Society Responsibility
Quality Control
Safety & Environment Protection
Occupational Health & Safety
Environment Matter
Company Initiative

Operating typically high-risk production procedures involving extreme temperatures, pressure, flammable and explosive and poisonous and erosive materials, the Company sees protecting employees' safety and health, maintaining a stable and safe production and shielding the natural environment and community from pollutants as paramount. In recent years, the Company has aligned its work safety and health measures with international practices. It has learnt to manage systematically and, heeding its own special characteristics as an enterprise, built a comprehensive HSE management system.

Our Chemical Products and Materials
Our business operations involve the use and production of chemicals hat are potentially dangerous, including natural gas, urea, methanol and ammonia. These chemicals could result in damage to, or destruction of, properties or production facilities, personal injury, environmental damage, business interruption and possible legal liability. The primary raw material used in our production processes is natural gas, which is highly explosive and combustible, flammable, and poisonous. Urea, one of our main products, may cause irritation to the skin and eyes upon contact. Methanol, our other main product, is highly poisonous and may result in blindness, metabolic acidosis, or damage to the central nervous system and liver if ingested or inhaled. Ammonia, a product of natural gas used for urea manufacture, may cause irritation and caustic burns if ingested or severe eye damage upon contact.

Safety Measures
We regard occupational health and safety as one of our important social responsibilities and have implemented safety measures at our natural gas chemical production facilities to ensure compliance with applicable regulatory requirements. We conduct periodic inspections of our production facilities in Hainan to ensure that our production operations comply with existing laws and regulations. We also conduct regular training sessions for employees on accident prevention and management.We have obtained a safety in production permit for Fudao phase I and Fudao phase II. We maintain separate production safety measures for Tianye Plant. We obtained a Safety in Production Permit for Tianye Plant in March 2005. We follow governmental regulations in adopting our own safety rules to be followed by all employees at Tianye Plant. We also provide safety-related education to employees and have established safety standards in connection with matters such as purchasing new equipment, constructing new facilities and improving existing facilities. At individual facilities, safety measures and regular safety inspection points are imposed at all stages of the production process to minimize the possibility of work-related accidents or injuries. We maintain personal injury and medical insurance coverage which covers all of our employees at both our Hainan facilities and Tianye Plant.

Fire Prevention
Our production facilities in Hainan and Inner Mongolia are equipped with automatic fire alarm systems and inflammable gas detectors. In addition, Fudao Phase II has its own firefighting management network. Our own fire brigade based at our Hainan production facilities, consisting of 28 full-time firefighters as of the Latest Practicable Date, is responsible for handling fires and other threats to safety within our Hainan production facilities and other properties in Hainan. We currently own four fire-fighting vehicles, including one water truck, one chemical foam truck, and two dry powder trucks for use at our Hainan production facilities. Fire drills are conducted in accordance with applicable requirements, and fire-fighting equipment inspections are carried out according to schedule. At Tianye Plant as of the Latest Practicable Date, we had 33 full-time firefighters and three fire-fighting vehicles.
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