2016 Annual Report
Company code: 600618 900908 Short name of the Company: SCAC Chlor-Alkali B share
Shanghai Chlor-Alkali Chemical Co., Ltd.
2016 Annual Report
Important Notice
I. The Board of Directors, the Supervisory Committee, Directors, Supervisors and senior
executives of the Company ensure that 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.
II. All the Directors of the Company attended the Board meeting.
III. BDO China Shu Lun Pan Certified Public Accountants LLP (special ordinary partnership)
issued an auditor's report with standard and unqualified opinion for the Company.
IV. Mr. Huang Dailie, the principal of the Company, Mr. Zhang Weimin, the principal in charge
of accounting of the Company, and Mr. Lai Yonghua, the head of accounting department
(accounting officer) declare to guarantee the truth, accuracy and integrity of the financial
report carried in this Annual Report.
V. The profit distribution preplan or the common reserves capitalizing preplan during the
reporting period reviewed by the board of directors
According to the 2016 annual financial audit report issued by BDO China Shu Lun Pan Certified
Public Accountants LLP engaged by the Company, in 2016 the net profit of the parent company was
RMB -320,466,343.92 Yuan and the undistributed profit at beginning of the year was RMB
-614,936,506.51 Yuan, and the profit available for distribution at end of the year was RMB
-935,402,850.43 Yuan. Therefore, the Company had no capability of cash dividend or common reserves
capitalization.
VI. Risk disclaimer of forward-looking statements
√Applicable □Not applicable
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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2016 Annual Report
VII. Is there any non-operational fund occupation by the controlling shareholder or the related
parties?
No
VIII. Does the Company provide the outward guarantees in breach of the stipulated
decision-making process?
No
IX. Notice on important risks
√Applicable □Not applicable
The company has described the related potential risks in this report. Please refer to the
contents concerning the risk factors that the Company may face in the future development
in Section IV Discussion and Analysis of the Business.
X. Other
□Applicable √Not applicable
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2016 Annual Report
Contents
Section I Paraphrase ........................................................................................................................... 4
Section II Company Profile and Main Financial indexes .................................................................... 5
Section III Summary on the Company's Business ................................................................................ 8
Section IV Discussion and Analysis of the Business .......................................................................... 11
Section V Major Events ..................................................................................................................... 34
Section VI Changes of Ordinary Shares and Particulars of Shareholders ........................................... 46
Section VII Particulars of Preferred Shares .......................................................................................... 50
Section VIII Particulars of the Directors, Supervisors, Senior Executives and Staff Members ............. 51
Section IX Company Governance ....................................................................................................... 60
Section X Particulars of the Company’s Bonds ................................................................................. 64
Section XI Financial Report ................................................................................................................ 65
Section XII Documents For Reference
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Section I Paraphrase
I. Paraphrase
In this Report, except otherwise indicated, these words and expressions shall have the meanings as
follows:
Paraphrase for generally-used expressions
CSRC means China Securities Regulatory Commission
SSRB means Shanghai Regulatory Bureau of China Securities Regulatory
Commission
Huayi Group means Shanghai Huayi (Group) Company
The Company, Company, or means Shanghai Chlor-Alkali Chemical Co., Ltd.
Chlor-Alkali Chemical
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.
EPVC, paste resin 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.
SLIC means Shanghai Lianheng Isocyanate Co., Ltd
SBPC means Shanghai BASF Polyurethane Co., Ltd
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Section II Company Profile and Main Financial indexes
I. 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
II. Contact information
Secretary of the Board of Directors Securities representative
Name Dong Yan Chen Lihua
Contact address No. 4747 Longwu Rd., Shanghai No. 4747 Longwu Rd., Shanghai
Tel. 021-23533113 021-64342640
Fax 021-64340817 021-64340817
E-mail dy@scacc.com chenlihua@scacc.com
III. Basic information
Registered address of the Company No. 4747 and 4800 Longwu Rd., Shanghai
Zip code of registered address
Business address of the Company No. 4747 Longwu Rd., Shanghai
Zip code of business address of the Company
Website www.scacc.com
E-mail dshmss@scacc.com
IV. 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 No. 4747 Longwu Rd., Shanghai
V. The Company's share
The Company's share
Type of share Stock exchange for listing Share name Share code
of share
A-share Shanghai Stock Exchange Chlor-Alkali Chemical
B-share Shanghai Stock Exchange Chlor-Alkali B Share
VI. Other relevant information
Name BDO China Shu Lun Pan Certified Public
Accountants LLP
Public accounting firm
Business address 4th Floor, New Huangpu Financial Plaza,
engaged by the Company
No.61, East Nanjing Rd., Shanghai, China
(domestic)
Name of the accountant Gu Xuefeng, Chen Luying
for signing
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VII. Main accounting data and financial indexes of the last 3 years
(I) Main accounting data
Unit: Yuan Currency: RMB
Increase or
decrease than
Main accounting data 2016 2015
same period of
last year (%)
Operating income 6,754,397,061.69 6,170,874,223.67 9.46 7,015,409,267.56
Net profit attributable to
shareholders of the listed -328,091,761.80 95,615,030.34 -443.14 -592,502,499.95
Company
Net profit attributable to
shareholders of the
-72,743,416.16 -31,416,638.28 N.A. -262,177,332.00
Company, after
non-recurring profit and loss
Net cash flow from
488,856,761.24 305,852,432.45 59.83 -29,059,999.83
operating activities
At the end of At the end of Increase or At the end of
2016 2015 decrease (%)
Net assets attributable to
shareholders of the listed 1,941,720,787.56 2,261,545,045.54 -14.14 2,164,655,507.39
Company
Total assets 4,489,616,046.06 4,847,854,403.79 -7.39 5,754,717,626.22
(II) Main financial indexes
Increase or decrease than same
Main financial indexes 2016 2015
period of last year (%)
Basic earnings per share (RMB/share) -0.2837 0.0827 -443.05 -0.5124
Diluted earnings per share (RMB/share) -0.2837 0.0827 -443.05 -0.5124
Basic earnings per share after
non-recurring profit and loss -0.0629 -0.0272 N.A -0.2267
(RMB/share)
Return on net assets, weighted average Decrease by 19.92 percentage
-15.6113 4.313 -24.4467
(%) points
Return on net assets, weighted average, Decrease by 2.04 percentage
-3.4613 -1.4171 -10.8175
after recurrent profit and loss (%) points
Notes to the main accounting data and financial indexes of the last 3 years before the end of the
reporting period
□Applicable √Not applicable
VIII. Difference in accounting data under domestic and overseas accounting standards
(I) The difference between net profit and net assets attributable to shareholders of the Company
between the international accounting standard and Chinese accounting standards
□Applicable √Not applicable
(II) The difference of net profit and net assets attributable to shareholders of the listed Company
in the financial report synchronously disclosed according to the international accounting
standards and Chinese accounting standards
□Applicable √Not applicable
(III) Explanation for differences between the international and Chinese accounting standards:
□Applicable √Not applicable
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IX. Main financial data by quarters in 2016
Unit: Yuan Currency: RMB
1st quarter 2nd quarter 3rd quarter 4th quarter
(Jan.-March) (Apr.-Jun.) (July-Sept.) (Oct.-Dec.)
Operating income 1,121,594,645.40 1,996,947,639.96 1,902,126,376.36 1,733,728,399.97
Net profit attributable
to shareholders of the 9,426,009.05 2,908,167.36 -58,655,607.08 -281,770,331.13
listed Company
Net profit attributable
to shareholders of the
listed Company after
21,263,550.76 24,316,965.61 4,060,482.46 -122,384,414.99
deducting
non-recurring profit
and loss
Net cash flow from
108,726,920.00 94,418,777.05 57,693,400.75 228,017,663.44
operating activities
Note on differences between the data of the quarters and that of the period report disclosed
□Applicable √Not applicable
X. Items of non-recurring profit and loss and amounts
√Applicable □Not applicable
Unit: Yuan Currency: RMB
Items of non-recurring profit Note (if
Amount of 2016 Amount of 2015 Amount of 2014
and loss applicable)
Profit or loss from disposal of 297,935.96 257,772,690.18 1,111,822.13
non-current assets
Government subsidy 22,590,620.20 The rest 30% of 41,118,941.72 5,732,560.40
attributable to profit and loss the government
of current period, except such subsidy for
government subsidy closely industrial
related to the Company's restructuring of
normal business operation, Wujing Base,
meeting the regulation of totally RMB
national policy and enjoyed 15,000,000.00
constantly in certain quota or Yuan
quantity according to a certain
standard
Profit and loss on the changes 13,928,846.49 Yield from sale of
in fair value of the Zhongyida’s
held-for-trading financial shares
assets and liabilities and the
investment yield from the
disposal of the
held-for-trading financial
assets and liabilities and
available-for-sale financial
assets except the valid hedging
business related to the normal
operation business of the
company
Other non-operating revenue 2,120,604.54 3,081,055.74 6,572,403.12
and expenditure other than
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above items
Other profit or loss items -297,607,371.13 Compensation for -174,731,937.80 -343,652,815.90
meeting the definition of personnel
non-recurring profit and loss placement and
related loss on
work stoppage
caused by
adjustment of the
industrial
structure in
Wujing Base
Impact of minority interests 3,119,749.28 -199,632.57 50,515.48
Impact of income tax 201,269.02 -9,448.67 -139,653.18
Total -255,348,345.64 127,031,668.60 -330,325,167.95
XI. Items measured by fair value
√Applicable □Not applicable
Unit: Yuan Currency: RMB
Beginning Change in Impact on the profit
Item Closing balance
balance current period of current period
Salable financial 50,765,875.23 70,138,258.46 19,372,383.23 344,311.88
assets
Total 50,765,875.23 70,138,258.46 19,372,383.23 344,311.88
XII. Others
□Applicable √Not applicable
Section III Summary on the Company's Business
I. Main business, operating mode and industrial status of the Company during the reporting
period
II. (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, for liquid chlorine, 600,000 tons, and for paste
and special resin, 80,000 tons.
III. (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 shanghai
chemical industrial park. The integrated industrial industry chain model is an interchange and sharing integrated
industry chain which mainly takes the ethylene product from SECCO as the flagship product, the chlor-alkali
product from the Company as the foundation, the refined chemical product such as isocyanate, polyisocyanate
and polycarbonate from BASF SE, Covestro and American HUNTSMAN as the intermediate, and the refined
chemical product such as the paint and the adhesive as the end-product. The structure of the specific industry
chain is described as follows: the Company provides the chlorine and the sodium hydroxide as the raw materials
to MDI/TDI/PC units in the park area, digest the byproduct hydrochloric acid gas and produce the dichloroethane
with the ethylene as the raw material and the secondary chlorine. Therefore, the Company built 720000t sodium
hydroxide unit and 720000t dichloroethane units in the shanghai chemical industrial park as the supporting
facilities, all of the chlorine liquid produced is basically supplied to the downstream of the shanghai chemical
industrial park. The chlorine pipeline and sodium hydroxide pipeline partition wall supply mode is adopted in the
shanghai chemical industrial park to guarantee the stability and safety of the supply and zero the logistics cost.
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 long-term contract on 10-year's
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supply of chlorine by the downstream enterprises in the shanghai chemical industrial park to the Company
became due in 2016 and the Company initiated the negotiation of the renew of the contract such as SLIC/SBPC
Contract I, II and III and Covestro Contract I and II in time. Both parties of a new round of 10-year's supply and
marketing contract upheld the idea of cooperation and win-win and took the growth, relevance and interaction of
the industry chain into full consideration. Therefore, the profit advantages of the integrated mode of the Company
continued in the shanghai chemical industrial park.
IV. (3) Description of industrial status: in 2016, the sodium hydroxide market turned round. Pushed forward by the
rise of the demand in the downstream and the shortage of the output in the main sodium hydroxide production
area, the operating factor of the enterprise rose and the price increased. In 2016, the output of the sodium
hydroxide in China reached up to 39,450,000t, with a net increment of 720000t compared with the 2015 (a new
increase of 2030000t and a cutting of outdated production capacity of 1310000t). There are totally 158 sodium
hydroxide producers in china, with a decrease of 5 producers compared with the last year. Although the output of
sodium hydroxide increased to a certain extent every year, the outdated production capacity was relatively large,
so the overall production capacity was stable. Due to the average increase in consumption, the average
industrial operating factor rose from 78% in 2015 to 83% in 2016 and the industrial concentration ratio increased.
Affected by the factors such as the supply-side reform for cutting industrial overcapacity, the operating factor of
PVC industry kept the trend of stable rise and the price increased. In 2016, the output of PVC was 23,260,000t,
with a net reduction of 220,000t compared with the end of 2015 (a new increase of 890,000t and a cutting of
outdated production capacity of 1,110,000t). At present, there are 75 PVC producers, with a net reduction of 6
producers compared with the end of the last year. The output of PVC had been in negative growth for 3 years.
Since the overall consumption stably grew, the industrial average operating factor rose from 69% in 2015 to 72%
in 2016 and the industrial concentration ratio rose.
V. Explanation for significant changes in prime assets of the Company during the reporting
period
□Applicable √Not applicable
VI. Analysis on the core competitive power in the reporting period
√Applicable □Not applicable
1. Signed a new-round 10-years supply and marketing contracts
Through 10 years'running in the shanghai chemical industrial park by the Company, the
integrated operating mode has fully demonstrated the merits of the cooperative win-win pricing
mechanism. When the Company signs the long-term contract with the downstream enterprises,
the pricing is based on the cost plus the reasonable profit and adjusts the changes in the price
and cost of the main cost factors including electricity, salt, steam, water, labor force and
industrial products. When the price of the raw material or energy rises, for example, the
electricity price rises, the contract price can be adjusted according to the price formula to make
efforts to eliminate the cost rise factors; with the chlorine bringing along the sodium hydroxide,
in sale of the chlorine, the sodium hydroxide is also sold as per a certain ratio at the same time.
The chlorine pipeline and sodium hydroxide pipeline partition wall supply mode is adopted in the
shanghai chemical industrial park to guarantee the stability and safety of the supply and zero
the logistics cost. It establishes the risk compensation mechanism for the execution of the
contracts. In the signing of long-term contracts，various factors were fully considered, for
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example, when the actual amount purchased of the customer is less than the amount carried in
the contract, the Company will be compensated in accordance with the stipulations of the
contract, thus, the risks from the execution of the contract are greatly reduced. At the same time,
based on the equity of the contract, when the commodity quantity supplied by the Company to
the downstream enterprises is lower than the quantity specified by the contract, the Company
will also compensate the downstream enterprises to guarantee the stable supply between and
by both parties. 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 long-term contract on 10-year's supply of chlorine by
the downstream enterprises in the shanghai chemical industrial park to the Company expired in
2016 and the Company initiated the negotiation of the renew of the contract such as
SLIC/SBPC Contract I, II and III and SECCO Contract I and II in time. Both parties upheld the
idea of cooperation and win-win and took the growth, relevance and interaction of the industry
chain into full consideration. On Dec. 4, 2016, the company signed the Contract on Supply of
Chlorine/Sodium Hydroxide with Covestro Polymer (China) Co., Ltd (the proposal of this
contract was reviewed and approved by the 6th meeting of the 9th board of directors and was
announced on Dec. 5, 2016) and had reached an agreement on the main clauses of the supply
contract with SLIC/SBPC and it was expected that the contract would be signed in the first half
year of 2017. Therefore, the Company's profitability predominance due to the integrated
operating mode in the shanghai chemical industrial park can continue to exist.
2. New R&D outcome of chlorine preparation technology, accelerating the
industrialization
In 2016, the advanced chlorine preparation process independently researched and developed
by the state-level technical center of the Company, namely hydrogen chloride to chlorine
through catalysis and oxidation passed the review of the experts from the industry and the
university; meanwhile, the Company optimized and perfected the feasibility study report on the
process package of hydrogen chloride to chlorine through catalysis and oxidation and the
industrialized project, laid a solid foundation of the industrialization of the hydrogen chloride to
chlorine through oxidation and accelerated the building of the circular economy industry chain in
the shanghai chemical industrial park.
3. Reserving a batch of new technology R&D outcomes
The Company independently researched and developed the chlorinated PVC by water phase
process and accomplished the research and application development of low-cost chlorinated
PVC resin and the formula for chlorinated PVC granular material for the particular customers in
2016, as a result, it seriated and customized the chlorinated PVC resin products.
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4. Having a powerful marketing platform
As the enterprise exporting sodium hydroxide earliest in China, the Company owns a 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 middle and
down stream of the Yangtze River, the most developed region in China, with the best
consumption and logistics. In 2016, the Company established the trading company to build an
integrated supply and marketing platform and achieve the “supply and marketing linkage,
product linkage and the linkage of the primary business and the trade”. The establishment of the
trading company is the need for achieving the industrial upgrading, transformation of growth
mode and secondary innovation and upgrading of the profit mode of the company.
Section IV Discussion and Analysis of the Business
I. Discussion and Analysis on the Management
In the first year of the 13th five-year plan, the chlor-alkali industry entered the critical period of industrial restructuring
and growth mode transformation. A series of changes had taken place in the industrial operation characteristics: the
industrial scale expanded continuously, but the speed of growth slowed down; the industrial concentration ratio rose
and the industrial layout became reasonable gradually; the market pattern changed continuously and the trading mode
was diversified; the production process was continuously optimized and the energy-saving and environmental
protection level was continuously improved. Viewed from the operating environment of the Company, the domestic
overall economic growth speed slowed down, the traditional manufacturing industry stepped into the recession cycle,
especially, the manufacturing industry of bulk commodity with severe competition entered into the period of cold winter.
Although the chlor-alkali product market in the second half year of 2016 turned a little better, the overall situation in the
whole year was still severe, the price of ethylene and EDC decreased greatly compared with the annual budget.
Confronted with the market fluctuation and actual difficulties, the Company encompassed the strategic target of
“innovation, upgrading and transformation” proposed in the 13th five-year plan, persisted in the working requirements
of “adjustment and cost cutting for survival and transformation and development for the future”, focused on cost
cutting and benefit increase, settlement and reemployment and going global strategy and preliminarily achieved the
established operation objectives.
(I) Pushing forward the arrangement and implementation of the strategy of the Company in an
all-round way
1. Accomplishing the strategic adjustment of Wujing Zone in an all-round way. According to the relevant policy against
the industrial layout and industrial restructuring issued by Shanghai Municipal Government as well as the strategic
planning of the Company for clustering and upgrading, the Company had implemented the adjustment of Wujing Zone
since 2013, shut down the production units in Wujing Zone in order step by step and actively and stably pushed
forward the reduction and reemployment of the employees in the Company. In 2016, the adjustment of Wujing Zone
entered the into the closing phase, the Company shut down all of the CPVC units and the related utilities in Wujing
Base and stably reduced 696 employees according to the specific proposal, indicating the strategic adjustment in
Wujing Zone had accomplished in an all-round way. The success of in strategic adjustment in Wujing Zone as
scheduled was an important step for the strategic development of the Company and was of milestone significance for
the transformation and development of the Company.
2. Accelerating the cluster and development of the shanghai chemical industrial park. The company further transferred
the production and operation center of gravity to Caojing Chemical Zone in an all-round way strengthen the industrial
layout in the shanghai chemical industrial park and lay a solid foundation for the great-leap-forward development
based on the shanghai chemical industrial park in the future. (1) Quickening the progress of the projects in the
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chemical zone. Firstly, the Company independently researched and developed the chlorine hydride to chlorine through
oxidation, formally launched the preparation of the feasibility study report on this project and accelerated the
industrialization progress of the project of 100000t/a chlorine hydride to chloride through oxidation. Secondly, the
chlorinated polyvinyl chloride project would be settled in Tianyuan Chemical Plant in the chemical zone. It was
originally planned to be settled in the land for the former paste resin unit on Plot D4 in Shanghai Chemical Zone. In
2016, 3rd board meeting of 9th board of directors reviewed and approved Proposal for Alteration of the Contents
Concerning 40000t/a High Performance Perchlorinated Polyvinyl Chloride Project and decided to invest in and build
this project in Tianyuan Chemical Plant to further optimize the investment in this project. Now the project is being
optimized continuously. (2) Strengthening the position of the important chloride supplier in the chemical zone. The
Company scientifically studied and judged the demand for chloride of the downstream enterprises in the chemical
zone in the coming years, did well in balance and assessment of the chloride resource in advance, dealt with the
challenges from the supply of the chloride resource in time and satisfied the demand at the downstream to the utmost
extent. In view that the long-term contract on supply of chloride from the downstream enterprises in the chemical zone
to the Company was due in 2016, it launched the negotiation of the renew of the contracts such as SLIC/SBPC
Contract I, II and III and Covestro Contract I and II. It regarded “business negotiation of major contracts” as the key
management project, strengthened the negotiation with the partners and fully accelerated the negotiation process.
Through many rounds of negotiation and communication between both parties, the Company signed the contract on
supply of chloride/sodium hydroxide with Covestro Polymer (China) Co., Ltd on Dec. 4, 2016 (the proposal for the
contract was reviewed and approved by the 6th board meeting of the 9 th board of directors and was announced on
Dec. 5, 2016) and it was expected the supply contract with SLIC/SBPC would be signed in the first half year of 2017.
3. Accelerating the step of \"going global\". In 2016, the Company took a material step in the “going global” strategy
and the 5th board meeting of the 9th board of directors of the Company reviewed and approved the proposal for
Investment in Inner Mongolia Junzheng Tianyuan Chemical Co., Ltd on Oct. 28, 2016. According to the proposal,
Inner Mongolia Junzheng Tianyuan Chemical Co., Ltd would be jointly invested and incorporated as per the stock ratio
of Chlor-Alkali Company 40% and Junzheng Energy 60% and the joint venture would plan and build the project of
200000t/a EPVC with seed emulsion process. This project would be implemented by phases and the project (phase I)
planned to put 100000t into production. This joint venture accomplished the industrial and commercial registration on
Jan. 10, 2017 and it was expected that it would be put into production at the end of 2017. The cooperation between
Chlor-Alkali Company and Junzheng Energy could make use of the advantages in local rich resources and rely on the
existing production and living facilities of Junzheng Energy to achieve the resources complementarities and upstream
and downstream linkage as well as combine the advantages in technology and brand with the ones in resources and
cost, as a result, it could effectively reduce the production cost and raise the product competitiveness. This project
conformed to the development planning of “trying for the industrial transfer to other appropriate regions in China,
relying on the more advantageous policy environment, more complete supporting facilities and cheaper cost input,
strengthening the market competitiveness of the products and building the industrial zone with scale effects and
competitiveness advantages” and would become an important step towards the implementation of the “going global”
strategy.
(II) Optimizing the operation and management of the Company in an all-round way
1. Enhancing HSE management and ensuring safety. The Company adhered to the principle of \"building the defense
line firmly, holding the bottom line and consolidating the line\", advocated the safety culture of \"self awareness,
sensitivity and working efficiently\" and enhanced continuously HSE management level to provide powerful guarantee
for its adjustment and development. With propaganda and implementation of the new Production Safety Law and
Environmental Protection Law as the main thread, persisting in the principle that “CPC committees and governments
are held accountable, officials take responsibility for workplace safety in performing their duties, and those who fail to
uphold safety standards are held accountable”, strengthening the consciousness of “bottom line”, “red line” and
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“high voltage line” for safety and environmental protection and ensuring the intrinsic safety of HSE. (1) Defining the
safety responsibility. Carrying out the activity of “my area in the charge of me and my work in the charge of me” and
continuously improving the safety consciousness and the sense of responsibility of the employees. Implementing HSE
responsibility system and signing the HSE responsibility agreement and the letter of commitment in layers, with the
contract signing ratio of 100%. In the context of institutional adjustment and reduction in workforce, adjusting HSE
working organ in time, establishing Safety Committee of Caojing Zone and guaranteeing the implementation of HSE
responsibility. (2) Strengthening safety assessment. Assessing each department and each employee every month.
Preparing Detailed Rules for Assessment of Comprehensive Bonus of HSE for Employees in the Company and
including the implementation of the production safety responsibility into the comprehensive management and
assessment system for the employees in the company for uniform assessment. Revising Detailed Rules for
Assessment of Contractors, aiming at the problems in the management of the contractor in the overhaul, studying the
assessment, rewards and punishment scheme for the contractors and preparing Standard of Chlor-Alkali Company for
Safety Assessment of Construction by the Contractor. (3) Implementing and urging the rectification and improvement.
Aiming at some individual minor accident, formulating and launching the measures for rectification and improvement in
time, strengthening the management of the key equipment and the major hazard sources, putting the management
into place, contracting the management to the specific person, improving the routine patrol quality and guaranteeing
the safety facilities in good condition. Amending the scheme for dumping of the chloride liquid storage tank,
guaranteeing the dumping in the abnormal condition in the controllable safety state, strengthening the emergency
drilling, upgrading the emergency drilling of the leakage of the chloride liquid to the height at the group level and keep
the information unblocked among the related persons.
2. Flexibly adjusting the sales system. (1) Integrating the marketing system, establishing the trade company and
building the efficient business platform. The establishment of the trade company was required for the industrial
upgrading and the secondary innovation and upgrading of the profit mode of the Company. Through the modern
marketing system more closely to the market, on one hand, it could achieve the proper linkage of the purchase and
sale of the self-operating products, do well in the management of two cores including purchase and sale and improve
the market competitiveness of the products; on the other hand, it would make full use of the new mechanism, motivate
the spirit of struggle to expand the market so as to transform the growth mode and cultivate the new profit increase
point. (2) Aiming at the market trend and optimizing the sale of the products. Firstly, optimizing the sale of EDC and
acid absorbent. Viewed from the profit of the chloride per t, the loss of the acid absorbent product was less than the
one of EDC product. In 2016, the Company greatly increased the sales volume of acid absorbent and optimized the
sales radius as well, and expanded the market of East China all out. Compared with the annual budget, the sales
volume of the acid absorbent increased 120000t and the loss was reduced by RMB 19,720,000.00 Yuan in the whole
year. Secondly, optimizing the sales structure of the sodium hydroxide. In 2016, the benefit of 32% alkali was better
than the one of 50% alkali sold at home and abroad. According to the benefit optimization principle, the Company
dynamically adjusted the variety structure of the sodium hydroxide and the regional structure, produced and sold more
32% alkali, increased the sales proportion in Shanghai all out, as a result, the sales proportion of 32% alkali in
Shanghai in 2016 increased remarkably, with an increase of 7% on year-on-year basis. (3) Active communication to
raise the execution rate of the contracts by the downstream enterprises. In 2016, based on the active communication
with the downstream enterprises, the Company closely followed up the execution of the contracts with the downstream
enterprises and raised the execution rate of the contract as much as possible to increase the profit of the Company.
The quantity of chloride received by the downstream enterprises in 2016 was 599,600t, reaching a record high, with an
increase of 23,000t on year-on-year basis.
3. Scientifically strengthening operation and management. (1) Deeply excavating the potential, reducing the cost and
increasing the benefit. The Company strictly implemented the budget, optimized the capital structure and the sales
structure, resulting in the reduction in three charges by 23% on year-on-year basis. Meanwhile, with respect to the
production, the Company strictly controlled the materials and energy consumption, enhanced the management,
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2016 Annual Report
reduced the production fluctuation and optimized the use structure of the raw materials, as a result, the manufacturing
expense fell down on year-on-year basis. (2) Adopting the flat management mode. The production system further
adopted the flat management mode, simplified the management layers, quickened the rate of the information flow,
improved the decision-making efficiency, implemented the refined production and achieved the remarkable
improvement of the cost and operation profit with the minimum input. The main purpose of the refined production was
to make the quickest response with the best quality, the lowest cost and the highest efficiency. With respect to the
organizational structure, it reduced the non-direct production layer, adopted the flat production system and quickly
responded to the market. The production management department was shifted to the economic operation department,
Tianyuan Chemical Plant and Huasheng Chemical Plant were cancelled, sodium hydroxide unit, oxidative chlorination
unit, resin unit and utilities were established and PVC plant was cancelled. Economic operation department, HSE
department and arm safeguard department directly managed them, in this way, they uniformly implemented the
production and operation function together with the four units.
II. Main operating status in the reporting period
In the reporting period, the Company realized the operating income of RMB 6,754,397,100Yuan,
increasing by RMB 583,522,800Yuan or 9.46% year on year, the gross profit of RMB -334,813,600
Yuan, decreasing by RMB 444,375,500 Yuan year on year, and the net profit attributable to shareholders
of the listed Company of RMB -328,091,800 Yuan, decreasing by RMB 423,706,800 Yuan year on year.
(I) Analysis of the main business
Analysis of Changes in Relevant Items in Income Statement and Cash Flow Statement
Unit: Yuan Currency: RMB
Item Current period Amount in the same
Change ratio (%)
amount period of last year
Operating income 6,754,397,061.69 6,170,874,223.67 9.46
Operating cost 6,128,517,218.57 5,559,439,778.97 10.24
Selling cost 184,329,793.95 199,911,085.12 -7.79
Management expenses 480,214,277.58 402,196,032.57 19.40
Financial expenses 74,994,167.59 140,436,053.89 -46.60
Net cash flow from operating activities 488,856,761.24 305,852,432.45 59.83
Net cash flow from investment -32,240,748.36 462,369,445.87 -106.97
activities
Net cash flow from financing activities -266,227,416.76 -930,062,240.97 Not applicable
R&D expenditure 22,218,163.42 36,893,630.81 -39.78
1. Analysis on revenue and cost
√Applicable □Not applicable
(1). Main business divided by sector, product and area
Unit: Yuan Currency: RMB
Main business by sector
Increase
Increase or
or
decrease of
decrease
Gross operating Increase or decrease of
of
Sector Operating income Operating cost profit income gross profit rate than
operating
rate (%) than previous yea (%)
cost than
previous
previous
year (%)
year (%)
Industry 3,825,805,128.74 3,478,929,132.02 9.07 -7.84 -2.18 Decrease by 5.26
percentage points
Constructio 52,384,954.98 50,855,935.65 2.92 57.02 71.53 Decrease by 8.21
n percentage points
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2016 Annual Report
Trade 2,834,742,551.50 2,557,264,284.04 9.79 46.13 32.35 Increase by 9.39
income percentage points
Total 6,712,932,635.22 6,087,049,451.71 9.32 9.61 10.30 Decrease by 0.58
percentage points
Main business by product
Increase or Increase or
decrease of decrease of
Gross Increase or decrease of
operating operating
Product Operating income Operating cost profit gross profit rate than
income than cost than
rate (%) previous yea (%)
previous year previous
(%) year (%)
PVC 538,275,093.61 557,330,514.67 -3.54 8.76 -3.11 Increase by 12.69
percentage points
Sodium 1,377,470,326.87 917,255,823.14 33.41 7.38 -2.50 Increase by 6.74
hydroxide percentage points
Chlorine 2,144,285,877.31 2,005,608,343.01 6.47 -0.14 5.79 Decrease by 5.24
products percentage points
Others 2,652,901,337.43 2,606,854,770.89 1.74 20.62 23.75 Decrease by 2.48
percentage points
Total 6,712,932,635.22 6,087,049,451.71 9.32 9.61 10.30 Decrease by 0.58
percentage points
Main business by area
Increase or Increase or
Gross decrease of decrease of
Increase or decrease of
profit operating operating
Area Operating income Operating cost gross profit rate than
rate income than cost than
previous yea (%)
(%) previous previous
year (%) year (%)
China 6,436,295,912.76 5,829,905,849.66 9.42 10.56 11.94 Decrease by 1.11
percentage points
Other 276,636,722.46 257,143,602.05 7.05 -8.75 -17.11 Increase by 9.37
countries percentage points
Total 6,712,932,635.22 6,087,049,451.71 9.32 9.61 10.30 Decrease by 0.58
percentage points
Explanation for the main business by industries, products and regions
√Applicable □Not applicable
1) The Company established the “double-core driven” business development mode and realized the
shift from “production and manufacture” to “manufacture+ service trade”. The service trade has rapidly
developed in the past two years, kept relatively high share in the market, quickened the transformation of
the trade mode and gradually built itself a trade company with relatively strong competitiveness in
purchase of the raw materials and sale of the product;
2) The Company, based on the platform of Shanghai Chemical Products Trading Market and the
platform of the trade company, expanded the business in the primary products and the raw materials,
further expanded the industry chain of the service trade, made use of the information and advantages in
the purchase of the existing primary raw materials including ethylene and vinyl chloride and intensified
the market development of the varieties such as polyethylene to gradually prompt the Company to shift
to the service trade of the varieties in the related industry chain from the main single raw materials
(ethylene and vinyl chloride) so as to further strengthen the discourse right of the Company in the
primary products and the raw materials market. In this stage, the expansion range of polyethylene
business mainly depends on the users in Zhejiang, Jiangsu, Shandong and so on.
3) Continuously making full use of the opportunity of the established ethylene tank project, actively
expanding ethylene trade market and seeking for the trade partners in many ways. During this reporting
period, the ethylene trade business mainly concentrates on the main consumption region of the ethylene,
including Shanghai, Jiangsu and Zhejiang, therefore, the trade business of the ethylene mainly depends
on the users in Zhejiang, Jiangsu and Shanghai. Considering the safety factors such as the capital, the
ethylene customers of Shanghai Chlor-Alkali are selected according to the standard of stable channel,
capital safety and a certain consumption;
4) Selection of settlement and trade mode: in this stage, this Company mainly concentrates on the
expansion of the market and the business varieties and guarantees the safety of the capital, as a result, as
to the trade mode, it firstly selects the downstream customers and determines the sales intent according
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2016 Annual Report
to the quantity and the price, then purchases the products from the upstream suppliers at a proper price,
so the form of settlement mainly adopts the payment before delivery.
(2). Analysis on production and sale
√Applicable □Not applicable
Increase or Increase or
Increase or
Sales decrease of decrease of
Output Stock decrease of
volume sales volume stock
Main products ('0000 balance output than
('0000 than balance than
tons) ('0000 tons) previous
tons) previous previous
year (%)
year (%) year (%)
PVC product 6.875 7.215 0.217 -10.12 -5.98 -65.69
Sodium hydroxide 101.358 67.981 0.928 47.36 2.61 -39.07
product
Chlorine product 140.622 144.667 3.727 -1.60 10.04 -54.20
In 2016, the basic chemical industry turned round, the price of the products rose, the market sale was
good and the stock size of the products decreased.
(3). Cost analysis
Unit: Yuan
By sector
Ratio in Ratio
Items of cost Amount in current Amount in the same Change
Sector total in total
structure period period of last year ratio (%)
cost (%) (%)
Industry Direct 2,903,828,396.6 47.71 2,860,008,053.66 51.83 1.53
material
Direct labor 77,872,144.56 1.28 96,854,436.74 1.76 -19.60
Power 199,367,318.61 3.28 244,563,736.73 4.43 -18.48
Manufacture 297,861,272.25 4.89 355,203,896.99 6.44 -16.14
cost
Total 3,478,929,132.02 57.15 3,556,630,124.12 64.45 -2.18
Construction Direct 1,832,355.52 0.03 2,220,503.52 0.04 -17.48
material
Direct labor 1,745,672.28 0.03 3,688,472.71 0.07 -52.67
Manufacture 47,277,907.85 0.78 23,738,840.58 0.43 99.16
cost
Total 50,855,935.65 0.84 29,647,816.81 0.54 71.53
Trade income Purchase cost 2,557,264,384.04 42.01 1,932,174,066.11 35.01 32.35
By product
Ratio in Ratio
Items of cost Amount in current Amount in the same Change
Product total in total
structure period period of last year ratio (%)
cost (%) (%)
PVC Direct 387,186,822.81 6.36 382,641,803.88 6.93 1.19
material
Direct labor 16,674,223.52 0.27 17,460,930.59 0.32 -4.51
Power 82,209,949.13 1.35 95,674,768.66 1.73 -14.07
Manufacture 71,259,519.21 1.17 79,451,927.95 1.44 -10.31
cost
Total 557,330,514.67 9.16 575,229,431.08 10.42 -3.11
Sodium Direct 760,390,751.28 12.49 729,098,699.59 13.21 4.29
hydroxide material
Direct labor 16,548,439.55 0.27 15,627,153.42 0.28 5.90
Power 69,768,678.75 1.15 94,463,749.19 1.71 -26.14
Manufacture 70,547,953.56 1.16 101,539,246.32 1.84 -30.52
cost
Total 917,255,823.14 15.07 940,728,848.52 17.05 -2.50
Chlorine Direct 1,792,188,346.51 29.44 1,690,759,223.40 30.64 6.00
product material
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2016 Annual Report
Direct labor 35,580,679.00 0.58 32,201,251.85 0.58 10.49
Power 50,674,330.48 0.83 43,801,478.39 0.79 15.69
Manufacture 127,164,987.02 2.09 129,158,563.36 2.34 -1.54
cost
Total 2,005,608,343.01 32.95 1,895,920,517.00 34.36 5.79
Explanation for other situation of cost analysis
□Applicable √Not applicable
(4). Main customers and main suppliers
√Applicable □Not applicable
The amount of sales of the first five customers was RMB 2,378,062,500.00 Yuan, accounting for
35.19% of the annual total sales, in which the amount of sales of the related parties of the first five
customers was RMB 0.00 Yuan, accounting for 0% of the annual total sales.
Unit: Yuan Currency: RMB
No. Customer Amount of sales Percent in annual total sales (%)
1 Covestro 702,663,341.07 10.40
2 Shanghai Daokuan Trade Co., Ltd 513,655,222.22 7.60
3 SLIC 473,681,459.22 7.01
4 BASF 350,184,633.60 5.18
Qingdao Shengtaifeng International
5 Trade Co., Ltd 337,877,863.25 5.00
Total 2,378,062,519.36 35.19
The amount of procurement of the first five suppliers was RMB 3,271,360,400.00 Yuan,
accounting for 59.79% of the annual total amount of procurement, in which the one of the related parties
of the first five suppliers was RMB 0.00 Yuan, accounting for 0% of the annual total amount of
procurement.
Unit: Yuan Currency: RMB
Amount of Percent in annual total amount
No. Supplier procurement of procurement (%)
State Grid Shanghai Municipal
1 Electric Power Company 1,102,666,883.85 20.16
Shanghai SECCO Petrochemical
2 Company Limited 864,644,799.54 15.80
Shandong Zhongxin Industry Trade
3 Co., Ltd 746,228,292.31 13.64
Qingdao Free Trade Zone
4 Zhongyan Trade Co., Ltd 322,971,615.38 5.90
5 Mitsubishi Corporation 234,848,784.08 4.29
Total 3,271,360,375.16 59.79
Other explanations
1. Covestro is an important downstream customer of the chemical zone and the Company supplies the
chemical products such as sodium hydroxide and chloride liquid to it.
2. State Grid Shanghai Municipal Electric Power Company is the main electric power supplier for the
Company to produce the main product sodium hydroxide.
3. Shanghai SECCO Petrochemical Company Limited is the supplier of the main raw materials for the
Company to produce the main product dichloroethane.
4. Shandong Zhongxin Industry Trade Co., Ltd is the supplier of polyethylene for the Company to
expand the market and carry out the main trade business.
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2016 Annual Report
2. Expenses
√Applicable □Not applicable
Unit: Yuan Currency: RMB
Year-on-year
2016
Item increase/decrease (%)
Selling cost 184,329,793.95 199,911,085.12 -7.79
Management expenses 480,214,277.58 402,196,032.57 19.40
Financial expenses 74,994,167.59 140,436,053.89 -46.60
Income tax expense 1,713,353.49 4,672,427.26 -63.33
Analysis of the reason for changes in the expenses:
1) The management expenses increased by 19.4% year on year, mainly caused by significant increase of
employee’s dismissal benefit than previous year.
2) The financial expenses decreased by 46.6% year on year, mainly caused by the reduction in interest
expenditure due to the optimization of loan portfolio and reduction in loan scale in this period.
3. R&D investment
Details of R&D investment
√Applicable □Not applicable
Unit: Yuan
Expense investment in R&D in current period 17,060,292.79
Capitalized investment in R&D in current period 5,157,870.63
Total of investment in R&D 22,218,163.42
Ratio of total investment in R&D in the operating income (%) 0.33
Number of R&D personnel in the Company
Ratio of R&D personnel in total employees of the Company (%) 28.85
Ratio of capitalized investment in R&D (%) 23.21
Notes
√Applicable □Not applicable
In 2016, 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”, “inner quality tracking and process improvement of
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, completed the optimization of the first
generation of catalyst, determined the technical indexes of the catalyst and magnified the process
parameter of preparation, established the enterprise standard of catalyst; the evaluation unit for the single
column run of Huasheng Chemical Plant was established and the preparations for the startup was made;
the research on the process of the offgas absorption liquid was made and 100000t/a industrialized
process package was further perfected. For the project of “inner quality tracking and process
improvement of the chlorinated polyvinyl chloride resin”, the Company conducted quality tracing for
chlorinated polyvinyl chloride resin. Comprehensively considering the static thermal stability and
dynamic rheological property as the quality indexes, it analyzed the fluctuation of chlorination process
and the fluctuation among the batches to adjust the chloride flow and the process. Based on the
follow-up and improvement of this project, the static temperature time and the quality product rate of
CPVC resin were risen to above 80%; based on the continuous follow-up, the batches with the quality
defects were retained in the Company and did not come into the market. In this year, good feedback was
get from the customers on CPVC, without any quality complaint. With the stable quality, the sales
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2016 Annual Report
volume rose step by step and the balance of production and marketing was achieved. As to the project of
“development and application of electrolyte tank energy-saving technology”, the electrolyte tank
reconstruction plan was accomplished in 2016. The operation of the unit in the condition of operation
current density of 5.0 KA/㎡, soda concentration of 32% and tank temperature of 90℃ got a very good
effect. In the evaluation, the voltage of the single tank was lower than 2.98V, the power consumption of
the sodium hydroxide per ton was reduced by 140KWH/sodium hydroxide per ton, the power
consumption of 360000t/a unit could be reduced by 50,000,000kWh or so, as a result, based on RMB 0.6
Yuan/KWH, it could save the electricity cost of RMB 30,000,000.00 Yuan, the electric energy saved in
each year was converted into about 16000t standard coal, equivalent to reduction of the emission of
40000t CO2 per year.
4. Cash flow
√Applicable □Not applicable
Unit: Yuan Currency: RMB
Item 2016 2015 Difference
Net cash flow from operating activities 488,856,761.24 305,852,432.45 183,004,328.79
Net cash flow from investment activities -32,240,748.36 462,369,445.87 -494,610,194.23
Net cash flow from financing activities -266,227,416.76 -930,062,240.97 663,834,824.21
Net increase of cash and cash equivalents 193,630,445.62 -162,165,661.15 355,796,106.77
Notes:
1) The increase in net cash flow from operating activities was mainly caused by the great drop of the
stock in trade in this period, resulting in the increase in the net cash flow from the operating activities on
year-on-year basis;
2) The decrease in cash flow from investing activities is mainly caused by the decrease in the cash
inflow due to no equity transfer and sale of buildings in current period.
3) The decrease in net cash flow from financing activities is mainly because the loan returned was
smaller than the outflow of funds in current period.
(II) Note on significant changes in the profit caused by non-main business
√Applicable □Not applicable
The main reasons for the loss of the Company during the reporting period: 1. Provision for impairment.
The provision for impairment of the fixed assets in this period was totally RMB 203,833,414.81 Yuan,
among which: (1) the amount of provision for impairment of paste resin unit in this year was RMB
142,123,801.94 Yuan. The reason for the provision: A. The Company planned to build the 40000t/a
CPVC project, but the original site, namely Plot D4 in the chemical zone was located at No. 168 Yinhe
Road Shanghai Chemical Zone and was adjusted in the planning since the chemical zone carried out the
overall planning of the plot at the north of Central River in the park. Now it is approved for the record
according to Opinion for Record of Shanghai Municipal Enterprise Investment Project by Shanghai
Chemical Zone Management Committee (Project record No.: HHGB [2014] 26). Shanghai Municipal
Bureau of Planning, Land and Resources issued the approval for Releasing Decision about Notice on
Requirements on Planning and Design of Construction Project of 40000t/a PVC Project by Water Phase
Process (HGTZHXF [2016] No. 9) and the site of this project was reselected at Plot B3 of the chemical
zone (the location of paste resin unit) (the alteration of the site selection of this project was announced in
the resolutions of the 3rd board meeting of the 9th board of directors). After the new site of this project
was determined, the Company launched the previous work such as application of the project for record,
environmental impact evaluation, safety evaluation and energy evaluation. B. The Company signed a
joint venture agreement with Ordos Junzheng Energy Chemical Co., Ltd on Dec. 15, 2016 (the
investment was announced in the resolutions of the 5th board meeting of the 9th board of directors) to
jointly invest in Mengxi Industry Zone, Ordos City, Inner Mongolia, China to establish Inner Mongolia
Junzheng Tianyuan Chemical Co., Ltd to produce EPVC products based on the local geological
advantages and 100000t/a EPVC unit technology of the company. In addition, the Company signed the
contract on technical license with Inner Mongolia Junzheng Tianyuan Chemical Co., Ltd, which
stipulated that Inner Mongolia Junzheng Tianyuan Chemical Co., Ltd used EPVC technology in the
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2016 Annual Report
manner of exclusive license, as a result, the production and development of the original paste resin unit
of the company was restricted. Based on the above-mentioned reasons, considering the high energy
consumption cost and the strict requirements on the environmental protection in Shanghai City, the
management of the Company decided to carry out the depreciation test of the paste resin unit. By Dec.
31, 2016, the Company, according to Data of Research Report on Paste Resin Industry in 2017, in
combination with the actual conditions of the Company, based on the net amount of the new cash flow
of the Company in the coming five years, provided RMB 142,123,801.94 Yuan as the provision for
impairment for the paste resin unit.
(2) The amount of provision for the impairment in Wujing Zone in this year was RMB 49,675,281.43
Yuan. The adjustment of the industrial structure of the Company in Wujing Zone entered into the final
stage (the shutdown in Wujing Zone was announced in the resolutions of the 5th board meeting of the 9th
board of directors), the overall production of the Company was entirely transferred to Shanghai
Chemical Zone, Wujing Zone was cleaned up in an all-round way and the production of the last
production unit was terminated in this period, so the provision for impairment of this unit and the
auxiliary facilities in this year was RMB 49,675,281.43 Yuan.
(3)The amount of provision for impairment of F2 electrolyte tank in this year was RMB 11,481,274.95
Yuan, the reasons for provision: with the cleaning-up of Wujing Zone of the Company in an all-round
way, the electrolyte tank in the former F2 unit was confronted with the cleaning-up, as a result,
according to the assessed value of the electrolyte tank confirmed by the Company by Dec. 31, 2016, the
amount of provision for impairment, totally RMB 11,481,274.95 Yuan was made.
2. Employee termination benefits expenditures. Due to the implementation of permanent parking
scheme in Wujing Base and current arrangement of adjustment progress, a large number of employees
terminated labor contract with the company in batches, and the actually diversion expense incurred was
RMB 125,000,000Yuan, the termination benefits withheld was RMB 131,000,000Yuan, and the
personnel diversion cost incurred in current period was totally RMB 256,000,000Yuam.
(III) Analysis on assets and liabilities
√Applicable □Not applicable
1. Status of Assets and Liabilities
Unit: Yuan
Ratio in Ratio in
Closing balance total Closing balance total Change
Item Remark
of current period assets of previous period assets ratio (%)
(%) (%)
Monetary 433,999,695.91 9.67 240,425,945.13 4.96 80.51 Capital recovery
fund in current period is
better
Notes 448,822,006.32 10.00 336,221,352.79 6.94 33.49 Increase in notes
receivable receivable of the
new subsidiary
New Materials
Trading Company
Advance 50,056,591.51 1.11 136,446,799.31 2.81 -63.31 Decrease in
payments advance project
payments and
dynamic payment
in current period
Other 762,159.00 0.02 3,561,716.78 0.07 -78.60 Collection of
receivables imprest fund
Inventory 159,466,728.86 3.55 384,885,265.71 7.94 -58.57 Falling inventories
of EDC product
Project 97,570,414.69 2.17 305,408,986.91 6.30 -68.05 Carrying forward
under the fixed assets
construction after the
completion of
project
Engineering 37,478.63 0.00 1,381,336.82 0.03 -97.29 Special materials
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2016 Annual Report
material requisition
Developmen 17,364,046.98 0.39 30,247,277.15 0.62 -42.59 Carrying forward
t intangible assets
expenditure and fixed assets
after the
completion of
project
Long-term 15,196,164.92 0.34 23,460,981.73 0.48 -35.23 Increase in
fees to be amortization of
apportioned current period
Short-term 1,256,000,000.0 27.98 620,000,000.00 12.79 102.58 Optimized the
loans 0 loan structure and
increased
short-term loans
and reduced
long-term
payables
Employees’ 131,471,648.00 2.93 780,802.00 0.02 16,738.0 Increase in
salary 3 dismissal benefit
payable appropriated in
this period
Tax payable 80,270,216.68 1.79 14,824,741.55 0.31 441.46 Increase in unpaid
VAT of current
period
Other 88,814,552.29 1.98 441,394,365.43 9.10 -79.88 Return the loan of
payables RMB 350,000,000
Yuan for Huayi
Group
Long-term 170,000,000.00 3.79 645,000,000.00 13.30 -73.64 Return the loan of
payables RMB 475,000,000
Yuan for Huayi
Group
2. Restriction of main assets by the end of report period
√Applicable □Not applicable
Unit: Yuan Currency: RMB
Item Final book value Reason of restriction
Fixed assets 5,008,538.28 Mortgage
Intangible assets 1,314,847.65 Mortgage
Total 6,323,385.93
3. Other information
□Applicable √Not applicable
(IV) Analysis on operational information of the industry
√Applicable □Not applicable
In the first year of “the 13th five-year plan”, the chlor-alkali industry entered the key period of
structure adjustment and pattern transformation. The industry operation characteristics experienced a
series of changes: continuous expansion of industry size with slower growth; enhanced
industrial concentration degree and gradually reasonable industrial layout; changing market pattern and
diversified trade mode; continuous optimization of production process and constant improvement of
energy conservation and environmental protection level. In recent years, affected by the pulling effect of
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2016 Annual Report
national economy growth and investment, as the basic material, there are many new expansion projects
constructed and put into operation every year in chlor-alkali industry. However, along with the
intensifying market competition of the industry, although the production capacity of chlor-alkali industry
is increasing, the backward and old production units will be gradually eliminated from the market, which
is the new characteristic of chlor-alkali production capacity growth.
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2016 Annual Report
Business information analysis of chemical industry
1 Basic information of the industry
(1). Industry policy and changes
√Applicable □Not applicable
Targeted policy during “the 13th five-year plan” of the state:
①Establish and improve the market access and exit mechanism to optimize the industrial layout
②Optimize material and technical route to promote the adjustment of product structure
③Utilize independent innovation and technical progress to promote the transformation and upgrading of
chlor-alkali industry
④Strengthen ecological environmental protection construction to promote the green development of the
industry
⑤Further deepen the circular economy development mode
⑥Strengthen the coordinated development of productive service industry
⑦Strengthen the information construction to promote the manufacturing level of transitional industries
⑧Implement responsible care for the industry, and enhance the health, security and environmental
system management.
(2). Basic information of main industry segments and industry status of the Company
√Applicable □Not applicable
The caustic soda production capacity of our country reached 39,450,000t in 2016, with a net
increase of 720,000t (new increase of 2,030,000t and exit of 1,310,000t) compared with that at the end
of 2015. There were totally 158 caustic soda production enterprises in China, decreased by 5 enterprises
compared with last year. There is certain increment in caustic soda every year, but the exit production
capacity is large, and the overall production capacity is stable; due to the average increase in
consumption, the average operating rate of the industry increases from 74% in 2013 to 83% in current
period, and the number of production enterprises reduces from 176 in 2013 to 158 in current period, and
the industrial concentration ratio has been improved. PVC production capacity in 2016 was 23,260,000t,
decreased by 220,000t (new increase of 890,000t and exit of 1,110,000t) compared with that at the end
of 2015. At present, there are 75 PVC production enterprise, decreased by 6 compared with that at the
end of last year. Although the PVC production capacity is negative growth for three consecutive years,
the average operating rate of the industry increases from 62% in 2013 to 72% in current period, and the
number of production enterprises reduces from 93 in 2013 to 75 in current period, and the industrial
concentration ratio has been improved.
The Company is mainly engaged in the manufacturing and sales of caustic soda, chlorine and
chlorine products as well as polyvinyl chloride plastic resin and products. As the main products of the
Company, the production capacity of caustic soda reaches 720,000t, dichloroethane reaches 720,000t,
liquid chlorine reaches 600,000t and paste and special resin reaches 80,000t. Currently, the production
capacity of special resin unit of the Company is 20,000t/a, and the Company is one of the largest special
resin suppliers in east China. The Company has obvious advantages in the fields of professional R&D
and product technology, and is thus an influential enterprise in the industry.
2 Product and production
(1). Main operating mode
√Applicable □Not applicable
The Company has integrated the marketing resources, actively pursued the transformation of
marketing mode, focused on the overall stable operation of the chemical industrial area, firstly ensured
the stable supply of chlorine resources in chemical industrial area, optimized the regional structure and
built differentiated marketing mode.
Caustic soda: internal and external integration operating mode, in combination of the production
operation conditions and domestic and foreign instant market situation, reasonable distribution of
internal and external sales proportion based on the principle of benefit priority, optimizing domestic
regional structure and improving the profitability of products;
PVC: relying on the special resin base, the Company actively implements differentiated marketing
strategy and adhere to the development of domestic high-end resin market to satisfy the customers’
differentiated service requirements, and has maintained the dominant status in domestic high-end resin
market;
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2016 Annual Report
Chlorine products: firstly putting MDI, TDI and similar production enterprises into operation as the
support in the downstream of chemical industrial area, with the rest mainly solvent market and PVC
market, to effectively reduce the product stock and sales cost.
Main conditions of operation mode adjustment in report period
□Applicable √Not applicable
(2). Main products
√Applicable □Not applicable
Main upstream raw Main downstream Main price affecting
Product Industry segment
materials application field factors
Caustic Chlor-alkali Industrial salt Dye printing, paper Market supply and
soda making demand
PVC Chlor-alkali Vinyl chloride Leatheret, wall Market supply and
paper, tools demand
Chlorine Chlor-alkali Industrial salt, Solvent, PVC Market supply and
products ethylene demand
(3). R&D innovation
√Applicable □Not applicable
The R&D and development of Company continued to adhere to the main line of advanced chlorine
production process and polymer new material technology in 2016. The main research projects include
“hydrogen chloride catalytic oxidation to chlorine process technology development”, “dichloroethane
oxychlorination to tetrachlorethylene amplification technology research”, “development and application
research on customized CPVC resin”, “solution-method vinyl polymer technology exploration and
mPOE product development” etc.
“Hydrogen chloride catalytic oxidation to chlorine process technology development” project has
completed the optimization of first generation catalyst in multi-channel small testing apparatus and
drafted the first generation of catalyst standards, and the catalyst has been used stably for over 6000h; in
the meanwhile, constructed the single tube test device in chemical area and put into operation,
established the analytical method for components of offgas absorption liquid; on the basis of process
package of completed 100,000t/a industrial unit, cooperated with domestic and foreign specialized
companies to improve the process package and improved the FSR of industrialized projects.
As for the “dichloroethane oxychlorination to tetrachlorethylene amplification technology research”
project, on the basis of preliminary exploration of process conditions, raw material ratio and analytical
method, carried out amplification process research through industry-university-research mode, and
established oxidative chlorination test amplification unit in colleges and universities, which has entered
experimental stage.
As for “development and application research on customized CPVC resin” project, carried out
quality tracing and assessment of CPVC resin and optimized the production process and technology to
improve the quality of CPVC resin; in the meanwhile, carried out the research on low-cost and
high-performance CPVC mixture formulation, reduced the formulation cost of tubs and pipes through
matching adjustment of auxiliary stabilizer system, lubrication system and filling system; developed
high-flow and creep-resistant special aggregate used for all vanadium redox flow battery for specific
customers, which is in specimen evaluation stage.
“Solution-method vinyl polymer technology exploration and mPOE product development” is the
prospective project for exploiting POE new material market, through the implementation of the project,
the Company masters the rules of ethylene solution polymerization process, prepares POE product in
conformity with technical indicators, determines the tentative metallocene catalyst and opens up the
refining process of POE product.
(4). Production process and flow
√Applicable □Not applicable
24 / 95
2016 Annual Report
Caustic
soda:
Secondary refined 20% alkali
20% alkali
brine Finished product
makeup tank
storage tank
Electrolysis 32% alkali
cooler
32% alkali
Finished product
Alkali storage tank
50% alkali
Evaporator 50% alkali Finished product
cooler storage tank
Liquid chlorine
Process water Refrigerated Concentrated
water sulphuric acid
Secondary
Wet chlorine
refined brine Chlorine
Electrolysis Chlorine Chlorine Chlorine Chlorine
column compressor
scrubber cooler refrigerator
drier
Liquid
chlorine
storage
tank
Hydrochloric
acid:
Chlorine
Hydrochloric Hydrochloric Offgas
Cooler
acid furnace acid absorber absorber
Hydrogen
31% hydrochloric acid
Hydrochloric 31% hydrochloric
acid storage acid
tank Storage tank in
tank farm
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2016 Annual Report
Dichloroethane:
Recycle
gas
compressor
Hydrogen 20% alkali
chloride
Liquid-vap Crude EDC
Ethylene Oxychlorination storage
quench or separator Decanter Lye tank
reactor tank
tower
Oxygen
Refined EDC
Storage EDC EDC refining EDC refining
tank in tank refining 3# 2# tower 1# tower
farm tower
Emulsion method PVC paste
resin:
Chemicals
Recovery
Chemicals preparation
Polymerization Drying Package
Seed emulsion
Suspension method PVC special
resin:
Chemicals
Recovery
Chemicals Polymerization Stripping Drying Package
preparation
(5). Production capacity and work condition
√Applicable □Not applicable
Main plant area or project Designed capacity Capacity utilization (%)
Caustic soda 720,000t 98.98
Dichloroethane 720,000t 56.67
Liquid chlorine 600,000t 100.10
Paste PVC 60,000t 83.37
Special PVC 20,000t 92.24
Increase or decrease in production capacity
□Applicable √Not applicable
26 / 95
2016 Annual Report
Adjustment of production line and capacity structure optimization
□Applicable √Not applicable
Abnormal shutdown
□Applicable √Not applicable
3 Raw materials purchase
(1). Basic information about main raw materials
√Applicable □Not applicable
Amount Price Influence of price fluctuation on
Raw material Purchase mode
purchased changes operating cost
The influence of purchase price is in
direct proportion to operating cost, the
Ethylene Long-term contract 1,190,000t Rise
higher the purchase cost, the higher the
operating shall be and vice versa.
Combination of
long-term and The influence of purchase price is in
short-term contract, direct proportion to operating cost, the
Salt 1,090,000t Drop
and combination of higher the purchase cost, the higher the
import and domestic operating shall be and vice versa.
purchase
Combination of
long-term and The influence of purchase price is in
Vinyl short-term contract, direct proportion to operating cost, the
68,900t Rise
chloride and combination of higher the purchase cost, the higher the
import and domestic operating shall be and vice versa.
purchase
(2). Countermeasures for price fluctuation risk of raw materials
Basic information about holding derivatives and other financial products
□Applicable √Not applicable
Main information about the adoption of periodic reserves and other means
□Applicable √Not applicable
4 Particulars about product sales
(1). Sales model
√Applicable □Not applicable
The sales territories of caustic soda and EDC and other main products of the Company include Shanghai,
Jiangsu, Zhejiang and south regions, adopting the mode combining direct selling and distribution.
(2). Basic information about main business of the Company divided by industry segments
√Applicable □Not applicable
Unit: Yuan Currency: RMB
Increase Increase
Increase or or or
decrease in decrease decrease
Gross
Industry Operating operating in in gross
Operating cost profit
segment income income over operating profit
(%)
previous cost over over
year (%) previous previous
year (%) year (%)
Industry 3,825,805,128.74 3,478,929,132.02 9.07 -7.84 -2.18 -5.26
Constructio
52,384,954.98 50,855,935.65 2.92 57.02 71.53 -8.21
n industry
Trade 2,834,742,551.50 2,557,264,384.04 9.79 46.13 32.35 9.39
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2016 Annual Report
income
Pricing strategy and price changes of main products
√Applicable □Not applicable
Pricing policy: the market price of product shall be adjusted timely according to real-time market
conditions, the changes of raw materials price and supply-demand relations.
Caustic soda: the caustic sola supplied to the downstream of chemical industrial area is contract
pricing, and the price is relatively stable, the overall price of products sold on market was stable in the
first half year and caustic soda was persistent overheating since August in the second half of year,
mainly because that some chlor-alkali enterprises were forced to limit production or even stop
production due to environmental protection reasons; the maximum downstream alumina market of
caustic soda turned better and the caustic soda demand was strong.
PVC: after nearly 5 years’ silence on the market, PVC eventually showed new condition in 2016.
The price began to rise in the middle of June, reached the peak in November and then became stable.
The main reason was that the reform effect of supply side of industrial capacity transfer gradually
appeared, furthermore, the limited production of calcium carbide for environmental reasons and better
export promoted PVC quotation to be better.
Chlorine product: the chlorine product supplied to the downstream of chemical industrial area
belonged to contract price and the price was relatively stable, but the price of chlorine product sold on
the market changed significantly, in excessive supply status for a long term, and the price dropped
greatly compared with 2015.
(3). Basic information about main business of the Company divided by sales channel
√Applicable □Not applicable
Unit: 10,000Yuan Unit: RMB
Year-on-year increase or decrease
Sales channel Operating income
in operating income (%)
China 6,436,295,912.76 10.56
Other countries 276,636,722.46 -8.75
Description of accounting policy
□Applicable √Not applicable
(4). Basic information about joint product, byproduct, semi-finished product, waste material and
waste-heat utilization product
√Applicable □Not applicable
Proportion of sales
Other output Production in Pricing Main target
of main target
products report period method customers
customer (%)
Recycled material 1634.48 Market price Shanghai Sitaiji
of Tianyuan Plant Plastic Cement Co.,
Ltd
Sulfuric acid used 11385.82 Market price Shanghai Chengtang
for fertilizer Industrial Co., Ltd
Solvent ethylene 3927.16 Market price Wuxi Yangshi
dichloride Chemical Co., Ltd
Sodium 17371.81 Market price Shanghai Yuanyuan
monophosphate for Chemical Co., Ltd
wastewater
treatment
Lye for 48.98 Market price Shanghai Lingtuo
neutralization Chemical Co., Ltd
Situation description
□Applicable √Not applicable
28 / 95
2016 Annual Report
5 Environmental Protection and Security
(1). Basic information about major safety production accidents of the Company in report period
□Applicable √Not applicable
(2). Basic information about environmental input of the Company during report period
√Applicable □Not applicable
Unit: 104Yuan Currency: RMB
Proportion of invested fund in operating income
Investment in environmental protection
(%)
3,892.28 0.58
Basic information about major environmental violations in report period
□Applicable √Not applicable
(3). Other information
□Applicable √Not applicable
(V) Analysis on investment status
1. General analysis on the equity investments in outside entities
√Applicable □Not applicable
1. General analysis on the equity investments in outside entities
Unit: 104Yuan Currency: RMB
Year-on-year
Closing Beginning Increment or
Item increase or
balance balance decrement
decrease (%)
Long-term equity
investment 36,521.56 28,885.54 7,636.02 26.44
Available-for-sale financial
assets 45,320.96 42,407.82 2,913.14 6.87
Including: measured at fair
value 7,013.83 5,076.59 1,937.24 38.16
Measured at cost 38,307.13 37,331.23 975.90 2.61
Analysis on the reason for change in equity:
1) Long-term equity investment increased by 26.44% year on year, mainly due to the investment
income in Huntsman confirmed in current period.
2) The Available-for-sale financial assets measured at fair value increased by 38.16% year on year,
mainly because that the Bank of Shanghai which was measured at cost was transferred to measured at
fair value in current period
(1) Significant equity investment
√Applicable □Not applicable
1. The Company deliberated and passed the proposal on Investment in Inner Mongolia Junzheng
Tianyuan Chemical Co., Ltd. on the 5th board meeting of the 9th Board of Directors on Oct. 28, 2016,
and jointly set up Inner Mongolia Junzheng Tianyuan Chemical Co., Ltd. according to the proportion of
shares, i.e. 40% for chlor-alkali company and 60% for Junzheng energy; joint venture corporation
planned and constructed 200,000t/a seed emulsion polymerization paste resin project. The project has
been implemented in phases, and the production capacity of phase I is intended to be 100,000t. The joint
venture corporation completed business registration on Jan. 10, 2017, the fund of 4,000,000Yuan for
Phase I was fully invested on Jan. 24, 2017, and Phase I is predicated to be put into operation at the end
of 2017.
2. The Company participated in capital increase and expansion MDI project of Shanghai Huntsman
Polyurethane Co., Ltd. and Shanghai Lianheng Isocyanate Co., Ltd in 2014. The contributions are as
follows: participation in the project of Shanghai Huntsman Polyurethane Co., Ltd. with the total
29 / 95
2016 Annual Report
contributions of 36,571,851.75Yuan in 2014 and the contributions of 16,244,815.25Yuan in 2017,
totally 52,816,667Yuan by now. Participated in the expansion project of Shanghai Lianheng Isocyanate
Co., Ltd, with the total contributions of 39,135,000Yuan in 2014, 40,466,400Yuan in 2015 and
18,316,800Yuan in 2016, totally 97,918,200Yuan by now.
(2) Significant non-equity investment
√Applicable □Not applicable
40,000t/a high-performance chlorinated polyvinyl chloride project got the EIA approval issued by
Shanghai Environmental Protection Bureau on Feb. 28, 2017.
(3) Financial assets measured at fair value
√Applicable □Not applicable
Change in
Profit or
Initial owner's equity Sourc
Stock Stock Ending book loss in Accounting
investment in the e of
code Name value reporting subject
cost reporting share
period
period
Legal
Huayi Group Available-for-sal
600623 690,000.00 1,921,920.00 -590,947.50 person
share 15,015.00 e financial assets
share
Legal
Available-for-sal
600636 3F 360,000.00 7,482,736.80 -1,117,551.60 person
e financial assets
share
Legal
Shanghai Available-for-sal
600688 900,000.00 2,898,000.00 -13,500.00 person
Petrochemical e financial assets
share
Legal
1,272,952.6 16,234,320.0 -11,648,154.4 Available-for-sal
600610 ZYD person
1 0 45,000.00 6 e financial assets
share
Legal
Shenwan 1,250,000.0 14,850,000.0 Available-for-sal
000166 264,000.0 10,200,300.00 person
Hongyuan 0 0 e financial assets
0 share
Legal
Available-for-sal
600637 Oriental Pearl 86,967.00 2,026,331.10 -951,636.40 person
20,296.88 e financial assets
share
Legal
Haitai Available-for-sal
600082 20,000.00 297,200.00 9,000.00 person
Development e financial assets
share
Legal
Bank of 7,307,758.8 24,427,750.5 Available-for-sal
601229 12,839,993.78 person
Shanghai 5 6 e financial assets
share
11,887,678. 70,138,258.4 344,311.8
Total 8,727,503.82 / /
46 6
(VI) Sales of important assets and equities
□Applicable √Not applicable
(VII) Analysis on main controlled companies and participated companies
√Applicable □Not applicable
1) Operating performance of main controlled companies
Unit: 104Yuan Currency: RMB
Registered Assets Net profit
Company name Business nature capital volume
Shanghai Chlor-Alkali New
Materials Trading Co., Ltd. Trade 5,000 21,032.45 60.86
Shanghai Jinyuan Tap Water Co., Tap water 900 1,429.48 85.50
30 / 95
2016 Annual Report
Ltd.
Maintenance of
petrochemical
devices and
Shanghai Chlor-Alkali machinery engineering
Co., Ltd. construction 3,000 2,743.33 -1,345.17
Shanghai Ruisheng Enterprise Co.
Ltd. Trade 500 6,837.85 340.03
Production of
CPVC tubing and
Shanghai Luwei Plastics Co., Ltd. pipe fittings 5,000 1,480.03 -1,905.73
2) Influence of the net profit of the controlled subsidiary or the income of the participated subsidiary on
the Company's net profit
Unit: 104Yuan Currency: RMB
Investment
Main Main income
Business Main products
Company name business business Net profit contributed by
nature or service
income profit the participated
company
Shanghai
Chlor-Alkali Chemical raw
New Materials materials and
Trading Co., Ltd. Trade product sales 25,295.30 1,611.35 60.86 60.86
Shanghai
Ruisheng Chemical raw
Enterprise Co. materials and
Ltd. Trade product sales 249,549.75 948.94 340.03 340.03
Shanghai
Chlor-Alkali
Machinery Co., Machine
Ltd. Industry manufacturing 9,546.30 1,037.27 -1,345.17 -1,120.93
Shanghai
Jinyuan Tap
Water Co., Ltd. Industry Tap water 810.03 411.77 85.50 66.50
Production of
Chemical CPVC tubing
Shanghai Luwei production and pipe
Plastics Co., Ltd. and sale fittings 271.46 -122.69 -1,905.73 -1,334.01
Shanghai
Huntsman Chemical
Polyurethane production MDI refining
Co., Ltd. and sale and polymer 307,342.25 47,305.05 32,451.87 9,735.56
Notes:
The data of Shanghai Huntsman Polyurethane Co., Ltd. in 2016 is the list of relevant data in DSB
(S) Z (17) No. P00165 Audit Report issued by Deloitte Touche Tohmatsu CPA Ltd. (special general
partnership) for Shanghai Huntsman Polyurethane Co., Ltd.
(VIII) Particular about structured entity controlled by the Company
□Applicable √Not applicable
III. Discussion and analysis on the Company's future development
(I) Industrial pattern and trend
√Applicable □Not applicable
31 / 95
2016 Annual Report
In the first year of the 13th five-year plan, the chlor-alkali industry entered the critical period of
industrial restructuring and growth mode transformation. A series of changes had taken place in the
industrial operation characteristics: the industrial scale expanded continuously, but the speed of growth
slowed down; the industrial concentration ratio rose and the industrial layout became reasonable
gradually; the market pattern changed continuously and the trading mode was diversified; the production
process was continuously optimized and the energy-saving and environmental protection level was
continuously improved. There are still many contradictions and urgent problems in the industry, for
example, overcapacity problem still exists, product homogenized competition is intense, the
competitiveness of high-end product is poor, the technological innovation capacity should be further
enhanced, “zombie enterprises” drags down the industrial development, which should be overall solved
during the “13th Five-year Plan”.
During the “13th five-year plan”, along with the steady progress in new urbanization, the demand of
caustic soda on end product market will maintain rapid growth. The urbanization rate of China will
exceed 60% in 2020, and the new urbanization and consumption upgrading will greatly pull the
construction investment in infrastructure and supporting facilities and promote the demand increase in
building materials, household appliances, clothing and articles for daily use, and then will pull the
continuous increase in the demand of caustic soda product. China’s annual export volume of caustic
soda was about 2,000,000t , basically covering the 64 countries of “the belt and road”. China has always
been the net exporter of caustic soda, the main export flow direction is basically in line with the
countries covered by “the belt and road”. Along with the development of economic construction of the
countries belong to “the belt and road”, the demand on caustic soda will further increase, so the export
volume of domestic caustic soda towards the countries of “the belt and road” will continue to be high. In
the coming years, the demand on caustic soda products of Europe, India, Australia and Southeast Asia
will continue to grow, therefore, the main future export regions of caustic soda will still be these
countries, and the export volume will keep increasing at the same time.
(II) Development strategy of the Company
√Applicable □Not applicable
Strategic thinking of the Company: based on the main battlefield, determined to go out, developing
new business.
Based on the main battlefield —— take the main battlefield of chemical industrial zone as the
support to optimize the operation capacity of units in service, raise the intrinsic safety degree of units
through technological innovation and management innovation to create high-end products and improve
the added value of products, so as to consolidate the main battlefield position of chemical industrial zone
and lay the foundation for innovative development of the Company.
Determined to go out—— implement the strategy of “going out from the chlor-alkali industry,
going out from Shanghai and going out from China”, to deepen the cooperation with well-known
companies both at home and abroad and to explore the optimum allocation of production factors and the
best combination of market, take advantage of corporate brand, management and other intangible assets
to improve the core competitiveness of the Company.
Developing new business—— take “innovation, upgrading and transformation” as the main line to
change the single structure of main products and to promote the Company to transfer to the
technology-based enterprise in advanced material field, with chlor-alkali products as the base, with new
materials and high value-added chemicals as the main body and with strong profitability. strengthen the
opportunity research on field segments of special PVC resin and related downstream products of
MDI/TDI.
(III) Operating plan
√Applicable □Not applicable
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 efficient and more sustainable development
of higher quality.
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2016 Annual Report
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 reward 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 measures 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. Speed up the industrialization of the key projects to lay a solid foundation for follow-up
development. On the basis of completion of feasibility study report, the environmental impact
assessment of 100,000t hydrogen chloride oxidation to chlorine project has been started; strengthen the
technical upgrading of existing resin products, collect various PVC resins for analysis and evaluation,
select 2 to 3 varieties according to different production characteristics and process for future
development, furthermore, make improvement for the production process, line and technology for
existing PVC products to improve the stability of PVC resin products.
4. Deepen the management to improve operation efficiency. Due to the sharp decrease in the staff
of the Company, the organizational structure, business process, internal control system should be
further organized and improved. The Company will optimize the organizational structure and
personnel structure, establish reasonable incentive mechanism, to deepen the management and
improve the efficiency.
5. Continue to explore the research on go out strategy to ensure the sustainable development.
From the aspects of perfecting the existing industrial chain in Shanghai chemical industrial area,
extending the existing product chain and looking for chemical new material product with high added
value and technical content, in combination with the actual situation of the Company, strengthen the
opportunity research on field segments of special PVC resin and related downstream products of
MDI/TDI.
(IV) Possible risks
√Applicable □Not applicable
1) Risk of microeconomic fluctuation. The downward economic pressure will not decrease in 2017
and the economic situation is still grim.
2) Policy risk and industrial risk. Under the background of deepening the structural reform of
supply side and cutting excessive industrial capacity of the state, there will be greater uncertainty on
chlor-alkali products and its downstream products market in 2017.
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 favor for the price of the electricity for
electrolysis under the guidance of existing location economy.
2. Countermeasures
1) Except for the five points in business plan, the Company shall strengthen the pace of
transformation of scientific research innovation into productivity, and accelerate the process of
industrialization of new technology chlorine hydride catalytic oxidation to chlorine and the amplification
technology research on dichloroethane oxychlorination to perchlorethylene.
2) Continue to explore the research on go-global strategy to look for resource and location
advantages. Aim at the regions with cost advantages to create new production base, and extend the
production chain of the company, so as to realize the transformation and upgrading.
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2016 Annual Report
3) take advantage of supply-marketing integrated platform of trade company to realize the “supply
and marketing linkage, products linkage and main trade linkage” for comprehensive improvement of the
marketing level.
(V) Other
□Applicable √Not applicable
IV. 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
Section V Major Events
I. Proposal on profit distribution of ordinary shares or transfer of capital reserves
(I) The formulation, implementation or adjustment of the cash dividend policy
√Applicable □Not applicable
1. 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.
2. The cash dividend policy has not been adjusted in reporting period.
(II) 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
reporting period)
Unit: Yuan Currency: RMB
Ratio in the net
Net profit
Issued profit
Total attributable to
dividend Shares attributable to
The year Bonus amount of shareholders of the
for every increased shareholders of
for share for cash listed Company in
10 shares for every the listed
dividend every 10 dividend the consolidated
held 10 shares Company in
distribution shares held issued (tax statements in the
(RMB) (tax held the
included) year for dividend
included) consolidated
distribution
statements (%)
2016 0 0 0 0 -328,091,761.80
2015 0 0 0 95,615,030.34
2014 0 0 0 0 -592,502,499.95
(III) Repurchase offer of shares in cash and included in cash dividends
□Applicable √Not applicable
(IV) If the profit is positive in the reporting 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
34 / 95
2016 Annual Report
II. Fulfillment of commitments
(I) Commitments of the actual controller, shareholders, related parties, purchaser and the
Company made to other related parties in the reporting period or left to the reporting
period
Applicable √Not applicable
(II) If there is earnings forecast for assets or project of the Company and the assets and project
are still in forecasted earnings period during the reporting period, the Company shall
explain whether the assets or project have reached the original earnings forecast and give
the reasons
□Reached □Failing to reach √Not applicable
III. Fund occupation and the liquidation in the reporting period
□Applicable √Not applicable
IV. Note of the Company on the “non-standard auditor’s report” of the public accounting firm
□Applicable √Not applicable
V. The analysis and explanation of the Company on the cause and influence of the changes in the
accounting policy and accounting estimate or correction of significant accounting errors
(I) Analysis and explanation of the Company on the cause and influence of the changes in the
accounting policy and accounting estimate
√Applicable □Not applicable
Follow the Provisions on Accounting Treatment Value-added Tax
The Ministry of Finance published the Provisions on Accounting Treatment Value-added Tax (CK
[2016] No. 22) Dec. 3, 2016 and the Provisions are applicable to the related transaction after May 1,
2016. The influences of the implementation of the provisions are as follows:
Contents and Reasons for the Changes of Approval Name and Amount of the
Accounting Policies Procedures Affected Items
(1) Adjust the item “business tax and surcharges” Approved by the
in income statement to item “taxes and decision of the Taxes and surcharges
surcharges”. Board of Directors
The amount of taxes and
surcharges of this year is
(2) Reclassify the housing property tax, land use
increased by RMB
tax, vehicle and vessel usage tax and stamp duty
6,835,416.74Yuan after
arising from the business activities of the
Approved by the adjustment, and the amount
enterprise since May 1, 2016 in the item
decision of the of administrative expenses of
“administrative expenses” to the item “taxes and
Board of Directors this year is decreased by
surcharges”, and the taxes incurred before May
RMB 6,663,499.58 Yuan
5, 2016 shall not be adjusted. The comparative
after adjustment. The amount
data shall not be adjusted.
of sales expenses of this year
is decreased by RMB
35 / 95
2016 Annual Report
Contents and Reasons for the Changes of Approval Name and Amount of the
Accounting Policies Procedures Affected Items
171,917.16 Yuan after
adjustment.
The adjusted increment in
ending balance of other
(3) Reclassify the value-added tax of income (or
current liabilities is RMB 0
gains) which has been recognized without
Approved by the Yuan, the adjusted increment
fulfillment of VAT obligations and should be
decision of the in other non-current
recognized as output VAT from the item “tax
Board of Directors liabilities is RMB 0 Yuan,
payable” to the item “other current liabilities”.
and the adjusted decrement
The comparative data shall not be adjusted.
in ending balance of tax
payable is RMB 0Yuan.
The adjusted increment in
(4) Reclassify the credit balance of the
ending balance of other
classification items of “VAT payable”, “unpaid
current assets is RMB 0
VAT”, “pending deduct VAT on purchase”,
Approved by the Yuan, the adjusted increment
“input VAT to be recognized” and “VAT
decision of the in other non-current assets is
retained” under the item “taxes payable” to the
Board of Directors RMB 0 Yuan, and the
item “other current assets” (or “other non-current
adjusted increment in ending
assets”). The comparative data shall not be
balance of tax payable is
adjusted.
RMB 0Yuan.
(II) Analysis and explanation of the Company on the cause and influence of the correction of
significant accounting errors
□Applicable √Not applicable
(III) Communication with former CPA firm
□Applicable √Not applicable
(IV) Other information
□Applicable √Not applicable
VI. Engagement and dismissal of the public accounting firm
Unit:104 Yuan Currency: RMB
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
Audit term of years of the domestic public
36 / 95
2016 Annual Report
accounting firm
Name Reward
Public accounting firm for audit of BDO China Shu Lun Pan Certified 35.2
internal control Public Accountants LLP
Note on the engagement and dismissal of the public accounting firm
□Applicable √Not applicable
Note on reengagement of public accounting firm in audit period
□Applicable √Not applicable
VII. Risk of suspension of listing
(I) Cause for suspension of listing
□Applicable √Not applicable
(II) Countermeasures to be taken by the Company
□Applicable √Not applicable
VIII. Faced with the termination of listing and causes
□Applicable √Not applicable
IX. Events related to bankruptcy and reorganization
□Applicable √Not applicable
X. Significant lawsuits and arbitrations
□Existence of significant lawsuits and arbitrations in the year
√No significant lawsuits and arbitrations in this year
XI. Penalties to the listed Company, Directors, Supervisors, senior executives, controlling
shareholder, actual controller and purchaser and the corrections
□Applicable √Not applicable
XII. Credit conditions of the Company and its controlling shareholder and actual controller in
reporting period
□Applicable √Not applicable
XIII. The Company's equity incentive plan, employee stock ownership plan and other incentives
to the employees and the influences
(I) Disclosure of related incentive matter in provisional announcement without subsequent
progress or change
□Applicable √Not applicable
(II) Incentive matters not disclosed in provisional announcement or with subsequent progress
Equity incentive
□Applicable √Not applicable
Other information
□Applicable √Not applicable
Information about employee stock ownership plan
□Applicable √Not applicable
37 / 95
2016 Annual Report
Other incentive measures
□Applicable √Not applicable
XIV. Significant related transactions
(I) Related transactions associated with routine operations
1. Events already disclosed in the provisional announcement and having no subsequent progress
or change
√Applicable □Not applicable
Summary of events Query Index
The 28th meeting of the 8th Board of Directors on Mar. 25, Reviewed and passed on the 28th meeting of the
2016 and 2015 Annual Shareholders’ Meeting of Apr. 25, 8th Board of Directors and 2015 Annual
2016 reviewed and passed the Proposal on Daily Related Shareholders’ Meeting
Transactions of the Company. The related transaction of www.sse.com.cn
the Company and related parties are normal business
activities and largely support the day-to-day operations
and development, conforming to the principle public,
justice and fairness.
2. Events already disclosed in the provisional announcement and having subsequent progress or
change
□Applicable √Not applicable
3. Events not disclosed by provisional announcements
√Applicable □Not applicable
Unit: 104 Yuan Currency: RMB
Ratio in
total amount
Pricing
Type of Content of Amount of of
Related transaction principle
Relationship related related related transaction
party for related
transaction transaction transaction of the same
transaction
kind
(%)
Shanghai Huayi Controlled Purchase Material Settled 92.13 0.02
Energy Chemical subsidiary of goods purchase through
Co., Ltd. parent negotiated
company price
Shanghai Huayi Controlled Purchase Material Settled 84.24 0.02
Tianyuan Chemical subsidiary of goods purchase through
Logistics Co., Ltd. parent negotiated
company price
Shanghai Wholly-owne Purchase Material Settled 140.30 0.03
Chlor-Alkali Creation d subsidiary of goods purchase through
Co., Ltd. parent negotiated
company price
Shanghai Huayi Wholly-owne Purchase Material Settled 44.17 0.01
Group Equipment d subsidiary of goods purchase through
Engineering Co., Ltd. parent negotiated
company price
Shanghai Chemical Wholly-owne Purchase Material Settled 10.21 0.00
Supply and d subsidiary of goods purchase through
Marketing Co., Ltd. parent negotiated
company price
Shanghai Chemical Wholly-owne Purchase Material Settled 86.25 0.02
Supply and d subsidiary of goods purchase through
Marketing Co., Ltd. parent negotiated
38 / 95
2016 Annual Report
company price
Shanghai Huayi Controlled Purchase Material Settled 147.01 0.04
Information subsidiary of goods purchase through
Technology Co., Ltd. parent negotiated
company price
Shanghai White Controlled Purchase Material Settled 0.49 0.00
Elephant & Swan subsidiary of goods purchase through
Battery Co., Ltd. parent negotiated
company price
Huayi Group (Hong Wholly-owne Purchase Material Settled 12,285.10 3.06
Kong) Co., Ltd. d subsidiary of goods purchase through
parent negotiated
company price
Shanghai Tiantan Controlled Purchase Material Settled 608.89 0.15
Auxiliaries Co., Ltd subsidiary of goods purchase through
parent negotiated
company price
Shanghai Chemical Wholly-owne Receive Receive Settled 288.42 0.07
Industry Inspection & d subsidiary of service service through
Detection Co., Ltd. parent negotiated
company price
Shanghai Huayi Controlled Receive Receive Settled 2,474.87 0.62
Tianyuan Chemical subsidiary of service service through
Logistics Co., Ltd. parent negotiated
company price
Shanghai New Controlled Receive Receive Settled 524.80 0.13
Tianyuan Chemical subsidiary of service service through
Transport Co., Ltd. parent negotiated
company price
Shanghai Wholly-owne Receive Receive Settled 341.32 0.08
Chlor-Alkali Creation d subsidiary of service service through
Co., Ltd. parent negotiated
company price
Shanghai Huayi Wholly-owne Receive Receive Settled 846.86 0.21
Engineering Co., Ltd. d subsidiary of service service through
parent negotiated
company price
Shanghai Huayi Controlled Receive Receive Settled 302.17 0.08
Information subsidiary of service service through
Technology Co., Ltd. parent negotiated
company price
Shanghai Pacific Controlled Receive Receive Settled 11.11 0.00
Chemica Equipment subsidiary of service service through
Engineering Co., Ltd. parent negotiated
company price
Shanghai Huayi Controlled Sell goods Product Settled 475.70 0.11
Energy Chemical subsidiary of sale through
Co., Ltd. parent negotiated
company price
Shanghai 3F New Controlled Sell goods Product Settled 39.09 0.00
Materials Co., Ltd. subsidiary of sale through
parent negotiated
company price
Shanghai Huayi Controlled Sell goods Product Settled 293.68 0.07
Tianyuan Chemical subsidiary of sale through
Logistics Co., Ltd. parent negotiated
39 / 95
2016 Annual Report
company price
Shanghai Wholly-owne Sell goods Product Settled 119.84 0.03
Chlor-Alkali Creation d subsidiary of sale through
Co., Ltd. parent negotiated
company price
Shanghai Tianyuan Wholly-owne Sell goods Product Settled 880.50 0.21
Group Shengde d subsidiary of sale through
Plastics Co., Ltd. parent negotiated
company price
Shanghai Resin Plant Wholly-owne Sell goods Product Settled 37.76 0.01
Co., Ltd. d subsidiary of sale through
parent negotiated
company price
Shanghai Huayi Controlled Sell goods Product Settled 225.66 0.05
Acrylic Acid Co., subsidiary of sale through
Ltd. parent negotiated
company price
Shanghai Chemical Wholly-owne Sell goods Product Settled 124.29 0.03
Supply and d subsidiary of sale through
Marketing Co., Ltd. parent negotiated
company price
Shanghai Sanaisi Wholly-owne Sell goods Product Settled 0.55 0.00
Reagent Co., Ltd. d subsidiary of sale through
parent negotiated
company price
Shanghai Yiping Controlled Sell goods Product Settled 191.59 0.05
Pigment Co., Ltd. subsidiary of sale through
parent negotiated
company price
Yixing Huayi Controlled Sell goods Product Settled 644.31 0.15
Colourating Science subsidiary of sale through
and Technology Co., parent negotiated
Ltd. company price
Shanghai Tiantan Controlled Sell goods Product Settled 71.44 0.02
Auxiliaries Co., Ltd subsidiary of sale through
parent negotiated
company price
Shanghai Huayi Controlled Provide Provide Settled 0.87 0.00
Tianyuan Chemical subsidiary of service service through
Logistics Co., Ltd. parent negotiated
company price
Shanghai Huayi Wholly-owne Provide Provide Settled 583.75 0.14
Engineering Co., Ltd. d subsidiary of service service through
parent negotiated
company price
Shanghai Huayi Wholly-owne Provide Provide Settled 46.20 0.01
Polymer Co., Ltd. d subsidiary of service service through
parent negotiated
company price
Shanghai Pacific Controlled Provide Provide Settled 5.19 0.00
Chemica Equipment subsidiary of service service through
Engineering Co., Ltd. parent negotiated
company price
Shanghai Coking Controlled Provide Provide Settled 13.16 0.00
Storage and subsidiary of service service through
Transportation Port parent negotiated
40 / 95
2016 Annual Report
Co., Ltd company price
Total / 22,041.92 5.42
Particulars of big sale return
Notes 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.
(II) Related transactions from acquisition and sale of assets or equity
1. Events already disclosed in the provisional announcement and having no subsequent progress
or change
□Applicable √Not applicable
2. Events already disclosed in the provisional announcement and having subsequent progress or
change
□Applicable √Not applicable
3. Events not disclosed by provisional announcements
□Applicable √Not applicable
4. If performance agreement involved, the performance implementation situation in reporting
period should be disclosed
□Applicable √Not applicable
(III) Significant related transactions of common investment
1. Events already disclosed in the provisional announcement and having no subsequent progress
or change
□Applicable √Not applicable
2. Events already disclosed in the provisional announcement and having subsequent progress or
change
□Applicable √Not applicable
3. Events not disclosed by provisional announcements
□Applicable √Not applicable
41 / 95
2016 Annual Report
(IV) Related creditor’s rights and debts
1. Events already disclosed in the provisional announcement and having no subsequent progress
or change
□Applicable √Not applicable
2. Events already disclosed in the provisional announcement and having subsequent progress or
change
□Applicable √Not applicable
3. Events not disclosed by provisional announcements
√Applicable □Not applicable
Unit: 104Yuan Currency: RMB
Provide fund to the related The related party provided
party fund to the listed Company
Related party Relationship Beginni
Beginning Closing Closing
Amount ng Amount
balance balance balance
balance
Shanghai Huayi Tianyuan Controlled 33.57 -0.09 33.48 6.35 7.75 14.10
Chemical Logistics Co., Ltd. subsidiary of
parent company
Shanghai Chlor-Alkali Wholly-owned 6.03 12.81 18.84 51.65 -39.40 12.25
Creation Co., Ltd. subsidiary of
parent company
Shanghai Resin Plant Co., Ltd. Wholly-owned 4.00 1.74 5.74
subsidiary of
parent company
Shanghai Tianyuan Group Wholly-owned 2,099.51 -1,174.0 925.51
Shengde Plastics Co., Ltd. subsidiary of
parent company
Shanghai Huayi Engineering Wholly-owned 28.51 271.04 299.55 11.42 187.21 198.63
Co., Ltd. subsidiary of
parent company
Shanghai Huayi Acrylic Acid Controlled 88.84 -81.25 7.59
Co., Ltd. subsidiary of
parent company
Shanghai Huayi Fine Chemical Wholly-owned 0.47 72.65 73.12
Co. Ltd. subsidiary of
parent company
Shanghai Soap Making Co., Controlled 0.00 0.54 0.00 0.54
Ltd. subsidiary of
parent company
Shanghai Huayi Energy Controlled 144.18 -4.96 139.22
Chemical Co., Ltd. subsidiary of
parent company
Shanghai 3F New Materials Controlled 21.88 -10.18 11.70
Co., Ltd. subsidiary of
parent company
Shanghai Huayi Polymer Co., Wholly-owned 107.52 -107.52 0.00
Ltd. subsidiary of
parent company
Shanghai Tiantan Auxiliaries Controlled 0.81 -0.81 0.00 0.00 53.47 53.47
Co., Ltd subsidiary of
parent company
Shanghai Yiping Pigment Co., Controlled 6.75 8.82 15.57
Ltd. subsidiary of
42 / 95
2016 Annual Report
parent company
Yixing Huayi Colourating Controlled 303.40 -29.29 274.11
Science and Technology Co., subsidiary of
Ltd. parent company
Shanghai Huayi Information Controlled 65.93 -65.93 0.00 8.71 3.98 12.69
Technology Co., Ltd. subsidiary of
parent company
Shanghai Pacific Chemica Controlled 0.00 6.07 6.07
Equipment Engineering Co., subsidiary of
Ltd. parent company
Shanghai Huayi New Controlled 0.00 6.37 6.37
Materials Co., Ltd subsidiary of
parent company
Shanghai New Tianyuan Controlled 11.08 49.45 60.53
Chemical Transport Co., Ltd. subsidiary of
parent company
Shanghai Chemical Industry Wholly-owned 1.41 46.80 48.21
Inspection & Detection Co., subsidiary of
Ltd. parent company
Shanghai Chemical Supply Wholly-owned 10.36 -1.72 8.64
and Marketing Co., Ltd. subsidiary of
parent company
Shanghai Huayi Equipment Wholly-owned 12.20 14.89 27.09
Engineering Co., Ltd subsidiary of
parent company
Huayi Group (Hong Kong) Wholly-owned 3,730.85 -2,145.8 1,585.00
Co., Ltd. subsidiary of
parent company
Shanghai Huayi Fine Chemical Wholly-owned 0.00 27.77 27.77
Co. Ltd. subsidiary of
parent company
Shanghai Huayi (Group) Controlling 0.00 12.55 12.55 99,685.7 -82,683. 17,001.8
Company shareholder 4 89 5
Shanghai Shenyu Medicine Controlled 0.02 -0.02 0.00
Chemical Co., Ltd. subsidiary of
parent company
Shanghai Huifeng Resin Plant Wholly-owned 5.14 0.00 5.14
subsidiary of
parent company
Shanghai Huayi Group Controlled 0.17 0.00 0.17
Huayuan Chemical Co., Ltd. subsidiary of
parent company
Shanghai Sanaisi Reagent Co., Controlled 0.08 -0.01 0.07
Ltd. subsidiary of
parent company
Shanghai Peony Painting Ink Controlled 0.14 0.00 0.14
Co., Ltd subsidiary of
parent company
Shanghai Huayi Group Affiliated 7.04 1.99 9.03
Finance Co., Ltd. company
2,911.40 -1,081.9 1,829.42 103,542. -84,477. 19,065.3
Total
8 90 58 2
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 No influence on the Company’s operating results and
on the Company financial status
43 / 95
2016 Annual Report
(V) Other
□Applicable √Not applicable
XV. Important contracts and the implementation
(I) Custody, contracting and leasing
1. Custody
□Applicable √Not applicable
2. Contracting
□Applicable √Not applicable
3. Leasing
√Applicable □Not applicable
Unit: 104Yuan Currency: RMB
Basis
Rela
for
Amount ted
Starting Income setting
Name of Name of Leased of End date trans Related
date of from leasin
lessor lessee assets leased of leasing actio relation
leasing leasing g
assets n or
incom
not
e
Shanghai Shanghai Fixed 3,466.16 01-01-2 12-31-201 1,384.68 Settled Yes Controlled
Chlor-Alkali Huayi asset 016 6 throug subsidiary
Chemical Tianyuan h of parent
Co., Ltd. Chemical negoti company
Logistics ated
Co., Ltd. price
Shanghai Shanghai Fixed 633.35 01-01-2 12-31-201 365.08 Settled Yes Wholly-o
Chlor-Alkali Tianyuan asset 016 6 throug wned
Chemical Group h subsidiary
Co., Ltd. Shengde negoti of parent
Plastics ated company
Co., Ltd. price
(II) Guarantee
□Applicable √Not applicable
(III) 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
(IV) Other important contracts
□Applicable √Not applicable
44 / 95
2016 Annual Report
XVI. Notes to other major events
□Applicable √Not applicable
XVII. Fulfillment of social responsibility
(I) Poverty alleviation of listed company
□Applicable √Not applicable
(II) Work on social responsibility
√Applicable □Not applicable
For details, see 2016 Social Responsibility Report of Shanghai Chlor-Alkali Chemical Co., Ltd.
(Summary) announced in the website of Shanghai Stock Exchange: www.sse.com.cn on March 30, 2017.
(III) Information about environmental protection of the company and its subsidiaries belonging
to key pollutant discharging unit published by environmental protection department
√Applicable □Not applicable
1. As for the environmental protection work in 2016, the Company has always adhered to the
sustainable development path, strengthened the awareness of social responsibility, promoted the
management and governance simultaneously based on the concept of green chemical industry, and
the technical and economical indicators of environmental protection have been well fulfilled. The
indicators of “three rates” for environmental protection have been completed, the running rate of
environmental protection treatment facilities was 100%, the industrial wastewater treatment rate was
100 %, and the external monitoring qualification rate of the “three wastes” discharge was 100%. The
environmental protection expenditures of the Company in 2016 was RMB 38,922,800 Yuan,
including RMB 16,720,000Yuan operating expenses, RMB 7,412,300Yuan of environmental
protection maintenance fee and RMB 14,790,500Yuan of effluent charge. The environmental
protection completion acceptance of by-product hydrogen energy project, integrated wastewater
operation project in industrial area and 500m3 finished-product sodium hypochlorite storage tank
construction project have been completed. Through setting goals and targets, operation control and
emergency plan, the environmental management system of the company ensured the control of key
environmental factors throughout the year. After the adjustment of the organizational structure of the
company in July, the environmental management system shall follow the newly adjusted
organizational structure to modify relevant procedure documents and supporting documents, update
and identify the environmental factors of the Company and key environmental factors and
implemented the control means of key environmental factors, and passed the third-party supervision
and examination organized by Shanghai Audit Center of Quality System on November 30 and
December; the environmental management system of the company was in continuous and effective
operation. After optimized operation of wastewater integrated project of the two plants in chemical
area in 2016 and incorporating the organic wastewater of Tianyuan into the organic wastewater
treatment system of Huasheng, the problem that the organic wastewater of Tianyuan exceeded the
takeover standard had been solved in 2016 and the organic wastewater of Huasheng was basically
stable and operated up to standard after operation optimization. 244.22 tons of hazardous wastes
from the two plants in chemical area were treated according to relevant regulations; more than 200
tons of hazardous wastes generated from the removal of production unit have been packed and
stored in accordance with regulations for incineration treatment.
Take the monitoring of environmental protection data of state-controlled enterprise as the basis to
ensure the stability and reliability of the daily operation of environmental protection devices. The
operating ratio and load rate of environmental protection device has reached the discharge standard
specified by laws and regulations; the unplanned shutdown of environmental protection shall be
managed as that of production unit, in case of shutdown for more than four hours, report to the quality,
environmental protection and security department of the company to be put on records and implement
the emergency plan of production unit at the same time to ensure the up-to-standard discharge of
wastewater and waste gas. Organize technical force to strive to make technological breakthrough for
environmental protection unit to ensure the effective operation of environmental protection device.
Since 2016, the comprehensive qualified rate of internal wastewater monitoring of the company
has always been 100%; except for the VCM recovery flue of Tianyuan Chemical Plant, the flue
45 / 95
2016 Annual Report
monitoring comprehensive qualified rate of others is 100%. The comprehensive qualified rate of
rainwater discharge monitoring is 100%. The environmental protective on-line monitoring instrument
for inorganic wastewater runs well, the qualification rate of on-line data transmission is 100% and the
transmission rate is 98% (indicator > 80%).
Promoted the discharge reduction of VOCs, strengthened the management and control of startup
and shutdown of production and the production site and reduced fugitive emission to further cut down
the pollutant discharge from the source. As for VOCs discharge reduction, the Company has conducted
leakage detection and repair (LDAR), quarterly detection and repair and EDC loading exhaust gas
collection facility reconstruction, and the wastewater silo tail gas recovery project has been carried out
as planned. On Dec. 14, 2016, Shanghai Academy of Environmental Sciences organized relevant
technical experts to hold the technical verification and investigation meeting for special support funds of
Shanghai Industrial VOCs emission reduction and enterprise pollution control project in Huasheng
Chemical Plant and Tianyuan Chemical Plant of the Company. After one days’ material examination
and on-site inspection, the assessment of the Company for applying for special support fund for
Shanghai industrial VOCs emission enterprises pollution control project passed.
(IV) Other information
□Applicable √Not applicable
XVIII. Convertible bond of the Company
(I) Convertible bond issuing
□Applicable √Not applicable
(II) Information about the convertible bond holder and guarantor in reporting period
□Applicable √Not applicable
(III) Changes of convertible bond in reporting period
□Applicable √Not applicable
Information about cumulative shares transfer of convertible bond in reporting period
□Applicable √Not applicable
(IV) Previous adjustments of conversion price
□Applicable √Not applicable
(V) Liabilities, credit change and cash arrangement for debt repayment in future years
□Applicable √Not applicable
(VI) Other information about convertible bond
□Applicable √Not applicable
Section VIChanges of Ordinary Shares and Particulars of Shareholders
I. Changes of ordinary shares
(I) Changes of ordinary shares
1. Changes of ordinary shares
In the reporting period, the total number and share structure of the ordinary share were not changed.
2. Description of the changes in ordinary shares
√Applicable □Not applicable
On July 28, 2016, to support and participate in the establishment of Shanghai state-owned assets
flow platform, Shanghai Huayi (Group) Company purchased Shanghai state-owned enterprises ETF
shares with 34,692,000 Chlor-Alkali shares (accounting for 5.16% of total equity of Huayi Group). After
such exchange and purchase, the direct shareholding ratio of Shanghai Huayi (Group) Company reduced
from 50.29% to 47.29%.
46 / 95
2016 Annual Report
3. Impact of changes of ordinary shares on the earnings per share and net asset value per share
in last year and the latest period (if any)
□Applicable √Not applicable
4. Other content deemed necessary by the Company to be disclosed or required by the securities
regulatory institution to be disclosed
□Applicable √Not applicable
(II) Changes of the shares limited to be sold
□Applicable √Not applicable
II. Issuing and listing of securities
(I) Securities issuing in the reporting period
□Applicable √Not applicable
Note on the securities issuing in the reporting period (for bonds with different interest rates, state
respectively)
□Applicable √Not applicable
(II) 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
□Applicable √Not applicable
(III) Existing internal staff shares
□Applicable √Not applicable
III. Particulars of the shareholders and the actual controller
(I) Total number of shareholders
Total number of ordinary shareholders as of end of the reporting 85,244
period
Total number of ordinary shareholders at end of the previous month 85,677
before the disclosing date of the annual report
(II) Top 10 shareholders, top 10 holders of tradable shares (or shareholders not under restricted
sales condition)
Unit: share
Top 10 shareholders
Shares Pledged or
Increase or Shares held with frozen status Nature
decrease in at end of the Proport restrict of
Name of shareholder (in full)
the reporting reporting ion (%) ed sales Share Numb sharehol
period period conditi status er der
on
Shanghai Huayi (Group) -34,691,900 546,900,447 47.29 0 0 State
Company owned
None
legal
person
SCBHK A/C BBH S/A 0 7,859,532 0.68 0 0 Overseas
VANGUARD EMERGING legal
None
MARKETS STOCK INDEX person
FUND
Central Huijin Asset 0 7,438,100 0.64 0 0 State
Management Limited Liability owned
None
Company legal
person
47 / 95
2016 Annual Report
Industrial and Commercial 6,526,623 6,526,623 0.56 0 0 Unknow
Bank of China Co., Ltd.－ n
None
China Securities Shanghai
State-owned Enterprises ETF
VANGUARD TOTAL 668,901 4,921,701 0.43 0 0 Overseas
INTERNATIONAL STOCK None legal
INDEX FUND person
Miao Guoqing -730,000 3,000,000 0.26 0 0 Domesti
None c natural
person
TICO Trust Corporation 2,956,790 2,956,790 0.26 0 0 Unknow
Limited － Qingshan No. 1 n
None
structured securities investment
assembled funds trust plan
Fang Jianwei -651,781 2,751,206 0.24 0 0 Domesti
None c natural
person
Bank of China Wuxi Branch 0 2,605,981 0.23 0 0 State
owned
None
legal
person
ISHARES CORE MSCI 1,157,500 2,441,900 0.21 0 0 Overseas
EMERGING MARKETS ETF None legal
person
Holdings of top 10 shareholders without restricted sales condition
Number of Type and number of shares
shares without
Name of shareholder
restricted sales Type Number
condition
Shanghai Huayi (Group) Company 546,900,447 A share 546,900,447
SCBHK A/C BBH S/A VANGUARD 7,859,532 7,859,532
EMERGING MARKETS STOCK INDEX B share
FUND
Central Huijin Asset Management Limited 7,438,100 7,438,100
A share
Liability Company
Industrial and Commercial Bank of China Co., 6,526,623 6,526,623
Ltd.－China Securities Shanghai State-owned A share
Enterprises ETF
VANGUARD TOTAL INTERNATIONAL 4,921,701 4,921,701
B share
STOCK INDEX FUND
Miao Guoqing 3,000,000 B share 3,000,000
TICO Trust Corporation Limited － Qingshan 2,956,790 2,956,790
No. 1 structured securities investment assembled A share
funds trust plan
Fang Jianwei 2,751,206 B share 2,751,206
Bank of China Wuxi Branch 2,605,981 A share 2,605,981
ISHARES CORE MSCI EMERGING 2,441,900 2,441,900
B share
MARKETS ETF
Note on the related relation or concerted actions The Company’s shares have all been tradable since November
for above shareholders 12, 2009, and none of the shareholder is under restricted 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.
Holdings of top 10 shareholders with restricted conditions and the restricted conditions
□Applicable √Not applicable
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2016 Annual Report
(III) Strategic investors or general legal person become top 10 shareholders due to rights issue
□Applicable √Not applicable
IV. Particulars of the controlling shareholder and the actual controller
(I) Particulars of the controlling shareholder
1 Legal person
√Applicable □Not applicable
Name Shanghai Huayi (Group) Company
Unit principal or legal representative Liu Xunfeng
Date of establishment Jan. 23, 1997
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 During the reporting period, Shanghai Huayi (Group) Company
overseas listed companies during the held 69.79% equity interest of Shanghai Huayi Group Co., Ltd and
reporting period 31.53% equity interest of Shanghai 3F New Material Co., Ltd.
2 Natural person
□Applicable √Not applicable
3 Special description of nonexistence of controlling shareholder in the Company
□Applicable √Not applicable
4 Index and dates of the changes of controlling shareholders in reporting period
□Applicable √Not applicable
5 Block diagram of property and control relations between the Company and controlling
shareholder
√Applicable □Not applicable
(II) Particulars of the actual controller
1 Legal person
√Applicable □Not applicable
Name State-owned Assets Supervision and Administration Commission
of Shanghai Municipal Government
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2016 Annual Report
2 Natural person
□Applicable √Not applicable
3 Special description of nonexistence of actual controller in the Company
□Applicable √Not applicable
4 Index and dates of the changes of actual controller in reporting period
□Applicable √Not applicable
5 Block diagram of property and control relations between the Company and actual controller
√Applicable □Not applicable
6 Actual controller controls the Company through trust or other assets management modes
□Applicable √Not applicable
(III) Other information about the controlling shareholder and actual controller
□Applicable √Not applicable
V. Legal person shareholders with the holdings more than 10%
□Applicable √Not applicable
VI. Note on the limitation of shares for reduction
□Applicable √Not applicable
Section VII Particulars of Preferred Shares
□Applicable √Not applicable
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2016 Annual Report
Section VIII Particulars of the Directors, Supervisors, Senior Executives and Staff Members
I. Changes in shareholding and particulars of rewards
(I) Particulars of Directors, Supervisors and senior executives (including the ones leaving post during the reporting period)
√Applicable □Not applicable
Unit: share
Reward got Get reward
from the from the
Shares Shares Company Company's
Position Start date of End date of held at the held at Increase or Reason of during the related party
Name Gender Age
(note) office term office term beginning the end decrease change reporting or not
of year of year period
(RMB'0000)
(before tax)
Huang Chairman of Male 58 04-25-2016 04-25-2019 1,000 1,000 0 0 Yes
Dailie the board
Zhang Director, Male 49 04-25-2016 04-25-2019 10,000 10,000 0 72.40 No
Weimin general
manager
Wang Wei Director, Male 48 04-25-2016 04-25-2019 0 0 0 61.50 No
deputy party
secretary
Li Ning Director Female 49 04-25-2016 04-25-2019 0 0 0 0 Yes
Yu Zhaojun Employee Male 58 04-25-2016 04-25-2019 2,000 2,000 0 53.90 No
representative
director
Zhang Outside Male 46 04-25-2016 04-25-2019 1,000 0 -1,000 Sold 1000 10 No
Wenlei director shares on
secondary
market at RMB
15.72Yuan/share
Shao Independent Male 52 04-25-2016 04-25-2019 0 0 0 10 No
Zhengzhong director
Wang Independent Male 55 04-25-2016 04-25-2019 0 0 0 5 No
Jinshan director
Zhao Ziye Independent Male 37 04-25-2016 04-25-2019 0 0 0 5 No
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2016 Annual Report
director
Gu Lili Chairman of Male 45 04-25-2016 04-25-2019 0 0 0 0 Yes
supervisory
committee
Zhang Hu Supervisor Male 47 04-25-2016 04-25-2019 0 0 0 0 Yes
Tang Liang Supervisor Male 46 04-25-2016 04-25-2019 0 0 0 40.21 No
Zhou Mei Employee Female 48 04-25-2016 04-25-2019 0 0 0 34.92 No
representative
supervisor
Zhang Employee Male 48 04-25-2016 04-25-2019 0 0 0 37.21 No
Guohua representative
supervisor
Cao Jinrong CFO Male 41 04-25-2016 04-25-2019 1,000 1,000 0 48.32 No
Yuan Deputy Male 48 04-25-2016 04-25-2019 1,000 1,000 0 56.31 No
Maoquan general
manager
Dong Yan Secretary of Female 44 04-25-2016 04-25-2019 1,000 1,000 0 47.03 No
the board of
directors
Wang General Male 54 04-25-2016 04-25-2019 1,000 1,000 0 64.43 No
Linzao manager
assistant
Hu Former Male 61 12-20-2012 04-25-2016 3,000 3,000 41.15 No
Yongkang director,
deputy Party
secretary
Wang Former Male 50 12-20-2012 04-25-2016 1,000 1,000 0 Yes
Zengjin director
Li Former Male 42 12-20-2012 04-25-2016 0 0 5 No
Zengquan independent
director
Zhang Former Male 54 12-30-2014 04-25-2016 0 0 5 No
Guoming independent
director
Chen Yao Former Male 53 09-17-2013 04-25-2016 0 0 0 Yes
chairman of
supervisory
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2016 Annual Report
committee
Yu Bin Former Male 42 12-20-2012 04-25-2016 1,000 1,000 0 Yes
supervisor
Wang Former Female 55 12-20-2012 04-25-2016 10,000 2,000 -8,000 Sold 8000 21.94 No
Mingchun supervisor shares on
secondary
market at RMB
13.56Yuan/share
Xu Peiwen Former Male 60 12-20-2012 04-25-2016 7,000 7,000 0 44.58 No
secretary of
the board of
directors
Total / / / / / / 663.90 /
Name Main work experience
Huang Dailie He used to be the Deputy Party secretary, executive Director and general manager of Shanghai Huayi Group Enterprise Development Co., Ltd. and
manager of Enterprise Adjustment Department of Huayi Group. Now he is the director and general manager of Shanghai Huayi (Group) Company;
director, deputy secretary of CPC Committee and chairman of trade union of Shanghai Huayi Co., Ltd.; Chairman of the Board of Shanghai Chlor-Alkali
Chemical Co., Ltd.
Zhang He used to be the assistant of general manager and deputy general manager of Shanghai Huayi Acrylic Acid Co., Ltd., deputy general manager of economic
Weimin operating department of Shanghai Huayi (Group) Company and general manager of safety & environmental protection department and chief of armed
security department of Shanghai Huayi (Group) Company. Now he is the Director, general manager and deputy secretary of Party Committee of Shanghai
Chlor-Alkali Chemical Co., Ltd.
Wang Wei He used to be the deputy general manager of human resources department of Shanghai Huayi (Group) Company and the deputy general manager of
Shanghai Huayi Investmetn Co., Ltd. Now he is the director and deputy secretary (executive) of Party Committee of Shanghai Chlor-Alkali Chemical Co.,
Ltd.
Li Ning She used to be the general manager of financial department of Shanghai Huayi (Group) Company. Now she is the general manager of capital operation
department of Shanghai Huayi Group Co., Ltd., the director of Shanghai 3F New Materials Co., Ltd and the director of Shanghai Chlor-Alkali Chemical
Co., Ltd.
Yu Zhaojun He used to be the Party secretary of PVC factory of Shanghai Chlor-Alkali Chemical Co., Ltd. Now he is the employee representative director, Deputy
Party secretary, secretary of Party discipline committee, chairman of trade union and party secretary of department office of Shanghai Chlor-Alkali
Chemical Co., Ltd.
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2016 Annual Report
Zhang Wenlei He used to be deputy chief of technical operation department, chief of general department and deputy secretary general of China Chlor-Alkali Industry
Association. Now he is vice chairman and secretary general of China Chlor-Alkali Industry Association, routine councilor of China Petrochemical Industry
Association, vice chairman of China Chemical Environment Protection Association, Independent Director of Tangshan Sanyou Chemical Group Co., Ltd.
and outside Director of Shanghai Chlor-Alkali Chemical Co., Ltd.
Shao He used to be the lecturer of material science department of Fudan University, the lecturer, associate professor, subdean and professor of polymer science
Zhengzhong department of Fudan University and associate professor of biology research institute of Aarhus University in Denmark. Now he is the doctoral tutor in
polymer science department of Fudan University. He is also the councilor of Shanghai Municipal Chemistry & Chemical 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.
Wang Jinshan He used to be the Vice Chairman of the Board of Directors and President of Nanjing First-O-Lite Co., Ltd.; Chairman of the Board of Directors and
President of Nanjing First New Materials Co., Ltd. Now he is the director and general manager of Nanjing First-O-Lite Co., Ltd. He is the Independent
Director of Shanghai Chlor-Alkali Chemical Co., Ltd.
Zhao Ziye He used to be the associate professor of Shanghai University of Finance and Economics, the Independent Director of Anshan No. 1 Engineering Co., Ltd
and the Independent Director of Shanghai Jinshan Development Co., Ltd. as well as the Independent Director of Shanghai Chlor-Alkali Chemical Co., Ltd.
Gu Lili He used to be the vice secretary of discipline inspection commission and general manager of supervision and examination department of Shanghai Huayi
(Group) Company. Now he is the vice president of Shanghai Huayi Group Co., Ltd. and the Chairman of Supervisory Committee of Shanghai Chlor-Alkali
Chemical Co., Ltd.
Zhang Hu He used to be the CFO of Shanghai Huayi Acrylic Acid Co., Ltd. Now he is the deputy general manager of finance department of Shanghai Huayi Group
Co., Ltd. and the supervisor of Shanghai Chlor-Alkali Chemical Co., Ltd.
Tang Liang He used to be the manager of technical development department of Shanghai Chlor-Alkali Chemical Co., Ltd. Now he is the manager of investment
planning department of Shanghai Chlor-Alkali Chemical Co., Ltd. and the supervisor of Shanghai Chlor-Alkali Chemical Co., Ltd.
Zhou Mei She used to be the assistant manager of the supervision, examination and security department of Shanghai Chlor-Alkali Chemical Co., Ltd. Now she is the
manager of armed security department and vice-chairman of trade union of Shanghai Chlor-Alkali Chemical Co., Ltd. as well as the supervisor of Shanghai
Chlor-Alkali Chemical Co., Ltd.
Zhang He used to be the director of party office and the deputy party secretary of department office of Shanghai Chlor-Alkali Chemical Co., Ltd. Now he is the
Guohua regional secretary of party committee of Shanghai Chlor-Alkali Chemical Co., Ltd. in Caojing, and the supervisor of Shanghai Chlor-Alkali Chemical Co.,
Ltd.
Cao Jinrong He used to be the deputy manager of assets department of Shanghai Huayi (Group) Company and deputy general manager of Shanghai Huayi Group
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2016 Annual Report
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 engineer of
Maoquan Shanghai Chlor-Alkali Chemical Co., Ltd. Now he is the deputy general manager of Shanghai Chlor-Alkali Chemical Co., Ltd.
Dong Yan She used to be assistant manager, manager, deputy chief economist of the human resource department of Shanghai Chlor-Alkali Chemical Co., Ltd. Now
she is the Secretary of the Board of Directors and deputy chief economic engineer of Shanghai Chlor-Alkali Chemical Co., Ltd.
Wang Linzao He used to be the manager of production director department of Shanghai Chlor-Alkali Chemical Co., Ltd., deputy general manager of Shanghai Tianyuan
Huasheng Chemical Co., Ltd., secretary of CPC general branch and factory director of Huasheng Chemical Plant, and production 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.
Hu Yongkang He used to be general manager, Party secretary and Chairman of the Board of Shanghai Wujin Chemical Co., Ltd. and director, Party secretary and deputy
general manager of Shanghai Chlor-Alkali Chemical Co., Ltd.
Wang Zengjin He used to be the director of Shanghai Chlor-Alkali Chemical Co., Ltd.
Li Zengquan He used to be the independent director of Shanghai Chlor-Alkali Chemical Co., Ltd.
Zhang He used to be the independent director of Shanghai Chlor-Alkali Chemical Co., Ltd.
Guoming
Chen Yao He used to be the Chairman of Supervisory Committee of Shanghai Chlor-Alkali Chemical Co., Ltd.
Yu Bin He used to be the supervisor of Shanghai Chlor-Alkali Chemical Co., Ltd.
Wang He used to be deputy Party secretary, secretary of Party disciplinary committee and chairman of trade union of PVC factory of Shanghai Chlor-Alkali
Mingchun Chemical Co., Ltd., vice chairman of trade union of Shanghai Chlor-Alkali Chemical Co., Ltd. and secretary of CPC committee of PVC factory. Now he is
the employee representative Supervisor of Shanghai Chlor-Alkali Chemical Co., Ltd.
Xu Peiwen He used to be the Board Secretary of Shanghai Tianyuan (Group) Co., Ltd., and the Board Secretary and chief of the Board Secretary's office of Shanghai
Chlor-Alkali Chemical Co., Ltd.
Presentation of other events
√Applicable □Not applicable
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2016 Annual Report
On March 25, 2016, the 28th Conference of the Eighth Board of Directors and the 19th Conference of the Eighth Board of Supervisors reviewed and passed the
proposal for general selection of directors and supervisors, the selections had been conducted on 2015 Annual Shareholders’ Meeting held on Apr. 25, 2016, and the
employee directors, employee supervisor were selected on the joint conference of the congress of workers and staff of the Company. On Apr. 25, 2016, the
Chairman of Board of Directors and Chairman of Supervisory Committee were elected on the first conference of the Ninth Board of Director and Board of
Supervisors of the Company, the new session of senior executives were engaged; relevant announcements had been disclosed on the website (www.sse.com.cn) of
Shanghai Stock Exchange on Apr. 26, 2016.
(II) Equity incentive awarded to the Director and senior executives during the reporting period
□Applicable √Not applicable
II. Particulars of Directors, Supervisors and senior executives (including the ones leaving post during the reporting period)
(I) 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 Director, general manager 12-02-2015
(II) Position in other unit
√Applicable □Not applicable
Name Name of other unit Position in other unit Start date of office term
Zhang Weimin Shanghai Huntsman Polyurethane Co., Ltd. Director, Vice chairman of the board of 08-20-2015
directors
Zhang Weimin Shanghai Huayi Group Finance Co., Ltd. Director 08-20-2015
Zhang Weimin Shanghai Chlor-Alkali New Materials Trading Executive director 02-18-2016
Co., Ltd.
Wang Wei Shanghai Chlor-Alkali Machinery Co., Ltd. Inner Mongolia Junzheng Tianyuan 12-18-2015
chemical Co., Ltd.
Wang Wei Shanghai Tianyuan (Group) Co., Ltd. Director 12-18-2015
Zhang Wenlei Tangshan Sanyou Chemical Group Co., Ltd. Independent director 09-15-2014
Wang Linzao Shanghai Jinyuan Tap Water Co., Ltd. Director 07-01-2011
Wang Linzao Shanghai Lianheng Isocyanic Acid Grease Co., Director 01-10-2016
Ltd.
Cao Jinrong Shanghai Ruisheng Enterprise Co. Ltd. Executive director 03-01-2012
Cao Jinrong Inner Mongolia Junzheng Tianyuan Chemical Chief supervisor 12-14-2016
56 / 95
2016 Annual Report
Co., Ltd.
Dong Yan Inner Mongolia Junzheng Tianyuan Chemical Director 12-14-2016
Co., Ltd.
Dong Yan Shanghai Huntsman Polyurethane Co., Ltd. Director 01-11-2016
Dong Yan Shanghai LvWei Plasitics Co., Ltd. Director 01-11-2016
Tang Liang Inner Mongolia Junzheng Tianyuan Chemical Director 12-14-2016
Co., Ltd.
III. Rewards of the Directors, Supervisors and senior executives
√Applicable □Not applicable
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 executives.
Supervisors and senior executives
Actual issuing of the rewards of the Directors, The Board of Directors decided the reward standard for the Directors, Supervisors and Senior Executives getting
Supervisors and senior executives 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 6,639,000Yuan
Supervisors and Senior Executives at end of the
reporting period
IV. Changes of the Directors, Supervisors and senior executives
√Applicable □Not applicable
Name Position Change Reason of change
Li Ning Director Elected Mrs. Li Ning was elected as the director of the Company by voting on 2015 Annual Shareholders’
Meeting On Apr. 25, 2016 and related announcement was disclosed on the website of Shanghai Stock
Exchange on Apr. 26, 2016.
Wang Wei Director Elected Mr. Wang Wei was elected as the director of the Company by voting on 2015 Annual Shareholders’
Meeting On Apr. 25, 2016 and related announcement was disclosed on the website of Shanghai Stock
Exchange on Apr. 26, 2016.
Wang Jinshan Independent director Elected Mr. Wang Jinshan was elected as the independent director of the Company by voting on 2015 Annual
Shareholders’ Meeting On Apr. 25, 2016 and related announcement was disclosed on the website of
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2016 Annual Report
Shanghai Stock Exchange on Apr. 26, 2016.
Zhao Ziye Independent director Elected Mr. Zhao Ziye was elected as the independent director of the Company by voting on 2015 Annual
Shareholders’ Meeting On Apr. 25, 2016 and related announcement was disclosed on the website of
Shanghai Stock Exchange on Apr. 26, 2016.
Gu Lili Chairman of Elected Mr. Gu Lili was elected as the shareholder representative supervisor by voting on 2015 Annual
supervisory committee Shareholders’ Meeting On Apr. 25, 2016 and was elected as the Chairman of Supervisory Committee after
examination and pass on the first meeting of the 9 th Board of Supervisors on Apr. 25, 2016. Related
announcements was disclosed on the website of Shanghai Stock Exchange on Apr. 26, 2016.
Zhang Hu Supervisor Elected Mr. Zhang Hu was elected as the supervisor of the Company by voting on 2015 Annual Shareholders’
Meeting On Apr. 25, 2016, and related announcement was disclosed on the website of Shanghai Stock
Exchange on Apr. 26, 2016.
Tang Liang Supervisor Elected Mr. Tang Liang was elected as the supervisor of the Company by voting on 2015 Annual Shareholders’
Meeting On Apr. 25, 2016, and related announcement was disclosed on the website of Shanghai Stock
Exchange on Apr. 26, 2016.
Zhou Mei Employee supervisor Elected Elected democratically by staff representatives on the 9 th meeting of the 3rd Congress of Workers and
Staff. Related announcement had bee disclosed on the website of Shanghai Stock Exchange on Mar. 9,
2016.
Zhang Guohua Employee supervisor Elected Elected democratically by staff representatives on the 9 th meeting of the 3rd Congress of Workers and
Staff. Related announcement had bee disclosed on the website of Shanghai Stock Exchange on Mar. 9,
2016.
Dong Yan Secretary of the board Engaged Engaged by the first meeting of the 9th Board of Directors of the Company on Apr. 25, 2016.
of directors
Wang Linzao General manager Engaged Engaged by the first meeting of the 9th Board of Directors of the Company on Apr. 25, 2016.
assistant
Hu Yongkang Director, deputy party Left the post Expiration of the term of office.
secretary
Wang Zengjin Director Left the post Expiration of the term of office.
Li Zengquan Independent director Left the post Expiration of the term of office.
Zhang Guoming Independent director Left the post Expiration of the term of office.
Chen Yao Chairman of Left the post Expiration of the term of office.
supervisory committee
Yu Bin Supervisor Left the post Expiration of the term of office.
Wang Mingchun Supervisor Left the post Expiration of the term of office.
Xu Peiwen Secretary of the board Left the post Expiration of the term of office.
of directors
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2016 Annual Report
V. Punishment by the securities regulatory authorities in recent 3 years
□Applicable √Not applicable
VI. Employees of the parent company and main subsidiaries
(I) Particulars of employees
Number of in-service employees of the parent company
Number of in-service employees of the main subsidiaries
Total number of in-service employees
Number of retired employees borne by the parent company and main subsidiaries 4,255
Profession structure
Type of profession Number of people
Production personnel
Sales people
Technical personnel
Finance personnel
Administrative personnel
Total
Educational status
Type of educational status Number of people
Bachelor or higher
Junior college
Senior high school (technical secondary school)
Lower than senior high school
Total
(II) Salary policy
√Applicable □Not applicable
The Company implements the Position Level Salary Measures of Shanghai Chlor-Alkali Chemical Co., Ltd.
(III) Training plan
√Applicable □Not applicable
In 2016, the Company made employee training for 4797 men-times. The training includes 3987 men-times for front-line employees, accounting for 83.11% in total
training. The main training content: post operation training (on-the-job training and job-transfer training), special work training (including the training for obtaining
certificate of post), QHSE training, staff skill and skill level training (including skill level and training for employment with certificate), HSE entire staff training,
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2016 Annual Report
team leader training, series training of labor union, degree program training, professional qualification improvement training and young employee cultivation. The
training includes 810 men-times for non front-line employees, accounting for 16.89% in total training. Main training content: professional technical training at the
engineers advanced study and training base in party school, engineering training for professional technical personnel, special topic lecture, management and strategy
course training, title and further education training, QHS training and HSE entire staff training.
(IV) Labor outsourcing
□Applicable √Not applicable
VII. Other
□Applicable √Not applicable
Section IXCompany Governance
I. Introduction to Company governance
√Applicable□Not applicable
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 pricing principle are disclosed to the public, and the related Director and related shareholders avoided the voting.
2. 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. 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.
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2016 Annual Report
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. 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 reporting period, the Company totally completed 4 periodic reports and 22 provisional announcements, making the
investors can learn the status of the Company timely, fairly, accurately and completely.
7. Management on insider information
During the reporting 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 secret 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.
If there is significant difference between company governance and the requirements of relevant regulations of China Securities Regulatory Commission; if yes, give
the reason
□Applicable √Not applicable
II. Briefing on the shareholders' meeting
Index on the website specified for carrying
The meeting Convening date Date for disclosing the resolutions
the resolutions
2015 annual shareholders’ meeting 04-25-2016 www.sse.com.cn 04-26-2016
Information about shareholders’ meeting
□Applicable √Not applicable
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2016 Annual Report
III. Duty performance of the Directors
(I) Particulars of the Directors for attending the Board meetings and shareholders meeting
Particulars of
attending the
Particulars of attending the Board Meetings
shareholders’
Independent
Name of meeting
Director or
director Number of Number of Whether not attending
not Number of Board Number of Number Number of
attendances attendances of in person the meeting
meetings in attendances attendances in the
through through absence consecutively for 2
current year in person shareholders' meeting
communication commitment times or not
Huang Dailie No 8 8 0 0 0 No
Li Ning No 6 5 0 1 0 No
Zhang Weimin No 8 8 0 0 0 No
Wang Wei No 6 6 0 0 0 No
Yu Zhaojun No 8 8 0 0 0 No
Zhang Wenlei No 8 8 0 0 0 No
Shao Yes 8 8 0 0 0 No
Zhengzhong
Wang Jinshan Yes 6 6 0 0 0 No
Zhao Ziye Yes 6 6 0 0 0 No
Explanations for not attending the meeting in person consecutively for 2 times:
□Applicable √Not applicable
Number of Board meetings convened in current year
Incl.: Number of on-site meetings
Number of meetings convened through communication
Number of meetings convened on-site and through communication
(II) Objection of the Independent Directors on relevant events of the Company
□Applicable √Not applicable
(III) Other
□Applicable √Not applicable
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2016 Annual Report
IV. Important opinions and proposals raised by the special committees under the Board of Directors while performing their duties in the reporting period,
and if any objection exists, the details shall be disclosed
√Applicable□Not applicable
In 2016, 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 2015, and raised the checking plan on the salary of the
senior executives in 2016. 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 under the Board of Directors in specialty and information to promote the decision-making of the Board of Directors
more scientific and more effective.
V. Note of the Supervisory Committee on discovering the Company’s risk
√Applicable□Not applicable
VI. Note of the Company on being unable to ensure independence and self operation capability in business, assets, organization and finance with the
controlling shareholder
□Applicable √Not applicable
In case of the existence of horizontal competition, the corresponding solutions, job schedule and subsequent wok plan of the Company
□Applicable √Not applicable
VII. Establishing and implementing the check mechanism and incentive mechanism for the senior executives in the reporting period
√Applicable□Not applicable
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.
VIII. Whether disclose the internal control self-assessment report or not
√Applicable□Not applicable
63 / 95
2016 Annual Report
For details of the 2016 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 30, 2017.
Note on significant deficiencies in the internal control during the reporting period
□Applicable √Not applicable
IX. Note on relevant status of the auditor's report for internal control
√Applicable□Not applicable
For details of the Auditor’s Report for Internal Control of Shanghai Chlor-Alkali Chemical Co., Ltd. in 2016, see relevant announcement in the website of Shanghai
Stock Exchange www.sse.com.cn on March 30, 2017.
Whether disclose the auditor’s report for internal control or not: yes
X. Other
□Applicable √Not applicable
Section X Particulars of the Company’s Bonds
□Applicable √Not applicable
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2016 Annual Report
Section XIFinancial Report
I. Auditor’s report
√Applicable □Not applicable
XKSHBZ [2017] No. ZA11253
To all shareholders of Shanghai Chlor-Alkali Chemical Co., Ltd.,
We have audited the attached financial statements of Shanghai Chlor-Alkali Chemical Co., Ltd.
(hereafter referred to as Chlor-Alkali Chemical), including the consolidated and the Company’s
balance sheets as of Dec. 31, 2016, the consolidated and the Company’s income statements in
2016, 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.
I. 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.
II. 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.
We believe, the audit evidences we have obtained are adequate and proper and provide basis for
expressing the audit opinion.
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2016 Annual Report
III. 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, 2016 and the consolidated and the
Company’s operating results and cash flow in 2016
BDO China Shu Lun Pan Certified China certified public accountant:
Public Accountants LLP Gu Xuefeng
China certified public accountant: Chen Luying
Shanghai China March 28, 2017
2. Financial Statement
Consolidated Balance Sheet
December 31, 2016
Prepared by: SHANGHAI CHLOR-ALKAL CHEMICAL CO.,LTD
Unit: Yuan Currency: RMB
Item Note Closing balance Opening balance
Current assets
Cash and cash balances 433,999,695.91 240,425,945.13
Settlement reserve
Lent to banks and other financial institutions
Financial assets at fair value through profit or loss
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2016 Annual Report
Item Note Closing balance Opening balance
Derivative financial asset
Notes receivable 448,822,006.32 336,221,352.79
Accounts receivable 202,272,347.66 259,044,580.24
Prepayments 50,056,591.51 136,446,799.31
Insurance Premium receivable
reinsurance account Receivable
Reserves for reinsurance contract Receivable
Interest receivable
Dividends receivable
Other receivables 762,159.00 3,561,716.78
Financial assets purchased under resale agreements
Inventories 159,466,728.86 384,885,265.71
Assets classified as held for sale
Non-current assets due within one year
Other current assets
Total current assets 1,295,379,529.26 1,360,585,659.96
Non-current assets:
Loans and advances
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2016 Annual Report
Item Note Closing balance Opening balance
Available-for-sale financial assets 453,209,607.08 424,078,182.70
Investment held to maturity
Long-term receivables
Long-term equity investments 365,215,620.38 288,855,432.45
Investment properties
Fixed assets 1,978,086,015.56 2,132,521,000.23
Construction in progress 97,570,414.69 305,408,986.91
Project materials 37,478.63 1,381,336.82
Disposal of fixed assets
Productive biological assets
Oil & gas assets
Intangible assets 267,521,472.23 281,295,016.13
Development expenditure 17,364,046.98 30,247,277.15
Goodwill
Long-term prepaid expenses 15,196,164.92 23,460,981.73
Deferred tax assets 35,696.33 20,529.71
Other non-current assets
Total non-current assets: 3,194,236,516.80 3,487,268,743.83
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2016 Annual Report
Item Note Closing balance Opening balance
Total assets 4,489,616,046.06 4,847,854,403.79
Current liabilities:
Short-term borrowing 1,256,000,000.00 620,000,000.00
Borrowing from the central bank
Customer deposits and deposits from banks and other financial
institutions
Interbank borrowing
Financial assets measured with fair value and having its
changes accounted in current income and loss
Derivative financial assets
Notes payable
Accounts payable 358,647,789.59 376,955,805.82
Receipts in advance 243,595,103.99 253,175,587.07
Financial assets sold for repurchase
Handling fees and commissions payable
Employee benefits payable 131,471,648.00 780,802.00
Taxes payable 80,270,216.68 14,824,741.55
Interest payable 1,955,378.33 2,788,929.31
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2016 Annual Report
Item Note Closing balance Opening balance
Dividends payable 2,724,553.75 2,724,553.75
Other payables 88,814,552.29 441,394,365.43
Reinsurance accounts payable
Reserve for insurance contract
Acting trading securities
Acting underwriting securities
Assets classified as available-for-sale assets
Non-current liabilities due within one year
Other current liabilities
Total current liabilities 2,163,479,242.63 1,712,644,784.93
Non-current liabilities
Long-term borrowing
Bonds payable
Including: Preferred stock
Debt sustainability
Long-term payables 170,000,000.00 645,000,000.00
Long-term employee benefits payable 181,130,000.00 190,880,000.00
Special payables 11,050,000.00 11,050,000.00
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2016 Annual Report
Item Note Closing balance Opening balance
Provisions 1,238,255.07
Deferred income 6,873,750.00 6,650,100.00
Deferred tax liabilities 14,562,645.00 11,653,477.05
Other non-current liabilities
Total non-current liabilities 384,854,650.07 865,233,577.05
Total liabilities 2,548,333,892.70 2,577,878,361.98
Shareholders' equity:
Share capital 1,156,399,976.00 1,156,399,976.00
Other equity instruments
Including: Preferred stock
Debt sustainability
Capital reserve 1,674,270,987.60 1,674,270,987.60
Less :Treasury stock
Other Comprehensive Income 20,585,420.26 12,317,916.44
Special reserve
Surplus reserves 11,329,760.39 11,329,760.39
General risk reserve
Retained earnings -920,865,356.69 -592,773,594.89
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2016 Annual Report
Item Note Closing balance Opening balance
Total shareholders’ equity attributable to shareholders of the
1,941,720,787.56 2,261,545,045.54
Company
Minority interests -438,634.20 8,430,996.27
Total shareholders’ equity 1,941,282,153.36 2,269,976,041.81
Total liabilities and shareholders’ equities 4,489,616,046.06 4,847,854,403.79
Legal representative: Superintendent responsible for accounting: Superintendent for accountancy firm:
Balance Sheet of Parent Company
December 31, 2016
Prepared by: SHANGHAI CHLOR-ALKAL CHEMICAL CO.,LTD
Unit: Yuan Currency: RMB
Item Note Closing balance Opening balance
Current assets:
Cash and cash balances 371,434,054.50 212,133,296.30
Financial assets at fair value through profit or loss
Derivative financial assets
Notes receivable 256,156,372.62 334,581,352.79
Accounts receivable 323,192,407.70 253,571,576.96
Prepayments 51,172,870.23 137,481,599.22
Interest receivable
Dividend receivable
Other receivables 4,509,657.46 10,766,735.59
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2016 Annual Report
Item Note Closing balance Opening balance
Inventories 155,028,612.34 371,277,788.79
Assets classified as held for sale
Non-current assets due within one year 20,000,000.00
Other current assets
Total current assets 1,181,493,974.85 1,319,812,349.65
Non-current assets:
Available-for-sale financial assets 426,458,325.42 413,190,044.22
Held-to-maturity investments
Long-term receivables
Long-term equity investments 473,550,440.36 355,444,207.96
Investment properties
Fixed assets 1,960,644,705.74 2,111,593,701.25
Construction in progress 91,697,502.44 302,075,871.66
Project materials 37,478.63 1,381,336.82
Disposal of fixed assets
Productive biological assets
Oil & gas assets
Intangible assets 254,644,610.18 259,886,963.38
Development expenditure 17,364,046.98 30,247,277.15
Goodwill
Long-term prepaid expenses 15,196,164.92 23,152,249.71
Deferred tax assets
Other non-current assets 20,000,000.00
Total non-current assets 3,239,593,274.67 3,516,971,652.15
Total assets 4,421,087,249.52 4,836,784,001.80
Current liabilities:
Short-term borrowing 1,256,000,000.00 620,000,000.00
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2016 Annual Report
Item Note Closing balance Opening balance
Financial assets measured with fair value and having its changes
accounted in current income and loss
Derivative financial assets
Notes payable
Accounts payable 341,939,490.32 370,153,498.98
Receipts in advance 232,409,605.46 253,775,506.41
Employee benefits payable 121,407,244.00 513,377.00
Tax payable 75,506,168.49 12,682,879.20
Interest payable 1,955,378.33 2,788,929.31
Dividend payable 1,189,676.90 1,189,676.90
Other payables 81,786,755.91 457,108,038.56
Assets classified as available-for-sale assets
Non-current liabilities due within one year
Other current liabilities
Total current liabilities 2,112,194,319.41 1,718,211,906.36
Non-current liabilities
Long-term borrowing
Bonds payable
Including: Preferred stock
Debt sustainability
Long-term payables 170,000,000.00 645,000,000.00
Long-term employee benefits 181,130,000.00 190,880,000.00
Special payables 11,050,000.00 11,050,000.00
Provisions
Deferred income 6,873,750.00 6,650,100.00
Deferred tax liabilities 9,728,506.05 10,785,123.90
Other non-current liabilities
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2016 Annual Report
Item Note Closing balance Opening balance
Total non-current liabilities 378,782,256.05 864,365,223.90
Total liabilities 2,490,976,575.46 2,582,577,130.26
Shareholders’ equity:
Share capital 1,156,399,976.00 1,156,399,976.00
Other equity instruments
Including: Preferred stock
Debt sustainability
Capital reserve 1,690,068,638.82 1,690,068,638.82
Less: Treasury stock
Other Comprehensive Income 7,715,149.28 11,345,002.84
Special reserve
Surplus reserves 11,329,760.39 11,329,760.39
Retained earnings -935,402,850.43 -614,936,506.51
Total shareholders’ equity 1,930,110,674.06 2,254,206,871.54
Total liabilities and shareholders’ equity 4,421,087,249.52 4,836,784,001.80
Legal representative: Superintendent responsible for accounting: Superintendent for accountancy firm:
Consolidated Income Statement
January-December 2016
Prepared by: SHANGHAI CHLOR-ALKAL CHEMICAL CO.,LTD
Unit: Yuan Currency: RMB
Amount incurred in Amount of
Item Note
current period previous period
1. Total Operating income 6,754,397,061.69 6,170,874,223.67
Including: Operating income 6,754,397,061.69 6,170,874,223.67
Interest income
Earned premium
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2016 Annual Report
Amount incurred in Amount of
Item Note
current period previous period
Fee and commission income
2. Total Operating Cost 7,245,409,457.47 6,427,713,999.83
Including: Operating costs 6,128,517,218.57 5,559,439,778.97
Interest expenditure
Fee and commission expense
Returned premium
Net compensation expenditure
Withdrawn net insurance contract reserve
Dividend expenditure on insurance policies
Reinsurance expenses
Business taxes and levies 28,916,705.72 19,193,727.90
Selling expenses 184,329,793.95 199,911,085.12
Administrative expenses 480,214,277.58 402,196,032.57
Financial expense 74,994,167.59 140,436,053.89
Asset impairment losses 348,437,294.06 106,537,321.38
Plus: Income from fair value changes (for loss, fill in \"-\")
Investment profit (loss is expressed with \"-\") 131,189,596.30 147,125,155.93
Including: Income from investments in associates and JCEs 97,360,187.93 44,597,649.84
Exchange gain/loss (for loss, fill in \"-\")
3. Operating Profit (Indicate Loss with \"-\") -359,822,799.48 -109,714,620.23
Plus: Non-operating income 26,386,162.15 220,140,784.81
Including: Gains from disposal of non-current assets 823,415.34 175,597,261.11
Less: Non-operating expenses 1,377,001.45 864,280.61
Including: Losses from disposal of non-current assets 525,479.38 520,754.37
4. Total Profit (Indicate Total Loss with \"-\") -334,813,638.78 109,561,883.97
Less: Income tax expenses 1,703,353.49 4,672,427.26
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2016 Annual Report
Amount incurred in Amount of
Item Note
current period previous period
5. Net Profit (Indicate Loss with \"-\") -336,516,992.27 104,889,456.71
Net profit attributable to shareholders of the Company -328,091,761.80 95,615,030.34
Profit or loss attributable to minority interests -8,425,230.47 9,274,426.37
6. Net amount of other comprehensive revenues after tax 8,267,503.82 10,397,536.07
Net amount of other comprehensive revenues after tax attributable to
8,267,503.82 10,397,536.07
shareholders of parent company
(1) Other comprehensive income that will not be reclassified
-460,000.00 -13,980,000.00
subsequently to profit or loss
1) Changes in net liabilities or net assets due to remeasurement of
-460,000.00 -13,980,000.00
defined benefit plans
2) Other comprehensive income that will not be reclassified subsequently
to profit or loss of invested entities under equity method
(2) Other comprehensive income that may be reclassified subsequently
8,727,503.82 24,377,536.07
to profit or loss
1) Other comprehensive income that may be reclassified subsequently to
profit or loss of invested entities under equity method in future
2) Changes in fair value of available-for-sale financial assets 8,727,503.82 24,377,536.07
3) Profit or loss of held-to-maturity investments that are reclassified as
available-for-sale financial assets
4) Effective part of profit or loss of cash flow hedge
5) Exchange differences on translating foreign operations
6) Other
Other comprehensive income (loss) attributable to minority interests
7. Total Comprehensive Income -328,249,488.45 115,286,992.78
Total comprehensive income attributable to shareholders of the Company -319,824,257.98 106,012,566.41
Total comprehensive income attributable to minority interests -8,425,230.47 9,274,426.37
8. Earnings per Share
(1) Basic earnings per share -0.2837 0.0827
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2016 Annual Report
Amount incurred in Amount of
Item Note
current period previous period
(2) Diluted earnings per share -0.2837 0.0827
Legal representative: Superintendent responsible for accounting: Superintendent for accountancy firm:
Income Statement of Parent Company
January-December 2016
Prepared by: SHANGHAI CHLOR-ALKAL CHEMICAL CO.,LTD
Unit: Yuan Currency: RMB
Amount incurred in Amount of previous
Item Note
current period period
1. Operating income 4,221,442,504.36 5,306,202,144.25
Less: Operating cost 3,635,572,923.53 4,779,946,815.88
Business taxes and levies 25,583,943.98 16,200,534.43
Sales expenses 166,289,797.50 184,902,755.30
Administrative expenses 444,945,382.58 352,189,770.28
Financial expense 74,847,579.48 139,259,008.16
Asset impairment losses 350,543,850.73 104,311,645.14
Plus: Income from fair value changes (for loss, fill in \"-\")
Investment profit (loss is expressed with \"-\") 132,724,899.42 196,816,182.18
Including: Income from investments in associates and JCEs 97,360,187.93 44,597,649.84
2. Operating Profit (Indicate Loss with \"-\") -343,616,074.02 -73,792,202.76
Plus: Non-operating income 24,394,366.15 217,277,438.15
Including: Gains from disposal of non-current assets 541,341.67 175,459,449.37
Less: Non-operating expenses 1,244,636.05 460,655.84
Including: Losses from disposal of non-current assets 512,438.97 376,422.17
3. Total Profit (Indicate Total Loss with \"-\") -320,466,343.92 143,024,579.55
Less: Income tax expense
4. Net Profit (Indicate Loss with \"-\") -320,466,343.92 143,024,579.55
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2016 Annual Report
5.Net amount of other comprehensive revenues after tax -3,629,853.56 10,389,083.82
(1) Other comprehensive income that will not be reclassified subsequently to profit
-460,000.00 -13,980,000.00
or loss
1) Changes in net liabilities or net assets due to remeasurement of defined benefit
-460,000.00 -13,980,000.00
plans
2) Other comprehensive income that will not be reclassified subsequently to profit or
loss of invested entities under equity method
(2) Other comprehensive income that may be reclassified subsequently to profit or
-3,169,853.56 24,369,083.82
loss
1) Other comprehensive income that may be reclassified subsequently to profit or
loss of invested entities under equity method in future
2) Changes in fair value of available-for-sale financial assets -3,169,853.56 24,369,083.82
3) Profit or loss of held-to-maturity investments that are reclassified as
available-for-sale financial assets
4) Effective part of profit or loss of cash flow hedge
5) Exchange differences on translating foreign operations
6) Other
6. Total Comprehensive Income -324,096,197.48 153,413,663.37
7.Earnings per Share:
(1) Basic earnings per share
(2) Diluted earnings per share
Legal representative: Superintendent responsible for accounting: Superintendent for accountancy firm:
Consolidated Cash Flow Statement
January-December 2016
Prepared by: SHANGHAI CHLOR-ALKAL CHEMICAL CO.,LTD
Unit: Yuan Currency: RMB
Amount incurred in Amount of previous
Item Note
current period period
1. Cash flow from operating activities:
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2016 Annual Report
Amount incurred in Amount of previous
Item Note
current period period
Cash received from sale of goods and rendering of services 7,509,526,827.49 7,510,561,650.86
Net increases in customer deposits and peer deposits
Net increases in borrowing from central bank
Net increases in interbank borrowing from other financial institutions
Cash received from premiums on primary insurance contracts
Net cash amount received from reinsurance business
Net increase in deposits from policyholder
Net increase from disposal of financial assets measured in fair value and having its
changes accounted in current profit and loss
Cash collected from interest, handling fees and commissions
Net increases in interbank borrowing
Net increase in repurchase business capital
Receipts of tax refunds 807,011.37 1,550,381.55
Other cash received related to operating activities 101,174,531.77 176,962,786.84
Sub-total of cash inflow from operating activities 7,611,508,370.63 7,689,074,819.25
Cash payments for goods purchased and services received 6,460,589,082.43 6,546,749,918.62
Net increases in customer loans and advances
Net increases in deposits with central bank and other financial institutions
Original insurance contract claims paid
Cash payments for interests, fees and commissions
Policyholder dividend paid
Cash payments to and on behalf of employees 372,744,973.77 392,633,278.07
Payments for various types of taxes 147,418,472.69 209,497,530.89
Other payments relating to operating activities 141,899,080.50 234,341,659.22
Sub-total of cash outflow relating to operating activities 7,122,651,609.39 7,383,222,386.80
Net cash flow from operating activities 488,856,761.24 305,852,432.45
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2016 Annual Report
Amount incurred in Amount of previous
Item Note
current period period
2. Cash flow from investing activities
Cash receipts from recovery of investments 14,750,893.88
Cash receipts from investment income 40,900,561.88 50,188,256.22
Net cash receipts from disposals of fixed assets, intangible assets and other
1,895,801.68 366,988,374.84
long-term assets
Net cash paid for acquisition of subsidiaries and other business units 201,393,475.46
Other cash received related to investing activities 340,000.00 568,000.00
Sub-total of cash inflow from investing activities 57,887,257.44 619,138,106.52
Cash payment to acquire or construct fixed assets, intangible assets and other
71,811,205.80 116,302,260.65
long-term assets
Cash payments to acquire investments 18,316,800.00 40,466,400.00
Net increase in pledge loans
Net cash paid for acquisition of subsidiaries and other business units
Other cash paid related to investing activities
Subtotal of cash outflow from investing activities 90,128,005.80 156,768,660.65
Net cash flow from investing activities -32,240,748.36 462,369,445.87
3. Cash flow from financing activities
Cash received from capital contributions
Including: cash receipts from capital contributions from minority shareholders of
subsidiaries
Cash received from borrowings 1,718,900,000.00 2,487,739,713.32
Cash received from bond issue
Other cash received related to financing activities
Sub-total of cash inflow from financing activities 1,718,900,000.00 2,487,739,713.32
Cash repayments of borrowings 1,909,900,000.00 3,277,077,512.61
Cash payments for distribution of dividends or profits or settlement of interest
75,227,416.76 140,724,441.68
expenses
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2016 Annual Report
Amount incurred in Amount of previous
Item Note
current period period
Including: payments for distribution of dividends or profit to minority shareholders of
subsidiaries
Other cash payments relating to financing activities
Sub-total of cash outflow relating to financing activities 1,985,127,416.76 3,417,801,954.29
Net cash flow from financing activities -266,227,416.76 -930,062,240.97
4. Effect of foreign exchange rate changes on cash and cash equivalents 3,241,849.50 -325,298.50
5. Net increase in cash and cash equivalents 193,630,445.62 -162,165,661.15
Add: Opening balance of cash and cash equivalents 240,369,250.29 402,534,911.44
6. Closing balance balance of cash and cash equivalents 433,999,695.91 240,369,250.29
Legal representative: Superintendent responsible for accounting: Superintendent for accountancy firm:
Cash Flow Statement of Parent Company
January-December 2016
Prepared by: SHANGHAI CHLOR-ALKAL CHEMICAL CO.,LTD
Unit: Yuan Currency: RMB
Amount incurred in Amount of previous
Item Note
current period period
1. Cash flow from operating activities:
Cash receipts from the sale of goods and rendering of services 4,680,256,864.22 6,511,335,605.62
Tax rebate received 807,011.37 279,357.64
Other cash receipts relating to operating activities 83,844,488.95 156,904,899.36
Sub-total cash inflow from operating activities 4,764,908,364.54 6,668,519,862.62
Cash payments for goods purchased and services 3,674,822,963.70 5,714,454,512.78
Cash payments to and on behalf of employees 326,343,263.63 317,693,761.30
Payments for various types of taxes 135,326,338.40 182,897,891.76
Other payments relating to operating activities 129,019,340.43 198,804,795.65
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2016 Annual Report
Amount incurred in Amount of previous
Item Note
current period period
Sub-total cash outflow relating to operating activities 4,265,511,906.16 6,413,850,961.49
Net cash flow from operating activities 499,396,458.38 254,668,901.13
2. Cash flow from investing activities
Cash receipts from recovery of investments 14,750,893.88
Cash receipts from investment income 42,435,865.00 75,126,857.37
Net cash receipts from disposal of fixed assets, intangible assets and other long-term
1,520,827.72 366,829,419.15
assets
Net cash paid for acquisition of subsidiaries and other business units 224,174,251.71
Other cash received related to investing activities 340,000.00 568,000.00
Sub-total cash flow from investing activities 59,047,586.60 666,698,528.23
Cash payments to acquire or construct fixed assets, intangible assets and other
68,748,453.09 75,105,899.49
long-term assets
Cash payments to acquire investments 68,316,800.00 40,466,400.00
Net cash paid for acquisition of subsidiaries and other business units
Other cash paid related to investing activities
Sub-total cash outflow relating to investing activities 137,065,253.09 115,572,299.49
Net cash flow from investing activities -78,017,666.49 551,126,228.74
3. Cash flow from financing activities
Cash received from capital contributions
Cash received from borrowings 1,739,000,000.00 2,373,595,009.82
Cash received from bond issue
Other cash receipts relating to financing activities
Sub-total cash inflow from financing activities 1,739,000,000.00 2,373,595,009.82
Cash repayments of borrowings 1,930,000,000.00 3,189,876,409.11
Cash payments for distribution of dividends or profits or settlement of interest expenses 74,319,883.19 137,950,238.68
Other cash paid related to financing activities
Sub-total cash outflow relating to financing activities 2,004,319,883.19 3,327,826,647.79
Net cash flow from financing activities -265,319,883.19 -954,231,637.97
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2016 Annual Report
Amount incurred in Amount of previous
Item Note
current period period
4. Effect of foreign exchange rate on cash and cash equivalents 3,241,849.50 -1,271,463.09
5. Net Increase in cash and cash equivalents 159,300,758.20 -149,707,971.19
Add: Opening balance of cash and cash equivalents 212,133,296.30 361,841,267.49
6. Closing Balance of cash and cash equivalents 371,434,054.50 212,133,296.30
Legal representative: Superintendent responsible for accounting: Superintendent for accountancy firm:
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2016 Annual Report
Consolidated Statement on Changes in Shareholders' Equity
January-December 2016
Current period
shareholders’s equity Attributable to the Parent Company
Other equity
Less: Other Minor Total
Item instruments Common
Share Capital Share Comprehe Special Surplus Attributabl shareholder shareholde
Preferr Sustain risk
capital Other reserve s in nsive reserve reserves e profit s’ equity rs' equity
ed able provision
s stock Income
stock debt
1,156,399,9 1,674,270,9 12,317,916.4 11,329,76 -592,773,59 2,269,976,04
1.Balance at the end of last year 8,430,996.27
76.00 87.60 4 0.39 4.89 1.81
Add: Change of accounting
policy
Correcting of previous
errors
Merger of entities under
common control
Others
2.Balance at the beginning of 1,156,399,9 1,674,270,9 12,317,916.4 11,329,76 -592,773,59 2,269,976,04
8,430,996.27
this year 76.00 87.60 4 0.39 4.89 1.81
3. Increase/decrease at this
-328,091,76 -328,693,888
term 8,267,503.82 -8,869,630.47
1.80 .45
(for decrease, fill in \"-\")
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2016 Annual Report
(1) Total Comprehensive -328,091,76 -328,249,488
8,267,503.82 -8,425,230.47
Income 1.80 .45
(2) Capital injection and
reduction by shareholders
1) Total comprehensive
income
2) Investment or decreasing of
capital by shareholders
3) Amount of shares paid and
accounted as shareholders’
equity
4) Others
(3) Profit allotment -444,400.00 -444,400.00
1) Providing of surplus
reserves
2) Providing of common risk
provisions
3) Allotment to the owners (or
-444,400.00 -444,400.00
shareholders)
4) Others
(4) Internal transferring of
shareholders’ equity
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2016 Annual Report
1) Capitalizing of capital
reserves (or to capital shares)
2) Capitalizing of surplus
reserves (or to capital shares)
3) Making up losses by
surplus reserves.
4) Others
(5) Special reserve
13,368,608. 13,368,608.5
1) Provided this term
56
13,368,608. 13,368,608.5
2) Used this term
56
(6) Other
4. Balance at the end of this 1,156,399,9 1,674,270,9 20,585,420.2 11,329,76 -920,865,35 1,941,282,15
-438,634.20
term 76.00 87.60 6 0.39 6.69 3.36
Previous period
Shareholders’s equity Attributable to the Parent Company
Other equity
Commo Minor Total
Item instruments Less: Other
Share Capital Special Surplus n risk Attributabl shareholder shareholders
Prefer Sustain Shares in Comprehensiv
capital Othe reserve reserve reserves provisio e profit s’ equity ' equity
red able stock e Income
rs n
stock debt
1.Balance at the end of last year 1,156,399,9 1,683,394,0 1,920,380.37 11,329,76 -688,388,6 91,606,113. 2,256,261,620
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2016 Annual Report
76.00 15.86 0.39 25.23 33 .72
Add: Change of accounting
policy
Correcting of previous errors
Merger of entities under
common control
Others
2.Balance at the beginning of this 1,156,399,9 1,683,394,0 11,329,76 -688,388,6 91,606,113. 2,256,261,620
1,920,380.37
year 76.00 15.86 0.39 25.23 33 .72
3. Increase/decrease at this term -9,123,028. 95,615,030 -83,175,117.
10,397,536.07 13,714,421.09
(for decrease, fill in \"-\") 26 .34
(1) Total Comprehensive 95,615,030 9,274,426.3 115,286,992.7
10,397,536.07
Income .34 7
(2) Capital injection and -9,123,028. -89,649,543. -98,772,571.6
reduction by shareholders 26 43
1) Total comprehensive income
2) Investment or decreasing of
capital by shareholders
3) Amount of shares paid and
accounted as shareholders’
equity
4) Others -9,123,028. -89,649,543. -98,772,571.6
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2016 Annual Report
26 43
-2,800,000.0
(3) Profit allotment -2,800,000.00
1) Providing of surplus reserves
2) Providing of common risk
provisions
3) Allotment to the owners (or -2,800,000.0
-2,800,000.00
shareholders)
4) Others
(4) Internal transferring of
shareholders’ equity
1) Capitalizing of capital
reserves (or to capital shares)
2) Capitalizing of surplus
reserves (or to capital shares)
3) Making up losses by surplus
reserves.
4) Others
(5) Special reserve
14,426,41
1) Provided this term 14,426,417.80
7.80
2) Used this term 14,426,41 14,426,417.80
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2016 Annual Report
7.80
(6) Other
1,156,399,9 1,674,270,9 11,329,76 -592,773,5 8,430,996.2 2,269,976,041
4. Balance at the end of this term 12,317,916.44
76.00 87.60 0.39 94.89 7 .81
Legal representative: Superintendent responsible for accounting: Superintendent for accountancy firm:
Statement on Changes in Shareholders' Equity of Parent Company
January-December 2016
Prepared by: SHANGHAI CHLOR-ALKAL CHEMICAL CO.,LTD
Unit: Yuan Currency: RMB
Current period
Other equity instruments Other Total
Item Share Capital Less: Shares in Special Surplus Attributabl
Preferre Sustainabl Comprehens shareholder
capital Others reserve stock reserve reserves e profit
d stock e debt ive Income s' equity
1,156,399,9 1,690,068,6 11,329,760. -614,936,50 2,254,206,87
1.Balance at the end of last year 11,345,002.84
76.00 38.82 39 6.51 1.54
Add: Change of accounting
policy
Correcting of previous errors
Others
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2016 Annual Report
2.Balance at the beginning of this 1,156,399,9 1,690,068,6 11,329,760. -614,936,50 2,254,206,87
11,345,002.84
year 76.00 38.82 39 6.51 1.54
3. Increase/decrease at this term -320,466,34 -324,096,197
-3,629,853.56
(for decrease, fill in \"-\") 3.92 .48
(1) Total Comprehensive -320,466,34 -324,096,197
-3,629,853.56
Income 3.92 .48
(2) Capital injection and
reduction by shareholders
1) Total comprehensive income
2) Investment or decreasing of
capital by shareholders
3) Amount of shares paid and
accounted as shareholders’
equity
4) Others
(3) Profit allotment
1) Providing of surplus reserves
2) Allotment to the owners (or
shareholders)
3) Others
(4) Internal transferring of
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2016 Annual Report
shareholders’ equity
1) Capitalizing of capital
reserves (or to capital shares)
2) Capitalizing of surplus
reserves (or to capital shares)
3) Making up losses by surplus
reserves.
4) Others
(5) Special reserve
13,368,608. 13,368,608.5
1) Provided this term
56
13,368,608. 13,368,608.5
2) Used this term
56
(6) Other
1,156,399,9 1,690,068,6 11,329,760. -935,402,85 1,930,110,67
4. Balance at the end of this term 7,715,149.28
76.00 38.82 39 0.43 4.06
Previous period
Other equity instruments Less: Other Total
Item Share Capital Special Surplus Attributable
Preferre Sustainab Other Shares in Comprehensiv shareholde
capital reserve reserve reserves profit
d stock le debt s stock e Income rs' equity
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2016 Annual Report
1,156,399,97 1,690,068, 11,329,76 -757,961,08 2,100,793,2
1.Balance at the end of last year 955,919.02
6.00 638.82 0.39 6.06 08.17
Add: Change of accounting policy
Correcting of previous errors
Others
1,156,399,97 1,690,068, 11,329,76 -757,961,08 2,100,793,2
2.Balance at the beginning of this year 955,919.02
6.00 638.82 0.39 6.06 08.17
3. Increase/decrease at this term (for 143,024,57 153,413,66
10,389,083.82
decrease, fill in \"-\") 9.55 3.37
143,024,57 153,413,66
(1) Total Comprehensive Income 10,389,083.82
9.55 3.37
(2) Capital injection and reduction by
shareholders
1) Total comprehensive income
2) Investment or decreasing of capital by
shareholders
3) Amount of shares paid and accounted as
shareholders’ equity
4) Others
(3) Profit allotment
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2016 Annual Report
1) Providing of surplus reserves
2) Allotment to the owners (or shareholders)
3) Others
(4) Internal transferring of shareholders’
equity
1) Capitalizing of capital reserves (or to
capital shares)
2) Capitalizing of surplus reserves (or to
capital shares)
3) Making up losses by surplus reserves.
4) Others
(5) Special reserve
14,426,4 14,426,417.
1) Provided this term
17.80
14,426,4 14,426,417.
2) Used this term
17.80
(6) Other
1,156,399,97 1,690,068, 11,329,76 -614,936,50 2,254,206,8
4. Balance at the end of this term 11,345,002.84
6.00 638.82 0.39 6.51 71.54
Legal representative: Superintendent responsible for accounting: Superintendent for accountancy firm:
94 / 95
2016 Annual Report
Section XII Documents For Reference
1.Financial statements signed and stamped by legal representative,principal in charge of accounting,CFO and head of accounting
Documents for reference
department;
Documents for reference 2.The original auditor's report stamped by the public accounting firm and signed and stamped by the certified public accountant;
Documents for reference 3.Articles of Association of Shanghai Chlor-Alkali Co.,Ltd. during the report period;
4.The formal version of all files and originials of the announcements disclosed in the newspapers appointed by China Securities
Documents for reference
Regulatory Commission during the report period;
5.The company shall furnish the above documents for reference while China Securities Regulatory Commission and the stock exchange
Documents for reference request to 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 :
Presenting date approved by the Board of Directors
March 30,2017
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