Exhibit 99.1

SHANGHAI SECCO PETROCHEMICAL COMPANY LIMITED

FINANCIAL STATEMENTS

FOR THE YEARS ENDED 31 DECEMBER 2018, 2019 AND 2020

AND REPORT OF INDEPENDENT AUDITOR

SHANGHAI SECCO PETROCHEMICAL COMPANY LIMITED

FINANCIAL STATEMENTS

FOR THE YEARS ENDED 31 DECEMBER 2018, 2019 AND 2020

AND REPORT OF INDEPENDENT AUDITOR

Report of Independent Auditor

2021/SH-0239

(Page 1/2)

To theBoard of Directors of Shanghai Secco Petrochemical Company Limited

We have audited the accompanying financial statements of Shanghai Secco Petrochemical Company Limited (the 'Company'), which comprise the balance sheets as of December 31, 2020 and 2019, and the related income statements, statements of changes in owners' equity and cash flows for the years then ended.

Management's Responsibility for the Financial Statements

Management is responsible for the preparation and fair presentation of the financial statements in accordance with the requirements of Accounting Standards for Business Enterprises in the People's Republic of China; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error.

Auditor's Responsibility

Our responsibility is to express an opinion on the financial statements based on our audits. We conducted our audits in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on our judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, we consider internal control relevant to the Company's preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

2021/SH-0239

(Page 2/2)

Opinion

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial positions of the Company as of December 31, 2020 and 2019, and the results of its operations and its cash flows for the years then ended in accordance with the requirements of Accounting Standards for Business Enterprises in the People's Republic of China.

Emphasis of Matter

Accounting Standards for Business Enterprises in the People's Republic of China vary in certain significant respects from accounting principles generally accepted in the United States of America. Information relating to the nature and effect of such differences is presented in Note 13 to the financial statements.

Other Matter

The accompanying income statement, statement of changes in equity and cash flow for the year ended December 31, 2018 are presented for purposes of complying with Rule 3-09 of SEC Regulation S-X; however, Rule 3-09 does not require the 2018 financial statements to be audited and they are, therefore, not covered by this report.

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SHANGHAI SECCO PETROCHEMICAL COMPANY LIMITED

BALANCE SHEETS

AS AT 31 DECEMBER 2019 AND 2020

(All amounts in RMB Yuan unless otherwise stated)

The accompanying notes form an integral part of these financial statements.

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SHANGHAI SECCO PETROCHEMICAL COMPANY LIMITED

INCOME STATEMENTS

FOR THE YEARS ENDED 31 DECEMBER 2018*, 2019 AND 2020

(All amounts in RMB Yuan unless otherwise stated)

The accompanying notes form an integral part of these financial statements.

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SHANGHAI SECCO PETROCHEMICAL COMPANY LIMITED

CASH FLOW STATEMENTS

FOR THE YEARS ENDED 31 DECEMBER 2018*, 2019 AND 2020

(All amounts in RMB Yuan unless otherwise stated)

The accompanying notes form an integral part of these financial statements.

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SHANGHAI SECCO PETROCHEMICAL COMPANY LIMITED

STATEMENTS OF CHANGES IN OWNERS' EQUITY

FOR THE YEARS ENDED 31 DECEMBER 2018*, 2019 AND 2020

(All amounts in RMB Yuan unless otherwise stated)

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SHANGHAI SECCO PETROCHEMICAL COMPANY LIMITED

STATEMENTS OF CHANGES IN OWNERS' EQUITY (CONTINUED)

FOR THE YEARS ENDED 31 DECEMBER 2018*, 2019 AND 2020

(All amounts in RMB Yuan unless otherwise stated)

The accompanying notes form an integral part of these financial statements.

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SHANGHAI SECCO PETROCHEMICAL COMPANY LIMITED

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEARS ENDED 31 DECEMBER 2018, 2019 AND 2020 (AMOUNTS FOR THE YEAR ENDED 31 DECEMBER 2018 ARE NOT COVERED BY THE INDEPENDENT AUDITOR'S REPORT INCLUDED HEREIN)

(All amounts in RMB Yuan unless otherwise stated)

Shanghai Secco Petrochemical Company Limited ('the Company') was a Sino-foreign equity joint venture established in Shanghai, the People's Republic of China ('the PRC') in 2001 by China Petroleum and Chemical Corporation ('Sinopec Corp.'), Sinopec Shanghai Petrochemical Company Limited ('SPC') and BP Chemicals East China Investments Limited ('BPCECIL'). The Company obtained an approval certificate (Wai Jing Mao Zi Shen Zi [2001] No. 0099 from the Ministry of Commerce (formerly Ministry of Foreign Trade and Economic Co-operation) on 13 September 2001, and a business license (Qi He Hu Zong Zi No. 029541 (Shi Ju)) on 29 October 2001 issued by the State Administration of Industry and Commerce of the PRC. The original registered capital and paid-in capital of the Company both were USD 901,440,964. Sinopec Corp., SPC and BPCECIL held 30%, 20% and 50% equity interest in the Company, respectively. The Company commenced its active operation on 31 March 2005, and the approved period of operation is 50 years.

On 24 October 2013 and 25 November 2013, Sinopec Corp., SPC and BPCECIL amended the Equity Joint Venture Contract and Articles of Association to progressively increase the registered capital of the Company from USD 901,440,964 to USD 1,051,526,582. The total increased registered capital would be contributed by Sinopec Corp., SPC and BPCECIL in proportion to their respective shareholding in the Company by instalments. In February 2014, the Company obtained a reply approval (Hu Shang Wai Zi Pi [2014] No. 292 Approval of Secco Petrochemical Company Limited Replenishment by Municipal Commission of Commerce) from Shanghai Municipal Commission of Commerce. On 17 March 2014, the Company obtained a business license (registration No. 310000400279832) issued by the State Administration of Industry and Commerce of the PRC.

In 2013 and 2014, the Company received paid-in capital contributed by Sinopec Corp., SPC and BPCECIL in proportion to their respective shareholding in the Company by instalments, totalling to USD 58,430,374 (equivalent to RMB 357,226,095).

On 27 April 2017, Sinopec Corp. and Sinopec Shanghai Gaoqiao Petrochemical Company Limited ('Gaoqiao Petrochemical') (subsidiary of Sinopec Corp.) entered into an agreement with BPCECIL, according to which Gaoqiao Petrochemical purchased 50% equity in the Company from BPCECIL. On 26 October 2017, the Company was transformed from a 'Sino-foreign joint venture' to an 'other limited liability corporation'.

As at 31 December 2020, the registered capital of the Company was USD 1,051,526,582 and the paid-in capital was USD 959,871,338 (equivalent to RMB 7,800,811,272)(31 December 2019: RMB 7,800,811,272). Among which, Sinopec Corp.'s contribution was USD 287,984,941 (equivalent to RMB 2,340,387,239), representing 30% of the paid-in capital of the Company; Gaoqiao Petrochemical's contribution was USD 479,896,436 (equivalent to RMB 3,900,165,871), representing 50% of the paid-in capital of the Company; SPC's contribution was USD 191,989,961 (equivalent to RMB 1,560,258,162), representing 20% of the paid-in capital of the Company.

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SHANGHAI SECCO PETROCHEMICAL COMPANY LIMITED

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEARS ENDED 31 DECEMBER 2018, 2019 AND 2020 (AMOUNTS FOR THE YEAR ENDED 31 DECEMBER 2018 ARE NOT COVERED BY THE INDEPENDENT AUDITOR'S REPORT INCLUDED HEREIN)

(All amounts in RMB Yuan unless otherwise stated)

The Company's approved scope of business operations mainly comprises the production of ethylene, polyethylene, styrene, polystyrene, propylene, acrylonitrile, polypropylene, butadiene, aromatic hydrocarbons and by-products; sales of these products and purchased raw materials; as well as provision of related after-sales services and technical consultation with respect to such main petrochemical products and by-products; it is also engaged in polymers application development and providing ancillary utilities engineering services to suppliers and processors.

These financial statements were approved for issue by the Company's responsible persons on 28 April 2021.

The financial statements are prepared in accordance with the Accounting Standards for Business Enterprises-Basic Standard, the specific accounting standards and other relevant regulations issued by the Ministry of Finance on 15 February 2006 and in subsequent periods (hereafter collectively referred to as 'the Accounting Standards for Business Enterprises' or 'CAS').

The financial statements are prepared on a going concern basis.

The financial statements of the Company for the years ended 31 December 2018, 2019 and 2020 are in compliance with the Accounting Standards for Business Enterprises, and truly and completely present the Company's financial position of the Company as at 31 December 2018, 2019 and 2020 and its financial performance, cash flows and other information for the years then ended.

The Company's accounting year starts on 1 January and ends on 31 December.

The Company's recording currency is Renminbi (RMB). The financial statements are presented in RMB.

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SHANGHAI SECCO PETROCHEMICAL COMPANY LIMITED

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEARS ENDED 31 DECEMBER 2018, 2019 AND 2020 (AMOUNTS FOR THE YEAR ENDED 31 DECEMBER 2018 ARE NOT COVERED BY THE INDEPENDENT AUDITOR'S REPORT INCLUDED HEREIN)

(All amounts in RMB Yuan unless otherwise stated)

Foreign currency transactions

Foreign currency transactions are translated into recording currency using the exchange rates prevailing at the dates of the transactions.

At the balance sheet date, monetary items denominated in foreign currencies are translated into recording currency using the spot exchange rates on the balance sheet date. Exchange differences arising from these translations are recognized in profit or loss for the current period, except for those attributable to foreign currency borrowings that have been taken out specifically for acquisition or construction of qualifying assets, which are capitalised as part of the cost of those assets. Non-monetary items denominated in foreign currencies that are measured at historical costs are translated at the balance sheet date using the spot exchange rates at the date of the transactions. The effect of exchange rate changes on cash is presented separately in the cash flow statement.

Cash and cash equivalents comprise cash on hand, deposits that can be readily drawn on demand, and short-term and highly liquid investments that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value.

A financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability or equity instrument of another entity. A financial asset or a financial liability is recognized when the Company becomes a party to the contractual provisions of the instrument.

Based on the business model for financial asset management and the contractual cash flow characteristics of financial assets, the Company classifies the financial assets as: (1) financial assets measured at amortized cost; (2) financial assets at fair value through other comprehensive income; (3) financial assets at fair value through profit or loss in the current period.

Financial assets are measured at fair value at initial recognition. For financial assets at fair value through profit and loss in the current period, the related transaction costs are directly recognized in profit or loss. For other financial assets, the related transaction costs are included in initially recognized amounts. Accounts receivable or notes receivable arising from sales of products or provision of services (excluding or without regard to significant financing components) are initially recognized at the consideration that is entitled to be charged by the Company as expected.

Debt instruments

Debt instruments held by the Company are instruments conform to the definition of financial liabilities from the perspective of the issuer, and are measured with the following three methods respectively:

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SHANGHAI SECCO PETROCHEMICAL COMPANY LIMITED

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEARS ENDED 31 DECEMBER 2018, 2019 AND 2020 (AMOUNTS FOR THE YEAR ENDED 31 DECEMBER 2018 ARE NOT COVERED BY THE INDEPENDENT AUDITOR'S REPORT INCLUDED HEREIN)

(All amounts in RMB Yuan unless otherwise stated)

Measured at amortized cost:

The Company's business model for financial asset management aims to receive contractual cash flows. The contractual cash flow characteristics of such financial assets are consistent with basic loan arrangement, which means the cash flow generated at certain date is only the payment for the principal and the corresponding interest based on unpaid principal. The interest income of such financial assets is recognized using the effective interest method. Such financial assets mainly comprise cash at bank and on hand, accounts receivables, other receivables and other current assets. Debt investments due within 1 year (inclusive) at the balance sheet date are included in the current portion of non-current assets; debt investments with maturities of no more than 1 year (inclusive) at acquisition are included in other current assets.

Measured at fair value and recorded into other comprehensive income:

The Company's business model for the financial asset management aims to receive contractual cash flows and hold the financial assets for sale. The contractual cash flow characteristics of such financial assets are consistent with basic loan arrangement. Such financial assets are measured at fair value through other comprehensive income. However, impairment losses or gains, exchange gains or losses and interest income calculated using the effective interest method are included in profit or loss in the current period. Such financial assets are presented as financial assets at fair value through other comprehensive income and other debt investments. Other debt investments due within 1 year (inclusive) at the balance sheet date are included in the current portion of non-current assets; other debt investments with maturities of no more than 1 year (inclusive) at acquisition are included in other current assets.

Measured at fair value and recorded in current profit and loss:

Debt instruments held by the Company that are not divided into those at amortized cost, or those measured at fair value through other comprehensive income are included in those measured at fair value through profit or loss. At initial recognition, the Company designates part of the financial assets as financial assets at fair value through profit or loss in the current period in order to eliminate or substantially reduce accounting mismatch. Financial assets with maturities over 1 year and expected to be held over 1 year at the balance sheet date are presented as other non-current financial assets, others are presented as financial assets at fair value through profit or loss.

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SHANGHAI SECCO PETROCHEMICAL COMPANY LIMITED

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEARS ENDED 31 DECEMBER 2018, 2019 AND 2020 (AMOUNTS FOR THE YEAR ENDED 31 DECEMBER 2018 ARE NOT COVERED BY THE INDEPENDENT AUDITOR'S REPORT INCLUDED HEREIN)

(All amounts in RMB Yuan unless otherwise stated)

For the financial assets measured at amortized cost, calculated at fair value and listed at other comprehensive profit, the Company recognizes the loss provision based on the expected credit losses.

The Company calculates and confirms expected credit losses, taking into account reasonable and well-founded information on past events, current conditions and projections of future economic conditions.

On each balance sheet date, the Company measures the expected credit losses of financial instruments at different stages. Financial instruments that have no significant increase in credit risk since the initial recognition are classified into 'Stage 1', and the Company measures the loss provision based on the expected credit losses in the following 12 months; financial instruments that have a significant increase in credit risk but with no credit impairment since the initial recognition are classified into 'Stage 2', and the Company measures the loss provision according to the lifetime expected credit losses; financial instruments that suffer credit impairment since the initial recognition are classified into 'Stage 3', and the Company measures the loss provision according to the lifetime expected credit losses.

For financial instruments with lower credit risk on the balance sheet date, the Company assumes that its credit risk has not increased significantly since the initial recognition, and measures the loss according to the expected credit losses in the next 12 months.

For financial instruments in Stage1 and Stage 2 and with low credit risk, interest income is calculated based on carrying amount without deduction of impairment provision and the actual effective interest rate. For financial instruments in Stage 3, interest income is calculated based on amortized cost by using carrying amount less impairment provision appropriated and the actual effective interest rate.

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SHANGHAI SECCO PETROCHEMICAL COMPANY LIMITED

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEARS ENDED 31 DECEMBER 2018, 2019 AND 2020 (AMOUNTS FOR THE YEAR ENDED 31 DECEMBER 2018 ARE NOT COVERED BY THE INDEPENDENT AUDITOR'S REPORT INCLUDED HEREIN)

(All amounts in RMB Yuan unless otherwise stated)

For notes receivables, accounts receivables, and financial assets at fair value through other comprehensive income resulted from operating activities, such as sales of goods or rendering of services, regardless of whether exists the significant financing component, the Company measures the loss provision according to the lifetime expected credit losses.

When a single financial asset is unable to assess the expected credit loss at a reasonable cost, the Company divides the receivables into several portfolios based on the characteristics of credit risk and calculates the expected credit loss on the basis of the portfolio.

For receivables based on portfolio and notes receivables and financial assets at fair value through other comprehensive income resulted from operating activities, such as sales of goods or rendering of services, the expected credit loss is calculated by default risk exposure and the expected credit loss rate in the whole life period, based on historical experience of credit loss, the current situation and forecast of future economic situation. For other receivables, the expected credit loss is calculated by default risk exposure and the expected credit loss rate in the next 12 months or the whole life period, based on historical experience of credit loss, the current situation and forecast of future economic situation.

The Company recognizes the losses from provision or reversal into the current profit or loss. For debt instruments at fair value through other comprehensive income, the Company adjusts other comprehensive income when impairment losses or gains are included in profit or loss in the current period.

Financial assets are derecognized when meet one of the following situations: (1) the right to receive cash flows has been ceased; (2) financial assests have been transferred and the Company has transferred substantially all the risks and rewards of ownership; (3) financial assets have been transferred. Although the Company neither transfers nor retains nearly all the risks and rewards in the ownership of the financial asset, it has relinquished control over the financial asset.

When the investment of other equity instruments is recognized after termination, the difference between the book value and the consideration received and the accumulated amount of the fair value change directly included in other comprehensive income shall be recorded into retained earnings.When the remaining financial assets are recognized, the difference between their book value and the sum of the consideration they received and the accumulated amount of the fair value change directly recorded in other comprehensive income shall be recorded into the current profit and loss.

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SHANGHAI SECCO PETROCHEMICAL COMPANY LIMITED

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEARS ENDED 31 DECEMBER 2018, 2019 AND 2020 (AMOUNTS FOR THE YEAR ENDED 31 DECEMBER 2018 ARE NOT COVERED BY THE INDEPENDENT AUDITOR'S REPORT INCLUDED HEREIN)

(All amounts in RMB Yuan unless otherwise stated)

Financial liabilities are classified into financial liabilities measured at amortized cost and financial liabilities at fair value through profit or loss.

The Company's financial liabilities are mainly financial liabilities measured at amortized cost, including accounts payables, and other payables, borrowings, etc. Such financial liabilities are recognized initially at fair value, net of transaction costs incurred, and subsequently measured using the effective interest method. Such financial liabilities with maturities no more than one year are classified as current liabilities. Other financial liabilities with maturities over one year but are due within one year at the balance sheet date are classified as the current portion of non-current liabilities. Others are classified as non-current liabilities.

A financial liability is derecognized or partly derecognized when the underlying present obligation is discharged or partly discharged. The difference between the carrying amount of the derecognized part of the financial liability and the consideration paid is recognized in profit or loss for the current period.

The fair value of a financial instrument that is traded in an active market is determined at the quoted price in the active market. The fair value of a financial instrument that is not traded in an active market is determined by using a valuation technique. The Company adopts valuation technique that is applicable in the current period and featured with enough data and other information to support valuation outcomes. In the process of valuation, the Company prefers inputs that come from assets and liabilities which have the similar character with the market participant's assets and liabilities and makes the maximum use of observable inputs. Unobservable inputs can be utilized when relevant observable inputs cannot be obtained or obtained inputs are not feasible. When relevant observable inputs are unavailable or infeasible, unobservable inputs are adopted.

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SHANGHAI SECCO PETROCHEMICAL COMPANY LIMITED

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEARS ENDED 31 DECEMBER 2018, 2019 AND 2020 (AMOUNTS FOR THE YEAR ENDED 31 DECEMBER 2018 ARE NOT COVERED BY THE INDEPENDENT AUDITOR'S REPORT INCLUDED HEREIN)

(All amounts in RMB Yuan unless otherwise stated)

Inventories include raw materials, work in progress and finished goods, and are measured at the lower of cost and net realizable value.

Cost is determined using the weighted average method. The cost of finished goods and semi-finished products comprise raw materials, direct labor and systematically allocated production overhead based on the normal production capacity. Turnover materials include low value consumables and packaging materials, and are expensed when issued.

Provision for decline in the value of inventories is determined at the excess amount of the carrying amounts of the inventories over their net realizable value. Net realizable value is determined based on the estimated selling price in the ordinary course of business, less the estimated costs to completion and estimated costs necessary to make the sale and related taxes.

The Company adopts the perpetual inventory system.

Fixed assets comprise buildings, machinery and equipment, motor vehicles, office and other equipment. Fixed assets purchased or constructed by the Company are initially measured at cost at the time of acquisition.

Subsequent expenditures incurred for a fixed asset are included in the cost of the fixed asset when it is probable that the associated economic benefits will flow to the Company and the related cost can be reliably measured. The carrying amount of the replaced part is derecognized. All the other subsequent expenditures are recognized in profit or loss for the period in which they are incurred.

Fixed assets are depreciated using the straight-line method to allocate the cost of the assets to their estimated residual values over their estimated useful lives. For the fixed assets that have been provided for impairment loss, the related depreciation charge is prospectively determined based upon the adjusted carrying amounts over their remaining useful lives.

The estimated useful lives, the estimated net residual values expressed as a percentage of cost and the annual depreciation rates of fixed assets are as follows:

The estimated useful life and the estimated net residual value of a fixed asset and the depreciation method applied to the asset are reviewed, and adjusted as appropriate at each year-end.

A fixed asset is derecognized on disposal or when no future economic benefits are expected from its use or disposal. The amount of proceeds from disposals on sale, transfer, retirement or damage of a fixed asset net of its carrying amount and related taxes and expenses is recognized in profit or loss for the current period.

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SHANGHAI SECCO PETROCHEMICAL COMPANY LIMITED

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEARS ENDED 31 DECEMBER 2018, 2019 AND 2020 (AMOUNTS FOR THE YEAR ENDED 31 DECEMBER 2018 ARE NOT COVERED BY THE INDEPENDENT AUDITOR'S REPORT INCLUDED HEREIN)

(All amounts in RMB Yuan unless otherwise stated)

Construction in progress is measured at actual cost. Actual cost comprises construction costs, installation costs, borrowing costs that are eligible for capitalisation and other costs necessary to bring the fixed assets ready for their intended use. Construction in progress is transferred to fixed assets when the assets are ready for their intended use, and depreciation is charged starting from the following month.

Intangible assets include land use rights, patent rights and computer software systems, and are measured at cost.

Land use rights are amortized on the straight-line basis over their approved use period of 47 years. If the acquisition costs of the land use rights and the buildings located thereon cannot be reasonably allocated between the land use rights and the buildings, all of the acquisition costs are recognized as fixed assets.

Patents are amortized on a straight-line basis over the patent protection period of 10 years as stipulated by the laws.

Computer software systems are amortized on the straight-line basis over the estimated useful lives.

For an intangible asset with a finite useful life, review of its useful life and amortisation method is performed at each year-end, with adjustment made as appropriate.

The expenditure on an internal research and development project is classified into expenditure on the research phase and expenditure on the development phase based on its nature and whether there is material uncertainty that the research and development activities can form an intangible asset at the end of the project.

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SHANGHAI SECCO PETROCHEMICAL COMPANY LIMITED

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEARS ENDED 31 DECEMBER 2018, 2019 AND 2020 (AMOUNTS FOR THE YEAR ENDED 31 DECEMBER 2018 ARE NOT COVERED BY THE INDEPENDENT AUDITOR'S REPORT INCLUDED HEREIN)

(All amounts in RMB Yuan unless otherwise stated)

Expenditure on the research phase is recognized in profit or loss in the period in which it is incurred. Expenditure on the development phase is capitalized only if all of the following conditions are satisfied:

Other development expenditures that do not meet the conditions above are recognized in profit or loss in the period in which they are incurred. Development costs previously recognized as expenses are not recognized as an asset in a subsequent period. Capitalized expenditure on the development phase is presented as development costs in the balance sheet and transferred to intangible assets at the date that the asset is ready for its intended use.

Long-term prepaid expenses mainly include the catalyst expenditures that have been incurred but should be recognized as expenses over more than one year in the current and subsequent periods. Long-term prepaid expenses are amortized on the straight-line basis over the expected beneficial period and are presented at actual expenditure net of accumulated amortisation.

Catalysts are amortized on the straight-line basis over their useful lives of 1.5 to 10 years.

Fixed assets, construction in progress and intangible assets with finite useful lives, are tested for impairment if there is any indication that an asset may be impaired at the balance date, and intangible assets not ready for their intended use are tested at least annually for impairment, irrespective of whether there is any indication that they may be impaired. If the result of the impairment test indicates that the recoverable amount of an asset is less than its carrying amount, a provision for impairment and an impairment loss are recognized for the amount by which the asset's carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset's fair value less costs to sell and the present value of the future cash flows expected to be derived from the asset. Provision for asset impairment is determined and recognized on the individual asset basis. If it is not possible to estimate the recoverable amount of an individual asset, the recoverable amount of a group of assets to which the asset belongs is determined. A group of assets is the smallest group of assets that is able to generate independent cash inflows.

Once the above asset impairment loss is recognized, it will not be reversed for the value recovered in the subsequent periods.

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SHANGHAI SECCO PETROCHEMICAL COMPANY LIMITED

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEARS ENDED 31 DECEMBER 2018, 2019 AND 2020 (AMOUNTS FOR THE YEAR ENDED 31 DECEMBER 2018 ARE NOT COVERED BY THE INDEPENDENT AUDITOR'S REPORT INCLUDED HEREIN)

(All amounts in RMB Yuan unless otherwise stated)

The borrowing costs that are directly attributable to the acquisition and construction of a fixed asset that needs a substantially long period of time for its intended use commence to be capitalised and recorded as part of the cost of the asset when expenditures for the asset and borrowing costs have been incurred, and the activities relating to the acquisition and construction that are necessary to prepare the asset for its intended use have commenced. The capitalisation of borrowing costs ceases when the asset under acquisition or construction becomes ready for its intended use and the borrowing costs incurred thereafter are recognized in profit or loss for the current period. Capitalisation of borrowing costs is suspended during periods in which the acquisition or construction of a fixed asset is interrupted abnormally and the interruption lasts for more than 3 months, until the acquisition or construction is resumed.

Employee benefits refer to all forms of consideration or compensation given by the Company in exchange for service rendered by employees or for termination of employment relationship, which include short-term employee benefits, post-employment benefits, termination benefits and other long-term employee benefits.

Short-term employee benefits include employee wages or salaries, bonus, allowances and subsidies, staff welfare, premiums or contributions on medical insurance, work injury insurance and maternity insurance, housing funds, union running costs and employee education costs. The short-term employee benefits actually occurred are recognized as a liability in the accounting period in which the service is rendered by the employees, with a corresponding charge to the profit or loss for the current period or the cost of relevant assets. Non-monetary benefits are measured at fair value.

The Company classifies post-employment benefit plans as either defined contribution plans or defined benefit plans. Defined contribution plans are post-employment benefit plans under which the Company pays fixed contributions into a separate fund and will have no obligation to pay further contributions; and defined benefit plans are post-employment benefit plans other than defined contribution plans. During the reporting period, the Company's post-employment benefits mainly include the premiums or contributions on basic pensions and unemployment insurance, both of which belong to defined contribution plans.

Basic pensions

The Company's employees participate in the basic pension plan set up and administered by local authorities of Ministry of Human Resource and Social Security. Monthly payments of premiums on the basic pensions are calculated according to prescribed bases and percentages by relevant local authorities. When employees retire, the relevant local authorities are obliged to pay the basic pensions to them. The amounts based on the above calculations are recognized as liabilities in the accounting period in which the service has been rendered by the employees, with a corresponding charge to the profit or loss for the current period or the cost of relevant assets.

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SHANGHAI SECCO PETROCHEMICAL COMPANY LIMITED

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEARS ENDED 31 DECEMBER 2018, 2019 AND 2020 (AMOUNTS FOR THE YEAR ENDED 31 DECEMBER 2018 ARE NOT COVERED BY THE INDEPENDENT AUDITOR'S REPORT INCLUDED HEREIN)

(All amounts in RMB Yuan unless otherwise stated)

The Company provides compensation for terminating the employment relationship with employees before the end of the employment contracts or as an offer to encourage employees to accept voluntary redundancy before the end of the employment contracts. The Company recognises a liability arising from compensation for termination of the employment relationship with employees, with a corresponding charge to profit or loss for the current period at the earlier of the following dates: 1) when the Company cannot unilaterally withdraw an employment termination plan or a curtailment proposal; 2) when the Company recognises costs or expenses for a restructuring that involves the payment of termination benefits.

The termination benefits expected to be settled within one year since the balance sheet date are classified as current liabilities.

Provisions for product warranties and onerous contracts, are recognized when the Company has a present obligation, it is probable that an outflow of economic benefits will be required to settle the obligation, and the amount of the obligation can be measured reliably.

A provision is initially measured at the best estimate of the expenditure required to settle the related present obligation. Factors surrounding a contingency, such as the risks, uncertainties and the time value of money, are taken into account as a whole in reaching the best estimate of a provision. Where the effect of the time value of money is material, the best estimate is determined by discounting the related future cash outflows. The increase in the discounted amount of the provision arising from passage of time is recognized as interest expense.

The carrying amount of provisions is reviewed at each balance sheet date and adjusted to reflect the current best estimate.

The provisions expected to be settled within one year since the balance sheet date are classified as current liabilities.

Deferred tax assets and deferred tax liabilities are calculated and recognized based on the differences arising between the tax bases of assets and liabilities and their carrying amounts (temporary differences). Deferred tax asset is recognized for the deductible losses that can be carried forward to subsequent years for deduction of the taxable profit in accordance with the tax laws. No deferred tax liability is recognized for a temporary difference arising from the initial recognition of goodwill. No deferred tax asset or deferred tax liability is recognized for the temporary differences resulting from the initial recognition of assets or liabilities due to a transaction other than a business combination, which affects neither accounting profit nor taxable profit (or deductible loss). At the balance sheet date, deferred tax assets and deferred tax liabilities are measured at the tax rates that are expected to apply to the period when the asset is realized or the liability is settled.

Deferred tax assets are only recognized for deductible temporary differences, deductible losses and tax credits to the extent that it is probable that taxable profit will be available in the future against which the deductible temporary differences, deductible losses and tax credits can be utilized.

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SHANGHAI SECCO PETROCHEMICAL COMPANY LIMITED

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEARS ENDED 31 DECEMBER 2018, 2019 AND 2020 (AMOUNTS FOR THE YEAR ENDED 31 DECEMBER 2018 ARE NOT COVERED BY THE INDEPENDENT AUDITOR'S REPORT INCLUDED HEREIN)

(All amounts in RMB Yuan unless otherwise stated)

Deferred tax assets and liabilities are offset when:

According to the decision of the State Council on Further Strengthing the work of production safety (Guofa No.2 2004), Shanghai Municipal Government to implement the State Council on Further Strengthening corporate safety work notice (Hufufa No.35 2010) and Safe production costs extraction and use of management practices (Caiqi No.16 2012) issued by the Ministry of Finance and the national production safety supervision administration on 2 February 2012, The Company extracted safety production costs in a certain percentage of sales revenue from the dangerous goods in previous year, which is used for safety costs.

The safety production costs, accrued in accordance with the above regulations, shall be charged in relevant costs or profit and loss, and in the specific reserve. Safety production costs, which belong to expenses, directly offset the special reserves. If the costs formed into fixed assets, the special reserves shall be offset according to the cost forming into fixed assets, and recognize the same amount of accumulated depreciation. This fixed asset shall no longer accrue depreciation in the following period.

The Company shall, when the customer acquires control over the relevant goods or services, recognize the income at the amount of consideration to which it is expected to be entitled.

Sales of goods

The Company manufactures and sells ethylene, polyethylene, styrene, polystyrene, propylene, acrylonitrile, polypropylene, butadiene, aromatic hydrocarbons and other chemical products and plastic raw materials to distributors. Sales are recognized when control of the products has transferred, being when the products are delivered to and accepted by the customer. The Company delivers the products to the specific location in accordance with the sales contract, and recognized as revenues when the customer confirms receipt of the products. Revenue excludes value added tax and is after deduction of any estimated trade discounts.

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SHANGHAI SECCO PETROCHEMICAL COMPANY LIMITED

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEARS ENDED 31 DECEMBER 2018, 2019 AND 2020 (AMOUNTS FOR THE YEAR ENDED 31 DECEMBER 2018 ARE NOT COVERED BY THE INDEPENDENT AUDITOR'S REPORT INCLUDED HEREIN)

(All amounts in RMB Yuan unless otherwise stated)

Government grants refer to the monetary or non-monetary assets obtained by the Company from the government, including tax return and financial subsidy.

Government grants are recognized when the grants can be received and the Company can comply with all attached conditions. If a government grant is a monetary asset, it will be measured at the amount received or receivable. If a government grant is a non-monetary asset, it will be measured at its fair value. If it is unable to obtain its fair value reliably, it will be measured at its nominal amount.

Government grants related to assets refer to government grants which are obtained by the Company for the purposes of purchase, construction or acquisition of the long-term assets. Government grants related to income refer to the government grants other than those related to assets.

Government grants related to assets are either deducted against the carrying amount of the assets, or recorded as deferred income and recognized in profit or loss on a systemic basis over the useful lives of the assets. Government grants related to income that compensate the future costs, expenses or losses are recorded as deferred income and recognized in profit or loss, or deducted against related costs, expenses or losses in reporting the related expenses; government grants related to income that compensate the incurred costs, expenses or losses are recognized in profit or loss, or deducted against related costs, expenses or losses directly in current period. The Company applies the presentation method consistently to the similar government grants in the financial statements.

Government grants that are related to ordinary activities are included in operating profit, otherwise, they are recorded in non-operating income or expenses.

The Company applied the new lease standard as of 1 January 2019.

Lease is a kind of contract whereby, within a certain period of time, the lessor transfers the right-of-use of assets to lessee in order to obtain benefits.

The Company as the lessee

The Company recognized the right-of-use assets at the beginning of the lease period and the lease liabilities at the present value of the outstanding lease payments.Lease payments include fixed payments and payments to be made if it is reasonably determined that the option to buy or to terminate the lease option will be exercised.The variable rent, which is determined by a certain percentage of sales, is not included in the lease payment and is recorded into the current profit and loss when it actually occurs.The Company will be paid from the balance sheet date within one year (including one year) of the lease liabilities, as a non-current liabilities due within one year.

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SHANGHAI SECCO PETROCHEMICAL COMPANY LIMITED

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEARS ENDED 31 DECEMBER 2018, 2019 AND 2020 (AMOUNTS FOR THE YEAR ENDED 31 DECEMBER 2018 ARE NOT COVERED BY THE INDEPENDENT AUDITOR'S REPORT INCLUDED HEREIN)

(All amounts in RMB Yuan unless otherwise stated)

The right-of-use assets of the Company including leased houses and buildings, plant and machinery equipment, means of transport and others.The right-of-use assets are initially measured at cost, which includes the initial measurement of the lease liability, the lease payment paid on or before the lease period, the initial direct expenses, etc., and deducts the lease incentive received.Where the Company is able to reasonably determine the ownership of the leased assets upon the expiration of the lease term, depreciation of the leased assets shall be calculated and withdrawn within the remaining service life of the leased assets;If it is not reasonable to determine whether the ownership of the leased asset can be acquired at the end of the lease term, the depreciation shall be calculated within the shorter period between the lease term and the remaining useful life of the leased asset. When the recoverable amount is lower than the book value of the asset, the Company writes down the book value to the recoverable amount.

For short-term leases with a lease term of no more than 12 months, the Company chooses not to recognize the right-of-use assets and lease liabilities, and records the relevant rental expenses into the current profits and losses or related asset costs according to the straight-line method during each period of the lease term.

Proposed profit distribution is recognized as a liability in the period in which it is approved by the Board of Directors.

The Company continually evaluates the critical accounting estimates and key judgements applied based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances.

The Company in determining the classification of financial assets involved in the major judgments including business model and contract cash flow characteristics of the analysis.

The Company determines the business model of managing financial assets at the level of financial asset portfolio, taking into account such factors as the way of evaluating and reporting the performance of financial assets to key managers, the risk and management methods that affect the performance of financial assets, and the ways in which relevant business managers are paid, etc..

When the Company evaluates whether the contract cash flow of financial assets is consistent with the basic loan arrangement, there are the following main judgments: whether the time distribution or amount of principal may change within the duration due to prepayment or other reasons; whether interest include only the time value of money, credit risk, other basic lending risks, and consideration of costs and profits. For example, whether the prepayment amount reflect only the principal outstanding and the interest based on the principal outstanding, as well as the reasonable compensation paid for the early termination of the contract.

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SHANGHAI SECCO PETROCHEMICAL COMPANY LIMITED

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEARS ENDED 31 DECEMBER 2018, 2019 AND 2020 (AMOUNTS FOR THE YEAR ENDED 31 DECEMBER 2018 ARE NOT COVERED BY THE INDEPENDENT AUDITOR'S REPORT INCLUDED HEREIN)

(All amounts in RMB Yuan unless otherwise stated)

The critical accounting estimates and key assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next accounting year are outlined below:

The Company assessed the estimated useful lives of fixed assets and other long-term assets in line with historical experience based on the actual useful lives of assets with similar nature or function. If there are significant changes in estimated useful lives and net residual values, depreciation or amortisation expenses for future periods are adjusted.

Any excess of the cost over the net realizable value of each item of inventories is recognized as a provision for decline in the value of inventories. Net realizable value is determined based on the estimated selling price in the ordinary course of business, less the estimated costs to completion and estimated costs necessary to make the sale and related taxes. Management bases the estimates on all available information, including the current market prices of the finished goods and raw materials, costs to completion, costs necessary to make the sale and related taxes. If the actual selling prices are lower or the costs to completion are higher than estimated, the actual allowance for decline in the value of inventories would be higher than estimated.

As there are some transactions and events for which the ultimate tax determination is uncertain during the ordinary course of business, significant judgement is required from the Company in determining the provision for income taxes. Where the final tax outcome of these matters is different from the amounts that were initially recorded, such differences will impact the income tax and deferred tax provisions in the period in which such determination is made.

- 23 -

SHANGHAI SECCO PETROCHEMICAL COMPANY LIMITED

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEARS ENDED 31 DECEMBER 2018, 2019 AND 2020 (AMOUNTS FOR THE YEAR ENDED 31 DECEMBER 2018 ARE NOT COVERED BY THE INDEPENDENT AUDITOR'S REPORT INCLUDED HEREIN)

(All amounts in RMB Yuan unless otherwise stated)

The main categories and rates of taxes applicable to the Company are set out below:

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SHANGHAI SECCO PETROCHEMICAL COMPANY LIMITED

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEARS ENDED 31 DECEMBER 2018, 2019 AND 2020 (AMOUNTS FOR THE YEAR ENDED 31 DECEMBER 2018 ARE NOT COVERED BY THE INDEPENDENT AUDITOR'S REPORT INCLUDED HEREIN)

(All amounts in RMB Yuan unless otherwise stated)

- 25 -

SHANGHAI SECCO PETROCHEMICAL COMPANY LIMITED

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEARS ENDED 31 DECEMBER 2018, 2019 AND 2020 (AMOUNTS FOR THE YEAR ENDED 31 DECEMBER 2018 ARE NOT COVERED BY THE INDEPENDENT AUDITOR'S REPORT INCLUDED HEREIN)

(All amounts in RMB Yuan unless otherwise stated)

The aging of accounts receivable and related provisions for bad debts are analyzed below:

For accounts receivables, regardless of whether exists the significant financing component, the Company measures the loss provision according to the lifetime expected credit losses.

- 26 -

SHANGHAI SECCO PETROCHEMICAL COMPANY LIMITED

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEARS ENDED 31 DECEMBER 2018, 2019 AND 2020 (AMOUNTS FOR THE YEAR ENDED 31 DECEMBER 2018 ARE NOT COVERED BY THE INDEPENDENT AUDITOR'S REPORT INCLUDED HEREIN)

(All amounts in RMB Yuan unless otherwise stated)

As at 31 December 2019 and 2020, all other receivables were aged within one year except for property rental deposits. No other receivables were past due but unimpaired. Provision for bad debts was not required as assessed by management of the Company.

As at 31 December 2019 and 31 December 2020, the Company's prepayment mainly refers to the prepayment of goods purchase, the aging of which is within one year.

- 27 -

SHANGHAI SECCO PETROCHEMICAL COMPANY LIMITED

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEARS ENDED 31 DECEMBER 2018, 2019 AND 2020 (AMOUNTS FOR THE YEAR ENDED 31 DECEMBER 2018 ARE NOT COVERED BY THE INDEPENDENT AUDITOR'S REPORT INCLUDED HEREIN)

(All amounts in RMB Yuan unless otherwise stated)

- 28 -

SHANGHAI SECCO PETROCHEMICAL COMPANY LIMITED

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEARS ENDED 31 DECEMBER 2018, 2019 AND 2020 (AMOUNTS FOR THE YEAR ENDED 31 DECEMBER 2018 ARE NOT COVERED BY THE INDEPENDENT AUDITOR'S REPORT INCLUDED HEREIN)

(All amounts in RMB Yuan unless otherwise stated)

As at 31 December 2020, the other non-current assets within one year of RMB 100,000,000 (31 December 2019: Nil) was 18-month bank depostis with the annual rate of 3.192% in Shanghai Rural Commercial Bank, Jinshan branch, which will be due in October 2021.

- 29 -

SHANGHAI SECCO PETROCHEMICAL COMPANY LIMITED

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEARS ENDED 31 DECEMBER 2018, 2019 AND 2020 (AMOUNTS FOR THE YEAR ENDED 31 DECEMBER 2018 ARE NOT COVERED BY THE INDEPENDENT AUDITOR'S REPORT INCLUDED HEREIN)

(All amounts in RMB Yuan unless otherwise stated)

- 30 -

SHANGHAI SECCO PETROCHEMICAL COMPANY LIMITED

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEARS ENDED 31 DECEMBER 2018, 2019 AND 2020 (AMOUNTS FOR THE YEAR ENDED 31 DECEMBER 2018 ARE NOT COVERED BY THE INDEPENDENT AUDITOR'S REPORT INCLUDED HEREIN)

(All amounts in RMB Yuan unless otherwise stated)

In 2020, the amounts of depreciation expenses charged cost of sales, selling and distribution expenses, general and administrative expenses and research and development expenses were RMB 610,002,606 ,RMB 1,120,980 ,RMB 12,881,160 and RMB 144,432 (2018: RMB 737,043,438, RMB 1,043,503, RMB 13,779,979 and RMB 60,169; 2019: RMB 609,665,198, RMB 1,067,539, RMB 12,461,713 and RMB 25,511), respectively.

- 31 -

SHANGHAI SECCO PETROCHEMICAL COMPANY LIMITED

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEARS ENDED 31 DECEMBER 2018, 2019 AND 2020 (AMOUNTS FOR THE YEAR ENDED 31 DECEMBER 2018 ARE NOT COVERED BY THE INDEPENDENT AUDITOR'S REPORT INCLUDED HEREIN)

(All amounts in RMB Yuan unless otherwise stated)

The construction in progress balance of the Company is mainly production and environmental protection equipment installation programs.

- 32 -

SHANGHAI SECCO PETROCHEMICAL COMPANY LIMITED

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEARS ENDED 31 DECEMBER 2018, 2019 AND 2020 (AMOUNTS FOR THE YEAR ENDED 31 DECEMBER 2018 ARE NOT COVERED BY THE INDEPENDENT AUDITOR'S REPORT INCLUDED HEREIN)

(All amounts in RMB Yuan unless otherwise stated)