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氯碱B股(900908)公告正文

氯碱化工:2015年年度报告

公告日期:2016-07-20

                                              2015 年年度报告



 Company code: 600618                                           Company name: Chlor-Alkali Chemical




     Shanghai Chlor-Alkali Chemical Co., Ltd.
               2015 Annual Report
                                         Important Notice
1. 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. Zhang Weimin, 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 2015 annual financial audit report issued by BDO China Shu Lun Pan Certified
   Public Accountants LLP engaged by the Company, in 2015 the net profit of the parent company is
   RMB 143,024,579.55 and the undistributed profit at beginning of the year is RMB - 757,961,086.06.
   After making up the loss in the undistributed profit, the profit available for distribution at end of the
   year should be RMB - 614,936,506.51. Therefore, the Company is not capable of distributing profit
   for 2015 or transferring the capital reserves into share capital.

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 notice to the
   investment risks.




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7. Is there any non-operational fund occupation by the controlling shareholder or the related
   parties?

   No

8. Is there any guarantee for outside entities in violation of the stipulated decision-making process?
  No

9. Notice on important risks
  None

10. Other
   None




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                                                                     Contents
1. Paraphrase ............................................................................................................................................... 4
2. Company Profile and Financial Highlights ............................................................................................. 5
3. Briefing on the Company's Business....................................................................................................... 7
4. Discussion and Analysis on the Management ......................................................................................... 9
5. Major Events ......................................................................................................................................... 21
6. Changes of Ordinary Shares and Particulars of Shareholders ............................................................... 31
7. Particulars of the Directors, Supervisors, Senior Executives and Staff Members................................. 35
8. Company Governance ........................................................................................................................... 41
9. Particulars of Preference Shares............................................................................................................ 44
10. Particulars of the Company's Bonds ................................................................................................... 44
11. Financial Report .................................................................................................................................. 44
12. Documents for Reference .................................................................................................................... 64




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                                          1. Paraphrase

1. 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, means Shanghai Chlor-Alkali Chemical Co., Ltd.
    or Chlor-Alkali Chemical
    Sodium hydroxide             means 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 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.
    Chlorine                     means Molecular formula: Cl2. As an important chemical raw
                                          material, chlorine gas is widely used in the industries such
                                          as papermaking, printing and dyeing, pigment, bleaching
                                          powder, textile industry, chemical fiber, grease petroleum,
                                          rubber, plastic, pharmacy, disinfection, agricultural
                                          pesticide, metallurgy and electronic industry.
    EDC                          means Ethylene dichloride. Achromatic or yellowish transparent
                                          liquid with specific gravity of about 1.26 and odor similar to
                                          chloroform, insoluble in water, dissolve in ethyl alcohol and
                                          ethyl ether. Mainly used as the solvent for wax, fat and
                                          rubber, and also used in producing vinyl chloride and
                                          polycarbonate.
    PPVC                         means Paste resin. The Company's production for paste resin
                                          mainly adopts two processes, mixing method and seed
                                          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.
    TPVC                         means Special resin. The special resin produced by the Company is
                                          mainly the customer specially-used material, the medical
                                          resin with high polymeric level such as plasma bag, infusion
                                          tube and the seal with high elasticity and the resin specially
                                          used for primary coating in automobiles.
    CPVC                         means Chlorinated polyvinyl chloride. Mainly used in various
                                          pipes with different caliber and the related fittings such as
                                          elbow and T-joint, the valve body and the wig.




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                     2. Company Profile and Financial Highlights

1. 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 Dailie

2. Contact information
                      Secretary of the Board of Directors             Securities representative
   Name            Xu Peiwen                                   Chen Lihua
   Contact address 4747 Longwu Rd., Shanghai                   4747 Longwu Rd., Shanghai
   Tel.            021-64342640                                021-64342640
   Fax             021-64341438                                021-64341438
   E-mail          shxpw@126.com                               amychen0131@126.com

3. Basic information
   Registered address of the Company                    4747 and 4800 Longwu Rd., Shanghai
   Zip code of registered address                       200241
   Business address of the Company                      4747 Longwu Rd., Shanghai
   Zip code of business address of the Company         200241
   Website                                              www.scacc.com
   E-mail                                               dshmss@scacc.com

4. Information disclosure and filing site
   Newspapers for information disclosure selected     China Securities News, Shanghai Securities News,
   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., Shanghai

5. The Company's share
                                        The Company's share
     Type of share     Stock exchange for listing      Share name              Share Share name
                               of share                                        code before change
  A share             Shanghai Stock Exchange Chlor-Alkali Chemical           600618
  B share             Shanghai Stock Exchange Chlor-Alkali B Share            900908

6. Other relevant information
                           Name                         BDO China Shu Lun Pan Certified Public
                                                        Accountants LLP
   Public    accounting
                           Business address             4th Floor, New Huangpu Financial Plaza, No.
   firm engaged by the
                                                        61, East Nanjing Rd., Shanghai, China
   Company (domestic)
                           Name        of       the     Gu Xuefeng, Ling Min
                           accountant for signing


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7. Main accounting data and financial indexes of previous 3 years before end of the report period
1) Main accounting data
                                                                                        Unit: RMB
                                                                                         Increase or
                                                                                        decrease than
         Main accounting data                   2015                   2014                                     2013
                                                                                       same period of
                                                                                        last year (%)
   Operating income                        6,170,874,223.67    7,015,409,267.56                 -12.04     6,974,211,654.53
   Net     profit   attributable    to       95,615,030.34      -592,502,499.95        Not applicable         16,623,782.76
   shareholders of the listed
   Company
   Net     profit   attributable    to       -31,416,638.26     -262,177,332.00        Not applicable       -139,868,977.14
   shareholders of the Company,
   after non-recurring profit and loss
   Net cash flow from operating             305,852,432.45       -29,059,999.83        Not applicable        580,026,390.02
   activities
                                                                                         Increase or
                                             End of 2015            End of 2014                             End of 2013
                                                                                        decrease (%)
   Net assets        attributable to       2,261,545,045.54    2,164,655,507.39                  4.48      2,848,201,003.60
   shareholders     of the listed
   Company
   Total assets                            4,847,854,403.79    5,754,717,626.22                -15.76      5,992,581,029.65
   Total share capital at end of the       1,156,399,976.00    1,156,399,976.00                  0.00      1,156,399,976.00
   repord period


2) Main financial indexes
                                                                                       Increase or decrease than
                  Main financial indexes                      2015        2014                                          2013
                                                                                      same period of last year (%)
   Basic earnings per share                                   0.0827      -0.5124     Not applicable                   0.0144
   Diluted earnings per share                                 0.0827      -0.5124     Not applicable                   0.0144
   Basic earnings per share after non-recurring profit
                                                           -0.0272        -0.2267     Not applicable                    -0.121
   and loss (RMB/share)
   Return on net assets, weighted average (%)                                         Increase by 28.76
                                                               4.313     -24.4467                                      0.5857
                                                                                      percentage points
   Return on net assets, weighted average, after                                      Increase by 9.40 percentage
                                                           -1.4171       -10.8175                                      -4.9279
   recurrent profit and loss (%)                                                      points


8. Difference of accounting data between domestic and overseas accounting standards
1) 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
2) The difference of net profit and net assets attributable to shareholders of the Company between
   the overseas accounting standards and Chinese accounting standards
□Applicable √Not applicable

9. Main financial data for quarters in 2015
                                                                                                                    Unit: RMB
                                              1st quarter          2nd quarter            3rd quarter         4th quarter
                                             (Jan.-March)          (Apr.-Jun.)            (July-Sept.)        (Oct.-Dec.)
   Operating income                        1,540,819,806.42     1,630,089,231.04       1,711,565,084.48    1,288,400,101.73
   Net profit attributable to
   shareholders of the listed                  4,057,976.87          -52,696,263.14         3,967,144.79     140,286,171.82
   Company
   Net prrearit attributable to
   shareholders of the Company,               53,895,146.66           -8,086,538.19       32,103,078.21     -109,328,324.94
   after non-recurring profit and loss
   Net cash flow from operating
                                             -52,610,580.45         114,040,798.82        32,061,368.67      212,360,845.41
   activities

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   Note on differences between the data of the quarters and that of the period report disclosed
□Applicable √Not applicable

10. Items of non-recurring profit and loss
√Applicable □Not applicable
                                                                                                         Unit: RMB
     Items of non-recurrent profit and      Amount of                                                   Amount of
                                                                 Note (if applied)   Amount of 2014
                   loss                       2015                                                        2013
                                                            Mainly      acquired
                                                            from sale of the
     Profit or loss from disposal of
                                          257,772,690.18    equity             of       1,111,822.13    71,743,954.84
     non-current assets
                                                            subsidiaries and sale
                                                            of buildings
     Tax return and exemption
     approved by the authority beyond
     its right or with no official                                                                       1,120,000.00
     approval file, or occasionally
     happened
     Government subsidy attributable
     to profit and loss of current
     period, except such government
     subsidy closely related to the
     Company's     normal     business
                                           41,118,941.72                                5,732,560.40   111,427,687.60
     operation, meeting the regulation
     of national policy and enjoyed
     constantly in certain quota or
     quantity according to a certain
     standard
     Other non-operating revenue and
     expenditure other than above            3,081,055.74                               6,572,403.12     7,086,532.41
     items
                                                            Compensation for
                                                            personnel placement
                                                            and related loss on
     Other profit or loss items meeting
                                                            work       stoppage
     the definition of non-recurring      -174,731,937.80                            -343,652,815.90   -35,532,990.89
                                                            caused            by
     profit and loss
                                                            adjustment of the
                                                            industrial structure
                                                            in Wujing Base
     Impact of minority interests            -199,632.57                                   50,515.48       -32,543.41
     Impact of income tax                      -9,448.67                                 -139,653.18       680,119.35
                   Total                  127,031,668.60                             -330,325,167.95   156,492,759.90


11. Items measured with fair value
                                                                                                       Unit: RMB
                                     Beginning             Closing              Change in      Impact on the profit
                Item
                                      balance              balance            current period    of current period
     Salable financial assets       14,914,742.76       50,765,875.23         35,851,132.47              36,415.17
               Total                14,914,742.76       50,765,875.23         35,851,132.47              36,415.17

                            3. Briefing on the Company's Business

1. Main business, operating mode and industrial status for the Company during the report period
1) Main business: The Company mainly produces and sells sodium hydroxide, chlorine, chlorine
    products, polyvinyl chloride plastics resin and the products. Now the Company's annual production
    capacity for sodium hydroxide is 720,000 tons, for ethylene dichloride, 720,000 tons and for liquid
    chlorine, 600,000 tons.

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2) Operating mode: The Company makes close cooperation with the international chemical magnate to
    establish an integrated operation mode with completed devices and pipe-line transportation in the
    chemical industry zone. The integrated operation mode has enhanced the Company's capability of
    long-term stable existing and development and has also provided guarantee for the downstream
    customers to obtain stable and reliable chlor-alkali products in long period, realizing mutual benefit
    and win-win.
3) Status of the industry: Due to the impact of weak macro economy and excess capacity on China's
    chlor-alkali industry, the market continues to slump, the downstream demand recovery is slow, cost
    rising factors increase, the original profit mode of "using alkali profit to cover the loss in chlorine in
    domestic chlor-alkali industry has been changed due to loss in both alkali and chlorine happened,
    and the industry has entered a difficult adjustment period.

2. Note on significant changes in prime assets of the Company in the report period
                                                                                                      Unit: RMB

                                                         Increase
                                                            or
                                                         decrease
         Item              2015             2014                                           Remark
                                                           than
                                                         previous
                                                         year (%)
                                                                      Mainly caused by the repayment of loan and
   Monetary fund      240,425,945.13   402,636,250.64        -40.29   decrease of the consolidation range
   Advance                                                            Mainly caused by the advance payment of projects
                      136,446,799.31   220,825,719.39
   accounts                                                  -38.21   and decrease of power payment
                                                                      Mainly caused by the increase of the revolving
   Other                                                              fund and the export rebates receivable in present
   receivables          3,561,716.78     1,895,445.80         87.91   period
   Deferred income                                                    Mainly caused by reducing of the consolidation
                           20,529.71     1,229,186.56
   tax assets                                                -98.33   range
   Employees'                                                         Mainly caused by the decrease of dismissal
   salary payable         780,802.00    28,052,005.16        -97.22   benefit appropriated
                                                                      Caused by reducing of the value added tax unpaid
   Tax payable         14,824,741.55    27,392,973.52        -45.88   in present period
   Other payables     441,394,365.43   713,938,238.76                 Mainly caused by return of loan of Huayi Group
                                                             -38.17
   Long-term
                                                                      Mainly caused by return of loan of Huayi Group
   payables           645,000,000.00   950,000,000.00        -32.11
   Deferred income
                                                                      Caused by change of fair value in current period
   tax liabilities     11,653,477.05     2,274,880.65        412.27


3. Analysis on the core competitive power in the report period
1) The improvement on the new-round integrated operating mode
   Through 10 years' running in the chemical industry zone by the Company, the integrated operating
   mode has fully demonstrated the merits of the cooperative win-win pricing mechanism, removing the
   cost rising factors reasonably with market means. With this mode the Company can also sell sodium
   hydroxide in certain ratio while selling chlorine products, and the established compensation
   mechanism for contract implementing risk can make constraint on both the buyer and the seller to
   stabilize the supply status. The integrated operation mode has enhanced the Company's capability
   of long-term stable existing and development and has also provided guarantee for the downstream
   customers to obtain stable and reliable chlor-alkali products in long period, realizing mutual benefit
   and win-win. The new-round negotiation for the 10-year supply and sale contract in the chemical
   industry zone adopts the idea of cooperation and win-win and considers fully the growth, relevance
   and interaction of the industrial chain. Therefore, the Company's profitability predominance due to
   the integrated operating mode in the chemical industry zone can continue to exist.
2) The achievement of new technique in chlorine producing has boosted to establish the industrial chain
   with circulating economy
   In this year the Company will continue the improvement on the technique for producing chlorine gas
   with hydrogen chloride catalytic oxidation process. It has completed the preparing of the first draft of
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   the feasibility report for the project to set solid basis for the industrialization of the technique for
   chlorine gas produced with oxidation of chlorine hydride.
3) With the reservation of a batch of R&D achievements such as the PVC chlorinated with water phase
   method self-developed, in 2015 the Company completed the reform for R&D platform for chlorinated
   polyvinyl chloride resin and the research and application development for the formulation of the fire
   pipe material and plumbing with chlorinated polyvinyl chloride resin and formed a series products of
   mixed chlorinated polyvinyl chloride used for spraying in fire control. So it has got the predominance
   in market.
4) It has a powerful marketing platform
   As the enterprise exporting sodium hydroxide earliest in China, the Company owns powerful
   international marketing platform and import base for raw salt and this means it is of distinct advance
   predominance. With respect to domestic trade, the Company is at the in the middle and lower reaches
   of the Yangtze River, the most developed area in China, with the best consumption and logistics. Its
   product brands and marketing have high reputation in market. Moreover, the Company has strived to
   explore the big market strategy and the reform for related marketing system, making the marketing
   mode fitting to structure of big trade.

                   4. Discussion and Analysis on the Management

1. Discussion and analysis on the management
   In the report period, China's chlor-alkali industry suffered the impact of weak macro economy, excess
   capacity and other factors, market continued to be slow, loss existed generally among this industry,
   the severe over capacity in the industry produced enormous pressure of destocking. The two leading
   products, sodium hydroxide and PVC, are in front of the problem of off-capacity, The capacity of
   sodium hydroxide has decreased by 0.95% than last year, the first time of negative growth. And the
   capacity of PVC has got negative growth consecutively for two years. Faced with the difficult
   business environment, the Company has fully implemented the strategy of " innovation, upgrading
   and transformation". Based on the requirements of optimizing the operation and reducing the loss, it
   has stabilized the production operation in the work area, enhanced the profitability of chlorine
   production, boosted the upgrading of the chemical industry. It has promoted the reform of the
   organization structure and management function, and accelerated the disposal for existing assets in
   Wujing and the adjustment in Wujing area to reduce the cost and enhance efficiency. It has strived to
   innovate the development mode, continued to implement the strategy of "going out" firmly, explored
   the chances for strategic cooperation and investment in global market and sought new space for the
   Company's development. With the safe and stable operation of its production operation in the whole
   year, the Company has realized operating income of RMB 6,170,000,000 and the net profit
   attributable to shareholders of the listed Company of RMB 95,615,000.

1) Accelerate the industrial agglomeration and upgrading of the chemical industry zone
(1) Accelerate to boost the project construction in the chemical industry zone and set the development
    basis with new projects and new technique. The Company adheres to the strategy of "high-end
    agglomeration in the chemical industry zone" and focuses on the optimization of the structure to
    boost the constructing of key projects. Firstly, it accelerates to boost the construction of the project
    of storage and transportation device for low temperature ethylene, taking effective measures to
    guarantee the project progress and the quality. This project was delivered on October 30, 2015. This
    means the device can be put into operation with ample storage power for ethylene. Secondly, it
    strives to boost the construction of CPVC project. At present the Company is just making the work
    for selecting the location. Thirdly, it strives to develop the circulating economy. It uses its
    self-developed technique for chlorine gas produce with oxidation of chlorine hydride to meet the
    demand of the enterprises in the chemical industry zone for liquid chlorine. At present it has
    completed the industrial process packet for chlorine gas produced through oxidation of chlorine
    hydride with annual capacity of 100,000 tons, and completed the preparing of the first draft of the
    feasibility report. In consideration of the transformation of this technique into actual production
    capacity and time matching of the downstream MDI for the demand for increasing of the chlorine,
    the Company has also planned to introduce the technique of oxygen cathode ion-exchange
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    membrane electrolyzer. The development or utilization of these two techniques has, to the greatest
    extent, realized the reutilization and reproduction of the chemical medium, forming the industrial
    chain mode of circulation economy.
(2) Boost the investment in new material field in the chemical industry zone. In 2014 the Company
    decided to participate in the construction of MDI project in the chemical industry zone. The
    investment for this project shall be divided into seven phases. In 2015 it totally invested the fund of
    RMB 40,466,400. It is also seeking the deep cooperation with the multinational companies in the
    chemical industry zone in the downstream of MDI and TDI.
(3) Accelerate the operation arragement in the chemical industry zone and the transfer of the center of
    production and management.
    In the chemical industry zone the Company has got the annual capacity of 720,000 tons for sodium
    hydroxide and 720,000 tons for EDC. In 2015 its income in the chemical industry zone reached
    RMB 3,881,600,000 with the gross profit of RMB 486,000,000, accounting for 103% in its total
    gross profit. In Wujing area, its income was only RMB 61,240,000 and the gross profit was - RMB
    15,880,000. With the profit mostly coming from the chemical industry zone, the Company's
    strategic objective of centralizing into the chemical industry zone has initially been realized. In
    company with the transfer of the Company's production center transferred to the chemical industry
    zone, the Company's function departments will also be transferred to the chemical industry zone
    on schedule.

2) Accelerate the adjustment in Wujing area
(1) Do good work on personnel placement and promote the organizational optimization
    In 2015, with the halt of the main production plants in Wujing area, the Company strived to boost
    the personnel placement of second round, reducing 321 employees calmly. Meanwhile, in order to
    adapt to the development strategy and enhance the management efficiency, the Company made
    significant adjustment for original organizational structure, integrating 24 departments into 14
    departments for management on devices and business.
(2) Focus on the development of main business and boost the integration of assets
    On demand of the Company for strengthening the main business, the Company boosted the stripping
    of the assets of non main business orderly. In 2015 in order to strengthen further the transfer of the
    assets of non main business, the Company transferred the 90% equity interest of Dakai Company
    and 44% equity interest of Tiantan Company to the enterprise development company of Huayi
    Group and the buildings in the ground of Huayi Group in Wujing area to Huayi Group, totally
    getting cash flow of RMB 610,000,000 and income of RMB 230,000,000. At present it continues to
    boost the whole withdrawal of the Company from the production base in Wujing area.
(3) Boost the reutilization of the inefficient assets and make use of the economic benefits of the assets
    In 2015 the Company made the reutilization and disposal of the assets in Wujing area as key
    management project. It made cooperation with all relevant parties to revitalize the stock of assets,
    boost the disposal of inefficient assets commonly and make use of the economic benefit of the
    inefficient assets to the greatest extent. It organized the sale and transfer of partial assets with the
    value of reutilization and proceeded to the negotiation for the assets with the intention of transfer. At
    present it has successfully completed the safe dismantlement of F1 type devices, sale of wasted
    material and transfer of partial equipment, increasing the income of more than RMB 10,000,000
    totally for the Company.

3) Accelerate the step of "going out" and seek the industrial transformation and upgrading
   The Company adheres to the strategy of "going out", striving for the chance of assets reorganization in
   international and domestic markets. In this year, it contacted 9 enterprises, 3 industrial zones and 4
   consultant institutions, conducted research and review work pertinently, selected the enterprises in
   new material field, and strived for the projects possibly improving its product chain or increasing the
   adjustment space for the products. The Company has established the investment committee office to
   strengthen the research the investment and cooperation in China and abroad through periodic
   meeting, intelligence collection, business discussion, on-the-spot investigation and report preparing,
   getting progress in exploring the realization of the extending, upgrading and transformation of the
   Company's industrial chain.

4) Adopt firm and flexible measures to enhance the operation and management level
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                                             2015 年年度报告


(1) Continue to enhance HSE management and ensure safety
    The Company adheres to the principle of "building the defense line firmly, holding the bottom line
    and consolidating the line", advocates the safety culture of "self awareness, sensitivity and working
    efficiently" and enhances continuously HSE management level to provide powerful guarantee for its
    adjustment and development. In 2015 the Company established the idea of "safety first" and conduct
    various HSE work based on self features. The enterprises in the chemical industry zone make the
    stabilization and safety of production and the safety of overhaul as the object. The PVC plant focuses
    on the safety and fire control of the halt devices, and the investment program department focus on
    the safety of projects construction. The Company thus ensures its safety and environment protection
    in all aspects.
(2) Grasp the market chance keenly and boost the differentiated sales
    For the slow market of sodium hydroxide, the Company adjusted initiatively the structure of the
    products for sale, conducted the optimization of products types timely and strived to adjust the
    area structure to maximize the profit of sodium hydroxide products. For general loss of resin
    products, the Company, based on the analysis on the marginal contribution of products, strengthen
    the sale of ethylene dichloride. It focused on high-end products market, optimized the area
    structure and customer structure of the products, and strengthened the quality improvement and
    promotion for the special resins and new material CPVC resin with all the technical and marketing
    force. In 2015, the domestic market remained in the doldrums, new projects were halted, and the
    demand for industrial pipes was reduced greatly. It is difficult to make breakthrough in other
    application fields in the short period, so the Company focused on export markets, develop the
    markets in Middle East, South America, Africa and other areas and got good sales performance.

5. Prepare the "13th Five-Year" plan and design the future development blueprint
   The Company's "13th Five-Year" plan is prepared under the situation with multiple pressures that
   China's economic development has entered a new normal status, economic growth is slowing,
   deep-seated contradictions and structural problems appear, business operation is facing the changeable
   situation, the production units in Wujing area are halted and employees need to be dismissed.
   Therefore, in 2015 the Company set the direction and goal through thinking, went to many domestic
   enterprises and industrial parks to make investigations time after time based on the development
   strategy of "going out" and organized various professional departments to revise the plan based on
   requirements of the Group to complete the preparing of the plan on schedule.
   It is estimated that in 2016 the global economy will continue to show the trend of weak recovery,
   the lack of demand of developed economies and low long-term growth rate will coexist, the
   declining trend of the overall growth rate of emerging economies will be difficult to be prevented,
   and the chlor-alkali industry will continue to get loss. 2016 is the starting year of the "13th
   Five-Year" plan and also the key year for the Company to "make adjustment for survival and win
   the future through transformation development". Therefore, the Company will continue to
   accelerate the withdrawal from Wujing area and boost the concentration and upgrading in the
   chemical industry zone through unified thought and erected confidence, strengthen the technical
   research and development to accelerate the development of new chemical materials, develop the
   green circulating economy and win its position in the field of new chemical industry, focus on the
   market demand to adjust the product structure and demonstrate the competitive advantage of its
   good products to achieve effective supply, adhere to the "going out" strategy to seek strategic
   cooperation and investment opportunities in global market to expand new space for the Company's
   development, and optimize the Company's governance in all aspects through regulating of all the
   management systems and creating a professional and competent management team.

2. Main operating status in the report period
   In the report period the Company realized the operating income of RMB 6,170,874,200, decreasing by
   RMB 844,535,000 or 12.04% than same period of last year, the gross profit of RMB 109,561,900,
   increasing by RMB 692,529,900 than same period of last year, and the net profit attributable to
   shareholders of the listed Company of RMB 95,615,000, increasing by RMB 688,117,500 than same
   period of last year (- RMB 592,502,500).



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                                             2015 年年度报告


1) Analysis on the main business
     Analysis on Changes in Relevant Items in the Income Statement and Cash Flow Statement
                                                                                     Unit: RMB
                    Item                     Current period   Same period of
                                                                              Change ratio (%)
                                                 amount          last year
   Operating income                         6,170,874,223.67 7,015,409,267.56           -12.04
   Operating cost                           5,559,439,778.97 6,375,944,582.66           -12.81
   Selling cost                               199,911,085.12   205,248,898.35            -2.60
   Management expenses                        402,196,032.57   633,388,738.66           -36.50
   Financial expenses                         140,436,053.89   121,456,535.42            15.63
   Net cash flow from operating activities    305,852,432.45   -29,059,999.83   Not applicable
   Net cash flow from investment activities   462,369,445.87 -495,001,156.50    Not applicable
   Net cash flow from financing activities   -930,062,240.97   353,435,963.67         -363.15
   R&D expenditure                             36,893,630.81    40,756,284.35            -9.48

(1) Analysis on revenue and cost

a) Main business divided by sector, product and area
                                                                                                      Unit: RMB
                                                Main business by sector
                                                                    Increase or
                                                                                    Increase or
                                                        Gross       decrease of                       Increase or decrease
                                                                                    decrease of
                                                         profit      operating                         of gross profit rate
      Sector      Operating income    Operating cost                               operating cost
                                                          rate     income than                         than previous year
                                                                                   than previous
                                                          (%)        previous                                 (%)
                                                                                     year (%)
                                                                     year (%)
   Industry       4,151,317,229.89   3,556,630,124.12     14.33           -14.96           -17.05         Increase by 2.16
                                                                                                         percentage points
   Construction      33,362,397.27      29,647,816.81        11.13        23.49            16.50          Increase by 5.33
                                                                                                         percentage points
   Trade          1,939,874,817.55   1,932,174,066.11         0.40        -2.69             -2.46        Decrease by 0.24
   income                                                                                                 percentage point
   Total          6,124,554,444.71   5,518,452,007.04         9.90       -11.27            -12.32         Increase by 1.09
                                                                                                         percentage points
                                              Main business by product
                                                                  Increase or      Increase or
                                                       Gross      decrease of      decrease of
                                                                                                     Increase or decrease
                                                        profit     operating        operating
     Product      Operating income   Operating cost                                                   of gross profit rate
                                                         rate    income than        cost than
                                                                                                    than previous year (%)
                                                         (%)       previous         previous
                                                                   year (%)         year (%)
   PVC              494,916,263.20    575,229,431.08    -16.23         -17.04            -32.51         Increase by 26.64
                                                                                                        percentage points
   Sodium         1,282,836,609.51    940,728,848.52         26.67        -5.85           -3.67          Decrease by 1.66
   hydroxide                                                                                            percentage points
   Chlorine       2,147,385,018.64   1,895,920,517.00        11.71       -17.99          -14.85          Decrease by 3.26
   products                                                                                             percentage points
   Other          2,199,416,553.36   2,106,573,210.44         4.22        -5.39           -5.90          Increase by 0.51
                                                                                                         percentage point
   Total          6,124,554,444.71   5,518,452,007.04         9.90       -11.27          -12.32          Increase by 1.09
                                                                                                        percentage points
                                                 Main business by area
                                                                    Increase or    Increase or
                                                         Gross      decrease of    decrease of
                                                                                                     Increase or decrease
                                                         profit      operating      operating
      Area        Operating income    Operating cost                                                  of gross profit rate
                                                          rate     income than      cost than
                                                                                                    than previous year (%)
                                                          (%)        previous       previous
                                                                     year (%)       year (%)
   China          5,821,380,551.51   5,208,231,369.33     10.53          -11.40          -12.79           Increase by 1.43
                                                                                                         percentage points

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                                                 2015 年年度报告


   Other             303,173,893.20       310,220,637.71           -2.32         -8.70            -3.62           Decrease by 5.39
   countries                                                                                                      percentage points
   Total           6,124,554,444.71      5,518,452,007.04          9.90        -11.27            -12.32            Increase by 1.09
                                                                                                                  percentage points


b) Analysis on production and sale
                                                                      Increase or         Increase or          Increase or
                                         Sales          Stock
                          Output                                      decrease of         decrease of          decrease of
                                        volume         balance
    Main products         ('0000                                      output than        sales volume         stock balance
                                        ('0000          ('0000
                           tons)                                       previous          than previous        than previous
                                         tons)           tons)
                                                                       year (%)            year (%)              year (%)
   PVC product               7.65           7.67            0.63           -11.49                 -3.25                -10.13
   Sodium                   68.78          66.25            1.52             -5.82                -3.44                -28.58
   hydroxide
   product
   Chlorine product        142.91        131.47             8.14            37.35                  -1.45                  23.42

c) Cost analysis
                                                                                                              Unit: RMB
                                                            By sector
                     Items of                                Ratio in                               Ratio in
                                   Amount in current                        Amount in same                         Change ratio
      Sector            cost                                total cost                             total cost
                                       period                              period of last year                        (%)
                     structure                                 (%)                                    (%)
   Industry        Direct             2,860,008,053.66           48.73       3,614,263,644.00           57.42             -20.87
                   material
                   Direct               96,854,436.74               1.65        92,817,782.97              1.47             4.35
                   labour
                   Power               244,563,736.73               4.17       249,017,879.57              3.96            -1.79
                   Manufacture         355,203,896.99               6.05       331,797,420.12              5.27             7.05
                   cost
                   Total              3,556,630,124.12             60.60     4,287,896,726.66             68.13           -17.05
   Construction    Direct                 2,220,503.52              0.04         1,397,498.74              0.02            58.89
                   material
                   Direct                3,688,472.71               0.06         1,581,052.08              0.03           133.29
                   labour
                   Manufacture          23,738,840.58               0.40        22,470,081.24              0.36             5.65
                   cost
                   Total                 29,647,816.81              0.51        25,448,632.06              0.40            16.50
   Trade           Purchase           1,932,174,066.11             35.01     1,980,812,658.24             31.47            -2.46
   income          cost
                                                           By product
                     Items of                                Ratio in                             Ratio in
                                   Amount in current                        Amount in same                        Change ratio
     Product            cost                                total cost                              total
                                       period                              period of last year                       (%)
                     structure                                 (%)                                cost (%)
   PVC             Direct              382,641,803.88              6.52        593,100,331.68         9.42                -35.48
                   material
                   Direct               17,460,930.59               0.30        22,641,881.58         0.36                -22.88
                   labour
                   Power                95,674,768.66               1.63       108,524,507.82         1.72                -11.84
                   Manufacture          79,451,927.95               1.35       128,110,613.58         2.04                -37.98
                   cost
                   Total               575,229,431.08               9.80       852,377,334.66        13.54                -32.51
   Sodium          Direct              729,098,699.59              12.42       846,403,320.03        13.45                -13.86
   hydroxide       material
                   Direct               15,627,153.42               0.27         4,283,945.16         0.07                264.78
                   labour
                   Power                94,463,749.19               1.61        86,798,377.75         1.38                  8.83
                   Manufacture         101,539,246.32               1.73        39,077,055.00         0.62                159.84
                   cost
                   Total                940,728,848.52             16.03       976,562,697.94        15.52                 -3.67
   Chlorine        Direct             1,690,759,223.40             28.81     2,043,905,626.27        32.47                -17.28

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                                             2015 年年度报告


   product          material
                    Direct          32,201,251.85               0.55       21,048,519.55      0.33             52.99
                    labour
                    Power           43,801,478.39               0.75       42,051,606.32      0.67               4.16
                    Manufacture    129,158,563.36               2.20      119,573,405.43      1.90               8.02
                    cost
                    Total         1,895,920,517.00             32.31     2,226,579,157.57    35.38             -14.85


(2) Expenses
                                                                                                     Unit: RMB
             Item                   2015                          2014              Increase or decrease (%)
   Selling cost                   199,911,085.12           205,248,898.35                        -2.60
   Management expenses            402,196,032.57           633,388,738.66                       -36.50
   Financial expenses             140,436,053.89           121,456,535.42                        15.63
   Income tax expense               4,672,427.26             4,622,713.67                         1.08
  Analysis on reason for change of the expenses:
  a) The management expenses decreased by 36.50% than same period of last year, and this is mainly
      caused by the big decrease of the employees' dismissal benefit than previous year.
  b) The financial expenses increased by 15.63% than same period of last year, and this is mainly by the
      paid interest of new loan increased in current period.

(3) Investment in R&D
    Details of R&D investment
                                                                                              Unit: RMB
     Expense investment in R&D in current period                                          26,417,262.01
     Capitalized investment in R&D in current period                                      10,476,368.80
     Total of investment in R&D                                                           36,893,630.81
     Ratio of total investment in R&D in the operating income (%)                                   0.60
     Number of R&D personnel in the Company                                                          407
     Ratio of R&D personnel in total employees of the Company (%)                                  27.37
     Ratio of capitalized investment in R&D (%)                                                    28.40
   Note:
   In 2015 the Company still continued to focus on the advanced chlorine making process and new
   material technique to make R&D. The main projects included "the improvement on chlorine making
   with hydrogen chloride catalytic oxidation", "the research on quality improvement and processing
   application for the chlorinated polyvinyl chloride resin" and "the development and application of the
   power-saving technology for electrolyzer". For the project of "the improvement on chlorine making
   with hydrogen chloride catalytic oxidation", the Company, based on the completed process package
   for the industrialized unit with the annual capacity of 100,000 tons and the suggestion of the
   specialists for evaluating the process package, conducted the research on the mono-tube exothermic
   character and the suitability of the raw material in the chemical industry zone to optimize further the
   performance of the catalyst. For the project of "the research on quality improvement and
   processing application for the chlorinated polyvinyl chloride resin", the Company conducted quality
   tracing and evaluation to enhance the quality of the chlorinated polyvinyl chloride resin while
   making research on the process formula for the tubing and plumbing of the chlorinated polyvinyl
   chloride.

(4) Cash flow
                                                                                                   Unit: RMB
                    Item                                 2015                   2014             Difference
   Net cash flow from operating activities           305,852,432.45        -29,059,999.83       334,912,432.28
   Net cash flow from investment
   activities                                        462,369,445.87       -495,001,156.50       957,370,602.37
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                                             2015 年年度报告



   Net cash flow from financing activities        -930,062,240.97          353,435,963.67     -1,283,498,204.64
   Net increase of cash and cash
   equivalents                                    -162,165,661.15         -170,749,479.51            8,583,818.36
   Note:
   a) The increase in net cash flow from operating activities is mainly caused by the decrease in the
      expenditure for employee's dismissal benefits and the increase in the income from government
      subsidies.
   b) The increase in cash flow from investing activities is mainly caused by the increase in the cash
      inflow from equity transfer and sale of buildings in current period.
   c) The decrease in net cash flow from financing activities is mainly caused by the increase in the
      outflow of funds due to return of loan in current period.

2) Note on significant changes in the profit caused by non main business
√Applicable □Not applicable
   During the report period, the Company transferred its 90% equity interest in Dakai Company and
   44% equity interest in Tiantan Company, and Wujing regional idly construction building transfer of
   assets, equity transfer and the transfer of assets total revenue RMB 230 million. Including the assets
   transfer of the building in idle land in Wujing area, the Company has totally got income of RMB
   230,000,000. The reason for transfer: (1) strip non main business stripping to focus on development of
   the main business in the chemical industry zone; (2) revitalize the stock assets, improve the
   Company's assets structure, and release the liquidity of the stock assets.

3) Analysis on assets and liabilities
                                     Status of Assets and Liabilities
                                                                                                    Unit: RMB
                                  Ratio in                     Ratio in
                Closing balance              Closing balance                Change
                                    total                        total
      Item         of current                  of previous                   ratio              Remark
                                   assets                       assets
                     period                       period                      (%)
                                     (%)                          (%)
                240,425,945.13               402,636,250.64                           Mainly caused by the
  Monetary                                                                            repayment of loan and
                                      4.96                          7.00     -40.29
  fund                                                                                change of the consolidation
                                                                                      range
                136,446,799.31               220,825,719.39                           Mainly caused by the
  Advance                                                                             advance payment of projects
                                      2.81                          3.84     -38.21
  accounts                                                                            and decrease of power
                                                                                      payment
                  3,561,716.78                 1,895,445.80                           Mainly caused by the
  Other                                                                               increase of the revolving
                                      0.07                          0.03     87.91
  receivables                                                                         fund and the export rebates
                                                                                      receivable in present period
  Deferred           20,529.71                 1,229,186.56                           Mainly caused by reducing
  income tax                          0.00                          0.02     -98.33   of the consolidation range
  assets
  Employees'        780,802.00                28,052,005.16                           Mainly caused by the
  salary                              0.02                          0.49     -97.22   decrease in dismissal benefit
  payable                                                                             appropriated
                 14,824,741.55                27,392,973.52                           Caused by reducing of the
  Tax payable                         0.31                          0.48     -45.88   value added tax unpaid in
                                                                                      present period
  Other         441,394,365.43               713,938,238.76                           Mainly caused by return of
                                      9.10                        12.41      -38.17
  payables                                                                            loan of Huayi Group
  Long-term     645,000,000.00               950,000,000.00                           Mainly caused by return of
                                     13.30                        16.51      -32.11
  payables                                                                            loan of Huayi Group
  Deferred       11,653,477.05                 2,274,880.65                           Caused by change of fair
  income tax                          0.24                          0.04    412.27    value in current period
  liabilities



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                                             2015 年年度报告


4) Analysis on operational information of the industry
   In 2015, the chlor-alkali industry entered the critical period of transition and upgrading. Due to the
   low economic environment, the global petrochemical industry strived continuously to adapt to the
   new trend. China's chlor-alkali industry also experienced severe situation and challenge. Due to the
   sharp problem of excess production capacity, less downstream market demand and low price of the
   main products, in 2015, the chlor-alkali market was very poor in general. In recent years, the growth
   rate of the productive capacity of sodium hydroxide has been decreasing rapidly, and even negative in
   this year. By the end of 2015, the production capacity of sodium hydroxide in China was 38,730,000
   tons, decreasing by 0.95% than 2014 (39,100,000); the growth rate has got the inflection point. In the
   deepening reform with industrial restructuring and elimination of backward production capacity, the
   total capacity of PVC in China is 23,480,000 tons, again a negative growth, in which the increased
   production capacity including the paste resin is 780,000 tons and the capacity declared officially to be
   withdrawn is 1,190,000 tons, a net decrease of 410,000 tons. Domestic PVC production capacity
   continues the way of optimization and reorganization.




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                                                                             2015 年年度报告

5) Analysis on investment status
(1) General analysis on the equity investments in outside entities
                                                                                                         Unit: RMB
                                    Closing       Beginning      Increase or      Increase or decrease than same
                Item
                                    balance        balance        decrease            period of last year (%)
    Long-term equity
    investment                      28,885.54      27,073.64         1,811.90                             6.69
    Salable financial assets        42,407.82      34,985.57         7,422.26                            21.22
    Incl.: Measured with fair
           value                      5,076.59       1,491.47        3,585.12                           240.37
           Measured as per cost     37,331.23      33,494.09         3,837.14                            11.46
    Analysis on the reason for change in equity
    investment:
    1) Long-term equity investment increased by 6.69% year on year, mainly due to the new investment income in
    Huntsman confirmed in current period.
    2) Measured with fair value the salable financial assets increased by 240.37% than same period of last year,
        mainly because the cost measurement changed to the fair value measurement due to lift of the tradable
        shares in current period.
    3) Measured as per cost, the salable financial assets increased by 11.46% than same period of last year and this
        is mainly caused by the investment in Lianheng Company in creased in current period.
a) Financial assets measured at fair value
                                                                                                                         Unit: RMB

                                     Initial      Closing balance of book     Profit or loss in   Change in owner's equity     Accounting        Source of
   Stock code     Stock name
                                investment cost            value             the report period      in the report period        subject            share

                 Double Coin                                                                                                 Salable            Legal person
     600623                         690,000.00                2,709,850.00          21,450.00                  336,481.50
                   Share                                                                                                     financial assets      share
                                                                                                                             Salable            Legal person
     600636            3F           360,000.00                8,972,805.60            5,398.80                 542,947.32
                                                                                                                             financial assets      share
                  Shanghai                                                                                                   Salable            Legal person
     600688                         900,000.00                2,916,000.00                                     620,775.00
                Petrochemical                                                                                                financial assets      share
                                                                                                                             Salable            Legal person
     600610            ZYD        2,095,000.00              32,586,840.00                                   22,868,880.00
                                                                                                                             financial assets      share



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                                                                                      2015 年年度报告

                                                                                                                                       Salable              Legal person
     600637         Oriental Pearl       86,967.00                   3,295,179.63             9,566.37                       652.25
                                                                                                                                       financial assets        share
                       Haitai                                                                                                          Salable              Legal person
     600082                              20,000.00                     285,200.00                                          7,800.00
                    Development                                                                                                        financial assets        share
               Total                   4,151,967.00                 50,765,875.23            36,415.17               24,377,536.07             /                 /


6) Sales of important assets and equities
                                                                                                                                   Unit: RMB'0000

                                                                                                             Difference between the disposal price and        The amount of other composite
                                       Ratio of
                           Price for                    Way for      Time point of      Basis for the time      the shared part in the subsidiary's net      income transferred to the profit or
        Name of                         equity
                            equity                       equity      losing control      point of losing         assets in the consolidated financial        loss on investments related to the
       subsidiary                      disposal
                           disposal                     disposal          right           control right       statement corresponding to the disposed           equity investment in original
                                         (%)
                                                                                                                              investment                                 subsidiary

                                                                                       Change           of
                                                      Transferred
   Shanghai Dakai                                                                      registration in the
                           10,814.42          90      through       Dec. 14, 2015                                                             1,981.17                                    912.30
   Plastics Co., Ltd.                                                                  Industry         &
                                                      agreement
                                                                                       Commerce Bureau
                                                                                       Change           of
   Shanghai Tiantan                                   Transferred
                                                                                       registration in the
   Auxiliaries Co.,        11,603.00          44      through       Dec. 21, 2015                                                             5,376.14
                                                                                       Industry         &
   Ltd.                                               agreement
                                                                                       Commerce Bureau


7) Analysis on main controlled companies and participated companies
(1) Operating performance of main controlled companies
                                                                                                                                                                 Unit: RMB'0000
   Company name                                            Business nature                                          Registered capital       Assets volume           Net profit
   Shanghai Jinyuan Tap Water Co., Ltd.                    Tap water                                                                  900                 1,574.35          175.32
                                                           Maintenance of petrochemical devices and
   Shanghai Chlor-Alkali machinery Co., Ltd.                                                                                       3,000                  2,789.74          653.04
                                                           engineering construction
   Shanghai Ruisheng Enterprise Co. Ltd.                   Trade                                                                      500                 4,958.78           83.14
   Shanghai Luwei Plastics Co., Ltd.                       Productioin of CPVC tubing and pipe fittings                            5,000                  3,156.52         -477.29


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                                                                               2015 年年度报告

(2) Influence of the net profit of the controlled subsidiary or the income of the participated subsidiary on the Company's net profit
                                                                                                                                                            Unit: RMB'0000
                                                                                                                                                           Investment income
                                                                                  Main products or         Main business    Main business
                  Company name                          Business nature                                                                      Net profit     contributed by the
                                                                                      service                income            profit
                                                                                                                                                          participated company
                                                                               Sale     of    chemical
     Shanghai Ruisheng Enterprise Co. Ltd.      Trade                                                          28,786.44          1,225.93        83.14                   83.14
                                                                               material and products
     Shanghai Chlor-Alkali Machinery Co.,
                                                Industry                       Machine manufacturing           10,430.18          2,353.31       653.04                  544.18
     Ltd.
     Shanghai Jinyuan Tap Water Co., Ltd.       Industry                       Tap water                          834.72           453.97        175.32                  148.33
                                                                               Production of CPVC
     Shanghai Luwei Plastics Co., Ltd.          Chemical production and sale                                     1,414.60            -6.23      -477.29                 -334.10
                                                                               tubing and pipe fittings
                                                                               MDI     refining      and
     Shanghai Huntsman Polyurethane Co., Ltd.   Chemical production and sale                                  296,015.09         23,293.98    14,865.88                4,459.76
                                                                               polymer


3. Discussion and analysis on the Company's future development
1) Industrial competition pattern and development trend
   While the two leading products of chlor-alkali industry, sodium hydroxide and PVC, have changed from rapid development to the status of negative growth and
   capacity removing, the chlor-alkali industry has been fully aware of the importance of transformation, upgrading and innovation. With the implementation of a
   series of industrial policies, the efforts to integrate the chlor-alkali industry in the future will continue to increase, the product structure will be more reasonable,
   and the pace of going out will also be accelerated. The future development of the chlor-alkali industry will be facing great challenges, but also bears new chances,
   in which the industrial upgrading will be the greatest chance. In recent years, the government has issued a series of standards and norms for safety, environmental
   protection and energy consumption of the chlor-alkali industry, and has put forward new constraint requirements. In order to adapt to the new situation, the chlor
   alkali industry has also got some positive changes, the cooperation between the upstream and downstream will also be increasingly enhanced, and the strong
   enterprises will achieve the extension of the industrial chain and the complementation between areas through acquisition, merger and other means.

2) Development strategy of the Company
   Driven by two means:
   (1) The optimization and upgrading of the industrial chain of circulating economy in the chemical industry zone will be made through the self-developed of new
       technology for chlorine making, making the increasing demand of chlorine in the downstream of the chemical industry zone satisfied by cyclic utilization of
       the chlorine medium. At the same time, the Company will make use of the development and application of the power-saving technology for electrolyzer to
       enhance the technical content of the operating devices in the chemical industry zone, reduce the unit consumption and obtain better benefits.
   (2) The Company will strive to explore the way for industrial transformation and upgrading and mergers and acquisitions. It will build new production base
       through mergers and acquisitions in the area with cost advantage, extend the product chain, achieve the transformation and upgrading and increase the new
       profit growth point. It will strive to seek low-cost aand high-quality raw material market and advanced chemical technology abroad to master the


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                                                                         2015 年年度报告

      internationally-advanced chemical technology, expand international raw materials market and sales market, implement the strategy of "going out from the
      chlor-alkali industry", "going out from Shanghai" and "going out from China" and promote the company's "innovation, upgrading and transformation to
      achieve new development.

3) Operating plan
   Faced with the situation of coexistence between chances and challenges and between pressure and power, the Company will take advantage of the situation to
   adapt to the new status of the economic development, promote the optimization of economic structure, promote the steady growth of business performance,
   boost the reform into depth, make steady progress, accelerate the transformation of development, and strive to achieve more e fficient and more sustainable
   development of higher quality.
(1) Adhere to the green development as the premise to ensure safety and environmental protection controlled in all aspects. The Company will reshape the HSE
    management system to ensure system running effectively, strengthen the safety management measures and safety to enhance the intrinsic safety with great
    efforts, implement the responsibility, strengthen the examination with strict award and penalty to enhance the HSE execution force, and improve the
    environmental management system to achieve green chemical industry and social caring with responsibility of caring.
(2) Strive to remove the loss and get profit and ensure all the measuress for reducing cost and enhancing efficiency implemented. The Company will stabilize the
    daily production and operation to ensure the high load operation of the profitable devices, optimize the sales structure to reduce procurement cost and seek to
    maximize the benefits, reduce the cost of public utilities costs to strengthen the efforts for implementing energy-saving and emission reducing projects and
    control strictly the three expenses and manufacturing cost to reduce the cost and improve the efficiency.
(3) Accelerate the restructuring of Wujing and reform the organization structure to ensure to seize the opportunity and move forward in the restructuring. The
    Company will optimize and integrate the organizational structure to improving the performance appraisal system and the organization competitive power,
    complete the organizating of the commercial company to strengthen the trade and get value increasing in trade, accelerate the final adjustment of Wu Jing base
    to accelerate the disposal of assets and strive to make operation with no burden.
(4) The Company will actively make planning in advance. For some idle or inefficient stock assets and strategic assets, the Company will introduce the third party
    cooperation, develop the third party service and take other measures to share the cost, revitalize the stock and enh ance the revenue.

4) Possible risks
(1) Policy risk and industrial risk. The central committee of CCP has clearly put forward the general requirements of insisting on maintaining stability while
    stepping forward and the five tasks, removing productive capacity, removing the inventories, deleveraging, reducing cost and make up for weaknesses, in the
    economic work conference. The chlor-alkali industry has severe oversupply of productive capacity, so it must proceed to remove the excess productive
    capacity.
(2) Product price risk. The over capacity in the chlor-alkali industry causes the risk of the product price falling down in 2016. Domestic and foreign sodium
    hydroxide market is still in a downward channel. The low cost competition in the international market makes the price of sodium hydroxide is lower than
    domestic market. The domestic downstream industries of sodium hydroxide, such as chemical fiber, papermaking, printing and dyeing and alumina, are in
    weakness of demand, so the price of sodium hydroxide is still in low position. This will affect the profitability of the Company’s leading product sodium
    hydroxide.



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(3) Raw material risk. Impacted by cold chain transportation, the Company's main raw material ethylene is of the unique commercial attributes, high fluctuations in
    price, and being easy to rise and difficult to fall. This will deviate from the production cost and bring risk to the control of the production cost of the Company's
    product ethylene dichloride. The electricity needed for sodium hydroxide is made as part of the raw material, but it is difficult to get policy favour for the price
    of the electricity for electrolysis under the guidance of existing location economy.

   Countermeasure
   (1) Further strengthen the policies and actions for achieving the object of the operating plan.
   (2) In the process of removing the productive capacity of PVC, seek the production base for producing the differentiated PVC with low cost raw material and
       enhance the competitive power in the process of transferring the paste resin production.
   (3) The Company will establish a commercial company to optimize the mode of purchase and sales, further expand the market, strengthen the efforts for product
       differentiation and the channel for purchase of raw material, and improve the anti-risk ability through reducing the raw material cost and increasing product
       sales price.

4) Note on the status and causes not disclosed as per criteria due to not being applicable to the provisions of the criteria or special causes
□Applicable √Not applicable

                                                                        5. Major Events

1. Proposal on profit distribution of ordinary shares or transfer of capital reserves
1) The formulation, implementation or adjustment of the cash dividend policy
   In 2012 the Company, according to relevant regulations of China Securities Regulatory Commission, Shanghai Securities Regulatory Bureau and Shanghai Stock
   Exchange, made amendment on relevant provisions related to profit distribution in the Articles of Association, further improved relevant decision-making
   process and mechanism, clarified the profit distribution form, the actual conditions and proportion of the cash dividend, the use principle of undistributed profit
   and other specific policies.
   During the report period, the Company, strictly in accordance with relevant provisions, executed the decision-making process of profit distribution and
   implemented the profit distribution plan. The Company's 2013 profit distribution plan: with the Company's total share capital of 1,156,399,976 shares as of Dec.
   31, 2013 as the basis, the Company would distribute cash dividend of RMB 0.05 (including tax) for every 10 shares held to all shareholders, totally issuing the
   dividend of RMB 5,781,999.88, and all the remained undistributed profit would be carried forward to future distribution. The cash dividends for the shareholders
   of B share would be paid after converted to US Dollars. The profit distribution plan was examined and passed in the Company's 2013 annual shareholders'
   meeting (annual meeting) on May 7, 2014, and implemented on Jun. 19, 2014.




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                                                                      2015 年年度报告

2) The Company's profit distribution plan for ordinary shares or proposal and the plan for capital reserves transferred to share capital or proposal in
   recent 3 years (including the report period)
                                                                                                                                              Unit: RMB
                                   Issued dividend for    Shares      Total amount of        Net profit attributable to        Ratio in the net profit
    The year for    Bonus share
                                     every 10 shares   increased for   cash dividend   shareholders of the listed Company attributable to shareholders of
     dividend       for every 10
                                     held (RMB) (tax     every 10       issued (tax     in the consolidated statements in    the listed Company in the
    distribution     shares held
                                        included)       shares held      included)      the year for dividend distribution  consolidated statements (%)
            2015                0                    0                               0                        95,615,030.34                             0
            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

3) If the profit is positive in the report period and the profit distributable to common shareholders by the parent company is positive but the Company
    does not lodge the proposal for profit distribution in cash for ordinary shares, the Company shall disclose in detail the reasons and the purpose and use
    plan of the undistributed profit
□Applicable √Not applicable

2. Implementation of the commitment
√Applicable □Not applicable

1) Commitments of the Company, shareholders, actual controller, purchaser, Directors, Supervisors, senior executives or other related parties in the report
   period or left to the report period
                                                                                                                      Has deadline for   Implemented
    Commitment Commitment             Commitment        Commitment
                                                                             Time and period of the commitment        implementation   strictly in time or
     background          type              party           content
                                                                                                                           or not              not
                                    Director,          Increase    the Increase the shares held within 6 months after
    Other
                     Other          Supervisor     and Company's       July 10 and committed not decreasing the Yes                    Yes
    commitment
                                    senior executives shares held      shares held within 6 months after then

3. Fund occupation and the liquidation in the report period
□Applicable √Not applicable




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                                                                        2015 年年度报告



4. Note of the Board of Directors on the "non-standard auditor's report" of the public accounting firm
1) Note of the Board of Directors and Supervisory Committee on the "non-standard auditor's report" of the public accounting firm
□Applicable √Not applicable

2) The analysis and explanation of the Board of Directors on the cause and influence of the changes in the accounting policy, accounting estimate or
   accounting method
□Applicable √Not applicable

3) The analysis and explanation of the Board of Directors on the cause and influence of corrected significant errors in earlier period
□Applicable √Not applicable

5. Engagement and dismissal of the public accounting firm
                                                                                   Unit: RMB'0000
                                                                        Now engage
   Name of the domestic public accounting firm          BDO China Shu Lun Pan Certified Public
                                                        Accountants LLP
   Reward of the domestic public accounting firm                                               88
   Audit term of years of the domestic public           5
   accounting firm
                                                 Name                                 Reward
   Public accounting firm for audit BDO China Shu Lun Pan                                           35.2
   of internal control               Certified Public Accountants
                                     LLP

   Note on the engagement and dismissal of the public accounting firm
□Applicable √Not applicable

6. Risk of suspension of listing
   Cause for suspension of listing and the the Company's measures for removing the suspension of listing
   None



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                                                                                    2015 年年度报告



7. Events related to bankruptcy and reorganization
□Applicable √Not applicable

8. Significant lawsuits and arbitrations
□Applicable √Not applicable

9. Penalties to the listed Company, Directors, Supervisors, senior executives, controlling shareholder, actual controller and purchaser and the corrections
□Applicable √Not applicable

10. The Company's equity incentive plan, employee stock ownership plan and other incentives to the employees and the influences
□Applicable √Not applicable

11. Significant related transactions
√Applicable □Not applicable
1) The related transactions associated with routine operations
(1) Events not disclosed by provisional announcements
√Applicable □Not applicable
                                                                                                                                                                              Unit: RMB
                                                                                                                                                                      Ratio in total amount of
                                                                                Type of related     Content of related    Pricing principle for   Amount of related
           Related transaction party                Related relation                                                                                                  the transactions of same
                                                                                  transaction          transaction         related transaction      transaction
                                                                                                                                                                              type (%)
  Shanghai Huayi Energy Chemical Co., Ltd.   Controlled subsidiary of parent   Purchase goods      Material purchase     Settled through                       129.84                      0.02
                                             company                                                                     negotiated price
  Shanghai Huayi Tianyuan Chemical           Controlled subsidiary of parent   Purchase goods      Material purchase     Settled through                        83.47                     0.01
  Logistics Co., Ltd.                        company                                                                     negotiated price
  Shanghai Chlor-Alkali Creation Co., Ltd.   Wholly-owned subsidiary of        Purchase goods      Material purchase     Settled through                       762.01                     0.13
                                             parent company                                                              negotiated price
  Shanghai Huayi Group Equipment             Wholly-owned subsidiary of        Purchase goods      Material purchase     Settled through                        48.03                     0.01
  Engineering Co., Ltd.                      parent company                                                              negotiated price
  Shanghai Chemical Supply and Marketing     Wholly-owned subsidiary of        Purchase goods      Material purchase     Settled through                        20.93                     0.00
  Co., Ltd.                                  parent company                                                              negotiated price
  Shanghai Huayi New Energy Chemical         Wholly-owned subsidiary of        Purchase goods      Material purchase     Settled through                       436.53                     0.08
  Sales Co., Ltd.                            parent company                                                              negotiated price


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                                                                                2015 年年度报告

Shanghai Huayi Information Technology    Controlled subsidiary of parent   Purchase goods         Material purchase   Settled through       20.59    0.00
Co., Ltd.                                company                                                                      negotiated price
Shanghai Huayi Group Huayuan Chemical    Wholly-owned subsidiary of        Purchase goods         Material purchase   Settled through       11.69    0.00
Co., Ltd.                                parent company                                                               negotiated price
Shanghai White Elephant & Swan Battery   Controlled subsidiary of parent   Purchase goods         Material purchase   Settled through         0.12   0.00
Co., Ltd.                                company                                                                      negotiated price
Huayi Group (Hong Kong) Co., Ltd.        Wholly-owned subsidiary of        Purchase goods         Material purchase   Settled through    18,115.59   3.20
                                         parent company                                                               negotiated price
Shanghai Chemical Industry Inspection &  Wholly-owned subsidiary of        Receive service        Receive service     Settled through      252.87    0.04
Detection Co., Ltd.                      parent company                                                               negotiated price
Shanghai Huayi Tianyuan Chemical         Controlled subsidiary of parent   Receive service        Receive service     Settled through     2,413.34   0.43
Logistics Co., Ltd.                      company                                                                      negotiated price
Shanghai New Tianyuan Chemical Transport Controlled subsidiary of parent   Receive service        Receive service     Settled through      461.95    0.08
Co., Ltd.                                company                                                                      negotiated price
Shanghai Chlor-Alkali Creation Co., Ltd. Wholly-owned subsidiary of        Receive service        Receive service     Settled through     2,244.83   0.40
                                         parent company                                                               negotiated price
Shanghai Huayi Engineering Co., Ltd.     Wholly-owned subsidiary of        Receive service        Receive service     Settled through     3,246.63   0.57
                                         parent company                                                               negotiated price
Shanghai Huayi Information Technology    Controlled subsidiary of parent   Receive service        Receive service     Settled through      145.42    0.03
Co., Ltd.                                company                                                                      negotiated price
Shanghai Pacific Chemica Equipment       Controlled subsidiary of parent   Receive service        Receive service     Settled through       22.22    0.00
Engineering Co., Ltd.                    company                                                                      negotiated price
Shanghai Huayi Energy Chemical Co., Ltd. Controlled subsidiary of parent   Sell goods             Product sale        Settled through      347.33    0.07
                                         company                                                                      negotiated price
Shanghai Huayi Group Huayuan Chemical Wholly-owned subsidiary of           Sell goods             Product sale        Settled through         2.08   0.00
Co., Ltd.                                parent company                                                               negotiated price
Shanghai 3F New Materials Co., Ltd.      Controlled subsidiary of parent   Sell goods             Product sale        Settled through       36.23    0.00
                                         company                                                                      negotiated price
Shanghai Huayi Tianyuan Chemical         Controlled subsidiary of parent   Sell goods             Product sale        Settled through          4.9   0.00
Logistics Co., Ltd.                      company                                                                      negotiated price
Shanghai Chlor-Alkali Creation Co., Ltd. Wholly-owned subsidiary of        Sell goods             Product sale        Settled through       53.73    0.01
                                         parent company                                                               negotiated price
Shanghai Tianyuan Group Shengde Plastics Wholly-owned subsidiary of        Sell goods             Product sale        Settled through      441.67    0.08
Co., Ltd.                                parent company                                                               negotiated price
Shanghai Resin Plant Co., Ltd.           Wholly-owned subsidiary of        Sell goods             Product sale        Settled through       25.98    0.00
                                         parent company                                                               negotiated price
Shanghai Huayi Acrylic Acid Co., Ltd.    Controlled subsidiary of parent   Sell goods             Product sale        Settled through      344.87    0.06
                                         company                                                                      negotiated price
Shanghai Chemical Supply and Marketing Wholly-owned subsidiary of          Sell goods             Product sale        Settled through      162.74    0.03
Co., Ltd.                                parent company                                                               negotiated price
Shanghai Sanaisi Reagent Co., Ltd.       Wholly-owned subsidiary of        Sell goods             Product sale        Settled through         0.99   0.00


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                                                                                    2015 年年度报告

                                             parent company                                                             negotiated price
  Huayi Group (Hong Kong) Co., Ltd.          Wholly-owned subsidiary of        Sell goods             Product sale      Settled through                  1,190.30                     0.22
                                             parent company                                                             negotiated price
  Shanghai Yiping Pigment Co., Ltd.          Controlled subsidiary of parent   Sell goods             Product sale      Settled through                     34.92                     0.01
                                             company                                                                    negotiated price
  Yixing Huayi Colourating Science and       Controlled subsidiary of parent   Sell goods             Product sale      Settled through                   384.42                      0.07
  Technology Co., Ltd.                       company                                                                    negotiated price
  Shanghai Huayi Tianyuan Chemical           Controlled subsidiary of parent   Sell goods             Provide service   Settled through                   584.35                      0.11
  Logistics Co., Ltd.                        company                                                                    negotiated price
  Shanghai Huayi Engineering Co., Ltd.       Wholly-owned subsidiary of        Provide service        Provide service   Settled through                   729.51                      0.14
                                             parent company                                                             negotiated price
  Shanghai Huayi Polymer Co., Ltd.           Wholly-owned subsidiary of        Provide service        Provide service   Settled through                   194.20                      0.04
                                             parent company                                                             negotiated price
  Shanghai Huayi Information Technology      Controlled subsidiary of parent   Provide service        Provide service   Settled through                   118.13                      0.02
  Co., Ltd.                                  company                                                                    negotiated price
  Double Coin Holdings, Ltd.                 Controlled subsidiary of parent   Provide service        Provide service   Settled through                      3.25                     0.00
                                             company                                                                    negotiated price
  Shanghai Huntsman Polyurethane Co., Ltd.   Affiliated company                Provide service        Provide service   Settled through                     13.38                     0.00
                                                                                                                        negotiated price
                                                       Total                                                                        /                  33,089.04                      5.86
  Particulars of big sale return
  Note on related transactions                                                                                                             The transactions between the Company and the
                                                                                                                                           related parties is needed by the Company's
                                                                                                                                           routine operating activities for purchase of raw
                                                                                                                                           material and sale of products of the regular
                                                                                                                                           business activities, as well as the expenditures
                                                                                                                                           for payment of service and custody business
                                                                                                                                           produced from stripping the non recurring assets
                                                                                                                                           and non core business. These are necessary
                                                                                                                                           supplements for professional cooperations and
                                                                                                                                           mutual exchange of merits between the
                                                                                                                                           Company and the controlled shareholder and
                                                                                                                                           between partial subordinate enterprises, and
                                                                                                                                           such related transactions shall be continued in
                                                                                                                                           future.


2) Related transactions from acquisition and sale of assets or equity
(1) Events disclosed already in the provisional announcement and having subsequent progress or change
    On October 19, 2015 the Company convened the 25th meeting of 8th Board of Directors, examined and passed the Motion on the Related Transaction for
    Transfer of 90% Equity Interests of Shanghai Dakai Plastics Co., Ltd. The Company should transfer the 90% equity interest of Dakai Company held to Shanghai


                                                                                            26 / 64
                                                                                2015 年年度报告

    Huayi Group Enterprise Development Co., Ltd. with the evaluated price of RMB 108,114,217.90. On Dec. 14, 2015 it completed the alteration of industrial &
    commercial registration. It examined and passed the Motion on the Related Transaction for Transfer of 44% Equity Interest of Shanghai Tiantan Auxiliaries Co.,
    Ltd. The Company should transfer the 44% equity interest of Tiantan Company to Shanghai Huayi Group Enterprise Development Co., Ltd. with the evaluated
    price of RMB 117,295,649.81. On Dec. 21, 2015 it completed the alteration of industrial & commercial registration.
    On October 28, 2015 the Company convened the 26th meeting of 8th Board of Directors, which examined and passed the Motion on the Related Transaction for
    Transfer of the Building Assets in the Idle Land of Wujing area, transferring such assets to Shanghai Huayi Holdings Company. On November 24, 2015 it
    completed the signing of the transfer of the buildings.
(2) Events not disclosed by provisional announcements
□Applicable √Not applicable

3) Significant related transactions of common investment
(1) Events not disclosed by provisional announcements
□Applicable √Not applicable

4) Related creditor's rights and debts
(1) Events not disclosed by provisional announcements
√Applicable □Not applicable
                                                                                                                                                                       Unit: RMB’
                                                                                    Provide fund to the related party           The related party provided fund to the listed Company
              Related party                      Related relation
                                                                            Beginning balance     Amount       Closing balance Beginning balance      Amount          Closing balance
  Shanghai Huayi Tianyuan Chemical      Controlled subsidiary of parent                  42.36          -8.79             33.57            111.89        -105.54                    6.35
  Logistics Co., Ltd.                   company
  Shanghai Chlor-Alkali Creation Co.,   Wholly-owned subsidiary of parent                17.37        -11.34              6.03               85.16         -33.51                 51.65
  Ltd.                                  company
  Shanghai Resin Plant Co., Ltd.        Wholly-owned subsidiary of parent                  6.87        -2.87              4.00
                                        company
  Shanghai Tianyuan Group Shengde       Wholly-owned subsidiary of parent             2,200.33       -100.82          2,099.51
  Plastics Co., Ltd.                    company
  Shanghai Dye Chemical Plant           Controlled subsidiary of parent                  37.62         -0.46             37.16
                                        company
  Shanghai Huayi Engineering Co., Ltd. Wholly-owned subsidiary of parent              2,954.20     -2,925.69             28.51               16.52          -5.10                 11.42
                                        company
  Shanghai Huayi Acrylic Acid Co., Ltd. Controlled subsidiary of parent                  54.53         34.31             88.84
                                        company
  Shanghai Huayi Fine Chemical Co. Ltd. Wholly-owned subsidiary of parent                  0.47         0.00              0.47
  (formerly Shanghai Paint Co,. Ltd.)   company


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                                                                             2015 年年度报告

Shanghai Soap Making Co., Ltd.           Controlled subsidiary of parent             33.35       0.00    33.35         0.54        0.00         0.54
                                         company
Shanghai Huayi Energy Chemical Co.,      Controlled subsidiary of parent            241.56     -97.38   144.18
Ltd.                                     company
Shanghai 3F New Materials Co., Ltd.      Controlled subsidiary of parent             34.84     -12.96    21.88
                                         company
Shanghai Huayi Polymer Co., Ltd.         Wholly-owned subsidiary of parent           76.43      31.09   107.52
                                         company
Shanghai Peony Printing Ink Co., Ltd.    Controlled subsidiary of parent              1.86      -1.86     0.00         0.14        0.00         0.14
                                         company
Shanghai Yiping Pigment Co., Ltd.        Controlled subsidiary of parent              0.00       6.75     6.75
                                         company
Yixing Huayi Coloration Science and      Controlled subsidiary of parent              0.00     303.40   303.40
Technology Co., Ltd.                     company
Shanghai Huayi Information               Controlled subsidiary of parent              0.00      65.93    65.93         9.91        -1.20        8.71
Technology Co., Ltd.                     company
Shanghai Tiantan Auxiliaries Co., Ltd.   Controlled subsidiary of parent              0.00       0.81     0.81
                                         company
Shanghai Huayi New Energy Chemical       Wholly-owned subsidiary of parent            0.09      -0.09     0.00
Sales Co., Ltd.                          company
Shanghai Chlor-alkali Creation Co.,      Wholly-owned subsidiary of parent            0.00       1.05     1.05
Ltd. Fluorine Ware Branch                company
Shanghai New Tianyuan Chemical           Controlled subsidiary of parent                                             25.37        -14.29      11.08
Transport Co., Ltd.                      company
Shanghai Chemical Industry Inspection    Wholly-owned subsidiary of parent                                             7.84        -6.43        1.41
& Detection Co., Ltd.                    company
Shanghai White Elephant & Swan           Controlled subsidiary of parent                                               0.06        -0.06        0.00
Battery Co., Ltd.                        company
Shanghai Chemical Supply and             Wholly-owned subsidiary of parent                                           25.12        -14.76      10.36
Marketing Co., Ltd.                      company
Shanghai Huayi Group Equipment           Wholly-owned subsidiary of parent                                             0.00       12.20       12.20
Engineering Co., Ltd.                    company
Huayi Group (Hong Kong) Co., Ltd.        Wholly-owned subsidiary of parent                                             0.00    3,730.85     3,730.85
                                         company
Shanghai Huayi (Group) Company           Controlling shareholder                                                 157,666.24   -57,980.50   99,685.74
Shanghai Shenyu Medicine Chemical        Controlled subsidiary of parent                                               0.02         0.00        0.02
Co., Ltd.                                company
Shanghai Huifeng Resin Plant             Wholly-owned subsidiary of parent                                             5.14        0.00         5.14
                                         company
Shanghai Huayi Group Huayuan             Controlled subsidiary of parent                                               2.61        -2.44        0.17
Chemical Co., Ltd.                       company


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                                                                                       2015 年年度报告

  Shanghai Sanaisi Reagent Co., Ltd.           Controlled subsidiary of parent                                                                         0.08           0.00                   0.08
                                               company
  Shanghai Dye Chemical Sales Co., Ltd. Controlled subsidiary of parent                                                                                0.03           -0.03                  0.00
                                               company
  Shanghai Huayi Group Finance Co.,            Affiliated company                                                                                     51.02          -43.98                  7.04
  Ltd.
                                         Total                                                5,701.88     -2,718.92          2,982.96           158,007.69    -54,464.79              103,542.90
  Cause for the related creditor's rights and debts                               Caused by purchase and sale in regular production and operation
  Influence of the related creditor's rights and debts on the Company             Makes no influence on the Company's operating results and financial status


12. Important contracts and the implementation
1) Custody, contracting and leasing
√Applicable □Not applicable
(1) Custody
□Applicable √Not applicable
(2) Contracting
□Applicable √Not applicable
(3) Leasing
√Applicable □Not applicable
                                                                                                                                                                              Unit: RMB'0000

                                                                                                                                       Basis for
                                                                      Amount                                                                             Related
                               Name of leasing           Leased                    Start date of       End date of     Income           setting
    Name of lossor                                                    of leased                                                                        transaction            Related relation
                                   party                 assets                      leasing             leasing      on leasing        leasing
                                                                       assets                                                                             or not
                                                                                                                                       income
   Shanghai                                                                                                                         Settled
                            Shanghai      Huayi
   Chlor-Alkali                                         Fixed                                                                       through                            Controlled subsidiary
                            Tianyuan Chemical                        4,537.31      2015-1-1            2015-12-31     1,066.24                         Yes
   Chemical     Co.,                                    assets                                                                      negotiated                         of parent company
                            Logistics Co., Ltd.
   Ltd.                                                                                                                             price
   Shanghai                                                                                                                         Settled
                            Shanghai Tianyuan                                                                                                                          Wholly-owned
   Chlor-Alkali                                         Fixed                                                                       through
                            Group       Shengde                      689.38        01-01-2015          12-31-2015     690.00                           Yes             subsidiary of parent
   Chemical     Co.,                                    assets                                                                      negotiated
                            Plastics Co., Ltd.                                                                                                                         company
   Ltd.                                                                                                                             price



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                                                                   2015 年年度报告



2) Guarantee
□Applicable √Not applicable

3) Management on cash assets made through committing others
(1) Financing through commitment
□Applicable √Not applicable
(2) Loan through commitment
□Applicable √Not applicable
(3) Other financing investment and derivative investment
□Applicable √Not applicable

4) Other important contracts
   None

13. Note on other major events
□Applicable √Not applicable

14. Fulfillment of social responsibility
1) Work on social responsibility
   For details, see 2015 Social Responsibility Report of Shanghai Chlor-Alkali Chemical Co., Ltd. announced in the website of Shanghai Stock Exchange:
   www.sse.com.cn on March 29, 2016.

15. Convertible bond of the Company
□Applicable √Not applicable




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                                                                               2015 年年度报告



                                       6. Changes of Ordinary Shares and Particulars of Shareholders

1. Changes of ordinary shares
1) Changes of ordinary shares
(1) Changes of ordinary shares
    In the report period, the total number and share structure of the ordinary share were not changed.
(2) Other content deemed necessary by the Company to be disclosed or required by the securities regulatory institution to be disclosed

2) Changes of the shares limited to be sold
□Applicable √Not applicable

2. Issuing and listing of securities
1) Securities issuing in the report period
   Note on the securities issuing in the report period (for bonds with different interest rates, state respectively):
   There was no such instance during the report period.

2) Changes of the total number of the ordinary shares and structure of the shareholders and changes of the structure of the Company's assets and
   liabilities
   During the report period, the Company did not have any change in the total number and structure of the shares caused by bonus shares and rationed shares.

3) Existing internal staff shares
   The Company does not have any staff shares.

3. Particulars of the shareholders and the actual controller
1) Total number of shareholders
    Total number of ordinary shareholders as of end of the report period                                                80,974
    Total number of ordinary shareholders at end of the previous month before the disclosing date of the                82,540
    annual report


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                                                                       2015 年年度报告



2) Top 10 shareholders, top 10 holders of tradable shares (or shares with no limited sales condition)
                                                                                                                                                     Unit: Share
                                                                           Top 10 shareholders
                                                                      Increase or                                               Pledged or frozen status
                                                                                    Shares held at               Shares with
                                                                      decrease in                       Ratio                                               Nature of
                     Name of shareholder (in full)                                     end of the               limited sales
                                                                       the report                       (%)                     Share status   Number      shareholder
                                                                                     report period                condition
                                                                         period
                                                                                                                                                      0    State owned
   Shanghai Huayi (Group) Company                                          0          581,592,347       50.29        0             None
                                                                                                                                                           legal person
   SCBHK A/C BBH S/A VANGUARD EMERGING MARKETS                                                                                                        0    Overseas
                                                                       -789,500        7,859,532        0.68         0             None
   STOCK INDEX FUND                                                                                                                                        legal person
                                                                                                                                                      0    State owned
   Central Huijin Asset Management Limited Liability Company          7,438,100        7,438,100        0.64         0             None
                                                                                                                                                           legal person
   VANGUARD TOTAL INTERNATIONAL STOCK INDEX                                                                                                           0    Overseas
                                                                      1,717,000        4,252,800        0.37         0             None
   FUND                                                                                                                                                    legal person
                                                                                                                                                      0    Domestic
   Jin Zhangxian                                                      4,080,000        4,080,000        0.35         0             None                    natural
                                                                                                                                                           person
                                                                                                                                                      0    Domestic
   Miao Guoqing                                                       3,730,000        3,730,000        0.32         0             None                    natural
                                                                                                                                                           person
                                                                                                                                                      0    Domestic
   Fang Jianwei                                                       1,683,511        3,402,987        0.29         0             None                    natural
                                                                                                                                                           person
                                                                                                                                                      0    Domestic
   Industrial and Commercial Bank of China Co., Ltd.-Huaxia                                                                                                non state
                                                                      2,622,057        2,622,057        0.23         0             None
   Leading Share Type Securities Investment Fund                                                                                                           owned legal
                                                                                                                                                           person
                                                                                                                                                      0    State owned
   Bank of China Wuxi Branch                                               0           2,605,981        0.23         0             None
                                                                                                                                                           legal person
                                                                                                                                                      0    Domestic
   China Costruction Bank Corp. - Huaxia Advantage Growth                                                                                                  non state
                                                                      2,037,900        2,037,900        0.18         0             None
   Hybrid Securities Investment Fund                                                                                                                       owned legal
                                                                                                                                                           person


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                                                                          2015 年年度报告

                                                                 Top 10 holders with no limited sales condition
                                                                                    Number of shares                           Type and number of shares
                               Name of shareholder                                with no limited sales
                                                                                                                          Type                            Number
                                                                                        condition
   Shanghai Huayi (Group) Company                                                           581,592,347         Renminbi ordinary share                        581,592,347
   SCBHK A/C BBH S/A VANGUARD EMERGING MARKETS STOCK                                          7,859,532 Domestic listed foreign capital                          7,859,532
   INDEX FUND                                                                                                             share
   Central Huijin Asset Management Limited Liability Company                                  7,438,100         Renminbi ordinary share                          7,438,100
   VANGUARD TOTAL INTERNATIONAL STOCK INDEX FUND                                              4,252,800 Domestic listed foreign capital                          4,252,800
                                                                                                                          share
   Jin Zhangxian                                                                              4,080,000 Domestic listed foreign capital                          4,080,000
                                                                                                                          share
   Miao Guoqing                                                                               3,730,000 Domestic listed foreign capital                          3,730,000
                                                                                                                          share
   Fang Jianwei                                                                               3,402,987 Domestic listed foreign capital                          3,402,987
                                                                                                                          share
   Industrial and Commercial Bank of China Co., Ltd.-Huaxia Leading Share                     2,622,057                                                          2,622,057
                                                                                                                Renminbi ordinary share
   Type Securities Investment Fund
   Bank of China Wuxi Branch                                                                  2,605,981         Renminbi ordinary share                          2,605,981
   China Costruction Bank Corp. - Huaxia Advantage Growth Hybrid                              2,037,900                                                          2,037,900
                                                                                                                Renminbi ordinary share
   Securities Investment Fund
   Note on the related relation or concerted actions for above shareholders       The Company's shares have all been tradable since November 12, 2009, so it has no any
                                                                                  holder of shares with no limited sales condition. It is unknown to the Company whether
                                                                                  there is related relation or the concerted actor specified in the Management Method on
                                                                                  Information Disclosure for Shareholding Change of the Shareholders of Listed
                                                                                  Companies

4. Particulars of the controlling shareholder and the actual controller

1) Particulars of the controlling shareholder
(1) Legal person
    Name                                         Shanghai Huayi (Group) Company
    Unit principal or legal representative       Liu Xunfeng
    Establishment date                           January 23, 1997


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                                                                      2015 年年度报告

   Main business                               Operation and management of state-owned assets within authorized range, investment on industry, manufacture
                                               and sale for chemical and medical products and equipment, installation, maintenance and contracted service for
                                               projects of chemical and medical equipment.
   Shares held in other domestic or overseas   During the report period Shanghai Huayi (Group) Company held 72.15% equity interest of Double Coin Holdings
   listed companies during the report period   Limited and 31.53% equity interest of Shanghai 3F New Material Co., Ltd..

2) Particulars of the actual controller
(1) Legal person
    Name                                         State-owned Assets Supervision and Administration Commission of Shanghai Municipal Government




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5. Note on the limitation of shares for reduction
□Applicable√Not applicable


                       7. Particulars of the Directors, Supervisors, Senior Executives and Staff Members

1. Changes in shareholding and particulars of rewards
1) Particulars of Directors, Supervisors and senior executives (including the ones leaving post during the report period)
√Applicable □Not applicable
                                                                                                                                                    Unit: Share
                                                                                                                                                                  Get reward
                                                                                                                                        Reward got from the
                                                                                                                                                                   from the
                                                                                                    Shares     Increase                 Company during the
                                                    Start date of   End date of   Shares held at                            Reason of                             Company's
      Name         Position (note)   Gender   Age                                                   held at       or                       report period
                                                    office term     office term   year-beginning                             change                                 related
                                                                                                   year-end    decrease                 (RMB'0000)(before
                                                                                                                                                                   party or
                                                                                                                                               tax)
                                                                                                                                                                      not
                                                                                                                             Bought
      Huang       Chairman of the                                                                                              from
                                      Male     57   12-30-2014      12-20-2015                 0       1,000       1,000                        0                    No
      Dailie          Board                                                                                                 secondary
                                                                                                                              market
                   Director, Party                                                                                           Bought
      Hu            secretary and                                                                                              from
                                      Male     60   12-20-2012      12-20-2015                 0       3,000       3,000                               82.71         No
    Yongkang       deputy general                                                                                           secondary
                      manager                                                                                                 market
                                                                                                                             Bought
      Zhang          Director,                                                                                                 from
                                      Male     48   08-30-2015      12-20-2015                 0      10,000     10,000                                13.04         No
     Weiming      general manager                                                                                           secondary
                                                                                                                              market
      Wang
                      Director        Male     49   12-20-2012      12-20-2015                 0       1,000       1,000                                   0         No
     Zengjin
                                                                                                                             Bought
                     Employee
                                                                                                                               from
    Yu Zhaojun     representative     Male     57   12-20-2012      12-20-2015                 0       2,000       2,000                               62.55         No
                                                                                                                            secondary
                      Director
                                                                                                                              market

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                                                            2015 年年度报告

    Li        Independent
                              Male     41   12-20-2012   12-20-2015           0       0       0                  10    No
 Zengquan       Director
  Zhang       Independent
                              Male     53   12-30-2014   12-20-2015           0       0       0                  10    No
 Guoming        Director
   Shao       Independent
                              Male     51   12-30-2014   12-20-2015           0       0       0                  10    No
Zhengzhong      Director
                                                                                                    Bought
  Zhang         Outside                                                                               from
                              Male     45   12-20-2012   12-20-2015           0    1,000   1,000                 10    No
  Wenlei        Director                                                                           secondary
                                                                                                     market
              Chairman of
 Chen Yao     Supervisory     Male     52   09-17-2013   12-20-2015           0       0       0                   0    No
              Committee
                                                                                                    Bought
                                                                                                      from
 Yu Bing       Supervisor     Male     41   12-20-2012   12-20-2015           0    1,000    1000                  0    No
                                                                                                   secondary
                                                                                                     market
                                                                                                    Bought
                                                                                                      from
 Dong Yan      Supervisor     Female   42   12-20-2012   12-20-2015           0    1,000    1000               48.34   No
                                                                                                   secondary
                                                                                                     market
                                                                                                    Bought
               Employee
 Wang                                                                                                 from
             representative   Female   54   12-20-2012   12-20-2015           0   10,000   10000               38.35   No
Mingchun                                                                                           secondary
               Supervisor
                                                                                                     market
                                                                                                    Bought
               Employee
  Wang                                                                                                from
             representative   Male     53   12-20-2012   12-20-2015           0    1,000    1000               70.51   No
 Linzhao                                                                                           secondary
               Supervisor
                                                                                                     market
                                                                                                    Bought
  Chao                                                                                                from
                 CFO          Male     40   12-20-2012   12-20-2015           0    1,000    1000               56.65   No
 Jinrong                                                                                           secondary
                                                                                                     market
                                                                                                    Bought
  Yuan       Deputy general
                              Male     47   12-20-2012   12-20-2015           0    1,000   1,000      from     65.85   No
 Maoquan       manager
                                                                                                   secondary

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                                                                   2015 年年度报告

                                                                                                                          market
                                                                                                                         Bought
               Secretary of the
                                                                                                                           from
Xu Peiwen         Board of        Male    59    12-20-2012     12-20-2015                   0       7,000       7,000                               57.67         No
                                                                                                                        secondary
                  Directors
                                                                                                                          market
                                                                                                                         Bought
               Deputy general                                                                                              from
Wang Hao                          Male    48    11-07-2014     12-20-2015              12,500      22,500     10,000                                24.16         No
                 manager                                                                                                secondary
                                                                                                                          market
  Total               /            /       /          /             /                  12,500      62,500     50,000         /                    559.83          /

   Name                                                                        Main work experience
               He used to be the Deputy Party secretary, executive Director and general manager of Shanghai Huayi Group Enterprise Development Co., Ltd. and
Huang Dailie   manager of Enterprise Adjustment Department of Huayi Group. Now he is deputy secretary of CPC Committee of Shanghai Huayi (Group)
               Company, chairman of trade union, employee Director and Chairman of the Board of Shanghai Chlor-Alkali Chemical Co., Ltd.
   Hu          He used to be general manager, Party secretary and Chairman of the Board of Shanghai Wujin Chemical Co., Ltd. and Party secretary and deputy
 Yongkang      general manager of Shanghai Chlor-Alkali Chemical Co., Ltd. Now he is the Director of Shanghai Chlor-Alkali Chemical Co., Ltd.
               He used to be the assistant of general manager and deputy general manager of Shanghai Huayi Acrylic Acid Co., Ltd., deputy general manager of
  Zhang        economic operating department of Shanghai Huayi (Group) Company and general manager of safety & environmental protection department and
 Weiming       chief of armed security department of Shanghai Huayi (Group) Company. Now he is the Director and general manager 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 and director of Tyre Research Institute of Tyre & Rubber Group Co., Ltd., deputy general
   Wang
               manager of Double Coin Holdings Limited and general manager of assets management department of Shanghai Huayi (Group) Company. Now he
  Zengjin
               is the general manager of assets management department, member of CPC committee and deputy secretary 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 representative director, Deputy
Yu Zhaojun
               Party secretary, secretary of Party discipline committee and chairman of trade union of Shanghai Chlor-Alkali Chemical Co., Ltd.
               He used to be the 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 Administration Commission, and has got the
Li Zengquan    title of Twilight Scholar. Now he is the vice dean of Accounting Institute of Shanghai University of Finance and Economics, proofreader of
               Economic Research and many other authoritative 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.



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                                                                   2015 年年度报告

              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 of Shanghai
  Zhang
              Jiaxiang Investment Co., Ltd. Now he is Chairman of the Board of Shanghai Nowei Investment Management Co., Ltd., Chairman of the Board of
 Guoming
              Shanghai Dingli Refreshing Technology Co., Ltd., Independent Director of 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 polymer
              science department of Fudan University and associate professor of biology research institute of Aarhus University in Denmark. Now he is the
   Shao
              doctoral tutor in polymer science department of Fudan University. He is also the councilor of Shanghai Municipal Chemistry & Chemical
Zhengzhong
              Engineering Association, subeditor of Journal of Materials Chemistry-B of Britain Royal Society of Chemistry (RSC) and member of multiple
              academic committees 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-Alkali
  Zhang       Industry Association. Now he is vice chairman and secretary general of China Chlor-Alkali Industry Association, routine councilor of China
  Wenlei      Petrochemical Industry Association, vice chairman of China Chemical Environment Protection Association, Independent Director of Binhua Co.,
              Ltd., Independent Director of Tangshan Sanyou Chemical 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, deputy general manager of
              Double Coin Holdings Limited and secretary of discipline committee of Shanghai Huayi (Group) Company. Now he is the member of CPC
 Chen Yao
              committee of Shanghai Huayi (Group) Company and depuby general manager of Shanghai Huayi (Group) Co., Ltd. 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 deputy
  Yu Bin      general manager of financial department of Shanghai Huayi (Group) Company and general manager of Shanghai Minhang Huayi Petty Loan Co.,
              Ltd. Now he is th deputy general manager of Shanghai Huayi Group Finance 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 and manager of human resource department
Dong Yan
              of Shanghai Chlor-Alkali Chemical Co., Ltd. Now she is the Supervisor and deputy chief economic engineer 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
              Chlor-Alkali Chemical Co., Ltd., vice chairman of trade union of Shanghai Chlor-Alkali Chemical Co., Ltd. and secretary of CPC committee of
Mingchun
              PVC factory. Now he is the employee representative Supervisor of Shanghai Chlor-Alkali Chemical Co., Ltd.
              He used to be the manager of production control department of Shanghai Chlor-Alkali Chemical Co., Ltd., deputy general manager of Shanghai
  Wang        Tianyuan Huasheng Chemical Co., Ltd., secretary of CPC general branch and factory director of Huasheng Chemical Plant. and production
 Linzhao      controller of Shanghai Chlor-Alkali Chemical Co., Ltd. Now he is the employee representative Supervisor and assistant of general manager 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 Huayi
Cao Jinrong
              Group Investment Co., Ltd. Now he is CFO of Shanghai Chlor-Alkali Chemical Co., Ltd.
  Yuan        He used to be the assistant chief and routine deputy chief of technical center of Shanghai Chlor-Alkali Chemical Company and deputy chief
 Maoquan      engineer of Shanghai Chlor-Alkali Chemical Co., Ltd. Now he is the deputy general manager of Shanghai Chlor-Alkali Chemical Co., Ltd.

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                    He used to be the Board Secretary of Shanghai Tianyuan (Group) Co., Ltd., and since 2000 he has been the Board Secretary and chief of the Board
     Xu Peiwen
                    Secretary's office of Shanghai Chlor-Alkali Chemical Co., Ltd.
                    He used to be the manager of technical development department of Shanghai Chlor-Alkali Chemical Co., Ltd. and assistant general manager and
     Chen Jiang
                    deputy general manager of Shanghai Chlor-Alkali Chemical Co., Ltd. He left the post in the Company in August 2015.

2) Equity incentive awarded to the Director, Supervisor and senior executives during the report period
□Applicable√Not applicable

2. 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 shareholder's unit                   Start date of office term
    Huang Dailie      Shanghai Huayi (Group) Company                 Deputy secretary of CPC Committee, chairman of trade          12-02-0215
                                                                     union and employee Director
   Chen Yao           Shanghai Huayi (Group) Company                 Vice president                                                12-02-0215


2) Position in other unit
√Applicable □Not applicable
               Name                              Name of other unit                              Position in other unit        Start date of office term
    Zhang Weiming               Shanghai Huntsman Polyurethane Co., Ltd.                   Director, Vice Chairman of the     08-20-2015
                                                                                           Board of Directors
   Zhang Weiming                Shanghai Huayi Group Financial Responsibility Co., Ltd.    Director                           08-20-2015
   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
   Li Zengquan                  Shenneng Co., Ltd.                                         Independent Director               05-20-2014
   Zhang Wenlei                 Binhua Group Co., Ltd.                                     Independent Director               05-09-2014
   Zhang Wenlei                 Tangshan Sanyou Chemical Industries Co., Ltd.              Independent Director               09-15-2014
   Wang Linzhao                 Shanghai Jinyuan Tap Water Co., Ltd.                       Director                           07-01-2014
   Wang Linzhao                 Shanghai Lianheng Isocyanic Acid Grease Co., Ltd.          Director                           01-10-2016
   Cao Jinrong                  Shanghai Ruisheng Enterprise Co. Ltd.                      Executive Director                 03-01-2012



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3. Rewards of the Directors, Supervisors and senior executives
    Decision-making process for the rewards of the The rewards of the Directors, Supervisors and senior executives shall be decided by the Company's salary &
    Directors, Supervisors and senior executives     examination committee.
    Basis for deciding the rewards of the Directors, Issued according to the "Examination Measures for the Reward of the Directors, Supervisors and senior
    Supervisors and senior executives                executives".
    Actual issuing of the rewards of the Directors, The Board of Directors decided the reward standard for the Directors, Supervisors and Senior Executives
    Supervisors and senior executives                getting salary from the Company this year and paid the rewards 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.
    Total reward got actually by all the Directors, RMB 5,598,300
    Supervisors and Senior Executives at end of the
    report period

4. Changes of the Directors, Supervisors and senior executives
      Name                   Position                 Change                                         Reason of change
    Zhang        Director, general manager       Engaged             On August 14, 2015 he was engaged as the general manager by the 23rd meeting
    Weimin                                                           of 8 Board of Directors. On August 31, 2015, he was elected as the Director by the
                                                                     Company's first provisional shareholders' meeting of 2015.
   Chen Jiang    Deputy general manager           Leaved post        In August 2015 he submitted the resignation for personal reason.

5. Punishment by the securities regulatory authorities in recent 3 years
□Applicable √Not applicable




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6. Employees of the parent company and main subsidiaries
1) Particulars of employees
    Number of in-service employees of the parent company                                             1,117
    Number of in-service employees of main subsidiaries                                                223
    Total number of in-service employees                                                             1,340
    Number of retired employees borne by the parent company                                           4188
    and main subsidiaries
                                           Profession structure
                         Type of profession                                    Number of people
                        Production personnel                                                           732
                            Sales people                                                                46
                        Technical personnel                                                            114
                         Finance personnel                                                              19
                     Administrative personnel                                                          206
                                Total                                                                1,117
                                            Educational status
                     Type of educational status                                Number of people
    Bachelor or higher                                                                                 283
    Junior college                                                                                     348
    Senior high school (technical secondary school)                                                    418
    Lower than senior high school                                                                       68
                                Total                                                                1,117

2) Salary policy
   The Company implements the "Position Level Salary Measures of Shanghai Chlor-Alkali Chemical
   Co., Ltd.".

3) Training plan
   In 2015 the Company made employee training for 5598 mentimes. The training includes 4418
   mentimes for front-line employees, accounting for 78.92% in total training. The main training content:
   post operation training, all special work training (including the training for obtaining certificate of
   post), QHSE training, post change training, skill grade training (including the training for certificate),
   HSE training, team building training and the training for enhancing the management skill of first-line
   manager. The training includes 1180 mentimes for non front-line employees, accounting for 21.08%
   in total training. Main training content: Professional skill training for engineers, special topic lecture
   for specialized technical personnel, management and strategy course training, title and further
   education training, QHS training, HSE training and other post ability training.


                                    8. Company Governance

1. Introduction for the Company's governance
   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.
1) About the shareholders and the shareholders' meeting
   The Company convened the shareholders' meeting strictly according to relevant provisions and
   procedures in the Articles of Association and the Rules of Procedure of the Shareholders' Meeting. It
   can ensure the equal position and lawful rights and interests of all the shareholders, especially the
   middle and small shareholders, let them enjoy and exercise fully their rights. All of the Company's
   related transactions have been made strictly according to the principle of fair and equitable, the
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   pricing principle are disclosed to the public, and the related Director and related shareholders avoided
   the voting.
2) The controlling shareholder and the listed Company
   The controlling shareholder exercises its right and bears the obligation according to law, not
   intervening directly or indirectly the Company's decision-making and operating activities without the
   authority of the shareholders' meeting. The Company and the controlling shareholder make Five
   Independence, i.e. assets, business, organization, finance and personnel. The Company's Board of
   Directors, Supervisory Committee and the internal institutions can all make operation independently
   to ensure the Company making and implementing the significant decisions independently.
3) The Directors and the Board of Directors
   The Company elects the Directors strictly in accordance with the procedure specified in the Company
   Law and Articles of Association, the Board of Directors is of scientific composition, clear
   responsibilities and perfect systems. The Company establishes four special committees, i.e. strategy,
   audit, nomination and salary & checking, under the Board of Directors, and all these committees can
   work earnestly and diligently strictly in accordance with the Articles of Association and the Work
   Enforcement Regulations of the Special Committees under the Board of Directors. For the Company's
   significant decisions and investments all the Directors can well play their professional role, raise their
   professional opinions and proposals, provide great support to the Company's scientific policy-making,
   and perform their duties loyally, cautiously, earnestly and diligently.
4) Supervisors and the Supervisory Committee
   The Company's Supervisory Committee elects the Supervisors strictly in accordance with the
   procedure specified in the Company Law and the Articles of Association, and the convening
   procedure conforms to the Rules of Procedure of the Supervisory Committee and has intact and true
   meeting record. The Company's Supervisors can perform earnestly their duties, make supervision
   independently on the Company's finance and operation status and the legitimacy and compliance of
   the Company's Directors, managers and other senior executives based on the manner of being
   responsible to all the shareholders, and safeguard the lawful rights and interests of the Company and
   the shareholders.
5) The performance appraisal and incentive and constraint mechanism
   The Company has established and gradually improved the performance appraisal standard and
   incentive and constraint mechanism for the Directors, Supervisors and senior executives, and the
   engagement of the senior executives is open and transparent and meets the requirements of relevant
   laws and statutes.
6) Information disclosure and transparence
   The Company has truly, accurately, completely and timely discloses relevant information strictly in
   accordance with the requirements of relevant laws and codes and its own Management System on the
   Information Disclosure Affairs and the internal report system on Significant Information, and ensure
   all the investors can obtain effective information equally. In the report period, the Company totally
   completed 4 periodic reports and 31 provisional announcements, making the investors can learn the
   status of the Company timely, fairly, accurately and completely.
7) Management on insider information
   During the report period, the Company executed strictly the Management on Registration of the
   Persons in the Know of Insider Information, got down with the work on keeping secreat of the insider
   information and required to fill in the record file of the person in the know of the insider information
   to safeguard the interest of the shareholders.

2. Briefing on the shareholders' meeting
                               Convening       Index on the website specified for      Date for disclosing
          The meeting
                                  date              carrying the resolutions             the resolutions
    2014        shareholders' 06-26-2015       www.sse.com.cn                         06-27-2015
    meeting
    2015 first provisional 08-31-2015          www.sse.com.cn                         09-01-2015
    shareholders' meeting
    2015 2nd provisional 11-16-2015            www.sse.com.cn                         11-17-2015
    shareholders' meeting


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3. Duty performance of the Directors
1) Particulars of the Directors for joining the Board meetings and shareholders meeting
                                                                                                                    Particulars
                                                                                                                     of joining
                                                 Particulars of joining the Board meetings                               the
                                                                                                                   shareholders'
                                                                                                                      meeting
             Independent
 Name of                                                                                           Whether not
              Director or   Number
 Director                                                                                          attending in     Number of
                  not       of Board                   Number of        Number of
                                       Number of                                       Number       person the      attendances
                            meetings                   attendances     attendances
                                       attendances                                        of         meeting           in the
                               in                        through         through
                                        in person                                      absences   consecutively    shareholders'
                             current                 communication     commitment
                                                                                                  for 2 times or      meeting
                              year
                                                                                                        not
Huang        No                  10            10                  0              0          0    No                          3
Dailie
Hu           No                  10            10                  0              0          0    No                          3
Yongkang
Zhang        No                   2             2                  0              0          0    No                          1
Weiming
Wang         No                  10            10                  0              0          0    No                          2
Zengjin
Yu Zhaojun   No                  10            10                  0              0          0    No                          3
Li           Yes                 10            10                  0              0          0    No                          1
Zengquan
Zhang        Yes                 10            10                  0              0          0    No                          2
Guoming
Shao         Yes                 10            10                  0              0          0    No                          3
Zhengzhong
Zhang        No                  10            10                  0              0          0    No                          2
Wenlei

Number of Board meetings convened in current              10
year
Incl.: Number of on-site meetings                         1
Number of meetings convened through                       9
communication
Number of meetings convened on-site and through           0
communication

2) Objection of the Independent Directors on relevant events of the Company
   Note on objection of the Independent Directors for relevant events of the Company
   In the report period, the Independent Directors did not make any objection for relevant events.

4. Important opinions and proposals raised by the special committees under the Board of
   Directors while performing their duties in the report period, and if any objection exists, the
   details shall be disclosed
   In 2015 the special committee of the Company's Board of Directors, based on the provisions of the
   Enforcement Regulations of Special Committees under the Board of Directors, performed their
   duties earnestly, conducted work actively, gave full play to their own special skills and played active
   role on the decision-making of the Board of Directors for significant events. The audit committee
   could perform its duty earnestly in the work for annual report and relevant work, raised construction
   suggestions on the Company's periodic report, internal control systems, asset disposal and related
   transactions, and supervised the Company to make healthful, stable and rapid development
   furthermore. The salary & checking committee convened meeting to check the salary of the senior
   executives in 2014, and raised the checking plan on the salary of the senior executives in 2015. The
   nomination committee convened the meeting to discuss and make proposal for change of the
   Company's Directors. The Company lay stress on exerting the knowledge of the special committees

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   under the Board of Directors in specialty and information to promote the decision-making of the
   Board of Directors more scientific and more effective.

5. Note of the Supervisory Committee on discovering the Company's risk
   The Supervisory Committee did not have any objection on the supervision events in the report period.

6. Note of the Company on being unable to ensure independence and self operation capability in
   business, assets, organization and finance with the controlling shareholder
   The Company did not have any event of being unable to ensure independence and self operation
   capability in business, assets, organization and finance with the controlling shareholder

7. Establishing and implementing of the check mechanism and incentive mechanism for the senior
   executives in the report period
   The Company implements the Checking Method on the Salary of Senior Executives of the Company,
   and the salary & checking committee under the Board of Directors made the annual performance
   review, decided the reward standard for the Directors, Supervisors and Senior Executives getting
   salary from the Company and paid the rewards monthly.

8. Whether disclose the internal control self-assessment report or not
√Applicable □Not applicable
   For details of the Internal Control Self-assessment Report of Shanghai Chlor-Alkali Chemical Co.,
   Ltd., see relevant announcement in the website of Shanghai Stock Exchange www.sse.com.cn on
   March 29, 2016.

   Note on significant deficiencies in the internal control during the report period
□Applicable √Not applicable

9. Note on relevant status of the auditor's report for internal control
   For details of the Auditor's Report for Internal Control of Shanghai Chlor-Alkali Chemical Co., Ltd.
   in 2015, see relevant announcement in the website of Shanghai Stock Exchange www.sse.com.cn on
   March 29, 2016.
   Whether disclose the auditor's report for internal control or not: yes

                            9. Particulars of Preference Shares
□Applicable √Not applicable



                         10. Particulars of the Company's Bonds
□Applicable √Not applicable



                                       11. Financial Report

1. Auditor's report
√Applicable □Not applicable
                                         Auditor's Report
                                                                              XKSHBZ [2016] No. 111593

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To all the shareholders of Shanghai Chlor-Alkali Chemical Co., Ltd.:


We have audited the attached financial statements of Shanghai Chlor-Alkali Chemical Co., Ltd.,
including the consolidated and the Company's balance sheets as of Dec. 31, 2015, the consolidated and
the Company's income statements in 2015, the consolidated and the Company's cash flow statements,
the consolidated and the Company's statements of changes in owner's equity and the notes on the
financial statements.


1) The responsibility of the management


  To prepare the financial statements and make fair presentation in it is the responsibility of the
  management of the Company. Such responsibility shall include: (1) to prepare the financial statements
  and make fair presentation in them in accordance with the provisions of the enterprise accounting
  standard; (2) to design, execute and maintain necessary internal control to prevent the financial
  statements from making significant misreport caused by fraud or error.


2) Responsibility of the certified public accountants


  Our responsibility is to express audit opinion to the financial statements based on the execution of the
  audit work. We have made the audit work in accordance with the provisions in the audit standard of
  China certified public accountant. The audit standard of China certified public accountant requires us
  to observe the code of professional ethics of China certified public accountants, plan and execute the
  audit work and obtain the reasonable assurance for not making significant misreport in the financial
  statements.


  The audit work involves the implementation of audit procedure to obtain the amount of financial
  statements and disclosed audit evidences. The selection of the audit procedure depends on the
  judgment of the certified public accountants, including the evaluation to the risk of significant
  misreport of the financial statements caused by the fraud or error. While making risk evaluation, the
  certified public accountant shall consider the internal control related to the preparing of the financial
  statements and the fair presentation to design proper audit procedure, but the purpose is not to express
  opinion for the effectiveness of the internal control. The audit work shall also include to evaluate the
  suitability of the accounting policy selected by the management and the reasonableness of the
  accounting estimate and to evaluate the general presentation of the financial statements.

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  We believe, the audit evidences we have obtained are adequate and proper and provide basis for
  express the audit opinion.


3) Audit opinion


  We deem that, the financial statements of the Company have been prepared in accordance with the
  provisions of the enterprise accounting standard in all significant aspects, and have reflected the
  consolidated and the Company's financial status on Dec. 31, 2015 and the consolidated and the
  Company's operating results and cash flow in 2015.


  BDO China Shu Lun Pan Certified Public Accountants LLP
  China certified public accountant: Gu Xuefeng
  China certified public accountant: Ling Min


           Shanghai, China                                      March 25, 2016

2. Financial statements
                                    Consolidated Balance Sheet
                                           Dec. 31, 2015
Prepared by: Shanghai Chlor-Alkali Chemical Co., Ltd.
                                                                                          Unit: RMB
                          Item                            Note Closing balance     Beginning balance
Current assets:
 Monetary capital                                                240,425,945.13        402,636,250.64
 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                                                336,221,352.79        313,867,535.80
 Accounts receivable                                             259,044,580.24        321,902,440.07
 Advance payment                                                 136,446,799.31        220,825,719.39
 Premium receivable
 Reinsurance accounts receivable
 Receivable deposit for reinsurance contract
 Interest receivable
 Dividend receivable
 Other receivables                                                 3,561,716.78          1,895,445.80
 Redemptory financial assets for sale
 Inventories                                                     384,885,265.71        497,804,243.07
 Assets held for sale
 Non-current assets due in 1 year
 Other current assets
    Subtotal of current assets                                 1,360,585,659.96      1,758,931,634.77
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Non-current assets:
  Loan and advances issued
  Salable financial assets                                      424,078,182.70     349,855,650.23
  Held-to-maturity investments
  Long-term receivable
  Long-term equity investment                                   288,855,432.45     270,736,394.62
  Investment real estate
  Fixed assets                                                 2,132,521,000.23   2,727,746,278.61
  Construction in progress                                       305,408,986.91     288,223,047.31
  Engineering materials                                            1,381,336.82       1,173,259.66
  Disposal of fixed assets
  Productive biological assets
  Oil gas assets
  Intangible assets                                             281,295,016.13     311,958,605.26
  Development expenditure                                        30,247,277.15      25,794,289.58
  Goodwill
  Long-term prepaid and deferred expenses                        23,460,981.73      19,069,279.62
  Deferred income tax assets                                         20,529.71       1,229,186.56
  Other non-current assets
     Subtotal of non-current assets                            3,487,268,743.83   3,995,785,991.45
        Total of assets                                        4,847,854,403.79   5,754,717,626.22
Current liabilities:
  Short-term loan                                               620,000,000.00     868,531,399.29
  Loan from central bank
  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                                              376,955,805.82     395,974,896.16
  Advance receipts                                              253,175,587.07     304,022,294.89
  Financial assets sold for repurchase
  Handling charges and commission payable
  Wages payable                                                     780,802.00      28,052,005.16
  Tax payable                                                    14,824,741.55      27,392,973.52
  Interest payable                                                2,788,929.31       3,916,313.32
  Dividends payable                                               2,724,553.75       2,724,553.75
  Other payables                                                441,394,365.43     713,938,238.76
  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                           1,712,644,784.93   2,344,552,674.85
Non-current liabilities:
  Long-term loan
  Bonds payable
  Incl.: Preference share
          Perpetual debt
  Long-term payables                                            645,000,000.00     950,000,000.00
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 Long-term wages payable                                       190,880,000.00       184,380,000.00
 Specific payables                                              11,050,000.00        11,050,000.00
 Estimated liabilities
 Deferred income                                                 6,650,100.00          6,198,450.00
 Deferred income tax liability                                  11,653,477.05          2,274,880.65
 Other non-current liabilities
   Subtotal of non-current liabilities                          865,233,577.05     1,153,903,330.65
       Total of liabilities                                   2,577,878,361.98     3,498,456,005.50
Owner's equity
 Share capital                                                1,156,399,976.00     1,156,399,976.00
 Other equity instruments
 Incl.: Preference share
         Perpetual debt
 Capital reserves                                             1,674,270,987.60     1,683,394,015.86
 Less: Treasury stock
 Other composite income                                         12,317,916.44          1,920,380.37
 Specific reserves
 Surplus reserves                                               11,329,760.39        11,329,760.39
 General risk reserve
 Undistributed profit                                          -592,773,594.89      -688,388,625.23
     Subtotal of owner's equity attributable to parent        2,261,545,045.54     2,164,655,507.39
                           company
 Minority interest                                                8,430,996.27        91,606,113.33
   Total of owner's equity                                    2,269,976,041.81     2,256,261,620.72
       Total of liabilities and owner's equity                4,847,854,403.79     5,754,717,626.22

Legal representative: Mr. Huang Dailie Principle in charge of accounting: Zhang Weiming    Head of
accounting dept.: Lai Yonghua


                                Balance Sheet of Parent Company
                                          Dec. 31, 2015
Prepared by: Shanghai Chlor-Alkali Chemical Co., Ltd.
                                                                                        Unit: RMB
                          Item                          Note Closing balance     Beginning balance
Current assets:
  Monetary capital                                             212,133,296.30       361,841,267.49
  Financial assets measured with fair value and having
  change attributed to profit or loss of current period
  Derivative financial assets
  Notes receivable                                             334,581,352.79       283,210,505.19
  Accounts receivable                                          253,571,576.96       263,729,293.70
  Advance payment                                              137,481,599.22       215,176,188.42
  Interest receivable
  Dividend receivable
  Other receivables                                             10,766,735.59         7,971,011.77
  Inventories                                                  371,277,788.79       428,301,688.75
  Assets held for sale
  Non-current assets due in 1 year
  Other current assets
     Subtotal of current assets                              1,319,812,349.65      1,560,229,955.32
Non-current assets:
  Salable financial assets                                     413,190,044.22       338,978,781.42
  Held-to-maturity investments
                                                 48 / 64
                                             2015 年年度报告


  Long-term receivable
  Long-term equity investment                                   355,444,207.96     454,050,813.30
  Investment real estate
  Fixed assets                                                 2,111,593,701.25   2,570,275,614.49
  Construction in progress                                       302,075,871.66     270,291,468.93
  Engineering materials                                            1,381,336.82       1,173,259.66
  Disposal of fixed assets
  Productive biological assets
  Oil gas assets
  Intangible assets                                             259,886,963.38     265,269,075.06
  Development expenditure                                        30,247,277.15      25,794,289.58
  Goodwill
  Long-term prepaid and deferred expenses                        23,152,249.71      16,525,841.24
  Deferred income tax assets
  Other non-current assets                                        20,000,000.00      50,000,000.00
     Subtotal of non-current assets                            3,516,971,652.15   3,992,359,143.68
        Total of assets                                        4,836,784,001.80   5,552,589,099.00
Current liabilities:
  Short-term loan                                               620,000,000.00     821,281,399.29
  Financial liabilities measured with fair value and
  having change attributed to profit or loss of current
  period
  Derivative financial liabilities
  Notes payable
  Accounts payable                                              370,153,498.98     357,965,113.50
  Advance receipts                                              253,775,506.41     299,962,187.40
  Wages payable                                                     513,377.00      27,774,004.42
  Tax payable                                                    12,682,879.20      24,552,210.54
  Interest payable                                                2,788,929.31       3,916,313.32
  Dividends payable                                               1,189,676.90       1,189,676.90
  Other payables                                                457,108,038.56     762,117,190.54
  Liabilities held for sale
  Non-current liabilities due in 1 year
  Other current liabilities
     Subtotal of current liabilities                           1,718,211,906.36   2,298,758,095.91
Non-current liabilities:
  Long-term loan
  Bonds payable
  Incl.: Preference share
          Perpetual debt
  Long-term payables                                            645,000,000.00     950,000,000.00
  Long-term wages payable                                       190,880,000.00     184,380,000.00
  Specific payables                                              11,050,000.00      11,050,000.00
  Estimated liabilities
  Deferred income                                                 6,650,100.00        6,198,450.00
  Deferred income tax liability                                  10,785,123.90        1,409,344.92
  Other non-current liabilities
     Subtotal of non-current liabilities                         864,365,223.90   1,153,037,794.92
        Total of liabilities                                   2,582,577,130.26   3,451,795,890.83
Owner's equity:
  Share capital                                                1,156,399,976.00   1,156,399,976.00
  Other equity instruments
  Incl.: Preference share
          Perpetual debt
                                                  49 / 64
                                             2015 年年度报告


  Capital reserves                                                 1,690,068,638.82     1,690,068,638.82
  Less: Treasury stock
  Other composite income                                             11,345,002.84           955,919.02
  Specific reserves
  Surplus reserves                                                    11,329,760.39        11,329,760.39
  Undistributed profit                                              -614,936,506.51      -757,961,086.06
    Total of owner's equity                                        2,254,206,871.54     2,100,793,208.17
       Total of liabilities and owner's equity                     4,836,784,001.80     5,552,589,099.00

Legal representative: Mr. Huang Dailie      Principle in charge of accounting: Zhang Weiming     Head of
accounting dept.: Lai Yonghua



                                    Consolidated Income Statement
                                           Jan. to Dec., 2015
                                                                                              Unit: RMB
                                                                        Amount in          Amount in
                         Item                               Note
                                                                     current period     previous period
1. Gross operating income                                            6,170,874,223.67   7,015,409,267.56
Incl.: Operating income                                              6,170,874,223.67   7,015,409,267.56
         Interest income
         Premium earned
         Income from handling charges and commission
2. Gross operating cost                                              6,427,713,999.83   7,674,426,880.15
Incl.: Operating cost                                                5,559,439,778.97   6,375,944,582.66
        Interest cost
        Expenditure for handling charges and commission
        Surrender value
        Net expenditure for compensation
        Net provision for insurance contract appropriated
        Bonus payment for policy
        Reinsurance premium
        Business tax and surcharges                                    19,193,727.90      17,827,448.28
        Selling cost                                                  199,911,085.12     205,248,898.35
        Management cost                                               402,196,032.57     633,388,738.66
        Financial expenses                                            140,436,053.89     121,456,535.42
        Loss from assets impairment                                   106,537,321.38     320,560,676.78
Plus: Income from change of fair value ("-" for loss)
         Investment income ("-" for loss)                            147,125,155.93      62,632,834.28
Incl.: Investment income from affiliated enterprises and               44,597,649.84      46,522,824.01
        joint ventures
        Income from currency exchange ("-" for loss)
3. Operating profit ("-" for loss)                                   -109,714,620.23   -596,384,778.31
   Plus: Non-operating income                                          220,140,784.81     13,543,603.10
         Incl.: Net gain from disposal of non-current                  175,597,261.11      1,152,634.58
         assets
   Less: Non-operating expenditure                                        864,280.61         126,817.45
         Incl.: Loss from disposal of non-current assets                  520,754.37          40,812.45
4. Gross profit ("-" for gross loss)                                 109,561,883.97    -582,967,992.66
   Less: Income tax cost                                                4,672,427.26       4,622,713.67
5. Net profit ("-" for net loss)                                     104,889,456.71    -587,590,706.33
   Net profit attributable to owners of parent company                 95,615,030.34    -592,502,499.95

                                                  50 / 64
                                             2015 年年度报告


   Minority interest income                                               9,274,426.37         4,911,793.62
6. Other composite income after tax                                      10,397,536.07       -17,770,996.38
   Other composite income attributed to owners of parent                 10,397,536.07       -17,770,996.38
   company after tax
1) Other composite income unable to be reclassified                     -13,980,000.00       -20,380,000.00
   into profit and loss afterwards
(1) Change of net liabilities or net assets through                     -13,980,000.00       -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                 24,377,536.07         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                 24,377,536.07         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                                     115,286,992.78      -605,361,702.71
   Total composite income attributable to owners of                     106,012,566.41      -610,273,496.33
   parent company
   Total composite income attributable to minority                        9,274,426.37         4,911,793.62
   shareholders
8. Earnings per share:
1) Basic earnings per share (RMB)                                              0.0827              -0.5124
2) Diluted earnings per share (RMB)                                             0.0827             -0.5124

Legal representative: Mr. Huang Dailie     Principle in charge of accounting: Zhang Weiming         Head
of accounting dept.: Lai Yonghua


                                Income Statement of Parent Company
                                          Jan. to Dec., 2015
                                                                                                 Unit: RMB
                                                             Note      Amount in           Amount in
                        Item
                                                                     current period      previous period
1. Operating income                                                 5,306,202,144.25     6,432,026,063.17
   Less: Operating cost                                             4,779,946,815.88     5,885,413,772.01
        Business tax and surcharges                                    16,200,534.43        14,534,262.10
        Selling cost                                                  184,902,755.30       187,923,372.52
        Management cost                                               352,189,770.28       574,961,996.42
        Financial expenses                                            139,259,008.16       118,604,257.55
        Loss from assets impairment                                   104,311,645.14       314,225,426.94
Plus: Income from change of fair value ("-" for
loss)
       Investment income ("-" for loss)                             196,816,182.18        67,674,160.81
                                                   51 / 64
                                               2015 年年度报告


 Incl.: Investment income from affiliated enterprises                 44,597,649.84      46,522,824.01
         and joint ventures
 2. Operating profit ("-" for loss)                                 -73,792,202.76     -595,962,863.56
    Plus: Non-operating income                                       217,277,438.15        9,552,010.09
          Incl.: Net gain from disposal of non-current               175,459,449.37        1,139,551.41
                 assets
      Less: Non-operating expenditure                                   460,655.84           80,000.00
          Incl.: Loss from disposal of non-current                      376,422.17
                 assets
 3. Gross profit ("-" for gross loss)                               143,024,579.55     -586,490,853.47
                   Less: Income tax cost
 4. Net profit ("-" for net loss)                                   143,024,579.55     -586,490,853.47
5. Other composite income after tax                                   10,389,083.82      -17,890,351.36
 1) Other composite income unable to be reclassified                 -13,980,000.00      -20,380,000.00
    into profit and loss afterwards
 (1) Change of net liabilities or net assets through                 -13,980,000.00      -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                    24,369,083.82        2,489,648.64
    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                     24,369,083.82        2,489,648.64
      salable 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
 6. Total amount of composite income                                 153,413,663.37     -604,381,204.83
7. Earnings per share:
 1) Basic earnings per share (RMB)
 2) Diluted earnings per share (RMB)

Legal representative: Mr. Huang Dailie        Principle in charge of accounting: Zhang Weiming    Head of
accounting dept.: Lai Yonghua


                                    Consolidated Cash Flow Statement
                                            Jan. to Dec., 2015
                                                                                               Unit: RMB
                           Item                               Note      Amount in          Amount in
                                                                      current period     previous period
1. Cash flow from operating activities:
   Cash received from sale of commodities and                        7,510,561,650.86    7,821,130,000.73
   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
                                                    52 / 64
                                              2015 年年度报告


   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                                              1,550,381.55         640,058.18
   Other cash received related to operating activities            176,962,786.84     156,646,472.25
      Subtotal of cash inflow from operating activities         7,689,074,819.25   7,978,416,531.16
   Cash paid for purchase of commodities and accepting          6,546,749,918.62   6,943,640,631.86
   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                                  392,633,278.07     601,151,343.25
   Cash paid for various taxes                                    209,497,530.89     203,873,014.61
   Other cash paid related to operating activities                234,341,659.22     258,811,541.27
      Subtotal of cash outflow from operating activities        7,383,222,386.80   8,007,476,530.99
         Net cash flow from operating activities                  305,852,432.45     -29,059,999.83
2. Cash flow from investment activities:
   Cash received from disinvestment
   Cash received from investment income                           50,188,256.22      21,390,010.27
   Net cash received from disposal of fixed assets,              366,988,374.84          38,134.62
   intangible assets and other long-term assets
   Net cash received from disposal of subsidiaries and           201,393,475.46
   other business units
   Other cash received related to investment activities              568,000.00
      Subtotal of cash inflow from investment activities         619,138,106.52      21,428,144.89
   Cash paid for purchase and construction of fixed              116,302,260.65     404,176,849.64
   assets, intangible assets and other long-term assets
   Cash paid for investment                                       40,466,400.00     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
   Subtotal of cash outflow from investment activities           156,768,660.65     516,429,301.39
         Net cash flow from investment activities                462,369,445.87    -495,001,156.50
3. Cash flow from financing activities:
   Cash received from absorbing investment
   Incl.: Cash received by subsidiaries from absorption
          of minorities' investment
   Cash received from loan                                      2,487,739,713.32   1,909,331,399.29
   Cash received from bond issuance
   Other cash received related to financing activities                               12,160,000.00

                                                   53 / 64
                                            2015 年年度报告


    Subtotal of cash inflow from financing activities             2,487,739,713.32   1,921,491,399.29
   Cash paid for redemption of debt                               3,277,077,512.61   1,433,600,855.65
   Cash paid for distribution of dividends, profit or               140,724,441.68     134,454,579.97
   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            3,417,801,954.29   1,568,055,435.62
          Net cash flow from financing activities                  -930,062,240.97     353,435,963.67
4. Impact of changes in exchange rate on cash and                      -325,298.50        -124,286.85
   cash equivalents
5. Net increase of cash and cash equivalents                      -162,165,661.15     -170,749,479.51
   Plus: Beginning balance of cash and cash equivalents            402,534,911.44      573,284,390.95
6. Closing balance of cash and cash equivalents                    240,369,250.29      402,534,911.44

Legal representative: Mr. Huang Dailie     Principle in charge of accounting: Zhang Weiming   Head
of accounting dept.: Lai Yonghua


                              Cash Flow Statement of Parent Company
                                         Jan. to Dec., 2015
                                                                                          Unit: RMB
                         Item                              Note      Amount in         Amount in
                                                                   current period    previous period
1. Cash flow from operating activities:
   Cash received from sale of commodities and                     6,511,335,605.62   7,161,542,311.10
   rendering of service
   Tax rebate received                                                  279,357.64
   Other cash received related to operating activities              156,904,899.36     168,932,480.24
      Subtotal of cash inflow from operating activities           6,668,519,862.62   7,330,474,791.34
   Cash paid for purchase of commodities and accepting            5,714,454,512.78   6,466,432,119.57
   of service
   Cash paid to or for employees                                    317,693,761.30     508,048,968.27
   Cash paid for various taxes                                      182,897,891.76     170,218,563.80
   Other cash paid related to operating activities                  198,804,795.65     223,070,162.72
    Subtotal of cash outflow from operating activities            6,413,850,961.49   7,367,769,814.36
         Net cash flow from operating activities                    254,668,901.13     -37,295,023.02
2. Cash flow from investment activities:
   Cash received from disinvestment
   Cash received from investment income                              75,126,857.37     21,151,336.80
   Net cash received from disposal of fixed assets,                 366,829,419.15
   intangible assets and other long-term assets
   Net cash received from disposal of subsidiaries and              224,174,251.71
   other business units
   Other cash received related to investment activities                 568,000.00
    Subtotal of cash inflow from investment activities              666,698,528.23     21,151,336.80
   Cash paid for purchase and construction of fixed                  75,105,899.49    376,753,836.62
   assets, intangible assets and other long-term assets
   Cash paid for investment                                          40,466,400.00    112,202,451.75
   Net cash paid for acquiring subsidiaries and other
   business units
   Other cash paid related to investment activities                                        50,000.00
   Subtotal of cash outflow from investment activities              115,572,299.49    489,006,288.37
         Net cash flow from investment activities                   551,126,228.74   -467,854,951.57
3. Cash flow from financing activities:
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                                           2015 年年度报告


   Cash received from absorbing investment
   Cash received from loan                                      2,373,595,009.82   1,761,781,399.29
   Other cash received related to financing activities                                12,160,000.00
    Subtotal of cash inflow from financing activities           2,373,595,009.82   1,773,941,399.29
   Cash paid for redemption of debt                             3,189,876,409.11   1,308,850,855.65
   Cash paid for distribution of dividends, profit or             137,950,238.68     118,874,246.53
   payment of interest
   Other cash paid related to financing activities
    Subtotal of cash outflow from financing activities          3,327,826,647.79   1,427,725,102.18
         Net cash flow from financing activities                 -954,231,637.97     346,216,297.11
4. Impact of changes in exchange rate on cash and                  -1,271,463.09        -114,435.64
   cash equivalents
5. Net increase of cash and cash equivalents                     -149,707,971.19    -159,048,113.12
   Plus: Beginning balance of cash and cash equivalents           361,841,267.49     520,889,380.61
6. Closing balance of cash and cash equivalents                   212,133,296.30     361,841,267.49

Legal representative: Mr. Huang Dailie    Principle in charge of accounting: Zhang Weiming   Head of
accounting dept.: Lai Yonghua




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                                                                                                  2015 年年度报告


                                                                   Consolidated Statement of Changes in Owners' Equity
                                                                                     Jan. to Dec., 2015
                                                                                                                                                                                                            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         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

 balance of last
 year
 Plus: Change of
 accounting
 policy
 Correction of
 previous errors
 Business merger
 under same
 control
 Other
2. Beginning       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

  balance of
  current year
3. Increase or                                                         -9,123,028.26                10,397,536.07                                                            95,615,030.34       -83,175,117.06       13,714,421.09

  decrease in
  current period
  ("-" for
  decrease)
1) Total amount                                                                                     10,397,536.07                                                            95,615,030.34         9,274,426.37      115,286,992.78

  of composite
  income
2) Capital                                                             -9,123,028.26                                                                                                             -89,649,543.43      -98,772,571.69

  increase and
  decrease by


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                                     2015 年年度报告

  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            -9,123,028.26                     -89,649,543.43   -98,772,571.69

3) Profit                                               -2,800,000.00    -2,800,000.00

distribution
(1) Appropriation
  of surplus
  reserves
(2) Appropriation
  of provision
  for normal risk
(3) Distribution                                        -2,800,000.00    -2,800,000.00

  to owners (or
  shareholders)
(4) Other
4) Owners' equity
  carried
  forward
  internally
(1) Capital
  reserves
  transferred into
  capital (or
  share capital)
(2) Surplus



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                                                                                                  2015 年年度报告

  reserves
  transferred into
  capital (or
  share capital)
(3) Deficit
  covered by
  surplus
  reserves
(4) Other
5) Specific
reserve
(1) Appropriated                                                                                                          14,426,417.80                                                                                  14,426,417.80

  in current
  period
(2) Used in                                                                                                               14,426,417.80                                                                                  14,426,417.80

  current period
6) Other
4. Closing            1,156,399,976.00                                 1,674,270,987.60               12,317,916.44                            11,329,760.39                 -592,773,594.89        8,430,996.27       2,269,976,041.81

  balance of
  current period



                                                                                                                                   Previous period

                                                                                               Owner's equity attributable to parent company
          Item                                                                                                                                                                                                          Total of owner's
                                                                                            Less:                                                                 General                          Minority interest
                                           Other equity instruments                                   Other composite                                                                                                        equity
                        Share capital                                   Capital reserves   Treasury                       Specific reserves    Surplus reserves     risk    Undistributed profit
                                          Preference Perpetual                              stock         income                                                  reserve
                                                               Other
                                            shares     debt
 1. Closing            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
    balance of last
    year
    Plus: Change                                                                                        12,720,000.00                                                          -177,320,000.00                            -164,600,000.00
    of accounting
    policy
    Correction of
    previous
    errors
    Business
    merger under



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                                                           2015 年年度报告

   same control
      Other
2. Beginning         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
   balance of
   current year
3. Increase or                            97,110,000.00       -17,770,996.38                   -598,284,499.83   -1,808,206.38   -520,753,702.59
   decrease in
   current period
   ("-" for
   decrease)
1) Total amount                                               -17,770,996.38                   -592,502,499.95    4,911,793.62   -605,361,702.71
   of composite
   income
2) 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                                                                                        -5,781,999.88   -6,720,000.00     -12,501,999.88
distribution
(1)
   Appropriation
   of surplus
   reserves
(2)
   Appropriation
   of provision
   for normal
   risk
(3) Distribution                                                                                 -5,781,999.88   -6,720,000.00     -12,501,999.88
   to owners (or
   shareholders)
(4) Other
4) Owners'
   equity carried
   forward
   internally
(1) Capital


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                                                                                                  2015 年年度报告

   reserves
   transferred
   into capital (or
   share capital)
(2) Surplus
   reserves
   transferred
   into capital (or
   share capital)
(3) Deficit
   covered by
   surplus
   reserves
(4) Other
5) Specific
reserve
(1) Appropriated                                                                                                           21,814,745.60                                                                                  21,814,745.60
   in current
   period
(2) Used in                                                                                                                21,814,745.60                                                                                  21,814,745.60
   current period
6) Other                                                                   97,110,000.00                                                                                                                                  97,110,000.00
4. Closing              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
   balance of
   current period


Legal representative: Mr. Huang Dailie                   Principle in charge of accounting: Zhang Weiming                       Head of accounting dept.: Lai Yonghua


                                                        Consolidated Statement of Changes in Owners' Equity of Parent Company
                                                                                   Jan. to Dec., 2015
                                                                                                                                                                                                            Unit: RMB
                                                                                                                      Current period
                                                       Other equity instruments                         Less:
              Item                                                                                                    Other composite                                                                      Total of owner's
                                    Share capital                                   Capital reserves   Treasury                            Specific reserves    Surplus reserves   Undistributed profit
                                                      Preference Perpetual                                                income                                                                                equity
                                                                           Other                        stock
                                                        shares     debt
1. Closing balance of last year    1,156,399,976.00                                 1,690,068,638.82                       955,919.02                             11,329,760.39       -757,961,086.06       2,100,793,208.17
   Plus: Change of accounting
   policy
   Correction of previous
   errors
      Other
2. Beginning balance of            1,156,399,976.00                                 1,690,068,638.82                       955,919.02                             11,329,760.39       -757,961,086.06       2,100,793,208.17
   current year




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                                                                                                     2015 年年度报告

3. Increase or decrease in                                                                                              10,389,083.82                                                 143,024,579.55       153,413,663.37
   current period ("-" for
   decrease)
1) Total amount of composite                                                                                            10,389,083.82                                                 143,024,579.55       153,413,663.37
   income
2) 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
(1) Appropriation of surplus
   reserves
(2) Distribution to owners (or
   shareholders)
(3) Other
4) 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) Other
5) Specific reserve
(1) Appropriated in current                                                                                                                 14,426,417.80                                                   14,426,417.80
   period
(2) Used in current period                                                                                                                  14,426,417.80                                                   14,426,417.80
6) Other
4. Closing balance of current     1,156,399,976.00                                  1,690,068,638.82                    11,345,002.84                           11,329,760.39        -614,936,506.51     2,254,206,871.54
 period



                                                                                                                    Previous period
                                                      Other equity instruments                           Less:
            Item                                                                                                   Other composite                                                                     Total of owner's
                                  Share capital                                   Capital reserves      Treasury                        Specific reserves   Surplus reserves    Undistributed profit
                                                     Preference Perpetual                                              income                                                                               equity
                                                                          Other                          stock
                                                       shares     debt
1. Closing balance of last        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
   year
   Plus: Change of                                                                                                     12,720,000.00                                               -177,320,000.00      -164,600,000.00


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                                                                                     2015 年年度报告

     accounting policy
   Correction of previous
   errors
      Other
2. Beginning balance of           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
   current year
3. Increase or decrease in                                                97,110,000.00             -17,890,351.36                                     -592,272,853.35   -513,053,204.71
   current period ("-" for
   decrease)
1) Total amount of                                                                                  -17,890,351.36                                     -586,490,853.47   -604,381,204.83
   composite income
2) 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                                                                                                                               -5,781,999.88      -5,781,999.88
   (or shareholders)
(3) Other
4) 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) Other
5) Specific reserve
(1) Appropriated in current                                                                                            21,814,745.60                                       21,814,745.60
   period
(2) Used in current period                                                                                             21,814,745.60                                        21,814,745.60
6) Other                                                                  97,110,000.00                                                                                     97,110,000.00
4. Closing balance of current     1,156,399,976.00                     1,690,068,638.82                  955,919.02                    11,329,760.39   -757,961,086.06   2,100,793,208.17
   period


Legal representative: Mr. Huang Dailie               Principle in charge of accounting: Zhang Weiming          Head of accounting dept.: Lai Yonghua

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                              12. Documents for Reference


                          1. Financial statements signed and stamped by legal representative, principal
Documents for reference
                             in charge of accounting, CFO and head of accounting department;
                          2. The original auditor's report stamped by the public accounting firm and
Documents for reference
                             signed and stamped by the certified public accountant;
                          3. Articles of Association of Shanghai Chlor-Alkali Co., Ltd. during the
Documents for reference
                             report period
                          4. The formal version of all files and originals of the announcements
Documents for reference      disclosed in the newspapers appointed by China Securities Regulatory
                             Committee during the report period;
                          5. The Company shall furnish the above documents for reference while China
                             Securities Regulatory Committee and the stock exchange request to
Documents for reference
                             provide them and the shareholders request to consult them 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 29, 2016




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