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SECURITIES AND EXCHANGE COMMISSION

Washington D.C. 20549

 

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FORM 6-K

 

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REPORT OF FOREIGN PRIVATE ISSUER

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

THE SECURITIES EXCHANGE ACT OF 1934

For the month of April 2007

Commission File Number: 1-12158

 

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Sinopec Shanghai Petrochemical Company Limited

(Translation of registrant’s name into English)

 

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Jinshanwei, Shanghai

The People’s Republic of China

(Address of principal executive offices)

 

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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

 

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SINOPEC SHANGHAI PETROCHEMICAL COMPANY LIMITED

Form 6-K

TABLE OF CONTENTS

 

		Page
Signature Page		3
Board Resolutions, dated April 26, 2007		4
First Quarterly Report of 2007, dated April 26, 2007		6

 

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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.

 

		SINOPEC SHANGHAI PETROCHEMICAL COMPANY LIMITED
Date: April 27, 2007		By:		/s/ Rong Guangdao
		Name:		Rong Guangdao
		Title:		Chairman

 

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

(Stock Code: 338)

Resolutions of the 19th Meeting of the Fifth Session of the Board of Directors

 

The directors were informed on the convening of the 19th meeting of the fifth session of the board of directors of Sinopec Shanghai Petrochemical Company Limited (the “Company”) (the “Meeting”) via facsimile and mail on 12 April 2007. The Meeting was held on 26 April 2007 by means of correspondence. Of the 12 directors entitled to attend the Meeting, 12 of them attended the Meeting. Supervisory Committee members and the senior management of the Company attended the Meeting. The Meeting complied with the requirements of the PRC Company Law and the articles of association of the Company. Mr. Rong Guangdao, Chairman of the Company, presided over the Meeting. The Meeting considered and approved the following resolutions:

 

Resolution  1

The 2007 first quarterly report; the authorization given to the secretary to the board of directors (the “Board”) to submit the report to the Shanghai Stock Exchange, The Stock Exchange of Hong Kong Limited and the New York Stock Exchange; and the announcement of the first quarterly report after 4:15 p.m. on 26 April 2007 and the publication of the report in designated newspapers of Hong Kong and Shanghai on 27 April 2007 were considered and approved (with 12 votes in favor, 0 vote against, 0 abstention);

Compared to the first quarter of 2006, the crude oil processing cost of the Group decreased in the first quarter of 2007. Meanwhile, the selling prices of most products increased. Accordingly, there was a significant growth in its overall 2007 first quarterly results as compared to the same period last year. The Board estimates that under the PRC Accounting Rules and Regulations, the net profit of the Group for the six months ending 30 June 2007 will turn from a net loss to a net profit as compared to same period last year (for the six months ended 30 June 2006, the net profit of the Group in accordance with the PRC Accounting Rules and Regulations was RMB-27,560).

 

Resolution  2

The submission of the 20-F to the Securities and Exchange Commission of the USA and the submission of the relevant information in respect of the Board meeting to the New York Stock Exchange were considered and approved (with 12 votes in favor, 0 vote against, 0 abstention);

 

Resolution  3

The amendments to the accounting policies and adjustments to the accounting estimates of the Company were considered and approved (with 12 votes in favor, 0 vote against, 0 abstention);

Pursuant to relevant regulations including the “Accounting Standards for Enterprises” announced by the PRC Ministry of Finance on 15 February 2006 and with reference to the actual situation of the Company, the Company has amended its existing major accounting policies as the basis and principles of the Company’s accounting work.

 

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Resolution  4

The amendment to the relevant article of the Articles of Association of the Company was considered and approved (with 12 votes in favor, 0 vote against, 0 abstention);

Details of the resolution are as follows:

Article 12 of the Articles of Association stipulates that:

“The Company’s scope of business shall be based on the projects approved by the Company’s registration authorities.

The Company’s scope of business includes: crude oil processing, oil products, petrochemical products, synthetic fibres and monomers, plastics and plastic products, raw materials and products for knitting, catalyst preparation and spent solvent reclamation, supply of electricity, heat energy, water and gas, water processing, loading and unloading on railways, river transport, terminals, storage, design, research and development, “Four Technologies” services.”

The article is proposed to be amended as follows:

“The Company’s scope of business shall be based on the projects approved by the Company’s registration authorities.

The Company’s scope of business includes: crude oil processing, oil products, petrochemical products, synthetic fibres and monomers, plastics and plastic products, raw materials and products for knitting, catalyst preparation and spent solvent reclamation, supply of electricity, heat energy, water and gas, water processing, loading and unloading on railways, river transport, terminals, storage, design, research and development, “Four Technologies” services, property management, leasing, education, media, advertisement production, advertisement publication.”

 

Resolution  5

2006 Annual General Meeting to be held at 9:00a.m. at Pine City Hotel, 8 Dongan Road, Shanghai on 19 June 2007 was considered and approved (with 12 votes in favor, 0 vote against, 0 abstention).

The notice of Annual General Meeting will be published later.

 

Resolution  6

The mandate to authorise the President to sell, when the opportunity arises, no more than 50% of the shares of Shanghai Pudong Development Bank Co., Ltd. (“Pudong Development Bank”) held by the Company within year 2007 was approved (with 12 votes in favor, 0 vote against, 0 abstention).

The Company holds an aggregate of 20,485,075 shares in Pudong Development Bank with a book value of RMB15,000,000. Such shares represent 0.52% of the total share capital of Pudong Development Bank and will become available for listing and circulation by May 2007.

Sinopec Shanghai Petrochemical Company Limited

Shanghai, the PRC, 26 April 2007

As at the date of this announcement, the executive directors of the Company are Rong Guangdao, Du Chongjun, Han Zhihao, Shi Wei, Li Honggen and Dai Jinbao; the non-executive directors of the Company are Lei Dianwu and Xiang Hanyin, and the independent non-executive directors of the Company are Chen Xinyuan, Sun Chiping, Jiang Zhiquan and Zhou Yunnong.

 

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`

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

(Stock Code: 338)

2007 First Quarterly Report

 

 

1	IMPORTANT INFORMATION

 

1.1

The Board of Directors (the “Board”) and Supervisory Committee of Sinopec Shanghai Petrochemical Company Limited (the “Company” or “SPC”) as well as its directors, supervisors, senior management warrant that there are no material omissions from, or misrepresentation or misleading statement contained in 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 statements of the Company’s first quarterly report have not been audited.

 

1.4

Mr. Rong Guangdao, Chairman and President of the Company, Mr. Han Zhihao, Director and Chief Financial Officer overseeing the accounting operations and Mr. Hua Xin, Finance Manager (Accounting Chief) in charge of the Accounting Department make representations in respect of the truthfulness and completeness of the financial statements contained in this quarterly report.

 

2	BASIC INFORMATION OF THE COMPANY

 

2.1	Major Accounting Data and Financial Indicators

Currency: RMB

 

		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 (‘000)		29,594,453		28,098,679		5.32
Shareholders’ equity (excluding minority interests) (‘000)		20,478,109		19,412,895		5.49
Net assets value per share (RMB)		2.844		2.696		5.49

 

		From the beginning of the year to the end of the reporting period		Increase/ (decrease) as compared to the same period of the previous year (%)
Net cash flow from operating activities (‘000)		785,219		—
Net cash flow per share from operating activities (RMB)		0.109		—

 

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		The reporting period		From the beginning of the year to the end of the reporting period		Increase/ (decrease) as compared to the same period of the previous year (%)
Net profit attributable to equity shareholders of the company (‘000)		1,065,214		1,065,214		—
Basic earnings per share (RMB)		0.148		0.148		—
Diluted earnings per share (RMB)		0.148		0.148		—
Return on net assets (%)		5.202		5.202		Increase 6.013 percentage points
Return on net assets excluding non-recurring items (%)		5.327		5.327		Increase 6.170 percentage points

 

Non-recurring items		From the beginning of the year to the end of the reporting period
		(‘000)
Loss on disposal of long-term equity investments		-7,659
Non-operating expenses (excluding normal provisions on assets provided in accordance with PRC Accounting Standard for Business Enterprises)		-26,466
Reversal of the impairment provisions on assets which had been provided in prior years		49
Non-operating income		3,996
Income tax effect		4,512
Total		-25,568

 

2.2	Number of shareholders at the end of the reporting period and top ten shareholders (share segregation reform not yet completed)

Unit: share

 

Number of shareholders at the end of the reporting period (unit)		107,002

Top ten holders of shares in circulation

 

Name of Shareholder (in full)		Number of shares in circulation held at end of the reporting period		Type of shares
HKSCC (Nominees) Ltd.		1,925,543,401		Overseas listed foreign shares
Hong Kong & Shanghai Banking Corporation (Nominees) Limited		356,774,000		Overseas listed foreign shares
China Construction Bank—Bosera Thematic Sector Equity Securities Investment Fund		12,000,000		RMB-denominated ordinary shares
Industrial and Commercial Bank of China—Zhonghai Energy Strategy Securities Investment Fund		11,685,501		RMB-denominated ordinary shares
Inner Monogolia Chuang-Xin Asset Management Company Limited ( )		10,418,710		RMB-denominated ordinary shares
HKSCC (Nominees) Limited		10,402,000		Overseas listed foreign shares

 

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Name of Shareholder (in full)		Number of shares in circulation held at end of the reporting period		Type of shares
Goldman Sachs Assets Management International—China Fund, Goldman Sachs International		8,219,300		RMB-denominated ordinary shares
China Merchants Bank Co., Ltd.—Shang Zheng Hong Li JiaoYi Xing Kai Fang Shi Securities Investment Fund		6,484,948		RMB-denominated ordinary shares
Industrial and Commercial Bank of China—Shang Zheng 50 Jiao Yi Xing Kao Fang Shi Index Securities Investment Fund		6,452,815		RMB-denominated ordinary shares
Yu-Yang Securities Investment Fund		6,000,000		RMB-denominated ordinary shares

 

3	IMPORTANT ITEM

 

3.1	Situation and reasons for the significant changes in the items of accounting statements, financial indicators of the Company

Unit: RMB’000

 

Item		For the three months ended of 31 March					Increase/ decrease amount		Change		Reasons for change
		2007		2006
									(%)
Operating profit/(losses)		1,261,486		(109,600	)		1,371,086		—		A decrease of the cost of crude oil processing and an increase of the prices of the major products as compared to the corresponding period of the previous year
Total profit/(losses)		1,239,016		(126,901	)		1,365,917		—
Net profit/(losses)		1,078,490		(136,172	)		1,214,662		—
Investment income		225,662		105,371			120,291		114.16		Investment gain from Shanghai Secco Petrochemical Company Limited increased substantially

 

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Unit: RMB’000

 

Item		31 March 2007		31 December 2006		Increase/ decrease amount		Change		Reasons for change
								(%)
Bills receivable		1,738,163		1,273,233		464,930		36.52		Mainly due to a relatively large decrease in discount amount for bills
Construction in progress		1,249,021		2,009,797		-760,776		-37.85		Mainly due to the completion and commencement of the 380,000 tons/year ethylene glycol project and leading to a transfer of this item into fixed assets
Trade creditors		2,195,870		1,510,688		685,182		45.36		Mainly due to an increase in amounts payable for crude oil purchases

 

3.2	Reason for the projection of possible losses in accumulated net profit for the period of the beginning of the year to the next reporting period or the warning for possible significant changes as compared to the same period of the previous year.

During the first quarter of 2007, the Group’s crude oil processing cost reported a decrease as compared to the same period of the previous year, while the prices of major products increased as compared to the same period of the previous year. Accordingly, the 2007 first quarterly results reported a substantial growth over the same period of the previous year and it is expected that the Group’s overall results for the period ending 30 June 2007 will turn from a loss to a profit.

 

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Appendix

Balance Sheet

31 March 2007

RMB’000 (Unaudited)

		The Group				The Company
Item		At the end of the period		At the Beginning of the year		At the end of the period		At the Beginning of the year
Current assets
Cash at bank and in hand		1,038,792		894,650		628,192		551,693
Bills receivable		1,738,163		1,273,233		1,384,528		980,026
Trade debtors		826,917		624,890		498,018		347,630
Advance payments		287,127		350,895		255,007		328,882
Dividend receivable		274,293		—		267,479		—
Other debtors		137,587		236,227		234,912		241,935
Inventories		4,874,668		4,163,256		4,331,826		3,584,431
Total current assets		9,177,547		7,543,151		7,599,962		6,034,597
Non-current assets
Available-for-sale financial assets		81,119		81,119		66,994		66,994
Long-term equity investments		3,490,259		3,536,402		5,387,456		5,514,488
Investment property		508,101		501,904		580,517		584,248
Fixed assets		14,286,585		13,606,924		12,685,073		11,842,516
Construction in progress		1,249,021		2,009,797		1,244,459		2,006,055
Intangible assets		599,798		605,719		488,988		496,160
Long-term deferred expenses		173,540		185,180		165,841		176,213
Deferred tax assets		28,483		28,483		28,483		28,483
Total non-current assets		20,416,906		20,555,528		20,647,811		20,715,157
Total assets		29,594,453		28,098,679		28,247,773		26,749,754
Liabilities and Shareholder’s equity
Current liabilities
Short-term loans		1,494,801		1,853,692		1,174,801		1,618,692
Bills payable		149,210		42,726		132,790		1,141
Trade creditors		2,195,870		1,510,688		1,530,040		879,972
Receipts in advance		309,282		403,620		232,444		373,774
Employee benefits		106,372		89,458		53,550		39,800
Taxes payable		231,850		269,498		231,870		271,382
Interest payable		43,741		26,386		41,003		26,386
Other payables		487,870		397,382		849,980		604,183
Short-term bonds payable		2,000,000		2,000,000		2,000,000		2,000,000
Current portion of non-current liabilities		432,644		416,645		403,644		383,034
Total current liabilities		7,451,640		7,010,095		6,650,122		6,198,364
Non-current liabilities
Long-term loans		1,039,944		1,063,654		850,000		873,710
Deferred tax liabilities		24,333		24,672		22,648		22,987
Other non-current liabilities		248,850		251,350		248,850		251,350
Total non-current liabilities		1,313,127		1,339,676		1,121,498		1,148,047
Total liabilities		8,764,767		8,349,771		7,771,620		7,346,411
Shareholders’ equity
Share capital		7,200,000		7,200,000		7,200,000		7,200,000

 

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		The Group				The Company
Item		At the end of the period		At the Beginning of the year		At the end of the period		At the Beginning of the year
Capital reserves		2,967,556		2,967,556		2,958,004		2,958,004
Less: Treasury shares
Surplus reserves		4,610,707		4,610,707		4,610,707		4,610,707
Undistributed profits (including dividend declared after the balance sheet date of RMB288,000,000 (2005: RMB720,000,000))		5,699,846		4,634,632		5,707,442		4,634,632
Total equity attributable to equity shareholders of the company		20,478,109		19,412,895		—		—
Minority interests		351,577		336,013		—		—
Total shareholder’s equity		20,829,686		19,748,908		20,476,153		19,403,343
Total liabilities and shareholder’s equity		29,594,453		28,098,679		28,247,773		26,749,754

Income Statements

January to March 2007

RMB’000 (Unaudited)

		The Group						The Company
Item		The reporting period			Corresponding period of the previous year			The reporting period		Corresponding period of the previous year
Operating income		12,844,301			11,532,711			11,425,748		10,533,829
Less: Cost of sales		11,123,462			11,119,760			9,814,781		10,274,213
Sales taxes and surcharges		184,368			164,019			181,851		159,144
Selling expenses		112,775			138,010			88,332		109,056
Administrative expenses		336,900			287,785			291,936		233,754
Financial expenses		51,021			38,108			42,774		27,869
Asset impairment losses		(49	)		—			—		—
Add: Investment income		225,662			105,371			230,565		139,565
Including: Investment income from associates and joint ventures		233,321			79,842			228,742		77,996
Operating profit/(losses)		1,261,486			(109,600	)		1,236,639		(130,642	)
Add: Non-operating income		3,996			9,026			3,002		648
Including: Income from disposal of non-current assets		16			1,181			—		576
Less: Non-operating expenses		26,466			26,327			18,358		21,768
Including: Net loss from disposal of non-current assets		5,091			803			3,623		—
Total profit/(losses)		1,239,016			(126,901	)		1,221,283		(151,762	)
Less: Income tax		160,526			9,271			148,473		378
Net profit/(losses)		1,078,490			(136,172	)		1,072,810		(152,140	)
Net profit/(losses) attributable to equity shareholders of the company		1,065,214			(152,140	)		1,072,810		(152,140	)
Minority interests		13,276			15,968			—		—
		1,078,490			(136,172	)		1,072,810		(152,140	)
Earnings per share
(a) Basic earnings per share		0.148			-0.021			0.149		-0.021
(b) Diluted earnings per share		0.148			-0.021			0.149		-0.021

 

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Note:

Effective from 1 January 2007, the Company implemented the Accounting Standard for Business Enterprises (the “New Accounting Standards”) announced by the Ministry of Finance in 2006. The Company has made retrospective adjustments for the accounting policy changes (mainly the capitalisation of ordinary borrowing costs) caused by the implementation of the New Accounting Standards. The retrospective adjustments led to a RMB2.143 million decrease in the Company’s net loss attributable to equity shareholders of the parent company for the three months ended 31 March 2006.

Cash Flow Statements

January to March 2007

RMB’000 (Unaudited)

		The Group						The Company
Item		The reporting period			Corresponding period of the previous year			The reporting period			Corresponding period of the previous year
Cash flows from operating activities
Cash received from sale of goods and rendering of service		14,367,290			13,212,128			12,660,917			11,958,580
Refund of taxes and levies		5,362			3,226			—			—
Other cash received relating to operating activities		15,928			32,177			13,755			29,491
Sub-total of cash inflows		14,388,580			13,247,531			12,674,672			11,988,071
Cash paid for goods and services		(12,831,488	)		(13,302,398	)		(11,214,278	)		(12,106,800	)
Cash paid to and on behalf of employees		(372,424	)		(448,138	)		(313,994	)		(317,015	)
Tax paid		(329,836	)		(202,003	)		(313,198	)		(173,275	)
Other cash paid relating to operating activities		(69,613	)		(71,342	)		(54,583	)		(55,550	)
Sub-total of cash outflows		(13,603,361	)		(14,023,881	)		(11,896,053	)		(12,652,640	)
Net cash flows from operating activities		785,219			(776,350	)		778,619			(664,569	)
Cash flows from investing activities
Cash received from disposal of investments		4,188			183,557			4,188			144,400
Cash received from investment income		2,142			—			1,824			80,001
Cash received from disposal of fixed assets, intangible assets and other long-term fixed assets		32,292			21,113			1,446			971
Other cash received relating to investing activities		7,266			17,707			3,496			12,853
Sub-total of cash inflows		45,888			222,377			10,954			238,225
Cash paid for acquisition of fixed assets, intangible assets and other long-term fixed assets		(266,422	)		(322,099	)		(221,163	)		(298,962	)
Sub-total of cash outflows		(266,422	)		(322,099	)		(221,163	)		(298,962	)
Net cash flows from investing activities		(220,534	)		(99,722	)		(210,209	)		(60,737	)
Cash flows from financing activities
Proceeds from borrowings		3,284,649			3,901,115			3,150,446			3,779,674
Proceeds from issuance of corporate bonds (excluding issue expenses)		—			973,800			—			973,800
Sub-total of cash inflows		3,284,649			4,874,915			3,150,446			4,753,474
Repayment of borrowings		(3,651,251	)		(4,297,494	)		(3,597,437	)		(4,248,289	)
Cash paid for interest		(53,092	)		(79,836	)		(44,906	)		(77,149	)
Sub-total of cash outflows		(3,704,343	)		(4,377,330	)		(3,642,343	)		(4,325,438	)
Net cash flows from financing activities		(419,694	)		497,585			(491,897	)		428,036

 

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		The Group						The Company
Item		The reporting period			Corresponding period of the previous year			The reporting period			Corresponding period of the previous year
Effect of foreign exchange rate changes		(849	)		(475	)		(14	)		(3	)
Net increase/(decrease) in cash and cash equivalents		144,142			(378,962	)		76,499			(297,273	)
Add: Balance at cash and cash equivalents as at the beginning of the period		894,650			1,347,237			551,693			821,564
Balance of cash and cash equivalents as at the end of the period		1,038,792			968,275			628,192			524,291
Supplementary Information
1. Reconciliation of net profit/(losses) to cash flow from operating activities
Net profit/(losses)		1,065,214			(152,140	)		1,072,810			(152,140	)
Minority interests		13,276			15,968			—			—
Provision for bad debts		(49	)		3,703			—			—
Fixed asset depreciation		415,886			466,849			350,666			380,837
Amortization of intangible assets		5,122			3,363			3,286			3,363
Amortization of long-term deferred expenses		19,794			—			18,552			—
Loss/(income) on disposal of fixed assets		5,075			(378	)		3,623			(576	)
Financial expenses		62,969			65,319			53,527			54,987
Income from investments		(225,662	)		(105,371	)		(230,565	)		(139,565	)
(Increase)/decrease in deferred tax liabilities		(339	)		378			(339	)		378
Increase in inventories		(711,412	)		(412,456	)		(747,395	)		(466,758	)
Increase in operating receivables		(525,113	)		(418,094	)		(492,349	)		(314,668	)
Increase/(decrease) in operating payables		660,458			(243,491	)		746,803			(30,427	)
Net cash flows from operating activities		785,219			(776,350	)		778,619			(664,569	)
2. Net changes in cash and cash equivalents
Cash and cash equivalents at the end of the period		1,038,792			968,275			628,192			524,291
Less: cash and cash equivalents at the beginning of the period		894,650			1,347,237			551,693			821,564
Net increase/(decrease) in cash and cash equivalents		144,142			(378,962	)		76,499			(297,273	)

By order of the Board

Rong Guangdao

Chairman

Shanghai, the PRC, 26 April 2007

As at the date of this announcement, the executive directors of the Company are Rong Guangdao, Du Chongjun, Han Zhihao, Shi Wei, Li Honggen and Dai Jinbao; the non-executive directors of the Company are Lei Dianwu and Xiang Hanyin, and the independent non-executive directors of the Company are Chen Xinyuan, Sun Chiping, Jiang Zhiquan and Zhou Yunnong.

 

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