2.1 Diversified Products, Colorful Life

Sinopec's products include natural resources like crude oil and natural gas, refined oil products like gasoline, diesel, jet fuel, lubricant, bitumen and thousands of other petrochemical products. Some of these products are used in our everyday lives and some are materials used in construction, transportation, pharmaceutical, agriculture and the aerospace industry. Together we are building our beautiful home.

In order to make the full use of petroleum and petrochemical products and better serve the customers, Sinopec has been consistently seeking technological breakthroughs, researching and developing new products, broadening product functions and boosting the upgrading of relevant downstream industries through the optimization of the Company's own product mix and the upgrading of its own industrial structures. In the past five years, Sinopec has been continuously pushing for products' quality improvement and has launched high-end gasoline products ahead of its industry peers into the market; over ten new synthetic resin products have been launched every year;the output and proportion of synthetic resin compounds has continuously increased; and the differentiation rate of chemical fibers has continuously increased to over 63%.

2.2 Leading Quality, Common Growth

Sinopec always regards the product quality as the life of the enterprise and strives to ensure the high quality and sufficient quantity of its products through strict management. At the same time, Sinopec has never been satisfied with its past success in quality management and under the guidance of "Being a leader in quality management", the Company perseveres in strengthening scientific research and improving the system and services, in order to become a leader in quality and grow with the customers.

◎Improving the Quality Assurance System

In 2011, Sinopec revised and published the new "Quality Management Measures" and "Quality-related Accident Management Regulation", adding relevant regulations and the detailed quality management methods with clearly defined rights and responsibility.

Strengthen the quality-oriented mindset and incorporate quality,goal and social responsibility into the corporate culture.

Intensify efforts in training and increase the accuracy in quantitative and quality data.

Regulate accident management and require timely report, investigation and settlement of quality-related accidents.

◎ Seeking Leading Quality

On the basis of improving quality assurance system, ensuring good quality and sufficient quantity, Sinopec keeps up with the development of the economy, society and relevant sectors, fully utilizes its comprehensive strength, strengthens the external cooperation, continuously develops better products and grows together with the customers.

2.3 Providing Caring Services

Sinopec adheres to the management principle of "meeting customer demands and creating value for customers" and consistently improves the service system, innovates in the service model, raises the service standard and creates higher value for the customers.

◎ Multi-Functional Non-Fuel Businesses that Enable Customers to Enjoy Convenient and Premium Services in Our Stations

In order to provide broader and more caring services, Sinopec has taken the advantage of its extensive retail network and is building a comprehensive, one-stop and multi-functional service platform that combines fueling, shopping, dining and car services, and turning the traditional petroleum stations into comprehensive service stations. By the end of 2011, Sinopec has 19,000 Easy Joy convenient stores, 3000 more than that in 2010.

◎The Value-Added Services of the Fuel Cards and Self-Service Stations Are Enriching Customers' Shopping Experience.

Sinopec has issued more than 60 million fuel cards by far and over 30% of the fueling consumption is paid with the fuel cards.

In order to meet the customers' diversified demands, Sinopec has opened the self-service stations timely to create a fresh customer experience. At the end of 2011, there were altogether 1,227 self-service stations in operation.

◎ Listen to Customers and Increase Customer Satisfaction

Sinopec adheres to the principle of "customer comes first" and keeps improving the service capability, customer satisfaction and loyalty. From the routine customer visit, providing technology services, opening telephone and internet information platforms to developing strategic cooperation, maintaining the profit margin of the downstream industry and conducting customer satisfaction survey, Sinopec is always making sure that the customers buy and use with confidence and assurance.

A survey carried out by an independent third-party organization shows that the overall customer satisfaction score of Sinopec's chemicals sales in 2011 is 92.5, 2.8 points higher than 2010 and 6.9 points higher than industry benchmark. The customer loyalty rate is 98.7%, 0.3 percentage points higher than 2010 and 8 percentage points higher than industry benchmark.

◎ Chemicals Sales: Promoting High-Quality, Easy and Value-Added Procurement

In order to satisfy the customers, Sinopec proactively promotes high-quality, easy and value-added procurement.

High-quality procurement is to control the four key elements in procurement and sales: supplier access, resources procurement, logistics and transportation, delivery and measurement. It is also being market-oriented and partnering with manufacturing companies to produce high-end, differentiated and special products customized to clients' needs.

Easy Shopping is to make shopping more convenient by enhancing the construction of the information system platform and sales network. Nowadays our 5,400 customers can easily send proposals, place orders and check accounts through the CRM system with a simple click. Filing a complaint, consulting and providing feedback can be done via a phone call. Moreover, customers can pay bank's acceptance bill and check the status of the order by going on-line. The 26 sales outlets all over the country make the procurement process very easy and provide before-sales, while-sales and after-sales services within the shortest distance, which gives customers the greatest convenience.

Value-added procurement is to proactively develop new products for customers based on their demands. It means more visits to customers, technology service, complaint handling, product delivery and continuously reducing customer procurement cost; making great efforts to ensure the supply to customers through the use of inventory when there is a shortage of resources; adjusting the price sensibly to keep reasonable margin when the market is slowing down; delivering technology services to customers when they are experiencing difficulties using our products.

◎Natural Gas, Proving the "Essence Gas" to Customers

In natural gas sales, pipeline operation and engineering construction, Sinopec reinforces the service and "essence" mindset, promotes the sophisticated management, makes great effort to build the Sinopec natural gas brand to make every cubic meter of natural gas the "essence gas" and provide high quality, rightly measured and priced clean energy for the public and our clients.

2.4 Going Through Special Times Hand-in-Hand

The peak farming seasons, the change of climate, price fluctuation and natural disasters will all cause dramatic change to the demand of oil products, and it's very difficult to adjust production at any time due to the characteristics of the petroleum and petrochemical industrial process. Hence, Sinopec continuously improves the emergency response system, plans ahead and prepares meticulously and has effectively eased the intensity between supply and demand, and contributed greatly to the stable economic growth and people's lives.

◎ Harness Hope in The Peak Farming Season

During the peak planting and harvesting seasons of Summer and Autumn, Sinopec plans ahead and sets up the leading groups in Hebei, Shanxi, Shandong, Henan, Jiangsu, Anhui and Hubei, and formulates the service and emergency response plans to ensure the supply of oil products for the agricultural vehicles. Through strengthening resource allocation, opening service stations and express channels exclusive for agricultural vehicles, organizing oil products delivery teams and opening a 24-hour hotline, the supply of oil products to the agriculture vehicles is ensured.

Besides, Sinopec also offers free services such as providing drinking water, medicine and repair tools, allocating rooms for people to rest in the service stations and giving out gift bags consisting of daily necessities, to provide more convenience to farmers.

◎ Join Hands to Tide over Disasters

To prepare for natural disasters and ensure the sufficient supply, all the sales subsidiaries of Sinopec have emergency response plans that involve resource allocation and transportation, duty arrangement, oil depot, service station supply etc. and exercises are carried out every year. In 2011, in the fights against snow, rain, frost, earthquake, drought and flood, Sinopec launched the emergency response plans quickly and took all possible measures such as opening express channels, fueling on the move and manually delivery, etc. to successfully ensure the sufficient supply of oil products.

Sinopec attaches great importance to the supply of oil products in Southwest China in winter time and increases the supply in the respective area every January. In January 2011, the supply of oil products in Guizhou, Hunan and Chongqing was 755,000 tons, a 13.5% year-on-year increase, and the supply could be increased anytime depending on the situation of the disaster.

◎ Making Every Effort to Ensure the Supply of Diesel

Since October, 2011, oil products supply, diesel supply in particular,has lagged far behind demand in the domestic market, due to a number of factors including the international oil price rebound,seasonal consumption demand increase, lower capacity utilization in some refineries and less products available from independent refineries. In light of the refining loss and diesel supply tension in domestic market, Sinopec conscientiously abode the principle of "Full-load production, Adjusting product mix, Tapping inventory, Decreasing export and Increasing Import", and took various measures to increase the output and supply of oil products to solve the problem as quickly as possible. Since October, Sinopec's average daily sales volume has been increasing significantly and hit record high.

Conclusion

A smile of satisfaction from customers is our biggest gain. In 2011, we have been staying with our customers regardless of the market situation and have gone through all the difficulties to deliver good performance.

In 2011, Sinopec further acted on the principle of"Being a leader in quality management" and "Excellent Quality and Sufficient Quantity for Customer Satisfaction". Everyone in Sinopec takes quality as importantly as one's own life and we strive to create a better tomorrow together with our customers.

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