ITEM 6. DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES

Executive Directors

DU Guosheng, aged 47, is our Chairman of the Board of Directors. He joined Yanshan Company in 1982 and became the Chairman and General Manager of Yanshan Company in 1999. Mr. Du graduated from Fushun Petroleum Institute and received a master’s degree in Engineering Management from Shanghai Tongji University.

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YANG Qingyu, aged 57, is the Vice-chairman of the Board of Directors. He joined Yanshan Company in 1970 and became Deputy General Manager of Yanshan Company in 1993. Mr. Yang graduated from Tianjin University.

XU Hongxing , aged 45, is our General Manager. He joined Yanshan Company in 1982 and has served various capacities including Deputy Director of the Synthetic Rubber Unit and Deputy General Manager of Yanshan Company. Mr. Xu graduated from Tianjin University and has a Master of Business Administration (“MBA”) degree from People’s University of China.

Non-executive Directors

WANG Yuying, aged 57, joined Yanshan Company in 1970 and has served in various capacities including Secretary of the Communist Party Committee and Vice-chairman of Yanshan Company. Ms. Wang graduated from People’s University of China with a master’s degree in administration of industrial enterprises.

WANG Yongjian , aged 44, joined Yanshan Company in 1982 and has served in various capacities including Director of the Chemical Product Unit and Deputy General Manager of Yanshan Company. Mr. Wang graduated from the East China Petroleum Institute and has an MBA degree from Dalian University of Science and Technology.

WANG Ruihua, aged 56, joined Yanshan Company in 1969 and became Chairman of the Trade Union and Deputy General Manager of Yanshan Company in 1996 and 1999, respectively. Mr. Wang graduated from Beijing Junior College of Chemical Engineering and Beijing Economics Institute.

CUI Guoqi , aged 50, joined Yanshan Company in 1969 and has served in various capacities including Chairman of the Trade Union of Yanshan Company. Mr. Cui graduated from the People’s University of China with an MBA degree.

XIANG Hanyin, aged 49, joined the Yizheng Chemical Fibre Company in 1982, and has served in various capacities. In 2000, Mr. Xiang joined the Chemicals Department of Sinopec as Deputy Director. Mr. Xiang graduated from Nanjing Chemical Institute.

Independent Non-executive Directors

ZHANG Haoruo , aged 72, has served in various capacities in a number of government bodies, including Vice Minister of the former Ministry of Foreign Trade and Economic Cooperation, Governor of Sichuan Province, Minister of the Ministry of Domestic Trade, Administrative Deputy Director of the former State Commission for Economic Restructuring, and member of the Standing Committee of the National People’s Congress. Mr. Zhang graduated from Tsinghua University.

ZHANG Yanning , aged 77, has served in various governmental offices, holding positions such as Vice Minister of the State Economic Commission, Deputy Director of the Production Committee of the State Council, Deputy Chief of the Economic and Trade Office of the State Council, member of the Finance and Economic Affairs Committee of the National People’s Congress, and Chairman of the All China Association of Enterprises. Mr. Zhang graduated from the Dalian Engineering Institute.

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LIU Haiyan, aged 62, joined Yanshan Company in 1969 and has served in various capacities including Director of the Oil Refinery Plant and General Manager of Yanshan Company. Mr. Liu served as the Vice Mayor of the Beijing Municipality from 1998 to 2003 and the Chairman of the Board of Huaxia Bank since 2003. Mr. Liu graduated from Xi’an Petroleum Institute and has obtained a master’s degree from Beijing Petroleum Institute.

YANG Xuefeng, aged 65, joined Sinopec in 1984 and has served in various capacities including Deputy Director of the Department of Production Management and Deputy Director of the Planning Department. Mr. Yang graduated from the Beijing Petroleum Institute.

Supervisors

SHANG Bo, aged 56, is the Chairman of our Board of Supervisors. Mr. Shang joined Yanshan Company in 1969 and has served in various capacities, including Deputy Secretary of the Communist Party Committee of Yanshan Company. Mr. Shang graduated from Lanzhou Petroleum Institute and Beijing Municipal Management Executive Training School.

REN Jinxiang, aged 56, joined Yanshan Company in 1969 and has served in various capacities including Deputy Chairman of the Trade Union of Yanshan Company. Mr. Ren graduated from the Self-taught Examinations Program of Beijing Higher Education and majored in executive management.

WANG Guifen, aged 51, joined Yanshan Company in 1971 and has served in various capacities including Deputy Secretary of the Disciplinary Inspection Committee and Director of the Supervision Department of Yanshan Company. Ms. Wang graduated from the People‘s University of China.

WANG Shulan, aged 49, joined Yanshan Company in 1971 and has served in various capacities including Deputy Chief of the Accounting Department of the Company. Ms. Wang graduated from the People’s University of China.

LIU Changwei, aged 46, joined Yanshan Company in 1983 and has served in various capacities including Chief of the Management Committee of No. 1 Chemical Plant. Mr. Liu graduated from Fushun Petroleum Institute.

RONG Guozhong , aged 46, joined Yanshan Company in 1976 and has served in various capacities including Chairman of the Trade Union of the Polypropylene Department. Mr. Rong graduated from the People’s University of China.

ZHANG Jianjun , aged 52, joined Yanshan Company in 1971 and has served in various capacities including Deputy Secretary of the Disciplinary Inspection Committee of Yanshan Company and Deputy Director of the Supervision Department of Sinopec Group. Ms. Zhang graduated from Tianjin University.

GENG Dianming , aged 57, joined Yanshan Company in 1978 and has served consecutively as Chief Accountant in Beijing Zhongyan Accounting Firm and Zhonglei Accounting Firm Beijing Office since 1993. Mr. Geng graduated from the Graduate School of China Academy of Social Sciences.

ZHAO Shaohua , aged 64, joined Yanshan Company in 1970 and has served as Chief Accountant of Yanshan Company since 1996. Mr. Zhao graduated from Xuzhou Teachers’ College.

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Other Executive Officers

ZHAO Qichao , aged 43, is our Deputy General Manager. He joined Yanshan Company in 1983 and has previously served as the Manager of our Polypropylene Department in 1997. Mr. Zhao graduated from the Second Branch of the Beijing Chemical Institute.

GUO Hong, aged 40, is our Chief Financial Officer. Mr. Guo joined Yanshan Company in 1982 and has served in various capacities including Deputy Director of the Financial Department of the Company. Mr. Guo graduated from Wuhan University of Industry with a master’s degree.

ZHOU Quansheng, aged 35, is our Secretary of the Board. Mr. Zhou joined Yanshan Company in 1990 and has served in various capacities such as Head of the Secretariat of the Board of Directors. Mr. Zhou graduated from Zhejiang University and obtained an MBA degree from the Dalian Institute of Technology.

Departure of an Independent Non-executive Director

Mr. Zhang Haoruo, one of our independent non-executive directors, passed away on March 27, 2004. We currently have no intention of making any arrangement to fill the resulting vacancy. The remaining three independent non-executive directors will continue to fulfill their roles as our independent non-executive directors. We do not expect that there will be any disruption to our operations due to Mr. Zhang’s unfortunate departure.

B. Compensation

The aggregate amount of cash remuneration paid to our directors, the members of the senior management and the Board of Supervisors during the year ended December 31, 2003 was RMB 1,233,480. During 2003, we set aside RMB 109,790 in non-cash remuneration (consisting solely of our contribution to retirement benefits) with respect to such individuals. In addition, directors who also act as our officers or employees receive certain other benefits in kind, such as subsidized or free health care services, housing management and transportation, customarily provided by enterprises in China to their employees. See “Employees.”

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C. Board Practices

All of our current directors and members of the Board of Supervisors were elected in June 2003 and will serve terms of three years or until the election of their respective successors.

Each of the executive directors has entered into a service contract with us for a term of three years, subject to renewal by agreement for one or more consecutive terms of three years. Under such contracts each executive director will receive a salary and a discretionary year-end bonus, at such levels as are proposed by our Board of Directors and approved by shareholders in the general meeting. None of the directors are entitled to receive any benefits upon termination with us.

Board of Supervisors

The Board of Supervisors exists to supervise our directors and our senior officers to prevent them from abusing their positions and powers or infringing our rights and interests or those of our shareholders or employees. The Board of Supervisors has no power over the decisions or actions of our directors or officers except to compel them to correct any act harmful to our interests. The Board of Supervisors is currently composed of the nine members listed in Item 6A, each of whom was appointed for a three year term. It has the right to attend meetings of our Board of Directors, inspect our financial affairs and perform other supervisory functions. These powers and duties are contained in our Articles of Association; there is no other written term of reference for our Board of Supervisors.

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Audit Committee

The Board of Directors established an audit committee in 2002. For the year ended December 31, 2003, the audit committee was composed of Mr. Zhang Haoruo, Mr. Zhang Yanning, Mr. Liu Haiyan, and Mr. Yang Xuefeng, who was elected as Chairman. The audit committee is responsible for the review and supervision of our financial reporting process and internal controls in order to meet the requirement of the Appendix 14 of the Listing Rules - the Code of Best Practice which was promulgated by the Hong Kong Stock Exchange. For the year ended December 31, 2003, the audit committee held two meetings. The audit committee, together with our management, has reviewed the accounting policies, principles and methods adopted by us, and has discussed about the contents of the auditing, internal controls and the financial statements.

Remuneration Committee

We do not have a remuneration or compensation committee.

Approximately 35% of our work force graduated from universities or technical colleges. All members of our work force are employed under employment contracts which specify the employee’s position, responsibilities, remuneration and grounds for termination.

We have a trade union that protects employees’ rights, aims to assist in the fulfillment of our economic objectives, encourages employee participation in management decisions and assists in mediating disputes between us and union members. Each of our operating units has a separate branch of the trade union. We have not been subjected to any strikes or other labor disturbances which have interfered with our operations, and we believe that our relations with our employees are good.

The remuneration package we offer our employees includes wages and bonuses. Employees and their families also receive certain social welfare benefits and education and health services through Yanshan Company. These benefits are subsidized in some cases by Yanshan Company, as required by PRC laws, rules and regulations. We reimburse Yanshan Company for such subsidies.

According to the housing reform policies of the PRC government, we may be required to pay a one-time subsidy to employees who joined us before December 31, 1998 and have not been able to buy housing at preferential prices under the previous scheme or have bought housing at preferential prices but with living areas less than the standard set by the municipal government. However, as of December 31, 2001, we had not completed a housing subsidy plan for submission to the municipal government for approval. Therefore, the amount of the one-time housing subsidy cannot be determined and no provision has been made in the financial statements. As detailed in our prospectus for the Combined Offering, Yanshan Company has undertaken to bear the cost of housing subsidies for our employees through the end of 1998. Therefore, we believe the implementation of the new government housing reform policy will not have a material effect on our financial condition.

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We, together with our employees, participate in a pension plan managed by the Beijing municipal government, pursuant to which our employees and we each pay an annual contribution to the plan. The annual contribution we paid in 2002 and 2003 equals 19% and 20% respectively of aggregate annual employee compensation. Each employee paid in 2002 and 2003 equals 6% and 8% respectively of his or her salary as an additional contribution. Upon retirement, our employees are entitled to the payment of pensions from the plan.

We started to implement the new regulations issued by the Beijing Municipal Government for its employee’s basic medical insurance in September 2002. Prior to the implementation of such regulations, we have been carrying out relevant State regulations by drawing 14% of the employees’ total current wages as welfare fees to be used as the medical expenditure for employees. The welfare fees were included in our labor costs specified in the financial statements included in Item 18. After the implementation of the new regulations, the medical insurance fees to be paid represented 9% of total wages, and such amount shall be included in the 14% employee welfare fees to be drawn by us.

All employees who are unable to work due to illness or disability are entitled to receive certain benefits during the period of their absence from the workplace.

In 2001, we terminated the employment of approximately 2,320 employees under a voluntary termination plan. We paid approximately RMB 246.9 million in connection with the termination of these employees. We did not further reduce our overall workforce during 2002 and 2003.

E. Share Ownership

None of the directors, supervisors or senior management had, as of December 31, 2003, any interests in any our shares or debentures.

We have no employee share purchase plan, share option plan or other arrangement to involve our employees in our share capital.

There was no contract of significance to which we were a party existing during or at the end of the year under review in which a director, supervisor or senior management had a material interest.