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氯碱B股(900908)公告正文

氯碱化工:2014年年度报告

公告日期:2015-03-31

                                           2014 年年度报告
    Company code: 600618                            Company name: Chlor-Alkali Chemical
    Shanghai Chlor-Alkali Chemical Co., Ltd.
               2014 Annual Report
                                       Important Notice1. The Board of Directors, the Supervisory Committee, Directors, Supervisors and senior
    executives of the the company ensure the content of this Annual Report is true, accurate and
    integrative, not having any false statement, misleading representation or significant omission,
    and will take joint and several legal responsibilities for the Report.2. All the Directors of the Company attended the Board meeting.3. BDO China Shu Lun Pan Certified Public Accountants LLP issued an auditor's report with
    standard and unqualified opinion for the Company.4. Mr. Huang Dailie, principal of the Company, Mr. He Gang, principal in charge of accounting of
    the Company, and Mr. Lai Yonghua, head of accounting department (accounting officer) declare
    to guarantee the truth, accuracy and integrity of the financial report in this Annual Report.5. The proposal on profit distribution and proposal on capital reserve transferring into share
    capital examined by the Board of Directors
    According to the 2014 annual financial audit issued by BDO China Shu Lun Pan Certified Public
    Accountants LLP engaged by the Company, the net profit of the parent company in 2014 is RMB -
    586,490,853.47 and the undistributed profit at beginning of the year is RMB 11,631,767.29. In 2014
    the Company distributed the profit of 2013 of RMB 5,781,999.88 to the shareholders. It executed the
    No. 9 Enterprise Accounting Standard - Employees Salary (amended) amended by the Ministry of
    Finance, reducing the undistributed profit at beginning of the year by RMB 177,320,000.00 according
    to the clause 31 of the Standard and making the profit available for dividend at end of the year being
    RMB - 757,961,086.06. Therefore, the Company is not capable of distributing profit for 2014, not
    making cash bonus for 2014.6. The declaration on the risk for forward looking statement
    The future plan or other forward looking statement included in this Report shall not constitute the
    Company's substantial commitment to the investors, and we remind the investors to pay attention to
    the investment risks.
                                                 1 / 74
                                           2014 年年度报告7. Is there any non-operational fund occupation by the controlling shareholder or the related
    parties?
    No8. Is there any guarantee for outside entities in violation of the stipulated decision-making process?
    No
                                                2 / 74
                                                      2014 年年度报告
                                                       Contents
    第一节     Paraphrase and Important Risk Prompt ............................................................................... 4
    第二节     Company Profile ................................................................................................................. 5
    第三节     Financial Highlights ............................................................................................................ 7
    第四节     Report of the Board of Directors ....................................................................................... 10
    第五节     Major Events ..................................................................................................................... 28
    第六节     Changes of Share Capital and Particulars of Shareholders ............................................... 38
    第七节     Particulars of the Preference Shares .................................................................................. 41
    第八节     Particulars of the Directors, Supervisors, Senior Executives and Staff Members ............. 42
    第九节     Company Governance ....................................................................................................... 51
    第十节     Internal Control ................................................................................................................. 54
    第十一节   Financial Report ................................................................................................................ 56
    第十二节   Documents for Reference .................................................................................................. 74
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                                             2014 年年度报告
                      1. Paraphrase and Important Risk Prompt1. Paraphrase
    In this Report, except otherwise indicated, these words and expressions shall have the meanings as
    follows:
    Paraphrase for generally-used expressions
    CSRC                               means China Securities Regulatory Commission
    SSRB                               means Shanghai Regulatory Bureau of China Securities
                                                 Regulatory Commission
    Huayi Group                        means Shanghai Huayi (Group) Company
    The Company, Company, or means Shanghai Chlor-Alkali Chemical Co., Ltd.
    Chlor-Alkali Chemical
                                                 Molecular formula: NaOH; a strong soluble alkali.
                                                 Sodium hydroxide is easy to be solved into water, has
                                                 strong alkalinity, and can supply Na+ ion. These
    Sodium hydroxide                   means properties make it used widely in the industries such as
                                                 soap-making, textile industry, printing and dyeing,
                                                 blanching,      papermaking,      petroleum      refining,
                                                 metallurgy and other chemical industries.
                                                 Molecular formula: Cl2. As an important chemical raw
                                                 material, chlorine gas is widely used in the industries
                                                 such as papermaking, printing and dyeing, pigment,
    Chlorine gas                       means bleaching powder, textile industry, chemical fiber,
                                                 grease petroleum, rubber, plastic, pharmacy,
                                                 disinfection, agricultural pesticide, metallurgy and
                                                 electronic industry.
                                                 Ethylene dichloride. Achromic or yellowish transparent
                                                 liquid with specific gravity of about 1.26 and odor
                                                 similar to chloroform, insoluble in water, dissolve in
    EDC                                means
                                                 ethyl alcohol and ethyl ether. Mainly used as the
                                                 solvent for wax, fat and rubber, and also used in
                                                 producing vinyl chloride and polycarbonate.
                                                 Paste resin. The Company's production for paste resin
                                                 mainly adopts two processes, mixing method and seed
    PPVC                               means emulsion polymerization, and the paste resin is mainly
                                                 used in the products such as the artificial leather, floor
                                                 leather, wall paper, toy and bottle cap.
                                                 Special resin. The special resin produced by the
                                                 Company is mainly the customer specially-used
                                                 material, the medical resin with high polymeric level
    TPVC                               means
                                                 such as plasma bag, infusion tube and the seal with
                                                 high elasticity and the resin specially used for primary
                                                 coating in automobiles.
                                                 Chlorinated polyvinyl chloride. Mainly used in various
    CPVC                               means pipes with different caliber and the related fittings such
                                                 as elbow and T-joint, the valve body and the wig.2. Important notice for risk
    The Company has described in details the risk factors existing in the Company in the Report. Please
    consult the content about the risk factors possibly faced in the outlook for future development and the
    countermeasures made by the Board of Directors.
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                                             2014 年年度报告
                                    2. Company Profile1. Company information
    Chinese name of the Company             上海氯碱化工股份有限公司
    Short form                              氯碱化工
    English name of the Company             SHANGHAI CHLOR-ALKALI CHEMICAL CO.,LTD.
    Abbreviation                            SCAC
    Legal representative of the Company     Mr. Huang Dailie2. Contact information
                                  Secretary of the Board of             Securities representative
                                          Directors
    Name                        Xu Peiwen                             Shen Qinyi
    Contact address             4747 Longwu Rd., Shanghai             4747 Longwu Rd., Shanghai
    Tel.                        021-64340601                          021-64342640
    Fax                         021-64341341                          021-64341438
    E-mail                      shxpw@126.com                         shqy_0227@126.com3. Basic information
    Registered address of the Company                4747, 4800 Longwu Rd., Shanghai
    Zip code of registered address                   200241
    Business address of the Company                  4747 Longwu Rd., Shanghai
    Zip code of business address                     200241
    Website                                          www.scacc.com
    E-mail                                           dshmss@scacc.com4. Information disclosure and filing site
    Newspapers for information disclosure         China Securities News, Shanghai Securities News,
    selected by the Company                       Securities Post and Hong Kong Commercial Daily
    Website appointed by China Securities         www.sse.com.cn
    Regulatory Commission for carrying annual
    report
    Site for filing annual report                 4747 Longwu Rd., Shanghai5. The Company's share
                                          The Company's share
    Type of share Stock exchange for        Share name     Share code      Share name before change
                   listing of share
    A share        Shanghai Stock          Chlor-Alkali      600618
                 Exchange                Chemical
    B share        Shanghai Stock          Chlor-Alkali B    900908
                 Exchange                Share6. Change of registration during the report period1) Index of the Company's first registration
    For the Company's first registration, please see Brief Introduction to the Company in 2011 Annual
    Report.
                                                  5 / 74
                                            2014 年年度报告2) Change in the Company's main business since its listing in stock market
    The Company has not got any change in its main business since its listing in the stock market.3) Change in the Company's controlling shareholder since its listing in stock market
    The Company has not got any change in its controlling shareholder since its listing in the stock
    market.7. Other relevant information
                                        Name                  BDO China Shu Lun Pan Certified Public
                                                                          Accountants LLP
    Public accounting firm       Business address          4th Floor, New Huangpu Financial Plaza, No.
    engaged by the Company                                 61, East Nanjing Rd., Shanghai, China
           (domestic)            Name of the               Gu Xuefeng, Ling Min
                                 accountant for
                                 signing8. Other
    On December 30, 2014, the Company convened the 16th meeting of 8th Board of Directors, which
    elected Mr. Huang Dailie the Chairman of the Board. On January 5, 2015, the Company completed
    the procedure for official alteration.
                                                  6 / 74
                                                 2014 年年度报告
                                        3. Financial Highlights1. Main accounting data and financial indexes of previous 3 years before end of the report period1) Main accounting data
                                                                                        Unit: RMB
                                                                                          Increase or
                                                              2013                          decrease
    Main accounting    2014 Interim
                                                                                           than same          2012
        data            Report
                                           After adjustment       Before adjustment         period of
                                                                                         last year (%)
    Operating
                     7,015,409,267.56       6,974,211,654.53         6,974,211,654.53           0.59     6,340,883,649.76
    income
    Net profit
    attributable to
    shareholders of    -592,502,499.95           16,623,782.76          16,623,782.76       -3,664.19      102,542,136.82
    the listed
    Company
    Net profit
    attributable to
    shareholders of
                                                                                          Not
    the Company,       -262,177,332.00       -139,868,977.14          -139,868,977.14                       65,211,838.90
                                                                                          applicable
    after
    non-recurring
    profit and loss
    Net cash flow
    from operating      -29,059,999.83        580,026,390.02           580,026,390.02         -105.01      644,308,830.14
    activities
                                                                                          Increase or
                                                        End of 2013
                       End of 2014                                                         decrease       End of 2012
                                           After adjustment       Before adjustment           (%)
    Net assets
    attributable to
                     2,164,655,507.39       2,848,201,003.60         2,848,201,003.60         -24.00     2,828,464,570.60
    shareholders of
    the Company
    Total assets      5,754,717,626.22       5,992,581,029.65         5,992,581,029.65          -3.97     6,340,132,786.822) Main financial indexes
                                                                2013                    Increase or decrease
       Main financial indexes            2014          After           Before           than same period of       2012
                                                    adjustment       adjustment             last year (%)
    Basic earnings per share
                                         -0.5124        0.0144            0.0144                   -3,658.33      0.0887
    (RMB/share)
    Diluted earnings per share
                                         -0.5124        0.0144            0.0144                   -3,658.33      0.0887
    (RMB/share)
    Basic earnings per share after
    non-recurring profit and loss         -0.2267         -0.121           -0.121             Not applicable       0.0564
    (RMB/share)
    Return on net assets,                                                                 Decrease by 25.03
                                        -24.4467        0.5857            0.5857                                  3.6921
    weighted average (%)                                                                   percentage points
    Return on net assets after
                                                                                          Decrease by 5.89
    non-recurring profit and loss,       -10.8175       -4.9279           -4.9279                                  2.3480
                                                                                          percentage points
    weighted average (%)2. Difference of accounting data between domestic and overseas accounting standards1) The difference of net profit and net assets attributable to shareholders of the Company between
    the international accounting standard and Chinese accounting standards□Applicable √Not applicable
                                                      7 / 74
                                                   2014 年年度报告2) The difference of net profit and net assets attributable to shareholders of the Company between
    the international accounting standards and Chinese accounting standards□Applicable √Not applicable3. Items of non-recurring profit and loss√Applicable □Not applicable
                                                                                                      Unit: RMB
    Items of non-recurring profit or                                                                 Amount in
                                           Amount in 2014    Note (if applicable)   Amount in 2013
                   loss                                                                                 2012
    Profit or loss from disposal of
                                              1,111,822.13                            71,743,954.84   12,512,201.40
    non-current assets
    Tax return and exemption approved
    by the authority beyond its right or
                                                                                       1,120,000.00    3,754,074.00
    with no official approval file, or
    occasionaly happened
    Government subsidy attributable to
    profit and loss of current period,
    except such government subsidy
    closely related to the Company's
    normal business operation, meeting          5,732,560.40                           111,427,687.60    7,605,127.69
    the regulation of national policy
    and enjoyed constantly in certain
    quota or quantity according to a
    certain standard
    The income generated when the
    cost for the Company acquiring the
    investment in the subsidiaries,
    affiliated enterprises and the joint
                                                                                                       7,427,541.47
    ventures is less than the fair value
    of the recognized net assets of the
    invested units enjoyed while
    acquiring the investment
    The profit and loss from change of
    fair value due to holding of
    tradable financial assets and
    tradable financial liabilities and the
    income acquired from disposal of
    tradable financial assets, tradable                                                                   136,030.13
    financial liabilities and salable
    financial assets, except that from
    the effective hedge business related
    to the Company's normal operating
    business
    Other non-operating revenue and
                                              6,572,403.12                             7,086,532.41    2,528,619.33
    expenditure other than above items
                                                             Compensation for
                                                             personnel
                                                             placement and
                                                             related loss on work
    Other profit or loss items meeting
                                                             stoppage caused by
    the definition of non-recurring          -343,652,815.90                           -35,532,990.89    4,311,535.50
                                                             the production halts
    profit and loss
                                                             of the PVC unit and
                                                             the supporting
                                                             facilities in Wujing
                                                             Base
    Impact of minority interests                   50,515.48                               -32,543.41     -876,846.11
    Impact of income tax                         -139,653.18                               680,119.35      -67,985.49
                Total                      -330,325,167.95                           156,492,759.90   37,330,297.924. Items measured with fair value
                                                                                                      Unit: RMB
                                                        8 / 74
                                    2014 年年度报告
                    Beginning                           Change in      Impact on profit of
      Item                          Closing balance
                     balance                          current period     current period
    Salable financial   10,926,604.39     14,914,742.76     3,988,138.37             55,663.83assets
       Total        10,926,604.39     14,914,742.76     3,988,138.37            55,663.83
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                                            2014 年年度报告
                     第一节         Report of the Board of Directors1. Discussion and analysis of the Board of Directors on the operation status during the report
    period
    In 2014, Chinese economy started to enter the transfer period from high speed growing to middle
    speed growing. In order to fit such complicated and changeable economic situation, the Company
    implemented the strategy of "innovation, upgrading and transformation" in all aspects, kept on
    speeding up the adjustment and transfer in Wujing area and promoting the upgrading in the Chemical
    Park, made the optimization of operation and decrease of loss as basic target and focused on the
    significant projects such as ethylene tank and CPVC to keep the equilibrium of operation and
    sustainable development for the Company. Meanwhile, it continued to implement the strategy of
    "going out" unshakably, sought the chances of strategic cooperation and investment in the global
    market, and strived to exploit new space for enterprise development.
    The adjustment in Wujing Base makes the Company get the biggest loss with the amount of RMB
    590,000,000 since its listing in stock market. However, through analysis to the loss, the expenditure
    of RMB 520,000,000 for the adjustment in Wujing Base is mainly the impairment appropriated for
    the units and the cost for placement of the employees. This expenditure will help the Company to
    alleviate the burden for its forthcoming development. For the production operation, after absorbing
    RMB 230,000,000 for the price rising of its main raw material ethylene and industrial electricity, the
    Company controls the loss at RMB 70,000,000.
    In 2014, the Company realized gross operating income of RMB 7,015,000,000, increasing by 0.59%
    than previous year, gross profit of RMB - 583,000,000, decreasing by 1961.7% than previous year,
    net profit attributable to shareholders of the Company of RMB - 592,000,000, decreasing by
    3664.19% than previous year, and investment income of RMB 62,632,800, decreasing by 56.54%
    than previous year.1) Analysis on main business(1) Analysis on changes in relevant items in the income statement and cash flow statement
                                                                                       Unit: RMB
                                                          Same period of last
                 Item                  Current period                          Change ratio (%)
                                                                 year
    Operating income                   7,015,409,267.56     6,974,211,654.53                 0.59
    Operating cost                     6,375,944,582.66     6,344,195,298.75                 0.50
    Selling cost                         205,248,898.35       193,012,461.43                 6.34
    Management cost                      633,388,738.66       416,638,560.56                52.02
    Financial expenses                   121,456,535.42       111,801,208.77                 8.64
    Net cash flow from operating         -29,059,999.83       580,026,390.02             -105.01
    activities
    Net cash flow from investment       -495,001,156.50      -247,218,330.78       Not applicable
    activities
    Net cash flow from financing         353,435,963.67      -327,297,981.40       Not applicable
    activities
    Expenditure on R&D                    40,756,284.35        42,071,822.11                -3.13(2) Income(a) Analysis on the factors influencing the Company's products income mainly from sale of goods
                                                                                  Unit: '0000 tons
          Product                                                           Increase or decrease
       classification            Item           2014             2013               (%)
    Polyvinyl chloride    Sales volume                8.01          15.47                  -48.22
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                                            2014 年年度报告
    resin                  Output                            8.61         16.76                        -48.63
                          Inventory                         0.70          0.31                        125.81
                          Sales volume                     71.50         74.80                         -4.41
    Sodium hydroxide       Output                           73.00         73.19                         -0.26
                          Inventory                         2.15          0.60                        258.33(b) Main customers
                                                                                                Unit: RMB
    Total of sales amount to top 5                                     Ratio in total sales
    customers                                     3,282,013,865.31     amount                         46.97%(3) Cost(a) Cost analysis
                                                                                                Unit: RMB
                                                 By sectors
                                                                                                       Change
                                                                                                        ratio
                                                             Ratio                           Ratio    between
                                                               in                              in    the current
                    Component of                                     Same period of
       Sector                         Current period         total                           total   period and
                       cost                                            last year
                                                             cost                            cost       same
                                                              (%)                             (%)     period of
                                                                                                      last year
                                                                                                         (%)
    Industry         Direct material   3,614,263,644.00       57.42   3,543,812,672.61        56.44         1.99
                    Direct labour        92,817,782.97        1.47     122,690,121.16         1.95      -24.35
                    Power               249,017,879.57        3.96     353,590,656.79         5.63      -29.57
                    Manufacturing       331,797,420.12        5.27     533,631,687.86         8.50      -37.82
                    cost
                    Total             4,287,896,726.66       68.13   4,553,725,138.42        72.52       -5.84
    Construction     Direct material       1,397,498.74        0.02         847,321.23         0.01       64.93
                    Direct labour         1,581,052.08        0.03       2,095,440.22         0.03      -24.55
                    Manufacturing        22,470,081.24        0.36      19,904,665.69         0.32       12.89
                    cost
                    Total                25,448,632.06        0.40      22,847,427.14         0.36       11.39
    Trade            Purchase cost     1,980,812,658.24       31.47   1,702,287,777.63        27.12       16.36
    income
                                                By product
                                                                                                       Change
                                                                                                        ratio
                                                             Ratio                           Ratio    between
                                                               in                              in    the current
                    Component of                                     Same period of
      Product                         Current period         total                           total   period and
                       cost                                            last year
                                                             cost                            cost       same
                                                              (%)                             (%)     period of
                                                                                                      last year
                                                                                                         (%)
    PVC              Direct material      593,100,331.68       9.42   1,120,840,740.78        17.85      -47.08
                    Direct labour         22,641,881.58       0.36      34,198,442.96         0.54      -33.79
                    Power                108,524,507.82       1.72     174,928,497.51         2.79      -37.96
                    Manufacturing        128,110,613.58       2.04     153,861,264.90         2.45      -16.74
                    cost
                    Total                852,377,334.66      13.54   1,483,828,946.15        23.63      -42.56
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                                                2014 年年度报告
    Sodium            Direct material      846,403,320.03      13.45         766,943,649.79   12.21     10.36
    hydroxide
                     Direct labour             4,283,945.16       0.07       15,567,915.32    0.25    -72.48
                     Power                    86,798,377.75       1.38       68,353,774.89    1.09     26.98
                     Manufacturing            39,077,055.00       0.62      140,535,329.16    2.24    -72.19
                     cost
                     Total                976,562,697.94      15.52         991,400,669.16   15.79     -1.50
    Chlorine          Direct material    2,043,905,626.27      32.47       1,587,487,697.19   25.28     28.75
    products
                     Direct labour         21,048,519.55          0.33       22,972,608.30    0.37     -8.38
                     Power                 42,051,606.32          0.67       99,822,584.08    1.59    -57.87
                     Manufacturing        119,573,405.43          1.90      197,330,597.08    3.14    -39.40
                     cost
                     Total              2,226,579,157.57      35.38       1,907,613,486.65   30.38     16.72(b) Main suppliers
                                                                                                   Unit: RMB
    Total of purchase amount from                                            Ratio in total purchase
    top 5 suppliers                                    3,906,600,757.17      amount                    54.33%(4) Expenses
                                                                                                  Unit: RMB
                                                                                              Increase or
          Item                         2014                              2013
                                                                                             decrease (%)
    Selling cost                      205,248,898.35                   193,012,461.43                     6.34
    Management cost                   633,388,738.66                   416,638,560.56                    52.02
    Financial expenses                121,456,535.42                   111,801,208.77                     8.64
    Income tax
    expense                             4,622,713.67                      5,990,994.17                -22.84
    Analysis on reasons for change of expenses:
    1) The selling cost increases by 6.34% than the same period of last year, and this is mainly caused by
      the increase of the depreciation of fixed assets transferred from the expanding of the dock.
    2) The management cost increased by 52.02% than the same period of last year, and this is mainly
      caused by the big increase of the employee's dismissal fee in this year than previous year.
    3) The expense of income tax decreased by 22.84% than the same period of last year, and this is
      mainly caused by decrease of the profit of the subsidiaries within the consolidation range this year.(5) Expenditure on R&D(a) Expenditure on R&D
                                                                                                 Unit: RMB
    The cost of R&D expenditure                                                                 15,511,089.73
    Capitalization of R&D expenditure in                                                        25,245,194.62
    current period
    Total of R&D expenditure                                                                    40,756,284.35
    Ratio of total R&D expenditure in net                                                                1.81
    assets (%)
    Ratio of total R&D expenditure in                                                                     0.58
    operating income (%)(b) Remark
    In 2014 the Company still focus on the advanced chlorine production process and the new material in
    its R&D work. The main research projects are the "process development for chlorine gas made
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                                              2014 年年度报告
    through catalytic oxidation of hydrogen chloride", "research on processing application for chlorinated
    polyvinyl chloride" and "development on specific polyvinyl chloride resin". For the project of
    "process development for chlorine gas made through catalytic oxidation of hydrogen chloride", based
    on the pilot research, the Company completed the compiling of the process package for the industrial
    unit with the capacity of 100,000 tons per year. For the project of "research on processing application
    for chlorinated polyvinyl chloride", the Company mainly made the research on the formulation for the
    long-time heat resisting fittings of chlorinated polyvinyl chloride and the improvement on the
    smoothness of inner-wall of the tubes with high extrusion speed and small caliber, improved the
    formulation for the tubing and fittings of chlorinated polyvinyl chloride, and realized the
    commercialization of the self-developed mixing material. For the project of "development on specific
    polyvinyl chloride resin", the Company mainly made the testing for the "production of paste resin
    with the mixing method of vinyl chloride-vinyl acetate copolymerization" to enhance the specialized
    rate of the products and the differentiation competitive advantage of the Company.(6) Cash flow
                                                                                             Unit: RMB
                  Item                          2014                  2013               Difference
    Net balance of cash flow from
    business activities                       -29,059,999.83        580,026,390.02         -609,086,389.85
    Net balance of cash flow from
    investment activity                      -495,001,156.50       -247,218,330.78         -247,782,825.72
    Net balance of cash flow from
    financing activities                      353,435,963.67       -327,297,981.40          680,733,945.07
    Note:
    1) The decrease of the net cash flow of operating activities is mainly caused by the decrease of the
    gross profit due to big rise of the ethylene prices and the dropping of the selling of products, the
    decrease of the government subsidy and the increase of the expenditure for dismissal cost of
    employees.
    2) The decrease of the net cash flow of investment activities is mainly caused by the increase of the
    investment in Huntsman, Lianhen and the financial company in current period.
    3) The increase of net cash flow of financing activities is mainly because the increase of loan
    makes the increase of the inflow of fund..(7) Other(a) Detailed explanation on significant changes of the profit structure or profit source of the
    Company
                                                                                                Unit: RMB
                                                                                 Increase or decrease
             Item                      2014                     2013
                                                                                than previous year (%)
    Management cost                   633,388,738.66        416,638,560.56                        52.02
    Loss from assets
    impairment                        320,560,676.78        116,423,625.78                       175.34
    Investment income                  62,632,834.28        144,125,008.27                       -56.54
    Operating profit                 -596,384,778.31        -88,579,797.32                      -573.27
    Non-operating revenue              13,543,603.10        122,523,307.47                       -88.95
    Non-operating expense                 126,817.45          2,629,788.44                       -95.18
    Gross profit                     -582,967,992.66         31,313,721.71                    -1961.70
    Net profit                       -587,590,706.33         25,322,727.54                    -2420.41
    Note:
    1) The increase of management cost is caused by the increase of the employee's dismissal cost in
    current year than previous year.
    2) The increase of loss from assets impairment is mainly because the production halt of the PVC unit
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                                             2014 年年度报告
    in Wujing Base makes the increase of the provision for assets impairment appropriated.
    3) The decrease of return on investment is caused by the decrease of the income from disposal of
    equity interest in current year than the previous year.
    4) The decrease of non-operating revenue is mainly caused by the decrease of the government
    subsidy fund in current year.
    5) The decrease of the operating profit, gross profit and net profit is mainly caused by the big rise of
    ethylene prices and the big increase of assets impairment appropriated and the employee's dismissal
    cost due to readjusting of industrial structure of the Company.(b) Explanation on the progress of the development strategy and management plan
    During the report period, the Company promoted the strategy of "innovation, upgrading and
    transformation" unshakably and implemented the halt plan for PVC unit (except chlorinated
    polyvinyl chloride, i.e. CPVC) in Wujing Base. This means the Company's strategic transfer is to be
    completed soon. Faced with the big rising of the price of raw material and energy and the
    continuous dropping of the product price, the Company strived to optimize the operation to enhance
    the efficiency and control the loss of main business. Due to the production halt plan implemented in
    Wujing Base, the Company is required to appropriate assets impairment provisions for PVC unit.
    Meanwhile, it should pay compensation cost to a large number of employees dismissed by the
    Company through agreement. Therefore in 2014 the Company got big loss in its business, a big
    decrease compared with the profit target raised by the Board of Directors at beginning of the year.A) Make great efforts to promote the Company's strategy adjustment based on the target for future
    development
    Speed up the step for entering the new material field. In 2014, through full analysis on the future
    development of MDI industry, the Company learned the good chance for rapid development of
    polyurethane industry in China and Asia Pacific area. In consideration of the requirements for
    strategic transformation to the new material field, the Company decided to make investment of
    RMB 307,480,000 in the MDI expansion project of Shanghai Huntsman Polyurethane Co., Ltd.
    and Shanghai Lianheng Isocyanic Ester Co., Ltd. The Company's total investment in MDI fields in
    Chemical Park has reached RMB 1,170,000,000, accounting for 26% of the Company's total
    investment in Chemical Park. This important investment in 2014 makes the Company be further
    involved with new material field and helps it to make transformation and solidify the industrial chain
    for the recycling economy. Meanwhile, through this project the Company can build a cooperative
    platform with foreign capital, master the new technology for producing chlorine and grasp chances
    in the keen competition in the industry.
    Speed up the concentration and upgrading from Wujing to Chemical Park. In 2014, the price of PVC,
    the Company's product, was influenced by the continual downturn of market and the price of the raw
    material ethylene was rising greatly. Such severe situation caused by over capacity means the
    advent of the capacity removing movement in PVC industry. Therefore, the Company, based on
    the strategic plan of concentration and upgrading from Wujing to Chemical Park and relevant
    policies such as industrial distribution and reorganization of an industry issued by Shanghai
    municipal government, has made determination to implement overall halt of PVC process unit in
    Wujing Base (only reserve CPVC unit). Meanwhile, it started to make the dismissal work in
    Wujing Base orderly. It formulated the dismissal plan in full consideration of the rights of the
    employees after hearing earnestly the opinion of the employees. Due the understanding and
    support of the employees, the plan can be implemented stably and orderly. The Company
    dismissed 792 persons totally in this year. The halt of main production units in Wujing area and the
    preliminary completion of the dismissal work mean that the Company's adjustment and
    transformation strategy in Wujing area entered the final period. In 2014 the Company's capacity
    transfer, work thought and management work further inclined to Chemical Park. In Chemical Park, it
    has got the annual capacity of 720,000 tons of sodium hydroxide and 720,000 tons of ethylene
    dichloride (EDC). In Chemical Park the Company's income reaches RMB 4,386,450,000 and gross
    profit reaches RMB 576,000,000, accounting for 144% of the total gross profit of the Company.
    While in Wujing area, the income is only RMB 235,610,000, and the gross profit is only RMB -
    138,000,000. The Company has firmly implemented the strategic adjustment from Wujing Base to
    Chemical Park, made hard work for Shanghai to realize "innovation driven and developing through
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                                            2014 年年度报告
    transformation", and made new contribution for Shanghai to build a city of resource-saving type and
    environment-friendly type.
    Continue to probe into the way of international merger and industrial transformation and upgrading.
    In 2014 the Company made tracking study on 9 merger and acquisition project, in which it
    completed the investigation on 4 companies and 2 chemical parks in China and formed the related
    investigation reports and traced 1 merger and acquisition project and 3 new joint venture projects.
    The target projects for acquisition mainly include following three types. First is that it makes use
    of the chance of industrial consolidation to build new production bases through merger and
    acquisition in the areas with cost comparative advantage. In this way it can expand its industrial
    scale, enhance its market share and strengthen the control power in market. This can support the
    implementation of the Company's strategy of "going out from Shanghai". Second is that it focused
    on the chemical products encouraged by national policy and having high added value and strong
    profitability based on the market position of the advanced material, in order to extend the Company's
    product chain and enhance the market risk preventing ability and the enterprise's whole profitability.
    This can support the implementation of the Company's strategy of "going out from chlor-alkali".
    Third is that, it strived to find the raw material of low-price and high quality and advanced chemical
    engineering technique in global market to master the internally advanced chemical engineering
    technique and expand the international raw material market and sales market. This can support the
    implementation of the Company's strategy of "going out from China". In order to strengthen the
    analytical study on investment abroad and strive for valuable investment opportunities, the Company
    has established the investment committee office. Through periodic meeting, information collecting,
    business discuss, field survey and report preparing, it strengthened the study on the chances for
    investment and cooperation at home and abroad and get progress in the study on extending of the
    industrial chain and upgrading and transformation of the Company.B) Optimize the Company's overall operation management based on the principle of efficiency first
    Optimize the operation to ensure the production equilibrium in the main battlefield of Chemical Park.
    The Company adjusted timely and flexibly the production load in accordance with the market change,
    and ensured the sodium hydroxide unit of Huasheng Factory running in heavy-duty level even with
    the high price of ethylene and fluctuating demand downstream. Due to the big loss of the PVC
    products in Wujing area, the Company reduced the output and provided vinyl chloride resource to
    Tianyuan Factory to ensure the monthly output of paste resin and special resin, Tianyuan's
    differentiated products, realizing the goal of maximizing the benefit of the units in the main
    battlefield.
    Adjust the structure of production and sale and contend for market with the differentiation strategy.
    Faced with the severe sales situation, the Company made adjustment initiatively, transfer the sales
    center to Chemical Park, focus on the high efficiency products and optimize the market distribution.
    It continued to promote the product differentiated marketing, focused on high-end product market,
    optimize the area structure and customer structure of the products, concentrated the technical force
    and marketing force to improve the quality and promotion of the special resin and new material
    CPVC, and grasped the chance to exploit the markets in Middle East Asia, South America and
    Africa. The implementation of the differentiated strategy has provided the Company with
    favourable conditions under the severe market competition.
    Strengthen the cooperation and seek the copartners to expand the business opportunities. The
    Company paid close attention to the cooperation between its units in Chemical Park and the
    downstream enterprises. Firstly, it valued highly the "commercial negotiation for important
    contracts", and established a specific negotiation group to promote the negotiation process and set
    sound basis for the Company's new development in Chemical Park. At present it has signed a supply
    agreement for the sodium hydroxide and liquid chlorine needed for capacity expansion with
    Lianheng Isocyanic Ester Co., Ltd., and the negotiation with Bayer, BASF and other enterprises are
    just under progress. Secondly, it strengthened the communication with the downstream enterprises
    and enhanced the implementation rate of contract. The quantities of liquid chlorine and hydrogen gas
    received have been increased to certain extent. Thirdly, it made active negotiation with Jinshan
    Petrochemical and Secco Petrochemical and completed the renewal of the new year's contract for
    ethylene with Jinshan Petrochemical. Meanwhile, it strived to find new suppliers for ethylene
    abroad, making negotiations with many international enterprises to discuss the purchase of
    ethylene. It is ready to purchase ethylene by itself in 2015.
                                                 15 / 74
                                             2014 年年度报告
    Take an active part in the deal for carbon emission and get "green profit" through energy-saving and
    emission reduction. In the adjustment in Wujing area, it made full use of the chance of production
    halt and big reduction of energy consumption, researched earnestly the carbon emission policy of the
    government and strived to conduct the transaction for carbon emission to get the "green profit" due
    to energy-saving and emission reduction for the Company. From June 2013 to June 2014, the
    Company had totally sold 53.167 carbon index and the transaction amount exceeded RMB
    10,000,000. Afterwards, it will continue to increase the efforts in energy-saving and emission
    reduction, enhance the management level for energy-saving, decrease the discharge amount of
    carbon, and based on the market situation make market transaction for the carbon index to seek for
    the biggest benefit for the Company.2) Analysis on industry, products and area operation(1) Main business divided by sectors and products
                                                                                                       Unit: RMB
                                           Main business by sectors
                                                                       Increase
                                                                                     Increase
                                                                           or
                                                                                        or
                                                                       decrease
                                                                                     decrease       Increase or
                                                           Gross           of
                                                                                        of       decrease of gross
    Sector     Operating income    Operating cost         profit      operating
                                                                                    operating     profit rate than
                                                          rate (%)      income
                                                                                    costs than   previous year (%)
                                                                          than
                                                                                     previous
                                                                       previous
                                                                                     year (%)
                                                                       year (%)
    Industry     4,881,799,897.82    4,287,896,726.66           12.17        -5.19        -5.84    Increase by 0.61
                                                                                                 percentage points
    Constructi      27,016,732.70       25,448,632.06            5.80       10.74        11.39    Decrease by 0.55
    on                                                                                            percentage points
    Trade        1,993,574,818.85    1,980,812,658.24            0.64       15.74        16.36    Decrease by 0.53
    income                                                                                        percentage points
    Total        6,902,391,449.37    6,294,158,016.96            8.81        0.09          0.24   Decrease by 0.14
                                                                                                 percentage points
                                          Main business by products
                                                                   Increase
                                                                                     Increase
                                                                       or
                                                                                        or
                                                                   decrease
                                                                                     decrease       Increase or
                                                        Gross          of
                                                                                        of       decrease of gross
    Product     Operating income    Operating cost      profit    operating
                                                                                    operating     profit rate than
                                                      rate (%)      income
                                                                                    costs than   previous year (%)
                                                                      than
                                                                                     previous
                                                                   previous
                                                                                     year (%)
                                                                   year (%)
    PVC            596,604,070.66     852,377,334.66      -42.87        -52.51          -42.56    Decrease by 24.75
                                                                                                  percentage points
    Sodium       1,362,501,605.21     976,562,697.94            28.33       -0.75         -1.50   Increase by 0.55
    hydroxide                                                                                           percentage
                                                                                                           points
    Chlorine     2,618,478,421.73    2,226,579,157.57           14.97       15.43        16.72    Decrease by 0.94
    products                                                                                      percentage points
    Other        2,324,807,351.77    2,238,638,826.79            3.71       16.33        18.07     Decrease by 1.42
                                                                                                  percentage points
    Total        6,902,391,449.37    6,294,158,016.96            8.81        0.09          0.24    Decrease by 0.14
                                                                                                  percentage points(2) Main business divided by area
                                                                                                    Unit: RMB
                Area                      Operating income                  Increase or decrease of operating
                                                                             income than previous year (%)
    China                                         6,570,330,568.88                                         2.02
    Other countries                                 332,060,880.49                                      -27.16
                                                     16 / 74
                                              2014 年年度报告
    Total                                           6,902,391,449.37                                    0.093) Analysis on the assets and liabilities(1) Analysis on assets and liabilities
                                                                                                 Unit: RMB
                                                                      Ratio of
                                       Ratio                          closing    Chang
                                         of                           balance    e ratio
                                      closing          Closing           of        of
                        Closing
        Item                          balance        balance of       previou    closin          Remark
                        balance
                                      in total     previous period    s period      g
                                       assets                         in total   balanc
                                        (%)                            assets    e (%)
                                                                        (%)
                                                                                           Mainly caused by
                                                                                           the increase of the
                                                                                           balance of the
    Accounts
                    321,902,440.07          5.59   219,585,380.39        3.66     46.60    receivables from
    receivable
                                                                                           the customers in
                                                                                           the sales credit
                                                                                           period
                                                                                           Mainly caused by
                                                                                           the capital increase
                                                                                           of the affiliated
                                                                                           company
    Long-term                                                                               Huntsman and the
    equity           270,736,394.62          4.70   187,641,718.86        3.13     44.28    increase of the
    investment                                                                              return             on
                                                                                           investment         of
                                                                                           Huntsman
                                                                                           confirmed          in
                                                                                           current period
                                                                                           Mainly caused by
                                                                                           the increase of the
                                                                                           investment in the
    Construction
                    288,223,047.31          5.01   142,900,085.66        2.38    101.70    low     temperature
    in progress
                                                                                           ethylene      storage
                                                                                           and transportation
                                                                                           unit project
                                                                                           Special equipment
    Engineering                                                                             used      for     the
                      1,173,259.66          0.02     1,914,050.52        0.03    -38.70
    materials                                                                               construction       in
                                                                                           progress
                                                                                           New development
    Development
                     25,794,289.58          0.45     8,805,094.96        0.15    192.95    projects in current
    expenditure
                                                                                           period
                                                                                           Increase of
    Short-term
                    868,531,399.29      15.09      422,800,855.65        7.06    105.42    short-term loan in
    loan
                                                                                           current period
                                                                                           Mainly caused by
    Wages                                                                         2,859.
                     28,052,005.16          0.49       947,961.82        0.02              the increase of
    payable                                                                          19
                                                                                           dismissal welfare
                                                                                           Decrease of the
                                                                                           value added tax
    Tax payable       27,392,973.52          0.48    62,085,362.46        1.04    -55.88
                                                                                           unpaid in current
                                                                                           period
                                                    17 / 74
                                            2014 年年度报告
                                                                                       Government
    Deferred                                                                            subsidy of the
                      6,198,450.00       0.11        930,800.00        0.02   565.93
    income                                                                              R&D project in
                                                                                       current period4) Analysis on core competitive power(1) Profitability advantage of the integrated commercial mode
    The Company implemented the integrated commercial mode in the Chemical Park, adopt the pricing
    mechanism of "cost formula method" to offset the cost rising basically. While selling chlorine, it
    should also sell sodium hydroxide in certain ratio. It established a compensation mechanism for the
    risk in contract implementation to ensure a stable supply relation between the two parties. The
    integrated commercial mode enhanced the Company's ability in long-term stable existing and
    development and ensured the downstream customers to obtain the long-term and stable supply of
    reliable chlor-alkali products. This has really reflected the mutually beneficial and win-win status.
    At present, MDI and TDI are still under a high-speed growing stage with good prospect. Therefore,
    the Company will still have profitability advantage with its integration mode in the Chemical Park.(2) Comprehensive advantages of the international cooperative partners
    The Company's downstream partners are all the multinational enterprises with the history of more
    than 100 years and plentiful of technology resources. Based on the cooperation with the Company's
    industrial chain, such companies will further make technical cooperation with the Company,
    because the Company is of the condition for integrating fully the technology resources of all parties
    and can conduct the industrial upgrading. In 2014 the Company made investment in Shanghai
    Huntsman Polyurethane Co., Ltd.'s MDI refining expansion project with the annual capacity of
    240,000 tons and Shanghai Lianheng Isocyanic Ester Co., Ltd.'s coarse MDI expansion project with
    the annual capacity of 240,000 tons and HCL catalytic oxidation project with the annual capacity of
    120,000 tons. If in 2016 MDI industry enters the second booming cycle, the Company will also get
    the return on investment.(3) The Company has got initial success in new technology and new material
    The Company has completed the kiloton-level pilot plant test for producing chlorine gas with
    hydrogen chloride through catalytic oxidation and completed basically the compiling of the
    industrial process package with the capacity of 100,000 tons, setting sound basis for the Company's
    realizing new technology for chlorine production. Meanwhile, the Company has perfected the
    self-developed industrial process technique for chlorinated polyvinyl chloride resin and can provide
    technical support for the industrial process package design for chlorinated polyvinyl chloride with
    annual capacity of 40,000 tons. This provides full preparation for the Company to expedite further
    the development and research for the series products of chlorinated polyvinyl chloride resin.5) Analysis on investment(1) General analysis on equity investment
                                                                      Unit: RMB'0000
                                                     Beginning        Increase or    Increase or
    Item                         Closing balance
                                                     balance          decrease       decrease (%)
    Long-term equity
    investment                     27,073.64          18,764.17           8,309.47         44.28
    Salable financial assets       34,985.56          27,113.69           7,871.87         29.03
    Incl.: Measured as per
    fair value                     1,491.47           1,092.66            398.81           36.50
    Measured as per cost           33,494.09          26,021.03           7,473.06         28.72
    Analysis on reason for change of equity investment:
    1) Long-term equity investment increased by 44.28% than the same period of last year, and this is
    mainly caused by the Increase of the investment in the affiliated company Huntsman and the return
    on investment in Huntsman in current period.
    2) The salable financial assets measured as per fair value increased by 36.50% than the same period
    of last year, and this is mainly caused by the change of fair value in current period.
                                                  18 / 74
                                              2014 年年度报告
    3) The salable financial assets measured as per cost increased by 28.72% than the same period of
    last year, and this is mainly caused by the increase of the investment in Lianheng Company and
    Huayi Financial Company.
    Information of invested companies
                                                                                            Unit: RMB'0000
                                                                             Ratio in the
                                                Beginning         Closing
                                                                               equity of
       Name of the                              balance of      balance of
                            Business nature                                  the invested       Remark
    invested company                            investment      investment
                                                                               company
                                                   cost            cost
                                                                                 (%)
    Shanghai Huntsman                                                                        Long-term
                           Refine of MDI and
    Polyurethane Co.,                             14,598.89      18,256.08             30    equity
                           polymer
    Ltd.                                                                                     investment
    Shanghai Lianheng       Produce and sell
                                                                                            Salable financial
    Isocyanic Ester Co.,    the chemicals         13,996.15      18,559.21             15
                                                                                            assets
    Ltd.                    related to raw MDI
    Shanghai Huayi
                                                                                            Salable financial
    Tianyuan Chemical       Logistics              7,540.66        7,540.66         16.64
                                                                                            assets
    Logistics Co., Ltd.
    Shanghai Huayi
                           Financial                                                        Salable financial
    Group Finance Co.,                             3,000.00        6,000.00            10
                           company                                                          assets
    Ltd.
    Suzhou Tianyuan                                                                          Salable financial
                           Logistics                134.09         134.09           13.5
    Logistics Co., Ltd.                                                                      assets
    Beijing Yinzhao
                           Consultation for
    Information                                                                              Salable financial
                           information              164.61         164.61             16
    Technology Co.,                                                                          assets
                           technology
    Ltd.(a) Equity interest in other listed companies held
                                                                                             Unit: RMB
                                                                                 Change in
                                                                     Gain or
                                 Initial            Closing                        owner's                      Source
    Share                                                           loss in the                Accounting
              Share name       investment       balance of book                 equity during                      of
    code                                                              report                      subjects
                                  cost               value                        the report                     share
                                                                      period
                                                                                    period
                                                                                                 Salable        Legal
    600636         3F             360,000.00       7,320,772.80        32,392.80 1,000,397.64 financial          person
                                                                                                 assets          share
                                                                                                 Salable        Legal
              Double Coin
    600623                        690,000.00       2,076,360.00        15,444.00    598,026.00 financial         person
                Share
                                                                                                 assets          share
                S China                                                                          Salable        Legal
    600610       Textile         2,095,000.00      2,095,000.00                                   financial      person
               Machinery                                                                         assets          share
                                                                                                 Salable        Legal
              Shanghai
    600688                        900,000.00       1,948,500.00        22,500.00    891,225.00 financial         person
            Petrochemical
                                                                                                 assets          share
                                                                                                 Salable        Legal
    600637       BesTV             86,967.00       3,294,309.96        7,827.03      59,354.98 financial         person
                                                                                                 assets          share
                                                                                                 Salable        Legal
                Haitai
    600082                         20,000.00         274,800.00                      60,000.00 financial         person
             Development
                                                                                                 assets          share
                                                  19 / 74
                                                   2014 年年度报告
              Total                   4,151,967.00       17,009,742.76     78,163.83      2,609,003.62              /              /(b) Equity interest of non-listed financial firms held
                                                          Ratio in
                                                            this
                                                                   Closing balance     Profit and loss             Source
                      Initial investment                 company's                                      Accounting
    Name of the firm                          Shares held              of book value     during the report              of
                       amount (RMB)                        equity                                        subjects
                                                                       (RMB)           period (RMB)                 share
                                                          interest
                                                            (%)
    Shenyin &                                                                                              Salable           Legal
    Wanguo                                                                                                 financial         person
                          1,250,000.00       1,760,000                1,250,000.00        176,000.00
    Securities Co.,                                                                                        assets            shareLtd.
    Bank of Shanghai                                                                                       Salable           Legal
    Co., Ltd.                  150,000.00       1,049,302                7,307,758.85        230,846.44    financial         person
                                                                                                        assets            share
    Shanghai Huayi                                                                                                           Finan
    Group Finance                                                                                                            cial
                                                                                                        Salable
    Co., Ltd.                                                                                                                contri
                         60,000,000.00                           10   60,000,000.00       600,000.00    financial
                                                                                                                          butio
                                                                                                        assets
                                                                                                                          n in
                                                                                                                          cash
      Total              61,400,000.00       2,809,302       /        68,557,758.85      1,006,846.44        /               /(2) Utilization of the raised capital(a) Utilization of the raised fund□Applicable √Not applicable(b) Projects promised in the raised fund□Applicable √Not applicable(c) Change of the project with raised fund□Applicable √Not applicable(3) Analysis on main subsidiaries and joint-stock companies(a) Operation status of the controlled companies
                                                                                                  Unit: RMB'0000
                                                                               Registered        Assets
          Name of company                           Business nature                                       Net profit
                                                                                capital          scale
    Shanghai Dakai Plastic Co.,            Plastic membrane and its deep
    Ltd.                                   processing                            4,347.76       14,875.38           -845.49
    Shanghai Jinyuan Tap Water
    Co., Ltd.                              Tap water                                    900      1,394.08               190.70
                                           Maintenance and engineering
    Shanghai        Chlor-Alkali           construction of petrochemical
    Machinery Co., Ltd.                    devices                                    3,000      2,208.02               289.76
    Shanghai            Ruisheng
    Enterprises Co., Ltd.                  Trade                                        500      5,100.00               470.26
    Shanghai Luwei Plastics                Production for CPVC tubing
    Co., Ltd.                              and fittings                               5,000      3,471.57           -921.74
    Shanghai Tiantai Addition              Produce antistatic agent and
    Agent Co., Ltd.                        levelling agent                            3,300     21,489.71        1,563.79
    (b) Individual controlled subsidiaries with its net profit or its investment income's impact on the
       Company's net profit over 10%
                                                                                      Unit: RMB'0000
                                                         20 / 74
                                               2014 年年度报告
                                                                                                      Investment
                                      Main            Main             Main                             income
    Name of          Business
                                    product or       business         business         Net profit      from the
    company           nature
                                     service         income            profit                         joint stock
                                                                                                       company
    Shanghai
                   Production
    Tiantai
                   and sale of
    Addition                        Chemical           23,992.14         5,322.76         1,563.79         688.07
                   chemical
    Agent Co.,                      reagent and
                   products
    Ltd.                            additive
                                   Sales     of
    Shanghai                        chemical
    Ruisheng        Trade           raw material       28,786.44         1,225.93          470.26          470.26
    Enterprises                     and
    Co., Ltd.                       products
    Shanghai
    Chlor-Alkali                    Machine
                   Industry                           10,430.18         2,353.31          289.76          241.46
    Machinery                       manufacturi
    Co., Ltd.                       ng
    Shanghai
    Jinyuan Tap
                   Industry        Tap water             834.72          453.97           190.70          148.33
    Water Co.,
    Ltd.
    Shanghai        Production      Production
    Luwei           and sale of     for CPVC
                                                       1,414.60               -6.23       -921.74        -645.22
    Plastics Co.,   chemical        tubing and
    Ltd.            products        fittings
                   Production      Plastic
    Shanghai        and sale of     membrane
                                                       7,900.82          -126.15          -845.49        -760.94
    Dakai Plastic   chemical        and its deep
    Co., Ltd.       products        processing
    Shanghai        Production
                                   Refine   of
    Huntsman        and sale of
                                   MDI     and      371,743.57         29,725.52         15,507.61       4,652.28
    Polyurethane    chemical
                                   polymer
    Co., Ltd.       products(4) Projects with non-raised capital√Applicable □Not applicable
                                                                                               Unit: RMB'0000
                                                                 Investment Total actual
                              Project
       Project name                       Project progress        amount in investment              Project income
                              amount
                                                                 current year amount
    30000m3          low                   Civilwork
    temperature                            construction was
                                                                                               The project is under
    ethylene storage and          23,845   basically                  13,713           14,685
                                                                                               construction
    transportation unit                    completed in the
    project                                report period
    40,000      tons/year                  The DESign for                                       This is the preparing
    high performance                       the foundation                                       period      for   the
    chlorinated                   43,326   work was                    3,522            3,522   project, construction
    polyvinyl chloride                     completed in the                                     has not been started
    project                                report period                                        yet.
           Total                 67,171            /                 17,235           18,207              /
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                                             2014 年年度报告2. Discussion and analysis of the Board of Directors on future development of the Company1) Competition situation and development trend in the industry(1) The low carbon society is required to make energy-saving and emission reduction to get green low
    carbon
    For the chlor-alkali industry of energy resource intensive type, in addition to the need for
    optimization and upgrading of the product structure, we are required to implement the energy-saving
    and emission reduction for low carbon production promptly. Only by speeding up the elimination of
    the backward production capacity and adjustment of the structure and take a new way of
    industrialization, we then can meet the need for future development of the chemical industry and
    achieve the new economic growth point in green economy and low carbon economy.(2) Merger and reorganization and the park integration should be the development direction of the
    chlor-alkali industry
    Merger and reorganization is the only way for chlor-alkali industry to be mature, the most effective
    mean for enhancing the competitive power, and the basic condition for the scientific development of
    chlor-alkali industry. To make the reorganization of cross-regions and cross-industries and to realize
    the industrial layout optimization should be the development trend of the chlor-alkali industry. By
    adopting the mode of chemical park for the chlor-alkali industry, we can make reasonable use of
    energy source and resource, maximize the energy-saving and consumption reducing, reduce the cost,
    increase the added value of the products and the anti-risk ability of the enterprise, and realize the
    sustainable development through the recycling economy mode.(3) The R&D and use of new material is the important support for development of the national economy
    The development of chemical new material industry should be of important support role in all the
    fields, especially the high technique and top technique fields. The rapid development of big aircraft,
    new energy automobile, modern rail transit and new strategic industries makes high technical
    requirements and market demand. The six kinds of material, i.e. the engineering plastics, special
    rubber, high performance fibre, organic fluorine material, organic silicon material and biological
    degradable plastics, are the focus of development.2) Development strategy of the Company
    In 2014 the Company completed the first draft of five-year plan (2015 to 2019) and clarified the
    development goal of future 5 years: "going out from chlor-alkali, going out from Shanghai and going
    out from China", promote the Company's "innovation, upgrading and transformation" and realize the
    Company's new development. The Company plans to become the professional chlorine supplier with
    best competitive power in the world and the manufacturer of vinyl material and chlorine fine
    chemicals with high added value.
    In the period of 2015 to 2019 Shanghai Chemical Industry Park Caojing Base will continue to be the
    main battlefield for the Company's development. In order to optimize the layout, the Company will
    speed up the concentration of the advanced material projects to the main battlefield, focusing on the
    construction of the second-phase projects of CPVC (chlorinated polyvinyl chloride) unit with annual
    capacity of 40,000 tons, DEACON (chlorine gas manufactured with hydrogen chloride through
    catalytic oxidation) with annual capacity of 100,000 tons, 30,000 m3 low temperature ethylene tank
    and persulfate unit with annual capacity of 15,000 tons. It joined the investment for production
    expansion of the copartners in Chemical Park to share income from the investment. It keeps a stiff
    step in "going out" to promote the development in different cities and in the world and enhance the
    international competition capability.
    For achieving above goals, the Company will stabilize the production operation in Chemical Park,
    optimize the existing assets and speed up the work of "going out" mainly with following work.(1) Stabilize the production and sale to ensure the profit target
    Strengthen the risk control and provide HSE guarantee for the adjustment and development. It will
    continue to advocate the safety culture of "consciousness, sensitivity and realism", make the safety
    production changed from generally controlled situation to intrinsic safety, ensure the heavy running
    of Huasheng Factory and enhance the contract implementation rate. It will strengthen the facility
    management, strengthen the careful operation, further reduce the non-planned production halt, make
    overhaul for the units and ensure the electrolysis units running stably and with full load. It will
    strengthen the communication and coordination with downstream enterprises, use price strategy to
    enhance the contract implementation rate, and optimize the supply chain for Tianyuan Factory to
                                                 22 / 74
                                               2014 年年度报告
    revive the national brand. It will expand the profit space through cost reduction and price rising. It
    will reduce the power cost and evaluate the cost structure reasonably. It will research the
    combination between the local optimization and whole benefit in the integrated industrial chain,
    integrate the marketing resource and enhance the market competitive power. It will integrate the
    marketing resources at home and abroad, enhance the international marketing level for bulk
    materials and exploit the segment market for the differentiated products. It will optimize the market
    structure for alkali and acid to enhance the value. It will make full use of the existing channels,
    customers, brands and other resources to exploit actively the trade with big profit. It will reform the
    marketing mechanism and organize the sales company.(2) Optimize the existing assets to overcome the pressure of transformation
    Build a high performance organization. The Company will continue to promote the dismissal and
    placement of the employees, achieving the target of about 1200 employees in the Company. It will
    transfer the control center to Caojing Chemical Park. It will handle official business in Caojing
    Chemical Park, make use of the professional advantages to strengthen the vertical support and
    service for the branch factory's operation, coordination in the upstream and downstream companies
    and the project construction.It will rebuild the process to enhance the organizing competitive power.
    It will further integrate and optimize the function of the departments, improve and explore the
    production and operation system, focus on key business, optimize the personnel structure and quality
    to achieve simplicity and high efficiency, enhance the competitive power and control strictly the
    expense in the transformation period to demonstrate the results of adjustment. It will control and
    reduce the expense in the adjustment period for PVC factory, no longer having the expenditure for
    investment and overhaul. The organizational system for PVC factory will be kept until the CPVC
    project with the capacity of 40,000 tons in the Chemical Park is put into service. It will optimize the
    utilities for CPVC unit with the capacity of 10,000 tons, make full use of the supply mode with
    market principle, reduce the cost and enhance the competitive power. It will speed up the dismissal
    of employees and assets disposal in Wujing area to reduce various service charge as early as possible
    and remove the inventories. It will reduce the fund cost for the inventories, reduce the risk of price
    decline of the inventories and speed up the disposal of idle assets. It will strengthen the maintenance,
    prevent the damage and loss through technical prevention, personnel prevention and periodic review
    of the inventories. Through the information channels of network and industry, it will organize the
    assets disposal group to promote the disposal of inventories. It will adopt many ways such as making
    realization through dividing, physical financial contribution and going out to make flexible disposal.(3) Strive to win the future
    The Company will speed up the industrialization speed of the CPVC unit with the capacity of 40,000
    tons. In April 2015 the project started the construction and entered the overall construction phase.
    The project is planned to be put into service in June 2016. It will innovate the marketing mode, make
    full use of the local marketing resource of third parties, strive to exploit the markets in different areas
    and with different culture, and build the channels to expand the market share. The objective is at end
    of 2016 the clear powder, mixture material and products should be of the sales ability of 4 times the
    current production capacity. Meanwhile, it will speed up the pace of industrialization for high-end
    products such as the hybrid material and products to further enhance the market competitive power
    and consolidate the integrated chlorine making. It will make the negotiation for renewal of the
    contract for supply of pipe chlorine with the downstream enterprise, striving for the expanding of
    production volume of the downstream enterprises to increase the supply of chlorine, and make the
    negotiation for the commercial contract for salt water reclamation with Bayer to ensure the pipe
    chlorine and alkali business. It will promote the new technology for preparation of chlorine. The
    Deacon project with the capacity of 100,000 tons has entered the preparing phase, and in 2017 the
    project will achieve the industrialization. It will make cooperation with the downstream enterprises
    to make technical study on the electrolysis of salt water, "going out" firmly. It will expand the border
    for the regions, products and industries through the innovation of technology (such as the new
    technology for vinyl material and chlorine fine chemical products) and the innovation of commercial
    mode (such as merger and acquisition, investment, joint venture and integration). Meanwhile it will
    build the development platform, strengthen the building of professional team, decide the object for
    merger and acquisition or investment, collect the information on reorganization of international
    chemical companies, select the target enterprise, and make the research and negotiation for
    development in the world to achieve the target of "going out".
                                                    23 / 74
                                             2014 年年度报告3) Operating plan
      Income plan          Cost plan         Expense plan            New year's operating objective
                              RMB 6.6            RMB 0.8
    RMB 7.1 billion                                                        Gross profit of RMB 11 million
                                 billion            billion
    Strategy and action adopted for realizing the objective
    (1) The Company will speed up the implementation of the strategic layout in the Chemical Park to set
      a sound basis for sustainable development. The adjustment on the layout of the Chemical Park
      by the Company is an important measure for implementation of the reorganization of the
      industrial structure raised by the 12th five-year plan of national chemical industry, and is the
      overall adjustment and optimization made under the deep change in domestic industry. This shall
      be of significant meaning for making the Company's main business bigger, stronger and better
      and enhancing the Company's overall competitive power. Therefore, in 2015 the Company needs
      to grasp the chances to speed up the pace for concentration in the Chemical Park, mainly
      promoting firmly the construction of key projects and focusing on the construction schedule and
      engineering quality. It needs to speed up the construction for the project of ethylene tank in the
      Chemical Park, adopting effective measures for the project progress to ensure the project
      completed on schedule. While speeding up the progress of the CPVC project with annual capacity
      of 40,000 tons, the Company not only needs to continue to strengthen the promotion of CPVC
      new products in the market, but also needs to promote the R&D on CPVC hybrid material with
      every efforts. In this way this project will make the Company transferred from the traditional
      chemical industry to new material field. Meanwhile, it will continue to perfect the
      industrialization technical process for the project of chlorine gas manufactured by hydrogen
      chloride through catalytic oxidation, speeding up the pace of the industrialization of the project.
    (2) The Company will adapt to the new and normal status for transformation development and
      enhance the management efficiency and level. In the chance for the Company's strategic
      adjustment and under the prerequisite condition for ensuring the current organization structure
      and system stable, the management efficiency and level will be enhanced significantly. In 2015
      the Company needs to continue to make the work on dismissal of the employees. Aimed at the
      severe problem of disproportion of management personnel, the Company will strive to further
      streamline and optimize the personnel structure, and enhance the efficiency of the management
      personnel through streamlining the surplus personnel and keeping the core personnel. On the
      other hand it will continue to promote the utilization and disposal of the inefficient assets. It will
      research and decide the executive plan to dispose and reuse the stopped units or assets, strive to
      find the chance of transferring all the assets or making investment, such as selling the sodium
      hydroxide and the paste resin unit including the technique. Meanwhile it will tap the potential
      value of Caowu pipeline and Jinwu pipeline and try to transfer them to enhance the assets
      utilization ratio and optimize the assets structure.
    (3) Adhere to the development strategy of "going out" and grasp the chance for internationalization
      and globalization. The Company makes "going out " as its goal and the important driving force
      for its upgrading development in recent years. In 2015 the Company will further increase the pace
      of "going out" and promote the industrial adjustment aimed at global distribution. It will
      strengthen the ability of merger and acquisition, strive to find the projects in view of forward
      looking and systematicness, strengthen the research on the development trend of the business of
      merger and acquisition and the object of merger and acquisition, strengthen the professional
      capability for project valuation and risk evaluation, optimize the design for incentive and
      evaluation system, initiate the enthusiasm of the team, and boost the system flow for the project
      from decision-making to implementation. It will strengthen the research on the investment
      opportunities. It will make use of the chance of industrial integration to find the cost advantage
      area and build new development base through merger and acquisition. Based on the Company's
      positioning of advanced material, it will find the chemical products having high added value and
      good profitability and encouraged by national policy to enrich the Company's product chain and
      enhance the Company's whole profitability. It will continue to collect the information on relevant
      products and markets, trace the investment opportunity and technology source for merger and
      acquisition at home and abroad and strengthen the communication with the investment institution
      at home and abroad. Through hard work, it will make the Company "go out from chlor-alkali, go
                                                  24 / 74
                                              2014 年年度报告
      out from Shanghai and go out from China", boost the Company's "innovation, upgrading and
      transformation" and set solid basis for the Company's new development.4) Fund required for maintaining current business and completing the investment projects under
    construction
    Due to big investment and fund pressure in the 12th Five-year Plan, the Company will continue to
    keep good cooperative relationship with banks and other financial institutions to stabilize the
    financing channels with banks. It will change its acquisition strategy in operating activities, strive to
    compare cost to control cost strictly, reduce stocks and reduce tying-down of capital. It will
    strengthen the process control for accounts receivable, improve the rate of fund recovery and
    increase the cash flow in production and operation. Meanwhile, it will continue to strive for the fund
    support of its big shareholder Huayi Group and try to find other financing channel.5) Possible risks(1) Risk(a) The sodium hydroxide market at home and abroad is still in decline. The keen low cost competition
    in international market makes the price of sodium hydroxide is lower than domestic market. The
    downstream industries such as chemical fiber, paper making, printing and dyeing and aluminium
    oxide are in depression with weak demand. The price of sodium hydroxide is still very low. This will
    influence the profitability of the Company's leading product sodium hydroxide.(b) The situation in the market of downstream is severe. Since the second half-year of 2014 TDI has
    been in difficulty with heavy loss for its gross profit. In 2015 Wanhua's 300,000 tons of capacity of
    TDI will be put into service, and the market competition will be more drastic. The rapid expansion
    of MDI causes the profitability decreasing greatly, and this product has already in low profit range.
    The structural surplus of PC in domestic market makes the domestic industrial operating rate in
    recent 5 years is lower than 60%, and most of the manufacturer get loss. This will possibly make
    influence on the operating rate of Huasheng Factory and the return on investment of the Company in
    the enterprises in Chemical Park.(c) The difference between the net value of stock assets in Wujing Base and the realized value of assets
    has made significant influence on the economic efficiency of the Company.(2) Countermeasures(a) Further implement the strategies and actions (1-3) to be taken for achieving the objects in the
    operating plan.(b) Stop some units in Wujing base, strive to get the specific subsidy for reorganization of an industry
    and the subsidy due to the policy for energy saving and emission reduction offered by Shanghai
    government and make the transfer of stock assets to reduce the influence on the efficiency of current
    period to smallest level.3. The explanation of the Board of Directors on the Non-standard Auditor's Report by the public
    accounting firm1) The explanation of the Board of Directors and the Supervisory Committee on the Non-standard
    Auditor's Report by the public accounting firm□Applicable √Not applicable2) The analysis and explanation of the Board of Directors on the reason and influence of the
    changes in the accounting policy, accounting estimate or accounting method√Applicable □Not applicable
    In 2014 the Ministry of Finance amended the No. 2 Enterprise Accounting Standard--Long-term
    Equity Investment, No. 9 Enterprise Accounting Standard--Employee's Rewards, No. 30 Enterprise
    Accounting Standard--Presentation in the Financial Statements, No. 33 Enterprise Accounting
    Standard--Consolidated Financial Statement, No. 39 Enterprise Accounting Standard--Measuring of
    Fair Value, No. 40 Enterprise Accounting Standard--Arrangement of Joint Operation, No. 41
                                                   25 / 74
                                            2014 年年度报告
    Enterprise Accounting Standard--Disposure of Equities in Other Entities and other standards, and
    requested the listed companies to implement them since July 1, 2014.
    Based on the issuing and amending of above accounting standards, the Company has made related
    change for original accounting policies. After this change the accounting policies adopted by the
    Company are 8 enterprise accounting standards issued by the Ministry of Finance since January 26,
    2014, i.e., No. 2, No. 9, No. 30, No. 33, No. 37, No. 39, No. 40 and No. 41., and the Enterprise
    Accounting Standard--Basic Principle amended on July 23, 2014. See followings:(1) Particulars of the implementation of the No. 2 Enterprise Accounting Standard-- Long-term Equity
    Investment
    In accordance with the requirements of the Notice of the Ministry of Finance on Printing and Issuing
    Amendment, the Company reclassified the long-term equity investment with no control, with joint
    control or significant influence and with no offer in active market and with the fair value
    immeasurable into the accounting subject salable financial assets, and make retroactive adjustment.
    The change of this accounting policy only makes influence to two items in the financial statement,
    the salable financial assets and the long-term equity investment, but no any influence to the
    operating results and cash flow in 2013 and current period.(2) Particulars of the implementation of the No. 9 Enterprise Accounting Standard--Employee's Rewards
    In accordance with clause 31 of No. 9 Enterprise Accounting Standard--Employee's Rewards, the
    Company evaluated the arrangement of the employee's rewards and made the benefit plan, made
    acturial evaluation, and after the audit by BDO China Shu Lun Pan Certified Public Accountants
    LLP, adopted the retroactive adjustment to make relevant adjustment. The implementation of this
    accounting standard influences the Company's equity at beginning of 2014 (the owner's equity
    reduced by RMB 164,600,000.00), and makes the profit in 2014 increase by RMB 600,000.00. This
    does not make significant influence on the Company's profit or loss of current period.(3) Implementation of No. 30 Enterprise Accounting Standard--Presentation of the Financial Statements,
    No. 33 Enterprise Accounting Standard--Consolidated Financial Statements, No. 39 Enterprise
    Accounting Standard--Measurement of Fair Value, No. 40 Enterprise Accounting
    Standard--Arrangement of Joint Operation, and No. 41 Enterprise Accounting Standard--Disclosure
    of the Equity in Other Entities
    The employee's rewards, presentation of financial statements, consolidated financial statements,
    measurement of fair value, arrangement of joint operation and the equity in other entities in the
    financial statements before the change of the accounting policies have been calculated and disclosed
    according to above standards since July 1, 2014. The change of the accounting policies due to the
    implementation of the new standard should not make influence on the operating results and cash
    flow amount in 2013 and current year, so we need not to make retroactive adjustment.3) The analysis and explanation of the Board of Directors on the reason and influence of the
    correction for important previous mistakes□Applicable √Not applicable4. Proposal on profit distribution or on capital reserves transferred into share capital1) Formulating, executing or adjusting of the cash dividend distribution policy
    In 2012 the Company, based on relevant regulations of China Securities Regulatory Committee,
    Shanghai Securities Regulatory Bureau and Shanghai Stock Exchange, made amendment on the
    clauses of the Articles of Association related to the profit distribution, improved further relevant
    decision-making process and mechanism, and defined the policies such as the profit distribution form,
    actual conditions and ratio for cash dividends and the use of undistributed profit.
    During the report period, the Company, strictly in accordance with relevant provisions, implemented
    the decision-making process for profit distribution and executed the profit distribution plan.. The
    Company's 2013 profit distribution plan: Based on the Company's total share capital of 1,156,399,976
    shares on December 31, 2013, the Company shall distribute cash dividend of RMB 0.05 (tax included)
    for every 10 shares held to all the shareholders, totally distributing dividend of RMB 5,781,999.88.
    The undistributed profit shall be carried forward to the next year. The cash dividend to the holders of
    B share shall be paid in US dollars. This profit distribution plan was examined and passed by the
    Company's 2013 annual shareholders' meeting convened on May 7, 2014 and implemented on June
    19, 2014.
                                                 26 / 74
                                             2014 年年度报告5. Proposal on profit distribution or on capital reserves transferred into share capital(1) The plan or proposal for profit distribution and the plan or proposal for transfer of capital
    reserves into share capital in recent 3 years (including the report period)
                                                                                             Unit: RMB
                              Dividend                                                      Ratio in the net
                   Bonus      for every Increased                            Net profit
                                                                                                  profit
    The year    shares for 10 shares       shares      Amount of          attributable to
                                                                                             attributable to
                                                                        shareholders of the
         for      every 10       held      for every cash dividend        Company in the
                                                                                            shareholders of
    distribution   shares      (RMB)       10 shares (tax included)                          the Company
                                                                            consolidated
                    held         (tax        held                                           in consolidated
                                                                             statements
                                                                                            statements (%)
                              included)
    2014                  0            0           0               0     -592,502,499.95                    0
    2013                  0         0.05           0    5,781,999.88        16,623,782.76             34.78
    2012                  0            0           0               0      102,542,136.82                    06. The work on fulfillment of social responsibility1) The work on social responsibility
    The Company performed its social responsibility actively and declared its social responsibility report
    of 2014. The full text of the report was carried in the website of Shanghai Stock Exchange at the same
    day: www.sse.comc.cn。
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                                              2014 年年度报告
                                        5. Major Events1. Significant lawsuits, arbitrations and events generally questioned by the media□Applicable √Not applicable2. Occupation of funds and the liquidation during the report period□Applicable √Not applicable3. Transaction of assets and business merger□Applicable √Not applicable4. Equity incentive of the Company and the influences□Applicable √Not applicable5. Significant related transactions√Applicable □Not applicable1) Related transactions in routine operation(1) The events disclosed in provisional announcement and having no progress or change
                          Description of event                                    Index
    Based on the principle of fairness and reasonableness, mutual
    advantage and mutual benefit and voluntaries and good faith, the
    Company, Shanghai Huayi (Group) Company and Shanghai Huayi
                                                                     China Securities News, Shanghai
    Group Finance Co., Ltd. signed a frame agreement on finance
                                                                     Securities News, Securities Post
    service of 3 parties, through which Shanghai Huayi (Group)
                                                                     and Hong Kong Commercial
    Company shall make use of the self advantage for short-term
                                                                     Daily on May 29, 2012 and the
    financing and bond issuing and Shanghai Huayi Group Finance
                                                                     website of Shanghai Stock
    Co., Ltd. shall provide the Company with finance service as a
                                                                     Exchange: www.sse.com.cn
    non-banking financial institution to meet the Company's
    requirements for reducing financing cost in developing its
    business. The valid period of the agreement is 3 years.
    For many years the Company has always provided Shanghai China Securities News, Shanghai
    Tianyuan Group Shengde Plastic Co., Ltd. with SPVC special Securities News, Securities Post
    material needed by production. In order to reduce the influence of and Hong Kong Commercial
    the Company's adjustment for Wujing Base on Shanghai Tianyuan Daily and the website of
    Group Shengde Plastic Co., Ltd., the Company singned an Shanghai                Stock   Exchange:
    agreement for customized 10000 tons SPVC special material with www.sse.com.cn on October 9,
    Shanghai Tianyuan Group Shengde Plastic Co., Ltd.                  2014.(1) Events not disclosed in provisional announcement
                                                                                             Unit: RMB'0000
                                                                                                   Ratio in total
                                                                     Pricing
                                      Type of       Content of                     Amount of        amount of
        Related        Related                                     principle of
                                       related        related                         related      transactions
    transaction party   relation                                       related
                                    transaction     transaction                    transaction      with same
                                                                   transaction
                                                                                                     type (%)
                      Controlled                                  Settled as per
    Shanghai Wujing
                      subsidiary   Purchase          Material     agreed price
    Chemical       Co.,                                                                    763.24              0.11
                      of parent    goods             purchase
    Ltd.
                      company
    Shanghai Huayi Controlled                                       Settled as per
                                   Purchase          Material
    Energy Chemical subsidiary                                      agreed price           906.04              0.13
                                   goods             purchase
    Co., Ltd. (original of parent
                                                  28 / 74
                                           2014 年年度报告name Shanghai companyCarbonizationCo., Ltd.)
    Shanghai Huayi                                               Settled as per
                   Controlled
    Tianyuan                                                     agreed price
                   subsidiary   Purchase          Material
    Chemical                                                                        84.50    0.01
                   of parent    goods             purchase
    Logistics     Co.,
                   companyLtd.
    Shanghai                                                     Settled as per
                   Controlled
    Xintianyuan                                                  agreed price
                   subsidiary   Purchase          Material
    Chemical                                                                       154.44    0.02
                   of parent    goods             purchase
    Transport     Co.,
                   companyLtd.
                   Wholly                                    Settled as per
    Shanghai           owned                                     agreed price
                                Purchase          Material
    Chlor-Alkali       subsidiary                                                  612.92    0.09
                                goods             purchaseCreation Co., Ltd. of parent
                   company
                   Wholly                                    Settled as perShanghai Huayi
                   owned                                     agreed price
    Group Equipment                 Purchase          Material
                   subsidiary                                                  167.50    0.02
    Engineering Co.,                goods             purchase
                   of parentLtd.
                   company
                   Wholly                                    Settled as perShanghai
                   owned                                     agreed price
    Chemical Supply                 Purchase          Material
                   subsidiary                                                   21.63    0.00
    and     Marketing               goods             purchase
                   of parentCo., Ltd.
                   company
                   Wholly                                    Settled as perShanghai Huayi
                   owned                                     agreed price
    New        Energy               Purchase          Material
                   subsidiary                                                 1,197.63   0.17
    Chemical Sales                  goods             purchase
                   of parentCo., Ltd.
                   company
    Shanghai Huayi Controlled                                    Settled as per
    Information        subsidiary   Purchase          Material   agreed price
                                                                               116.33    0.02
    Technology Co., of parent       goods             purchase
    Ltd.               company
                   Wholly                                    Settled as perShanghai Huayi
                   owned                                     agreed price
    Group Huayuan                   Purchase          Material
                   subsidiary                                                   18.07    0.00
    Chemical      Co.,              goods             purchase
                   of parentLtd.
                   company
                   Wholly                                    Settled as per
                   owned                                     agreed price
    Shanghai Huayi                  Purchase          Material
                   subsidiary                                                 1,164.06   0.16
    Trade Co., Ltd.                 goods             purchase
                   of parent
                   company
                   Controlled                                Settled as perShanghai White
                   subsidiary   Purchase          Material   agreed price
    Elephant & Swan                                                                  0.58    0.00
                   of parent    goods             purchaseBattery Co., Ltd.
                   company
    Shanghai           Controlled                                Settled as per
                                Accept            Accept
    Zhongyuan          subsidiary                                agreed price
                                labour            labour                        20.00    0.00
    Chemical      Co., of parent
                                service           service
    Ltd.               company
    Shanghai Chemical                                            Settled as per
    Industry Inspection Wholly      Accept            Accept                       343.92    0.05
                                               29 / 74
                                                2014 年年度报告
    & Detection Co.,         owned        labour           labour     agreed price
    Ltd.         (original   subsidiary   service          serviceShanghai Chemical
                         of parent
    Industry     Pressure
    Vessel     Inspection    companyCo., Ltd.)
    Shanghai Huayi                                                    Settled as per
                    Controlled
    Tianyuan                              Accept           Accept     agreed price
                    subsidiary
    Chemical                              labour           labour                       3,689.25   0.51
                    of parent
    Logistics      Co.,                   service          service
                    companyLtd.
    Shanghai                                                          Settled as per
                    Controlled
    Xintianyuan                           Accept           Accept     agreed price
                    subsidiary
    Chemical                              labour           labour                        298.66    0.04
                    of parent
    Transport      Co.,                   service          service
                    companyLtd.
                    Wholly                                        Settled as per
    Shanghai            owned             Accept           Accept     agreed price
    Chlor-Alkali        subsidiary        labour           labour                       2,839.41   0.39
    Creation Co., Ltd. of parent          service          service
                    company
                    Wholly                                        Settled as per
    Shanghai Huayi owned                  Accept           Accept     agreed price
    Engineering Co., subsidiary           labour           labour                      13,650.12   1.90
    Ltd.                of parent         service          service
                    company
    Shanghai Huayi Controlled                                         Settled as per
                                      Accept           Accept
    Information         subsidiary                                    agreed price
                                      labour           labour                        361.94    0.05Technology Co., of parent
                                      service          service
    Ltd.                company
                    Controlled                                    Settled as per
    Shanghai       Dye                    Accept           Accept
                    subsidiary                                    agreed price
    Research Institute                    labour           labour                           0.18   0.00
                    of parent
    Co., Ltd.                             service          service
                    company
    Shanghai Huayi                                                    Settled as per
    Energy Chemical Controlled                                        agreed price
    Co., Ltd. (original subsidiary        Sell
                                                  Product sale                       425.43    0.07
    name Shanghai of parent               commodities
    Carbonization       companyCo., Ltd.)
                    Wholly                                        Settled as perShanghai Huayi
                    owned                                         agreed price
    Group Huayuan                         Sell
                    subsidiary                    Product sale                        85.37    0.01
    Chemical       Co.,                   commodities
                    of parentLtd.
                    company
                    Controlled                                    Settled as perShanghai 3F New
                    subsidiary        Sell                        agreed price
    Materials      Co.,                               Product sale                      3,484.56   0.53
                    of parent         commoditiesLtd.
                    company
    Shanghai Huayi                                                    Settled as per
                    Controlled
    Tianyuan                                                          agreed price
                    subsidiary        Sell
    Chemical                                          Product sale                       294.60    0.05
                    of parent         commodities
    Logistics      Co.,
                    companyLtd.
    Shanghai            Wholly                                     Settled as per
                                      Sell
    Chlor-Alkali        owned                         Product sale agreed price           63.24    0.01
                                      commoditiesCreation Co., Ltd. subsidiary
                                                    30 / 74
                                         2014 年年度报告
                    of parent
                    company
                    Wholly                                   Settled as perShanghai
                    owned                                    agreed price
    Tianyuan Group                   Sell
                    subsidiary               Product sale                     4,687.62   0.73
    Shengde Plastic                  commodities
                    of parentCo., Ltd.
                    company
                    Wholly                                   Settled as per
                    owned                                    agreed price
    Shanghai Resin                   Sell
                    subsidiary               Product sale                       37.79    0.01
    Factory Co., Ltd.                commodities
                    of parent
                    company
                    Controlled                            Settled as perShanghai Huayi
                    subsidiary   Sell                     agreed price
    Acrylic Acid Co.,                            Product sale                      296.08    0.05
                    of parent    commoditiesLtd.
                    company
                    Wholly                                   Settled as perShanghai
                    owned                                    agreed price
    Chemical Supply                  Sell
                    subsidiary               Product sale                      316.63    0.05
    and     Marketing                commodities
                    of parentCo., Ltd.
                    company
                    Controlled                            Settled as perShanghai Peony
                    subsidiary   Sell                     agreed price
    Printing Ink Co.,                            Product sale                       12.34    0.00
                    of parent    commoditiesLtd.
                    company
    Shanghai                                                  Settled as per
    Huntsman            Affiliated   Sell                     agreed price
                                             Product sale                      295.20    0.05
    Polyurethane Co., company        commoditiesLtd.
                    Wholly                                   Settled as per
                    owned                                    agreed price
    Shanghai Sanaisi                 Sell
                    subsidiary               Product sale                        1.49    0.00
    Reagent Co., Ltd.                commodities
                    of parent
                    company
                    Controlled                            Settled as per
    Shanghai Yiping subsidiary       Sell                     agreed price
                                             Product sale                       22.50    0.00
    Pigment Co., Ltd. of parent      commodities
                    company
    Shanghai Huayi                                               Settled as per
    Energy Chemical Controlled                                   agreed price
    Co., Ltd. (original subsidiary   Rendering of Rendering of
                                                                               132.36    0.02
    name Shanghai of parent          service        service
    Carbonization       companyCo., Ltd.)
    Shanghai Huayi                                               Settled as per
                    Controlled
    Tianyuan                                                     agreed price
                    subsidiary   Rendering of Rendering of
    Chemical                                                                       317.77    0.05
                    of parent    service        service
    Logistics      Co.,
                    companyLtd.
                    Wholly                                   Settled as per
    Shanghai Huayi owned                                         agreed price
                                 Rendering of Rendering of
    Engineering Co., subsidiary                                                     32.50    0.01
                                 service        service
    Ltd.                of parent
                    company
    Shanghai Huayi Wholly            Rendering of Rendering of Settled as per
                                                                               110.36    0.02
    Polymer Co., Ltd. owned          service        service    agreed price
                                              31 / 74
                                            2014 年年度报告
                     subsidiary
                     of parent
                     company
    Shanghai                                                       Settled as per
    Huntsman            Affiliated Rendering of Rendering of agreed price
                                                                                         5.44          0.00
    Polyurethane Co., company          service         service
    Ltd.
                      Controlled                                 Settled as per
    Shanghai 3F New
                      subsidiary Rendering of Rendering of agreed price
    Materials      Co.,                                                                    8.55          0.00
                      of parent      service         service
    Ltd.
                      company
                                Total                                   /          37,040.25           5.33
    Particulars for return sales of big quantity
    The necessity and The transaction between the Company and related parties, is that the Company pays
    persistence of the expenditure for service and trusteeship business, for purchase of raw material, sales
    related transaction, of product and other recurring business operations and for stripping non-recurring
    the reason for select assets and non-central business. Such transactions are the necessary supplement for
    the related party the coordination based on specialization and mutual transfer of predominance
    (not other party in between the Company and its controlling shareholder and part of subordinate
    the market) to make enterprises, and they will continue to exist.
    transaction
    The influence of the This makes no impacts on the Company's independence.
    related transaction
    on the Company's
    independence.2) Related transactions due to purchase and sale of assets(1) The events disclosed in provisional announcement and having subsequent implementation
    progress or change
    On November 23, 2013 the Company convened the 7th meeting of 8th Board of Directors, which
    examined and passed the Motion on the Related Transaction for Purchase of the Construction in
    Progress of D4-2 Land Lot of Shanghai Paint Co., Ltd. As evaluated by Shanghai Dongzhou Assets
    Appraisal Co., Ltd., this asset shoud have the book value of RMB 141,910,000 and evaluated value
    of RMB 108,420,000. On May 28, 2014, the Company signed a transfer agreement with Shanghai
    Paint Co., Ltd. in the evaluated price of RMB 108,420,000 and completed the assets transfer on
    November 11, 2014, when the Company got the Shanghai real estate warrants for this land lot. On
    February 13, 2015 the Company completed the transfer procedure with Shanghai Paint Co., Ltd.3) Significant related transactions for joint investment(1) The events disclosed in provisional announcement and having subsequent implementation
    progress or change
    On November 23, 2013 the Company convened the 7th meeting of 8th Board of Directors, which
    examined and passed the Motion on the Related Transaction for Joint Capital Increase with the
    Related Party in Shanghai Huayi Group Finance Co., Ltd. The motion agreed that Shanghai Huayi
    Group Finance Co., Ltd. increased the registered capital by RMB 0.3 billion, and the shareholders
    shall make the capital increase with cash in the share holding ratio. The Company shall make capital
    increase of RMB 30,000,000 according to its shareholding ratio. On March 19, 2014, the Company
    made financial contribution of RMB 30,000,000 to complete this capital increase.4) Related creditor's rights and debts(1) Events not disclosed in provisional announcement
                                                                                       Unit: RMB'0000
                       Related                                         Related parties provide fund to the
    Related party                   Provide fund to related parties
                       relation                                                 listed Company
                                                32 / 74
                                             2014 年年度报告
                                     Beginning                 Closing    Beginning            Closing
                                                 Amount                             Amount
                                      balance                  balance     balance             balance
                WhollyShanghai
                ownedTianyuan Group
                subsidiary              804.04    1,396.29     2,200.33Shengde Plastic
                of    parentCo., Ltd.
                company
    Shanghai      Huayi
    Energy     Chemical   Controlled
    Co., Ltd. (original   subsidiary
    name       Shanghai                     120.61      120.95       241.56
                      of    parent
    Carbonization Co.,    companyLtd.)
                   ControlledShanghai 3F New
                   subsidiary
    Materials     Co.,                       12.14       22.70        34.84
                   of     parentLtd.
                   company
                   WhollyShanghai Huayi owned
    Engineering Co., subsidiary           6,645.42    -3,691.22    2,954.20        1.51    15.01       16.52
    Ltd.               of     parent
                   companyShanghai
    Huntsman           Affiliated
                                         12.78       -12.78        0.00Polyurethane Co., companyLtd.
                   ControlledShanghai Peony
                   subsidiary
    Printing Ink Co.,                         0.44         1.42        1.86
                   of     parentLtd.
                   companyShanghai Huayi
                   ControlledTianyuan
                   subsidiary
    Chemical                                  0.45       41.91        42.36        0.00   111.89      111.89
                   of     parent
    Logistics     Co.,
                   companyLtd.
                   Wholly
                   ownedShanghai Resin
                   subsidiary             2.29         4.58        6.87Factory Co., Ltd.
                   of     parent
                   company
                   Wholly
                   ownedShanghai Paint
                   subsidiary             0.47         0.00        0.47Co., Ltd.
                   of     parent
                   company
                   WhollyShanghai
                   ownedChlor-Alkali
                   subsidiary             0.00       17.37        17.37        6.69    78.47       85.16
    Creation      Co.,
                   of     parentLtd.
                   company
                   Controlled
    Shanghai      Dye subsidiary
                                          0.00       37.62        37.62
    chemical plant     of     parent
                   company
                   Controlled
    Shanghai     Soap
                   subsidiary             0.00       33.35        33.35Co., Ltd.
                   of     parent
                                                 33 / 74
                                          2014 年年度报告
                  company
                  Wholly
                  ownedShanghai Huayi
                  subsidiary            0.00       76.43    76.43Polymer Co., Ltd.
                  of    parent
                  company
                  ControlledShanghai Huayi
                  subsidiary
    Acrylic Acid Co.,                       0.00       54.53    54.53
                  of    parentLtd.
                  company
                  WhollyShanghai Huayi
                  owned
    New       Energy
                  subsidiary            0.03         0.06    0.09Chemical Sales
                  of    parentCo., Ltd.
                  companyShanghai Chemical
    Industry Inspection      Wholly
    & Detection Co.,         owned
    Ltd.         (original
    Shanghai Chemical        subsidiary                  0.00               10.52    -2.68       7.84
    Industry     Pressure    of    parent
    Vessel     Inspection    companyCo., Ltd.)Shanghai
                   ControlledXintianyuan
                   subsidiary
    Chemical                                                                  0.96   24.41      25.37
                   of    parent
    Transport     Co.,
                   companyLtd.Shanghai Huayi Controlled
    Information        subsidiary
                                                                          0.00    9.91       9.91
    Technology Co., of       parent
    Ltd.               company
                   WhollyShanghai
                   ownedChemical Supply
                   subsidiary                                           25.30    -0.18      25.12
    and     Marketing
                   of    parentCo., Ltd.
                   company
                   Controlled
    Shanghai     Soap subsidiary
                                                     0.00                 0.00    0.54       0.54
    Co., Ltd.          of    parent
                   company
                   ControlledShanghai White
                   subsidiary
    Elephant & Swan                                      0.00                 0.00    0.06       0.06
                   of    parentBattery Co., Ltd.
                   companyShanghai Huayi
                   Controlling
    (Group)                                                             157,661.84    4.40 157,666.24
                   shareholderCompanyShanghai Huayi
                   ControlledGroup
                   subsidiary
    Construction                                                              2.85   -2.85       0.00
                   of    parentCost Consultation
                   companyCo., Ltd.Shanghai Shenyu Controlled
    Medicine           subsidiary
                                                                          0.00    0.02       0.02
    Chemical      Co., of    parent
    Ltd.               company
                                               34 / 74
                                                2014 年年度报告
                     Wholly
    Shanghai           owned
    Huifeng     Resin subsidiary                                                  0.00      5.14         5.14
    Factory            of     parent
                     company
    Shanghai Huayi Controlled
    Group Huayuan subsidiary
                                                                                0.00      2.61         2.61
    Chemical      Co., of     parent
    Ltd.               company
                     Controlled
    Shanghai Sanaisi subsidiary
                                                                                0.00      0.08         0.08
    Reagent Co., Ltd. of      parent
                     company
                     Controlled
    Shanghai Peony
                     subsidiary
    Printing Ink Co.,                                                             0.00      0.14         0.14
                     of     parent
    Ltd.
                     company
                     Controlled
    Shanghai      Dye
                     subsidiary
    Chemical Sales                                                                0.00      0.03         0.03
                     of     parent
    Co., Ltd.
                     company
    Shanghai Huayi
                     Affiliated
    Group     Finance                                                             0.00     51.02        51.02
                     company
    Co., Ltd.
               Total                  7,598.67     -1,896.79 5,701.88 157,709.67 298.02 158,007.69
    During the report period the amount of the fund supplied by the
                                                                                             -18,967,900.00
    Company to its controlling shareholder and subsidiaries (RMB)
    Balance of the fund supplied by the Company to its controlling
                                                                                              57,018,800.00
    shareholder and subsidiaries (RMB)
    Reason for related creditor's rights and debts            Formed from purchase and sale in regular
                                                            production operation
    Impacts of related creditor's rights and debts to the     No influence on the Company's operating
    Company's operation results and financial status          results and financial status6. Important contracts and the implementation1) Trusteeship, contracting and leasing√Applicable □Not applicable(1) Leasehold
                                                                                                   Unit: RMB'0000
                                                                                        Basis for
                                   Amount                                               deciding
                                               Beginning                     Income                 Related
                           Leased related to                   End date of                 the                Related
    Lessor       Lessee                          date of                        on                 transaction
                           assets   leased                       leasing                 income               relation
                                                leasing                      leasing                 or not
                                     asset                                                 on
                                                                                         leasing
    Shanghai      Shanghai
    Chlor-Alkali  Huayi                                                                    Settled              Controlled
    Chemical      Tianyuan    Fixed                                                        as per               subsidiary
                                    5,882.25   2014-01-01      2014-12-31    1,049.40                Yes
    Co., Ltd.     Chemical    assets                                                       agreed                of parent
               Logistics                                                                price                 company
               Co., Ltd.
    Shanghai      Shanghai
                                                                                                               Wholly
    Chlor-Alkali Tianyuan                                                                  Settled
                                                                                                               owned
    Chemical Co., Group       Fixed                                                        as per
                                     713.54    2014-01-01      2014-12-31     900.00                 Yes     subsidiary
    Ltd.          Shengde     assets                                                       agreed
                                                                                                              of parent
               Plastic                                                                  price
                                                                                                              company
               Co., Ltd.
                                                     35 / 74
                                               2014 年年度报告(2) Particulars of guarantee□Applicable √Not applicable7. Engaging and dismissing of the public accounting firm
                                                                                               Unit: RMB'0000
    Whether change public accounting firm or not:          No
                                                                   Now engage
    Name of the domestic public accounting firm       BDO China Shu Lun Pan Certified Public
                                                   Accountants LLP
    Reward to the domestic public accounting firm                                        88
    Service age of domestic public accounting firm    4
                                                     Name                     Reward
    Accounting firm for internal BDO China Shu Lun Pan Certified                        35.2
    control                             Public Accountants LLP8. The influence of the implementation of new accounting standards on the consolidated financial
    statements
    In accordance with the No. 2 Enterprise Accounting Standard--Long-term Equity Investment, No. 9
    Enterprise Accounting Standard--Employee's Rewards, No. 30 Enterprise Accounting
    Standard--Presentation of Financial Statements and No. 33 Enterprise Accounting
    Standard--Consolidated Financial Statements amended by the Ministry of Finance and the No. 39
    Enterprise Accounting Standard--Measurement of Fair Value, No. 40 Enterprise Accounting
    Standard--Arrangement of Joint Operation and No. 41 Enterprise Accounting Standard--Disclosure of
    the Equity in Other Entities issued by the Ministry of Finance, the Company has made amendment on
    original accounting policies. After this change the accounting policies adopted by the Company are 8
    enterprise accounting standards issued by the Ministry of Finance since January 26, 2014, i.e., No. 2,
    No. 9, No. 30, No. 33, No. 37, No. 39, No. 40 and No. 41., and the Enterprise Accounting
    Standard--Basic Principle amended on July 23, 2014. Among them, the implementation of the No. 2
    Enterprise Accounting Standard--Long-term equity investment, No. 30 Enterprise Accounting
    Standard--Presentation of the Financial Statements, No. 33 Enterprise Accounting
    Standard--Consolidated Financial Statements, No. 39 Enterprise Accounting Standard--Measurement
    of Fair Value, No. 40 Enterprise Accounting Standard--Arrangement of Joint Operation and No. 41
    Enterprise Accounting Standard--Disclosure of the Equity in Other Entities makes no influence on the
    operating results and cash flow amount in 2013 and current year, so the Company needs not to make
    retroactive adjustment. For implementation of No. 9 Enterprise Accounting Standard--Employee's
    Rewards, the Company makes relevant adjustment through retroactive adjustment method. The
    implementation influences the Company's equity at beginning of 2014 (the owner's equity reduced by
    RMB 164,600,000.00), and makes the profit in 2014 increase by RMB 600,000.00. This does not
    make significant influence on the Company's profit or loss of current period.1) The influence of the change of the standard for long-term equity investment on the consolidated
    financial statements (1)
                                                                                        Unit: RMB
                                             Shareholders'                       December 31, 2013
                                                 equity
                                             attributed to                                              Shareholders'
                Invested unit                    parent                            Salable financial        equity
                                                              Long-term equity
                                             company on                                                 attrubuted to
                                                              investment (+/-)       assets (+/-)
                                              January 1,                                               parent company
                                              2013 (+/-)                                                     (+/-)
    China Textile Machinery Co., Ltd.                             -2,095,000.00         2,095,000.00
    China    Petro    Chemical     Shanghai                         -900,000.00           900,000.00
    Petrochemical Co., Ltd.
    Shanghai Lianheng Isocyanic Ester Co.,                      -139,961,549.50      139,961,549.50
    Ltd.
                                                    36 / 74
                                             2014 年年度报告
    Suzhou Tianyuan Logistics Co., Ltd.                          -1,340,890.20     1,340,890.20
    Beijing Yinzhao Information Technology                       -1,646,060.19     1,646,060.19
    Co., Ltd.
    Shanghai Huayi Tianyuan Chemical                            -75,406,591.18    75,406,591.18
    Logistics Co., Ltd.
    Shanghai Huayi Group Finance Co., Ltd.                   -30,000,000.00       30,000,000.00
    Shenyin & Wanguo Securities Co., Ltd.                     -1,250,000.00        1,250,000.00
    Shanghai Baoding Investment Co., Ltd.                        -62,500.00           62,500.00
    Tianjin Tiannu Chemical Group Co., Ltd.                     -239,957.55          239,957.55
    Bank of Shanghai Co., Ltd.                                -7,307,758.85        7,307,758.85
                     Total                                 -260,210,307.47      260,210,307.472) The influence of the change of the standard for employee's rewards
                                                                                          Unit: RMB
    Long-term wages payable on January 1, 2014           Shareholders' equity attributed to parent
                        (+/-)                              company on January 1, 2014 (+/-)
                                     164,600,000                                         164,600,000
    Note on the influence of the change of the standard for employee's rewards
    The change of the standard for employee's rewards makes the Company's shareholders' equity at
    beginning of 2014 decrease by RMB 164,600,000.00.9. Description on other significant events□Applicable √Not applicable
                                                 37 / 74
                                           2014 年年度报告
         6. Changes of Share Capital and Particulars of Shareholders1. Change of share capital1) Table of change of share capital(1) Table of change of share capital
    During the report period the Company did not have any change in the total number of shares and the
    structure of the share capital.2. Issuing and listing of securities1) Changes in the total number of the Company's shares, the structure of the Company's
    shareholders and the structure of the Company's assets and liabilities
    During the report period there was no change of total number and structure of the Company's shares
    caused by bonus share, rationed share or other reason.3. Information of the shareholders and the actual controller1) Number of shareholders:
    Number of shareholders at end of the report period                                        98,752
    Number of shareholders at end of the fifth trading day before the                         92,187
    disclosing date for annual report2) Top 10 shareholders and top 10 holders of tradable share (or the shareholders with no limited
    sales condition) at end of the report period:
                                                                                           Unit: Share
                                              Top 10 shareholders
                                                                     Shares     Pledged or
                                  Increase or                         with         frozen
                                                  Closing
                                  decrease in               Ratio limited                         Nature of
    Name of shareholder (in full)               balance of                    Status
                                   the report                (%)      sales           Quantit shareholder
                                                shares held                     of
                                     period                        conditions            y
                                                                              share
                                                                      held
    Shanghai Huayi (Group)
                                            0 581,592,347 50.29             0 None        0      State-owned
    Company
    SCBHK A/C BBH S/A
    VANGUARD EMERGING                                                                               Overseas
                                            0     8,649,032   0.75          0 None        0
    MARKETS STOCK INDEX                                                                           legal person
    FUND
    GUOTAI JUNAN
                                                                                                   Overseas
    SECURITIES(HONGKONG) 2,429,028                 3,044,228   0.26          0 None        0
                                                                                                 legal person
    LIMITED
                                                                                                 State-owned
    Bank of China Wuxi Branch                0     2,605,981   0.23          0 None        0
                                                                                                 legal person
    VANGUARD TOTAL
                                                                                                   Overseas
    INTERNATIONAL STOCK               695,600      2,535,800   0.22          0   无        0
                                                                                                 legal person
    INDEX FUND
    Customer credit trading
    guarantee securities account
                                   1,630,786      1,843,401   0.16            None                   Other
    of Hongyuan Securities Co.,
    Ltd.
                                                                                                   Overseas
    Fang Jianwei                    1,719,476      1,719,476   0.15          0 None        0         natural
                                                                                                    person
                                                38 / 74
                                            2014 年年度报告
    Customer credit trading
    guarantee securities account
                                  1,382,962      1,502,864     0.13              None                 Other
    of Haitong Securities Co.,
    Ltd.
                                                                                                    Domestic
    Chen Cailin                              0     1,399,248     0.12          0   None      0         natural
                                                                                                     person
    CB LONDON A/C LEGAL
    AND GENERAL                                                                                        Overseas
                                    100,000      1,200,450     0.10          0   None      0
    ASSURANCE (PENSIONS                                                                              legal person
    MANAGEMENT) LTD
                               Top 10 shareholders with no limited sales condition
                                               Number of tradable              Type and number of share
                                                 shares with no
              Name of shareholder
                                                  limited sales                Type               Quantity
                                                 condition held
    Shanghai Huayi (Group) Company                                         Renminbi ordinary
                                                      581,592,347                                  581,592,347
                                                                                        share
    SCBHK A/C BBH S/A VANGUARD
                                                                             Domestic listed
    EMERGING MARKETS STOCK                                 8,649,032                                    8,649,032
                                                                        foreign capital share
    INDEX FUND
    GUOTAI JUNAN                                                               Domestic listed
                                                         3,044,228                                    3,044,228
    SECURITIES(HONGKONG) LIMITED                                          foreign capital share
    Bank of China Wuxi Branch                                              Renminbi ordinary
                                                         2,605,981                                    2,605,981
                                                                                        share
    VANGUARD TOTAL
                                                                             Domestic listed
    INTERNATIONAL STOCK INDEX                              2,535,800                                    2,535,800
                                                                        foreign capital share
    FUND
    Customer credit trading guarantee
                                                                         Renminbi ordinary
    securities account of Hongyuan Securities              1,843,401                                    1,843,401
                                                                                        share
    Co., Ltd.
    Fang Jianwei                                                               Domestic listed
                                                         1,719,476                                    1,719,476
                                                                        foreign capital share
    Customer credit trading guarantee
                                                                         Renminbi ordinary
    securities account of Haitong Securities               1,502,864                                    1,502,864
                                                                                        share
    Co., Ltd.
    Chen Cailin                                                                Domestic listed
                                                         1,399,248                                    1,399,248
                                                                        foreign capital share
    CB LONDON A/C LEGAL AND
                                                                             Domestic listed
    GENERAL ASSURANCE (PENSIONS                            1,200,450                                    1,200,450
                                                                        foreign capital share
    MANAGEMENT) LTD
                                              Since January 12, 2009 the Company's shares have been
                                              tradable in full, and it now has no shareholder with limited sales
                                              condition. The Company has not learned whether related
    Remark on related relations or concerted
                                              relation exists between above shareholders or whether above
    actions between above shareholders
                                              shareholders belong to the concerted actors stipulated in the
                                              "Management Method for Information Disclosure for Change of
                                              Shares Held by the Shareholders of Listed Companies".4. Change of controlling shareholder and actual controller1) The controlling shareholder(1) Legal person
                                                                                        Unit: RMB'0000
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                                          2014 年年度报告
    Name                            Shanghai Huayi (Group) Company
    Principal or legal              Liu Xunfeng
    representative
    Establishment date              January 23, 1997
    Organization code               13226216-8
    Registered capital                                                                            328,108
                                   Operation and management of state-owned assets within authorized
                                   range, investment on industry, manufacture and sale for chemical and
    Main business
                                   medical products and equipment, installation, maintenance and
                                   contracted service for projects of chemical and medical equipment.
                                   Achieve the "1350" strategic objective: Through hard work for several
                                   years, the sales income will reach RMB 100 billion, the market share
    Future development strategy     of a batch of core products will be at leading position, it will reach
                                   among top 3 in the chemical industry of China, top 50 in manufacture
                                   industry of China and top 50 in global chemical industry.
    Shares held in other domestic   During the report period Shanghai Huayi (Group) Company held
    or overseas listed companies    65.66% equity interest of Double Coin Holdings Limited and 31.53%
    during the report period        equity interest of Shanghai Sanaifu New Material Co., Ltd..2) The actual controller(1) Legal person
                                                                                           Unit: RMB
    Name                                State-owned Assets Supervision and Administration
                                       Commission of Shanghai Municipal Government(2) The block diagram for property right and control relation between the Company and its actual
    controller
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                                          2014 年年度报告
                        7. Particulars of the Preference SharesDuring the report period the Company had no preference share.
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                                                                       2014 年年度报告
                       8. Particulars of the Directors, Supervisors, Senior Executives and Staff Members1. Changes in shareholding and particulars of rewards1) Particulars of Directors, Supervisors and senior executives (including the ones leaving post during the report period)
                                                                                                                                                    Unit: Share
                                                                                                                                   Reward got from
                                                                                                                                    the Company       Wage in the
                                                  Start date                                     Shares    Increase
                                                               End date of    Shares held at                          Reason of    during the report shareholder's
      Name        Position (note)   Gender Age    of office                                      held at      or
                                                               office term    year-beginning                           change           period         unit in the
                                                    term                                        year-end   decrease
                                                                                                                                  (RMB'0000)(before report period
                                                                                                                                         tax)
    Huang          Chairman    of                 12/30/2014    12/20/2015                  0          0           0                               0
                                    Male    56
    Dailie         the Board
                  Director, Party
    Hu             secretary  and
                  deputy general    Male    59   12/20/2012    12/20/2015                  0          0           0                           76.9
    Yongkang
                  manager
                  Director,
                  general
    He Gang        manager and       Male    46   12/20/2012    12/20/2015              14,000    14,000           0                             84
                  deputy Party
                  secretary
    Wang                                          12/20/2012    12/20/2015                  0          0           0                              0
                  Director          Male    48
    Zhenjin
                  Employee's                     12/20/2012    12/20/2015                  0          0           0                          60.80
    Yu Zhaojun     representative    Male    56
                  director
    Li             Independent                    12/20/2012    12/20/2015                  0          0           0                             10
                                    Male    40
    Zengquan       Director
    Zhang          Independent                    12/30/2014    12/20/2015                  0          0           0                              0
                                    Male    52
    Guoming        Director
    Shao           Independent                    12/30/2014    12/20/2015                  0          0           0                              0
                                    Male    50
    Zhengzhong     Director
    Zhang          Outside           Male    44   12/20/2012    12/20/2015                  0          0           0                          11.32
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                                                                2014 年年度报告
    Wenlei        Director
              Chairman of                  09/17/2013   12/20/2015                  0       0        0                 0
    Chen Yao      Supervisory    Male     51
              Committee
    Yu Bin        Supervisor      Male    40   12/20/2012   12/20/2015                  0       0        0                  0
    Dong Yan      Supervisor     Female   41   12/20/2012   12/20/2015                  0       0        0              45.30
    Wang          Employee                     12/20/2012   12/20/2015                  0       0        0              34.80
                             Female   53
    Minchun       Supervisor
    Wang          Employee                     12/20/2012   12/20/2015                  0       0        0              74.40
                             Male     52
    Linzao        Supervisor
    Cao Jinrong   CFO            Male     40   12/20/2012   12/20/2015                  0       0        0              54.64
              Deputy                       12/20/2012   12/20/2015                  0       0        0              64.50
    Chen Jiang    general        Male     50
              manager
              Deputy                       12/20/2012   12/20/2015                  0       0        0              64.10Yuan
              general        Male     47Maoquan
              manager
              Deputy                       11/07/2014   12/20/2015                  0   12,500   12,500   Buy in       0
    Wang Hao      general        Male     48                                                                  second
              manager                                                                                     market
              Secretary of                 12/20/2012   12/20/2015                  0       0        0              56.90
    Xu Peiwen     the Board of   Male     59
              Directors
              Chairman of                  12/20/2012   10/29/2014                865     865        0                 0
    Li Jun                       Male     55
              the Board
    Wang          Independent                  12/20/2012   12/30/2014                  0       0        0                10
                             Male     56
    Kaiguo        Director
              Independent                  12/20/2012   12/30/2014                  0       0        0                10
    Lu Yiping                    Male     69
              Director
              Deputy                       12/20/2012   09/16/2014                  0       0        0              57.10Zhang
              general        Male     40Junjun
              manager
    Total             /         /      /        /            /                  14,865   27,365   12,500       /    714.76   /
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                                                                  2014 年年度报告
    Name                                                                Main work of recent 5 years
               He used to be the Deputy Party secretary, executive Director and general manager of Shanghai Huayi Group Enterprise Development Co.,
               Ltd. and manager of Enterprise Adjustment Department of Huayi Group. Now he is Chairman of the Board of Shanghai Chlor-AlkaliHuang Dailie
               Chemical Co., Ltd., member of CPC Committee of Shanghai Huayi (Group) Company, Director, chairman of trade union and chairman of
               Shanghai municipal chemical trade union.
               He used to be general manager, Party secretary and Chairman of the Board of Shanghai Wujin Chemical Co., Ltd. Now he is the Director,Hu Yongkang
               Party secretary and deputy general manager of Shanghai Chlor-Alkali Chemical Co., Ltd.
               He used to be the manager of marketing department of Shanghai Chlor-Alkali Chemical Co., Ltd., assistant general manager, deputy general
    He Gang        manager and Routine vice general manager of Shanghai Chlor-Alkali Chemical Co., Ltd. Now he is the Director, general manager and deputy
               Party secretary of Shanghai Chlor-Alkali Chemical Co., Ltd.
               He used to be the chief economist and assets controller of assets financial department, head of management department and deputy general
               manager of Tyre & Rubber Group Co., Ltd., routine vice director of Tyre Research Institute and deputy general manager of Double CoinWang Zhenjin
               Holdings Limited. Now he is the general manager of assets department of Shanghai Huayi (Group) Company and Director of Shanghai
               Chlor-Alkali Chemical Co., Ltd.
               He used to be Party secretary of PVC factory of Shanghai Chlor-Alkali Chemical Co., Ltd. Now he is the employee's representative director,Yu Zhaojun
               Deputy Party secretary, secretary of Party discipline committee and chairman of trade union of Shanghai Chlor-Alkali Chemical Co., Ltd.
               Li Zengquan: He used to be the associate professor and master's tutor in Accounting Institute of Shanghai University of Finance and
               Economics, senior researcher and senior visiting scholar of Accounting Department of City University of Hong Kong, Independent Director
               of Bus Share, Independent Director of Haibo Share and financial consultation expert of Xuhui District State-owned Assets Supervision and
    Li Zengquan    Administration Commission, has got the title of Twilight Scholar. Now he is the vice dean of Accounting Institute of Shanghai University of
               Finance and orienttreasureconomics, proofreader of orienttreasureconomic Research and many other authoritive periodicals, member of
               editorial board of China Journal of Accounting Research, Independent Director of Oriental Fortune, Independent Director of East China
               Computer, Independent Director of Shenneng Share and Independent Director of Shanghai Chlor-Alkali Chemical Co., Ltd.
               He used to be the deputy general manager of Shanghai Lianfa Property Management Development Company, executive director of Hong
               Kong Tianhe Asset Management Company, Independent Director of Shanghai Qiangsheng Holdings Co., Ltd and Chairman of the Board ofZhang
               Shanghai Jiaxiang Investment Co., Ltd. Now he is Chairman of the Board of Shanghai Nowei Investment Management Co., Ltd., ChairmanGuoming
               of the Board of Shanghai Dingli Refreshing Technology Co., Ltd., Dongfeng Electronic Science and Technology Co., Ltd., Independent
               Director of Shanghai Xinpeng Industrial Co., Ltd. and Independent Director of Shanghai Chlor-Alkali Chemical Co., Ltd.
               He used to be the lecturer of material science department of Fudan University, the lecturer, associate professor, subdean and professor of
               Fudan University and associate professor of biology research institute of Aarhus University in Denmark. Now he is the doctoral tutor inShao
               polymer science department of Fudan University. He is also the councilor of Shanghai Municipal Chemistry & Chemical EngineeringZhengzhong
               Association, subeditor of Journal of Materials Chemistry-B of Britain Royal Society of Chemistry (RSC) and member of multiple academic
               committee, and the Independent Director of Shanghai Chlor-Alkali Chemical Co., Ltd.
               He used to be deputy chief of technical operation department, chief of general department and deputy secretary general of China Chlor-AlkaliZhang Wenlei
               Industry Association. Now he is vice chairman and secretary general of China Chlor-Alkali Industry Association, routine councilor of China
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                                                                 2014 年年度报告
               Petrochemical Industry Association, vice chairman of China Chemical Environment Protection Association, Independent Director of Hebei
               Jinniu Chemical Co., Ltd. and Independent Director of Yibin Tianyuan Group Co., Ltd. and outside Director of Shanghai Chlor-Alkali
               Chemical Co., Ltd.
               He used to be the manager of foreign cooperation department of Shanghai Huayi (Group) Company, Party secretary and deputy general
    Chen Yao       manager of Double Coin Holdings Limited. Now he is the secretary of Party discipline committee of Shanghai Huayi (Group) Company, vice
               chairman of Supervisory Committee and Chairman of the Supervisory Committee of Shanghai Chlor-Alkali Chemical Co., Ltd.
               He used to be the deputy general manager, CFO, manager of finance department of Huayi Group Enterprise Development Co., Ltd., and
    Yu Bin         deputy general manager of financial department of Shanghai Huayi (Group) Company. Now he is the general manager of Shanghai Minhang
               Huayi Petty Loan Co., Ltd. and Supervisor of Shanghai Chlor-Alkali Chemical Co., Ltd.
               She used to be the member of cadre section and allotment section of human resource department and chief of personnel wage section of
               Shanghai Tianyuan (Group) Co., Ltd. and Shanghai Chlor-Alkali Chemical Co., Ltd., and the assistant manager of human resourceDong Yan
               department of Shanghai Chlor-Alkali Chemical Co., Ltd. Now she is the Supervisor and human resource department manager of Shanghai
               Chlor-Alkali Chemical Co., Ltd.
               He used to be deputy Party secretary, secretary of Party disciplinary committee and chairman of trade union of PVC factory of Shanghai
    Wang Minchun   Chlor-Alkali Chemical Co., Ltd. Now he is the employee Supervisor and vice chairman of trade union of Shanghai Chlor-Alkali Chemical
               Co., Ltd. and Party secretary of PVC plant of Shanghai Chlor-Alkali Chemical Co., Ltd.
               He used to be the manager of production control department of Shanghai Chlor-Alkali Chemical Co., Ltd. and deputy general manager of
    Wang Linzao    Shanghai Tianyuan Huasheng Chemical Co., Ltd. Now he is the employee Supervisor of Shanghai Chlor-Alkali Chemical Co., Ltd. and
               secretary of CPC general branch and factory director of Huasheng Chemical Plant of Shanghai Chlor-Alkali Chemical Co., Ltd.
               He used to be the deputy manager of assets department of Shanghai Huayi (Group) Company and deputy general manager of Shanghai HuayiCao Jinrong
               Group Investment Co., Ltd. Now he is the CFO of Shanghai Chlor-Alkali Chemical Co., Ltd.
               He used to be manager of technical development department of Shanghai Chlor-Alkali Chemical Co., Ltd. and assistant general manager ofChen Jiang
               Shanghai Chlor-Alkali Chemical Co., Ltd. Now he is the deputy general manager of Shanghai Chlor-Alkali Chemical Co., Ltd.
               He used to be the workshop chief engineer of PVC plant of Shanghai Chlor-Alkali Chemical Company, assistant chief and routine deputy
    Yuan Maoquan   chief of technical center of Shanghai Chlor-Alkali Chemical Company and deputy chief engineer of Shanghai Chlor-Alkali Chemical Co.,
               Ltd. Now he is the deputy general manager of Shanghai Chlor-Alkali Chemical Co., Ltd.
               He used to be the assistant manager of technical development department of Shanghai Chlor-Alkali Chemical Co., Ltd. and deputy generalWang Hao
               manager of Shanghai Huntsman Polyurethane Co., Ltd. Now he is the deputy general manager of Shanghai Chlor-Alkali Chemical Co., Ltd.
               He used to be Board Secretary of Shanghai Tianyuan (Group) Co., Ltd., and since 2000 he has also been the Board Secretary and chief of theXu Peiwen
               Board Secretary's office of Shanghai Chlor-Alkali Chemical Co., Ltd.
               He used to be general manager and Deputy Party secretary of Shanghai Chlor-Alkali Chemical Co., Ltd. and Deputy Party secretary of
               Shanghai Tianyuan (Group) Co., Ltd. Now he is the vice president of Shanghai Huayi (Group) Company, chairman of China Chlor-AlkaliLi Jun
               Industry Association and vice chairman of Shanghai Stock Company Association. On October 29, 2014, he leave the post of Chairman of the
               Board of Shanghai Chlor-Alkali Chemical Co., Ltd.
    Wang Kaiguo    Since June 2001 he has been Party secretary and Chairman of the Board of Haitong Securities Co., Ltd. On December 30, 2014, he left the
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                                                                         2014 年年度报告
                      post of Independent Director of Shanghai Chlor-Alkali Chemical Co., Ltd.
                      He used to be Chairman of the Board of Shanghai Petrochemical, Chairman of the Board of Shanghai Secco Petrochemical Industry Co., Ltd.
                      and Chairman of the Board of Shanghai Chemical Industry Park Development Co., Ltd. He resigned the post of Chairman of the Board of
    Lu Yiping          Shanghai Petrochemical in 2005, the post of Chairman of the Board of Shanghai Secco Petrochemical Industry Co. in November 2006 and the
                      post of Chairman of the Board of Shanghai Chemical Industry Park Development Co. in August 2008. On December 30, 2014, he left the post
                      of Independent Director of Shanghai Chlor-Alkali Chemical Co., Ltd.2) Equity incentive awarded to the Director, Supervisor and senior executives during the report period□Applicable √Not applicable2. Particulars of Directors, Supervisors and senior executives (including the ones leaving post during the report period)1) Position in shareholder's unit√Applicable □Not applicable
                    Name                            Name of shareholder's unit               Position in the shareholder's unit         Start date of office term
    Huang Dailie                          Shanghai Huayi (Group) Company                   Member of CPC Committee,                  04/01/2008
                                                                                           Director, chairman of trade union
    Wang Zhenjin                          Shanghai Huayi (Group) Company                   General     manager       of     assets   09/01/2008
                                                                                           department
    Chen Yao                              Shanghai Huayi (Group) Company                   Secretary    of    Party     discipline   10/01/2011
                                                                                           committee, vice chairman             of
                                                                                           Supervisory Committee2) Position in other units√Applicable □Not applicable
                    Name                                Name of other unit                           Position in other unit             Start date of office term
    Hu Yongkang                            Shanghai Chlor-Alkali Machinery Co., Ltd.        Chairman of the Board                    03/01/2012
    He Gang                                Shanghai Lianheng Isocyanic Acid Grease Co.,     Director                                 04/01/2011
                                           Ltd.
    He Gang                                 Shanghai Huntsman Polyurethane Co., Ltd.         Chairman of the Board                    08/01/2013
    He Gang                                 Shanghai Huayi Group Fiscal Responsibility       Director                                 03/01/2012
                                           Co., Ltd.
    Li Zengquan                             East Money Information Co., Ltd.                 Independent Director                     01/22/2014
    Li Zengquan                             Shanghai East China Computer Co., Ltd.           Independent Director                     04/19/2014
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                                                                       2014 年年度报告
    Li Zengquan                            Shenneng Co., Ltd.                              Independent Director                  05/20/2014
    Zhang Wenlei                           Hebei Jinniu Chemical Co., Ltd.                 Independent Director                  06/08/2011
    Wang Linzao                            Shanghai Jinyuan Tap Water Co., Ltd.            Director                              07/01/2011
    Chen Jiang                             Shanghai Dakai Plastic Co., Ltd.                Chairman of the Board                 03/01/2011
    Chen Jiang                             Shanghai Huayi Tianyuan Chemical Logistics      Director                              03/01/2010
                                          Co., Ltd.
    Cao Jinrong                            Shanghai Luwei Plastics Co., Ltd.               Chairman of the Board                 02/01/2013
    Cao Jinrong                            Shanghai Ruisheng Enterprises Co., Ltd.         Executive director                    03/01/2012
    Wang Hao                               Shanghai Huntsman Polyurethane Co., Ltd.        Director                              08/01/20133. Rewards of Directors, Supervisors and senior executives
    Decision-making process for rewards to The reward to Directors, Supervisors and senior executives is decided by the salary & checking committee of
    Directors, Supervisors and senior executives    the Company.
    The basis for deciding Rewards to Directors, Distributed according to the "Checking and Evaluation Methods on the Reward to Directors, Supervisors and
    Supervisors and senior executives               Senior Executives" of the Company
    The rewards of the Directors, Supervisors and The Board of Directors decided the reward standard for the Directors, Supervisors and Senior Executives get
    Senior Executives payable                       salary from the Company and paid the reward monthly in accordance with the Company's unified salary
                                                    management system and the annual performance review by the salary & checking committee of the Board of
                                                    Directors. The standard for allowance to Independent Directors was examined and passed by the
                                                    shareholders' meeting.
    Actual total reward to all the Directors,
    Supervisors and Senior Executives at end of the RMB 7,147,600
    report period4. Change of Directors, Supervisors and senior executives
         Name               Position       Change                                                Reason of change
                      Director, Chairman             Elected the Director by the Company's 2014 first provisional shareholders' meeting on December 30, 2014.
    Huang Dailie                          Engaged
                      of the Board                   In the same day, he was elected Chairman of the Board by 16th meeting of 8th Board of Directors.
    Zhang Guoming       Independent       Engaged Elected the Independent Director by the Company's 2014 first provisional shareholders' meeting on
                        Director                     December 30, 2014.
    Shao Zhengzhong Independent           Engaged Elected the Independent Director by the Company's 2014 first provisional shareholders' meeting on
                        Director                     December 30, 2014.
    Wang Hao            Deputy general Engaged Engaged by 14th meeting of 8th Board of Directors on November 7, 2014.
                        manager
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                                                          2014 年年度报告
    Li Jun         Chairman of the   Leave   For work need, request to resign from the post on October 29, 2014.
               Board             post
    Wang Kaiguo    Independent       Leave   For work need, request to resign from the post on October 29, 2014, and the resignation was valid since
               Director          post    December 30, 2014.
    Lu Yiping      Independent       Leave   For work need, request to resign from the post on December 11, 2014, and the resignation was valid since
               Director          post    December 30, 2014.
    Zhang Junjun   Deputy general    Leave   For work need, request to resign from the post on September 16, 2014.
               manager           post
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                                              2014 年年度报告5. Employees of the parent company and main subsidiaries1) Particulars of employees
    Number of in-service employees of the parent company                                             1,368
    Number of in-service employees of main subsidiaries                                                373
    Total number of in-service employees                                                             1,741
    Number of retired employees borne by the parent                                                  4,188
    company and main subsidiaries
                                           Profession structure
                      Type of profession                                    Number of people
    Production personnel                                                                               903
    Sales people                                                                                        47
    Technical personnel                                                                                134
    Financial personnel                                                                                 26
    Administrative personnel                                                                           258
                             Total                                                                   1,368
                                              Education level
    Education level                                                         Number of people
    Bachelor degree or higher                                                                          276
    Junior college                                                                                     358
    Senior high school (technical secondary school)                                                    592
    Lower than senior high school                                                                      142
                             Total                                                                   1,3682) Salary policy
    The Company implements the "Position Level Salary Measures of Shanghai Chlor-Alkali Chemical
    Co., Ltd.".3) Training plan
    In 2014 the Company made training for 11,643 mentimes. The training includes front line employees
    of 7,854 mentimes, accounting for 67.46% of total. The main train content: post operation training, all
    special work training (including the training for obtaining certificate of post), QHSE training, all staff
    training for safety month and quality month, post change training, skill grade training (including the
    training for certificate), and the training for enhancing the management skill of first-line manager.
    There were 3,789 men-times of training for non front line employees, accounting for 32.54% of the
    total training numbers. Main training content: Training for qualification of new manager, experience
    training for management team, further education training for professional technical post,
    certificate-getting training for the qualification of special post, QHSE training, special topic training
    for engineer, special lecture and other training for post ability.
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                                           2014 年年度报告4) Statistical chart for profession5) Statistical chart for education level
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                                             2014 年年度报告
                                   9. Company Governance1. Company governance and registration management for insider
    The Company kept on improving the Company's corporate governance structure, regulating its
    operation and strengthening its internal management strictly in accordance with the provisions and
    requirements of the Company Law, Securities Law and the Management Principle of the Listed
    Companies and the files for company's governance issued by China Securities Regulatory Committee
    and Shanghai Stock Exchange. The Board of Directors deems that, the actual conditions of the
    Company's corporate governance structure have no difference compared with the requirements in the
    Management Principle of the Listed Companies.
    During the report period the Company implemented the Management System on Registration of
    Learners of Insider Information strictly and made the insider information security work further well to
    safeguard the interests of the shareholders.2. Brief introductions to the shareholders' meetings
                                                                             Index on the        Date for
                                                                              appointed          carrying
    The meeting         Date         Name of motions         Resolutions
                                                                              website for           the
                                                                             carrying the       resolutions
                                                                              resolution
                                   1. Examined 2013
                                      Annual Report and
                                      the Abstract;
                                   2. Examined 2013
                                      Work Report of the
                                      Board of Directors;
                                   3. Examined 2013
                                      Work Report of the
                                      Supervisory
                                      Committee;
                                   4. Examined the
                                      Motion on 2013
                                      Final Accounts and
                                      2014 Financial
                                      Budget;
                                   5. Examined the
    2013 annual
                                      Proposal for 2013      Examined
    shareholders'    05/07/2014                                             www.sse.com.cn      05/08/2014
                                      Profit Distribution;   and passed
    meeting
                                   6. Examined the
                                      Motion on
                                      Application for
                                      Financing Credit
                                      Limit in 2014;
                                   7. Examined the
                                      Motion on
                                      Engagement of the
                                      Auditor for the
                                      Company's 2014
                                      Annual Report and
                                      Payment for the
                                      Reward of 2013;
                                   8. Examined the
                                      Motion on
                                      Engagement of the
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                                            2014 年年度报告
                                     Auditor for the
                                     Company's internal
                                     control and
                                     Payment for the
                                     Reward of 2013;
                                  9. Examined the 2013
                                     Duty Performance
                                     Report of the
                                     Independent
                                     Directors.
                                  1. Examined the
                                     Motion on Election
                                     of New Director of
                                     the Company,
                                     electing Mr. Huang
                                     Dailie the Director
                                     of 8th Board of
                                     Directors;
                                  2. Examined the
                                     Motion on Election
    2014      1st
                                     of New
    provisional                                             Examined
                   12/30/2014        Independent                         www.sse.com.cn       12/31/2014
    shareholders'                                           and passed
                                     Directors
    meeting
                                  2.1 Elected Mr. Zhang
                                     Guoming the
                                     Independent
                                     Director of 8th
                                     Board of Directors;
                                  2.2 Elected Mr. Shao
                                     Zhengzhong the
                                     Independent
                                     Director of 8th
                                     Board of Directors.3. Duty performance of the Directors1) Attendance of Directors in Board meetings and shareholders' meetings
                                                                                                        Particulars
                                                                                                             of
                                                                                                        attendance
                                           Particulars of attendance in Board meetings
                                                                                                             in
            Independent                                                                                shareholders'Name of
             Director or                                                                                 meetingsDirector
                 not                                                                 Attendances
                            Required                                                               Attendances
                                                   Attendances                       not in person
                            number of Attendances                Entrusted                              in
                                                     through                Absences successively
                           attendances in person                attendances                        shareholders'
                                                  communication                       for 2 times
                             this year                                                               meeting
                                                                                         or not
    Huang      No                       1         1             0           0        0 No                       1Dailie
    Hu         No                     9           9                6           0            0   No                  2Yongkang
    He Gang    No                     9           9                6           0            0   No                  2
    Wang       No                     9           9                6           0            0   No                  2Zhenjin
    Yu         No                     9           9                6           0            0   No                  2Zhaojun
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                                            2014 年年度报告
    Li          Yes                   9            9                6           0          0   No              2Zengquan
    Zhang       Yes                   1            1                0           0          0   No              1Guoming
    Shao        Yes                   1            1                0           0          0   No              1Zhengzhong
    Zhang       No                    9            9                6           0          0   No              2Wenlei
    Board meetings convened this year                    9
    Incl.: On-site meetings                              3
    Meetings held through communication                  6
    Meetings held through communication and on site      04. Important opinions and proposals raised by the special committees under the Board of
    Directors in duty performance during the report period
    In 2014 the special committees under the Board of Directors of the Company, in accordance with the
    provisions in the Enforcement Rules of the Special Committee under the Board of Directors,
    performed their duties earnestly, conducted work actively, give full play to their professional skills
    and play active role in the decision-making of the Board of Directors. For the annual report and
    related work, the audit committee performed its duty earnestly, raising the constructive suggestion
    for the Company's periodic report, internal control system, asset disposal and related transaction
    from the professional point of view and supervising the further healthful, stable and rapid
    development of the Company. The investment committee made discussion in a meeting on the
    Company's participating the capital increase for expansion of MDI project by Shanghai Huntsman
    Polyurethane Co., Ltd. and Shanghai Lianheng Isocyanic Ester Co., Ltd. and the investment in the
    high performance chlorinated polyvinyl chloride project with the annual capacity of 40,000 tons to
    enhance the scientificaalness of the investments. The salary & checking committee held a meeting to
    examine and confirm the salary of the Company's senior executives in 2014 and raised an
    examination proposal for the salary of the senior executives in 2014. The nomination committee held
    a meeting to make discussion and proposal for the Company's change of Directors or Independent
    Directors. The Company focus on exerting the advantage of the special committees under the Board
    of Directors and the Independent Directors in profession and information, promoting the Board of
    Directors making decision more scientific and effective.5. The note of the Supervisory Committee for the Company's risk
    The Supervisory Committee makes no rejection for the supervised events during the report period.6. The examination and evaluation mechanism for the senior executives and the establishment and
    implementation of the incentive mechanism during the report period
    The implemented the Salary Checking Method for the Company's Senior Executives, let the salary &
    checking committee under the Board of Directors to conduct annual performance review to decide the
    reward standard for the Directors, Supervisors and Senior Executives getting salary from the
    Company, and paid the reward monthly.
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                                        10. Internal Control1. Declaration for the responsibility of internal control and the construction of the internal control
    system
    In accordance with the provisions of the enterprise internal control model system, to establish the
    healthful and effective internal control, appraise the effectiveness and disclose the appraisal report on
    internal control according to the facts, shall be the responsibility of the Board of Directors of the
    Company. The Supervisory Committee shall exercise supervision on the Board of Directors'
    establishing and implementing the internal control. The management shall be responsible for leading
    the routine running of the internal control of the enterprise. The Board of Directors, the Supervisory
    Committee, Directors, Supervisors and senior executives of the Company ensure that the content in
    the report does not have any false statement, serious misrepresentation or significant omission and
    will take the joint and several legal responsibilities for the truth, accuracy and completeness of the
    content of the Report.
    The goal of the Company's internal control is to ensure reasonably the legality and compliance of the
    operating management, the safety of assets and the truth and integrity of the financial report and
    relevant information, enhance the operating efficiency and effect and promote the realization of the
    development strategy. Owing to its inherent limitation, the internal control can only provide
    reasonable assurance for realization of above goal. Furthermore, the change of instances may cause
    the internal control improper or the level of policy control and procedure following reduced, so
    predicting the effectiveness of the future internal control in accordance with the appraisal result to the
    internal control shall be of certain risk.
    According to the cognizance to the significant and important deficiency in the internal control on the
    financial report of Shanghai Chlor-Alkali Chemical Co., Ltd., there was no significant and important
    deficiency in the internal control on the financial report at the base date of the appraisal report for
    internal control; the Board of Directors deems that, the Company has kept effective internal control on
    the financial report in all significant aspects in accordance with the requirements of the regulating
    system and relevant provisions for the enterprise internal control. According to the cognizance to the
    significant and important deficiencies other than in internal control on the financial report of Shanghai
    Chlor-Alkali Chemical Co., Ltd., the Company did not find any significant and important deficiencies
    other than in the internal control on the financial report at the base date of the appraisal report for the
    internal control. There was no any factor influencing the appraisal conclusion for effectiveness of the
    internal control from the base date of the appraisal report for the internal control to the issuing date of
    the appraisal report for the internal control. For details of the appraisal report on internal control,
    please see 2014 Self-appraisal Report for Internal Control of Shanghai Chlor-Alkali Chemical Co.,
    Ltd. carried in the website of Shanghai Stock Exchange at the same day.
    Whether disclose the self-assessment report for internal control: yes3. Explanation of the auditor's report on internal control
    During the report period the Company engaged BDO China Shu Lun Pan Certified Public
    Accountants LLP as its audit agency for the internal control in 2014. Shanghai Shu Lun Pan CPA Ltd.
    (special general partnership) issued an auditor's report on internal control with standard unqualified
    opinion, deeming that the Company kept effective internal control on the financial report in all
    significant aspects in accordance with the Fundamental Norms for Enterprise Internal Control and
    relevant provisions on December 31, 2014. For details of the auditor's report on internal control,
    please see the Auditor's Report on the Company's Internal Control carried in the website of Shanghai
    Stock Exchange at the same day.
    Whether disclose the auditor's report for internal control: yes
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                                             2014 年年度报告3. The accountability system for significant mistakes in the annual report and the note on relevant
    implementation
    The Company's Information Disclosure Management System had defined the range of insider
    information and the confidentiality obligation of the insider for such information. The insider for such
    information shall assume the obligation and responsibility of good faith and performing duty
    diligently according to law. In case of any violation of the system, Shanghai Stock Exchange shall
    dispose it according to regulations. The Company ensures the effective enforcement of internal
    control through the responsibility claim system and encourage system.
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                                             2014 年年度报告
                                      11. Financial Report1. Auditor's Report
                                        Auditor's Report
                                                                                 XKSBZ [2015] No. 111082To all the shareholders of Shanghai Chlor-Alkali Chemical Co., Ltd.:We audited the attached financial statements of Shanghai Chlor-Alkali Chemical Co., Ltd. (hereinafterreferred to as the "Company"), including the balance sheet and consolidated balance sheet as ofDecember 31, 2014, income statement and consolidated income statement of 2014, cash flow statementand consolidated cash flow statement of 2014, statement of changes of owner's equity and consolidatedstatement of changes of owner's equity, and the notes of financial statements.1. The management's responsibility to financial statements
    To prepare financial statements make report fairly in it is the responsibility of the management of the
    Company. Such responsibility should include: (1) to prepare the financial statements in accordance
    with the provisions in the Enterprise Accounting Standard and make the statements realize fair
    reflection; (2) to design, execute and maintain necessary internal control to make the financial
    statements not have significant misrepresentation caused by fraud or error.2. Responsibility of the certified accountants
    Our responsibility is to express our audit opinion to the financial statements on the basis of executing
    the audit work. We conducted the audit work in accordance with the provisions of the Auditing
    Standards for CPAs of China. The Auditing Standards for CPAs of China requires us to abide by the
    code of professional ethics of CPAs of China, and to plan and execute audit work to obtain reasonable
    assurance for the financial statements not having significant misrepresentation.
    The audit work involves with conducting audit procedure to obtain the audit evidences related to the
    amount and disclosure of the financial statements. The audit procedure selected depends on the
    judgement of the certified accountants, including the evaluation on the risk of significant
    misrepresentation of the financial statements due to fraud or error. While making risk evaluation, the
    certified accountants considered the internal control related to preparing and fair listing of the
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                                             2014 年年度报告
    financial statements to design a proper audit procedure, but the purpose is not to express our opinion
    to effectiveness of the internal control. The audit work further includes evaluating the suitability of
    accounting policy selected by the management and the reasonableness of the accounting estimate
    made by the management, as well as evaluating the overall presentation of the financial statements.
    We believe that the audit evidences we have obtained is sufficient and appropriate to provide a basis
    for our audit opinion.3. Audit opinion
    We deem that, the financial statements of the Company has been prepared in accordance with the
    provisions of the enterprise accounting standard in all significant aspects, and has fairly reflected the
    consolidated and the Company's financial status as of December 31, 2014 and its operating results and
    cash flow in 2014.BDO China Shu Lun Pan Certified Public Accountants LLPChina certified accountant: Gu XuefengChina certified accountant: Ling Min
    ShanghaiChina                                                   March 19, 2015
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                                            2014 年年度报告2. Financial statements
                                    Consolidated Balance Sheet
                                        December 31, 2014Prepared by: Shanghai Chlor-Alkali Chemical Co., Ltd.
                                                                                         Unit: RMB
                                                                                            Beginning
                           Item                               Note Closing balance
                                                                                                balanceCurrent assets:
    Monetary capital                                                  402,636,250.64     573,468,453.52
    Settlement provisions
    Capital lent
    Financial assets measured with fair value and having
    change attributed to profit or loss of current period
    Derivative financial assets
    Notes receivable                                                  313,867,535.80     378,074,710.56
    Accounts receivable                                               321,902,440.07     219,585,380.39
    Advance payment                                                   220,825,719.39     230,394,610.83
    Premium receivable
    Reinsurance accounts receivable
    Receivable deposit for reinsurance contract
    Interest receivable
    Dividend receivable
    Other receivables                                                   1,895,445.80       1,481,952.65
    Redemptory financial assets for sale
    Inventories                                                       497,804,243.07     390,476,527.64
    Assets held for sale
    Non-current assets due in 1 year
    Other current assets
      Subtotal of current assets                                    1,758,931,634.77   1,793,481,635.59Non-current assets:
    Loan and advances issued
    Salable financial assets                                          349,855,650.23     271,136,911.86
    Held-to-maturity investments
    Long-term receivable
    Long-term equity investment                                       270,736,394.62     187,641,718.86
    Investment real estate
    Fixed assets                                                     2,727,746,278.61   3,313,496,420.90
    Construction in progress                                           288,223,047.31     142,900,085.66
    Engineering materials                                                1,173,259.66       1,914,050.52
    Disposal of fixed assets
    Productive biological assets
    Oil gas assets
    Intangible assets                                                 311,958,605.26     255,416,359.06
    Development expenditure                                            25,794,289.58       8,805,094.96
    Goodwill
    Long-term prepaid and deferred expenses                            19,069,279.62      16,776,930.53
    Deferred income tax assets                                          1,229,186.56       1,011,821.71
    Other non-current assets
      Subtotal of non-current assets                                3,995,785,991.45   4,199,099,394.06
        Total of assets                                             5,754,717,626.22   5,992,581,029.65Current liabilities:
    Short-term loan                                                   868,531,399.29     422,800,855.65
    Loan from central bank
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    Absorbed deposit and interbank deposit
    Loan from other financial institutions
    Financial liabilities measured with fair value and having
    change attributed to profit or loss of current period
    Derivative financial liabilities
    Notes payable
    Accounts payable                                             395,974,896.16     372,058,908.94
    Advance receipts                                             304,022,294.89     331,371,643.21
    Financial assets sold for repurchase
    Handling charges and commission payable
    Wages payable                                                 28,052,005.16         947,961.82
    Tax payable                                                   27,392,973.52      62,085,362.46
    Interest payable                                               3,916,313.32       3,231,705.95
    Dividends payable                                              2,724,553.75       2,907,553.75
    Other payables                                               713,938,238.76     806,835,168.66
    Reinsurance accounts payable
    Provision for insurance contract
    Receipt from vicariously traded securities
    Receipt from vicariously underwriting securities
    Liabilities held for sale
    Non-current liabilities due in 1 year
    Other current liabilities
    Subtotal of current liabilities                          2,344,552,674.85   2,002,239,160.44Non-current liabilities:
    Long-term loan
    Bonds payable
    Incl.: Preference share
          Perpetual debt
    Long-term payables                                           950,000,000.00     950,000,000.00
    Long-term wages payable                                      184,380,000.00
    Specific payables                                             11,050,000.00      96,000,000.00
    Estimated liabilities
    Deferred income                                                6,198,450.00         930,800.00
    Deferred income tax liability                                  2,274,880.65       1,795,745.90
    Other non-current liabilities
    Subtotal of non-current liabilities                      1,153,903,330.65   1,048,726,545.90
        Total of liabilities                                  3,498,456,005.50   3,050,965,706.34Owner's equity
    Share capital                                               1,156,399,976.00   1,156,399,976.00
    Other equity instruments
    Incl.: Preference share
          Perpetual debt
    Capital reserves                                            1,683,394,015.86   1,586,284,015.86
    Less: Treasury stock
    Other composite income                                         1,920,380.37       6,971,376.75
    Specific reserves
    Surplus reserves                                              11,329,760.39      11,329,760.39
    General risk reserve
    Undistributed profit                                         -688,388,625.23      87,215,874.60
    Subtotal of owner's equity attributable to parent company   2,164,655,507.39   2,848,201,003.60
    Minority interest                                              91,606,113.33      93,414,319.71
    Total of owner's equity                                  2,256,261,620.72   2,941,615,323.31
        Total of liabilities and owner's equity               5,754,717,626.22   5,992,581,029.65
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    Legal representative: Mr. Huang Dailie    Principal in charge of accounting: Mr. He Gang     Head ofaccounting dept.: Mr. Lai Yonghua
                                Balance Sheet of Parent Company
                                       December 31, 2014Prepared by: Shanghai Chlor-Alkali Chemical Co., Ltd.
                                                                                           Unit: RMB
                         Item                              Note   Closing balance    Beginning balanceCurrent assets:
    Monetary capital                                                361,841,267.49       520,889,380.61
    Financial assets measured with fair value and having
    change attributed to profit or loss of current period
    Derivative financial assets
    Notes receivable                                                283,210,505.19       359,331,691.41
    Accounts receivable                                             263,729,293.70       172,900,894.31
    Advance payment                                                 215,176,188.42       223,657,620.42
    Interest receivable
    Dividend receivable
    Other receivables                                                 7,971,011.77         1,146,309.00
    Inventories                                                     428,301,688.75       318,452,938.40
    Assets held for sale
    Non-current assets due in 1 year
    Other current assets                                                                  20,000,000.00
      Subtotal of current assets                                  1,560,229,955.32    1,616,378,834.15Non-current assets:
    Salable financial assets                                        338,978,781.42       260,419,183.02
    Held-to-maturity investments
    Long-term receivable
    Long-term equity investment                                     454,050,813.30       370,956,137.54
    Investment real estate
    Fixed assets                                                   2,570,275,614.49    3,147,708,955.11
    Construction in progress                                         270,291,468.93      136,595,991.98
    Engineering materials                                              1,173,259.66        1,914,050.52
    Disposal of fixed assets
    Productive biological assets
    Oil gas assets
    Intangible assets                                               265,269,075.06       205,724,769.34
    Development expenditure                                          25,794,289.58         8,805,094.96
    Goodwill
    Long-term prepaid and deferred expenses                           16,525,841.24         15,829,943.15
    Deferred income tax assets
    Other non-current assets                                          50,000,000.00
      Subtotal of non-current assets                              3,992,359,143.68    4,147,954,125.62
        Total of assets                                           5,552,589,099.00    5,764,332,959.77Current liabilities:
    Short-term loan                                                 821,281,399.29       368,350,855.65
    Financial liabilities measured with fair value and
    having change attributed to profit or loss of current
    period
    Derivative financial liabilities
    Notes payable
    Accounts payable                                                357,965,113.50       348,490,583.44
    Advance receipts                                                299,962,187.40       323,823,687.69
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                                          2014 年年度报告
    Wages payable                                                  27,774,004.42
    Tax payable                                                    24,552,210.54       58,852,446.65
    Interest payable                                                3,916,313.32        3,231,705.95
    Dividends payable                                               1,189,676.90        1,372,676.90
    Other payables                                                762,117,190.54      833,863,795.45
    Liabilities held for sale
    Non-current liabilities due in 1 year
    Other current liabilities
      Subtotal of current liabilities                          2,298,758,095.91    1,937,985,751.73Non-current liabilities:
    Long-term loan
    Bonds payable
    Incl.: Preference share
           Perpetual debt
    Long-term payables                                            950,000,000.00      950,000,000.00
    Long-term wages payable                                       184,380,000.00
    Specific payables                                              11,050,000.00       96,000,000.00
    Estimated liabilities
    Deferred income                                                 6,198,450.00          930,800.00
    Deferred income tax liability                                   1,409,344.92          969,995.16
    Other non-current liabilities
      Subtotal of non-current liabilities                      1,153,037,794.92    1,047,900,795.16
         Total of liabilities                                  3,451,795,890.83    2,985,886,546.89Owner's equity:
    Share capital                                               1,156,399,976.00    1,156,399,976.00
    Other equity instruments
    Incl.: Preference share
           Perpetual debt
    Capital reserves                                            1,690,068,638.82    1,592,958,638.82
    Less: Treasury stock
    Other composite income                                            955,919.02        6,126,270.38
    Specific reserves
    Surplus reserves                                               11,329,760.39       11,329,760.39
    Undistributed profit                                         -757,961,086.06       11,631,767.29
      Total of owner's equity                                  2,100,793,208.17    2,778,446,412.88
         Total of liabilities and owner's equity               5,552,589,099.00    5,764,332,959.77
    Legal representative: Mr. Huang Dailie Principal in charge of accounting: Mr. He Gang   Head ofaccounting dept.: Mr. Lai Yonghua
                                 Consolidated Income Statement
                                   January to December 2014
                                                                                        Unit: RMB
                                                                   Amount in           Amount in
                        Item                              Note
                                                                 current period     previous period
    1. Gross operating income                                       7,015,409,267.56   6,974,211,654.53
    Incl.: Operating income                                         7,015,409,267.56   6,974,211,654.53
         Interest income
         Premium earned
         Income from handling charges and commission
    2. Gross operating cost                                         7,674,426,880.15   7,206,916,460.12
    Incl.: Operating cost                                           6,375,944,582.66   6,344,195,298.75
        Interest cost
        Expenditure for handling charges and commission
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        Surrender value
        Net expenditure for compensation
        Net provision for insurance contract appropriated
        Bonus payment for policy
        Reinsurance premium
        Business tax and surcharges                             17,827,448.28     24,845,304.83
        Selling cost                                           205,248,898.35    193,012,461.43
        Management cost                                        633,388,738.66    416,638,560.56
        Financial expenses                                     121,456,535.42    111,801,208.77
        Loss from assets impairment                            320,560,676.78    116,423,625.78Plus: Income from change of fair value ("-" for loss)
         Investment income ("-" for loss)                      62,632,834.28    144,125,008.27
    Incl.: Investment income from affiliated enterprises            46,522,824.01     60,933,984.15
        and joint ventures
        Income from currency exchange ("-" for loss)
    3. Operating profit ("-" for loss)                            -596,384,778.31   -88,579,797.32
    Plus: Non-operating income                                    13,543,603.10   122,523,307.47
         Incl.: Net gain from disposal of non-current             1,152,634.58       499,145.25
         assets
    Less: Non-operating expenditure                                  126,817.45     2,629,788.44
         Incl.: Loss from disposal of non-current assets             40,812.45       239,846.23
    4. Gross profit ("-" for gross loss)                          -582,967,992.66    31,313,721.71
    Less: Income tax cost                                          4,622,713.67     5,990,994.17
    5. Net profit ("-" for net loss)                              -587,590,706.33    25,322,727.54
    Net profit attributable to owners of parent company         -592,502,499.95    16,623,782.76
    Minority interest income                                       4,911,793.62     8,698,944.78
    6. Other composite income after tax                             -17,770,996.38     1,412,650.24
    Other composite income attributed to owners of                                  1,412,650.24
                                                                -17,770,996.38
    parent company after tax1) Other composite income unable to be reclassified
                                                                -20,380,000.00into profit and loss afterwards(1) Change of net liabilities or net assets through
                                                                -20,380,000.00
    remeasuring and setting beneficial plan(2) Part shared in other composite income unable to be
    reclassified into profit and loss in the invested unit
    under equity method
    2) Other composite income to be reclassified into profit                           1,412,650.24
                                                                  2,609,003.62
    and loss afterwards(1) Part shared in other composite income to be
    reclassified into profit and loss in the invested unit
    under equity method
    (2) Profit and loss from change of fair value of salable                           1,412,650.24
                                                                  2,609,003.62
    financial assets(3) Profit and loss from held-to-maturity investments
    reclassified into salable financial assets(4) Effective part of the profit and loss from hedge of
    cash flow(5) Conversion difference of foreign currency in
    financial statement(6) other
    Other composite income attributed to minority
    shareholders after tax
    7. Total amount of composite income                            -605,361,702.71    26,735,377.78
    Total composite income attributable to owners of            -610,273,496.33    18,036,433.00
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    parent company
    Total composite income attributable to minority                                   8,698,944.78
                                                                    4,911,793.62
    shareholders8. Earnings per share:
    1) Basic earnings per share (RMB)                                        -0.5124           0.0144
    2) Diluted earnings per share (RMB)                                      -0.5124           0.0144Legal representative: Mr. Huang Dailie Principal in charge of accounting: Mr. He Gang  Head ofaccounting dept.: Mr. Lai Yonghua
                                  Income Statement of Parent Company
                                       January to December 2014
                                                                                              Unit: RMB
                                                               Note     Amount in          Amount in
                           Item
                                                                      current period     previous period
    1. Operating income                                                  6,432,026,063.17   5,916,425,456.32
    Less: Operating cost                                              5,885,413,772.01   5,388,806,879.89
          Business tax and surcharges                                    14,534,262.10      21,475,479.12
          Selling cost                                                  187,923,372.52     178,228,083.71
          Management cost                                               574,961,996.42     353,291,897.24
          Financial expenses                                            118,604,257.55     108,695,503.06
          Loss from assets impairment                                   314,225,426.94     116,003,101.01Plus: Income from change of fair value ("-" for loss)
         Investment income ("-" for loss)                              67,674,160.81     143,303,054.56
    Incl.: Investment income from affiliated enterprises                   46,522,824.01      60,933,984.15
         and joint ventures
    2. Operating profit ("-" for loss)                                  -595,962,863.56     -106,772,433.15
    Plus: Non-operating income                                           9,552,010.09      118,197,625.26
          Incl.: Net gain from disposal of non-current                   1,139,551.41           89,848.58
                 assets
              Less: Non-operating expenditure                               80,000.00        1,974,977.39
          Incl.: Loss from disposal of non-current assets                                      188,781.30
    3. Gross profit ("-" for gross loss)                                -586,490,853.47        9,450,214.72
                    Less: Income tax cost
    4. Net profit ("-" for net loss)                                    -586,490,853.47        9,450,214.72
    5. Other composite income after tax                                    -17,890,351.36           29,497.441) Other composite income unable to be reclassified
                                                                        -20,380,000.00
    into profit and loss afterwards(1) Change of net liabilities or net assets through
                                                                        -20,380,000.00
      remeasuring and setting beneficial plan(2) Part shared in other composite income unable to be
    reclassified into profit and loss in the invested unit
    under equity method
    2) Other composite income to be reclassified into                       2,489,648.64          29,497.44
    profit and loss afterwards(1) Part shared in other composite income to be
      reclassified into profit and loss in the invested unit
      under equity method
    (2) Profit and loss from change of fair value of salable                2,489,648.64          29,497.44
      financial assets(3) Profit and loss from held-to-maturity investments
      reclassified into salable financial assets(4) Effective part of the profit and loss from hedge of
      cash flow
                                                     63 / 74
                                              2014 年年度报告(5) Conversion difference of foreign currency in
    financial statement(6) other
    6. Total amount of composite income                                 -604,381,204.83      9,479,712.167. Earnings per share:1) Basic earnings per share (RMB)2) Diluted earnings per share (RMB)
    Legal representative: Mr. Huang Dailie     Principal in charge of accounting: Mr. He Gang   Head ofaccounting dept.: Mr. Lai Yonghua
                                  Consolidated Cash Flow Statement
                                      January to December 2014
                                                                                            Unit: RMB
                           Item                               Note     Amount in          Amount in
                                                                     current period     previous period1. Cash flow from operating activities:
    Cash received from sale of commodities and                       7,821,130,000.73   8,203,869,209.67
    rendering of service
    Net increase of customers' deposit and interbank
    deposit
    Net increase of loan from central bank
    Net increase of loans from other financial institutions
    Cash received for premium of original insurance
    contract
    Net cash received for reinsurance business
    Net increase of deposit and investment of the insured
    Net increase of financial assets measured with fair
    value and having change attributed to profit or loss
    of current period
    Cash from receiving interest, handling charge and
    commission
    Net increase of loans from other financial institutions
    Net increase of fund for buy-back business
    Tax rebate received                                                    640,058.18         554,337.82
    Other cash received related to operating activities                156,646,472.25     172,431,519.72
       Subtotal of cash inflow from operating activities             7,978,416,531.16   8,376,855,067.21
    Cash paid for purchase of commodities and                        6,943,640,631.86   6,795,220,824.04
    accepting of service
    Net increase of customer's loan and advances
    Net increase of deposit in central bank and interbank
    deposit
    Cash for payment of compensation for original
    insurance contract
    Cash for payment of interest, handling charge and
    commission
    Cash for payment of policy bonus
    Cash paid to or for employees                                      601,151,343.25     479,462,908.17
    Cash paid for various taxes                                        203,873,014.61     212,616,312.30
    Other cash paid related to operating activities                    258,811,541.27     309,528,632.68
       Subtotal of cash outflow from operating activities            8,007,476,530.99   7,796,828,677.19
         Net cash flow from operating activities                       -29,059,999.83     580,026,390.022. Cash flow from investment activities:
    Cash received from disinvestment                                                         307,808.78
    Cash received from investment income                               21,390,010.27      11,632,681.50
                                                   64 / 74
                                          2014 年年度报告
    Net cash received from disposal of fixed assets,
                                                                       38,134.62          879,408.36
    intangible assets and other long-term assets
    Net cash received from disposal of subsidiaries and
                                                                                      100,455,646.23
    other business units
    Other cash received related to investment activities                                  287,300.00
       Subtotal of cash inflow from investment activities          21,428,144.89      113,562,844.87
    Cash paid for purchase and construction of fixed
                                                                  404,176,849.64      360,776,175.65
    assets, intangible assets and other long-term assets
    Cash paid for investment                                      112,202,451.75
    Net increase of mortgage loan
    Net cash paid for acquiring subsidiaries and other
    business units
    Other cash paid related to investment activities                   50,000.00            5,000.00
    Subtotal of cash outflow from investment activities           516,429,301.39      360,781,175.65
          Net cash flow from investment activities               -495,001,156.50    -247,218,330.783. Cash flow from financing activities:
    Cash received from absorbing investment                                               100,000.00
    Incl.: Cash received by subsidiaries from absorption
           of minorities' investment
    Cash received from loan                                     1,909,331,399.29      934,700,855.65
    Cash received from bond issuance
    Other cash received related to financing activities            12,160,000.00
      Subtotal of cash inflow from financing activities         1,921,491,399.29      934,800,855.65
    Cash paid for redemption of debt                            1,433,600,855.65 1,153,805,075.14
    Cash paid for distribution of dividends, profit or
                                                                  134,454,579.97      108,293,761.91
    payment of interest
    Incl.: Cash paid to minority shareholders as dividend
           and profit by subsidiaries
    Other cash paid related to financing activities
    Subtotal of cash outflow from financing activities         1,568,055,435.62 1,262,098,837.05
           Net cash flow from financing activities                353,435,963.67    -327,297,981.40
    4. Impact of changes in exchange rate on cash and                   -124,286.85       -6,162,774.22
    cash equivalents
    5. Net increase of cash and cash equivalents                    -170,749,479.51         -652,696.38
    Plus: Beginning balance of cash and cash equivalents          573,284,390.95      573,937,087.33
    6. Closing balance of cash and cash equivalents                  402,534,911.44      573,284,390.95
    Legal representative: Mr. Huang Dailie Principal in charge of accounting: Mr. He Gang    Head ofaccounting dept.: Mr. Lai Yonghua
                            Cash Flow Statement of Parent Company
                                   January to December 2014
                                                                                           Unit: RMB
                          Item                              Note     Amount in          Amount in
                                                                   current period     previous period1. Cash flow from operating activities:
    Cash received from sale of commodities and rendering           7,161,542,311.10   6,909,563,045.93
    of service
    Tax rebate received
    Other cash received related to operating activities              168,932,480.24     182,400,494.17
       Subtotal of cash inflow from operating activities           7,330,474,791.34   7,091,963,540.10
    Cash paid for purchase of commodities and accepting            6,466,432,119.57   5,694,920,028.38
    of service
    Cash paid to or for employees                                   508,048,968.27     365,962,535.42
    Cash paid for various taxes                                     170,218,563.80     176,779,177.89
                                               65 / 74
                                         2014 年年度报告
    Other cash paid related to operating activities               223,070,162.72    244,191,812.22
      Subtotal of cash outflow from operating activities        7,367,769,814.36 6,481,853,553.91
           Net cash flow from operating activities                -37,295,023.02    610,109,986.192. Cash flow from investment activities:
    Cash received from disinvestment                                                     307,808.78
    Cash received from investment income                           21,151,336.80      11,679,367.61
    Net cash received from disposal of fixed assets,                                     122,298.35
    intangible assets and other long-term assets
    Net cash received from disposal of subsidiaries and
                                                                                      99,416,016.00
    other business units
    Other cash received related to investment activities                                 287,300.00
    Subtotal of cash inflow from investment activities            21,151,336.80    111,812,790.74
    Cash paid for purchase and construction of fixed
                                                                  376,753,836.62    352,867,211.32
    assets, intangible assets and other long-term assets
    Cash paid for investment                                      112,202,451.75      21,000,000.00
    Net cash paid for acquiring subsidiaries and other
    business units
    Other cash paid related to investment activities                   50,000.00      20,005,000.00
    Subtotal of cash outflow from investment activities          489,006,288.37    393,872,211.32
          Net cash flow from investment activities               -467,854,951.57 -282,059,420.583. Cash flow from financing activities:
    Cash received from absorbing investment
    Cash received from loan                                     1,761,781,399.29    808,350,855.65
    Other cash received related to financing activities            12,160,000.00
      Subtotal of cash inflow from financing activities         1,773,941,399.29    808,350,855.65
    Cash paid for redemption of debt                            1,308,850,855.65 1,001,555,075.14
    Cash paid for distribution of dividends, profit or
                                                                  118,874,246.53    103,365,742.92
    payment of interest
    Other cash paid related to financing activities
      Subtotal of cash outflow from financing activities        1,427,725,102.18 1,104,920,818.06
           Net cash flow from financing activities                346,216,297.11 -296,569,962.414. Impact of changes in exchange rate on cash and
                                                                     -114,435.64      -5,953,739.96
    cash equivalents
    5. Net increase of cash and cash equivalents                    -159,048,113.12      25,526,863.24
    Plus: Beginning balance of cash and cash equivalents          520,889,380.61    495,362,517.37
    6. Closing balance of cash and cash equivalents                  361,841,267.49    520,889,380.61
    Legal representative: Mr. Huang Dailie Principal in charge of accounting: Mr. He Gang    Head ofaccounting dept.: Mr. Lai Yonghua
                                              66 / 74
                                                                                                    2014 年年度报告
                                                                        Consolidated Statement of Changes in Owners' Equity
                                                                                      January to December 2014
                                                                                                                                                                                                                     Unit: RMB
                                                                                                                      Current period
                                                                                  Owner's equity attributable to parent company
         Item                                                                                                                                                                                                   Total of owner's
                                                                                                                                                                                            Minority interest
                                            Other equity instruments                    Less:                                                                General                                                 equity
                                                                                                  Other composite
                         Share capital                                Capital reserves Treasury                       Specific reserves   Surplus reserves     risk  Undistributed profit
                                           Preference Perpetual                                       income
                                                                Other                   stock                                                                reserve
                                             shares     debt
    1. Closing balance of   1,156,399,976.00
                                                                       1,586,284,015.86                6,971,376.75                         11,329,760.39                  87,215,874.60     93,414,319.71      2,941,615,323.31last yearPlus: Change of
                                                                                                    12,720,000.00                                                        -177,320,000.00                         -164,600,000.00accounting policyCorrection ofprevious errorsBusiness mergerunder same controlOther
    2. Beginning balance    1,156,399,976.00
                                                                       1,586,284,015.86             19,691,376.75                           11,329,760.39                 -90,104,125.40     93,414,319.71      2,777,015,323.31
    of current year3. Increase or
    decrease in current
                                                                         97,110,000.00             -17,770,996.38                                                        -598,284,499.83      -1,808,206.38      -520,753,702.59
    period ("-" for
    decrease)1) Total amount of
                                                                                                   -17,770,996.38                                                        -592,502,499.95      4,911,793.62       -605,361,702.71
    composite income2) Capital increase
    and decrease by
    owners(1) Common share
    invested by the
    shareholder(2) Capital input by
    the holder of other
                                                                                                           67 / 74
                                         2014 年年度报告
    equity instruments(3) Shares paymentattributed to owners'equity(4) Other
    3) Profit distribution                                                 -5,781,999.88   -6,720,000.00   -12,501,999.88(1) Appropriation of
    surplus reserves(2) Appropriation of
    provision for
    normal risk(3) Distribution to
    owners (or                                                           -5,781,999.88   -6,720,000.00   -12,501,999.88
    shareholders)(4) Other4) Owners' equity
    carried forward
    internally(1) Capital reserves
    transferred into
    capital (or share
    capital)(2) Surplus reserves
    transferred into
    capital (or share
    capital)(3) Deficit covered
    by surplus reserves(4) Other5) Specific reserve(1) Appropriated in
                                                       21,814,745.60                                   21,814,745.60
    current period(2) Used in current
                                                       21,814,745.60                                   21,814,745.60
    period
    6) Other                 97,110,000.00                                                                 97,110,000.00
                                             68 / 74
                                                                                                  2014 年年度报告4. Closing balance of
                        1,156,399,976.00                            1,683,394,015.86               1,920,380.37                             11,329,760.39                -688,388,625.23      91,606,113.33       2,256,261,620.72
    current period
                                                                                                                                   Previous period
                                                                                   Owner's equity attributable to parent company
          Item                                                                                                                                                                                                       Total of owner's
                                                Other equity instruments                        Less:                                                             General                     Minority interest
                                                                                                        Other composite                                                                                                   equity
                              Share capital                                 Capital reserves   Treasury                 Specific reserves     Surplus reserves      risk Undistributed profit
                                               Preference Perpetual                                         income
                                                                    Other                       stock                                                             reserve
                                                 shares     debt
    1. Closing balance of      1,156,399,976.00                                1,590,142,742.37                                                     10,384,738.92                71,537,113.31      80,230,030.92       2,908,694,601.52
    last year
    Plus: Change of                                                            -5,558,726.51              5,558,726.51
    accounting policy
    Correction of
    previous errors
    Business merger
    under same control
       Other
    2. Beginning balance       1,156,399,976.00                                1,584,584,015.86              5,558,726.51                           10,384,738.92                71,537,113.31      80,230,030.92       2,908,694,601.52
    of current year3. Increase or decrease
    in current period ("                                                        1,700,000.00              1,412,650.24                               945,021.47               15,678,761.29      13,184,288.79          32,920,721.79
    -" for decrease)1) Total amount of
                                                                                                          1,412,650.24                                                        16,623,782.76       8,698,944.78          26,735,377.78
    composite income2) Capital increase and
                                                                                                                                                                                                  4,458,004.73           4,458,004.73
    decrease by owners(1) Common share
    invested by the                                                                                                                                                                               4,458,004.73           4,458,004.73
    shareholder(2) Capital input by the
    holder of other
    equity instruments(3) Shares payment
    attributed to owners'
    equity(4) Other
    3) Profit distribution                                                                                                                              945,021.47                 -945,021.47          27,339.28              27,339.28(1) Appropriation of
                                                                                                                                                     945,021.47                 -945,021.47
    surplus reserves(2) Appropriation of
    provision for normal
    risk
                                                                                                        69 / 74
                                                                                                    2014 年年度报告(3) Distribution to
    owners (or                                                                                                                                                                                  27,339.28             27,339.28
    shareholders)(4) Other4) Owners' equity
    carried forward
    internally(1) Capital reserves
    transferred into
    capital (or share
    capital)(2) Surplus reserves
    transferred into
    capital (or share
    capital)(3) Deficit covered by
    surplus reserves(4) Other5) Specific reserve
    (1) Appropriated in                                                                                                       14,832,850.91                                                                          14,832,850.91
    current period
    (2) Used in current                                                                                                       14,832,850.91                                                                          14,832,850.91
    period
    6) Other                                                                       1,700,000.00                                                                                                                       1,700,000.00
    4. Closing balance of    1,156,399,976.00                                  1,586,284,015.86              6,971,376.75                        11,329,760.39              87,215,874.60      93,414,319.71      2,941,615,323.31
    current period
    Legal representative: Mr. Huang Dailie                 Principal in charge of accounting: Mr. He Gang                       Head of accounting dept.: Mr. Lai Yonghua
                                                                Statement of Changes in Owners' Equity of Parent Company
                                                                                January to December 2014
                                                                                                                                                                                                         Unit: RMB
                                                                                                                   Current period
                                                 Other equity instruments                              Less:
          Item                                                                                                    Other composite
                           Share capital                                         Capital reserves     Treasury                        Specific reserves   Surplus reserves    Undistributed profit Total of owner's equity
                                             Preference Perpetual                                                     income
                                                                      Other                            stock
                                               shares     debt
    1. Closing balance of    1,156,399,976.00                                        1,592,958,638.82                   6,126,270.38                             11,329,760.39        11,631,767.29       2,778,446,412.88
    last year
    Plus: Change of                                                                                                 12,720,000.00                                                -177,320,000.00        -164,600,000.00
    accounting policy
    Correction of
    previous errors
       Other
    2. Beginning balance     1,156,399,976.00                                        1,592,958,638.82                  18,846,270.38                             11,329,760.39      -165,688,232.71       2,613,846,412.88
    of current year
                                                                                                        70 / 74
                                                             2014 年年度报告3. Increase or decrease
    in current period ("                         97,110,000.00              -17,890,351.36                                   -592,272,853.35   -513,053,204.71
    -" for decrease)1) Total amount of
                                                                           -17,890,351.36                                   -586,490,853.47   -604,381,204.83
    composite income2) Capital increase and
    decrease by owners(1) Common share
    invested by the
    shareholder(2) Capital input by the
    holder of other
    equity instruments(3) Shares payment
    attributed to owners'
    equity(4) Other
    3) Profit distribution                                                                                                        -5,781,999.88     -5,781,999.88(1) Appropriation of
    surplus reserves(2) Distribution to
    owners (or                                                                                                                 -5,781,999.88     -5,781,999.88
    shareholders)(3) Other4) Owners' equity
    carried forward
    internally(1) Capital reserves
    transferred into
    capital (or share
    capital)(2) Surplus reserves
    transferred into
    capital (or share
    capital)(3) Deficit covered by
    surplus reserves(4) Other5) Specific reserve
    (1) Appropriated in                                                                         21,814,745.60                                      21,814,745.60
    current period
    (2) Used in current                                                                         21,814,745.60                                      21,814,745.60
    period
    6) Other                                         97,110,000.00                                                                                  97,110,000.00
    4. Closing balance of      1,156,399,976.00   1,690,068,638.82                 955,919.02                   11,329,760.39   -757,961,086.06   2,100793208.17current period
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                                                                                               2014 年年度报告
                                                                                                              Previous period
                                               Other equity instruments                           Less:
         Item                                                                                                 Other composite
                         Share capital                                     Capital reserves      Treasury                       Specific reserves   Surplus reserves   Undistributed profit   Total of owner's equity
                                            Preference Perpetual                                                  income
                                                                   Other                          stock
                                              shares     debt
    1. Closing balance of    1,156,399,976.00                                  1,597,355,411.76                                                           10,384,738.92          3,126,574.04          2,767,266,700.72
    last year
    Plus: Change of                                                             -6,096,772.94                     6,096,772.94
    accounting policy
    Correction of
    previous errors
      Other
    2. Beginning balance     1,156,399,976.00                                  1,591,258,638.82                      6,096,772.94                         10,384,738.92          3,126,574.04          2,767,266,700.72
    of current year3. Increase or
    decrease in current
                                                                               1,700,000.00                         29,497.44                            945,021.47          8,505,193.25             11,179,712.16
    period ("-" for
    decrease)
    1) Total amount of                                                                                                  29,497.44                                                9,450,214.72              9,479,712.16
    composite income2) Capital increase
    and decrease by
    owners(1) Common share
    invested by the
    shareholder(2) Capital input by
    the holder of other
    equity instruments(3) Shares payment
    attributed to
    owners' equity(4) Other
    3) Profit distribution                                                                                                                                   945,021.47           -945,021.47
    (1) Appropriation of                                                                                                                                     945,021.47           -945,021.47
    surplus reserves(2) Distribution to
    owners (or
    shareholders)(3) Other4) Owners' equity
    carried forward
    internally(1) Capital reserves
    transferred into
    capital (or share
    capital)
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                                                                              2014 年年度报告(2) Surplus reserves
    transferred into
    capital (or share
    capital)(3) Deficit covered by
    surplus reserves(4) Other5) Specific reserve
    (1) Appropriated in                                                                                       14,832,850.91                                     14,832,850.91
    current period
    (2) Used in current                                                                                       14,832,850.91                                     14,832,850.91
    period
    6) Other                                                          1,700,000.00                                                                                1,700,000.00
    4. Closing balance of    1,156,399,976.00                     1,592,958,638.82             6,126,270.38                   11,329,760.39   11,631,767.29   2,778,446,412.88
    current period
    Legal representative: Mr. Huang Dailie       Principal in charge of accounting: Mr. He Gang        Head of accounting dept.: Mr. Lai Yonghua
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                                           2014 年年度报告
                               12. Documents for Reference
    Accounting statements signed and stamped by legal representative, CFO and chief of accounting1.
    department;
    The original auditor's report stamped by the public accounting firm and signed and stamped by the2.
    certified public accountant;
    3.   Articles of Association of Shanghai Chlor-Alkali Co., Ltd. during the report period
    The formal version of all files and originals of the announcements disclosed in the newspapers4.
    appointed by China Securities Regulatory Committee during the report period;
    The Company shall furnish the above documents for reference when the China Securities
    5.   Regulatory Committee and the stock exchange request to provide them and the shareholders
    request to consult according to the requirements of the statute or the Articles of Association.
                                                Chairman of the Board: Huang Dailie
                                  Presenting date approved by the Board of Directors: March 21, 2015
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