,234.79 43,256,982.72
performance costs
Impairment of fixed assets 60,614,634.58
Total 67,185,869.37 43,256,982.72
Note: Loss is shown as positive figures
(45) Asset disposal income
The amount
Items 2020 2019 recognized in non-
recurring profit
Disposal gains or losses
arising from disposal of 325,651.61 3,441,646.67 325,651.61
fixed assets not held for sale
195
Bengang Steel Plates Co., Ltd. Annual Report 2020
The amount
Items 2020 2019 recognized in non-
recurring profit
Total 325,651.61 3,441,646.67 325,651.61
(46) Non-operating income
The amount
Items 2020 2019 recognized in non-
recurring profit
Non-current assets scrapped gains 2,703,102.88 9,476,065.29 2,703,102.88
Debt restructuring gain 32,800.02 50,640.00 32,800.02
Others 1,592,660.62 779,757.58 1,592,660.62
Total 4,328,563.52 10,306,462.87 4,328,563.52
(47) Non-operating expense
The amount
Items 2020 2019 recognized in non-
recurring profit
Donations
Non-current assets scrapped loss 95,724,280.44 90,209,742.22 95,724,280.44
Others
Total 95,724,280.44 90,209,742.22 95,724,280.44
(48) Income tax expenses
1. Income tax expenses
Items 2020 2019
Income tax payable for the current year 35,594,567.91 18,987,986.70
Adjustment of deferred income tax -10,223,337.35 -33,048.28
Total 25,371,230.56 18,954,938.42
2. Accounting profit and income tax expense adjustment process
Items 2020
Total profit 416,850,796.79
Income tax expense calculate according to the official or applicable tax rate 104,212,699.20
Effect of different tax rates applied by subsidiaries
Effect of adjustment of the income tax expense of prior period 2,107,736.22
196
Bengang Steel Plates Co., Ltd. Annual Report 2020
Items 2020
Effect of non-taxable income -93,529.97
Effect of undeductible costs, expenses or losses 122,123.16
Effect of use of deductible losses of unrecognized deferred tax asset of prior
period -158,710,195.23
Effect of deductible temporary differences or deductible losses of unrecognized
deferred tax asset of current period 77,732,397.18
Changes in the balance of deferred income tax assets and liabilities at the
beginning of the period due to the additional deductible expenses and tax rate
adjustments required by the tax law
Income tax expenses 25,371,230.56
(49) Earnings per share
1. Basic earnings per share
The basic earnings per share is calculated by dividing the consolidated net profit attributable to the common
stock shareholders of the parent company by the weighted average number of common stocks issued by the
company:
Items 2020 2019
Consolidated net profit attributable to
384,252,740.78 555,646,971.40
ordinary shareholders of parent company
The weighted average number of common
3,875,371,532.00 3,875,371,532.00
shares issued by the company
Basic earnings per share 0.099 0.143
Including: basic earnings per share for
0.099 0.143
continuing operations
Basic earnings per share for discontinued
operations
2. Diluted earnings per share
Diluted earnings per share is calculated by dividing the consolidated net profit attributable. to the common
shareholders of the parent company (diluted) by the weighted average number of ordinary shares issued by
the company (diluted):
Since convertible bonds have caused anti-dilution, diluted earnings per share are disclosed in accordance
with basic earnings per share.
(50) Notes of statement of cash flows
197
Bengang Steel Plates Co., Ltd. Annual Report 2020
1. Cash received related to other operating activities
Items 2020 2019
Withdraw of current accounts, advance for another 415,131,996.05 80,209,527.36
Interest income 365,343,047.49 289,867,473.89
Special subsidy income 27,624,696.63 3,378,441.11
Non-operating income 673,106.88 9,799.92
Others 8,181,857.38 3,620,413.94
Total 816,954,704.43 377,085,656.22
2. Cash paid related to other operating activities
Items 2020 2019
Current accounts, advance for another 347,552,655.29 67,238,789.58
Sales expenses 72,862,184.48 139,977,333.30
Administrative expenses 44,664,338.51 77,588,717.78
Bank charges 20,710,711.34 14,562,642.52
Others 1,489,830.36 23,593,941.76
Total 487,279,719.98 322,961,424.94
3. Cash received related to other financing activities
Items 2020 2019
Margin for bill, letter of guarantee and letter of credit 1,076,807,422.35 1,571,269,971.97
Proceeds from negotiation 253,068,892.21
Total 1,329,876,314.56 1,571,269,971.97
4. Cash paid related to other financing activities
Items 2020 2019
Margin for bill, letter of guarantee and letter of credit 34,424,434.31 1,612,133.00
Convertible bond issuance costs 41,084,701.18
Others 8,731,273.67
Total 75,509,135.49 10,343,406.67
(51) Supplementary details of statement of cash flows
1. Supplementary details for statement of cash flows
198
Bengang Steel Plates Co., Ltd. Annual Report 2020
Items 2020 2019
1. A reconciliation of net profit to cash flows from
operating activities:
Net profit 391,479,566.23 556,860,488.98
Add: Credit impairment loss 304,019,761.75 6,541,900.62
Impairment of assets 67,185,869.37 43,256,982.72
Depreciation of fixed assets 2,191,070,638.31 2,432,266,554.80
Amortization of intangible assets 6,567,370.80 6,562,417.70
Amortization of long-term deferred expenses
Losses proceeds from disposal of fixed assets, intangible
-325,651.61 -3,441,646.67
assets and other long-term assets (Earnings marked“－”)
Scrapped losses from fixed assets (Earnings
93,021,177.56 80,733,676.93
marked“－”)
Loss from changes in fair value (Earnings marked“－”)
Financial expenses (Earnings marked“－”) 720,937,498.95 1,009,666,817.96
Investment losses (Earnings marked“－”) -13,951,362.33 -1,058,377.90
Deferred tax assets reduction (Addition marked“－”) -10,223,337.35 -33,048.28
Deferred tax liabilities increased (Reduction marked“－”)
Reduction of inventory (Addition marked“－”) -1,302,981,909.11 2,992,064,351.09
Operating receivable items reduction (Addition
-2,847,086,786.29 1,617,190,398.59
marked“－”)
Operating payable items increase (Less marked"－") -1,638,713,049.57 -1,762,786,475.38
Others
Net cash flows generated from operating activities -2,039,000,213.29 6,977,824,041.16
2. Payments of investing and financing activities not
involving cash:
Liabilities transferred to capital
Convertible corporate bonds due within one year
Fixed assets financed by leasing
3. The net increase in cash and cash equivalents:
Ending balance of cash 9,229,417,595.12 13,441,414,988.58
Less: Beginning balance of cash 13,441,414,988.58 11,752,548,621.97
Add: Ending balance of cash equivalents
Less: Opening balance of cash equivalents
The net increase in cash and cash equivalents -4,211,997,393.46 1,688,866,366.61
2. The structure of cash and cash equivalents
Items 20201231 20191231
1. Cash 9,229,417,595.12 13,441,414,988.58
Including: Cash on hand 3,026.68 5,588.98
Bank deposits available on demand 9,229,414,568.44 13,441,409,399.60
199
Bengang Steel Plates Co., Ltd. Annual Report 2020
Items 20201231 20191231
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 9,229,417,595.12 13,441,414,988.58
Including: Cash and cash equivalents limited to use by the
parent company of other subsidiary in the group
(52) Assets of which ownership or right to use are restricted
Items Ending balance Reason
Cash at bank and on hand 3,897,249,320.14 Deposit for notes and letter of credit
Receivables financing 887,473,044.29 Pledged for acceptance bill
Other equity instrument
1,037,735,849.00 Pledged for loans
investments
Fixed assets 94,790,118.09 Mortgage for fund borrowing
Intangible assets 37,116,386.66 Mortgage for fund borrowing
Total 5,954,364,718.18
(53) Foreign currency monetary items
1． Foreign currency monetary items
Ending balance in Exchange rate at Ending balance
Items
foreign currency the year-end translated to RMB
Cash at bank and on hand 470,322,450.33
Including: USD 71,983,473.35 6.5249 469,684,965.31
EUR 50,753.26 8.0250 407,294.97
HKD 273,514.80 0.8416 230,190.05
Short-term loans 1,239,731,000.00
Including: USD 190,000,000.00 6.5249 1,239,731,000.00
Non-current liabilities due
within one year
108,050,361.43
Including: USD 4,700,000.00 6.5249 30,667,030.00
EUR 9,460,158.74 8.0250 75,917,773.89
JPY 23,176,000.00 0.0632 1,465,557.54
200
Bengang Steel Plates Co., Ltd. Annual Report 2020
Ending balance in Exchange rate at Ending balance
Items
foreign currency the year-end translated to RMB
Long-term loans 388,134,427.65
Including: USD 11,850,000.00 6.5249 77,320,065.00
EUR 37,635,016.95 8.0250 302,021,017.45
JPY 139,056,000.00 0.0632 8,793,345.20
2. The Company has no overseas operating entities.
201
Bengang Steel Plates Co., Ltd. Annual Report 2020
(54) Government subsidies
1. Government subsidies related to assets
Items listed on The amount included in the current profit or loss or offsetting the Items included in the current
Item Amount the balance loss of related costs profit or loss or offsetting the
sheet 2020 2019 loss of related costs
Cold-rolled high-strength steel reconstruction Deferred
250,000,000.00 50,000,000.00 50,000,000.00 Other income
project income
Production line of high-grade electro- Deferred
41,040,000.00 8,208,000.00 8,208,000.00 Other income
galvanized sheet for automobile income
7 130t Boilers Flue Gas Desulfurization Deferred
24,000,000.00 4,800,000.00 4,800,000.00 Other income
Renovation Project of Power Plant income
Waste heat utilization project and
Deferred
desulfurization transformation project of 21,020,000.00 4,204,000.00 Other income
income
sintering machine in ironworks
Deferred
Environmental Pollution Control Project 26,170,000.00 3,620,000.00 Other income
income
Introduce special funds for overseas advanced 14,420,000.00 Deferred 2,000,000.00 2,884,000.00 Other income
202
Bengang Steel Plates Co., Ltd. Annual Report 2020
Items listed on The amount included in the current profit or loss or offsetting the Items included in the current
Item Amount the balance loss of related costs profit or loss or offsetting the
sheet 2020 2019 loss of related costs
and applicable technologies income
Industrial enterprise energy management Deferred
11,600,000.00 2,320,000.00 2,320,000.00 Other income
center construction demonstration project income
Power plant three power plant cogeneration Deferred
10,000,000.00 2,000,000.00 2,000,000.00 Other income
reform project income
Deferred
MES Project Special Fund 8,600,000.00 1,720,000.00 Other income
income
Deferred
Special funds for environmental protection 5,800,000.00 1,160,000.00 Other income
income
Energy saving and environmental protection Deferred
5,800,000.00 1,160,000.00 1,160,000.00 Other income
project for sintering machine in ironworks income
Desulfurization and Denitrification Project of
Deferred
Coal-fired Boiler in High-pressure Workshop 6,000,000.00 600,000.00 600,000.00 Other income
income
of Bengang Power Plant
Environmental governance projects and 2,400,000.00 Deferred 340,000.00 Other income
203
Bengang Steel Plates Co., Ltd. Annual Report 2020
Items listed on The amount included in the current profit or loss or offsetting the Items included in the current
Item Amount the balance loss of related costs profit or loss or offsetting the
sheet 2020 2019 loss of related costs
comprehensive prevention and control projects income
for regional river basin environmental
protection
Iron Smelter 360 Sintering Machine Flue Gas Deferred
1,000,000.00 200,000.00 Other income
Desulfurization Project income
Research on the Influence Mechanism and
Deferred
Control of Rare Earth Oxide Sulfide on 357,520.00 173,155.01 Other income
income
Automobile Steel Plasticity
Deferred
Automatic air quality monitoring system 350,000.00 70,000.00 70,000.00 Other income
income
“Steel for high-strength pipelines under low-
Deferred
temperature and high-pressure service 188,000.00 90,322.26 67,000.00 Other income
income
conditions” Project national support funds
Deferred
2018 Municipal Skill Master Workstation Fee 240,000.00 120,423.00 52,960.66 Other income
income
204
Bengang Steel Plates Co., Ltd. Annual Report 2020
Items listed on The amount included in the current profit or loss or offsetting the Items included in the current
Item Amount the balance loss of related costs profit or loss or offsetting the
sheet 2020 2019 loss of related costs
Research and development of the third- Deferred
2,900,000.00 580,000.00 Other income
generation high-strength steel for automobiles income
Bengang Group Co., Ltd. Automotive Sheet
Deferred
Engineering Laboratory Engineering 1,000,000.00 1,000,000.00 Other income
income
Construction Fund
Research and development of anti-oxidation Deferred
250,000.00 84,847.73 Other income
hot forming steel PHS1500A income
Construction of a professional technology
Deferred
innovation platform for the automotive steel 1,000,000.00 800,000.00 Other income
income
industry
Deferred
Liaoning craftsman subsidy 100,002.97 99,981.08 Other income
income
2. Government subsidies related to income
205
Bengang Steel Plates Co., Ltd. Annual Report 2020
The amount included in the current profit or loss or Items included in the
offsetting the loss of related costs current profit or loss
Items Amount
or offsetting the loss
2020 2019
of related costs
Service support 240,000.00 240,000.00 Other income
Technical Support 80,000.00 80,000.00 Other income
Education-integrated
enterprises reduce education 15,406.80 15,406.80 Other income
fees and local education fees
Supplementary Fund for
Relocation of Railway 1,626,919.00 1,626,919.00 Other income
Transport
Liaoning Provincial Local
Financial Supervision and
Administration Bureau to
5,000,000.00 5,000,000.00 Other income
support the development of
special funds for enterprises to
go public
Job stabilization subsidy 19,151.07 19,151.07 Other income
206
Bengang Steel Plates Co., Ltd. Annual Report 2020
The amount included in the current profit or loss or Items included in the
offsetting the loss of related costs current profit or loss
Items Amount
or offsetting the loss
2020 2019
of related costs
Subsidy for training by work 44,400.00 44,400.00 Other income
Tax refund 569,547.42 569,547.42 Other income
3. Return of government subsidies during the reporting period
None
207
Bengang Steel Plates Co., Ltd. Annual Report 2020
6. Changes in the scope of consolidation
There is no changes to the scope of consolidation during the current period.
7. Equity in other entities
(1) Equity in subsidiaries
1. Constitution of enterprise group
Principal Shareholding ratio
Registered Notes of
Name of the subsidiaries place of Acquiring method
address business Direct Indirect
business
Xiamen Bengang Steel & Iron Sales Business combination
Xiamen Xiamen Sales 100.00
Co., Ltd. under common control
Wuxi Bengang Steel & Iron Sales Co., Business combination
Wuxi Wuxi Sales 100.00
Ltd. under common control
Tianjin Bengang Steel & Iron Trading Business combination
Tianjin Tianjin Sales 100.00
Co., Ltd. under common control
Nanjing Bengang Materials Sales Co., Business combination
Nanjing Nanjing Sales 100.00
Ltd. under common control
Yantai Bengang Steel & Iron Sales Business combination
Yantai Yantai Sales 100.00
Co., Ltd. under common control
Harbin Bengang Economic and Business combination
Harbin Harbin Sales 100.00
Trading Co., Ltd. under common control
Changchun Bengang Steel & Iron Business combination
Changchun Changchun Sales 100.00
Sales Co., Ltd. under common control
Guangzhou Bengang Steel & Iron
Guangzhou Guangzhou Sales 100.00 Establishment
Trading Co., Ltd.
Shanghai Bengang Metallurgy
Shanghai Shanghai Sales 100.00 Establishment
Science and Technology Co., Ltd.
Bengang Steel Plates Liaoyang Pellet Manufactu
Liaoyang Liaoyang 100.00 Establishment
Co., Ltd. ring
Dalian Benruitong Automobile Manufactu
Dalian Dalian 65.00 Establishment
Material Technology Co., Ltd. ring
Bengang POSCO Cold-rolled Sheet Manufactu Business combination
Benxi Benxi 75.00
Co., Ltd. ring under common control
Benxi Bengang Steel Sales Co., Ltd Benxi Benxi Sales 100.00 Establishment
Shenyang Bengang Metallurgical
Shenyang Shenyang Sales 100.00 Establishment
Science and Technology Co., Ltd.
Chongqing Liaoben Steel & Iron
Chongqing Chongqing Sales 100.00 Establishment
Trading Co., Ltd.
Bengang Baojin (Shenyang) auto new Manufactu Business combination
Shenyang Shenyang 85.00
material technology Co., Ltd. ring under common control
2. Significant but not wholly-owned subsidiaries
Profits and Dividend Ending
Proportion of
losses declared to balance of
non-
Name of the subsidiaries attributing to distribute to non-
controlling
non-controlling non-controlling controlling
interests (%)
shareholders shareholders interests
Bengang POSCO Cold-
25.00 10,501,387.54 506,134,000.89
rolled Sheet Co., Ltd.
208
Bengang Steel Plates Co., Ltd. Annual Report 2020
3. Financial information of significant but not wholly-owned subsidiaries
20201231
Name of the Non-
subsidiaries Non-current Current current
Current assets Total assets Total liabilities
assets liabilities liabilitie
s
Bengang POSCO
Cold-rolled Sheet 3,799,519,376.39 1,384,600,108.47 5,184,119,484.86 3,159,583,481.30 3,159,583,481.30
Co., Ltd.
20191231
Non-
Name of the Current Non-current Current
Total assets current Total liabilities
subsidiaries assets assets liabilities
liabilities
Bengang
POSCO Cold- 4,305,831,723.98 1,509,417,518.88 5,815,249,242.86 3,832,718,789.47 3,832,718,789.47
rolled Sheet Co.,
Ltd.
2020
Name of the subsidiaries Total Net cash flows
Operating
Net profit comprehensive from operating
income
income activities
Bengang POSCO Cold-rolled 7,327,060,880.66 42,005,550.17 42,005,550.17 301,022,342.34
Sheet Co., Ltd.
2019
Name of the subsidiaries Total
Operating Net cash flows from
Net profit comprehensiv
income operating activities
e income
Bengang POSCO Cold-rolled 7,379,865,156.54 19,378,253.07 19,378,253.07 -517,602,292.64
Sheet Co., Ltd.
4. Significant restrictions on the use of enterprise group assets and the settlement of enterprise group debts
None.
5. Financial or other support provided to structured entities included in the scope of consolidated financial
statements
None.
(2) The shareholder's equity in the subsidiary has changed and still control the subsidiary's transactions
The Company does not exist such matters.
209
Bengang Steel Plates Co., Ltd. Annual Report 2020
(3) Equity in joint venture or associates
1. Important joint ventures and associates
The Company has no important joint ventures or associates.
2. Summary of financial information of unimportant joint ventures and associates
20201231/2020 20191231/2019
Joint ventures:
Total book value of investment: 2,742,064.73 2,642,998.70
The total amount of the following items
calculated according to the shareholding
ratio
—Net profit 374,119.86 452,582.71
—Other comprehensive income
—Total comprehensive income 374,119.86 452,582.71
3. Explanation on the significant limitation of the ability of the joint venture or associate to transfer funds to
the company
The Company does not exist such matters.
4. Excess losses incurred by joint ventures or associates
The Company does not exist such matters.
5. Unconfirmed commitments related to joint venture investment
The Company does not exist such matters.
6. Contingent liabilities related to joint venture or associate investment
The Company does not exist such matters.
(4) Important joint operations
The Company does not exist such matters.
210
Bengang Steel Plates Co., Ltd. Annual Report 2020
(5) Equity in structured entities that not included in the scope of consolidated financial statements
The Company does not exist such matters.
8. Risks associated with financial instruments
The company faces various financial risks in its operation: credit risk, market risk and liquidity risk. The company's
board of directors is fully responsible for the determination of risk management objectives and policies, and assumes
ultimate responsibility for the risk management objectives and policies. However, the board of directors has
authorized the company's planning and development department to design and implement procedures that ensure the
effective implementation of risk management objectives and policies. The board of directors reviews the
effectiveness of the implemented procedures and the rationality of risk management objectives and policies through
reports submitted by the planning and development department. The company's internal auditors also audit risk
management policies and procedures, and report relevant findings to the audit committee.
The overall goal of the company's risk management is to formulate a risk management policy that minimizes risks
without excessively affecting the company's competitiveness and resilience.
(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. Before signing a new contract, the company will assess the credit risk of new customers, including
external credit ratings and bank credit certificates in certain cases (when this information is available). The
company has set a credit limit for each customer, which is the maximum amount that does not require additional
approval.
The Company ensures that the company's overall credit risk is within a controllable range through regular
monitoring of existing customers' credit ratings and periodic review of aging analysis of accounts receivable.
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
211
Bengang Steel Plates Co., Ltd. Annual Report 2020
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.
2. Currency risk
Currency risk refers to fluctuations of fair value or future cash flows due to exchange rate changes. The
Company has been constantly working on the adjustment of the organizational framework of risk management
and optimization of debt structures to lower the currency risk.
The currency risk facing the Company originates from the assets and liabilities measured by US dollars, Euro,
Hongkong dollars and Japanese Yen. The ending balance of the assets and liabilities after converted in RMB is
shown as below:
(In 10 Thousand Yuan)
Ending balance
Items
USD Euro HKD Japanese Yen Total
Assets 46,968.50 40.73 23.02 47,032.25
Liabilities 134,771.81 37,793.88 1,025.89 173,591.58
Beginning balance
Items
USD Euro HKD Japanese Yen Total
Assets 8,990.85 1,109.84 22.90 10,123.59
Liabilities 147,372.23 45,006.35 1,188.28 193,566.86
On December 31, 2020, with all other variables held constant, if the relevant currency appreciates or depreciates
against RMB by 5%, the company will increase or decrease the net profit of RMB 47,459,800 (on December
31, 2018: RMB 91,721,600). Management believes that 5% reasonably reflects the reasonable range of possible
currency-to-renminbi changes in the next year.
(3) Liquidity risk
Liquidity risk refers to the risk of shortage of funds which occurs in fulfilling the obligation of settlement in a
manner of delivering cash or other financial assets. The Company’s policy is to maintain sufficient cash to meet
maturing obligations. Liquidity risk is centralized controlled by the Company’s finance department. Through
the monitoring of unrestricted cash and cash equivalents, bank acceptance bills due in short time and the
continues forecasting of cash flow in the next 12 months, the finance department ensures that the Company has
sufficient cash to meet obligations in all predicted reasonable circumstances.
The following table details the Company’s mature date of residual contract value of underivative financial
liabilities to repay according to the contract terms. The table has been drawn up based on the undiscounted cash
flows of financial liabilities based on the earliest date on which the Company can be required to pay. The table
212
Bengang Steel Plates Co., Ltd. Annual Report 2020
includes both interest and principal cash flows.
(In 10 Thousand Yuan)
20201231
Items Over 5
Within 1 year 1-2 years 2-5 years Total
years
Trade and other payables 1,643,593.66 111,423.24 1,755,016.90
Loans and interests 1,137,576.14 25,647.04 321,586.21 3,060.20 1,487,869.59
Total 2,781,169.80 25,647.04 321,586.21 114,483.44 3,242,886.49
(In 10 Thousand Yuan)
20191231
Items Over 5
Within 1 year 1-2 years 2-5 years Total
years
Trade and other payables 1,700,791.05 51,693.94 1,752,484.99
Loans and interests 1,339,677.16 328,523.94 133,765.16 22,678.49 1,824,644.75
Total 3,040,468.21 328,523.94 133,765.16 74,372.43 3,577,129.74
9. Disclosure of fair value
The input value used in fair value measurement is divided into three levels:
The input value of the first level is the unadjusted quotation of the same asset or liability that can be obtained on the
measurement date in an active market.
The input value of the second level is the input value of the related assets or liabilities that is directly or indirectly
observable except the input value of the first level.
The third level of input value is the unobservable input value of related assets or liabilities.
The level to which the fair value measurement result belongs is determined by the lowest level to which the input
value that is important to the fair value measurement as a whole belongs.
(1) Fair value of assets and liabilities measured at fair value
Fair value at the end of the period
Fair value Fair value
Item measuremen measuremen Fair value measurement
Total
t in the first t in the in the third level
level second level
1. Continuous fair
213
Bengang Steel Plates Co., Ltd. Annual Report 2020
Fair value at the end of the period
Fair value Fair value
Item measuremen measuremen Fair value measurement
Total
t in the first t in the in the third level
level second level
value measurement
◆Financial assets
held for trading
(1) Financial assets
measured at fair
value and whose
changes are included
in the current profit
and loss
(a) Investment in
debt instruments
(b) Investment in
equity instruments
(c) Derivative
financial assets
(d) Others
(2) Designated as a
financial asset
measured at fair
value and its
changes are included
in the current profit
and loss
(1) Investment in
debt instruments
(2) Others
214
Bengang Steel Plates Co., Ltd. Annual Report 2020
Fair value at the end of the period
Fair value Fair value
Item measuremen measuremen Fair value measurement
Total
t in the first t in the in the third level
level second level
◆ Accounts
receivable 4,189,977,871.92 4,189,977,871.92
financing
◆ Other debt
investments
◆ Investment in
other equity 1,042,024,829.00 1,042,024,829.00
instruments
◆ Other non-
current financial
assets
(1) Financial assets
measured at fair
value and whose
changes are included
in the current profit
and loss
(a) Investment in
debt instruments
(b) Investment in
equity instruments
(c) Derivative
financial assets
(d) Others
(2) Designated as a
financial asset
measured at fair
215
Bengang Steel Plates Co., Ltd. Annual Report 2020
Fair value at the end of the period
Fair value Fair value
Item measuremen measuremen Fair value measurement
Total
t in the first t in the in the third level
level second level
value and its
changes are included
in the current profit
and loss
(a) Investment in
debt instruments
(b) Others
Total assets
continuously
5,232,002,700.92 5,232,002,700.92
measured at fair
value
◆Financial
liabilities held for
trading
Including:
Issued
tradin
g
bonds
Derivative financial
liabilities
Others
◆Designated as a
financial liability
measured at fair
value and its
216
Bengang Steel Plates Co., Ltd. Annual Report 2020
Fair value at the end of the period
Fair value Fair value
Item measuremen measuremen Fair value measurement
Total
t in the first t in the in the third level
level second level
changes included in
the current profit
and loss
Total liabilities
continuously
measured at fair
value
2. Non-continuous
fair value
measurement
(1) Assets held for
sale
Total assets not
measured
continuously at fair
value
For example:
Liabilities held for
sale
Total liabilities not
measured
continuously at fair
value
(2) The basis for determining the market value of the continuous and non-continuous first-level fair value
measurement projects
217
Bengang Steel Plates Co., Ltd. Annual Report 2020
The Company has no first level fair value measurement project.
(3) Continuous and non-continuous second-level fair value measurement items, using valuation techniques
and qualitative and quantitative information on important parameters
The Company has no second level fair value measurement items.
(4) Continuous and non-continuous third-level fair value measurement items, using valuation techniques and
qualitative and quantitative information on important parameters
The other equity instruments that continue the third level of fair value measurement are mainly unlisted equity
investments held by the company. The company adopted valuation techniques for fair value measurement, mainly
using valuation techniques of listed company comparison method, referring to stock prices of similar securities and
considering liquidity discounts.
(5) For continuous fair value measurement projects, where conversion between various levels occurs during
the period, the reason for the conversion and the policy for determining the timing of conversion
During the current period, there was no conversion between various levels.
(6) Changes in valuation techniques and reasons for changes during the period
No changes during the period.
(7) Fair value of financial assets and financial liabilities not measured at fair value
No
10. Related party transactions
(1) Details of parent company
Place of Notes of Registered Share Voting
Name of parent company
Registry Business capital proportion (%) rights (%)
Benxi Steel & Iron Benxi,
Manufacturing 62.92 62.18 62.18
(Group) Co., Ltd. Liaoning
Note:
The ultimate controlling party of the Company is the State-owned Assets Supervision and Administration
Commission of the People's Government of Liaoning Province.
(2) Details of the subsidiaries
218
Bengang Steel Plates Co., Ltd. Annual Report 2020
For details of subsidiaries of the Company please refer to Note 7 “Equity in other entities”.
（3） The company's joint ventures and associates
Name of joint ventures and associates
Relationship
Zhejiang Bengang Jingrui Steel Processing Co., Ltd. Associate
（4） Details of other related parties
219
Bengang Steel Plates Co., Ltd. Annual Report 2020
Name of Other related parties Relationship
Bengang Group Co., Ltd. (Hereinafter
Controlling shareholder of parent company.
referred to as "Bengang Group")
Bengang Group International Economic and
Belongs to Bengang Group Co., Ltd.
Trading Co., Ltd.
Bengang Cold-rolled Stainless Steel
Same parent company
Dandong Co., Ltd.
Benxi Beiying Steel & Iron (Group) Co., Ltd.
Belongs to Bengang Group Co., Ltd.
(Hereinafter referred to as "Beiying Steel")
Bengang Electronics and Gas Co., Ltd. Associate of parent company
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) Machinery
Same parent company
Manufacture Co., Ltd.
Benxi Steel & Iron (Group) Construction Co.,
Same parent company
Ltd.
Benxi Steel & Iron (Group) Mining Co., Ltd. Same parent company
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 and
Same parent company
Automatic Tech Co., Ltd.
220
Bengang Steel Plates Co., Ltd. Annual Report 2020
Benxi Steel & Iron (Group) Construction and
Same parent company
Repairing Co., Ltd.
Benxi Steel & Iron (Group) Metallurgy
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 Materials Co., Ltd.
Benxi High-tech Drilling Tools Manufacture
Belongs to Bengang Group Co., Ltd.
Co., Ltd.
Benxi New Career Development Co., Ltd. Same parent company
Dalian Boluole Steel Tube Co., Ltd. Belongs to Bengxi Steel and Iron (Group) Co., Ltd.
Guangzhou Free Trade Zone Bengang Sales Belongs to Bengxi Steel and Iron (Group) Co., Ltd.
Co., Ltd.
Benxi Steel & Iron (Group) General Hospital Belongs to Bengxi Steel and Iron (Group) Co., Ltd.
Liaoning Bengang Steel & Iron Trading Co.,
Same parent company
Ltd.
Liaoning Hengtai Heavy Machinery Co., Ltd. Same parent company
Liaoning Hengtong Metallurgical Equipment
Same parent company
Manufacture Co., Ltd.
Liaoning Metallurgy Technician College Same parent company
Liaoning Metallurgy Vocational Technical
Same parent company
College
Suzhou Bengang Industrial Co., Ltd. Shareholding company
Benxi Steel & Iron (Group) Medical Services
Associate of parent company
Department;
221
Bengang Steel Plates Co., Ltd. Annual Report 2020
Bengang Group Finance Co., Ltd. Belongs to Bengang Group Co., Ltd.
Liaoning Hengyi Financial Leasing Co., Ltd. Belongs to Bengang Group Co., Ltd.
(5) Related Party Transactions
1. Related party transactions of purchasing goods and services
Company as the purchaser
(In 10 Thousand Yuan)
The content of related
Name 2020 2019
party transactions
Benxi Steel & Iron (Group) Co., Ltd. Repair expense 30,206.47 27,611.81
Raw material and
Benxi Steel & Iron (Group) Co., Ltd.
supplementary material 2,121.13
Bengang Cold-rolled Stainless Steel Dandong Co., Ltd. Products 22.39 171.87
Benxi Steel & Iron (Group) Mining Co., Ltd. Labor cost 3,213.23 864.66
Raw material and
Benxi Steel & Iron (Group) Mining Co., Ltd.
supplementary material 514,193.50 466,510.90
Benxi Steel & Iron (Group) Mining Co., Ltd. Freight 1,227.47 1,318.16
Benxi Steel & Iron (Group) Metallurgy Residues Co., Raw material and
Ltd. supplementary material 34,303.84 27,932.17
Benxi Steel & Iron (Group) Steel & Iron Process and
Processing fee
Logistics Co., Ltd. 63.22 127.67
Benxi Steel & Iron (Group) Real-estate Development
Raw materials
Co., Ltd. 3,648.95
Benxi Steel & Iron (Group) Machinery Manufacture
Spare parts 5,984.04 11,131.68
Co., Ltd.
Benxi Steel & Iron (Group) Machinery Manufacture
Repair services 2,773.62 2,922.74
Co., Ltd.
Benxi Steel & Iron (Group) Construction Co., Ltd. Spare parts 1,624.97 787.21
Benxi Steel & Iron (Group) Construction Co., Ltd. Project fee 20,274.33 18,016.18
Benxi Steel & Iron (Group) Construction Co., Ltd. Repair services 18,022.98 21,561.78
Raw material and
Benxi Steel & Iron (Group) Construction Co., Ltd. 1,241.22 236.10
supplementary material
Benxi Steel & Iron (Group) Construction Co., Ltd. Freight 51.39 502.47
Benxi Steel & Iron (Group) Industrial Development Co., Raw material and 21,095.06 19,118.00
222
Bengang Steel Plates Co., Ltd. Annual Report 2020
Ltd. supplementary material
Benxi Steel & Iron (Group) Industrial Development Co.,
Repair services 1,537.66 2,157.65
Ltd.
Benxi Steel & Iron (Group) Industrial Development Co.,
Freight 446.80
Ltd.
Benxi Steel & Iron (Group) Industrial Development Co.,
Project fee 107.01 235.00
Ltd.
Raw material &
Benxi Steel & Iron (Group) Construction and Repairing
supplementary 228.18 256.76
Co., Ltd.
materials & spare parts
Benxi Steel & Iron (Group) Construction and Repairing
Project fee 1,911.38 4,998.34
Co., Ltd.
Benxi Steel & Iron (Group) Construction and Repairing
Repair expense 17,475.94 19,506.98
Co., Ltd.
Raw material and
Bengang Electronics and Gas Co., Ltd. 13,856.30 13,763.00
supplementary material
Bengang Electronics and Gas Co., Ltd. Repair services 3,063.31 1,879.36
Benxi High-tech Drilling Tools Manufacture Co., Ltd. Spare parts 39.00 26.63
Benxi New Career Development Co., Ltd. Repair services 487.81
Raw material and
Benxi New Career Development Co., Ltd. supplementary material 1,028.90 907.16
and food
Liaoning Metallurgy Technician College Spare parts 933.26 1,202.01
Liaoning Metallurgy Vocational Technical College Project fee
Liaoning Metallurgy Vocational Technical College Repair services 648.24 580.5
Bengang Group International Economic and Trading Raw material and
508,961.39
Co., Ltd. supplementary material
Bengang Group International Economic and Trading
Agency fee 5,531.64 6,309.73
Co., Ltd.
Bengang Group International Economic and Trading
Port surcharges 9,279.98 7,099.20
Co., Ltd.
Benxi Steel & Iron (Group) Information and Automatic
Spare parts 850.35 785.28
Tech Co., Ltd.
Benxi Steel & Iron (Group) Information and Automatic
Project fee 1,121.38 1,942.52
Tech Co., Ltd.
Benxi Steel & Iron (Group) Information and Automatic
Repair services 1,732.50 3,483.24
Tech Co., Ltd.
Benxi Steel & Iron (Group) Thermal Power
Heating costs 119.00 115.25
Development Co., Ltd.
223
Bengang Steel Plates Co., Ltd. Annual Report 2020
Benxi Steel & Iron (Group) Thermal Power Raw material and
71.04 70.93
Development Co., Ltd. supplementary material
Benxi Steel & Iron (Group) Designing Institute Design fees 125.98 1,323.40
Raw material and 1,154,378.5
Benxi Beiying Steel & Iron (Group) Co., Ltd. 492,390.02
supplementary material 3
Benxi Beiying Steel & Iron (Group) Co., Ltd. Energy & Power 46,589.86 54,489.91
Benxi Beiying Steel & Iron (Group) Co., Ltd. Freight 407.53 571.46
Benxi Beiying Steel & Iron (Group) Co., Ltd. Labor cost 7,190.62 8,663.23
Benxi Beiying Steel & Iron (Group) Co., Ltd. Spare parts 1,710.81 1,308.45
Liaoning Hengtong Metallurgical Equipment Raw material and spare
8,336.02 8,758.96
Manufacture Co., Ltd. parts
Liaoning Hengtong Metallurgical Equipment
Repair services 661.14
Manufacture Co., Ltd.
Raw material and spare
Liaoning Hengtai Heavy Machinery Co., Ltd. 138.59 231.09
parts
Liaoning Hengtai Heavy Machinery Co., Ltd. Repair and labor cost 716.99 1,930.35
Property management
Bengang Group Co., Ltd.
fee
Bengang Group Co., Ltd. Labor cost 18,876.38 15,507.90
Company as the seller
(In 10 Thousand Yuan)
The content of related party
Name 2020 2019
transactions
Bengang Electronics and Gas Co., Ltd. Energy & Power 72.4 76.74
Raw material &
Benxi Beiying Steel & Iron (Group) Co., Ltd. supplementary materials 138,409.84 500,154.15
& spare parts
Benxi Beiying Steel & Iron (Group) Co., Ltd. Products 2,150.96 1,286.59
Benxi Beiying Steel & Iron (Group) Co., Ltd. Energy & Power 22,602.26 21,662.54
Benxi Steel & Iron (Group) Real-estate
Energy & Power 8.65 10.44
Development Co., Ltd.
Benxi Steel & Iron (Group) Steel & Iron
Energy & Power 25.88 36.79
Process and Logistics Co., Ltd.
Benxi Steel & Iron (Group) Steel & Iron
Products 89.25
Process and Logistics Co., Ltd.
Benxi Steel & Iron (Group) Machinery Products 1,898.85 980.32
224
Bengang Steel Plates Co., Ltd. Annual Report 2020
The content of related party
Name 2020 2019
transactions
Manufacture Co., Ltd.
Benxi Steel & Iron (Group) Machinery
Energy & Power 2,088.72 2,137.30
Manufacture Co., Ltd.
Raw material &
Benxi Steel & Iron (Group) Machinery
supplementary materials 338.56 641.3
Manufacture Co., Ltd.
& spare parts
Benxi Steel & Iron (Group) Construction
Energy & Power 699.16 593.8
Co., Ltd.
Raw material &
Benxi Steel & Iron (Group) Construction
supplementary materials 6,452.06 5,781.00
Co., Ltd.
& spare parts
Benxi Steel & Iron (Group) Mining Co., Ltd. Energy & Power 62,020.89 64,747.81
Raw material &
Benxi Steel & Iron (Group) Mining Co., Ltd. supplementary materials 9,678.23 10,078.34
& spare parts
Benxi Steel & Iron (Group) Mining Co., Ltd. Freight revenue 743.9 1,031.79
Benxi Steel & Iron (Group) Mining Co., Ltd. Products 1,107.48 502.82
Benxi Steel & Iron (Group) Thermal Power
Energy & Power 2,995.62 2,639.73
Development Co., Ltd.
Raw material &
Benxi Steel & Iron (Group) Thermal Power
supplementary materials 1,750.62 2,749.21
Development Co., Ltd.
& spare parts
Benxi Steel & Iron (Group) Thermal Power
Freight revenue
Development Co., Ltd.
Benxi Steel & Iron (Group) Industrial
Energy & Power 824.47 827.49
Development Co., Ltd.
Benxi Steel & Iron (Group) Industrial
Products 3.97
Development Co., Ltd.
Raw material &
Benxi Steel & Iron (Group) Industrial
supplementary materials 1,914.44 2,295.96
Development Co., Ltd.
& spare parts
Benxi Steel & Iron (Group) Information and
Energy & Power 14.64 15.87
Automatic Tech Co., Ltd.
Benxi Steel & Iron (Group) Construction and
Energy & Power 125.15 133.05
Repairing Co., Ltd.
Raw material &
Benxi Steel & Iron (Group) Construction and
supplementary materials 368.03 93.84
Repairing Co., Ltd.
& spare parts
225
Bengang Steel Plates Co., Ltd. Annual Report 2020
The content of related party
Name 2020 2019
transactions
Benxi Steel & Iron (Group) Metallurgy
Energy & Power 659.84 532.33
Residues Co., Ltd.
Raw material &
Benxi Steel & Iron (Group) Metallurgy
supplementary materials 26,839.91 25,018.15
Residues Co., Ltd.
& spare parts
Benxi Steel & Iron (Group) Metallurgy
Freight revenue
Residues Co., Ltd.
Benxi Steel & Iron (Group) Metallurgy 423.53
Products
Residues Co., Ltd.
Benxi Steel & Iron (Group) Co., Ltd. Energy & Power 205.47 232.43
Raw material &
Benxi Steel & Iron (Group) Co., Ltd. supplementary materials 1,013.53 796.46
& spare parts
Benxi New Career Development Co., Ltd. Energy & Power 38.37 40.25
Dalian Boluole Steel Tube Co., Ltd. Products 1,136.33 404.87
Liaoning Bengang Steel & Iron Trading Co.,
Products
Ltd.
Benxi Steel & Iron (Group) General Hospital Energy & Power 5.09
Benxi Steel & Iron (Group) Zhengtai
Energy & Power 2.16 5.22
Construction Materials Co., Ltd.
Liaoning Hengtong Metallurgical Equipment
Energy & Power
Manufacture Co., Ltd.
Raw material &
Liaoning Hengtong Metallurgical Equipment
supplementary materials 731.86 2,444.76
Manufacture Co., Ltd.
& spare parts
Liaoning Hengtong Metallurgical Equipment
Products 908.89 352.89
Manufacture Co., Ltd.
Raw material &
Bengang Cold-rolled Stainless Steel
supplementary materials 46.59
Dandong Co., Ltd.
& spare parts
Bengang Cold-rolled Stainless Steel
Products 2,716.09 111.16
Dandong Co., Ltd.
Suzhou Bengang Industrial Co., Ltd. Products 49,983.82 41,269.54
Bengang Group Finance Co., Ltd. Energy & Power 1.3 1.39
Bengang Group Co., Ltd. Energy & Power 7.33 2.78
Raw material &
Bengang Group Co., Ltd. 1,539.32
supplementary materials
226
Bengang Steel Plates Co., Ltd. Annual Report 2020
The content of related party
Name 2020 2019
transactions
& spare parts
Liaoning Hengtai Heavy Machinery Co.,
products 29.54
Ltd.
Notes:
The pricing policy is based on the transaction content and pricing principles specified in the "Raw Material and
Service Supply Agreement" and "Land Use Right Leasing Contract" and supplementary agreements entered into
between the Company and Bengang Group and Benxi Steel and Iron (Group) Co., Ltd. The main pricing principle
is that if there is a market price, the market price will be used. If there is no market price, then the full cost plus the
national additional tax plus a reasonable profit will be used as the pricing standard.
2. Lease information of related parties
Operating Lease
Company as the lessor
Currency unit: Yuan
Lessee Lease capital category Lease income of 2020 Lease income of 2019
Benxi Steel & Iron
(Group) Steel & Iron Warehouse and 500,000.00 500,000.00
Process and Logistics ancillary facilities
Co., Ltd.
Benxi Steel & Iron
Plants and ancillary 122,500.03
(Group) Machinery
facilities
Manufacture Co., Ltd.
Company as the lessee
Currency unit: Yuan
Lease
Lease charges of
Lessor Lease capital category charges of
2019
2020
Land use right
Benxi Steel & Iron 7,669,068.17 sq.m.
57,383,355.31 54,984,486.36
(Group) Co., Ltd Land use right
42,920.00 sq.m
Benxi Steel & Iron 2300 Hot rolling product line,
16,711,424.34 167,859,103.82
(Group) Co., Ltd related real estate
227
Bengang Steel Plates Co., Ltd. Annual Report 2020
Benxi Beiying Steel & 1780 Hot rolling product line,
15,578,677.65 83,686,698.60
Iron (Group) Co., Ltd. related real estate
Bengang Group Co., Land use right
9,945,423.08 4,972,711.56
Ltd. 728,282.30 sq.m.
Notes:
1. According to the "Land Use Right Leasing Contract" and subsequent supplementary agreements signed
between the Company and Bengang Steel (Group)on April 7, 1997, December 30, 2005 and subsequent, the
Company leases land from Benxi Steel (Group), 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. On August 14, 2019, the Company signed the "House Lease Agreement" with Benxi Steel (Group) and
Beiying Iron and Steel Company, and leased the houses and auxiliary facilities occupied by the 2300 hot rolling
mill production line and the 1780 hot rolling mill production line. The lease term of the houses and ancillary
facilities is until December 31, 2038.
3. On July 15, 2019, the Company signed "Land Lease Agreement" with Bengang Group and Bengang Steel
(Group) respectively, leased and used a total of 8 pieces of land from Bengang Group and Bengang Group
Company, with leased areas of 42,920.00 square meters and 728,282.30 square meters. The lease term is 20
years, the rental price is 1.138 yuan per square meter per month.
Notes of Financial Leasing
During the reporting period, the Company purchased equipment from Liaoning Hengyi Financial Leasing Co.,
Ltd. in the form of financial leasing. The annual purchase amount (including tax) in 2020 was RMB
933,008,875.20, and interest and handling fees were RMB 43,807,781.54.
3. Information of Guarantee among related parties
Company as the warrantee
Starting date Ending date of Has the guarantee
Warrantor Amount of guarantee
of Guarantee Guarantee been fulfilled
Bengang Group
RMB 15,000,000,000.00 2020/8/13 2022/8/12 No
Co., Ltd.
Bengang Group
RMB 500,000,000.00 2020/6/19 2021/6/18 No
Co., Ltd.
Bengang Group
RMB 310,000,000.00 2020/5/26 2021/5/25 No
Co., Ltd.
Bengang Group RMB 670,000,000.00 2020/5/26 2021/5/25 No
228
Bengang Steel Plates Co., Ltd. Annual Report 2020
Co., Ltd.
Bengang Group
RMB 400,000,000.00 2020/10/20 2021/10/19 No
Co., Ltd.
Bengang Group
RMB 1,280,000,000.00 2020/11/5 2021/11/4 No
Co., Ltd.
Bengang Group
RMB 400,000,000.00 2020/10/28 2021/10/27 No
Co., Ltd.
Bengang Group
RMB 1,800,000,000.00 2020/12/1 2021/12/1 No
Co., Ltd.
Bengang Group
RMB 6,024,000,000.00 2020/3/17 2021/3/17 No
Co., Ltd.
Benxi Steel & Iron
RMB 5,024,000,000.00 2020/11/4 2021/11/4 No
(Group) Co., Ltd.
Bengang Steel
RMB 250,000.00 2020/5/25 2021/5/25 No
Plates Co., Ltd
Bengang Steel
RMB 490,000.00 2020/8/20 2021/8/20 No
Plates Co., Ltd
Bengang Steel
RMB 200,000,000.00 2020/12/24 2021/12/24 No
Plates Co., Ltd
Bengang Group
Co., Ltd. and Benxi
RMB 70,000,000.00 2016/3/30 2025/3/20 No
Steel & Iron
(Group) Co., Ltd.
Bengang Group
Co., Ltd. and Benxi
RMB 430,000,000.00 2017/2/27 2025/2/20 No
Steel & Iron
(Group) Co., Ltd.
Bengang Group
RMB 622,600,000.00 2017/12/15 2024/8/20 No
Co., Ltd.
Bengang Group
RMB 87,280,000.00 2018/3/26 2024/6/21 No
Co., Ltd.
229
Bengang Steel Plates Co., Ltd. Annual Report 2020
Bengang Group
RMB 24,620,000.00 2017/11/15 2021/12/21 No
Co., Ltd.
Bengang Group
RMB 30,560,000.00 2015/6/25 2021/9/21 No
Co., Ltd.
Bengang Group
RMB 24,000,000.00 2015/12/9 2022/3/21 No
Co., Ltd.
Bengang Group
EUR 166,579.87 2015/6/25 2025/9/30 No
Co., Ltd.
Bengang Group
EUR 5,691,165.00 2015/8/20 2025/9/30 No
Co., Ltd.
Bengang Group
EUR 407,161.22 2015/6/25 2026/4/30 No
Co., Ltd.
Bengang Group
EUR 4,984,751.64 2015/12/28 2026/4/30 No
Co., Ltd.
Bengang Group
EUR 2,077,667.88 2016/12/14 2026/4/30 No
Co., Ltd.
Bengang Group
EUR 6,162.48 2015/6/25 2026/4/30 No
Co., Ltd.
Bengang Group
EUR 4,069.11 2015/12/28 2026/4/30 No
Co., Ltd.
Bengang Group
EUR 779,734.95 2017/6/30 2025/10/31 No
Co., Ltd.
Bengang Group
EUR 2,733,223.28 2016/6/27 2020/4/30 No
Co., Ltd.
Bengang Group
EUR 334,941.21 2015/6/25 2025/6/30 No
Co., Ltd.
Bengang Group
EUR 9,577,728.02 2015/6/25 2025/6/30 No
Co., Ltd.
Bengang Group
EUR 294,013.70 2015/12/28 2025/6/30 No
Co., Ltd.
Bengang Group EUR 7,585,942.33 2015/6/25 2025/10/31 No
230
Bengang Steel Plates Co., Ltd. Annual Report 2020
Co., Ltd.
Bengang Group
EUR 3,271,319.20 2015/12/28 2025/10/31 No
Co., Ltd.
Bengang Group
EUR 8,390,619.39 2015/6/25 2025/8/31 No
Co., Ltd.
Bengang Group
EUR 180,800.00 2015/12/28 2025/8/31 No
Co., Ltd.
Bengang Group
EUR 609,296.41 2015/6/25 2025/8/31 No
Co., Ltd.
Bengang Group
JPY 162,232,000.00 1997/10/10 2027/9/10 No
Co., Ltd.
Benxi Steel & Iron
RMB 12,000,000,000.00 2019/3/16 2021/9/3 No
(Group) Co., Ltd.
Bengang Group
RMB 740,000,000.00 2020/1/8 2021/1/8 No
Co., Ltd.
4. Asset transfer and debt restructuring of related parties
Currency unit: Yuan
Related
Current Amount Amount of last period
Related Party transaction
(Excluding tax) (Excluding tax)
content
Purchase of 2300
Benxi Steel & Iron (Group) Co., Ltd. hot rolling mill 3,004,988,590.00
production line
Purchase of 1780
Benxi Beiying Steel & Iron (Group) Co., Ltd. hot rolling mill 684,727,905.00
production line
Notes:
On August 14, 2019, the Company signed the "Asset Transfer Agreement" with Benxi Steel (Group) and Beiying
Steel, respectively, to acquire the related equipment assets of the 2300mm hot rolling mill production line held
231
Bengang Steel Plates Co., Ltd. Annual Report 2020
by Benxi Steel (Group) and the 1780mm held by Beiying Steel.
5.Remuneration of key management personnel
(In 10 Thousand Yuan)
Name 2020 2019
Remuneration of key management
309.04 302.23
personnel
6. Other related party transactions
(1) Loan from and deposits in Bengang Group Finance Co., Ltd.
(In 10 Thousand Yuan)
Item Beginning balance Increase Decrease Ending balance Notes
Deposits 1,364,312.51 17,703,820.82 17,735,933.55 1,332,199.78
1. The interests income of deposits of Bengang Group Finance Co., Ltd. is RMB 308,242.3 thousand in
2020. As at 31 December 2020, the interest receivable from Bengang Group Finance Co., Ltd. is RMB
87,919.8 thousand.
2. As at 31 December 2020, the restricted deposits in Bengang Group Finance Co., Ltd. is RMB
2,408,822.8 thousand.
3. In 2020, 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 4.5 billion in
2020. The amount of acceptance bill issued by Bengang Group Finance Co., Ltd. was RMB 4.077 billion
in 2020. As of December 31, 2020, the amount of acceptance bills that the Company entrusted Finance
Company had issued and not yet paid was RMB 2.409 billion, with a margin ratio of 100.00%.
(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
Capital lending 7,500.00 7,500.00
Total 7,500.00 7,500.00
Notes: In 2020, the interest accrued is RMB 3,545,625.00, and as of 31 December 2020, the Company has no interest
that has not been paid.
6. Receivables and payables of the related parties
1、Receivables of the Company
(in 10 thousand yuan)
232
Bengang Steel Plates Co., Ltd. Annual Report 2020
20201231 20191231
Provision Provision
Items Name Carrying Carrying
for bad for bad
amount amount
debts debts
Accounts
receivable
financing
Benxi Beiying Steel & Iron
230,217.55 - 42,342.56 -
(Group) Co., Ltd.
Benxi Steel & Iron (Group) Co.,
81.99 - 402.17 -
Ltd.
Zhejiang Bengang Jingrui Steel
- - 400.00 -
Processing Co., Ltd.
Accounts
Receivable
Bengang Group International
10,463.45 104.63 5,892.34 58.92
Economic and Trading Co., Ltd.
Benxi Steel & Iron (Group)
Thermal Power Development 2,692.94 26.93 1,301.32 13.01
Co., Ltd.
Bengang Cold-rolled Stainless
188.46 1.88 188.80 1.89
Steel Dandong Co., Ltd.
Benxi Steel & Iron (Group)
0.10 - 0.14 -
Metallurgy Residues Co., Ltd.
Benxi Steel & Iron (Group)
Machinery Manufacture Co., - - 7.70 0.08
Ltd.
Prepayments
Bengang Group International
114,662.12 - - -
Economic and Trading Co., Ltd.
Benxi Steel & Iron (Group)
Machinery Manufacture Co., 6,470.61 - 3,559.63 -
Ltd.
Benxi Beiying Steel & Iron
- - -
(Group) Co., Ltd. 93,762.24
Other
receivables
Bengang Group International
601.21 - 432.77 0.20
Economic and Trading Co., Ltd.
233
Bengang Steel Plates Co., Ltd. Annual Report 2020
20201231 20191231
Provision Provision
Items Name Carrying Carrying
for bad for bad
amount amount
debts debts
Benxi Steel & Iron (Group) Real-
278.31 253.84 270.17 246.52
estate Development Co., Ltd.
Benxi Steel & Iron (Group)
Zhengtai Construction Materials 27.05 19.96 24.60 12.30
Co., Ltd.
Liaoning Metallurgy Technician
5.80 5.80 5.80 5.80
College
Benxi Steel & Iron (Group)
- - 94.75 85.27
Medical Services Department;
Benxi Steel & Iron (Group)
- - 0.02 -
Industrial Development Co., Ltd.
Other non-
current assets
Liaoning Hengyi Financial
86,459.06 58,419.72
Leasing Co., Ltd.
2、 Payables of the Company
(in 10 thousand yuan)
Items Name 2020.12.31 2019.12.31
Notes payable
Bengang Group
International
345,103.76
Economic and Trading
Co., Ltd.
Benxi Steel & Iron
(Group) Mining Co., 91,857.00 69,292.59
Ltd.
Bengang Electronics
6,414.33 2,285.78
and Gas Co., Ltd.
Benxi Steel & Iron
(Group) Industrial 5,253.76 3,203.52
Development Co., Ltd.
234
Bengang Steel Plates Co., Ltd. Annual Report 2020
Items Name 2020.12.31 2019.12.31
Liaoning Hengyi
Financial Leasing Co., 4,602.43 1,758.01
Ltd.
Liaoning Hengtong
Metallurgical
868.28
Equipment
Manufacture Co., Ltd.
Benxi Steel & Iron
(Group) Machinery 255.94 186.51
Manufacture Co., Ltd.
Liaoning Metallurgy
133.27 195.91
Technician College
Liaoning Hengtai
Heavy Machinery Co., 84.78
Ltd.
Liaoning Metallurgy
Vocational Technical 47.90 43.55
College
Benxi Steel & Iron
(Group) Metallurgy 16.62
Residues Co., Ltd.
Benxi Beiying Steel &
508,775.58
Iron (Group) Co., Ltd.
Benxi Steel & Iron
(Group) Real-estate 684.81
Development Co., Ltd.
Benxi Steel & Iron
(Group) Information
189.02
and Automatic Tech
Co., Ltd.
Bengang Cold-rolled
Stainless Steel 71.84
Dandong Co., Ltd.
Benxi Steel & Iron
(Group) Construction
14.82
and Repairing Co.,
Ltd.
Benxi Steel & Iron
13.05
(Group) Construction
235
Bengang Steel Plates Co., Ltd. Annual Report 2020
Items Name 2020.12.31 2019.12.31
Co., Ltd.
Benxi High-tech
Drilling Tools 5.71
Manufacture Co., Ltd.
Accounts
payable
Benxi Steel & Iron
(Group) Mining Co., 20,807.68 8,524.77
Ltd.
Liaoning Hengyi
Financial Leasing Co., 5,799.10
Ltd.
Benxi Steel & Iron
(Group) Construction
5,182.75 4,443.69
and Repairing Co.,
Ltd.
Benxi Beiying Steel &
3,172.95
Iron (Group) Co., Ltd.
Benxi Steel & Iron
(Group) Construction 2,394.63 10,331.91
Co., Ltd.
Liaoning Hengtai
Heavy Machinery Co., 2,171.25 3,246.28
Ltd.
Benxi Steel & Iron
(Group) Information
1,852.50 6,567.06
and Automatic Tech
Co., Ltd.
Benxi Steel & Iron
(Group) Metallurgy 1,645.14 1,033.48
Residues Co., Ltd.
Bengang Electronics
1,500.74 1,149.26
and Gas Co., Ltd.
Liaoning Metallurgy
1,388.84 724.86
Technician College
Liaoning Hengtong
Metallurgical
1,297.91 1,487.15
Equipment
Manufacture Co., Ltd.
236
Bengang Steel Plates Co., Ltd. Annual Report 2020
Items Name 2020.12.31 2019.12.31
Bengang Group Co.,
1,246.38 3,148.91
Ltd.
Benxi Steel & Iron
(Group) Machinery 964.33 1,143.65
Manufacture Co., Ltd.
Liaoning Metallurgy
Vocational Technical 746.81 671.93
College
Bengang Cold-rolled
Stainless Steel 616.72 521.64
Dandong Co., Ltd.
Bengang Group
International
579.53 70,193.27
Economic and Trading
Co., Ltd.
Benxi New Career
415.37 292.66
Development Co., Ltd.
Benxi Steel & Iron
(Group) Industrial 385.20 11,311.75
Development Co., Ltd.
Benxi Steel & Iron
(Group) Thermal
178.73 144.24
Power Development
Co., Ltd.
Benxi Iron and Steel
(Group) Engineering
65.51 16.28
Construction
Supervision Co., Ltd.
Benxi Steel & Iron
(Group) Real-estate 61.52 62.65
Development Co., Ltd.
Benxi High-tech
Drilling Tools 38.60 33.77
Manufacture Co., Ltd.
Benxi Steel & Iron
(Group) Zhengtai
0.24 0.24
Construction
Materials Co., Ltd.
Benxi Steel & Iron
2.04
(Group) Medical
237
Bengang Steel Plates Co., Ltd. Annual Report 2020
Items Name 2020.12.31 2019.12.31
Services Department;
Advance from customers
Suzhou Bengang
5,374.03 1,635.62
Industrial Co., Ltd.
Dalian Boluole Steel
181.60 85.93
Tube Co., Ltd.
Benxi Steel & Iron
(Group) Metallurgy 161.66 126.57
Residues Co., Ltd.
Benxi Steel & Iron
(Group) Industrial 55.77 35.79
Development Co., Ltd.
Liaoning Hengtong
Metallurgical
52.81 82.00
Equipment
Manufacture Co., Ltd.
Bengang Group
International
43.70
Economic and Trading
Co., Ltd.
Benxi Steel & Iron
(Group) Steel & Iron
1,582.14
Process and Logistics
Co., Ltd.
Other payables
Benxi Steel & Iron
13,013.80 18,278.27
(Group) Co., Ltd.
Benxi Steel & Iron
(Group) Steel & Iron
1,681.17
Process and Logistics
Co., Ltd.
Bengang Group
International
1,277.85 1,432.74
Economic and Trading
Co., Ltd.
Benxi Steel & Iron
(Group) Thermal
561.73 437.69
Power Development
Co., Ltd.
238
Bengang Steel Plates Co., Ltd. Annual Report 2020
Items Name 2020.12.31 2019.12.31
Benxi Steel & Iron
(Group) Construction 436.25 526.14
Co., Ltd.
Guangzhou Free Trade
Zone Bengang Sales 267.44 267.44
Co., Ltd.
Liaoning Hengyi
Financial Leasing Co., 208.60 0.39
Ltd.
Benxi New Career
197.61 223.84
Development Co., Ltd.
Benxi Steel & Iron
(Group) Real-estate 143.59 143.59
Development Co., Ltd.
Benxi Steel & Iron
(Group) Industrial 31.33 30.42
Development Co., Ltd.
Liaoning Metallurgy
1.34 1.34
Technician College
Benxi Steel & Iron
(Group) Machinery 1.01 1.01
Manufacture Co., Ltd.
Bengang Group
0.98 0.60
Finance Co., Ltd.
Benxi Beiying Steel &
6.00
Iron (Group) Co., Ltd.
Liaoning Hengyi
Non-current Financial Leasing Co., 111,423.24 51,693.94
Payables Ltd.
11. Commitments and Contingencies
(1) Commitments
1. Lease contracts in progress or to be performed and their financial impacts
(1) According to the "Land Use Right Leasing Contract" and subsequent supplementary agreements signed
by the company and Benxi Steel (Group) on April 7, 1997, December 30, 2005, the Company leased land
from Benxi Steel (Group). The monthly rent is 0.594 yuan per square meters, the leased land area is
7,669,068.17 square meters, and the annual rent is 54,665,100 yuan.
（2）On August 14, 2019, the Company signed the "House Lease Agreement" with Benxi Steel (Group)
239
Bengang Steel Plates Co., Ltd. Annual Report 2020
and Beiying Steel respectively, leasing the houses and auxiliary facilities occupied by 2300 and 1780 hot
rolling mill production lines, and the lease term ends on December 31, 2038. The rental fee is based on the
depreciation of the original rent value and the national additional tax, plus reasonable profit negotiation.
The estimated annual rent is not more than 20 million yuan and 18 million yuan respectively. The rental fee
is settled and paid monthly. This related party transaction has been reviewed and approved at the fourth
meeting of the eighth board of directors of the Company.
(3) On July 15, 2019, the Company signed "Land Lease Agreement" with Bengang Group and Benxi Steel
(Group) respectively, and leased and used a total of 8 pieces of land of the two companies. The lease areas
are 42,920.00 square meters and 728,282.30 square meters respectively, with a lease term of 20 years, and
a rental price of 1.138 yuan per square meter per month. After the agreement comes into effect, considering
the national law and policy adjustments every five years, both parties should determine whether the rent
needs to be adjusted according to the pricing basis stipulated in Article 2 of this agreement. This related
party transaction has been reviewed and approved at the third meeting of the eighth board of directors of
the company.
(4) As of December 31, 2020, the amount of financial lease contracts that the Company and Liaoning Hengyi
Financial Leasing Co., Ltd. had signed but had not yet started to execute was 0.806 billion yuan.
2. Irrevocable letter of credit
As at December 31, 2020, the amount of irrevocable letter of credit that was not fulfilled was 1.21 billion
yuan.
(2) Contingencies
At the balance sheet date, no significant contingencies need to be disclosed.
12. Subsequent events
(1) Important non-adjustment matters
None
(2) Profit Distribution
On April 26, 2021, the seventeenth meeting of the eighth board of directors of the
company passed the 2020 dividend distribution plan. It is planned to use the total
share capital of 3,875,371,532 shares at the end of 2020 as the base number to
Profit or
distribute a cash dividend of 0.1 yuan for every 10 shares to all shareholders
dividend to be
Including tax), a total of 38,753,715.32 yuan of cash dividends will be distributed.
distributed
This distribution will not be converted from capital reserves to share capital. The
above profit distribution plan needs to be reviewed and approved by the general
meeting of shareholders.
(3) Sales Return
Not applicable.
(4) Divided into assets held for sale and disposal portfolio
240
Bengang Steel Plates Co., Ltd. Annual Report 2020
Not applicable.
(5) Other subsequent events
Not applicable.
13. Other significant events
(1) Correction of previous accounting errors
None
(2) Debt restructuring
None
(3) Asset replacement
None
(4) Termination of business
None
(5) Segment information
Since the Company's main product is steel, other products account have a small proportion of sales,
the main production base is in Liaoning, and the disclosure of the segment report is not applicable.
(6) Other important matters that have an impact on investor decisions
1. Financial leasing matters
In order to optimize the debt structure and broaden the financing channels, the Company signed the
"Financial Leasing Cooperation Framework Agreement" with Liaoning Hengyi Financial Leasing
Co., Ltd. in 2018. The financing amount is not more than RMB 5 billion per year. The Company
obtains funds through financing after-sales leaseback. The lease interest rate is not higher than the
benchmark loan interest rate announced by the People's Bank of China for the same period. The
lease interest rate during the lease period is dynamically adjusted with the changes in the benchmark
interest rate announced by the People's Bank of China. The ratio of lease deposit is not higher than
241
Bengang Steel Plates Co., Ltd. Annual Report 2020
30% of the lease principal amount.
2. The controlling shareholder pledges the Company's shares
As of the balance sheet date, the Company's controlling shareholder Benxi Iron and Steel (Group)
Co., Ltd. held 2,409,628,094 shares of the Company, of which 712,545,000 shares were in pledged
status and 102,100,000 shares were in restricted sales and frozen status.
3. Major strategic restructuring of indirect controlling shareholders
The company received a notice from Bengang Group, the controlling shareholder of the parent company, and learned
that Ansteel Group Co., Ltd. is planning to reorganize the Bengang Group, which may lead to changes in the
company's control. As of the audit report, the restructuring is still in the planning stage, and after the plan is
determined, the approval of the relevant departments is still required.
14. Notes to the financial statements of parent company
1. Accounts receivable
(1) Accounts receivable disclosed by aging
Items 201201231 20191231
Within 1 year (inclusive) 283,561,303.90 339,851,051.52
1-2 years (inclusive) 2,420,511.80 31,642,073.27
2-3 years (inclusive) 6,500,255.55 24,708,264.04
Over 3 years 177,111,797.34 175,744,519.91
Sub-total 469,593,868.59 571,945,908.74
Less: Provision for bad
179,728,406.39 182,948,800.28
debts
Total: 289,865,462.20 388,997,108.46
(2) Accounts receivable disclosed by category
242
Bengang Steel Plates Co., Ltd. Annual Report 2020
20201231 20191231
Carrying amount Provision for bad debts Carrying amount Provision for bad debts
Items Bad
Percent Book value Percentage Bad debts Book value
Amount Amount debts Amount Amount
age (%) (%) ratio (%)
ratio (%)
Provision for
Bad Dept 47,762,337.18 10.17 47,762,337.18 100.00 47,762,337.18 8.35 47,762,337.18 100.00
individually
Provision for
Bad Dept by 421,831,531.41 89.83 131,966,069.21 31.28 289,865,462.20 524,183,571.56 91.65 135,186,463.10 25.79 388,997,108.46
portfolio
Include:
Portfolio 1:
245,720,903.60 52.33 131,966,069.21 53.71 113,754,834.39 268,981,818.03 47.03 135,186,463.10 50.26 133,795,354.93
Aging
Portfolio
2:Combined 176,110,627.81 37.50 176,110,627.81 255,201,753.53 44.62 255,201,753.53
related party
Total 469,593,868.59 100.00 179,728,406.39 289,865,462.20 571,945,908.74 100.00 182,948,800.28 388,997,108.46
243
Bengang Steel Plates Co., Ltd. Annual Report 2020
Accounts receivable tested for impairment individually
20201231
Bad debts
Items Provision for
Accounts receivable ratio Reason
bad debts
（%）
Benxi Nanfen
Benxi Nanfen Xinhe Metallurgical
47,762,337.18 47,762,337.18 100.00 Xinhe has halt
Co., Ltd.
operation.
Total 47,762,337.18 47,762,337.18
Accounts receivable tested for impairment by portfolio:
Portfolio tested by aging
20201231
Items
Carrying amount Provision for bad debts Bad debts ratio (%)
Within 1 year 107,450,676.09 1,074,506.76 1.00
1-2 years 2,420,511.80 242,051.18 10.00
2-3 years 6,500,255.55 1,300,051.11 20.00
Over 3 years 129,349,460.16 129,349,460.16 100.00
Total 245,720,903.60 131,966,069.21
(3) Information of provision, reversal or recovery of bad debts of current period.
The amount of bad debt provision reversed in the current period is 3,220,393.89 yuan
(4) No accounts receivable has been written off this year.
(5) Top five debtors at the year-end
20201231
Company Percentage of total Provision for
Amount
accounts receivable (%) bad debts
The first 176,110,627.81 37.50
The second 56,158,745.71 11.96 561,587.46
The third 47,762,337.18 10.17 47,762,337.18
The fourth 26,929,400.04 5.73 269,294.00
The fifth 9,008,967.00 1.92 9,008,967.00
Total 315,970,077.74 67.28 57,602,185.64
(6) There is no accounts receivable derecognized due to the transfer of financial assets in the current
period.
(7) There is no assets and liabilities formed by continued involvement due to the
transfer of Account receivables.
244
Bengang Steel Plates Co., Ltd. Annual Report 2020
3. Accounts receivable financing
(1) Details of accounts receivable financing
Items 20201231 20191231
Notes receivable 4,143,431,412.08 2,193,319,842.60
Include: Bank
1,876,753,316.46 2,184,526,834.33
acceptance bill
Commercial
2,266,678,095.62 8,793,008.27
acceptance bill
Total 4,143,431,412.08 2,193,319,842.60
Other information: The "receivable financing" item reflects the notes and accounts receivable that are measured at
fair value at the balance sheet date and whose changes are included in other comprehensive income.
(2) Acceptance bills pledged by the company at the end of the period
Items Pledged amount
Bank acceptance bill 484,093,073.28
Commercial acceptance bill 403,379,971.01
Total 887,473,044.29
(3) Acceptance bills have been endorsed or discounted by the company and have not expired
at the year end
Items Derecognized amount Not derecognized amount
Bank acceptance bill 13,819,427,581.34
Commercial acceptance bill 2,230,183,094.41
Total 13,819,427,581.34 2,230,183,094.41
(4) There are no bills converted into accounts receivable due to the failure of the issuer to
perform the contract at the end of the period.
4. Other receivables
Item 20201231 20191231
Interest receivables 23,028,942.73 19,658,230.77
Dividend receivables
Other receivables 228,379,193.99 247,005,005.04
Total 251,408,136.72 266,663,235.81
1. Interest receivables
(1) Interest receivable disclosed by category
Items 20201231 20191231
245
Bengang Steel Plates Co., Ltd. Annual Report 2020
Deposit interest 23,028,942.73 19,658,230.77
Subtotal 23,028,942.73 19,658,230.77
Less: provision for bad debt
Total 23,028,942.73 19,658,230.77
(2) There is no significant provision for overdue interest and bad debt provision.
2. Other receivables
(1) Other receivables disclosed by aging
Items Ending balance Beginning balance
Within 1 year (inclusive) 53,898,656.03 115,480,359.05
1-2 years (inclusive) 47,649,189.02 15,711,856.93
2-3 years (inclusive) 13,842,023.46 3,479,413.59
Over 3 years 180,717,695.14 177,724,723.88
Sub-total 296,107,563.65 312,396,353.45
Less: Provision for bad
67,728,369.66 65,391,348.41
debts
Total: 228,379,193.99 247,005,005.04
(2) Provision for bad debt provision
Stage one Stage two Stage three
Lifetime
Lifetime expected
12-month
Provision for bad debts expected credit credit losses Total
expected credit
losses (no credit (credit
losses
impairment) impairment
occurred)
Beginning balance 9,179,698.89 56,211,649.52 65,391,348.41
Beginning balance in
current period
--Transfer to Stage two
--Transfer to Stage three -768,390.73 768,390.73
--Reversal to Stage two
--Reversal to Stage one 6,592.60 -6,592.60
Current period provision 801,959.46 2,816,265.56 601,252.83 4,219,477.85
Current period reversal 6,207.34 6,207.34
Current period write-back 1,745,713.37 130,535.89 1,876,249.26
Current period write-off
Other change
246
Bengang Steel Plates Co., Ltd. Annual Report 2020
Stage one Stage two Stage three
Lifetime
Lifetime expected
12-month
Provision for bad debts expected credit credit losses Total
expected credit
losses (no credit (credit
losses
impairment) impairment
occurred)
Ending balance 802,344.72 9,475,267.75 57,450,757.19 67,728,369.66
Changes of other receivables
Stage one Stage two Stage three
Lifetime
Lifetime expected
12-month
Provision for bad debts expected credit credit losses Total
expected credit
losses (no credit (credit
losses
impairment) impairment
occurred)
Beginning balance 232,528,777.63 23,655,926.30 56,211,649.52 312,396,353.45
Beginning balance in
current period
--Transfer to Stage two
--Transfer to Stage three -1,369,740.15 1,369,740.15
--Reversal to Stage two
--Reversal to Stage one 14,813.42 -14,813.42
Current period increase 149,569,647.91 6,006,395.62 5.00 155,576,048.53
Current period
163,877,950.90 7,856,351.54 130,535.89 171,864,838.33
derecognition
Other change
Ending balance 218,235,288.06 20,421,416.81 57,450,858.78 296,107,563.65
(4) Provision for bad debts accrued, reversed or recovered in the current period.
(5) There is no other accounts receivable actually written off in the current period.
(6) Other receivables disclosed by nature
Nature 20201231 20191231
Receivable and payable 288,295,814.93 304,483,575.55
Other 7,811,748.72 7,912,777.90
247
Bengang Steel Plates Co., Ltd. Annual Report 2020
Total 296,107,563.65 312,396,353.45
(7) Top five debtors at the year-end
Percentage of total
Provision for
Company Nature or content Amount Aging other receivables
bad debts
(%)
Within 1
year:18,348,177.57
The First Receivable and payable 23,677,915.37 8.00 449,968.67
Remaining：1-2
years
The Second Receivable and payable 5,492,200.00 Within 1 year 1.85 54,922.00
Within 1 year to 3
The Third Receivable and payable 2,446,897.43 0.83 2,202,207.69
years
Over 3 years
The Fourth 2,261,360.00 0.76 2,261,360.00
Receivable and payable
The Fifth Receivable and payable 2,123,692.31 2-3years 0.72 424,738.46
Total 36,002,065.11 12.16 5,393,196.82
（8）No other receivables involving government subsidies in the current period.
（9）There are no other receivables derecognized due to the transfer of financial assets in the
current period.
（10）No assets and liabilities formed by continued involvement due to the transfer of other
receivables in the current period.
5. Long-term equity investment
Ending balance Beginning balance
Items Carrying Impairme Impair
Book value Carrying amount Book value
amount nt ment
Subsidiaries 2,016,281,902.16 2,016,281,902.16 2,016,281,902.16 2,016,281,902.16
Joint Venture
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
248
Bengang Steel Plates Co., Ltd. Annual Report 2020
Ending
Impairme
balance
Ending nt of
Name of entity Beginning balance Increase Decrease of
balance current
impairm
period
ent
Guangzhou Bengang
Steel & Iron Trading Co., 30,000,000.00 30,000,000.00
Ltd.
Shanghai Bengang
Metallurgy Science and 30,000,000.00 30,000,000.00
Technology Co., Ltd.
Bengang Steel Plates
529,899,801.38 529,899,801.38
Liaoyang Pellet Co., Ltd.
Dalian Benruitong
Automobile Material 65,000,000.00 65,000,000.00
Technology Co., Ltd.
Bengang POSCO Cold-
1,019,781,571.10 1,019,781,571.10
rolled Sheet Co., Ltd.
Changchun Bengang
Steel & Iron Sales Co., 28,144,875.36 28,144,875.36
Ltd.
Harbin Bengang
Economic and Trading 29,923,398.23 29,923,398.23
Co., Ltd.
Nanjing Bengang
2,081,400.65 2,081,400.65
Materials Sales Co., Ltd.
Wuxi Bengang Steel &
29,936,718.57 29,936,718.57
Iron Sales Co., Ltd.
Xiamen Bengang Steel
1,095,711.66 1,095,711.66
& Iron Sales Co., Ltd.
Yantai Bengang Steel &
49,100,329.41 49,100,329.41
Iron Sales Co., Ltd.
Tianjin Bengang Steel &
60,318,095.80 60,318,095.80
Iron Trading Co., Ltd.
249
Bengang Steel Plates Co., Ltd. Annual Report 2020
Ending
Impairme
balance
Ending nt of
Name of entity Beginning balance Increase Decrease of
balance current
impairm
period
ent
Benxi Bengang Steel
5,000,000.00 5,000,000.00
Sales Co., Ltd
Shenyang Bengang
Metallurgical 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 Materials
Technology Co., Ltd.
Total 2,016,281,902.16 2,016,281,902.16
6. Operating Income and Operating Cost
Operating income and operating cost
2020 2019
Items
Revenue Cost Revenue Cost
Principal business 44,436,384,616.09 42,659,983,317.54 45,495,328,832.91 43,241,111,129.03
Other business 4,374,721,858.64 4,082,717,104.16 7,109,784,374.11 6,493,078,331.57
Total 48,811,106,474.73 46,742,700,421.70 52,605,113,207.02 49,734,189,460.60
Breakdown of operating income
Items Principal Business Other Business
Classified by business area 44,436,384,616.09 4,374,721,858.64
Including：Domestic 40,653,042,300.78 4,374,721,858.64
Abroad 3,783,342,315.31
Classified by the time of commodity
44,436,384,616.09 4,374,721,858.64
transfer
250
Bengang Steel Plates Co., Ltd. Annual Report 2020
Items Principal Business Other Business
Including: recognize at a certain point
44,436,384,616.09 4,374,131,134.83
in time
recognize over a certain period of time 590,723.81
合计 44,436,384,616.09 4,374,721,858.64
7. Income on investment
Items 2020 2019
Income from long-term equity investment (cost method) 27,594,915.42
Dividend income obtained during the holding period of other
77,242.47
equity instrument investments
Total 77,242.47 27,594,915.42
15. Supplementary information
(1) Details of non-recurring profit and loss
Items Amount Notes
Profit or loss from disposal of non-current assets -92,695,525.95
Tax refund, reduction or exemption of unauthorized approval or no
formal approval document
Government subsidy attributable to profit and loss of current period
(except such government subsidy closely related to the company's
normal business operation, meeting the regulation of national policy and 81,193,591.56
enjoyed constantly in certain quota or quantity according to a certain
standard)
Fund occupation fee charged to non-financial enterprises included in
current profit and loss
The investment cost of an enterprise acquiring subsidiaries, associates
and joint ventures is less than the income from the fair value of the
identifiable net assets of the investee when obtaining the investment
Non-monetary asset exchange gains and losses
Profit or loss from investment or assets entrusted to others
Provision for asset impairment due to unavoidable factors such as natural
disasters
Profit or loss from debt restructuring 32,800.02
Restructuring costs, such as the cost of relocating employees, integration
costs, etc.
Profits and losses in excess of fair value from unfair transaction
Subsidiary companies arising from business combinations under the
same control
Profits and losses from contingencies are not related to the company's
normal business operations
Profits excluded effective hedging business related to the company's
normal business operations, from holding transactional financial assets,
derivative financial assets, transactional financial liabilities, fair value
13,500,000.00
changes in derivative financial liabilities, and disposal of transactional
financial assets and derivative financial assets, trading financial
liabilities, derivative financial liabilities and other debt investments
251
Bengang Steel Plates Co., Ltd. Annual Report 2020
Items Amount Notes
Reversal of impairment provision for individually tested impairment of
receivables
Profits and losses from external entrusted loans
Profits and losses from changes in fair value of investment real estate
that use the fair value model for subsequent measurement
Profit and loss affected due to the adjustments of requirements of
taxation, accounting and other laws and regulations
Trustee income from trust operations
Other non-operating revenue and expenditure other than above items 1,592,660.62
Other non-recurring profit and loss
Subtotal 3,623,526.25
Impact of income tax -786,094.20
Impact of minority interests -54,476.26
Total 2,782,955.79
(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 1.90 0.099 0.099
Net profit attributable to ordinary shareholders
1.88 0.098 0.098
after deducting non-recurring profit and loss
(3) Differences between Domestic and Foreign Accounting Standards
（1）The differences in net profit and net assets in financial reports disclosed under International Financial
Reporting Standards and Chinese accounting standards
□ applicable √ not applicable
（2）The difference between net profit and net assets in financial reports disclosed under overseas accounting
standards and Chinese accounting standards
□ applicable √ not applicable
（3）Explanation of the reasons for differences in accounting data under domestic and foreign accounting
standards. If the data that has been audited by an overseas audit institution is adjusted for differences, the
name of the overseas institution should be indicated.
(4) Others
252
Bengang Steel Plates Co., Ltd. Annual Report 2020
XIII. Documents available for inspection
1, Financial Statements signed and stamped by the legal representative, CFO, and accounting manager;
2, All of the original copies of documents and announcements that have been published on China Securities Journal,
Securities Times, and Hong Kong Commercial Daily;
3, Original copy of the Auditors’ Report under the seal of the CPA and signed by and under the seal of certified
accountants.
253
