Edgar Filing: SINOPEC SHANGHAI PETROCHEMICAL CO LTD

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Form 6-K

SECURITIES AND EXCHANGE COMMISSION

Washington D.C. 20549

FORM 6-K

REPORT OF FOREIGN PRIVATE ISSUER

PURSUANT TO RULE 13a-16 OR 15d-16 UNDER

THE SECURITIES EXCHANGE ACT OF 1934

For the month of May 2012

Commission File Number: 1-12158

Sinopec Shanghai Petrochemical Company Limited

(Translation of registrant’s name into English)

Jinshanwei, Shanghai

The People’s Republic of China

(Address of principal executive offices)

Indicate by check mark whether the registrant files or will file annual reports under cover Form 20-F or Form 40-F.

Form 20-F x Form 40-F ¨

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1): ¨

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): ¨

Indicate by check mark whether by furnishing the information contained in this Form, the registrant is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.

Yes ¨ No x

If “Yes” is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b): 82- Not Applicable

SINOPEC SHANGHAI PETROCHEMICAL COMPANY LIMITED

Form 6-K

TABLE OF CONTENTS


	Page

Signature Page		3

Supplementary Explanation to the 2011 Annual Report		4

2012 First Quarterly Report		7

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

S Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take no responsibility for the contents of this announcement, make no representation as to its accuracy or completeness and expressly disclaim any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this announcement.

LOGO

(A joint stock limited company incorporated in the People’s Republic of China)

(Stock Code: 00338)

Supplementary Explanation to the 2011 Annual Report

The Company and all members of the board of directors warrant that the information contained in this announcement is truthful, accurate and complete, and jointly accept full responsibility for any false representations or misleading statements contained in, or material omissions from, this announcement.

This announcement is made pursuant to Rule 13.09(1) and (2) of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited (the “Hong Kong Listing Rules”).

Sinopec Shanghai Petrochemical Company Limited (the “Company”) has recently noticed the concerns from several investors that in the section “Major Events” of its 2011 annual report relating to the “Major Connected Transactions Involving Purchases and Sales of Goods and Services” (see the table below), the total raw materials purchased by the Company from China International United Petroleum & Chemicals Co., Ltd. and other related parties amounted to approximately RMB47,800 million, which exceeded the annual cap of 2011 (i.e. RMB47,300 million) on the purchases of raw materials by the Company from China Petroleum and Chemical Corporation (“Sinopec Corp.”) and its associates as considered and approved at the 2010 extraordinary general meeting of the Company held on 28 December 2010.

Unit: RMB’000


Type of transactions	Related parties	Amount		Percentage of the total amount of this type of transaction (%)
Income from sales of products and services income	Sinopec Huadong Sales Company Limited		36,585,798		38.29

	Other related parties		16,696,923		17.44

Purchases	China International United Petroleum & Chemical Co., Ltd.		31,569,944		39.95

	Other related parties		16,238,905		20.55

Sales commission	Sinopec Corp. Chemical Products Sales Branch		195,606		100.00

Insurance premiums for petrochemical industry	Sinopec and its subsidiaries		115,910		79.37

Construction and installation cost	Sinopec and its subsidiaries		286,023		38.17

It is hereby explained as below:

“Other related parties” stated in the above table refer to related parties of the Company as defined in Note 2 (27) to the 2011 financial statements of the Company prepared under the China Accounting Standards for Business Enterprises issued by the Ministry of Finance of the People’s Republic of China, and in Note 1 (y) to the 2011 financial statements of the Company prepared under the International Financial Reporting Standards. Such “other related parties” included, among others, the associates and jointly controlled entities of the Company (such as Shanghai Jinsen Hydrocarbon Resins Co., Ltd., BOC-SPC Gases Co., Ltd., etc.). According to the definitions of “related party” under the Listing Rules of the Shanghai Stock Exchange (the “Shanghai Listing Rules”) and of “connected person” under the Hong Kong Listing Rules, the above associates and jointly controlled entities of the Company are not related parties of the Company as defined under the Shanghai Listing Rules, and are not regarded as Sinopec Corp.’s associates as defined under the Hong Kong Listing Rules. The amounts of transactions with “Other related parties” in the above table mainly comprises those between the Company and its above associates and jointly controlled entities as well as between the Company and Sinopec Corp.’s associates.

Please refer to the following table for the amounts of continuing (routine) connected transactions set out separately between the Company and Sinopec Corp.’s associates and Non-Sinopec Corp.’s associates during 2011:

Unit: RMB’000


Type of transactions	Related parties	Amount		Percentage of the total amount of this type of transaction (%)

Income from sales of products and services income	Sinopec Huadong Sales Company Limited		36,585,798		38.29

	Other Sinopec Corp.’s associates		15,680,097		16.39


	Subtotal from Sinopec Corp. and its associates		52,265,895		54.68

	Non-Sinopec Corp.’s associates		1,016,826		1.05

Purchases	China International United Petroleum & Chemical Co., Ltd		31,569,944		39.95

	Other Sinopec Corp.’s associates		15,536,972		19.66


	Subtotal from Sinopec Corp. and its associates		47,106,916		59.61

	Non-Sinopec Corp.’s associates		701,933		0.89

Sales commission	Sinopec Corp. Chemical Products		195,606		100.00

Insurance premiums for petrochemical industry	Sinopec and its subsidiaries		115,910		79.37

Construction and installation cost	Sinopec and its subsidiaries		286,023		38.17

The audit committee of the board of directors of the Company (the “Board”) and the Board have confirmed that the amounts of continuing (routine) connected transactions of the Company incurred in 2011 did not exceed the annual caps of 2011 as considered and approved at the 2010 extraordinary general meeting of the Company. KPMG, the auditor of the Company, also issued to the Board an auditor’s letter in respect of the continuing (routine) connected transactions of the Company during 2011. For details of the letter, please refer to the section “Major Events” of the 2011 annual report of the Company.

Sinopec Shanghai Petrochemical Company Limited

Shanghai, the PRC, 27 April 2012

As at the date of this announcement, the executive Directors of the Company are Rong Guangdao, Wang Zhiqing, Wu Haijun, Li Honggen, Shi Wei and Ye Guohua; the non-executive directors of the Company are Lei Dianwu and Xiang Hanyin, and the independent non-executive directors of the Company are Shen Liqiang, Jin Mingda, Wang Yongshou and Cai Tingji.

Hong Kong Exchanges and Clearing Limited and the Stock Exchange of Hong Kong Limited take no responsibility for the contents of this announcement, make no representation as to its accuracy or completeness and expressly disclaim any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this announcement.

LOGO

(A joint stock limited company incorporated in the People’s Republic of China)

(Stock Code: 00338)

2012 First Quarterly Report

This report is published simultaneously in Shanghai and Hong Kong. This report is published pursuant to the Rules Governing the Listing of Stocks on Shanghai Stock Exchange in the People’s Republic of China and is made pursuant to the disclosure obligations under Rules 13.09(1) and (2) of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited.

§1	IMPORTANT MESSAGE

1.1

The Board of Directors (the “Board”) and the Supervisory Committee of Sinopec Shanghai Petrochemical Company Limited (the “Company”) as well as its directors, supervisors and senior management warrant that there are no false representations or misleading statements contained in, or material omissions from, this report, and severally and jointly accept full responsibility for the truthfulness, accuracy and completeness of the information contained in this report.

1.2	All of the Company’s directors attended the Board meeting.

1.3	The financial report of the Company for the three-month period ended 31 March 2012 (the “Reporting Period”) was unaudited.

1.4

Mr. Rong Guangdao, Chairman of the Board and the responsible person of the Company, Mr. Ye Guohua, Director and Chief Financial Officer overseeing the accounting operations and Mr. Hua Xin, Deputy Chief Financial Officer and person- in-charge of Accounting Department (accountant in charge) hereby warrant the truthfulness and completeness of the financial report contained in this quarterly report.

§2	BASIC INFORMATION OF THE COMPANY

2.1

Major Accounting Data and Financial Indicators


	As at the end of the Reporting Period		As at the end of the previous year		Increase/(decrease) as compared to the end of the previous year (%)
Total assets (RMB’000)		35,554,256		31,110,085		14.29
Total equity attributable to equity shareholders of the Company (RMB’000)		17,948,961		18,112,483		–0.90
Net asset value per share attributable to equity shareholders of the Company (RMB)		2.493		2.516		–0.90


	From the beginning of the year to the end of the Reporting Period		Increase/(decrease) as compared to the corresponding period of the previous year (%)
Net cash outflow from operating activities (RMB’000)		–2,767,881		184.60
Net cash outflow per share from operating activities (RMB)		–0.384		184.60

The
Reporting
Period

From the
beginning of
the year to
the end of
the reporting
period

Increase/(decrease)
as compared to
the corresponding
period of the
previous year (%)

Net loss attributable to equity shareholders of the Company (RMB’000)

–190,122

–120.86

Basic loss per share (RMB)

–0.026

–120.86

Basic loss per share excluding non-recurring items (RMB)

–0.026

–120.60

Diluted loss per share (RMB)

–0.026

–120.86

Return on net assets (weighted average) (%)

–1.054

Decreased by 6.014
percentage points

Return on net assets based on net loss excluding non-recurring items (weighted average) (%)

–1.048

Decreased by 6.038
percentage points

Non-recurring items and amount:

RMB’000


Item	Amount
Net gain on disposal of non-current assets		1,149
Employee reduction expenses		–2,510
Government grants recorded in profit and loss (except for government grants under the State’s unified standards on quota and amount entitlements and closely related to corporate business)		1,356
Income from external entrusted loans		529
Other non-operating income and expenses other than those mentioned above		–3,632
Income tax effect		2,259
Effect attributable to minority interests (after tax)		–336

Total		–1,185

2.2

Total Number of Shareholders as at the End of the Reporting Period and Shareholding of the Top Ten Shareholders of Shares in Circulation

Unit: Share


Total number of shareholders as at the end of the Reporting Period				109,629

Shareholding of the top ten shareholders of shares in circulation
Name of shareholders (in full)	Number of shares in circulation held as at the end of the Reporting Period		Type of shares
HKSCC (Nominees) Ltd.		2,294,284,101		Overseas listed foreign shares
China Construction Bank – CIFM China Advantage Fund （中國建設銀行－上投摩根中國優勢證券投資基金）		69,836,385		RMB-denominated ordinary shares
ICBC – SWS MU New Economics Mixed Fund （中國工商銀行－申萬菱信新經濟混合型證券投資基金）		20,818,257		RMB-denominated ordinary shares
China Life Insurance Company Limited – Bonus – Individual Bonus – 005L – FH002 Shanghai （中國人壽保險股份有限公司－分紅－個人分紅-005L-FH002 滬）		14,166,204		RMB-denominated ordinary shares
China Life Insurance Company Limited – Traditional – Ordinary Insurance Product – 005L – CT001 Shanghai （中國人壽保險股份有限公司－傳統－普通保險產品-005L-CT001滬）		12,408,194		RMB-denominated ordinary shares
IP KOW		5,432,000		Overseas listed foreign shares
Agricultural Bank of China Limited – New China Selected Growth Stock Fund （中國農業銀行股份有限公司－新華優選成長股票型證券投資基金）		4,518,720		RMB-denominated ordinary shares
Industrial and Commercial Bank of China Limited – Harvest Theme New Power Stock Fund （中國工商銀行股份有限公司－嘉實主題新動力股票型證券投資基金		3,367,193		RMB-denominated ordinary shares
China Merchants Bank Co., Limited – Fortis Haitong Surging Return Mixed Type Fund （招商銀行股份有限公司－海富通強化回報混合型證券投資基金）		3,029,933		RMB-denominated ordinary shares
Zhang Xinming		2,976,068		RMB-denominated ordinary shares

§3	MAJOR EVENTS

3.1

Description of Substantial Changes in Financial Report Items and Financial Indicators of the Company

RMB’000


Item	As at 31 March 2012		As at 31 December 2011		Increase/ (decrease) amount		Change (%)		Major reason for change
Inventories		9,354,831		5,582,425		3,772,406		67.58	The purchase of crude oil at the end of the Reporting Period increased, and the price of raw materials increased significantly during the Reporting Period.
Total current assets		13,755,649		9,665,814		4,089,835		42.31	Balance of inventories at the end of the Reporting Period increased significantly.
Short-term loans		9,331,599		5,512,074		3,819,525		69.29	The Company borrowed short-term loans to replenish the working capital during the Reporting Period.
Total current liabilities		16,755,302		12,271,832		4,483,470		36.53	Balance of loans and borrowings at the end of the Reporting Period increased significantly.
Total liabilities		17,328,112		12,727,501		4,600,611		36.15

RMB’000

Item

For the three-month
period ended
31 March

Increase/
decrease
amount

Change
(%)

Major reason for change

2012

2011

Operating profit (“–” represents loss)

–243,210

1,199,671

–1,442,881

–120.27

Profit before income tax (“–” represents loss)

–250,471

1,193,146

–1,443,617

–120.99

Net profit for the period (“–” represents loss)

–183,614

914,778

–1,098,392

–120.07

Gross profit of sales decreased during the Reporting Period.

Net profit attributable to equity shareholders of the Company (“–” represents loss)

–190,122

911,610

–1,101,732

–120.86

Financial expenses

37,376

7,825

29,551

377.65

Interest on loans and borrowings increased.

Impairment losses (“–” represents reversals)

–1,560

184,726

–186,286

–100.84

Provision for diminution in value of inventories decreased significantly during the Reporting Period.

Investment income

32,012

97,471

–65,459

–67.16

Net profit of associates decreased during the Reporting Period.

Income tax expense

–66,857

278,368

–345,225

–124.02

Operating results decreased substantially.

3.2

Warning and Explanation on Projection of a Possible Loss or Material Year-on-year Change in Operating Results from the Beginning of the Year to the End of the Next Reporting Period

Since 2012, international crude oil prices have remained at a high level, resulting in a significant increase in the production costs of the Company and its subsidiaries (the “Group”). In addition, domestic prices of refined oil products were not adjusted in an adequate and timely manner during the Reporting Period. The market for petrochemical products remained weak despite a slight pickup, together with intensified competition within the industry. Thereby the Group recorded net loss attributable to equity shareholders of the Company for the first quarter of 2012. The Company forecasted that the Group’s net profit attributable to equity shareholders of the Company for the six-month period ending 30 June 2012 would have a substantial decrease as compared to the corresponding period of the previous year.

3.3

Implementation of Dividend Policy during the Reporting Period

The 2011 profit distribution plan was considered and approved at the fifth meeting of the seventh session of the Board held on 29 March 2012. Based on the total share capital of 7.2 billion shares as at 31 December 2011, a dividend of RMB0.50 (tax inclusive) per 10 shares shall be distributed subject to the approval by the 2011 annual general meeting of the Company.

§4	APPENDIx

4.1

Consolidated Balance Sheet (Unaudited)

As at 31 March 2012

Unit: RMB’000


Item	31 March 2012		31 December 2011
	(Unaudited)		(Audited)
Current assets:
Cash at bank and on hand		294,343		91,346
Bills receivable		2,792,761		3,131,579
Accounts receivable		711,093		609,906
Prepayments		430,455		43,160
Other receivables		63,522		46,994
Inventories		9,354,831		5,582,425
Other current assets		108,644		160,404


Total current assets		13,755,649		9,665,814


Non-current assets:
Long-term equity investments		3,125,778		3,101,305
Investment properties		449,242		452,555
Fixed assets		12,247,801		12,659,332
Construction in progress		4,593,256		3,882,992
Intangible assets		511,316		519,198
Long-term deferred expenses		275,498		306,052
Deferred tax assets		595,716		522,837


Total non-current assets		21,798,607		21,444,271


Total assets		35,554,256		31,110,085

Consolidated Balance Sheet (Unaudited) (Cont’d)

As at 31 March 2012

Unit: RMB’000


Item	31 March 2012		31 December 2011
	(Unaudited)		(Audited)
Current liabilities:
Short-term loans		9,331,599		5,512,074
Bills payable		—		15,688
Accounts payable		5,335,270		4,650,007
Advances from customers		575,951		706,835
Employee benefits payable		62,650		46,140
Taxes payable		629,910		507,938
Interest payable		24,440		9,442
Dividends payable		21,734		22,599
Other payables		773,748		801,109


Total current liabilities		16,755,302		12,271,832


Non-current liabilities:
Long-term loans		256,340		160,050
Other non-current liabilities		316,470		295,619


Total non-current liabilities		572,810		455,669


Total liabilities		17,328,112		12,727,501


Shareholders’ equity:
Share capital		7,200,000		7,200,000
Capital reserve		2,914,763		2,914,763
Specific reserve		48,377		21,777
Surplus reserve		5,151,770		5,151,770
Retained earnings		2,634,051		2,824,173

Total equity attributable to equity shareholders of the Company		17,948,961		18,112,483

Minority interests		277,183		270,101

Total equity		18,226,144		18,382,584


Total liabilities and shareholders’ equity		35,554,256		31,110,085

Balance Sheet (Unaudited)

As at 31 March 2012

Unit: RMB’000


Item	31 March 2012		31 December 2011
	(Unaudited)		(Audited)
Current assets:
Cash at bank and on hand		239,191		61,057
Bills receivable		2,664,402		2,941,248
Accounts receivable		351,429		538,149
Prepayments		424,867		51,583
Other receivables		23,194		10,592
Inventories		8,965,242		5,281,885
Other current assets		23,168		55,921


Total current assets		12,691,493		8,940,435


Non-current assets:
Long-term equity investments		4,126,279		4,105,694
Investment properties		449,242		452,555
Fixed assets		11,753,603		12,136,472
Construction in progress		4,522,486		3,812,222
Intangible assets		416,129		419,387
Long-term deferred expenses		275,498		306,052
Deferred tax assets		595,423		522,544


Total non-current assets		22,138,660		21,754,926


Total assets		34,830,153		30,695,361

Balance Sheet (Unaudited) (Cont’d)

As at 31 March 2012

Unit: RMB’000


Item	31 March 2012		31 December 2011
	(Unaudited)		(Audited)
Current liabilities:
Short-term loans		9,332,899		5,526,574
Bills payable		—		15,688
Accounts payable		4,831,677		4,377,765
Advances from customers		536,394		674,368
Employee benefits payable		57,992		41,506
Taxes payable		623,334		481,854
Interest payable		24,440		9,434
Dividends payable		21,655		22,599
Other payables		1,177,615		1,256,888
Non-current liabilities due within one year		45,000		45,000


Total current liabilities		16,651,006		12,451,676


Non-current liabilities:
Long-term loans		225,000		135,000
Other non-current liabilities		316,470		295,619


Total non-current liabilities		541,470		430,619


Total liabilities		17,192,476		12,882,295


Shareholders’ equity:
Share capital		7,200,000		7,200,000
Capital reserve		2,914,763		2,914,763
Specific reserve		38,025		14,272
Surplus reserve		5,151,770		5,151,770
Retained earnings		2,333,119		2,532,261


Total equity		17,637,677		17,813,066


Total liabilities and shareholders’ equity		34,830,153		30,695,361

4.2

Consolidated Income Statement (Unaudited)

For the three-month period ended 31 March 2012

Unit: RMB’000


Item			2012		2011
			(Unaudited)		(Unaudited)
Operating income				23,550,221		24,633,858
Less:	Operating costs			21,649,053		20,882,563
	Business taxes and surcharges			1,429,399		1,612,892
	Selling and distribution expenses			164,565		164,120
	General and administrative expenses			546,610		679,532
	Financial expenses			37,376		7,825
	Impairment losses (“–” represents reversals)			–1,560		184,726
Add:	Investment income			32,012		97,471
	Including: Income from investment in associates and jointly controlled enterprises			25,878		97,471
Operating profit (“–” represents loss)				–243,210		1,199,671
Add:	Non-operating income			4,997		4,259
Less:	Non-operating expenses			12,258		10,784
	Including: Losses from disposal of non-current assets			4,989		3,708
Profit before income tax (“–” represents loss)				–250,471		1,193,146
Less: Income tax expense				–66,857		278,368
Net profit for the period (“–” represents loss)				–183,614		914,778
Attributable to:		Equity shareholders of the Company (“–” represents loss)		–190,122		911,610
		Minority shareholders		6,508		3,168
Earnings per share:
Basic and diluted earnings per share (“–” represents loss) (RMB)				–0.026		0.127
Other comprehensive income				—		—

Total comprehensive income (“–” represents loss)				–183,614		914,778

Attributable to:		Equity shareholders of the Company (“–” represents loss)		–190,122		911,610
		Minority shareholders		6,508		3,168

Income Statement (Unaudited)

For the three-month period ended 31 March 2012

Unit: RMB’000


Item	2012		2011
	(Unaudited)		(Unaudited)
Operating income		20,171,979		20,698,979
Less: Operating costs		18,338,832		16,995,596
Business taxes and surcharges		1,428,324		1,610,848
Selling and distribution expenses		141,623		141,622
General and administrative expenses		510,376		646,787
Financial expenses		37,569		14,276
Impairment losses (“–” represents reversals)		–100		184,726
Add: Investment income		20,585		83,236
Including: Income from investment in associates and jointly controlled enterprises		20,585		83,236
Operating profit (“–” represents loss)		–264,060		1,188,360
Add: Non-operating income		4,295		3,933
Less: Non-operating expenses		12,256		10,784
Including: Losses from disposal of non-current assets		4,989		3,708
Profit before income tax (“–” represents loss)		–272,021		1,181,509
Less: Income tax expense		–72,879		274,848
Net profit for the period (“–” represents loss)		–199,142		906,661
Other comprehensive income		—		—

Total comprehensive income (“–” represents loss)		–199,142		906,661

4.3

Consolidated Cash Flow Statement (Unaudited)

For the three-month period ended 31 March 2012

Unit: RMB’000


Item	2012		2011
	(Unaudited)		(Unaudited)
Cash flows from operating activities:
Cash received from sale of goods and rendering of services		27,749,310		27,822,950
Refund of taxes		12,941		—
Other cash received relating to operating activities		25,844		1,439

Sub-total of cash inflows		27,788,095		27,824,389

Cash paid for goods and services		–28,261,164		–25,404,298
Cash paid to and for employees		–533,349		–442,190
Cash paid for all types of taxes		–1,605,283		–2,822,231
Other cash paid relating to operating activities		–156,180		–128,214

Sub-total of cash outflows		–30,555,976		–28,796,933

Net cash outflow from operating activities		–2,767,881		–972,544

Cash flows from investing activities:
Cash received from disposal of investments		16,000		14,000
Cash received from investment income		2,841		—
Net cash received from disposal of fixed assets		1,258		—
Cash received relating to other investing activities		27,541		18,575

Sub-total of cash inflows		47,640		32,575

Cash paid for acquisition of fixed assets and other long-term assets		–928,471		–316,377
Cash paid for disposal of fixed assets		—		–150

Sub-total of cash outflows		–928,471		–316,527

Net cash outflow from investing activities		–880,831		–283,952

Consolidated Cash Flow Statement (Unaudited) (Cont’d)

For the three-month period ended 31 March 2012

Unit: RMB’000


Item	2012		2011
	(Unaudited)		(Unaudited)
Cash flows from financing activities:
Cash received from borrowings		12,761,471		9,716,363

Sub-total of cash inflows		12,761,471		9,716,363

Cash repayments of borrowings		–8,819,302		–8,241,089
Cash paid for dividends, profits distribution and interest		–90,495		–48,151

Sub-total of cash outflows		–8,909,797		–8,289,240

Net cash inflow from financing activities		3,851,674		1,427,123

Effect of foreign exchange rate changes on cash and cash equivalents		35		–129

Net increase in cash and cash equivalents		202,997		170,498

Add: Cash and cash equivalents at the beginning of the period		91,346		100,110
Cash and cash equivalents at the end of the period		294,343		270,608

Cash Flow Statement (Unaudited)

For the three-month period ended 31 March 2012

Unit: RMB’000


Item	2012		2011
	(Unaudited)		(Unaudited)
Cash flows from operating activities:
Cash received from sale of goods and rendering of services		23,911,709		23,181,368
Other cash received relating to operating activities		25,142		780

Sub-total of cash inflows		23,936,851		23,182,148

Cash paid for goods and services		–24,499,738		–20,902,020
Cash paid to and for employees		–498,309		–409,248
Cash paid for all types of taxes		–1,551,045		–2,751,532
Other cash paid relating to operating activities		–139,390		–93,971

Sub-total of cash outflows		–26,688,482		–24,156,771

Net cash outflow from operating activities		–2,751,631		–974,623

Cash flows from investing activities:
Net cash received from disposal of fixed assets		1,256		—
Cash received relating to other investing activities		24,991		15,914

Sub-total of cash inflows		26,247		15,914

Cash paid for acquisition of fixed assets and other long-term assets		–922,336		–313,395
Cash paid for disposal of fixed assets		—		–150

Sub-total of cash outflows		–922,336		–313,545

Net cash outflow from investing activities		–896,089		–297,631

Cash Flow Statement (Unaudited) (Cont’d)

For the three-month period ended 31 March 2012

Unit: RMB’000


Item	2012		2011
	(Unaudited)		(Unaudited)
Cash flows from financing activities:
Cash received from borrowings		12,731,280		9,679,763

Sub-total of cash inflows		12,731,280		9,679,763

Cash repayments of borrowings		–8,818,060		–8,240,101
Cash paid for dividends, profits distribution and interest		–87,402		–47,516

Sub-total of cash outflows		–8,905,462		–8,287,617

Net cash inflow from financing activities		3,825,818		1,392,146

Effect of foreign exchange rate changes on cash and cash equivalents		36		–109

Net increase in cash and cash equivalents		178,134		119,783

Add: Cash and cash equivalents at the beginning of the period		61,057		89,224
Cash and cash equivalents at the end of the period		239,191		209,007

By Order of the Board

Rong Guangdao

Chairman

Shanghai, the PRC, 27 April 2012

As at the date of this report, the executive directors of the Company are Rong Guangdao, Wang Zhiqing, Wu Haijun, Li Honggen, Shi Wei and Ye Guohua; the non-executive directors of the Company are Lei Dianwu and Xiang Hanyin, and the independent non-executive directors of the Company are Shen Liqiang, Jin Mingda, Wang Yongshou and Cai Tingji.

SINOPEC SHANGHAI PETROCHEMICAL COMPANY LIMITED

Date: May 7, 2012

/s/ Wang Zhiqing

Wang Zhiqing